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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, 1996
[ ] 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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2500 WINDY RIDGE PARKWAY, ATLANTA, GEORGIA 30339
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(770) 989-3000
(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 February 21, 1997 was $3,538,829,156.
There were 125,806,395 shares of Common Stock outstanding as of February
21, 1997.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Share Owners for the year
ended December 31, 1996, 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 21, 1997 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................................................ 2
Territories................................................. 3
Products.................................................... 4
Marketing................................................... 5
Raw Materials............................................... 5
Domestic Bottle Contracts................................... 6
International Bottler's Agreements.......................... 9
Competition................................................. 11
Employees................................................... 12
Governmental Regulation..................................... 12
Financial Information on Industry Segments and Geographic
Areas................................................ 14
ITEM 2. PROPERTIES.................................................. 14
ITEM 3. LEGAL PROCEEDINGS........................................... 15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......... 16
ITEM 4(A). EXECUTIVE OFFICERS OF THE COMPANY........................... 17
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS....................................... 19
ITEM 6. SELECTED FINANCIAL DATA..................................... 19
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................. 19
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA................. 19
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.................................. 20
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.......... 20
ITEM 11. EXECUTIVE COMPENSATION...................................... 20
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT................................................ 20
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. 20
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K....................................................... 21
SIGNATURES.................................................. 28
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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's bottling territories are located in the United States, Great Britain,
France, Belgium and the Netherlands.
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. At
December 31, 1996, The Coca-Cola Company owned approximately 44.9% of the
Company's common stock. References in this report to the "Company" include the
Company and its subsidiaries and divisions.
The Company's domestic and international bottling territories (see
"Territories" below), contained approximately 282 million people at the end of
1996. Throughout the Company's bottling territories, sales of beverage product
totaled approximately 2.7 billion equivalent cases(1) in 1996. As used in the
description of the business of the Company, and unless the context indicates
otherwise, the population within bottling territories and sales information are
reported as if all companies acquired during 1996 and through February 1997 had
been owned at January 1, 1996.
Bottling Operations
In the United States, the Company operates in exclusive and perpetual
territories containing approximately 55% of the population of the United States.
In Europe, the Company's territories include all of the Netherlands, Belgium,
Great Britain and most of France. (See "Territories" and "International
Bottler's Agreement" below.)
Management estimates that 1996 total case sales of all beverage products
were approximately 1.9 billion equivalent cases within the Company's territories
in the United States and approximately 766 million equivalent cases in its
European territories.
In 1996 approximately 88% of the equivalent case sales of the beverage
products sold throughout the Company's territories worldwide were produced and
sold under licenses from The Coca-Cola Company.
Strategy
The Company's primary operating objective is to increase long-term
operating cash flows through profitable increases in sales volume. The Company
plans to achieve its operating objective through the continued implementation
and execution of the following strategies:
- creating and executing innovative and superior marketing programs at
the local level;
- balancing volume growth with improved margins and sustainable
increases in market share;
- developing profitable business partnerships with customers;
- integrating its international and domestic acquisitions; and
- structuring compensation plans to help focus its employees on
enhancing share-owner value.
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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 servings).
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The Company's primary financial objective is to deliver a superior
investment return to share owners. The Company strives to achieve this objective
through the continued implementation and execution of the following strategies:
- allocating resources appropriately between capital expenditures,
infrastructure investment, share repurchases, acquisitions and debt
repayment;
- maintaining a capital structure which maximizes financial flexibility,
given current investment opportunities; and
- continuing to evaluate acquisition opportunities that will result in
long-term value.
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 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 Agreements" below. Other significant transactions and
agreements include 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 this reorganization of its
bottler system. See "Acquisitions" below and "Certain Relationships and Related
Transactions -- Agreements and Transactions with The Coca-Cola Company" in the
Company's Proxy Statement for the Annual Meeting of Share Owners to be held
April 21, 1997 (the "Company's 1997 Proxy Statement"), which information is
incorporated by reference in Item 13 hereof.
ACQUISITIONS
On February 21, 1996, the Company acquired the Ouachita Coca-Cola Bottling
Company, Inc. (the world's first Coca-Cola bottler), having territories in
Arkansas, Louisiana and Mississippi, for a transaction value (purchase price and
issued and assumed debt) of approximately $313 million, which was paid to the
former shareholders in cash, common stock and convertible preferred stock of the
Company.
On July 26, 1996, the Company acquired the bottling and canning operations
of The Coca-Cola Company in France and Belgium for a transaction value (purchase
price and assumed debt, net of cash acquired) of approximately $915 million.
On August 12, 1996, the Company acquired Coca-Cola Bottling Company West,
Inc. and Grand Forks Coca-Cola Bottling Co. for a transaction value (purchase
price and assumed debt) of $158
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million. These companies operate in a franchise territory which includes parts
of Minnesota, Montana, North Dakota, South Dakota and Wyoming.
On February 10, 1997, the Company acquired Coca-Cola & Schweppes Beverages
Limited, the bottler for Great Britain, for a transaction value (purchase price,
assumed debt and other long-term obligations) of approximately 1.2 billion
pounds sterling, or approximately $2 billion.
The total cost of all of the Company's acquisitions since reorganization in
1986 through the date of this report is $9.2 billion including assumed and
issued debt where applicable. The Company intends to acquire only bottling
businesses offering the Company the ability to produce long-term share-owner
value.
TERRITORIES
The Company's bottling territories in the United States include portions of
41 states and all of the District of Columbia. At December 31, 1996, these
territories contained approximately 146 million people, representing
approximately 55% of the United States population.
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[map of U.S. territory]
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The bottling territories for the Company's European operations consist of
Great Britain, the Netherlands, Belgium, and most of France. The aggregate
population of these territories was approximately 136 million people at December
31, 1996.
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[map of European territory]
PRODUCTS
Within its domestic territories 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,
Barq's, Fanta, Fresca, Fruitopia, Mello Yello, Minute Maid juices, Hi-C fruit
drinks, Mr. PiBB, POWERaDE, Surge, and TAB. Additionally, the Company markets,
distributes and produces (or obtains from contract packers) Nestea products,
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. Substantially all of the beverages bearing the trademark
"Coca-Cola" or "Coke" (the "Coca-Cola Trademark Beverages") as well as TAB,
Sprite and Minute Maid juices, are available throughout the Company's domestic
territories. Other products of The Coca-Cola Company and of other companies,
including products of Dr Pepper/Seven-Up, Inc., are available in selected
territories. Certain of the Company's locations supply products to other
Coca-Cola bottlers and major fountain accounts.
Major products marketed and distributed by the Company in its European
territories include Aquarius, Bonaqua, Buxton Mineral Water, caffeine free
Coca-Cola, caffeine free Coca-Cola light, Canada Dry, Cherry Coke, Coca-Cola,
Coca-Cola light, Cresta flavors, diet Coke, Dr Pepper, Fanta, Finley, Five
Alive, Fruitopia, Kia-Ora, Kinley, Lilt, Minute Maid juices, Nestea, Oasis,
Perrier Mineral Water, Roses, Schweppes, Schweppes Lemonade, Schweppes Mixers,
Schweppes Traditionals, Sprite, and Sprite light.
The Coca-Cola Company and other companies manufacture syrups and
concentrates, and in some cases the finished product, for sale to bottlers and
to fountain wholesalers. The Company's bottling and canning operations combine
the syrup or concentrate with sweetener and carbonated water, and package the
finished product in authorized containers for sale and direct store delivery to
retailers. See "Marketing" and "Raw Materials" below.
Approximately 72% of the Company's domestic equivalent case sales in 1996
(excluding post-mix) represented caloric products and the balance represented
low-calorie products. "Post-mix" (sometimes called fountain syrup) is syrup
which is mixed with water and carbon dioxide at the time it is being dispensed
in open containers, such as cups, for immediate consumption.
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MARKETING
The Company sells its products in a variety of packages authorized by The
Coca-Cola Company and other companies. In 1996, domestic and international
equivalent case sales of the Company, excluding post-mix syrup sales, were
packaged approximately 49% in cans, 45% in other nonrefillable packaging, 5% in
returnable containers, and 1% in pre-mix containers. Post-mix syrup accounted
for approximately 12% of the Company's equivalent case sales in 1996.
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 products 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. Certain of the marketing expenditures by The
Coca-Cola Company and other beverage companies are made pursuant to annual
arrangements. Although The Coca-Cola Company has advised the Company that it
intends to continue to provide marketing support in 1997, it is not obligated to
do so under either the domestic or international bottle contracts, except as
otherwise specifically committed. See "Domestic Bottle Contracts" and
"International Bottler's Agreements" below.
Sales of the Company's products are seasonal, with the second and third
calendar quarters accounting for higher sales volumes than the first and fourth
quarters. The addition of the international bottling territories in Great
Britain, France and Belgium will result in more volatility in sales volume
because of the higher sensitivity of European consumption to weather conditions.
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 materials, other than
concentrates, syrups, and sweeteners, from multiple suppliers. The domestic and
international 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 used by the
Company in the United States for 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 1997 requirements for sweeteners
in the United States. See "Certain Relationships and Related
Transactions -- Agreements and Transactions with The Coca-Cola
Company -- Sweetener Requirements Agreement" in the Company's 1997 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 syrup or concentrate purchased by the Company from The Coca-Cola Company. In
Europe, the principal sweetener is sugar from sugar beets, purchased from
multiple suppliers.
The Company currently purchases its requirements for plastic bottles in the
United States from manufacturers 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. In Europe, the Company produces most of its plastic bottle
requirements using preforms purchased from various merchant suppliers.
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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 its principal liquid nonalcoholic refreshment
products within the United States under two basic forms of carbonated 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 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 that
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 1997 for syrup and concentrates will increase
approximately 2.8% as compared to 1996 prices. The Coca-Cola Company has no
rights under the Bottle Contracts to establish the resale prices at which the
Company sells its products.
The Company is obligated to maintain such plant and equipment, staff, and
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 fully satisfy the demand for
these beverages in its territories; to undertake adequate quality control
measures prescribed by The Coca-Cola Company; to develop and to 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 of its obligations to The Coca-Cola Company. The
Company is required to meet annually with The Coca-Cola Company to present its
marketing, management, and advertising plans with respect to the Coca-Cola
Trademark Beverages for the year, including financial plans showing that the
Company has the consolidated financial capacity to perform its 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
Contracts. 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
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reduce the territory covered by that Cola Bottle Contract by eliminating the
portion of the territory in 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
1997 at a comparable level of support as that provided in 1996, 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 Contracts
described above.
The domestic Cola Bottle Contracts are perpetual, but they are subject to
termination by The Coca-Cola Company upon the occurrence of an 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 that Cola Bottle Contract
that remains uncured for 120 days after notice by The Coca-Cola Company. If any
Cola Bottle Contract is terminated because of an event of default, The Coca-Cola
Company has the right to terminate all other Cola Bottle Contracts held by the
Company.
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 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 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 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.
The Allied Bottle Contracts
The Allied Beverages are beverages of The Coca-Cola Company which are
neither Coca-Cola Trademark Beverages nor (except for Hi-C fruit drinks)
noncarbonated beverages. Under the Allied Bottle Contracts, the Company has
exclusive rights to distribute the Allied Beverages in authorized containers in
specified territories. These 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. Under the Allied Bottle Contracts, the Company
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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. Each Allied Bottle Contract has a term of ten years and is
renewable by the bottler for an additional ten years at the end of each term.
The initial term for many of the Company's Allied Bottle Contracts expired in
1996 and substantially all were renewed. The Company intends to renew
substantially all the Allied Bottle Contracts as they expire. The Allied Bottle
Contracts are subject to termination in the event of default by the Company. The
Coca-Cola 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.
Supplementary Agreement
In addition to the Bottle Contracts, 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 in the United States 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.
Noncarbonated Beverage Agreements
The Company purchases certain noncarbonated beverages such as isotonics,
teas, and fruit drinks in finished form from The Coca-Cola Company, or its
designees, pursuant to the terms of marketing and distribution agreements (the
"Noncarbonated Beverage Agreements"). With respect to certain products, such as
Nestea, Fruitopia and Minute Maid juice drinks, the Company has not yet signed
Noncarbonated Beverage Agreements. The Noncarbonated Beverage Agreements have
certain significant differences from the Cola Bottle Contracts.
Each of the Noncarbonated Beverage Agreements has a term of ten years and
is 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, establishes the pricing the
Company must pay for noncarbonated beverages but has agreed, under certain
circumstances, to give the Company
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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
1996, the Company sold and/or delivered such post-mix products in all of its
major territories. 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
territory, the Company is involved in the sale, distribution, and marketing of
post-mix syrups in differing degrees. In some territories, 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 business. See "Certain
Relationships and Related Transactions -- Agreements and Transactions with The
Coca-Cola Company, -- Agency Billing and Delivery Arrangements" in the Company's
1997 Proxy Statement, which information is incorporated by reference in Item 13
hereof.
Bottle Agreements in the United States with Other Licensors
The bottle agreements in the United States between the Company and other
licensors of beverage products and syrups contain restrictions generally similar
in effect to those in the Bottle Contracts as to trade names, approved bottles,
cans and labels, sale of imitations, and cause for termination. Those agreements
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. The agreements with
subsidiaries of Cadbury Beverages Inc., which represented in 1996 approximately
8% of the beverages sold by the Company in the United States and the Caribbean,
provide that the parties will give each other at least one year's notice prior
to terminating the agreement for any brand, and pay certain fees in some
circumstances. Also, the Company agreed that it would not cease distributing Dr
Pepper brand products prior to December 31, 2000 or Canada Dry, Schweppes or
Squirt brand products prior to December 31, 1998. The termination provisions for
Dr Pepper renew for five-year periods, those for the other Cadbury brands renew
for 3-year periods.
INTERNATIONAL BOTTLER'S AGREEMENTS
The Company's bottlers in the Netherlands, Belgium and France (collectively
the "Company Continental Bottlers") and the Company's bottler in Great Britain
(which together with the Company Continental Bottlers are collectively called
the "Company European Bottlers"), operate in their respective territories under
bottler's agreements with The Coca-Cola Company and The Coca-Cola Export
Corporation; dated July 26, 1996 for the Company Continental Bottlers and
February 10, 1997 for the British bottler (the "International Bottler's
Agreements"); these agreements have certain significant differences from the
domestic Bottle Contracts, Noncarbonated Beverage Agreements and post-mix
arrangements described above.
9
<PAGE> 12
The International Bottler's Agreements expire July 26, 2006 for the Company
Continental Bottlers and February 10, 2007 for the British bottler, unless
terminated earlier as provided therein. If the European Bottlers have fully
complied with the agreements during the initial term, are "capable of the
continued promotion, development, and exploitation of the full potential of the
business" and request 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 Agreements
before the expiration of the stated term upon the insolvency, bankruptcy,
nationalization, or similar condition of the Company European Bottlers or the
occurrence of a default under the International Bottler's Agreements which is
not remedied within 60 days of notice of the default being given by The
Coca-Cola Company. The International Bottler's Agreements may be terminated by
either party in the event foreign exchange is unavailable or local laws prevent
performance.
Subject to the European Supplemental Agreement, described in this report,
and certain minor exceptions, the Company European Bottlers have the exclusive
rights granted by The Coca-Cola Company in their territories to sell the
beverages covered by their respective International Bottler's Agreements in
glass bottles, PET bottles and/or cans. The covered beverages include Coca-Cola
Trademark Beverages, Allied Beverages, noncarbonated beverages and certain
beverages not sold in the United States. See "Products." 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 within the
territories. The Coca-Cola Company has further granted certain Company European
Bottlers a nonexclusive authorization to package and sell post-mix and/or
pre-mix beverages in their territories; this authorization is terminable by
either party with 90 days' prior notice.
The Company European Bottlers are prohibited from making sales of the
beverages outside of their territories, or to anyone intending to resell the
beverages outside their territories, 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 Agreements contemplate that there may be instances
in which large or special buyers have operations transcending the boundaries of
the territories, and in furtherance of this, the Company European Bottlers and
The Coca-Cola Company are cooperating in sales to such buyers.
The Company believes that the International Bottler's Agreements are
substantially similar to other agreements between The Coca-Cola Company and
other European bottlers of Coca-Cola Trademark Beverages Allied Beverages.
Similar to the Bottle Contracts under which the Company and its other
subsidiaries operate, the International Bottler's Agreements provide that the
sales of beverage base and other goods to the Company European Bottlers are at
prices which are set from time to time by The Coca-Cola Company. The Company
expects that net prices charged in 1997 by The Coca-Cola Company for syrup,
concentrate, and other goods will increase approximately 3% to 4% over 1996
prices.
While The Coca-Cola Company has no commitment under the International
Bottler's Agreements to provide marketing support, it has agreed with the
Company to provide certain specified assistance for limited periods of time in
connection with the Company's acquisitions of the bottlers in Belgium, France
and Great Britain. With respect to the bottlers in Belgium and France, the
Company and The Coca-Cola Company have developed a business plan though the year
2000, to be supplemented with agreed annual plans, under which the Company will
receive set levels of funds to support the marketing of Coca-Cola brands; the
Company is obligated to cause the French bottler to spend marketing funds in
support of the Coca-Cola brands, the amounts of the expenditures to increase as
case volume increases. Additionally, The Coca-Cola Company has provided for the
last six months of 1996, and has committed to provide for 1997, transitional
marketing support to the Company to support the cost of customer and consumer
programs designed to enhance the marketing and sale of the Coca-Cola brands.
With respect to the bottler in Great Britain, a business plan has been developed
by agreement of the Company and
10
<PAGE> 13
The Coca-Cola Company through 2001, to be supplemented with agreed annual plans.
The Coca-Cola Company has committed to a minimum level of annual support
throughout the period of the business plan to fund marketing programs for
Coca-Cola brands, and to make transition support payments in agreed amounts for
1997, 1998 and 1999 to fund customer and consumer programs designed to enhance
the marketing and sale of Coca-Cola brands. The Coca-Cola Company has provided
substantial marketing support in the past to the Company's bottler in the
Netherlands, and the Company expects that increased support will be provided in
1997, as a recognition of increased sales.
European Supplemental Agreement
In addition to the International Bottler's Agreements described above, the
Company Continental Bottlers, The Coca-Cola Company and The Coca-Cola Export
Corporation are parties to a supplemental agreement (the "European Supplemental
Agreement") with regard to the Company Continental Bottlers' rights pursuant to
the International Bottler's Agreements. The European Supplemental Agreement
permits the Company Continental Bottlers to prepare, package, distribute and
sell the beverages covered by any of the Company Continental Bottlers'
International Bottler's Agreements in any other territory of another Company
Continental Bottler, provided that the Company and The Coca-Cola Company shall
have reached agreement upon a business plan for such beverages. The European
Supplemental Agreement may be terminated, either in whole or in part by
territory, by The Coca-Cola Company at any time with 90 days prior written
notice. The British bottler is not a party to the European Supplemental
Agreement, but The Coca-Cola Company has committed to enter into a similar
arrangement with it.
Bottle Agreements in Europe with Other Licensors
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 agreements contain restrictions generally similar in effect to
those in the International Bottler's Agreements as to trade names, approved
bottles, cans and labels, sale of imitations, planning, and cause for
termination. As a condition to Cadbury Schweppes plc's sale of its 51% interest
in the British bottler to the Company in February 1997, the Company entered into
agreements concerning certain aspects of the Schweppes products distributed by
the British bottler. These agreements impose obligations upon the Company with
respect to the marketing, sale and distribution of Schweppes products within the
British bottler's territory. These agreements further require the British
bottler to achieve certain agreed growth rates for Cadbury Schweppes brands and
grant certain rights and remedies to Cadbury Schweppes if these rates are not
met. These agreements also place some limitations upon the British bottler's
ability to discontinue Schweppes brands, and recognize the exclusivity of
certain Schweppes brands in their respective flavor categories. The British
bottler is given the first right to any new Schweppes brands introduced in the
territory. The agreements run through 2012 and are automatically renewed for a
10-year term thereafter unless terminated by either party.
COMPETITION
The liquid nonalcoholic refreshment business is highly competitive.
Competition exists among all beverages, including soft drinks, isotonics, tea,
tea drinks, juices, juice drinks, coffee, coffee drinks, water, beer, wine, wine
coolers, milk and milk drinks, and bottled waters. Competitors in this business
include bottlers and distributors of beverages marketed and advertised at
international, national, regional and local levels, as well as chain store and
private label beverages. Information on sales in the liquid nonalcoholic
refreshment business is not readily available. In the carbonated soft drink
segment of the liquid nonalcoholic refreshment business, however, the Company
estimates
11
<PAGE> 14
that in 1996 the products of The Coca-Cola Company represented approximately 36%
of total food store carbonated soft drink sales in all domestic territories in
which the Company operates, and that those of PepsiCo, Inc. represented
approximately 31%. The Company also estimates that in each of its domestic
territories, between 55% and 75% of food store carbonated soft drink sales are
accounted for by the Company and its major carbonated soft drinks 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 consumer and customer goodwill
associated with the trademarks of its products are the most favorable factor for
the Company. Other competitive factors among beverage distributors include
marketing, distribution methods, service to the trade and the management of
sales promotion activities. Vending machine sales, packaging changes and
relationships with fountain customers are also competitive factors. The
introductions of new products and packages have been major competitive elements
in the liquid nonalcoholic refreshment industry.
EMPLOYEES
At February 28, 1997, the Company had approximately 43,200 employees, about
7,200 of these located outside of the United States. The Company is a party to
collective bargaining agreements covering approximately 23% of its domestic
employees. These collective bargaining agreements expire at various dates
through 2001. 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. A favorable settlement with the
state on the deposits escheated to the state prior to the effective date of the
law was achieved in September 1996. Michigan also has a statute requiring
bottlers to pay to the state unclaimed container deposits.
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 European Commission has issued a packaging and packing waste directive
which is in the process of being incorporated into the national legislation of
the member states. This will result in targets being set for the recovery and
recycling of household, commercial and industrial packaging waste and impose
substantial responsibilities upon bottlers and retailers for implementation.
12
<PAGE> 15
Excise taxes on sales of soft drinks have been in place in various states
in the United States for several years. The states in which the Company operates
currently imposing such taxes are Arkansas, Louisiana, North Carolina, and
Tennessee. The North Carolina General Assembly reduced the excise tax by 25% in
July 1996; the legislature also enacted a measure repealing the excise tax in
25% increments over a three-year period, eliminating it in 1999. In addition,
two local jurisdictions in which the Company operates, Baltimore City, Maryland
and Honolulu, Hawaii, have imposed a special tax on nonrefillable soft drink
containers. The Baltimore City container tax is being phased out over a period
of eighteen months, ending July 1, 1997. 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.
Value added tax (VAT) on soft drinks varies widely in the Company's
bottling territories within the European Community, ranging from 3% to 25%. In
addition, excise taxes on sales of soft drinks are in place in Belgium, France
and the Netherlands. The existence and level of this indirect taxation on the
sale of soft drinks is now a matter of legal and public debate given the need
for further tax harmonization within the European Community.
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 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, neither 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 ("PRP") 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.
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<PAGE> 16
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 repair, if necessary, of underground fuel
storage tanks at Company bottlers and remediation of their sites, if necessary
and, to a lesser extent, the abatement of the discharge of pollutants, upgrading
water treatment facilities, and remediating friable asbestos, at various Company
facilities. The Company spent approximately $5 million in 1996, and the Company
estimates it will spend approximately $9 million in 1997 and a like amount in
1998 pursuant to this plan. In the opinion of management of the Company, any
liabilities associated with the items covered by such plan 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.
The Treaty of Rome, which established the European Community, precludes
restrictions of the free movement of goods within the member states. As a
result, unlike the Company's domestic bottling operations, the bottling
agreements with the European Community do not grant the Company exclusive
bottling territories. Therefore, other suppliers of the beverages produced by
the Company can, in response to unsolicited orders, sell such products in the
Company's European Community territories. See, "International Bottler's
Agreements."
FINANCIAL INFORMATION ON INDUSTRY SEGMENTS AND GEOGRAPHIC AREAS
For financial information on industry segments and operations in geographic
areas, see note 15 to the Company's Consolidated Financial Statements, found on
page 40 of the Annual Report to Share Owners for the year ended December 31,
1996, which is incorporated herein by reference.
ITEM 2. PROPERTIES
The principal properties of the Company include the executive offices,
production facilities, distribution facilities, administrative offices, and
service centers. At February 28, 1997, the Company operated 61 beverage
production facilities, 19 of which are solely production facilities and 42 of
which are combination production/distribution facilities, and also operated 249
principal distribution facilities. The Company owns 56 of its production
facilities, 217 of its principal distribution facilities, and leases the others.
In the aggregate, the Company's owned and leased facilities covered
approximately 28.5 million square feet. Management of the Company believes that
its production and distribution facilities are generally sufficient to meet
present operating needs.
One of the facilities owned by the Company is subject to a lien to secure
indebtedness in an aggregate principal amount of approximately $2.7 million at
December 31, 1996. Excluding expenditures for bottler acquisitions, the
Company's capital expenditures in 1996 were approximately $622 million.
At February 28, 1997, the Company owned and operated approximately 32,300
vehicles of all types used in the sale, production and distribution of its
products and over one million coolers, beverage dispensers and vending machines.
14
<PAGE> 17
ITEM 3. LEGAL PROCEEDINGS
The Company and several of its bottling subsidiaries or divisions have been
named as PRPs at several federal and state "Superfund" sites. In 1990, Florida
Coca-Cola Bottling Company ("Florida CCBC") was named as a PRP at the Wingate
Road Incinerator and Landfill, a former municipal waste disposal site in Fort
Lauderdale, Florida. The total remediation costs for this site have been
estimated at up to $20 million. Florida CCBC conducted an internal investigation
of this matter and determined that some of its waste may have been taken to this
site for disposal. The City of Fort Lauderdale, which itself is a PRP, has
asserted that Florida CCBC's share of the total waste is about 2%, but Florida
CCBC has not yet confirmed or refuted this assertion. If it is accurate, Florida
CCBC's ultimate liability could approach $400,000. In 1992, Florida CCBC was
named as a PRP at the Peak Oil site in Tampa, Florida, formerly the location of
a refiner of used motor oil. Following an internal investigation and lengthy
negotiations with the PRP Group, Florida CCBC agreed to accept liability for
approximately 32,000 gallons of used oil, representing approximately 1.6% of the
total amount. With total remediation costs estimated at up to $18 million,
Florida CCBC's ultimate liability could reach $300,000. In 1992, The Coca-Cola
Bottling Company of Memphis, Tenn. ("CCBC Memphis") was named as a PRP with
respect to the South 8th Street landfill site (a/k/a West Memphis landfill) in
West Memphis, Arkansas, which is alleged to have been used in the 1950s and
1960s as a dump site for the byproducts from the reprocessing of used motor oil.
Total cleanup for the site has been estimated at up to $45 million. CCBC Memphis
conducted an internal investigation of this matter and determined that some of
its waste oil may have been taken to the South 8th Street landfill. However,
neither the specific volume of waste oil that may have been generated by CCBC
Memphis, nor its percentage of the whole relative to other PRPs has yet been
determined. Accordingly, CCBC Memphis cannot yet estimate the amount of its
ultimate liability. In 1994, the Company was named as a PRP at the Waste
Disposal Engineering site in Andover, Minnesota, a former landfill. The claim
against the Company is approximately $110,000; 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 1994, Florida CCBC was
named as a PRP at the Petroleum Products Corporation site in Pembroke Park,
Florida, the former location of a used oil recycling facility. Total cleanup for
the site has been estimated at up to $100 million. Florida CCBC conducted an
internal investigation of this matter and determined that some of its waste oil
may have been taken to the site. However, neither the specific volume of waste
oil that may have been generated by Florida CCBC, nor its percentage of the
whole relative to other PRPs, has yet been determined. Accordingly, Florida CCBC
cannot yet estimate the amount of its ultimate liability. In September 1996, the
Company's Cincinnati, Ohio facility received a notice stating that 113
violations of the pH limits of the facility's wastewater discharge had been
detected between November 1984 and April 1996, and that the unpermitted
discharges had caused structural damage to the municipal wastewater collection
system. Accordingly, it is proposed that the Company pay a permit violation
penalty in the amount of $16,900, reimburse certain investigative costs of
$19,370, and pay the estimated sewer replacement cost of $369,000. The Company
is currently negotiating for a reduction in these costs. The Company or its
bottling subsidiaries have been named as PRPs at seventeen other federal and
seven other 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.
In August 1995, the European Commission (the "Commission") charged that
certain marketing rebates associated with the fountain business of the Company's
French bottler, Coca-Cola Beverages, S.A. ("CCBSA"), constituted an abuse of a
dominant position in a "cola market" in France in violation of Article 86 of the
Treaty of Rome. The case arose from an investigation commenced in 1993 at the
behest of a competitor of CCBSA. In July 1996 CCBSA responded, denying that
there was a "cola market" or that it was dominant or that the practices
complained of were abusive. If the Commission maintains its initial conclusions,
certain marketing practices may have to be amended
15
<PAGE> 18
and there is the possibility that penalties could be imposed. The proceedings
are being defended by The Coca-Cola Company, which is obligated to indemnify
CCBSA and the Company for defense costs, fines and penalties.
In November 1996, a complaint was filed with the Commission against the
Company's bottler in Great Britain, Coca-Cola & Schweppes Beverages Limited
("CCSB"), alleging that certain practices of CCSB constituted an abuse of its
dominant position in a "carbonated soft drink market" in Great Britain, in
violation of Article 86 of the Treaty of Rome. The complaint, which was filed by
a competitor, complained specifically of CCSB's program of annual rebates based
on increased sales, alleged exclusive arrangements for vending and dispensing
equipment, and pricing policies. CCSB has not yet responded.
On January 22, 1997, the Commission cleared the Company's acquisition of
the parent of CCSB, Amalgamated Beverages Great Britain Limited ("ABGB"), which
was a joint venture owned 51% by Cadbury Schweppes plc and 49% by The Coca-Cola
Company. The Commission concluded that although The Coca-Cola Company could
exercise decisive influence over the Company and that ABGB was dominant in a
"cola market" in Great Britain, under the Merger Regulation the acquisition had
to be cleared because it would not strengthen that dominant position. As a
consequence of the decision certain commercial practices are likely to be
affected by restrictions generally imposed on companies found to be in a
dominant market position. In addition, the Company agreed to an undertaking that
restricts specific commercial practices with certain of CCSB's customers in
Great Britain. It has not yet been decided whether to appeal the Commission's
conclusions, which the Company believes are not supported by either the facts or
the law.
On January 27, 1997, the French Competition Council (the "Council")
concluded its investigation of CCBSA by finding that certain practices of CCBSA
constituted an abuse of a dominant position in what is defined as the French
cola market. CCBSA was fined 10 million French francs. On February 27, 1997,
CCBSA filed an appeal of the Council's findings, which it feels are not
supported by the facts or the law. In addition to the fine, CCBSA may have to
modify certain of its practices regarding the provision of post-mix machines to
certain customers, and other commercial practices are likely to be affected by
restrictions generally imposed upon companies found to be in a dominant market
position. The proceedings are being defended by The Coca-Cola Company, which is
obligated to indemnify CCBSA and the Company for defense costs, fines and
penalties.
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. 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.
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<PAGE> 19
ITEM 4(A). EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is information as of March 1, 1997 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............ 64 Mr. Johnston has been Vice Chairman of the Board and
Chief Executive Officer of the Company since
December 1991.
Henry A. Schimberg..................... 63 Mr. Schimberg has been President, Chief Operating
Officer, and a director of the Company since
December 1991.
John R. Alm............................ 51 Mr. Alm has been Senior Vice President and Chief
Financial Officer of the Company since December
1991.
Margaret F. Carton..................... 39 Ms. Carton has been Vice President, Investor
Relations and Planning since October 1996. She
served as Director, Investor Relations from 1990 to
October 1996.
John H. Downs, Jr...................... 40 Mr. Downs has been Vice President, Public Affairs of
the Company since 1989.
Norman P. Findley III.................. 52 Mr. Findley has been Senior Vice President of the
Company since December 1995 and European Group
President since July 1996. He was Vice President,
Domestic and International Marketing from July 1993
to December 1995. From 1989 to July 1993 he served
as Vice President, Marketing of the Company.
Summerfield K. Johnston III............ 43 Mr. Johnston has been Senior Vice President of the
Company since December 1995 and Eastern United
States Group President since July 1996. He was Vice
President, Regional Operations from July 1993 to De-
cember 1995. He was Vice President and General Man-
ager, West Central Region from December 1992 to July
1993. He served as Vice President, Human Resources
of the Company from February 1992 to December 1992.
Jarratt H. Jones....................... 43 Mr. Jones has been Vice President, Human Resources
of the Company since October 1993. He was a General
Manager for International Business Machines Corpora-
tion from 1991 to 1993.
Lowry F. Kline......................... 56 Mr. Kline has been Senior Vice President of the Com-
pany since February 1996 and General Counsel of the
Company since December 1991. He was a partner in the
law firm of Miller & Martin, Chattanooga, Tennessee,
from 1970 until 1996.
Vicki G. Roman......................... 43 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.
</TABLE>
17
<PAGE> 20
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AGE THE PAST FIVE YEARS
- ---- --- ---------------------------
<S> <C> <C>
Philip H. Sanford...................... 43 Mr. Sanford has been Senior Vice President, Finance
and Administration of the Company since December
1995. He was Vice President, Finance and Administra-
tion from February 1993 to December 1995, and was
Vice President and Executive Assistant to the Chief
Executive Officer from February 1992 to February
1993.
Gary P. Schroeder...................... 51 Mr. Schroeder has been Senior Vice President of the
Company and Western United States Group President
since July 1996. He was Vice President, Regional
Operations of the Company from December 1994 to July
1996. He was Regional Vice President, General
Manager of the Southwest Region from January 1992 to
December 1994.
G. David Van Houten, Jr................ 47 Mr. Van Houten has been Senior Vice President of the
Company since December 1995 and Central United
States Group President since July 1996. He was Vice
President, Regional Operations of the Company from
July 1993 to December 1995 and he was Regional Vice
President and General Manager, Texas Region from
1992 to 1993.
O. Michael Whigham..................... 46 Mr. Whigham has been Vice President, Controller and
Principal Accounting Officer of the Company since
October 1996. He was Region Vice President of
Finance for the Atlanta Region of the Company from
1992 to 1996 and served as Director of Internal
Audit from 1987 to 1992.
</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.
18
<PAGE> 21
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
LISTED AND TRADED: New York Stock Exchange
TRADED: Boston, Cincinnati, Chicago,
Pacific, and Philadelphia Exchanges
Share owners of common stock of record as of February 26, 1997: 9,534
STOCK PRICES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
1996 HIGH LOW
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Fourth Quarter 49 1/8 42 1/8
Third Quarter 46 1/4 34
Second Quarter 35 5/8 27 5/8
First Quarter 31 5/8 24
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
1995 HIGH LOW
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Fourth Quarter 29 7/8 24 1/8
Third Quarter 25 1/2 20 5/8
Second Quarter 23 1/4 20 1/8
First Quarter 21 3/4 17 3/4
- ----------------------------------------------------------------------------------------
</TABLE>
DIVIDENDS
Quarterly dividends in the amount of $0.0125 per share were paid during
fiscal year 1995. In February 1996, the Company's Board of Directors increased
the quarterly dividend to $0.025 per share, effective for the quarterly
dividends payable April 1, 1996 and subsequently.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" for the years 1987 through 1996, on pages 46 and
47 of the Company's Annual Report to Share Owners for the year ended December
31, 1996 is incorporated in this report by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
"Management's Financial Review" on pages 18 through 28 of the Company's
Annual Report to Share Owners for the year ended December 31, 1996 is
incorporated in this report by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Registrant and its
subsidiaries are incorporated in this report by reference to the Company's
Annual Report to Share Owners for the year ended December 31, 1996, at the pages
indicated:
Consolidated Statements of Income -- Years ended December 31, 1996,
1995 and 1994 (page 21)
Consolidated Statements of Cash Flows -- Years ended December 31,
1996, 1995 and 1994 (page 23)
Consolidated Balance Sheets -- December 31, 1996 and 1995 (page 25)
19
<PAGE> 22
Consolidated Statements of Share-Owners' Equity -- Years ended
December 31, 1996, 1995 and 1994 (page 26)
Notes to Consolidated Financial Statements (pages 29-43)
Report of Independent Auditors (page 45)
"Quarterly Financial Information," on page 43 of the Company's Annual
Report to Share Owners is incorporated in this report 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
caption "Election of Directors -- Information Concerning Directors" on pages 4
through 7 of the Company's 1997 Proxy Statement. Such information is
incorporated in this report by reference. 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 relating to 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 -- Section 16(a) Beneficial Ownership Reporting
Compliance" on page 11 of the Company's 1997 Proxy Statement. Such information
is incorporated in this report by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to Director compensation is set forth under the
caption "Election of Directors -- Compensation of Directors" and "Executive
Compensation" on page 8 of the Company's 1997 Proxy Statement, and information
relating to executive compensation is set forth under the caption "Executive
Compensation" on pages 12 through 20 of the Company's 1997 Proxy Statement. Such
information is incorporated in this report by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information relating to 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 page
3 and pages 9 through 11, respectively, of the Company's 1997 Proxy Statement.
Such information is incorporated in this report by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information relating to certain transactions between the Company, The
Coca-Cola Company and their affiliates and certain other persons is set forth
under the caption "Certain Relationships and Related Transactions" on pages 21
through 24 of the 1997 Proxy Statement. Such information is incorporated in this
report by reference.
20
<PAGE> 23
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, 1996, are incorporated by
reference in Part II, Item 8 of this report:
Consolidated Statements of Income -- Years ended December 31, 1996,
1995 and 1994.
Consolidated Statements of Cash Flows -- Years ended December 31,
1996, 1995 and 1994.
Consolidated Balance Sheets -- December 31, 1996 and 1995.
Consolidated Statements of Share-Owners' Equity -- Years ended
December 31, 1996, 1995 and 1994.
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, 1996, 1995
and 1994..................................... 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.
21
<PAGE> 24
(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>
2.1 -- Stock Purchase Agreement by and among Exhibit 2 to the Company's Current Report on
The Coca-Cola Export Corporation and Form 8-K (Date of Report: July 26, 1996).
Varoise de Concentres, S.A., Barlan
Inc., Beverage Products Limited,
Bottling Holdings (International) Inc.,
The Coca-Cola Company, and Coca-Cola
Enterprises, dated as of July 26, 1996.
2.2 -- Agreement between Cadbury Schweppes Exhibits 2.1, 2.2, 2.3 and 2.4 to the
Public Limited Company, Coca-Cola Company's Current Report on Form 8-K (Date of
Holdings (United Kingdom) Limited, The Report: February 10, 1997).
Coca-Cola Company, Bottling Holdings
(Great Britain) Limited, and Coca-Cola
Enterprises, dated August 9, 1996, as
amended by amendments dated November
29, 1996, December 16, 1996 and January
29, 1997.
3.2 -- Bylaws of Coca-Cola Enterprises, as Exhibit 3.2 to the Company's Annual Report on
amended through February 20, 1996. Form 10-K for the fiscal year ended December
31, 1995.
4.1 -- Indenture dated as of July 30, 1991, Exhibit 4.1 to the Company's Current Report
together with the First Supplemental on Form 8-K (Date of Report: July 30, 1991);
Indenture thereto dated January 29, Exhibit 4.01 to the Company's Current Report
1992, between Coca-Cola Enterprises and on Form 8-K (Date of Report: January 29,
The Chase Manhattan Bank, formerly 1992); Exhibit 4.02 to the Company's Current
known as Chemical Bank (successor by Report on Form 8-K (Date of Report: January
merger to Manufacturers Hanover Trust 29, 1992); Exhibit 4.01 to the Company's
Company), as Trustee, with regard to Current Report on Form 8-K (Date of Report:
certain unsecured and unfunded debt September 8, 1992); Exhibits 4.01 and 4.02 to
securities of Coca-Cola Enterprises, the Company's Current Report on Form 8-K
and forms of notes and debentures (Date of Report: November 12, 1992); Exhibit
issued thereunder. 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); Exhibit 4.01 to the Company's Current
Report on Form 8-K (Date of Report: September
25, 1996): Exhibit 4.01 to the Company's
Current Report on Form 8-K (Date of Report:
October 3, 1996); Exhibit 4.01 to the
Company's Current Report on Form 8-K (Date of
Report: November 19, 1996).
</TABLE>
22
<PAGE> 25
<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>
4.2 -- Medium-Term Notes Issuing and Paying Exhibit 4.2 to the Company's Annual Report on
Agent Agreement dated as of October 24, Form 10-K for the fiscal year ended December
1994, between Coca-Cola Enterprises and 31, 1994.
The Chase Manhattan Bank, formerly
known as 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 Report
between Coca-Cola Enterprises and on Form 8-K (Date of Report: December 12,
Bankers Trust Company, as Trustee, with 1989); Exhibit 4.4(a) to the Company's Annual
regard to certain unsecured and Report on Form 10-K for the fiscal year ended
unsubordinated debt securities of December 29, 1989; Exhibit 4.4(b) to the
Coca-Cola Enterprises, and forms of Company's Annual Report on Form 10-K for the
Fixed Rate Medium Term Note and fiscal year ended December 29, 1989.
Floating Rate Medium Term Note, each
issuable commencing December 18, 1989
pursuant to the above-referenced
Indenture.
4.4 -- Five Year Credit Agreement dated as of Filed herewith.
November 4, 1996 among Coca-Cola
Enterprises; Bottling Holdings (Great
Britain) Limited; Citibank
International PLC; Citibank, N.A., ABN
AMRO Bank N.V., Atlanta Agency; Bank of
America NT&SA; Bank Brussels Lambert,
New York Branch; CIBC Inc.; Commerzbank
AG; The Dai-Ichi Kangyo Bank, Ltd.,
Atlanta Agency; Deutsche Bank A.G., New
York and/or Cayman Islands Branches;
The First National Bank of Chicago;
Kredietbank N.V., Grand Cayman Branch;
Midland Bank PLC; Nationsbank, N.A.;
The Northern Trust Company; Societe
Generale; SunTrust Bank, Atlanta; Swiss
Bank Corporation, New York Branch;
Texas Commerce Bank, National
Association; Union Bank of Switzerland,
New York Branch; Wachovia Bank of
Georgia, N.A.
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.
</TABLE>
23
<PAGE> 26
<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>
10.1 -- 1986 Stock Option Plan of Coca-Cola Exhibit 10.1 to the Company's Annual Report
Enterprises, as amended through on Form 10-K for the fiscal year ended
February 12, 1991.* December 31, 1991.
10.2 -- Form of Stock Option Agreement between Exhibit 10.5 to the Company's Registration
Coca-Cola Enterprises and certain of Statement on Form S-1, No. 33-9447.
its officers.*
10.3 -- Coca-Cola Enterprises 1991 Stock Option Exhibit 10.11 to the Company's Annual Report
Plan, as amended and restated through on Form 10-K for the fiscal year ended
February 18, 1992.* December 31, 1992.
10.4 -- Coca-Cola Enterprises 1994 Stock Option Exhibit 4.3 to the Company's Registration
Plan.* Statement on Form S-8, No. 33-53221.
10.5 -- Coca-Cola Enterprises 1995 Stock Option Exhibit 4.3 to the Company's Registration
Plan.* Statement on Form S-8, No. 33-58699.
10.6 -- Coca-Cola Enterprises 1992 Restricted Exhibit 4.3 to the Company's Registration
Stock Award Plan (as amended and Statement on Form S-8, No. 33-53219.
restated effective February 7, 1994).*
10.7 -- Coca-Cola Enterprises 1995 Restricted Exhibit 4.3 to the Company's Registration
Stock Award Plan.* Statement on Form S-8, No. 33-58695.
10.8 -- Coca-Cola Enterprises Restricted Stock Exhibit 10.8 to the Company's Annual Report
Award Tax Withholding Agreement.* on Form 10-K for the fiscal year ended
December 31, 1995.
10.9 -- 1995 Phantom Stock Award Plan.* Exhibit 10.9 to the Company's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1995.
10.10 -- Coca-Cola Enterprises 1995 Restricted Filed herewith.
Stock Award Plan (As Amended and
Restated effective January 2, 1996).*
10.11 -- Coca-Cola Enterprises 1995 Stock Option Filed herewith.
Plan (As Amended and Restated effective
January 2, 1996).*
10.12 -- Long-Term Incentive Plan (As Amended Filed herewith.
and Restated effective January 1,
1996)*.
10.13 -- 1993 Long-Term Incentive Plan of Exhibit 10.6 to the Company's Annual Report
Coca-Cola Enterprises, as amended.* on Form 10-K for the fiscal year ended
December 31, 1994.
10.14 -- Coca-Cola Enterprises 1994-1996 Long- Exhibit 10.7 to the Company's Annual Report
Term Incentive Plan.* on Form 10-K for the fiscal year ended
December 31, 1994.
10.15 -- Coca-Cola Enterprises Inc. Long-Term Exhibit 10.12 to the Company's Annual Report
Incentive Plan (Effective January 1, on Form 10-K for the fiscal year ended
1995).* December 31, 1995.
</TABLE>
24
<PAGE> 27
<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>
10.16 -- Coca-Cola Enterprises Executive Pension Filed herewith.
Plan, effective January 1, 1996.*
10.17 -- 1991 Amendment and Restatement of the Exhibit 10.9 to the Company's Annual Report
Coca-Cola Enterprises Supplemental on Form 10-K for the fiscal year ended
Retirement Plan, as amended effective December 31, 1994.
July 1, 1993.*
10.18 -- Form of Stock Option Agreements between Exhibit 10.36 to the Company's Registration
Coca-Cola Enterprises and certain of Statement on Form S-1, No. 33-9447.
its directors.*
10.19 -- Coca-Cola Enterprises 1988 Stock Exhibit 10.10 to the Company's Annual Report
Appreciation Rights Plan, as amended on Form 10-K for the fiscal year ended
through February 12, 1991.* December 31, 1991.
10.20 -- Amended and Restated Deferred Exhibit 10.16 to the Company's Annual Report
Compensation Agreement between Johnston on Form 10-K for the fiscal year ended
Coca-Cola Bottling Group and Henry A. December 31, 1993.
Schimberg dated December 16, 1991, as
amended.*
10.21 -- 1993 Amendment and Restatement of Exhibit 10.17 to the Company's Annual Report
Deferred Compensation Agreement between on Form 10-K for the fiscal year ended
Johnston Coca-Cola Bottling Group and December 31, 1993.
John R. Alm as of April 30, 1993.*
10.22 -- Retirement Plan for the Board of Exhibit 10.33 to the Company's Annual Report
Directors of Coca-Cola Enterprises, on Form 10-K for the fiscal year ended
effective April 11, 1991.* December 31, 1991.
10.23 -- Deferred Compensation Plan for Non- Exhibit 10.16 to the Company's Annual Report
Employee Director Compensation, as on Form 10-K for the fiscal year ended
amended and restated effective April 1, December 31, 1994.
1994.*
10.24 -- Tax Sharing Agreement dated November Exhibit 10.1 to the Company's Registration
12, 1986 between Coca-Cola Enterprises Statement on Form S-1, No. 33-9447.
and The Coca-Cola Company.
10.25 -- Registration Rights Agreement dated Exhibit 10.3 to the Company's Registration
November 12, 1986 between Coca-Cola Statement of Form S-1, No. 33-9447.
Enterprises and The Coca-Cola Company.
10.26 -- Registration Rights Agreement dated as Exhibit 10 to the Company's Current Report on
of December 17, 1991 among Coca-Cola Form 8-K (Date of Report: December 18, 1991).
Enterprises, The Coca-Cola Company and
the share owners of Johnston Coca-Cola
Bottling Group named therein.
10.27 -- 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 30, 1988.
</TABLE>
25
<PAGE> 28
<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>
10.28 -- Letter Agreement dated March 15, 1989 Exhibit 10.23 to the Company's Annual Report
between Coca-Cola Enterprises and The on Form 10-K for the fiscal year ended
Coca-Cola Company with respect to the December 31, 1991.
Bottle Contracts, as amended by letter
agreement dated December 18, 1991.
10.29 -- Form of Tolling Agreement between The Exhibit 10.41 to the Company's Annual Report
Coca-Cola Company and various Company on Form 10-K for the fiscal year ended
bottlers. January 2, 1987.
10.30 -- Sweetener Sales Agreement -- Bottler Exhibit 10.30 to the Company's Annual Report
between The Coca-Cola Company and on Form 10-K for the fiscal year ended
various Company bottlers. December 31, 1992.
10.31 -- Can Supply Agreement, dated November Exhibit 10.30 to the Company's Annual Report
30, 1995, between American National Can on Form 10-K for the fiscal year ended
Company and Coca-Cola Enterprises.** December 31, 1995.
10.32 -- Share Repurchase Agreement dated Exhibit 10.44 to the Company's Annual Report
January 1, 1991 between The Coca-Cola on Form 10-K for the fiscal year ended
Company and Coca-Cola Enterprises. December 28, 1990.
10.33 -- Form of International Bottler's Filed herewith.
Agreement.
10.34 -- Supplementary Agreement between Filed herewith.
Coca-Cola Enterprises, certain of its
international bottlers and The
Coca-Cola Company and The Coca-Cola
Export Corporation.
11 -- Statement re computation of per share Filed herewith.
earnings.
12 -- Statement re computation of ratios. Filed herewith.
13 -- 1996 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 or arrangements required to be
filed as an exhibit to this form pursuant to Item 14(c).
** The Company has requested confidential treatment with respect to portions of
this document.
26
<PAGE> 29
(B) REPORTS ON FORM 8-K.
During the fourth quarter of 1996, the Company filed the following current
reports on Form 8-K:
<TABLE>
<CAPTION>
DATE OF REPORT DESCRIPTION
-------------- -----------
<S> <C>
September 30, 1996................... Opinion of counsel with respect to Form S-3
registration statement.
October 2, 1996...................... Announcing increased expenses for stock-based plans.
October 3, 1996...................... Terms agreement, form of debentures and opinion of
counsel relating to 6.70% Debentures due 2036.
October 16, 1996..................... Reporting financial results for third quarter and
first nine months of 1996.
October 25, 1996..................... Opinion of counsel in connection with the offering of
medium-term notes.
November 6, 1996..................... Announcing termination of acquisition negotiations
with Nora Beverages Inc.
November 14, 1996.................... Pro forma financial information for the third
quarter, including Amalgamated Beverages Great
Britain Limited.
November 15, 1996.................... Opinion of counsel in connection with 6.95%
Debentures due 2026.
November 19, 1996.................... Terms agreement and form of debentures relating to
6.95% Debentures due 2026.
</TABLE>
(C) EXHIBITS
See Item 14(a)(3) above.
(D) FINANCIAL STATEMENT SCHEDULES
See Item 14(a)(2) above.
27
<PAGE> 30
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 7, 1997
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 7, 1997
- ----------------------------------------------------- Executive Officer and a
(S. K. Johnston, Jr.) Director (principal
executive officer)
/s/ JOHN R. ALM Senior Vice President and March 7, 1997
- ----------------------------------------------------- Chief Financial Officer
(John R. Alm) (principal financial
officer)
/s/ O. MICHAEL WHIGHAM Vice President and Controller March 7, 1997
- ----------------------------------------------------- (principal accounting
(O. Michael Whigham) officer)
* Chairman of the Board of March 7, 1997
- ----------------------------------------------------- Directors
(M. Douglas Ivester)
* President, Chief Operating March 7, 1997
- ----------------------------------------------------- Officer and a Director
(Henry A. Schimberg)
* Director March 7, 1997
- -----------------------------------------------------
(Howard G. Buffett)
* Director March 7, 1997
- -----------------------------------------------------
(John L. Clendenin)
* Director March 7, 1997
- -----------------------------------------------------
(Johnnetta B. Cole)
</TABLE>
28
<PAGE> 31
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director March 7, 1997
- -----------------------------------------------------
(T. Marshall Hahn, Jr.)
* Director March 7, 1997
- -----------------------------------------------------
(Claus M. Halle)
* Director March 7, 1997
- -----------------------------------------------------
(L. Phillip Humann)
* Director March 7, 1997
- -----------------------------------------------------
(E. Neville Isdell)
* Director March 7, 1997
- -----------------------------------------------------
(John E. Jacob)
* Director March 7, 1997
- -----------------------------------------------------
(Robert A. Keller)
* Director March 7, 1997
- -----------------------------------------------------
(Scott L. Probasco, Jr.)
* Director March 7, 1997
- -----------------------------------------------------
(Francis A. Tarkenton)
</TABLE>
*By: /s/ LOWRY F. KLINE
-------------------------------
Lowry F. Kline
Attorney-in-Fact
29
<PAGE> 32
INDEX TO FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors.............................. F-2
Schedule II -- Valuation and Qualifying Accounts for the
fiscal years ended December 31, 1996, 1995
and 1994..................................... F-3
</TABLE>
F-1
<PAGE> 33
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 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, 1996 and 1995, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1996, 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.
/s/ ERNST & YOUNG LLP
Atlanta, Georgia
January 21, 1997, except for the
1997 acquisition described in Note
2, as to which the date is February
10, 1997, and except for the
subsequent event described in Note
18, as to which the date is
February 18, 1997.
F-2
<PAGE> 34
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
COCA-COLA ENTERPRISES INC.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
- --------------------------------- --------- ------------------------------ ------------- ---------
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)
<S> <C> <C> <C> <C> <C>
FISCAL YEAR ENDED:
DECEMBER 31, 1996
Allowance for losses on
trade accounts............ $ 33 $14 $ 6(a) $ 8(b) $ 45
Valuation allowance for
deferred tax assets....... 120 9 34(c) 28(d) 135
DECEMBER 31, 1995
Allowance for losses on
trade accounts............ $ 34 $ 5 $ 3(a) $ 9(b) $ 33
Valuation allowance for
deferred tax assets....... 112 8 -- -- 120
DECEMBER 31, 1994
Allowance for losses on
trade accounts............ $ 33 $11 $-- $10(b) $ 34
Valuation allowance for
deferred tax assets....... 105 7 -- -- 112
</TABLE>
- ---------------
(a) Principally represents recoveries of amounts previously charged off and, at
December 31, 1996, allowances for losses on trade accounts of acquired
companies at date of acquisition.
(b) Charge off of uncollectible accounts.
(c) Valuation allowances for deferred tax assets of acquired companies at date
of acquisition.
(d) Write-off, reversal and expiration of certain components of the valuation
allowance for deferred tax assets.
F-3
<PAGE> 35
(RECYCLE LOGO)
<PAGE> 36
EXHIBIT INDEX
<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>
2.1 -- Stock Purchase Agreement by and among Exhibit 2 to the Company's Current Report on
The Coca-Cola Export Corporation and Form 8-K (Date of Report: July 26, 1996).
Varoise de Concentres, S.A., Barlan
Inc., Beverage Products Limited,
Bottling Holdings (International) Inc.,
The Coca-Cola Company, and Coca-Cola
Enterprises, dated as of July 26, 1996.
2.2 -- Agreement between Cadbury Schweppes Exhibits 2.1, 2.2, 2.3 and 2.4 to the
Public Limited Company, Coca-Cola Company's Current Report on Form 8-K (Date of
Holdings (United Kingdom) Limited, The Report: February 10, 1997).
Coca-Cola Company, Bottling Holdings
(Great Britain) Limited, and Coca-Cola
Enterprises, dated August 9, 1996, as
amended by amendments dated November
29, 1996, December 16, 1996 and January
29, 1997.
3.2 -- Bylaws of Coca-Cola Enterprises, as Exhibit 3.2 to the Company's Annual Report on
amended through February 20, 1996. Form 10-K for the fiscal year ended December
31, 1995.
</TABLE>
<PAGE> 37
<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 Report
together with the First Supplemental on Form 8-K (Date of Report: July 30, 1991);
Indenture thereto dated January 29, Exhibit 4.01 to the Company's Current Report
1992, between Coca-Cola Enterprises and on Form 8-K (Date of Report: January 29,
The Chase Manhattan Bank, formerly 1992); Exhibit 4.02 to the Company's Current
known as Chemical Bank (successor by Report on Form 8-K (Date of Report: January
merger to Manufacturers Hanover Trust 29, 1992); Exhibit 4.01 to the Company's
Company), as Trustee, with regard to Current Report on Form 8-K (Date of Report:
certain unsecured and unfunded debt September 8, 1992); Exhibits 4.01 and 4.02 to
securities of Coca-Cola Enterprises, the Company's Current Report on Form 8-K
and forms of notes and debentures (Date of Report: November 12, 1992); Exhibit
issued thereunder. 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); Exhibit 4.01 to the Company's Current
Report on Form 8-K (Date of Report: September
25, 1996): Exhibit 4.01 to the Company's
Current Report on Form 8-K (Date of Report:
October 3, 1996); Exhibit 4.01 to the
Company's Current Report on Form 8-K (Date of
Report: November 19, 1996).
4.2 -- Medium-Term Notes Issuing and Paying Exhibit 4.2 to the Company's Annual Report on
Agent Agreement dated as of October 24, Form 10-K for the fiscal year ended December
1994, between Coca-Cola Enterprises and 31, 1994.
The Chase Manhattan Bank, formerly
known as 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 Report
between Coca-Cola Enterprises and on Form 8-K (Date of Report: December 12,
Bankers Trust Company, as Trustee, with 1989); Exhibit 4.4(a) to the Company's Annual
regard to certain unsecured and Report on Form 10-K for the fiscal year ended
unsubordinated debt securities of December 29, 1989; Exhibit 4.4(b) to the
Coca-Cola Enterprises, and forms of Company's Annual Report on Form 10-K for the
Fixed Rate Medium Term Note and fiscal year ended December 29, 1989.
Floating Rate Medium Term Note, each
issuable commencing December 18, 1989
pursuant to the above-referenced
Indenture.
</TABLE>
<PAGE> 38
<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 -- Five Year Credit Agreement dated as of
November 4, 1996 among Coca-Cola
Enterprises; Bottling Holdings (Great
Britain) Limited; Citibank
International PLC; Citibank, N.A., ABN
AMRO Bank N.V., Atlanta Agency; Bank of
America NT&SA; Bank Brussels Lambert,
New York Branch; CIBC Inc.; Commerzbank
AG; The Dai-Ichi Kangyo Bank, Ltd.,
Atlanta Agency; Deutsche Bank A.G., New
York and/or Cayman Islands Branches;
The First National Bank of Chicago;
Kredietbank N.V., Grand Cayman Branch;
Midland Bank PLC; Nationsbank, N.A.;
The Northern Trust Company; Societe
Generale; SunTrust Bank, Atlanta; Swiss
Bank Corporation, New York Branch;
Texas Commerce Bank, National
Association; Union Bank of Switzerland,
New York Branch; Wachovia Bank of
Georgia, N.A.
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 Report
Enterprises, as amended through on Form 10-K for the fiscal year ended
February 12, 1991.* December 31, 1991.
10.2 -- Form of Stock Option Agreement between Exhibit 10.5 to the Company's Registration
Coca-Cola Enterprises and certain of Statement on Form S-1, No. 33-9447.
its officers.*
10.3 -- Coca-Cola Enterprises 1991 Stock Option Exhibit 10.11 to the Company's Annual Report
Plan, as amended and restated through on Form 10-K for the fiscal year ended
February 18, 1992.* December 31, 1992.
10.4 -- Coca-Cola Enterprises 1994 Stock Option Exhibit 4.3 to the Company's Registration
Plan.* Statement on Form S-8, No. 33-53221.
10.5 -- Coca-Cola Enterprises 1995 Stock Option Exhibit 4.3 to the Company's Registration
Plan.* Statement on Form S-8, No. 33-58699.
10.6 -- Coca-Cola Enterprises 1992 Restricted Exhibit 4.3 to the Company's Registration
Stock Award Plan (as amended and Statement on Form S-8, No. 33-53219.
restated effective February 7, 1994).*
</TABLE>
<PAGE> 39
<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>
10.7 -- Coca-Cola Enterprises 1995 Restricted Exhibit 4.3 to the Company's Registration
Stock Award Plan.* Statement on Form S-8, No. 33-58695.
10.8 -- Coca-Cola Enterprises Restricted Stock Exhibit 10.8 to the Company's Annual Report
Award Tax Withholding Agreement.* on Form 10-K for the fiscal year ended
December 31, 1995.
10.9 -- 1995 Phantom Stock Award Plan.* Exhibit 10.9 to the Company's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1995.
10.10 -- Coca-Cola Enterprises 1995 Restricted
Stock Award Plan (As Amended and
Restated effective January 2, 1996).*
10.11 -- Coca-Cola Enterprises 1995 Stock Option
Plan (As Amended and Restated effective
January 2, 1996).*
10.12 -- Long-Term Incentive Plan (As Amended
and Restated effective January 1,
1996)*.
10.13 -- 1993 Long-Term Incentive Plan of Exhibit 10.6 to the Company's Annual Report
Coca-Cola Enterprises, as amended.* on Form 10-K for the fiscal year ended
December 31, 1994.
10.14 -- Coca-Cola Enterprises 1994-1996 Long- Exhibit 10.7 to the Company's Annual Report
Term Incentive Plan.* on Form 10-K for the fiscal year ended
December 31, 1994.
10.15 -- Coca-Cola Enterprises Inc. Long-Term Exhibit 10.12 to the Company's Annual Report
Incentive Plan (Effective January 1, on Form 10-K for the fiscal year ended
1995).* December 31, 1995.
10.16 -- Coca-Cola Enterprises Executive Pension
Plan, effective January 1, 1996.*
10.17 -- 1991 Amendment and Restatement of the Exhibit 10.9 to the Company's Annual Report
Coca-Cola Enterprises Supplemental on Form 10-K for the fiscal year ended
Retirement Plan, as amended effective December 31, 1994.
July 1, 1993.*
10.18 -- Form of Stock Option Agreements between Exhibit 10.36 to the Company's Registration
Coca-Cola Enterprises and certain of Statement on Form S-1, No. 33-9447.
its directors.*
10.19 -- Coca-Cola Enterprises 1988 Stock Exhibit 10.10 to the Company's Annual Report
Appreciation Rights Plan, as amended on Form 10-K for the fiscal year ended
through February 12, 1991.* December 31, 1991.
10.20 -- Amended and Restated Deferred Exhibit 10.16 to the Company's Annual Report
Compensation Agreement between Johnston on Form 10-K for the fiscal year ended
Coca-Cola Bottling Group and Henry A. December 31, 1993.
Schimberg dated December 16, 1991, as
amended.*
</TABLE>
<PAGE> 40
<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 -- 1993 Amendment and Restatement of Exhibit 10.17 to the Company's Annual Report
Deferred Compensation Agreement between on Form 10-K for the fiscal year ended
Johnston Coca-Cola Bottling Group and December 31, 1993.
John R. Alm as of April 30, 1993.*
10.22 -- Retirement Plan for the Board of Exhibit 10.33 to the Company's Annual Report
Directors of Coca-Cola Enterprises, on Form 10-K for the fiscal year ended
effective April 11, 1991.* December 31, 1991.
10.23 -- Deferred Compensation Plan for Non- Exhibit 10.16 to the Company's Annual Report
Employee Director Compensation, as on Form 10-K for the fiscal year ended
amended and restated effective April 1, December 31, 1994.
1994.*
10.24 -- Tax Sharing Agreement dated November Exhibit 10.1 to the Company's Registration
12, 1986 between Coca-Cola Enterprises Statement on Form S-1, No. 33-9447.
and The Coca-Cola Company.
10.25 -- Registration Rights Agreement dated Exhibit 10.3 to the Company's Registration
November 12, 1986 between Coca-Cola Statement of Form S-1, No. 33-9447.
Enterprises and The Coca-Cola Company.
10.26 -- Registration Rights Agreement dated as Exhibit 10 to the Company's Current Report on
of December 17, 1991 among Coca-Cola Form 8-K (Date of Report: December 18, 1991).
Enterprises, The Coca-Cola Company and
the share owners of Johnston Coca-Cola
Bottling Group named therein.
10.27 -- 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 30, 1988.
10.28 -- Letter Agreement dated March 15, 1989 Exhibit 10.23 to the Company's Annual Report
between Coca-Cola Enterprises and The on Form 10-K for the fiscal year ended
Coca-Cola Company with respect to the December 31, 1991.
Bottle Contracts, as amended by letter
agreement dated December 18, 1991.
10.29 -- Form of Tolling Agreement between The Exhibit 10.41 to the Company's Annual Report
Coca-Cola Company and various Company on Form 10-K for the fiscal year ended
bottlers. January 2, 1987.
10.30 -- Sweetener Sales Agreement -- Bottler Exhibit 10.30 to the Company's Annual Report
between The Coca-Cola Company and on Form 10-K for the fiscal year ended
various Company bottlers. December 31, 1992.
10.31 -- Can Supply Agreement, dated November Exhibit 10.30 to the Company's Annual Report
30, 1995, between American National Can on Form 10-K for the fiscal year ended
Company and Coca-Cola Enterprises.** December 31, 1995.
10.32 -- Share Repurchase Agreement dated Exhibit 10.44 to the Company's Annual Report
January 1, 1991 between The Coca-Cola on Form 10-K for the fiscal year ended
Company and Coca-Cola Enterprises. December 28, 1990.
</TABLE>
<PAGE> 41
<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>
10.33 -- Form of International Bottler's
Agreement.
10.34 -- Supplementary Agreement between
Coca-Cola Enterprises, certain of its
international bottlers and The
Coca-Cola Company and The Coca-Cola
Export Corporation.
11 -- Statement re computation of per share
earnings.
12 -- Statement re computation of ratios.
13 -- 1996 Annual Report to Share Owners
(Pages 18-43, 45-47).
21 -- Subsidiaries of the Registrant.
23 -- Consent of Independent Auditors.
24 -- Powers of Attorney.
27 -- Financial Data Schedule.
</TABLE>
- ---------------
* Management contracts and compensatory plans or arrangements required to be
filed as an exhibit to this form pursuant to Item 14(c).
** The Company has requested confidential treatment with respect to portions of
this document.
<PAGE> 1
EXHIBIT 4.4
U.S. $1,500,000,000
FIVE YEAR CREDIT AGREEMENT
Dated as of November 4, 1996
Among
COCA-COLA ENTERPRISES INC.
BOTTLING HOLDINGS (GREAT BRITAIN) LTD.
as Initial Borrowers,
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
and
CITIBANK INTERNATIONAL plc
as Agent
and
BANK OF AMERICA NT&SA
DEUTSCHE BANK AG, NEW YORK BRANCH
NATIONSBANK, N.A.
UNION BANK OF SWITZERLAND
as Co-Agents
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms ...................................... 1
SECTION 1.02. Computation of Time Periods ................................ 14
SECTION 1.03. Accounting Terms and Determinations ........................ 14
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. The Syndicated Loans ...................................... 15
SECTION 2.02. Making the Syndicated Loans ................................ 15
SECTION 2.03. The Competitive Bid Loans .................................. 17
SECTION 2.04. Fees ...................................................... 22
SECTION 2.05. Termination or Reduction of the Commitments ................ 23
SECTION 2.06. Repayment of Syndicated Loans .............................. 24
SECTION 2.07. Interest on Syndicated Loans .............................. 24
SECTION 2.08. Interest Rate Determination ................................ 24
SECTION 2.09. Prepayments of Syndicated Loans ............................ 27
SECTION 2.10. Increased Costs ............................................ 28
SECTION 2.11. Illegality ................................................ 29
SECTION 2.12. Payments and Computations .................................. 29
SECTION 2.13. Taxes ...................................................... 31
SECTION 2.14. Regulation D Compensation .................................. 34
SECTION 2.15. Use of Proceeds ............................................ 35
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of
Sections 2.01 and 2.03 .................................... 35
SECTION 3.02. Initial Loan to Each Designated Subsidiary ................ 37
SECTION 3.03. Conditions Precedent to Each Syndicated
Borrowing .................................................. 38
SECTION 3.04. Conditions Precedent to Each Competitive Bid
Borrowing .................................................. 38
SECTION 3.05. Determinations Under Section 3.01 .......................... 39
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrowers .................................................. 40
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. Affirmative Covenants ...................................... 42
SECTION 5.02. Negative Covenants ........................................ 45
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default .......................................... 48
ARTICLE VII
GUARANTEE
SECTION 7.01. Unconditional Guarantee .................................... 51
SECTION 7.02. Guarantee Absolute ........................................ 52
SECTION 7.03. Waivers .................................................... 53
SECTION 7.04. Subrogation ................................................ 53
SECTION 7.05. Survival .................................................. 54
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action .................................. 54
SECTION 8.02. Agent's Reliance, Etc. .................................... 55
SECTION 8.03. Citibank International and Affiliates ...................... 56
SECTION 8.04. Lender Credit Decision .................................... 56
SECTION 8.05. Indemnification ............................................ 56
SECTION 8.06. Successor Agent ............................................ 57
SECTION 8.07. Co-Agents .................................................. 57
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. .......................................... 57
SECTION 9.02. Notices, Etc................................................ 58
SECTION 9.03. No Waiver; Remedies ........................................ 59
SECTION 9.04. Costs and Expenses ........................................ 59
SECTION 9.05. Right of Set-off; Sharing of Payments ...................... 61
SECTION 9.06. Binding Effect ............................................ 62
SECTION 9.07. Assignments and Participations ............................ 62
SECTION 9.08. Designated Subsidiaries .................................... 65
SECTION 9.09. Commitment Extension ...................................... 66
SECTION 9.10. Confidentiality ............................................ 66
SECTION 9.11. Governing Law .............................................. 67
SECTION 9.12. Execution in Counterparts .................................. 67
SECTION 9.13. Judgment .................................................. 67
SECTION 9.14. Jurisdiction, Etc. ........................................ 67
</TABLE>
<PAGE> 4
FIVE YEAR CREDIT AGREEMENT
Dated as of November 4, 1996
COCA-COLA ENTERPRISES INC., a Delaware corporation (the
"Company") Bottling Holdings (Great Britain) Ltd., a corporation organized under
the laws of England ("UK Holdings" and, together with the Company, the "Initial
Borrowers"), the banks, financial institutions and other institutional lenders
(the "Initial Lenders") listed on the signature pages hereof, CITIBANK
INTERNATIONAL PLC ("Citibank International"), as agent (the "Agent") for the
Lenders (as hereinafter defined) and BANK OF AMERICA NT&SA, DEUTSCHE BANK AG,
NEW YORK BRANCH, NATIONSBANK, N.A. and UNION BANK OF SWITZERLAND, as co-agents
(the "Co-Agents") for the Lenders, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Stock, by contract or
otherwise.
"Agent's Account" means (a) in the case of Base Rate Loans,
the account of the US Sub-Agent maintained by the US Sub-Agent at
Citibank at its office at 399 Park Avenue, New York, New York 10043,
Account No. 36852248, Attention: Mr. Matthew Carter, (b) in the case of
Loans denominated in Dollars other than Base Rate Advances, the account
of the Agent maintained by the Agent at Citibank at its office at 399
Park Avenue, New York, New York 10043, Favor - Citibank International
plc, London, Account No. 10963054, Attention: Loans Agency Department,
(c) in the case of Loans denominated in Eurocurrencies other than
Dollars, the account of the Agent designated in writing from time to
time by the Agent to the Company and the Lenders for such purpose and
(d) in any such case, such other account of the Agent as is designated
in writing from time to time by the Agent to the Company and the
Lenders for such purpose.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
<PAGE> 5
Base Rate Loan and such Lender's Eurocurrency Lending Office in the
case of a Eurocurrency Rate Loan and, in the case of a Competitive Bid
Loan, the office of such Lender notified by such Lender to the Agent as
its Applicable Lending Office with respect to such Competitive Bid
Loan.
"Applicable Margin" means, as of any date, a percentage per
annum determined by reference to the Level in effect on such date as
set forth below:
<TABLE>
<CAPTION>
----------------------------
Level Applicable Margin
------- ------------------
<S> <C>
Level 1 0.090%
Level 2 0.090%
Level 3 0.100%
Level 4 0.125%
Level 5 0.250%
----------------------------
</TABLE>
"Applicable Percentage" means, as of any date, a percentage
per annum determined by reference to the Level in effect on such date
as set forth below:
<TABLE>
<CAPTION>
---------------------------------
Level Applicable Percentage
------- ----------------------
<S> <C>
Level 1 0.050%
Level 2 0.060%
Level 3 0.100%
Level 4 0.125%
Level 5 0.150%
---------------------------------
</TABLE>
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Agent, in substantially the form of Exhibit C hereto.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate;
(b) the sum (adjusted to the nearest 1/16 of 1% or,
if there is no nearest 1/16 of 1%, to the next higher 1/16 of
1%) of (i) 1/2 of 1% per annum, plus (ii) the rate obtained by
dividing (A) the latest three-week moving average of secondary
market morning offering rates in the United States for
three-month certificates of deposit of major United States
money market banks, such three-week moving average (adjusted
to the basis of a year of 360 days) being determined weekly on
each Monday (or, if such day is not a Business Day, on the
next
2
<PAGE> 6
succeeding Business Day) for the three-week period ending on
the previous Friday by Citibank on the basis of such rates
reported by certificate of deposit dealers to and published by
the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations
for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected
by Citibank, by (B) a percentage equal to 100% minus the
average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement)
for Citibank with respect to liabilities consisting of or
including (among other liabilities) three-month Dollar
non-personal time deposits in the United States, plus (iii)
the average during such three-week period of the annual
assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the
Federal Deposit Insurance Corporation (or any successor) for
insuring Dollar deposits of Citibank in the United States; and
(c) 1/2 of one percent per annum above the Federal
Funds Rate.
"Base Rate Loan" means a Syndicated Loan denominated in
Dollars that bears interest as provided in Section 2.07(a)(i).
"Beverages France" means Coca-Cola Beverages, S.A., a
corporation organized under the laws of the Republic of France.
"Beverages Netherlands" means Coca-Cola Beverages Nederland
B.V., a corporation organized under the laws of the Kingdom of The
Netherlands.
"Borrowers" means, collectively, each Initial Borrower and
each Designated Subsidiary that shall become a party to this Agreement
pursuant to Section 9.08.
"Borrowing" means a Syndicated Borrowing or a Competitive Bid
Borrowing.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurocurrency Rate Loan or LIBO
Rate Loan, on which dealings are carried on in the London interbank
market and banks are
3
<PAGE> 7
open for business in London and in the country of issue of the currency
of such Eurocurrency Rate Loan or LIBO Rate Loan.
"Citibank" means Citibank, N.A., a national banking
association organized under the laws of the United States.
"Commitment" means as to any Lender the Dollar amount set
forth opposite its name on the signature pages hereof or, if such
Lender has entered into any Assignment and Acceptance, set forth for
such Lender in the Register maintained by the Agent pursuant to Section
9.07(d), as such amount may be reduced pursuant to Section 2.05.
"Competitive Bid Borrowing" means a borrowing consisting of
simultaneous Competitive Bid Loans from each of the Lenders whose offer
to make one or more Competitive Bid Loans as part of such borrowing has
been accepted under the competitive bidding procedure described in
Section 2.03.
"Competitive Bid Loan" means an advance by a Lender to any
Borrower as part of a Competitive Bid Borrowing resulting from the
competitive bidding procedure described in Section 2.03 and refers to a
Fixed Rate Loan or a LIBO Rate Loan (each of which shall be a "Type" of
Competitive Bid Loan).
"Competitive Bid Note" means a promissory note of any Borrower
payable to the order of any Lender, in substantially the form of
Exhibit A-2 hereto, evidencing the indebtedness of such Borrower to
such Lender resulting from a Competitive Bid Loan made by such Lender
to such Borrower.
"Competitive Bid Reduction" has the meaning specified in
Section 2.01.
"Confidential Information" means information that any Borrower
furnishes to the Agent or any Lender in a writing designated as
confidential, but does not include any such information that is or
becomes generally available to the public or that is or becomes
available to the Agent or such Lender from a source other than a
Borrower.
"Consolidated" refers to the consolidation of the financial
statements of the Company and its Subsidiaries in accordance with
generally accepted accounting principles, including principles of
consolidation.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Syndicated Loans of one Type into Syndicated Loans of the
other Type pursuant to Section 2.08.
"Debt" means (i) indebtedness for borrowed money or for the
deferred purchase price of property or services, other
4
<PAGE> 8
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
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.
"Designated Subsidiary" means any wholly-owned Subsidiary of
the Company designated for borrowing privileges under this Agreement
pursuant to Section 9.08.
"Designation Letter" means, with respect to any Designated
Subsidiary, a letter in the form of Exhibit E hereto signed by such
Designated Subsidiary and the Company.
"Dollars" and the "$" sign each means lawful money of the
United States of America.
"Domestic Lending Office" means, with respect to any Initial
Lender, the office of such Lender specified as its "Domestic Lending
Office" opposite its name on Schedule I hereto and, with respect to any
other Lender, the office of such Lender specified as its "Domestic
Lending Office" in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office of such Lender as such Lender may
from time to time specify to the Company and the Agent.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; (iii) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
$500,000,000; (iv) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof,
and having total assets in excess of $500,000,000; (v) a commercial
bank organized under the laws of any other country that is a member of
the Organization for Economic Cooperation and Development or has
5
<PAGE> 9
concluded special lending arrangements with the International Monetary
Fund associated with its General Arrangements to Borrow or of the
Cayman Islands, or a political subdivision of any such country, and
having total assets in excess of $500,000,000, so long as such bank is
acting through a branch or agency located in the United States or in
the country in which it is organized or another country that is
described in this clause (v); (vi) the central bank of any country that
is a member of the Organization for Economic Cooperation and
Development; or (vii) any other Person approved by the Agent and the
Company, such approval not to be unreasonably withheld or delayed;
provided, however, that neither the Company nor an Affiliate of the
Company shall qualify as an Eligible Assignee.
"Equivalent" in Dollars of any Primary Currency on any date
means the equivalent in Dollars of such Primary Currency determined by
using the quoted spot rate at which Citibank International's principal
office in London offers to exchange Dollars for such Primary Currency
in London prior to 4:00 P.M. (London time) on such date as is required
pursuant to the terms of this Agreement, and the "Equivalent" in any
Primary Currency of Dollars means the equivalent in such Primary
Currency of Dollars determined by using the quoted spot rate at which
Citibank International's principal office in London offers to exchange
such Foreign Currency for Dollars in London prior to 4:00 P.M. (London
time) on such date as is required pursuant to the terms of this
Agreement.
"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 Company 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.
"Eurocurrency Lending Office" means, with respect to any
Initial Lender, the office of such Lender specified as its
"Eurocurrency Lending Office" opposite its name on Schedule I hereto
and, with respect to any other Lender, the office of such Lender
specified as its "Eurocurrency Lending Office" in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the Company
and the Agent.
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<PAGE> 10
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurocurrency Rate" means, for any Interest Period for each
Eurocurrency Rate Loan comprising part of the same Syndicated
Borrowing, the average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a multiple) of the
rate per annum at which deposits in Dollars or in the applicable
Primary Currency, as the case may be, are offered by the principal
office of each of the Reference Banks in London, England to prime banks
in the London interbank market at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period in an amount
substantially equal to such Reference Bank's Eurocurrency Rate Loan
comprising part of such Syndicated Borrowing to be outstanding during
such Interest Period and for a period equal to such Interest Period.
The Eurocurrency Rate for any Interest Period for each Eurocurrency
Rate Loan comprising part of the same Syndicated Borrowing shall be
determined by the Agent on the basis of applicable rates furnished to
and received by the Agent from the Reference Banks two Business Days
before the first day of such Interest Period, subject, however, to the
provisions of Section 2.08.
"Eurocurrency Rate Loan" means a Syndicated Loan denominated
in Dollars or in a Primary Currency that bears interest as provided in
Section 2.07(a)(ii).
"Eurocurrency Rate Reserve Percentage" for any Interest Period
for all Eurocurrency Rate Loans or LIBO Rate Loans comprising part of
the same Borrowing means the reserve percentage applicable two Business
Days before the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal
Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference
to which the interest rate on Eurocurrency Rate Loans or LIBO Rate
Loans is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal
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<PAGE> 11
funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"Fitch" means Fitch Investors Service, Inc.
"Fixed Rate Loan" has the meaning specified in Section
2.03(a)(i), which Loan shall be denominated in Dollars or in any
Primary Currency.
"France Holdings" means Bottling Holdings (France) S.A., a
corporation organized under the laws of the Republic of France.
"High Rating" means, with respect to any Rating Agency, that
such agency shall have rated the commercial paper of the Company, as
set forth below:
Rating Agency Rating
S&P A-1 or higher
Moody's P-1
Fitch 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 benefits under such Plan
exceeds the fair market value of the assets of such Plan 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 each Eurocurrency Rate Loan
comprising part of the same Syndicated Borrowing and each LIBO Rate
Loan comprising part of the same Competitive Bid Borrowing, the period
commencing on the date of such Eurocurrency Rate Loan or LIBO Rate Loan
or the date of the Conversion of any Base Rate Loan into such
Eurocurrency Rate Loan and ending on the last day of the period
selected by the Borrower requesting such Borrowing pursuant to the
provisions below and, thereafter, with respect to Eurocurrency Rate
Loans, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by such Borrower pursuant to the provisions below. The
duration of each such Interest
8
<PAGE> 12
Period shall be one, two, three or six months and, if acceptable to all
Lenders, nine or twelve months, as the Borrower requesting the
Borrowing may, upon notice received by the Agent not later than 11:00
A.M. (New York City time) on the third Business Day prior to the first
day of such Interest Period, select; provided, however, that:
(i) such Borrower may not select any Interest Period
that ends after the Termination Date;
(ii) Interest Periods commencing on the same date for
Eurocurrency Rate Loans comprising part of the same Syndicated
Borrowing or for LIBO Rate Loans comprising part of the same
Competitive Bid Borrowing shall be of the same duration;
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, however, that, if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding
Business Day; and
(iv) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"Lenders" means the Initial Lenders and each Eligible Assignee
that shall become a party hereto pursuant to Section 9.07.
"Level" means, as of any date, the lowest of Level 1, Level 2,
Level 3, Level 4 or Level 5 then applicable to the commercial paper of
the Company.
"Level 1" means that three Rating Agencies shall have assigned
a High Rating to the commercial paper of the Company.
"Level 2" means that either (a) two Rating Agencies shall have
assigned a High Rating and one Rating Agency shall have assigned a
Middle Rating or (b) one Rating Agency shall have
9
<PAGE> 13
assigned a High Rating and two Rating Agencies shall have assigned a
Middle Rating, in each case to the commercial paper of the Company.
"Level 3" means that three Rating Agencies shall have assigned
a Middle Rating to the commercial paper of the Company.
"Level 4" means that either one Rating Agency or two Rating
Agencies (but not more than two Rating Agencies) shall have assigned a
Low Rating to the commercial paper of the Company.
"Level 5" means that three Rating Agencies shall have assigned
a Low Rating to the commercial paper of the Company.
"LIBO Rate" means, for any Interest Period for all LIBO Rate
Loans comprising part of the same Competitive Bid Borrowing, the
average (rounded upward to the nearest whole multiple of 1/16 of 1% per
annum, if such average is not such a multiple) of the rate per annum at
which deposits in Dollars or in the applicable Primary Currency, as the
case may be, are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before
the first day of such Interest Period in an amount substantially equal
to the amount that would be the Reference Banks' respective ratable
shares of such Borrowing if such Borrowing were to be a Syndicated
Borrowing to be outstanding during such Interest Period and for a
period equal to such Interest Period. The LIBO Rate for any Interest
Period for each LIBO Rate Loan comprising part of the same Competitive
Bid Borrowing shall be determined by the Agent on the basis of
applicable rates furnished to and received by the Agent from the
Reference Banks two Business Days before the first day of such Interest
Period, subject, however, to the provisions of Section 2.08.
"LIBO Rate Loan" means a Competitive Bid Loan denominated in
Dollars or in any Primary Currency and bearing interest based on the
LIBO Rate.
"Loan" means a Syndicated Loan or a Competitive Bid Loan.
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<PAGE> 14
"Low Rating" means, with respect to any Rating Agency, that
such agency shall have rated the commercial paper of the Company, as
set forth below:
Rating Agency Rating
S&P A-3 or below
Moody's P-3 or below
Fitch F-3 or below
Substitute Rating Agency equivalent to above
"Majority Lenders" means at any time Lenders holding at least
66 2/3% of the then aggregate principal amount (based on the Equivalent
in Dollars at such time) of the Syndicated Loans, or, if no such
principal amount is then outstanding, Lenders having at least 66 2/3%
of the Commitments.
"Middle Rating" means, with respect to any Rating Agency, that
such agency shall have rated the commercial paper of the Company, as
set forth below:
Rating Agency Rating
S&P A-2
Moody's P-2
Fitch F-2
Substitute Rating Agency equivalent to above
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means, as of any date, a "multiemployer
plan", as defined in Section 4001(a)(3) of ERISA, to which the Company
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 five 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 Company or an ERISA Affiliate, and
one or more employers other than the Company 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 Company 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 the Company 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
11
<PAGE> 15
Company or any ERISA Affiliate as of such date, as reasonably
determined by the Company in good faith, exceeds $5,000,000.
"Netherlands Holdings" means Bottling Holdings (Netherlands)
B.V., a corporation organized under the laws of the Kingdom of The
Netherlands.
"Note" means a Syndicated Note or a Competitive Bid Note.
"Notice of Competitive Bid Borrowing" has the meaning
specified in Section 2.03(a).
"Notice of Syndicated Borrowing" has the meaning specified in
Section 2.02(a).
"Obligations" has the meaning specified in Section 7.01.
"Payment Office" means, for any Primary Currency, such office
of Citibank as shall be from time to time selected by the Agent and
notified by the Agent to the Borrowers and the Lenders.
"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 limited liability company, 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.
"Primary Currencies" means lawful currency of the United
Kingdom of Great Britain and Northern Ireland, lawful currency of
Canada, lawful currency of the Republic of France, the lawful currency
of the Kingdom of Belgium and the lawful currency of the Netherlands.
"Process Agent" has the meaning specified in Section 9.12(a).
"Rating Agency" means any of S&P, Moody's, Fitch or any
substitute rating agency designated by the Company and acceptable to
the Majority Lenders ( 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.
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<PAGE> 16
"Reference Banks" means Citibank, Union Bank of Switzerland,
New York Branch and Deutsche Bank AG.
"Register" has the meaning specified in Section 9.07(d).
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"S&P" means Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies.
"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
Company or any ERISA Affiliate, was) maintained for employees of the
Company or any ERISA Affiliate and (iii) whose assets have a market
value as of such date, as reasonably determined by the Company in good
faith, in excess of $100,000,000 or which has an Insufficiency as of
such date, as reasonably determined by the Company 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
Company.
"Substitute Rating Agency" has the meaning set forth in the
definition of "Rating Agency."
"Syndicated Borrowing" means a borrowing consisting of
simultaneous Syndicated Loans of the same Type made by each of the
Lenders pursuant to Section 2.01.
"Syndicated Loan" means an advance by a Lender to any Borrower
as part of a Syndicated Borrowing and refers to a Base Rate Loan or a
Eurocurrency Rate Loan (each of which shall be a "Type" of Syndicated
Loan).
"Syndicated Note" means a promissory note of any Borrower
payable to the order of any Lender, in substantially the form of
Exhibit A-1 hereto, evidencing the aggregate indebtedness of such
Borrower to such Lender resulting from the Syndicated Loans made by
such Lender to such Borrower.
"Termination Date" means the earlier of (a) the fifth
anniversary of the Effective Date and (b) the date of
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<PAGE> 17
termination in whole of the Commitments pursuant to Section 2.05(a) or
Section 6.01.
"Termination Event" means (i) a "reportable event", as such
term is described in Section 4043(c) 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 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, is reasonably likely to 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
Lenders with evidence reasonably satisfactory to the Lenders that there
are reasonable grounds for contesting, and the Borrower is in fact
contesting in a timely and appropriate manner, such Withdrawal
Liability.
"US Holdings" means Bottling Holdings (International) Inc., a
Delaware corporation.
"US Sub-Agent" means Citibank, in its capacity as a subagent
of the Agent with respect to any Syndicated Borrowings consisting of
Base Rate Loans and any Competitive Bid Borrowings consisting of Fixed
Rate Loans to be denominated in Dollars.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
SECTION 1.03. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein
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<PAGE> 18
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 Company's independent
public accountants) with the most recent audited Consolidated financial
statements of the Company and its Consolidated Subsidiaries delivered to the
Lenders.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. The Syndicated Loans. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to make Syndicated
Loans to any Borrower from time to time on any Business Day during the period
from the Effective Date until the Termination Date in an aggregate amount (based
in respect of any Syndicated Loan denominated in a Primary Currency on the
Equivalent in Dollars on the Business Day such Loan is made), not to exceed at
any time outstanding such Lender's Commitment, provided that the aggregate
amount of the Commitments of the Lenders shall be deemed used from time to time
to the extent of the aggregate amount (based in respect of any Competitive Bid
Loan denominated in a Primary Currency on the Equivalent in Dollars at such
time) of the Competitive Bid Loans then outstanding and such deemed use of the
aggregate amount of the Commitments shall be allocated among the Lenders ratably
according to their respective Commitments (such deemed use of the aggregate
amount of the Commitments being a "Competitive Bid Reduction"); provided further
that each Lender's Loan made under the Competitive Bid Option shall not reduce
such Lender's obligation to lend its pro rata share of the remaining undrawn
Commitments. Each Syndicated Borrowing shall be in an aggregate amount not less
than $25,000,000 (or the Equivalent thereof in any Primary Currency, determined
as of the date of the applicable Notice of Syndicated Borrowing) or an integral
multiple of $1,000,000 (or the Equivalent thereof in any Primary Currency,
determined as of the date of the applicable Notice of Syndicated Borrowing) in
excess thereof and shall consist of Syndicated Loans of the same Type made on
the same day by the Lenders ratably according to their respective Commitments.
Within the limits of each Lender's Commitment, any Borrower may borrow under
this Section 2.01, prepay pursuant to Section 2.09 and reborrow under this
Section 2.01.
SECTION 2.02. Making the Syndicated Loans. (a) Each Syndicated
Borrowing shall be made on notice, given not later than (x) 11:00 A.M. (London
time) on the third Business Day prior to the date of the proposed Syndicated
Borrowing in the case of a Syndicated Borrowing consisting of Eurocurrency Rate
Loans or
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<PAGE> 19
(y) 10:30 A.M. (New York City time) on the day of the proposed Syndicated
Borrowing in the case of a Syndicated Borrowing consisting of Base Rate Loans,
by any Borrower to the Agent (and, in the case of a Syndicated Borrowing
consisting of Base Rate Loans, simultaneously to the US Sub-Agent), which shall
give to each Lender prompt notice thereof by telecopier or telex. Each such
notice of a Syndicated Borrowing (a "Notice of Syndicated Borrowing") shall be
by telephone, confirmed immediately in writing, or telecopier or telex in
substantially the form of Exhibit B-1 hereto, specifying therein the requested
(i) date of such Syndicated Borrowing, (ii) Type of Loans comprising such
Syndicated Borrowing, (iii) aggregate amount of such Syndicated Borrowing, and
(iv) in the case of a Syndicated Borrowing consisting of Eurocurrency Rate
Loans, initial Interest Period and currency for each such Syndicated Loan. Each
Lender shall, before 12:00 noon (New York City time) on the date of such
Syndicated Borrowing, in the case of a Syndicated Borrowing consisting of Base
Rate Loans, and before 11:00 A.M., (London time) on the date of such Syndicated
Borrowing, in the case of a Syndicated Borrowing consisting of Eurocurrency Rate
Loans, make available for the account of its Applicable Lending Office to the
Agent at the applicable Agent's Account in same day funds, such Lender's ratable
portion (determined in accordance with Section 2.01) of such Syndicated
Borrowing. After the Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Agent will make such funds
available to the Borrower requesting the Syndicated Borrowing at the Agent's
address referred to in Section 9.02 or at the applicable Payment Office, as the
case may be.
(b) Anything in subsection (a) above to the contrary
notwithstanding, the Eurocurrency Rate Loans may not be outstanding as part of
more than ten separate Syndicated Borrowings.
(c) Each Notice of Syndicated Borrowing of any Borrower shall
be irrevocable and binding on such Borrower. In the case of any Syndicated
Borrowing that the related Notice of Syndicated Borrowing specifies is to be
comprised of Eurocurrency Rate Loans, the Borrower requesting such Syndicated
Borrowing shall indemnify each Lender against any loss, cost or expense incurred
by such Lender as a result of any failure by such Borrower to fulfill on or
before the date specified in such Notice of Syndicated Borrowing for such
Syndicated Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Syndicated Loan to
be made by such Lender as part of such Syndicated Borrowing when such Syndicated
Loan, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender
prior to the date of any Syndicated Borrowing that such
16
<PAGE> 20
Lender will not make available to the Agent such Lender's ratable portion of
such Syndicated Borrowing, the Agent may assume that such Lender has made such
portion available to the Agent on the date of such Syndicated Borrowing in
accordance with subsection (a) of this Section 2.02 and the Agent may, in
reliance upon such assumption, make available to the Borrower proposing such
Syndicated Borrowing on such date a corresponding amount. If and to the extent
that such Lender shall not have so made such ratable portion available to the
Agent and the Agent shall have made such portion available to such Borrower on
such date, such Lender and such Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount, together with interest thereon,
for each day from the date such amount is made available to such Borrower until
the date such amount is repaid to the Agent, at (i) in the case of such
Borrower, the interest rate applicable at the time to Syndicated Loans
comprising such Syndicated Borrowing and (ii) in the case of such Lender (A) the
Federal Funds Rate in the case of Loans denominated in Dollars or (B) the cost
of funds incurred by the Agent in respect of such amount in the case of Loans
denominated in Primary Currencies. If such Lender shall repay to the Agent such
corresponding amount, such Borrower shall be relieved of its obligation to repay
such amount to the Agent and such amount so repaid (excluding interest) shall
constitute such Lender's Syndicated Loan as part of such Syndicated Borrowing
for purposes of this Agreement.
(e) The failure of any Lender to make the Syndicated Loan to
be made by it as part of any Syndicated Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Syndicated Loan on the
date of such Syndicated Borrowing, but no Lender shall be responsible for the
failure of any other Lender to make the Syndicated Loan to be made by such other
Lender on the date of any Syndicated Borrowing.
SECTION 2.03. The Competitive Bid Loans. (a) Each Lender
severally agrees that any Borrower may request Competitive Bid Borrowings under
this Section 2.03 from time to time on any Business Day during the period from
the date hereof until the date occurring 7 days prior to the Termination Date in
the manner set forth below; provided that, following the making of each
Competitive Bid Borrowing, the aggregate amount (based in respect of any Loan
denominated in a Primary Currency on the Equivalent in Dollars on the Business
Day such Loan is requested) of the Loans then outstanding shall not exceed the
aggregate amount of the Commitments of the Lenders at such time (computed
without regard to any Competitive Bid Reduction).
(i) Any Borrower may request a Competitive Bid Borrowing under
this Section 2.03 by delivering to the Agent (and, in the case of a
Competitive Bid Borrowing consisting of Fixed Rate Loans (as
hereinafter defined) to be denominated in Dollars, simultaneously to
the US Sub-Agent), by telecopier or
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<PAGE> 21
telex, a notice of a Competitive Bid Borrowing (a "Notice of
Competitive Bid Borrowing"), in substantially the form of Exhibit B-2
hereto, specifying therein the requested (s) date of such proposed
Competitive Bid Borrowing, (t) aggregate amount of such proposed
Competitive Bid Borrowing, (u) interest rate basis to be offered by the
Lenders, (v) currency of such proposed Competitive Bid Borrowing, (w)
in the case of a Competitive Bid Borrowing consisting of LIBO Rate
Loans, Interest Period, or in the case of a Competitive Bid Borrowing
consisting of Fixed Rate Loans, maturity date for repayment of each
Fixed Rate Loan to be made as part of such Competitive Bid Borrowing
(which maturity date may not be earlier than the date occurring 7 days
after the date of such Competitive Bid Borrowing or later than the
earlier of (I) 180 days after the date of such Competitive Bid
Borrowing and (II) the Termination Date), (x) interest payment date or
dates relating thereto, (y) location of such Borrower's account to
which funds are to be advanced, and (z) other terms (if any) to be
applicable to such Competitive Bid Borrowing, not later than 4:00 P.M.
(London time) (A) at least one Business Day prior to the date of the
proposed Competitive Bid Borrowing, if such Borrower shall specify in
its Notice of Competitive Bid Borrowing that the rates of interest to
be offered by the Lenders shall be fixed rates per annum (each Loan
comprising any such Competitive Bid Borrowing being referred to herein
as a "Fixed Rate Loan") and that the Loans comprising such proposed
Competitive Bid Borrowing shall be denominated in Dollars, (B) at least
two Business Days prior to the date of the proposed Competitive Bid
Borrowing, if such Borrower shall instead specify in its Notice of
Competitive Bid Borrowing that the Loans comprising such Competitive
Bid Borrowing shall be Fixed Rate Loans denominated in any Primary
Currency and (C) at least four Business Days prior to the date of the
proposed Competitive Bid Borrowing, if such Borrower shall instead
specify in its Notice of Competitive Bid Borrowing that the Loans
comprising such Competitive Bid Borrowing shall be LIBO Rate Loans.
Each Notice of Competitive Bid Borrowing shall be irrevocable and
binding on such Borrower. Any Notice of Competitive Bid Borrowing by a
Designated Subsidiary shall be given to the Agent in accordance with
the preceding sentence through the Company on behalf of such Designated
Subsidiary. The Agent shall in turn promptly notify each Lender of each
request for a Competitive Bid Borrowing received by it from such
Borrower by sending such Lender a copy of the related Notice of
Competitive Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to
do so, irrevocably offer to make one or more Competitive Bid Loans to
the Borrower proposing the Competitive Bid Borrowing as part of such
proposed Competitive Bid Borrowing at a rate or rates of interest
specified by such Lender in its sole discretion, by notifying the Agent
(which
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shall give prompt notice thereof to such Borrower), (A) before 2:00
P.M. (London time) on the date of such proposed Competitive Bid
Borrowing, in the case of a Competitive Bid Borrowing consisting of
Fixed Rate Loans denominated in Dollars, (B) before 12:00 noon (London
time) one Business Day before the date of such proposed Competitive Bid
Borrowing, in the case of a Competitive Bid Borrowing consisting of
Fixed Rate Loans denominated in any Primary Currency and (C) before
12:00 noon (London time) three Business Days before the date of such
proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of LIBO Rate Loans, of the minimum amount and
maximum amount of each Competitive Bid Loan which such Lender would be
willing to make as part of such proposed Competitive Bid Borrowing
(which amounts, or the Equivalent thereof in Dollars, as the case may
be, may, subject to the proviso to the first sentence of this Section
2.03(a), exceed such Lender's Commitment, if any), the rate or rates of
interest therefor and such Lender's Applicable Lending Office with
respect to such Competitive Bid Loan; provided that if the Agent in its
capacity as a Lender shall, in its sole discretion, elect to make any
such offer, it shall notify such Borrower of such offer at least 30
minutes before the time and on the date on which notice of such
election is to be given to the Agent by the other Lenders. If any
Lender shall elect not to make such an offer, such Lender shall so
notify the Agent, before 12:00 noon (London time) on the date on which
notice of such election is to be given to the Agent by the other
Lenders, and such Lender shall not be obligated to, and shall not, make
any Competitive Bid Loan as part of such Competitive Bid Borrowing;
provided that the failure by any Lender to give such notice shall not
cause such Lender to be obligated to make any Competitive Bid Loan as
part of such proposed Competitive Bid Borrowing.
(iii) The Borrower proposing the Competitive Bid Loan
shall, in turn, (A) before 2:30 P.M. (London time) on the date
of such proposed Competitive Bid Borrowing, in the case of a
Competitive Bid Borrowing consisting of Fixed Rate Loans denominated
in Dollars, (B) before 3:00 P.M. (London time) one Business Day before
the date of such proposed Competitive Bid Borrowing, in the case of a
Competitive Bid Borrowing consisting of Fixed Rate Loans denominated
in any Primary Currency and (C) before 3:00 P.M. (London time) three
Business Days before the date of such proposed Competitive Bid
Borrowing, in the case of a Competitive Bid Borrowing consisting of
LIBO Rate Loans, either:
(x) cancel such Competitive Bid Borrowing by giving
the Agent notice to that effect, or
(y) accept one or more of the offers made by any
Lender or Lenders pursuant to paragraph (ii) above, in
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<PAGE> 23
its sole discretion, by giving notice to the Agent of the
identity of such Lender or Lenders and the amount of each
Competitive Bid Loan (which amount shall be equal to or
greater than the minimum amount, and equal to or less than the
maximum amount, notified to such Borrower by the Agent on
behalf of such Lender or Lenders for such Competitive Bid Loan
pursuant to paragraph (ii) above) to be made by such Lender or
Lenders as part of such Competitive Bid Borrowing, and reject
any remaining offers made by other Lenders pursuant to
paragraph (ii) above by giving the Agent notice to that
effect. Such Borrower shall accept the offers made by any
Lender or Lenders to make Competitive Bid Loans in order of
the lowest to the highest rates of interest offered by such
Lenders. If two or more Lenders have offered the same interest
rate, the amount to be borrowed at such interest rate will be
allocated among such Lenders in proportion to the amount that
each such Lender offered at such interest rate.
(iv) If the Borrower proposing the Competitive Bid Borrowing
notifies the Agent that such Competitive Bid Borrowing is cancelled
pursuant to paragraph (iii)(x) above, the Agent shall give prompt
notice thereof to the Lenders and such Competitive Bid Borrowing shall
not be made.
(v) If the Borrower proposing the Competitive Bid Borrowing
accepts one or more of the offers made by any Lender or Lenders
pursuant to paragraph (iii)(y) above, the Agent shall in turn promptly
notify (A) each Lender that has made an offer as described in paragraph
(ii) above, of the date and aggregate amount of such Competitive Bid
Borrowing and whether or not any offer or offers made by such Lender
pursuant to paragraph (ii) above have been accepted by such Borrower,
(B) each Lender that is to make a Competitive Bid Loan as part of such
Competitive Bid Borrowing, of the amount of each Competitive Bid Loan
to be made by such Lender as part of such Competitive Bid Borrowing,
and (C) each Lender that is to make a Competitive Bid Loan as part of
such Competitive Bid Borrowing, upon receipt, that the Agent has
received forms of documents appearing to fulfill the applicable
conditions set forth in Article III. Each Lender that is to make a
Competitive Bid Loan as part of such Competitive Bid Borrowing shall,
before 12:00 noon (New York City time), in the case of a Competitive
Bid Borrowing consisting of Fixed Rate Loans denominated in Dollars,
and before 12:00 noon (London time), in each other case, on the date of
such Competitive Bid Borrowing specified in the notice received from
the Agent pursuant to clause (A) of the preceding sentence or any later
time when such Lender shall have received notice from the Agent
pursuant to clause (C) of the preceding sentence, make available for
the account of its Applicable Lending Office to
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the Agent at the applicable Agent's Account, in same day funds, such
Lender's portion of such Competitive Bid Borrowing. Upon fulfillment of
the applicable conditions set forth in Article III and after receipt by
the Agent of such funds, the Agent will make such funds available to
such Borrower's account at the location specified by such Borrower in
its Notice of Competitive Bid Borrowing. Promptly after each
Competitive Bid Borrowing the Agent will notify each Lender of the
amount of such Competitive Bid Borrowing, the consequent Competitive
Bid Reduction and the dates upon which such Competitive Bid Reduction
commenced and will terminate.
(vi) If the Borrower proposing the Competitive Bid Borrowing
notifies the Agent that it accepts one or more of the offers made by
any Lender or Lenders pursuant to paragraph (iii)(y) above, such notice
of acceptance shall be irrevocable and binding on such Borrower. Such
Borrower shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure by such Borrower to
fulfill on or before the date specified in the related Notice of
Competitive Bid Borrowing for such Competitive Bid Borrowing the
applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Competitive
Bid Loan to be made by such Lender as part of such Competitive Bid
Borrowing when such Competitive Bid Loan, as a result of such failure,
is not made on such date.
(b) Each Competitive Bid Borrowing shall be in an aggregate
amount not less than $25,000,000 (or the Equivalent thereof in any Primary
Currency, determined as of the date of the applicable Notice of Competitive Bid
Borrowing) or an integral multiple of $1,000,000 (or the Equivalent thereof in
any Primary Currency, determined as of the date of the applicable Notice of
Competitive Bid Borrowing) in excess thereof and, following the making of each
Competitive Bid Borrowing, the Borrower that has borrowed such Competitive Bid
Borrowing shall be in compliance with the limitation set forth in the proviso to
the first sentence of subsection (a) above.
(c) Within the limits and on the conditions set forth in this
Section 2.03, any Borrower may from time to time borrow under this Section 2.03,
repay or prepay pursuant to subsection (d) below, and reborrow under this
Section 2.03, provided that a Competitive Bid Borrowing shall not be made within
three Business Days of the date of any other Competitive Bid Borrowing.
(d) Any Borrower that has borrowed through a Competitive Bid
Borrowing shall repay to the Agent for the account of each Lender that has made
a Competitive Bid Loan, on the maturity date
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of such Competitive Bid Loan (such maturity date being that specified by such
Borrower for repayment of such Competitive Bid Loan in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above and
provided in the Competitive Bid Note evidencing such Competitive Bid Loan), the
then unpaid principal amount of such Competitive Bid Loan. Such Borrower shall
have no right to prepay any principal amount of any Competitive Bid Loan unless,
and then only on the terms, specified by such Borrower for such Competitive Bid
Loan in the related Notice of Competitive Bid Borrowing delivered pursuant to
subsection (a)(i) above and set forth in the Competitive Bid Note evidencing
such Competitive Bid Loan.
(e) Each Borrower that has borrowed through a Competitive Bid
Borrowing shall pay interest on the unpaid principal amount of each Competitive
Bid Loan comprising such Competitive Bid Borrowing from the date of such
Competitive Bid Loan to the date the principal amount of such Competitive Bid
Loan is repaid in full, at the rate of interest for such Competitive Bid Loan
specified by the Lender making such Competitive Bid Loan in its notice with
respect thereto delivered pursuant to subsection (a)(ii) above, payable on the
interest payment date or dates specified by such Borrower for such Competitive
Bid Loan in the related Notice of Competitive Bid Borrowing delivered pursuant
to subsection (a)(i) above, as provided in the Competitive Bid Note evidencing
such Competitive Bid Loan. Upon the occurrence and during the continuance of an
Event of Default under Section 6.01(a), such Borrower shall pay interest on the
amount of unpaid principal of and interest on each Competitive Bid Loan owing to
a Lender, payable in arrears on the date or dates interest is payable thereon,
at a rate per annum equal at all times to 1% per annum above the rate per annum
required to be paid on such Competitive Bid Loan under the terms of the
Competitive Bid Note evidencing such Competitive Bid Loan unless otherwise
agreed in such Competitive Bid Note.
(f) The indebtedness of any Borrower resulting from each
Competitive Bid Loan made to such Borrower as part of a Competitive Bid
Borrowing shall be evidenced by a separate Competitive Bid Note of the Borrower
payable to the order of the Lender making such Competitive Bid Loan.
SECTION 2.04. Fees. (a) Facility Fee. The Company agrees to
pay to the Agent for the account of each Lender a facility fee on the aggregate
amount of such Lender's Commitment from the Effective Date in the case of each
Initial Lender and from the later of the Effective Date and the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date at a rate per annum
equal to the Applicable Percentage in effect from time to time, payable in
arrears quarterly on the last day of each
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March, June, September and December, commencing December 31, 1996 and on the
Termination Date.
(b) Agent's Fees. The Company shall pay to the Agent for its
own account such fees as may from time to time be agreed between the Company and
the Agent.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Ratable Termination or Reduction. The Company shall have the right, upon at
least three Business Days' notice to the Agent, to terminate or cancel in whole
or reduce ratably in part the unused portions of the respective Commitments of
the Lenders, provided that each partial reduction shall be in an aggregate
amount not less than $25,000,000 or an integral multiple of $5,000,000 in excess
thereof and provided further that the aggregate amount of the Commitments of the
Lenders shall not be reduced to an amount that is less than the sum of the
aggregate principal amount of the Competitive Bid Loans denominated in Dollars
then outstanding plus the Equivalent in Dollars (determined as of the date of
such notice) of the aggregate principal amount of the Competitive Bid Loans
denominated in Primary Currencies then outstanding.
(b) Non-Ratable Termination by Assignment. The Company shall
have the right, upon at least ten Business Days' written notice to the Agent
(which shall then give prompt notice thereof to the relevant Lender), to require
any Lender that makes a demand for payment under Section 2.10 or 2.13 to assign,
pursuant to and in accordance with the provisions of Section 9.07, all of its
rights and obligations under this Agreement and under the Notes to an Eligible
Assignee selected by the Company; provided, however, that (i) no Event of
Default shall have occurred and be continuing at the time of such request and at
the time of such assignment; (ii) the assignee shall have paid to the assigning
Lender the aggregate principal amount of, and any interest accrued and unpaid to
the date of such assignment on, the Note or Notes of such Lender; (iii) the
Company shall have paid to the assigning Lender any and all facility fees and
other fees payable to such Lender and all other accrued and unpaid amounts owing
to such Lender under any provision of this Agreement (including, but not limited
to, any increased costs or other additional amounts owing under Section 2.10 and
any indemnification for Taxes under Section 2.13) as of the effective date of
such assignment; and (iv) if the assignee selected by the Company is not an
existing Lender, such assignee or the Company shall have paid the processing and
recordation fee required under Section 9.07(a) for such assignment; provided
further that the assigning Lender's rights under Sections 2.10, 2.13 and 9.04,
and its obligations under Section 8.05, shall survive such assignment as to
matters occurring prior to the date of assignment.
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SECTION 2.06. Repayment of Syndicated Loans. Each Borrower
shall repay to the Agent for the ratable account of the Lenders on the
Termination Date the aggregate principal amount of the Syndicated Loans then
outstanding in respect of such Borrower.
SECTION 2.07. Interest on Syndicated Loans. (a) Scheduled
Interest. Each Borrower shall pay interest on the unpaid principal amount of
each Syndicated Loan owing by such Borrower to each Lender from the date of such
Syndicated Loan until such principal amount shall be paid in full, at the
following rates per annum:
(i) Base Rate Loans. During such periods as such Syndicated
Loan is a Base Rate Loan, a rate per annum equal at all times to the
Base Rate in effect from time to time, payable in arrears quarterly on
the last day of each March, June, September and December during such
periods and on the date such Base Rate Loan shall be Converted or paid
in full.
(ii) Eurocurrency Rate Loans. During such periods as such
Syndicated Loan is a Eurocurrency Rate Loan, a rate per annum equal at
all times during each Interest Period for such Syndicated Loan to the
sum of (x) the Eurocurrency Rate for such Interest Period for such
Syndicated Loan plus (y) the Applicable Margin in effect from time to
time, payable in arrears on the last day of such Interest Period and,
if such Interest Period has a duration of more than three months, on
each day that occurs during such Interest Period every three months
from the first day of such Interest Period and on the date such
Eurocurrency Rate Loan shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default under Section 6.01(a), each Borrower shall
pay interest on (i) the unpaid principal amount of each Syndicated Loan owing by
such Borrower to each Lender, payable in arrears on the dates referred to in
clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to 1% per
annum above the rate per annum required to be paid on such Syndicated Loan
pursuant to clause (a)(i) or (a)(ii) above (or, if applicable, the proviso to
Section 2.08(b) below) and (ii) to the fullest extent permitted by law, the
amount of any interest, fee or other amount payable hereunder by such Borrower
that is not paid when due, from the date such amount shall be due until such
amount shall be paid in full, payable in arrears on the date such amount shall
be paid in full and on demand, at a rate per annum equal at all times to 1% per
annum above the rate per annum required to be paid on such Syndicated Loan
pursuant to clause (a)(i) above.
SECTION 2.08. Interest Rate Determination. (a) Each Reference
Bank agrees to furnish to the Agent timely information for the purpose of
determining each Eurocurrency Rate and each LIBO
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Rate. If any one or more of the Reference Banks shall not furnish such timely
information to the Agent for the purpose of determining any such interest rate,
the Agent shall determine such interest rate on the basis of timely information
furnished by the remaining Reference Banks. The Agent shall give prompt notice
to the Company and the Lenders of the applicable interest rate determined by the
Agent for purposes of Section 2.07(a)(i) or (ii), and the rate, if any,
furnished by each Reference Bank for the purpose of determining the interest
rate under Section 2.07(a)(ii).
(b) If, with respect to any Eurocurrency Rate Loans, the
Majority Lenders reasonably and in good faith notify the Agent that (i) they are
unable to obtain matching deposits in the London inter-bank market at or about
11:00 A.M. (London time) on the second Business Day before the making of a
Borrowing in sufficient amounts to fund their respective Syndicated Loans as a
part of such Borrowing during its Interest Period or (ii) the Eurocurrency Rate
for any Interest Period for such Loans will not adequately reflect the cost to
such Majority Lenders of making, funding or maintaining their respective
Eurocurrency Rate Loans for such Interest Period, the Agent shall forthwith so
notify each Borrower and the Lenders, whereupon (A) the Borrower of such
Eurocurrency Rate Loans will, on the last day of the then existing Interest
Period therefor, (1) if such Eurocurrency Rate Loans are denominated in Dollars,
Convert such Loans into Base Rate Loans and (2) if such Eurocurrency Rate Loans
are denominated in any Primary Currency, either (x) prepay such Loans or (y)
redenominate such Loans into an Equivalent amount of Dollars and Convert such
Loans into Base Rate Loans, and (B) the obligation of the Lenders to make
Eurocurrency Rate Loans in the same currency as such Eurocurrency Rate Loans
shall be suspended until the Agent shall notify each Borrower and the Lenders
that the circumstances causing such suspension no longer exist; provided, if the
circumstances set forth in clause (ii) above are applicable, the applicable
Borrower may elect, by notice to the Agent and the Lenders, to continue such
Loans in such Primary Currency for Interest Periods of not longer than one
month, which Loans shall thereafter bear interest at a rate per annum equal to
the Applicable Margin plus, for each Lender, the cost to such Lender (expressed
as a rate per annum) of funding its Eurocurrency Rate Loans by whatever means it
reasonably determines to be appropriate. Each Lender shall certify its costs of
funds for each such Interest Period to the Agent and the Company as soon as
practicable (but in any event not later than ten Business Days after the first
day of such Interest Period).
(c) If any Borrower shall fail to select the duration of the
Interest Period for any Eurocurrency Rate Loans in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify such Borrower and the Lenders and such Loans will
automatically, on the last day of the then existing Interest Period therefor,
(i) if such Eurocurrency Rate Loans are denominated in Dollars, be Converted
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into Base Rate Loans and (ii) if such Eurocurrency Rate Loans are denominated in
any Primary Currency, be redenominated into an Equivalent amount of Dollars and
Converted into Base Rate Loans.
(d) Upon the occurrence and during the continuance of any
Event of Default under Section 6.01(a), (i) each Eurocurrency Rate Loan will
automatically, on the last day of the then existing Interest Period therefor,
(A) if such Eurocurrency Rate Loan is denominated in Dollars, be Converted into
a Base Rate Loan and (B) if such Eurocurrency Rate Loan is denominated in any
Primary Currency, be redenominated into an Equivalent amount of Dollars and
Converted into a Base Rate Loan and (ii) the obligation of the Lenders to make
Eurocurrency Rate Loans shall be suspended; provided that the Company and the
applicable Borrower may elect, by notice to the Agent and the Lenders within one
Business Day of such Event of Default, to continue such Loans in such Primary
Currency, whereupon the Agent may require that each Interest Period relating to
such Eurocurrency Rate Loans shall bear interest at the Overnight Eurocurrency
Rate for a period of three Business Days and thereafter, each such Interest
Period shall have a duration of not longer than one month. "Overnight
Eurocurrency Rate" means the rate per annum applicable to an overnight period
beginning on one Business Day and ending on the next Business Day equal to the
sum of 1%, the Applicable Margin and the average (rounded upward to the nearest
whole multiple of 1/16 of 1%, if such average is not such a multiple) of the
respective rates per annum quoted by each Reference Bank to the Agent on request
as the rate at which it is offering overnight deposits in the relevant currency
in amounts comparable to such Reference Bank's Eurocurrency Rate Loans.
(e) If fewer than two Reference Banks furnish timely
information to the Agent for determining the Eurocurrency Rate or LIBO Rate for
any Eurocurrency Rate Loans or LIBO Rate Loans, as the case may be,
(i) the Agent shall forthwith notify the relevant Borrower
and the Lenders that the interest rate cannot be determined for
such Eurocurrency Rate Loans or LIBO Rate Loans, as the case may be,
(ii) with respect to Eurocurrency Rate Loans, each such Loan
will automatically, on the last day of the then existing Interest
Period therefor, (A) if such Eurocurrency Rate Loan is denominated in
Dollars, be Converted into a Base Rate Loan and (B) if such
Eurocurrency Rate Loan is denominated in any Primary Currency, be
redenominated into an Equivalent amount of Dollars and Converted into a
Base Rate Loan, and
(iii) the obligation of the Lenders to make Eurocurrency Rate
Loans or LIBO Rate Loans shall be suspended until the Agent shall
notify the Borrowers and the Lenders
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that the circumstances causing such suspension no longer exist.
SECTION 2.09. Prepayments of Syndicated Loans. (a) Optional
Prepayments. Each Borrower may, upon notice to the Agent stating the proposed
date and aggregate principal amount of the prepayment, given not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of
such proposed prepayment, in the case of Eurocurrency Rate Loans, and not later
than 11:00 A.M. (New York City time) on the day of such proposed prepayment, in
the case of Base Rate Loans, and, if such notice is given, such Borrower shall,
prepay the outstanding principal amount of the Syndicated Loans comprising part
of the same Syndicated Borrowing in whole or ratably in part (without premium or
penalty or additional costs other than pursuant to Section 9.04(c)), together
with accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that (x) each partial prepayment shall be in an
aggregate principal amount not less than $25,000,000 or the Equivalent thereof
in a Primary Currency (determined on the date notice of prepayment is given) or
an integral multiple of $5,000,000 or the Equivalent thereof in a Primary
Currency (determined on the date notice of prepayment is given) in excess
thereof and (y) in the event of any such prepayment of a Eurocurrency Rate Loan
other than on the last day of the Interest Period therefor, such Borrower shall
be obligated to reimburse the Lenders in respect thereof pursuant to Section
9.04(c). Each notice of prepayment by a Designated Subsidiary shall be given to
the Agent through the Company.
(b) Mandatory Prepayments. (i) If the Agent notifies the
Company that, on any interest payment date, the sum of (A) the aggregate
principal amount of all Loans denominated in Dollars then outstanding plus (B)
the Equivalent in Dollars (determined on the third Business Day prior to such
interest payment date) of the aggregate principal amount of all Loans
denominated in Primary Currencies then outstanding exceeds 103% of the aggregate
Commitments of the Lenders on such date, the Company and each other Borrower
shall, within two Business Days after receipt of such notice, prepay the
outstanding principal amount of any Loans owing by such Borrower in an aggregate
amount sufficient to reduce such sum to an amount not to exceed 100% of the
aggregate Commitments of the Lenders on such date.
(ii) Each prepayment made pursuant to this Section 2.09(b)
shall be made together with any interest accrued to the date of such prepayment
on the principal amounts prepaid and, in the case of any prepayment of a
Eurocurrency Rate Loan or a LIBO Rate Loan on a date other than the last day of
an Interest Period or at its maturity, any additional amounts which such
Borrower shall be obligated to reimburse to the Lenders in respect thereof
pursuant to Section 9.04(c). The Agent shall give prompt notice of
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any prepayment required under this Section 2.09(b) to the Borrowers and the
Lenders.
SECTION 2.10. Increased Costs. (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 Lender (or its
Applicable 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
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 Eurocurrency Rate Loan or LIBO Rate Loan any such requirement included in an
applicable Eurocurrency Reserve Percentage) against assets of, deposits with or
for the account of, or credit extended by, any Lender (or its Applicable Lending
Office) or shall impose on any Lender (or its Applicable Lending Office) or on
the United States market for certificates of deposit or the London interbank
market any other condition affecting its Eurocurrency Rate Loans or LIBO Rate
Loans, its Notes or its obligation to make Eurocurrency Rate Loans, and the
result of any of the foregoing is to increase the cost to such Lender (or its
Applicable Lending Office) of making or maintaining any Eurocurrency Rate Loan
or LIBO Rate Loan, or to reduce the amount of any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Agreement or under its
Notes with respect thereto by an amount deemed by such Lender to be material,
then, within 15 days after demand by such Lender, the Borrower of such Loans
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction.
(b) If after the date hereof, any Lender 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 Lender (or its
Applicable 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 Lender's capital as a consequence of its obligations hereunder to
a level below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, within 15 days after demand by such Lender, the Company
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
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(c) Each Lender will notify the Agent and the Company of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section within the time
limitation set forth in Section 9.04(d) and will designate a different
Eurocurrency 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
Lender, be otherwise disadvantageous to such Lender. A certificate of any Lender
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 Lender may use any reasonable
averaging and attribution methods.
SECTION 2.11. 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 Lender (or its
Eurocurrency 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 Lender (or its Eurocurrency
Lending Office) to make, maintain or fund its Eurocurrency Rate Loans in Dollars
or any Primary Currency or LIBO Rate Loans in Dollars or any Primary Currency
hereunder such Lender shall so notify the Agent and the Company, whereupon until
such Lender notifies the Agent and the Company that the circumstances giving
rise to such suspension no longer exist, the obligation of such Lender to make
such Eurocurrency Rate Loans shall be suspended. Before giving any notice to the
Agent and the Company pursuant to this Section, such Lender shall designate a
different Eurocurrency Lending Office if such designation will avoid the need
for giving such notice and will not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender. If such Lender shall determine that it
may not lawfully continue to maintain and fund any of its outstanding
Eurocurrency Rate Loans or LIBO Rate Loans to maturity and shall so specify in
such notice, each such Eurocurrency Rate Loan or such LIBO Rate Loan, as the
case may be, will automatically, upon such demand, (a) if such Eurocurrency Rate
Loan or LIBO Rate Loan is denominated in Dollars, be converted into a Base Rate
Loan or a Loan that bears interest at the rate set forth in Section 2.07(a)(i),
as the case may be and (b) if such Eurocurrency Loan or LIBO Rate Loan is
denominated in any Primary Currency, be redenominated into an Equivalent amount
of Dollars and converted into a Base Rate Loan or a Loan that bears interest at
the rate set forth in Section 2.07(a)(i), as the case may be.
SECTION 2.12. Payments and Computations. (a) Each Borrower
shall make each payment hereunder and under the Notes, except with respect to
principal of, interest on, and other amounts
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relating to, Loans denominated in a Primary Currency, not later than 12:00 noon
(New York City time) on the day when due in Dollars to the Agent at the
applicable Agent's Account in same day funds. Each Borrower shall make each
payment hereunder and under the Notes with respect to principal of, interest on,
and other amounts relating to Loans denominated in a Primary Currency not later
than 12:00 Noon (at the Payment Office for such Primary Currency) on the day
when due in such Primary Currency to the Agent in same day funds by deposit of
such funds to the applicable Agent's Account. The Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal or
interest or facility fees ratably (other than amounts payable pursuant to
Section 2.03, 2.10, 2.13, 2.14 or 9.04(c)) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 9.07(c), from and after the effective date specified in such Assignment
and Acceptance, the Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned thereby to the Lender assignee thereunder,
and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) All computations of interest based on the Base Rate and of
facility fees shall be made by the Agent on the basis of a year of 365 or 366
days, as the case may be, and all computations of interest based on the
Eurocurrency Rate, the LIBO Rate or the Federal Funds Rate shall be made by the
Agent on the basis of a year of 360 days (or, in the case of Loans denominated
in Primary Currencies where market practice differs, in accordance with market
practice), in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest or
facility fees are payable. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or facility fee, as
the case may be; provided, however, that, if such extension would cause payment
of interest on or principal of Eurocurrency Rate Loans or LIBO Rate Loans to be
made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
(d) Unless the Agent shall have received notice from any
Borrower prior to the date on which any payment is due to the
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Lenders hereunder that such Borrower will not make such payment in full, the
Agent may assume that such Borrower has made such payment in full to the Agent
on such date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent such Borrower shall not have so made such
payment in full to the Agent, each Lender shall repay to the Agent forthwith on
demand such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Agent, at (i) the Federal Funds Rate
in the case of Loans denominated in Dollars or (ii) the cost of funds incurred
by the Agent in respect of such amount in the case of Loans denominated in
Primary Currencies.
SECTION 2.13. Taxes. (a) Any and all payments by any Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.12,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender, the US Sub-Agent and the
Agent, taxes imposed on its overall net income, and franchise taxes imposed on
it in lieu of net income taxes, by the jurisdiction under the laws of which such
Lender, the US Sub-Agent or the Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender, taxes imposed on
its overall net income, and franchise taxes imposed on it in lieu of net income
taxes, by the jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder or under any of the Notes being hereinafter referred to as "Taxes").
If any Borrower shall be required by law to deduct any Taxes from or in respect
of any sum paid or payable hereunder or under any Note to any Lender, the US
Sub-Agent or the Agent, or, if the Agent shall be required by law to deduct any
Taxes from or in respect of any sum paid or payable hereunder or under any Note
to any Lender or if the US Sub-Agent shall be required by law to deduct any
Taxes from or in respect of any sum paid or payable hereunder or under any Note
to any Lender or to the Agent, (i) the sum payable by such Borrower shall be
increased by such Borrower as may be necessary so that, after making all
required deductions (including deductions, whether by such Borrower, the US
Sub-Agent or the Agent, applicable to additional sums payable under this Section
2.13) such Lender, the US Sub-Agent and the Agent each receive an amount equal
to the sum they each would have received had no such deductions been made (for
example, and without limitation, if the sum paid or payable hereunder from or in
respect of which a Borrower or the US SubAgent or the Agent shall be required to
deduct any Taxes is interest, the interest payable by such Borrower shall be
increased by such Borrower as may be necessary so that, after making all
required deductions (including deductions applicable to additional
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interest), such Lender, the US Sub-Agent and the Agent each receive interest
equal to the interest they each would have received had no such deduction been
made), (ii) such Borrower (or, as the case may be and as required by applicable
law, the US Sub-Agent or the Agent) shall make such deductions and (iii) such
Borrower (or, as the case may be and as required by applicable law, the US
Sub-Agent or the Agent) shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) In addition, each Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or under the Notes
or from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Agreement or any of the Notes (hereinafter
referred to as "Other Taxes").
(c) Each Borrower shall indemnify each Lender, the US
Sub-Agent and the Agent for and hold harmless against the full amount of Taxes
or Other Taxes (as well as, without limitation, any taxes imposed by any
jurisdiction on amounts payable under this Section 2.13) imposed on or paid by
such Lender, the US Sub-Agent or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 30 days from the date
such Lender, the US Sub-Agent or the Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
each Borrower shall furnish to the Agent at its address referred to in Section
9.02, the original or a certified copy of a receipt evidencing payment thereof.
In the case of any payment hereunder or under any of the Notes by or on behalf
of any Borrower through an account or branch outside the United States, the
United Kingdom, the Republic of France and the Kingdom of The Netherlands or by
or on behalf of any Borrower by a payor that is not a United States person or a
corporation organized under the laws of the United Kingdom, the Republic of
France or the Kingdom of The Netherlands, if such Borrower determines that no
Taxes are payable in respect thereof, such Borrower shall furnish, or shall
cause such payor to furnish, to the Agent, at such address, an opinion of
counsel reasonably acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d), the terms "United States" and
"United States person" shall have the meanings specified in Section 7701 of the
Internal Revenue Code.
(e) Each Lender, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender and on the date of
the Assignment and Acceptance pursuant to which it becomes a Lender in the case
of each other Lender, and from time to time thereafter as requested in writing
by
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any Borrower (but only so long as such Lender remains lawfully able to do so),
shall provide such Borrower and the Agent with any form or certificate that is
required by any taxing authority including, if applicable, two original Internal
Revenue Service forms 1001 or 4224, as appropriate, or any successor or other
form prescribed by the Internal Revenue Service, certifying (if it is the case)
that such Lender is exempt from or entitled to a reduced rate of Home
Jurisdiction Withholding Taxes on payments pursuant to this Agreement or the
Notes (or, in the case of a Lender that initially becomes a party to this
Agreement pursuant to an assignment under Section 9.07, exempt from or entitled
to a reduced rate of Home Jurisdiction Withholding Taxes on payments made
pursuant to this Agreement or the Notes that is no greater than the rate to
which the assigning Lender was subject (assuming such assigning Lender provided
such forms or certificates as may be required by this subsection (e)));
provided, however, that such Lender shall have been advised in writing by each
Borrower (including at the time any renewal form is due) of the form or
certificate applicable to it, determined by reference to the jurisdiction of
organization and Applicable Lending Office of such Lender set forth on Schedule
I hereto, in the case of each Initial Lender, or to the jurisdiction of
organization and Applicable Lending Office of such Lender set forth in the
Assignment and Acceptance pursuant to which it became a Lender, in the case of
each other Lender, or such other branch or office of any Lender designated by
such Lender from time to time. If any form or document referred to in this
subsection (e) requires the disclosure of information not substantially similar
to the information necessary to compute the tax payable and information required
on the date hereof by Internal Revenue Service form 1001 or 4224 or United
Kingdom Inland Revenue Form FD13, and which a Lender reasonably considers to be
confidential, such Lender shall give notice thereof to the Borrower and shall
not be obligated to include in such form or document such confidential
information.
"Home Jurisdiction Withholding Taxes" means (a) in the case of
the Company and US Holdings, withholding taxes imposed by the United States, (b)
in the case of UK Holdings, withholding taxes imposed by the United Kingdom, (c)
in the case of Beverages France and France Holdings, withholding taxes imposed
by the Republic of France and (d) in the case of Netherlands Holdings and
Beverages Netherlands, withholding taxes imposed by the Kingdom of The
Netherlands.
(f) For any period with respect to which a Lender has failed,
within 30 days of such Lender's receipt of written advice to such effect from
any Borrower, to provide such Borrower with the appropriate form or certificate
described in Section 2.13(e) (other than if such failure is due to a change in
law (including, without limitation, any change in regulation or change in the
interpretation of any statute or regulation or other rule of law) occurring
subsequent to the date on which a form originally was required to be provided,
such Lender shall not be entitled to
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indemnification under Section 2.13(a) or (c) with respect to Taxes imposed by
the United States, the United Kingdom, the Republic of France and the Kingdom of
The Netherlands by reason of such failure; provided, however, that should a
Lender become subject to Taxes because of its failure to deliver a form or
certificate required hereunder, each Borrower shall take such steps as such
Lender shall reasonably request, and at such Lender's expense, to assist such
Lender to recover such Taxes.
(g) Each Lender shall promptly upon the request of the Agent
take all action (including without limitation the completion of forms and the
provision of information to the appropriate taxing authorities or to the Agent),
of the kind prescribed in regulations promulgated under Section 118H of the U.K.
Income and Corporation Taxes Act of 1988 (and any statements published by the
Inland Revenue relating thereto and having general application) and consistent
with such Lender's legal and regulatory restrictions, reasonably requested by
the Agent, and the Agent shall upon reasonable request from any Borrower make
such request of each Lender and shall itself (consistent with the Agent's legal
and regulatory restrictions), to the extent appropriate and reasonable, take
similar action, to secure the benefit of any exemption from, or relief with
respect to, Taxes or Other Taxes imposed by the United Kingdom under Section
118H of the U.K. Income and Corporation Taxes Act of 1988 in relation to any
amounts payable under this Agreement or any of the Notes.
(h) Any Lender or the Agent (as the case may be) claiming any
additional amounts payable pursuant to this Section 2.13 will notify the Agent
and the applicable Borrower of such claim within the time limitation set forth
in Section 9.04(d) and agrees to use reasonable efforts (consistent with such
Lender's or the Agent's (as the case may be) internal policy and legal and
regulatory restrictions) to change the jurisdiction of its Applicable Lending
Office or the office of the Agent (as the case may be) if the making of such a
change would avoid the need for, or reduce the amount of, any such additional
amounts that may thereafter accrue and would not, in the sole judgment of such
Lender or in the reasonable judgment of the Agent (as the case may be), be
otherwise disadvantageous to such Lender or the Agent (as the case may be). Each
Borrower shall promptly upon request by any Lender or the Agent take all actions
(including, without limitation, the completion of forms and the provision of
information to the appropriate taxing authorities) reasonably requested by such
Lender or the Agent to secure the benefit of any exemption from, or relief with
respect to, Taxes or Other Taxes in relation to any amounts payable under this
Agreement.
SECTION 2.14. Regulation D Compensation. Each Lender that is
subject to reserve requirements of the Board of Governors of the Federal Reserve
System (or any successor) may require the applicable Borrower to pay,
contemporaneously with each payment of
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interest on the Eurocurrency Rate Loans and LIBO Rate Loans, as the case may be,
additional interest on the related Eurocurrency Rate Loans and LIBO Rate Loans,
as the case may be, of such Lender at the rate per annum equal to the excess of
(i) (A) the applicable Eurocurrency Rate or LIBO Rate, as the case may be,
divided by (B) one minus the Eurocurrency Rate Reserve Percentage over (ii) the
rate specified in clause (i) (A). Any Lender wishing to require payment of such
additional interest (x) shall so notify the Agent and the applicable Borrower,
in which case such additional interest on the Eurocurrency Rate Loans and LIBO
Rate Loans, as the case may be, of such Lender shall be payable to such Lender
at the place indicated in such notice with respect to each Interest Period
commencing at least five Business Days after the giving of such notice and (y)
shall notify the Agent and the applicable Borrower at least five Business Days
prior to each date on which interest is payable on the amount then due it under
this Section.
SECTION 2.15. Use of Proceeds. The proceeds of the Loans shall
be available (and each Borrower agrees that it shall use such proceeds) solely
for working capital and for other general corporate purposes of such Borrower
and its Subsidiaries, including, without limitation, backstop of commercial
paper and acquisition financing.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of
Sections 2.01 and 2.03. Sections 2.01 and 2.03 of this Agreement shall become
effective on and as of the first date on or before November 15, 1996 (the
"Effective Date") on which the following conditions precedent have been
satisfied:
(a) The Company shall have notified the Agent as to the
proposed Effective Date.
(b) The Company shall have paid all accrued fees and expenses
of the Agent (including the accrued fees and expenses of counsel to the
Agent).
(c) On the Effective Date, the following statements shall be
true and the Agent shall have received for the account of each Lender a
certificate of the Company on behalf of itself and each other Borrower,
signed by a duly authorized officer of the Company, dated the Effective
Date, stating that:
(i) The representations and warranties contained in
Section 4.01 are correct on and as of the Effective Date, and
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(ii) No event has occurred and is continuing that
constitutes a Default.
(d) The Company shall have terminated the commitments of the
banks parties to the $1,000,000,000 Credit Agreement dated as of
December 7, 1994 with the Company, and shall have paid in full all Debt
outstanding under such Credit Agreement.
(e) The Agent shall have received on or before the Effective
Date the following, each dated such day, in form and substance
satisfactory to the Agent and (except for the Syndicated Notes) in
sufficient copies for each Lender:
(i) The Syndicated Notes of each Initial Borrower
to the order of the Lenders, respectively.
(ii) Certified copies of the resolutions of the
Board of Directors of each Initial Borrower approving this
Agreement and the Notes of such Initial Borrower, and of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this
Agreement and such Notes.
(iii) A certificate of the Secretary or an Assistant
Secretary of each Initial Borrower certifying the names and
true signatures of the officers of such Initial Borrower
authorized to sign this Agreement and the Notes of such
Initial Borrower and the other documents to be delivered
hereunder.
(iv) Copies of the most recently available
Consolidated financial statements of the Company and its
Consolidated Subsidiaries and the related Consolidated
statements of income, Consolidated balance sheets,
Consolidated statements of shareholder's equity and
Consolidated statements of cash flows, duly certified by the
chief financial officer of the Company.
(v) A favorable opinion of Miller & Martin, counsel
of the Borrowers, substantially in the form of Exhibit F
hereto and as to such other matters as any Lender through the
Agent may reasonably request.
(vi) A favorable opinion of Shearman & Sterling,
counsel for the Agent, in form and substance satisfactory to
the Agent.
(vii) Evidence of the Process Agent's acceptance of
its appointment pursuant to Section 9.14(a) as the agent of
the Initial Borrowers.
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(viii) Such other approvals, opinions or documents as
any Lender, through the Agent, may reasonably request.
SECTION 3.02. Initial Loan to Each Designated Subsidiary. The
obligation of each Lender to make an initial Loan to each Designated Subsidiary
following any designation of such Designated Subsidiary as a Borrower hereunder
pursuant to Section 9.08 is subject to the Agent's receipt on or before the date
of such initial Loan of each of the following, in form and substance
satisfactory to the Agent and dated such date, and (except for the Syndicated
Notes) in sufficient copies for each Lender:
(a) The Syndicated Notes of such Borrower to the order of the
Lenders, respectively.
(b) Certified copies of the resolutions of the Board of
Directors of such Borrower (with a certified English translation if the
original thereof is not in English) approving this Agreement and the
Notes of such Borrower, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to
this Agreement and such Notes.
(c) A certificate of the Secretary or an Assistant Secretary
of such Borrower certifying the names and true signatures of the
officers of such Borrower authorized to sign this Agreement and the
Notes of such Borrower and the other documents to be delivered
hereunder.
(d) A certificate signed by a duly authorized officer of the
Company, dated as of the date of such initial Loan, certifying that
such Borrower shall have obtained all governmental and third party
authorizations, consents, approvals (including exchange control
approvals) and licenses required under applicable laws and regulations
necessary for such Borrower to execute and deliver this Agreement and
the Notes and to perform its obligations thereunder.
(e) The Designation Letter of such Designated Subsidiary,
substantially in the form of Exhibit D hereto.
(f) Evidence of the Process Agent's acceptance of its
appointment pursuant to Section 9.14(a) as the agent of such Borrower,
substantially in the form of Exhibit E hereto.
(g) A favorable opinion of counsel (which may be in-house
counsel) to such Designated Subsidiary, dated the date of such initial
Loan, covering, to the extent customary and appropriate for the
relevant jurisdiction, the opinions outlined on Exhibit G hereto.
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(h) Such other approvals, opinions or documents as any Lender,
through the Agent, may reasonably request.
SECTION 3.03. Conditions Precedent to Each Syndicated
Borrowing. The obligation of each Lender to make a Syndicated Loan on the
occasion of each Syndicated Borrowing shall be subject to the conditions
precedent that the Effective Date shall have occurred and on the date of such
Syndicated Borrowing (a) the following statements shall be true (and each of the
giving of the applicable Notice of Syndicated Borrowing and the acceptance by
the Borrower requesting such Syndicated Borrowing of the proceeds of such
Syndicated Borrowing shall constitute a representation and warranty by such
Borrower that on the date of such Borrowing such statements are true):
(i) the representations and warranties contained in Section
4.01 (except the representations set forth in the last sentence of
subsection (e) and in subsection (f) thereof (other than clause (ii)
thereof)) thereof are correct in all material respects on and as of the
date of such Syndicated Borrowing, before and after giving effect to
such Syndicated Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, and additionally, if
such Syndicated Borrowing shall have been requested by a Designated
Subsidiary, the representations and warranties of such Designated
Subsidiary contained in its Designation Letter are correct in all
material respects on and as of the date of such Syndicated Borrowing,
before and after giving effect to such Syndicated Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date;
(ii) no event has occurred and is continuing, or would result
from such Syndicated Borrowing or from the application of the proceeds
therefrom, that constitutes a Default;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request.
SECTION 3.04. Conditions Precedent to Each Competitive Bid
Borrowing. The obligation of each Lender that is to make a Competitive Bid Loan
on the occasion of a Competitive Bid Borrowing to make such Competitive Bid Loan
as part of such Competitive Bid Borrowing is subject to the conditions precedent
that (i) the Agent shall have received the written confirmatory Notice of
Competitive Bid Borrowing with respect thereto, (ii) on or before the date of
such Competitive Bid Borrowing, but prior to such Competitive Bid Borrowing, the
Agent shall have received a Competitive Bid Note payable to the order of such
Lender for each of the one or more Competitive Bid Loans to be made by such
Lender as part of such Competitive Bid Borrowing, in a principal amount equal to
the principal amount of the Competitive Bid Loan to be evidenced
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thereby and otherwise on such terms as were agreed to for such Competitive Bid
Loan in accordance with Section 2.03, and (iii) on the date of such Competitive
Bid Borrowing the following statements shall be true (and each of the giving of
the applicable Notice of Competitive Bid Borrowing and the acceptance by the
Borrower requesting such Competitive Bid Borrowing of the proceeds of such
Competitive Bid Borrowing shall constitute a representation and warranty by such
Borrower that on the date of such Competitive Bid Borrowing such statements are
true):
(a) the representations and warranties contained in Section
4.01 (except the representations set forth in the last sentence of
subsection (e) thereof and in subsection (f) thereof (other than clause
(ii) thereof)) are correct in all material respects on and as of the
date of such Competitive Bid Borrowing, before and after giving effect
to such Competitive Bid Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date, and, if such
Competitive Bid Borrowing shall have been requested by a Designated
Subsidiary, the representations and warranties of such Designated
Subsidiary contained in its Designation Letter are correct in all
material respects on and as of the date of such Competitive Bid
Borrowing, before and after giving effect to such Competitive Bid
Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date,
(b) no event has occurred and is continuing, or would result
from such Competitive Bid Borrowing or from the application of the
proceeds therefrom, that constitutes a Default, and
(c) no event has occurred and no circumstance exists as a
result of which the information concerning such Borrower that has been
provided to the Agent and each Lender by such Borrower in connection
herewith would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements contained
therein, in the light of the circumstances under which they were made,
not materially misleading.
SECTION 3.05. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Company,
by notice to the Lenders, designates as the proposed Effective Date, specifying
its objection thereto. The
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Agent shall promptly notify the Lenders of the occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrowers.
Each Borrower represents and warrants as follows:
(a) Each 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. Each 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 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 financial condition or operations of the Company and its
Subsidiaries taken as a whole.
(b) The execution, delivery and performance by each Borrower
of this Agreement and the Notes of such Borrower are within such
Borrower's corporate powers, have been duly authorized by all necessary
corporate action and do not contravene (i) such Borrower's charter or
by-laws (or equivalent constitutive documents) or (ii) any law, rule,
regulation or contractual restriction in any material contract or, to
the knowledge of the Chief Financial Officer of the Company, any other
contract the breach of which would limit the ability of any Borrower to
perform its obligations under this Agreement or the Notes, binding on
or affecting any 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 any
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 each Borrower party
thereto enforceable against such Borrower in accordance with their
respective terms.
(e) The Consolidated financial statements of the Company and
its Consolidated Subsidiaries as of December 31, 1995 and the related
Consolidated statements of income, Consolidated balance sheets,
Consolidated statements of shareholders'
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equity and Consolidated statements of cash flows for the fiscal year
then ended, reported on by Ernst & Young and set forth in the Company's
1995 Form 10-K, and the Consolidated financial statements of the
Company and its Consolidated Subsidiaries as of June 28, 1996 and the
related Consolidated statements of income, Consolidated balance sheets,
Consolidated statements of shareholders' equity and Consolidated
statements of cash flows for the six months then ended, duly certified
by the chief financial officer of the Company, a copy of which has been
delivered to each of the Lenders, fairly present, subject, in the case
of said financial statements as at June 28, 1996, to year-end audit
adjustments, in accordance with generally accepted accounting
principles, the consolidated financial position of the Company and its
Consolidated Subsidiaries at such dates and their consolidated results
of operations for the periods ended on such dates. Since December 31,
1995, there has been no material adverse change in the business,
financial position or results of operations of the Company and its
Subsidiaries, taken as a whole.
(f) There is no pending or, to the best of each Borrower's
knowledge, threatened action or proceeding involving any Borrower or
any of its Subsidiaries before any court, governmental agency or
arbitrator, (i) which is likely to materially adversely affect the
financial condition or operations of the Company and its Subsidiaries
taken as a whole or (ii) which purports to affect the legality,
validity or enforceability of this Agreement or any Note.
(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) No Borrower is 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 Company or any
ERISA Affiliate with respect to each Plan has been filed with the
Internal Revenue Service, and each such
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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) No Borrower is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. Affirmative Covenants. So long as any Loan shall
remain unpaid or any Lender shall have any Commitment hereunder, the Company
will, unless the Majority Lenders 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 and all applicable environmental laws),
noncompliance with which would materially adversely affect the business
or financial condition of the Company and its Consolidated
Subsidiaries, taken as a whole.
(b) Reporting Requirements. Furnish to the Agent on behalf of
the Lenders:
(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 Company, commencing with the fiscal
quarter ending September 27, 1996, Consolidated balance sheets
of the Company and its Consolidated Subsidiaries as of the end
of such quarter, and related Consolidated statements of income
of the Company 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 Company and
its Consolidated Subsidiaries for such quarter and for such
period, in each case signed by the chief financial officer of
the Company, together with (A) the representation and warranty
of the Company to the effect that no Default has occurred and
is continuing or, if a Default has occurred and is continuing,
a statement as to the nature thereof and the action which the
Company has taken and proposes to take with respect thereto
and (B) a schedule in form satisfactory to the Majority
Lenders of the computations used by the Company in
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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
Company, a copy of the annual report for such year for the
Company 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 Lenders stating that
such Consolidated financial statements fairly present the
Consolidated financial position of the Company 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 Company's independent public accountants)
and that the audit by such accountants in connection with such
Consolidated financial statements has been made in accordance
with generally accepted auditing standards, together with (A)
the representation and warranty of the Company 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
Company has taken and proposes to take with respect thereto
and (B) a schedule in form satisfactory to the Majority
Lenders of the computations used by the Company 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 Company 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 Company has taken and proposes to take with respect
thereto;
(iv) promptly after the sending or filing thereof,
copies of all reports which the Company 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 Company 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
60 Business Days after the Company or any ERISA Affiliate
knows or has reason to know that any Termination Event
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described in clause (i) of the definition of Termination Event
with respect to any Plan has occurred and (B) within 30
Business Days after the Company 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 Company describing such Termination
Event and the action, if any, which the Company or such ERISA
Affiliate proposes to take with respect thereto;
(vi) promptly and in any event within six Business
Days after receipt thereof by the Company or any ERISA
Affiliate, copies of each notice received by the Company 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
Business Days after receipt thereof by the Company or any
ERISA Affiliate from the sponsor of a Multiemployer Plan, a
copy of each notice received by the Company 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 Company or any ERISA Affiliate
in connection with any event described in clause (A), (B) or
(C) above;
(viii) promptly after the preparation thereof, if
any, annual financial statements of each of the Borrowers
other than the Company; and
(ix) such other information respecting the condition
or operations, financial or otherwise, of the Company or any
of its Subsidiaries as any Lender through the Agent 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 Company 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 Company or any Subsidiary from discontinuing the
operation or maintenance of any of such properties if such
discontinuance is not materially adverse to the Lenders and,
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in the judgment of the Company, 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
Company or such Subsidiary operates, provided that the Company may
self-insure, or insure through captive insurers or insurance
cooperatives, to the extent consistent with prudent business practices.
(e) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a lien or encumbrance upon its
property; provided, however, that neither the Company nor any of its
Subsidiaries shall be required to pay and discharge any such tax,
assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained in accordance with GAAP, unless and until any lien or
encumbrance resulting therefrom attaches to its property and becomes
enforceable against its other creditors.
(f) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence; provided, however, that the Company and its
Subsidiaries may consummate any merger or consolidation permitted under
Section 5.02(c).
(g) Rating Agencies. Maintain ratings of its commercial paper
by not fewer than three Rating Agencies.
SECTION 5.02. Negative Covenants. So long as any Loan shall
remain unpaid or any Lender shall have any Commitment hereunder, the Company
will not, without the written consent of the Majority Lenders:
(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
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<PAGE> 49
such Principal Property, shares of stock or indebtedness are now owned
or hereafter acquired). "Restricted Subsidiary" means any Subsidiary
which owns or is the lessee of any Principal Property. "Principal
Property" means each bottling plant or facility; 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 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 June 28,
1996;
(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 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,
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 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 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 to the Company or a Restricted Subsidiary;
(6) Mortgages on property of the Company or a
Restricted Subsidiary in favor of the United States of
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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 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
Company 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
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 clauses (1) through (7) above), does not
at the time exceed 15% of the shareholders' 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.
(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 Company's published Consolidated
financial statements and calculated under the generally accepted
accounting principles and practices applied by the Company on the date
hereof in the preparation of its Consolidated financial statements.
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(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 Company may merge or consolidate with or into, or dispose of
assets to, any other Subsidiary of the Company and (ii) any Subsidiary
of the Company may merge into or dispose of assets to the Company 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 Company is a party the Company
is the surviving corporation.
(d) Affiliate Transactions. Engage in, or permit any of its
Subsidiaries to engage in any transaction (other than transactions
between the Company and any Subsidiary or between Subsidiaries of the
Company) involving payments, or property having a fair market value, in
excess of $30,000,000 with The Coca Cola Company or any Person
controlling, controlled by, or under common control with the Company,
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 Company 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 Company 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) any 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 or other amounts payable hereunder for
a period of five days after the same becomes due and payable; or
(b) any representation or warranty made or deemed (under
Section 3.03 or 3.04) to have been made by any Borrower (or any of its
officers) in connection with this Agreement, or by
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any Designated Subsidiary in the Designation Letter pursuant to which
such Designated Subsidiary became a Borrower hereunder, shall prove to
have been incorrect or misleading in any material respect when made or
deemed to have been made; or
(c) the Company shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 5.01(b)(iii), (v), (vi) or
(vii) or 5.02 provided that any such failure with respect to Section
5.01(b)(vii) shall be an Event of Default under this clause (i) only if
the amount of liability incurred or expected to be incurred by the
Company or any ERISA Affiliate exceeds $25,000,000, 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 Company
by the Agent or any Lender; 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 Company or any Subsidiary or under any guarantee
of payment by the Company 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 four 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 four Business Days after the Company 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 $50,000,000;
or
(e) the Company or any Subsidiary pursuant to or within the
meaning of any Bankruptcy Law: (i) commences a voluntary
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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; (v) a court of
competent jurisdiction enters an order or decree under any Bankruptcy
Law that (A) is for relief against the Company or any Subsidiary in an
involuntary case, (B) appoints a Custodian of the Company or any
Subsidiary or for all or substantially all of its property, or (C)
orders the liquidation of the Company 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 Company'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 or similar official under any Bankruptcy Law; or
(f) any judgment or order for the payment of money in excess
of $50,000,000 shall be rendered against the Company 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; provided, however, that any such
judgment or order shall not be an Event of Default under this Section
6.01(f) if and for so long as (i) the amount of such judgment or order
is covered by a valid and binding policy of insurance between the
defendant and the insurer covering payment thereof and (ii) such
insurer has been notified of, and has not denied the claim made for
payment of, the amount of such judgment or order; or
(g) any Termination Event with respect to a Plan shall have
occurred and 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 Company or any
ERISA Affiliate related to such Termination Event) is equal to or
greater than $30,000,000; or
(h) the Company or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has
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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 Company 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 Company 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; or
(j) any provision of Article VII hereof shall for any reason
cease to be valid and binding on or enforceable against the Company or
the chief financial officer of the Company shall so state in writing by
reference to this Section;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrowers, declare the
obligation of each and every Lender to make Loans to be terminated, whereupon
the same shall forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Majority Lenders, by notice to the Borrowers, declare all
Notes, all interest thereon and all other amounts payable under this Agreement
to be forthwith due and payable, whereupon the Notes, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrowers; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to any Borrower under any
Bankruptcy Law, (A) the obligation of each Lender to make Loans shall
automatically be terminated and (B) the Notes, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrowers.
ARTICLE VII
GUARANTEE
SECTION 7.01. Unconditional Guarantee. For valuable
consideration, receipt whereof is hereby acknowledged, and to
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induce each Lender to make Loans to the Designated Subsidiaries and to induce
the Agent to act hereunder, the Company hereby unconditionally and irrevocably
guarantees to each Lender and the Agent the punctual payment when due, whether
at stated maturity, by acceleration or otherwise, of all obligations of each of
the other Borrowers now or hereafter existing under this Agreement, whether for
principal, interest, fees, expenses or otherwise (such obligations being the
"Obligations"). Without limiting the generality of the foregoing, the Company's
liability shall extend to all amounts that constitute part of the Obligations
and would be owed by any other Borrower to the Agent or any other Lender under
this Agreement but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
any such other Borrower.
SECTION 7.02. Guarantee Absolute. The Company guarantees that
the Obligations will be paid strictly in accordance with the terms of this
Agreement, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of any Lender or
the Agent with respect thereto. The obligations of the Company under this
Article VII are independent of the Obligations, and a separate action or actions
may be brought and prosecuted against the Company to enforce this Article VII,
irrespective of whether any action is brought against any other Borrower or
whether any other Borrower is joined in any such action or actions. The
liability of the Company under this guarantee shall be irrevocable absolute and
unconditional irrespective of, and the Company hereby irrevocably waives any
defenses it may now or hereafter have in any way relating to, any or all of the
following:
(a) any lack of validity or enforceability of this Agreement
or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to departure from this Agreement
(including, without limitation, any Commitment extension pursuant to
Section 9.09);
(c) any taking, exchange, release or non-perfection of any
collateral or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the
Obligations;
(d) any change, restructuring or termination of the corporate
structure or existence of any other Borrower; or
(e) any other circumstance, (including, without limitation,
any statute of limitations to the fullest extent permitted by
applicable law) which might otherwise constitute
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a defense available to, or a discharge of, the Company, any other
Borrower or a guarantor.
This guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by any of the Lenders or the Agent upon the insolvency,
bankruptcy or reorganization of any other Borrower or otherwise, all as though
such payment had not been made.
SECTION 7.03. Waivers. (a) The Company hereby expressly waives
promptness, diligence, notice of acceptance, presentment, demand for payment,
protest, any requirement that any right or power be exhausted or any action be
taken against any other Borrower or against any other guarantor of all or any
portion of the Loans, and all other notices and demands whatsoever.
(b) The Company hereby waives any right to revoke this
guaranty, and acknowledges that this guaranty is continuing in nature and
applies to all Obligations, whether existing now or in the future.
(c) The Company acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated herein
and that the waivers set forth in this Article VII are knowingly made in
contemplation of such benefits.
(d) The Company agrees that payments made by it pursuant to
this Article VII will be subject to the provisions of Section 2.13 and Section
9.13 as if such payments were made by the Company in its capacity as a Borrower.
SECTION 7.04. Subrogation. The Company will not exercise any
rights that it may now or hereafter acquire against any other Borrower, any
Designated Subsidiary or any other insider guarantor that arise from the
existence, payment, performance or enforcement of the Obligations under this
Agreement, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any other Lender against
another Borrower or any other insider guarantor or any collateral, whether or
not such claim, remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or receive from
another Borrower or any other insider guarantor, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Obligations
and all other amounts payable under this guaranty shall have been paid in full
in cash and the Commitments shall have expired or terminated. If any amount
shall be paid to the Company in violation of the preceding sentence at
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any time prior to the later of the payment in full in cash or immediately
available funds of the Obligations and all other amounts payable under this
guaranty and the Termination Date, such amount shall be held in trust for the
benefit of the Agent and the other Lenders and shall forthwith be paid to the
Agent to be credited and applied to the Obligations and all other amounts
payable under this guaranty, whether matured or unmatured, in accordance with
the terms of this Agreement, or to be held as collateral for any Obligations or
other amounts payable under this guaranty thereafter arising. If (i) the Company
shall make payment to the Agent or any other Lender of all or any part of the
Obligations, (ii) all the Obligations and all other amounts payable under this
guaranty shall be paid in full in cash and (iii) the Termination Date shall have
occurred, the Agent and the other Lenders will, at the Company's request and
expense, execute and deliver to the Company appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to the Company of an interest in the Obligations
resulting from such payment by the Company. The Company acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by this Agreement and that the waiver set forth in this section is
knowingly made in contemplation on such benefits.
SECTION 7.05. Survival. This guaranty is a continuing
guarantee and shall (a) remain in full force and effect until payment in full
(after the Termination Date) of the Obligations and all other amounts payable
under this guaranty, (b) be binding upon the Company, its successors and
assigns, (c) inure to the benefit of and be enforceable by each Lender
(including each assignee Lender pursuant to Section 9.07) and the Agent and
their respective successors, transferees and assigns and (d) shall be reinstated
if at any time any payment to a Lender or the Agent hereunder is required to be
restored by such Lender or the Agent. Without limiting the generality of the
foregoing clause (c), each Lender may assign or otherwise transfer its interest
in any Loan to any other Person, and such other Person shall thereupon become
vested with all the rights in respect thereof granted to such Lender herein or
otherwise.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action. (a) Each Lender hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or
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collection of the Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Lenders, and such instructions shall be
binding upon all Lenders and all holders of Notes; provided, however, that the
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement or applicable law. The
Agent agrees to give to each Lender prompt notice of each notice given to it by
any Borrower pursuant to the terms of this Agreement.
(b) Each Lender hereby also appoints and authorizes Citibank
to act as the US Sub-Agent hereunder and to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement as are
delegated to the US SubAgent under Section 2.02 or as are otherwise from time to
time delegated thereto by the Agent, together with such powers and discretions
as are reasonably incidental thereto. In such capacity, the US Sub-Agent shall
be entitled to the benefits of all of the provisions of this Article VIII
(including, without limitation, Section 8.05) as if such provisions were set
forth in full herein with respect thereto.
SECTION 8.02. Agent's Reliance, Etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (a) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.07; (b) may consult with legal counsel (including counsel for the
Company), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with this Agreement; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement on the part of any Borrower
or to inspect the property (including the books and records) of any Borrower;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; and (f) shall incur
no liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or
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writing (which may be by telecopier, telegram or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 8.03. Citibank International and Affiliates. With
respect to its Commitment, the Loans made by it and the Note issued to it,
Citibank International shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include Citibank International in its individual capacity. Citibank
International and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, the Company, any of its
Subsidiaries and any Person who may do business with or own securities of the
Company or any such Subsidiary, all as if Citibank International were not the
Agent and without any duty to account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender and based on the financial statements referred to in Section 4.01(e) and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 8.05. Indemnification. The Lenders agree to indemnify
the Agent (to the extent not reimbursed by a Borrower), ratably according to the
respective principal amounts of the Syndicated Notes then held by each of them
(or if no Syndicated Notes are at the time outstanding, ratably according to the
respective amounts of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by the Agent under
this Agreement, provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this
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Agreement, to the extent that the Agent is not reimbursed for such expenses by a
Borrower.
SECTION 8.06. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Lenders and the Company and may be
removed at any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Agent which, so long as no Default shall have occurred and be
continuing, shall be subject to the Company's approval, which approval shall not
be unreasonably withheld or delayed. If no successor Agent shall have been so
appointed by the Majority Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of resignation or the
Majority Lenders' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 8.07. Co-Agents. Bank of America NT&SA, Deutsche Bank
AG, New York Branch, NationsBank, N.A. and Union Bank of Switzerland have been
designated as Co-Agents under this Agreement, but the use of such title does not
impose on any of them any duties or obligations greater than those of any other
Lender.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Syndicated Notes, nor consent to any
departure by any Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Majority Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders affected
thereby, do any of the following: (a) waive any of the conditions specified in
Section 3.01, (b) increase the Commitments of the Lenders or subject the Lenders
to any additional obligations, (c) reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, (d) postpone any
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date fixed for any payment of principal of, or interest on, the Notes or any
fees or other amounts payable hereunder, (e) release the Company from any of its
obligations under Article VII, (f) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Loans, or the number of Lenders,
that shall be required for the Lenders or any of them to take any action
hereunder or (g) amend this Section 9.01; and provided further that no
amendment, waiver or consent shall, unless in writing and signed by the Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Agent under this Agreement or any Note.
SECTION 9.02. Notices, Etc. (a) All notices and other
communications provided for hereunder shall be in writing (including telex,
facsimile or similar communication) and mailed (return receipt requested) or
delivered, if to any Initial Borrower or to any Designated Subsidiary, at the
Company's address at 2500 Windy Ridge Parkway, Floor 11, Atlanta, Georgia 30339,
Attention: Treasury Services; if to any Initial Lender, at its Domestic Lending
Office specified opposite its name on Schedule I hereto; if to any other Lender,
at its Domestic Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender; if to the Agent, at its address at 3rd
Floor Riverdale House, 68 Molesworth Street, Lewisham, England SE13 7EU,
Attention: Loans Agency Department; and if to the US Sub-Agent, at its address
at One Court Square, 7th Floor, Zone 1, Long Island City, New York 11120,
Attention: Mr. Matthew Carter, Bank Loan Syndication Department; or, as to any
Borrower or the Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Company and the Agent. All such notices and communications shall be
effective (i) if given by telex, when such telex is transmitted to the
applicable telex number and the appropriate answerback is received, (ii) if
given by facsimile, when such facsimile is transmitted to the applicable
facsimile number and telephonic confirmation is received, (iii) if given by
mail, five 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 appropriate address, except that notices and
communications to the Agent or the US Sub-Agent pursuant to Article II, III or
VIII shall not be effective until received by the Agent. 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. Delivery by facsimile of
an executed counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.
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(b) Notwithstanding anything to the contrary contained in this
Agreement or any Note, (i) any notice to the Borrowers or to any one of them
required under this Agreement or any such Note that is delivered to the Company
shall constitute effective notice to the Borrowers or to any such Borrower,
including the Company and (ii) any Notice of Borrowing may be delivered by any
Borrower or by the Company, on behalf of any other Borrower. Each Initial
Borrower (other than the Company) and each Designated Subsidiary hereby
irrevocably appoints the Company as its authorized agent to receive and deliver
notices in accordance with this Section 9.02, and hereby irrevocably agrees that
(A) in the case of clause (i) of the immediately preceding sentence, the failure
of the Company to give any notice referred to therein to any such Initial
Borrower or any such Designated Subsidiary, as the case may be, to which such
notice applies shall not impair or affect the validity of such notice with
respect thereto and (B) in the case of clause (ii) of the immediately preceding
sentence, the delivery of any such notice by the Company, on behalf of any other
Borrower, shall be binding on such other Borrower to the same extent as if such
notice had been executed and delivered directly by such Borrower.
SECTION 9.03. No Waiver; Remedies. No failure on the part of
any Lender or the Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses. (a) The Company shall pay
(i) all reasonable out-of-pocket expenses of the Agent, including fees and
disbursements of special counsel for the Agent, in connection with the
preparation, execution and delivery 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 reasonable
out-of-pocket expenses incurred by the Agent, the US Sub-Agent and the Lenders,
including fees and disbursements of counsel (or the reasonable allocable costs
and disbursements of any Lender's in-house counsel), in connection with such
Event of Default and collection and other enforcement proceedings resulting
therefrom.
(b) The Company agrees to indemnify and hold harmless the
Agent, the US Sub-Agent and each Lender and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation, litigation
or proceeding or preparation of a defense
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in connection therewith) the Notes, this Agreement, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the Loans,
except to the extent such claim, damage, loss, liability or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 9.04(b) applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by any
Borrower, its directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. Each
Borrower also agrees not to assert any claim against the Agent, the US
Sub-Agent, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Notes, this Agreement, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the Loans.
(c) If any Borrower makes any payment of principal with
respect to any Eurocurrency Rate Loan or LIBO Rate Loan (pursuant to Section
2.03(d), 2.05(b), 2.09 (a) or (b), 2.11, acceleration of the maturity of the
Notes pursuant to Section 6.01 or otherwise) on any day other than the last day
of the Interest Period applicable thereto, or if any Borrower fails to borrow
any Eurocurrency Rate Loans or LIBO Rate Loans after notice has been given to
the Agent in accordance with Section 2.02 or 2.03, such Borrower shall reimburse
each Lender 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 Lender shall have delivered to
the Company 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 Lender has granted a participation in a Loan, the
aggregate amount of losses and expenses demanded by such Lender shall not exceed
the aggregate amount of losses and expenses that such Lender would have incurred
had it not granted such participation.
(d) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in Sections 2.10, 2.13 and 9.04 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the Notes
and the termination in whole of the Commitments hereunder; provided, however,
that the obligations of the Borrowers contained in Sections 2.10, 2.13 and 9.04
shall terminate upon the third anniversary of the later of such payment and
termination of the
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Commitments except to the extent of any claims that have not been fully
satisfied in accordance with the terms of such Sections; and provided, further,
that each Lender and the Agent (as the case may be) agrees to make written
demand upon the applicable Borrower no later than six months after such Lender
or the Agent (as the case may be) receives actual knowledge of the event giving
rise to a claim under Sections 2.10, 2.13 and 9.04 and its effect upon this
Agreement and if such Lender or the Agent fails to give such notice within such
time limitation, such Borrower shall have no obligation to pay any amount
thereunder arising prior to the 180th day preceding such demand.
SECTION 9.05. Right of Set-off; Sharing of Payments. (a) Upon
(i) the occurrence and during the continuance of any Event of Default and (ii)
the making of the request or the granting of the consent specified by Section
6.01 to authorize the Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender and each of its Affiliates 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 Lender or such Affiliate to or for the credit or the account
of any Borrower against any and all of the obligations of such Borrower now or
hereafter existing under this Agreement and the Note of such Borrower held by
such Lender, whether or not such Lender shall have made any demand under this
Agreement or such Note and although such obligations may be unmatured. Each
Lender agrees promptly to notify the relevant Borrower after any such set-off
and application, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of each Lender and its
Affiliates under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender and
its Affiliates may have.
(b) Each Lender 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 Lender in
respect of the aggregate amount of principal and interest due with respect to
any Note held by such other Lender (a "non-pro rata payment"), the Lender
receiving such non-pro rata payment shall promptly purchase such participations
in the Notes held by the other Lenders, and such other adjustments shall be
made, as may be required so that all such non-pro rata payments shall be shared
by the Lenders (i) pro rata in accordance with the principal amounts of their
Notes (other than Competitive Bid 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 Competitive Bid
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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 impair the right
of any Lender 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 Borrowers other than its indebtedness under the Notes. Each 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 such Borrower in the amount of such
participation. Each Lender receiving any non-pro rata payment shall notify the
Agent, the Company and the other Lenders of such payment within five Business
Days after receipt.
SECTION 9.06. Binding Effect. This Agreement shall become
effective (other than Sections 2.01 and 2.03, which shall only become effective
upon satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by each Initial Borrower and the Agent and when the
Agent shall have been notified by each Initial Lender that such Initial Lender
has executed it and thereafter shall be binding upon and inure to the benefit of
each Borrower, the Agent, the US Sub-Agent and each Lender and their respective
successors and assigns, except that no Borrower shall have the right to assign
its rights hereunder or any interest herein without the prior written consent of
the Lenders.
SECTION 9.07. Assignments and Participations. (a) Each Lender
may assign, with the consent, not to be unreasonably withheld, of the Agent and
the Company, to one or more Persons all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Syndicated Loans owing to it and the Syndicated
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all rights and
obligations under this Agreement (other than any right to make Competitive Bid
Loans, Competitive Bid Loans owing to it and Competitive Bid Notes), (ii) except
in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than the lesser of (x) $20,000,000 or an integral multiple of
$1,000,000 in excess thereof or (y) an amount equal to the product of
$20,000,000 and a fraction the numerator of which is such Lender's Commitment
and the denominator of which is the sum of such Lender's Commitment and the
"Commitment" of such Lender under the $1,000,000,000 364-Day Credit Agreement
dated as of November 4, 1996 (the "364-Day Credit Agreement") among the Company,
the lenders and co-agents parties
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thereto and Citibank, as agent, provided that contemporaneously with such
assignment, such Lender shall assign to such assignee an amount of such Lender's
"Commitment" under the 364-Day Credit Agreement equal to the excess of
$20,000,000 over the amount described in this clause (y), (iii) each such
assignment shall be to an Eligible Assignee and (iv) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any
Syndicated Note subject to such assignment and a processing and recordation fee
of $3,500. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Company or the performance or observance by the Borrowers of any of their
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, the US Sub-Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent and the US
Sub-Agent to take such action as agent on its behalf and to exercise such powers
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and discretion under this Agreement as are delegated to the Agent and the US
Sub-Agent, respectively, by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Syndicated Note or Notes subject to such assignment,
the Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company and each other Borrower. Within
five Business Days after its receipt of such notice, each Borrower, at its own
expense, shall execute and deliver to the Agent in exchange for the surrendered
Syndicated Note made by such Borrower a new Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a Commitment
hereunder, a new Syndicated Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Syndicated
Note or Notes from each Borrower shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Syndicated Note or Notes,
shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A-1 hereto.
(d) The Agent shall maintain at its address referred to in
Section 9.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes absent manifest error, and the Company,
each other Borrower, the Agent, the US Sub-Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Company, any other Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(e) Each Lender may sell participations to one or more banks
or other entities (other than the Company or any of its Affiliates) in or to all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Loans owing to it
and the Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation,
64
<PAGE> 68
its Commitment to the Company and the other Borrowers hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Note for all purposes of this Agreement, (iv) the Company
and each other Borrower, the Agent, the US Sub-Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note, or any consent to any
departure by any Borrower therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.
(f) Any Lender may, in connection with an assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to an existing or proposed assignee or participant any
information relating to the Company or any Borrower furnished to such Lender by
or on behalf of the Company or such Borrower; provided, however, that, prior to
any such disclosure, the existing or proposed assignee or participant shall
agree to preserve the confidentiality of any Confidential Information relating
to the Company or any Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this
Agreement, any Lender may, without consent of the Company or the Agent, (i) at
any time create a security interest in all or any portion of its rights under
this Agreement (including, without limitation, the Loans owing to it and the
Note or Notes held by it) in favor of any Federal Reserve Bank in accordance
with Regulation A of the Board of Governors of the Federal Reserve System and
(ii) assign, with notice to the Company and the Agent, all or part of its rights
or obligations under this Agreement to any of its Affiliates or any other
Lender.
SECTION 9.08. Designated Subsidiaries. The Company may at any
time, and from time to time, by delivery to the Agent of a Designation Letter
duly executed by the Company and the respective Subsidiary and substantially in
the form of Exhibit D hereto, designate such Subsidiary as a "Designated
Subsidiary" for purposes of this Agreement and such Subsidiary shall thereupon
become a "Designated Subsidiary" for purposes of this Agreement and, as such,
shall have all of the rights and obligations of a Borrower hereunder. The Agent
shall promptly notify each Lender of each such designation by the Company and
the identity of the respective Subsidiary.
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<PAGE> 69
SECTION 9.09. Commitment Extension. The Company shall have the
right to make requests for one-year extensions of the Termination Date; any such
request shall be received by the Agent at least 30 days (but not more than 60
days) prior to any anniversary of the Effective Date. Each such request shall be
irrevocable and binding upon the Borrowers. The Agent shall promptly notify each
Lender of any such request. If a Lender agrees, in its individual and sole
discretion, to so extend its Commitment (an "Extending Lender"), it will notify
the Agent, in writing, of its decision to do so within 30 days after receipt of
such notice from the Agent but in any event, no later than 15 days prior to the
next anniversary of the Effective Date. The Commitment of any Lender that fails
to accept the Company's request for extension of the Termination Date (a
"Declining Lender") shall be terminated on the Termination Date originally in
effect (without regard to extension by other Lenders). The Company shall have
the right to first, accept from the Extending Lenders increases in their
respective Commitments by an aggregate amount up to the amount of all Declining
Lenders' Commitments and second, to identify Eligible Assignees that agree to
accept assignments of Commitments ("Replacement Lenders") in an amount equal to
the amount of all Declining Lenders' Commitments not otherwise assumed by
Extending Lenders, in each case by requiring each Declining Lender to assign in
full its rights and obligations under this Agreement to one or more Extending
Lenders or Replacement Lenders, provided that (i) such assignment is otherwise
in compliance with Section 9.07, (ii) such Declining Lender receives payment in
full of the principal amount of all Advances owing to such Declining Lender,
together with accrued interest thereon to the date of such payment of principal
and all other amounts payable to such Declining Lender under this Agreement and
(iii) any such assignment shall be effective on the date specified by the
Company and agreed to by the applicable Extending Lenders or Replacement Lenders
and the Agent. If, but only if, Extending Lenders and/or Replacement Lenders
provide Commitments in an aggregate amount equal to 100% of the aggregate amount
of the Commitments outstanding immediately prior to the Termination Date in
effect at the time the Company requests such extension, the Termination Date
shall be extended by one year.
SECTION 9.10. Confidentiality. Neither the Agent nor any
Lender shall disclose any Confidential Information to any other Person without
the consent of the Company, other than (a) to the Agent's, the US Sub-Agent's or
such Lender's Affiliates and their officers, directors, employees, agents and
advisors, and then only for use in connection with the transaction contemplated
by this Agreement and on a "need to know" basis, and, as contemplated by Section
9.07(f), to actual or prospective assignees and participants, and then only on a
confidential basis, (b) as required by any law, rule or regulation or judicial
process and (c) as requested or required by any state, federal or foreign
authority or examiner regulating banks or banking.
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<PAGE> 70
SECTION 9.11. Governing Law. This Agreement, each Designation
Letter and the Notes shall be governed by, and construed in accordance with, the
laws of the State of New York.
SECTION 9.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.13. Judgment. (a) If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due hereunder or under
the Notes in Dollars into another currency, the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the Agent
could purchase Dollars with such other currency at Citibank's principal office
in London at 11:00 A.M. (London time) on the Business Day preceding that on
which final judgment is given.
(b) If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder or under the Notes in a Primary
Currency into Dollars, the parties agree to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase such Primary
Currency with Dollars at Citibank's principal office in London at 11:00 A.M.
(London time) on the Business Day preceding that on which final judgment is
given.
(c) The obligation of any Borrower in respect of any sum due
from it to any Lender or the Agent hereunder or under a Note held by such Lender
shall, notwithstanding any judgment in a currency other than Dollars, be
discharged only to the extent that on the Business Day following receipt by such
Lender or the Agent (as the case may be) of any sum adjudged to be so due in
such other currency, such Lender or the Agent (as the case may be) may in
accordance with normal banking procedures purchase Dollars with such other
currency; if the Dollars so purchased are less than such sum due to such Lender
or the Agent (as the case may be) in Dollars, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender or the Agent (as the case may be) against such loss, and if the Dollars
so purchased exceed such sum due to any Lender or the Agent (as the case may be)
in Dollars, such Lender or the Agent (as the case may be) agrees to remit to
such Borrower such excess.
SECTION 9.14. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for
67
<PAGE> 71
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the Notes, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such federal court. Each Initial Borrower hereby
agrees that service of process in any such action or proceeding brought in any
such New York State court or in such federal court may be made upon CT
Corporation System at its offices at 1633 Broadway, New York, New York 10019
(the "Process Agent") and each Designated Subsidiary hereby irrevocably appoints
the Process Agent its authorized agent to accept such service of process, and
agrees that the failure of the Process Agent to give any notice of any such
service shall not impair or affect the validity of such service or of any
judgment rendered in any action or proceeding based thereon. Each Borrower
hereby further irrevocably consents to the service of process in any action or
proceeding in such courts by the mailing thereof by any parties hereto by
registered or certified mail, postage prepaid, to such Borrower at its address
specified pursuant to Section 9.02. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any party
may otherwise have to serve legal process in any other manner permitted by law
or to bring any action or proceeding relating to this Agreement or the Notes in
the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
COCA-COLA ENTERPRISES INC.
S/ VICKI G. ROMAN
By: ----------------------------
Name: Vicki G. Roman
68
<PAGE> 72
Title: Vice President and
Treasurer
BOTTLING HOLDINGS (GREAT BRITAIN) LTD.
S/ VICKI G. ROMAN
By: ----------------------------
Name: Vicki G. Roman
Title: Vice President and
Treasurer
69
<PAGE> 73
[THIS PAGE INTENTIONALLY LEFT BLANK]
70
<PAGE> 74
CITIBANK INTERNATIONAL PLC,
as Agent
S/ STEWART J. HOLMES
By: -------------------------------
Name: Stewart J. Holmes
Title: Vice President
COMMITMENT: THE LENDERS:
$ 150,000,000.00 CITIBANK, N.A.
S/ STEVEN R. VICTORIN
By:--------------------------------
Name: Steven R. Victorin
Title: Attorney-in-Fact
$ 90,000,000.00 ABN AMRO BANK N.V., ATLANTA AGENCY
S/ STEVEN HIPSMAN
By: --------------------------------
Name: Steven Hipsman
Title: Vice President
S/ LARRY KELLY
By: ------------------------------
Name: Larry Kelly
Title: Group Vice President
$ 127,500,000.00 BANK OF AMERICA NT&SA
S/ MICHELLE KACERGIS
By: -------------------------------
Name: Michelle Kacergis
Title: Vice President
$ 30,000,000.00 BANK BRUSSELS LAMBERT,
NEW YORK BRANCH
S/ JOHN KIPPAX
By: --------------------------------
Name: John Kippax
Title: Vice President
71
<PAGE> 75
S/ DOMINICK H. J. VANGAEVER
By: --------------------------------
Name: Dominick H. J. Vangaever
Title: Senior Vice President,
Credit
$ 90,000,000.00 CIBC INC.
S/ WILLIAM C. HUMPHRIES
By: --------------------------------
Name: William C. Humpries
Title: Director
$ 90,000,000.00 COMMERZBANK AG
S/ A. BREMER
By: --------------------------------
Name: A. Bremer
Title: Senior Vice President
S/ D. SUTTLES
By: --------------------------------
Name: D. Suttles
Title: Vice President
$ 30,000,000.00 THE DAI-ICHI KANGYO BANK, LTD.,
ATLANTA AGENCY
S/ TOSHIAKI KURIHARA
By: -------------------------------
Name: Toshiaki Kurihara
Title: Joint General Manager
$ 127,500,000.00 DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCH
S/ STEPHAN A. WIDEMANN
By:--------------------------------
Name: Stephan A. Widemann
Title: Vice President
S/ ALKA JAIN GOYAL
By:--------------------------------
Name: Alka Jain Goyal
Title: Assistant Vice President
72
<PAGE> 76
$ 60,000,000.00 THE FIRST NATIONAL BANK OF CHICAGO
S/ ROBERT H. WOLOHAN
By:--------------------------------
Name: Robert H. Wolohan
Title: Corporate Banking Officer
$ 30,000,000.00 KREDIETBANK N.V.,
GRAND CAYMAN BRANCH
S/ ROBERT SNAUFFER
By:--------------------------------
Name: Robert Snauffer
Title: Vice President
S/ TOD R. ANGUS
By:--------------------------------
Name: Tod R. Angus
Title: Vice President
$ 30,000,000.00 MIDLAND BANK PLC
S/ C. J. HORO
By:--------------------------------
Name: C. J. Horo
Title: Head of Consumer,
$ 127,500,000.00 NATIONSBANK, N.A.
S/ THOMAS F. O'NEILL
By:--------------------------------
Name: Thomas F. O'Neill
Title: Senior Vice President
$ 30,000,000.00 THE NORTHERN TRUST COMPANY
S/ JOHN J. CONWAY
By:--------------------------------
Name: John J. Conway
Title: Vice President
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<PAGE> 77
$ 60,000,000.00 SOCIETE GENERALE
S/ RALPH SAHEB
By:--------------------------------
Name: Ralph Saheb
Title: Vice President, Manager
$ 90,000,000.00 SUNTRUST BANK, ATLANTA
S/ WILLEM-JAN O. HATTINK
By:--------------------------------
Name: Willem-Jan O. Hattink
Title: Group Vice President
S/ KEVIN S. MCDONALD
By:--------------------------------
Name: Kevin S. McDonald
Title:
$ 30,000,000.00 SWISS BANK CORPORATION, NEW YORK
BRANCH
S/ THOMAS EGGENSCHWILER
By:--------------------------------
Name: Thomas Eggenschwiler
Title: Executive Director,
Credit Risk Management
S/ KAREN MAYROSE
By:--------------------------------
Name: Karen Mayrose
Title: Associate Director,
Banking Finance Support, N.A.
$ 90,000,000.00 TEXAS COMMERCE BANK, NATIONAL
ASSOCIATION
S/ MIKE COSTELLO
By:--------------------------------
Name: Mike Costello
Title: Vice President
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<PAGE> 78
$ 127,500,000.00 UNION BANK OF SWITZERLAND, NEW YORK BRANCH
S/ ROBERT W. CASEY, JR.
By:--------------------------------
Name: Robert W. Casey, Jr.
Title: Managing Director
S/ DIETER HOEPPLI
By:--------------------------------
Name: Dieter Hoeppli
Title: Assistant Vice President
$ 90,000,000.00 WACHOVIA BANK OF GEORGIA, N.A.
S/ BRADLEY S. MARCUS
By:--------------------------------
Name: Bradley S. Marcus
Title: Senior Vice President
$ 1,500,000,000.00 Total of the Commitments
75
<PAGE> 79
SCHEDULES
Schedule I - List of Applicable Lending Offices
EXHIBITS
Exhibit A-1 -Form of Syndicated Note
Exhibit A-2 -Form of Competitive Bid Note
Exhibit B-1 -Form of Notice of Syndicated Borrowing
Exhibit B-2 -Form of Notice of Competitive Bid Borrowing
Exhibit C -Form of Assignment and Acceptance
Exhibit D -Form of Designation Letter
Exhibit E -Form of Acceptance by Process Agent
Exhibit F -Form of Opinion of Miller & Martin, Counsel for the
Company
Exhibit G -Form of Opinion of Counsel to a Designated Subsidiary
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<PAGE> 80
SCHEDULE I
APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
Eurocurrency Primary Currency
Name of Initial Lender Domestic Lending Office Lending Office Lending Office
- ---------------------- ----------------------- -------------- --------------
<S> <C> <C> <C>
CITIBANK INTERNATIONAL PLC One Court Square, 7th Floor Riverdale House One Court Square, 7th Floor
Long Island City, NY 11120 68 Molesworth Street Long Island City, NY 11120
Attn: Matthew Carter 3rd Floor Attn: Matthew Carter
Phone: (718) 248-4478 Lewisham SE13 7EU Phone: (718) 248-4478
Fax: (718) 248-4845 ENGLAND Fax: (718) 248-4845
Attn: Cliff Posner
Phone: (171) 500-4247
Fax: (171) 500-4482
ABN AMRO BANK N.V., One Ravinia Drive One Ravinia Drive One Ravinia Drive
ATLANTA AGENCY Suite 1200 Suite 1200 Suite 1200
Atlanta, GA 30346 Atlanta, GA 30346 Atlanta, GA 30346
Attn: Patrick Thom Attn: Patrick Thom Attn: Patrick Thom
Phone: (770) 399-7381 Phone: (770) 399-7381 Phone:(770) 399-7381
Fax: (770) 399-7397 Fax: (770) 399-7397 Fax: (770) 399-7397
BANK BRUSSELS LAMBERT, 630 Fifth Avenue 630 Fifth Avenue 630 Fifth Avenue
NEW YORK BRANCH 6th Floor 6th Floor 6th Floor
New York, NY 10111 New York, NY 10111 New York, NY 10111
Attn: John Kippax Attn: John Kippax Attn: John Kippax
Phone: (212) 632-5316 Phone: (212) 632-5316 Phone: (212) 632-5316
Fax: (212) 333-5786 Fax: (212) 333-5786 Fax: (212) 333-5786
BANK OF AMERICA NT&SA 1850 Gateway Blvd. 1850 Gateway Blvd. 1850 Gateway Blvd.
Concord, CA 94520 Concord, CA 94520 Concord, CA 94520
Attn: Daryl Hurst Attn: Daryl Hurst Attn: Daryl Hurst
Phone: (510) 675-7777 Phone: (510) 675-7777 Phone: (510) 675-7777
Fax: (510) 675-7531 Fax: (510) 675-7531 Fax: (510) 675-7531
CIBC, INC. Two Paces West Two Paces West Two Paces West
2727 Paces Ferry Road 2727 Paces Ferry Road 2727 Paces Ferry Road
Suite 1200 Suite 1200 Suite 1200
Atlanta, GA 30339 Atlanta, GA 30339 Atlanta, GA 30339
Attn: Kelli Jones Attn: Kelli Jones Attn: Kelli Jones
Phone: (770) 319-4817 Phone: (770) 319-4817 Phone: (770) 319-4817
Fax: (770) 319-4950 Fax: (770) 319-4950 Fax: (770) 319-4950
COMMERZBANK AG, Promenade Two Promenade Two Promenade Two
ATLANTA AGENCY 1230 Peachtree Street, N.E. 1230 Peachtree Street, N.E. 1230 Peachtree Street, N.E.
Suite 3500 Suite 3500 Suite 3500
Atlanta, GA 30309 Atlanta, GA 30309 Atlanta, GA 30309
Attn: David Suttles Attn: David Suttles Attn: David Suttles
Phone: (404) 888-6500 Phone: (404) 888-6500 Phone: (404) 888-6500
Fax: (404) 888-6539 Fax: (404) 888-6539 Fax: (404) 888-6539
THE DAI-ICHI KANGYO Marquis Two Tower Marquis Two Tower Marquis Two Tower
BANK, LTD., ATLANTA AGENCY Suite 2400 Suite 2400 Suite 2400
285 Peachtree Center Ave. 285 Peachtree Center Ave. 285 Peachtree Center Ave.
Atlanta, GA 30303 Atlanta, GA 30303 Atlanta, GA 30303
Attn: Patrick Tracy Attn: Patrick Tracy Attn: Patrick Tracy
Phone: (404) 581-0200 Phone: (404) 581-0200 Phone: (404) 581-0200
Fax: (404) 581-9657 Fax: (404) 581-9657 Fax: (404) 581-9657
DEUTSCHE BANK A.G., New York Branch Cayman Islands Branch New York Branch NEW
YORK AND/OR CAYMAN 31 West 52nd Street 31 West 52nd Street 31 West 52nd Street
ISLANDS BRANCHES New York, NY 10019 New York, NY 10019 New York, NY 10019
Attn: Stephan Wiedemann Attn: Stephan Wiedemann Attn: Stephan Wiedemann
Phone: (212) 469-8663 Phone: (212) 469-8663 Phone: (212) 469-8663
Fax: (212) 469-8212 Fax: (212) 469-8212 Fax: (212) 469-8212
THE FIRST NATIONAL BANK One First National Plaza One First National Plaza One First National Plaza
OF CHICAGO Suite 0634, 1-10 First Chicago House Suite 0634, 1-10
Chicago, IL 60670 90 Long Acre Chicago, IL 60670
Attn: Yvette Thompkins London, ENGLAND Attn: Yvette Thompkins
Phone: (312) 732-1395 Attn: Dot O'Flaherty Phone: (312) 732-1395
Fax: (312) 732-4840 Phone: (171) 438-4150 Fax: (312) 732-4840
Fax: (171) 438-4148
</TABLE>
<PAGE> 81
<TABLE>
<S> <C> <C> <C>
KREDIETBANK N.V., 1349 West Peachtree Street 1349 West Peachtree Street 1349 West Peachtree Street
GRAND CAYMAN BRANCH Suite 1750 Suite 1750 Suite 1750
Atlanta, GA 30309 Atlanta, GA 30309 Atlanta, GA 30309
Attn: Kojo J. Asakura Attn: Kojo J. Asakura Attn: Kojo J. Asakura
Phone: (404) 876-2556 Phone: (404) 876-2556 Phone: (404) 876-2556
Fax: (404) 876-3212 Fax: (404) 876-3212 Fax: (404) 876-3212
MIDLAND BANK PLC 27-32 Poultry 27-32 Poultry 27-32 Poultry
London EC2P 2BX London EC2P 2BX London EC2P 2BX
ENGLAND ENGLAND ENGLAND
Attn: Philip Kemp Attn: Philip Kemp Attn: Philip Kemp
Phone: (171) 260-0525 Phone: (171) 260-0525 Phone: (171) 260-0525
Fax: (171) 260-4800 Fax: (171) 260-4800 Fax: (171) 260-4800
NATIONSBANK, N.A. Independence Center Independence Center Independence Center
15th Floor 15th Floor 15th Floor
101 North Tryon St., 101 North Tryon St., 101 North Tryon St.,
Charlotte, NC 28266 Charlotte, NC 28266 Charlotte, NC 28266
Attn: Leslie Henson Attn: Leslie Henson Attn: Leslie Henson
Phone: (800) 688-4576 Phone: (800) 688-4576 Phone: (800) 688-4576
Fax: (704) 386-8694 Fax: (704) 386-8694 Fax: (704) 386-8694
THE NORTHERN TRUST 50 LaSalle Street 50 LaSalle Street 50 LaSalle Street
COMPANY Chicago, IL 60675 Chicago, IL 60675 Chicago, IL 60675
Attn: Linda Honda Attn: Linda Honda Attn: Linda Honda
Phone: (312) 444-3532 Phone: (312) 444-3532 Phone: (312) 444-3532
Fax: (312) 630-1566 Fax: (312) 630-1566 Fax: (312) 630-1566
SOCIETE GENERALE Trammel Crow Center Trammel Crow Center Trammel Crow Center
2001 Ross Avenue 2001 Ross Avenue 2001 Ross Avenue
Suite 4800 Suite 4800 Suite 4800
Dallas, TX 75201 Dallas, TX 75201 Dallas, TX 75201
Attn: Mr. Ralph Saheb Attn: Mr. Ralph Saheb Attn: Mr. Ralph Saheb
Phone: (214) 979-2764 Phone: (214) 979-2764 Phone: (214) 979-2764
Fax: (214) 979-1104 Fax: (214) 979-1104 Fax: (214) 979-1104
or or or
(214) 754-0171 (214) 754-0171 (214) 754-0171
SUNTRUST BANK, ATLANTA 25 Park Place 25 Park Place 25 Park Plave
23rd Floor 23rd Floor 23rd Floor
Atlanta, GA 30302 Atlanta, GA 30302 Atlanta, GA 30302
Attn: Kevin MacDonald Attn: Kevin MacDonald Attn: Kevin MacDonald
Phone: (404) 588-8560 Phone: (404) 588-8560 Phone: (404) 588-8560
Fax: (404) 588-8833 Fax: (404) 588-8833 Fax: (404) 588-8833
SWISS BANK CORPORATION 222 Broadway 222 Broadway 222 Broadway
NEW YORK BRANCH New York, NY 10038 New York, NY 10038 New York, NY 10038
Attn: Lynn Brown Attn: Lynn Brown Attn: Lynn Brown
Phone: (212) 574-3112 Phone: (212) 574-3112 Phone: (212) 574-3112
Fax: (212) 574-3888 Fax: (212) 574-3888 Fax: (212) 574-3888
TEXAS COMMERCE BANK, 707 Travis 707 Travis 707 Travis
NATIONAL ASSOCIATION P.O. Box 2558 P.O. Box 2558 P.O. Box 2558
Houston, TX 77252-8059 Houston, TX 77252-8059 Houston, TX 77252-8059
Attn: Becky Rawalt Attn: Becky Rawalt Attn: Becky Rawalt
Phone: (713) 216-4973 Phone: (713) 216-4973 Phone: (713) 216-4973
Fax: (713) 216-6710 Fax: (713) 216-6710 Fax: (713) 216-6710
UNION BANK OF SWITZERLAND 299 Park Avenue 299 Park Avenue 299 Park Avenue
NEW YORK BRANCH New York, NY 10171 New York, NY 10171 New York, NY 10171
Attn: Robert Casey, Jr. Attn: Robert Casey, Jr. Attn: Robert Casey, Jr.
Phone: (212) 821-3329 Phone: (212) 821-3329 Phone: (212) 821-3329
Fax: (212) 821-3383 Fax: (212) 821-3383 Fax: (212) 821-3383
WACHOVIA BANK OF GEORGIA, 191 Peachtree Street, N.E. 191 Peachtree Street, N.E. 191 Peachtree Street, N.E.
N.A. Atlanta, GA 30303-1757 Atlanta, GA 30303-1757 Atlanta, GA 30303-1757
Attn: Bradley Marcus Attn: Bradley Marcus Attn: Bradley Marcus
Phone: (404) 332-6483 Phone: (404) 332-6483 Phone: (404) 332-6483
Fax: (404) 332-5016 Fax: (404) 332-5016 Fax: (404) 332-5016
</TABLE>
<PAGE> 82
EXHIBIT A-1 - FORM OF
SYNDICATED
PROMISSORY NOTE
U.S. $ ..........
Dated: ..............., 199..
FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER], a ..........
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of ..........
(the "Lender") for the account of its Applicable Lending Office on the
Termination Date (each as defined in the Credit Agreement referred to below) the
aggregate principal amount of the Syndicated Loans made by the Lender to the
Borrower pursuant to the Five Year Credit Agreement dated as of November 4, 1996
among the Borrower and certain other borrowers parties thereto, the Lender and
certain other lenders parties thereto, Citibank International plc, as Agent, for
the Lender and such other lenders (as amended or modified from time to time, the
"Credit Agreement"; the terms defined therein being used herein as therein
defined) outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal amount of
each Syndicated Loan from the date of such Syndicated Loan until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest in respect of each Syndicated Loan (i) in
Dollars are payable in lawful money of the United States of America to Citibank
International plc, as Agent, at its account maintained at Citibank, N.A., 399
Park Avenue, New York, New York, 10043, in same day funds and (ii) in any
Primary Currency are payable in such currency at the applicable Payment Office
in same day funds. Each Syndicated Loan owing to the Lender by the Borrower
pursuant to the Credit Agreement, and all payments made on account of principal
thereof, shall be recorded by the Lender and, prior to any transfer hereof,
endorsed on the grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Syndicated Notes referred to in, and
is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of Syndicated Loans by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the Dollar amount first above mentioned or the Equivalent
thereof in one or more Primary Currencies, the indebtedness of the Borrower
resulting from each such Syndicated Loan being evidenced by this Promissory
Note, (ii) contains provisions for determining the Dollar Equivalent of
Syndicated Loans denominated in Primary Currencies and (iii) contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
<PAGE> 83
This promissory note shall be governed by, and construed in accordance
with the laws of the State of New York.
[NAME OF BORROWER]
By..............................
Name:
Title:
<PAGE> 84
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
========================================================================================================
| | | | | Amount of | | |
| | | Amount of | | Principal | Unpaid | |
| | Type of | Loan in | Interest | Paid | Principal | Notation |
| Date | Loan | Relevant Currency | Rate | or Prepaid | Balance | Made By |
|-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
| | | | | | | |
|------------------------------------------------------------------------------------------------------|
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- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 85
EXHIBIT A-2 - FORM OF
COMPETITIVE BID
PROMISSORY NOTE
Dated: ..............., 199..
FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER], a
.......... corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
.......... (the "Lender") for the account of its Applicable Lending Office (as
defined in the Five Year Credit Agreement dated as of November 4, 1996 among the
Borrower and certain other borrowers parties thereto, the Lender and certain
other lenders parties thereto, Citibank International plc, as Agent, for the
Lender and such other lenders (as amended or modified from time to time, the
"Credit Agreement"; the terms defined therein being used herein as therein
defined)), on ..............., the principal amount of [U.S.$................]
[for a Competitive Bid Loan in a Primary Currency, list currency and amount of
such Loan].
The Borrower promises to pay interest on the unpaid principal
amount hereof from the date hereof until such principal amount is paid in full,
at the interest rate and payable on the interest payment date or dates provided
below:
Interest Rate: [...% per annum (calculated on the basis of a
year of ..... days for the actual number of days elapsed)].
Interest Payment Date or Dates: ..............
Both principal and interest are payable in lawful money of
................... to Citibank International plc, as Agent, for the account of
the Lender at the office of ........................., at
......................... in same day funds.
This Promissory Note is one of the Competitive Bid Notes
referred to in, and is entitled to the benefits of, the Credit Agreement. The
Credit Agreement, among other things, contains provisions for (a) determining
the Dollar Equivalent of Competitive Bid Loans denominated in Primary Currencies
and (b) acceleration of the maturity hereof upon the happening of certain stated
events.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
[NAME OF BORROWER]
By...................................
Name:
Title:
<PAGE> 86
EXHIBIT B-1 - FORM OF NOTICE OF
SYNDICATED BORROWING
Citibank International plc, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
3rd Floor Riverdale House
68 Molesworth Street
Lewisham, England
SE13 7EU
Citibank, N.A., as US Sub-Agent
for said Lenders
One Court Square
7th Floor, Zone 1
Long Island City, New York 11120 [Date]
Attention:
Ladies and Gentlemen:
The undersigned, [Name of Borrower], refers to the Five Year
Credit Agreement, dated as of November 4, 1996 (as amended or modified from time
to time, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among the undersigned, certain other Borrowers parties
thereto, certain Lenders parties thereto and Citibank International plc, as
Agent for said Lenders, and hereby gives you notice, irrevocably, pursuant to
Section 2.02 of the Credit Agreement that the undersigned hereby requests a
Syndicated Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Syndicated Borrowing (the "Proposed
Syndicated Borrowing") as required by Section 2.02(a) of the Credit Agreement:
(i) The date of the Proposed Syndicated Borrowing is
................
(ii) The Type of Loans comprising the Proposed Syndicated
Borrowing is [Base Rate Loans] [Eurocurrency Rate Loans].
(iii) The aggregate amount of the Proposed Syndicated
Borrowing is [$...............] [for a Syndicated Borrowing in a
Primary Currency, list currency and amount of Syndicated Borrowing].
[(iv) The initial Interest Period for each Eurocurrency Rate
Loan made as part of the Proposed Syndicated Borrowing is .....
month[s].]
<PAGE> 87
2
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Syndicated Borrowing:
(A) the representations and warranties contained in Section
4.01 of the Credit Agreement (except the representations set forth in
the last sentence of subsection (e) thereof and in subsection (f)
thereof (other than clause (ii) thereof)), are correct in all material
respects, before and after giving effect to the Proposed Syndicated
Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date; and
(B) no event has occurred and is continuing, or would result
from such Proposed Syndicated Borrowing or from the application of the
proceeds therefrom, that constitutes a Default.
Very truly yours,
[NAME OF BORROWER]
By......................................
Name:
Title:
<PAGE> 88
EXHIBIT B-2 - FORM OF NOTICE OF
COMPETITIVE BID BORROWING
Citibank International plc, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
3rd Floor Riverdale House
68 Molesworth Street
Lewisham, England SE13 7EU
Citibank, N.A., as US Sub-Agent
for said Lenders
One Court Square
7th Floor, Zone 1
Long Island City, New York 11120 [Date]
Attention:
Ladies and Gentlemen:
The undersigned, [Name of Borrower], refers to the Five Year
Credit Agreement, dated as of November 4, 1996 (as amended or modified from time
to time, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among the undersigned, certain other Borrowers parties
thereto, certain Lenders parties thereto and Citibank International plc, as
Agent for said Lenders, and hereby gives you notice, irrevocably, pursuant to
Section 2.03 of the Credit Agreement that the undersigned hereby requests a
Competitive Bid Borrowing under the Credit Agreement, and in that connection
sets forth the terms on which such Competitive Bid Borrowing (the "Proposed
Competitive Bid Borrowing") is requested to be made:
<TABLE>
<S> <C> <C>
(A) Date of Competitive Bid Borrowing ..................
(B) Aggregate Amount of Competitive Bid Borrowing ..................
(C) [Maturity Date] [Interest Period] ..................
(D) Interest Rate Basis ..................
(E) Interest Payment Date(s) ..................
(F) [Currency] ..................
(G) Borrower's Account Location ..................
(H) ................... ..................
</TABLE>
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Competitive Bid Borrowing:
(A) the representations and warranties contained in Section
4.01 of the Credit Agreement (except the representations set forth in
the last sentence of subsection (e) thereof and in subsection (f)
thereof (other than clause (ii) thereof)), are correct in all material
respects, before and after giving effect to the Proposed Competitive
Bid Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date; and
(B) no event has occurred and is continuing, or would result
from such Proposed Competitive Bid Borrowing or from the application of
the proceeds therefrom, that constitutes a Default.
<PAGE> 89
2
The undersigned hereby confirms that the Proposed Competitive
Bid Borrowing is to be made available to it in accordance with Section
2.03(a)(v) of the Credit Agreement.
Very truly yours,
[NAME OF BORROWER]
By...................................
Name:
Title:
<PAGE> 90
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated: .............
Reference is made to the Five Year Credit Agreement dated as
of November 4, 1996 (as amended or modified from time to time, the "Credit
Agreement") among Coca-Cola Enterprises Inc., a Delaware corporation (and
together with any Designated Subsidiaries, as defined in the Credit Agreement,
collectively, the "Borrowers"), the Lenders (as defined in the Credit Agreement)
and Citibank International plc, as agent (the "Agent") for the Lenders (as
defined in the Credit Agreement). Terms defined in the Credit Agreement are used
herein with the same meaning.
............ (the "Assignor") and ............ (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement as of the
date hereof (other than in respect of Competitive Bid Loans and Competitive Bid
Notes) equal to the percentage interest specified on Schedule 1 hereto of all of
the Assignor's outstanding rights and obligations under the Credit Agreement
(other than in respect of Competitive Bid Loans and Competitive Bid Notes).
After giving effect to such sale and assignment, the Assignee's Commitment and
the amount of the Syndicated Loans in each relevant currency owing to the
Assignee will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other instrument or document furnished pursuant thereto
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or the
performance or observance by such Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Syndicated Note held by the Assignor and requests that the
Agent exchange such Syndicated Note for a new Syndicated Note payable to the
order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto and, if the assigning Lender has retained a Commitment
hereunder, a new Syndicated Note payable to the order of the Assignor in an
amount equal to the Commitment retained by the Assignor under the Credit
Agreement, respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 4.01(e) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under the Credit
<PAGE> 91
2
Agreement as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of the Credit Agreement are required to be performed by it as a Lender;
and (vi) attaches any U.S. Internal Revenue Service forms required under Section
2.13 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement, provided, however,
that the Assignor's rights under Sections 2.10, 2.13 and 9.04 of the Credit
Agreement, and its obligations under Section 8.05 of the Credit Agreement, shall
survive the assignment pursuant to this Assignment and Acceptance as to matters
occurring prior to the Effective Date.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Credit
Agreement and the Syndicated Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and facility
fees with respect thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit Agreement and the
Syndicated Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
<PAGE> 92
Schedule 1
to
Assignment and Acceptance
Dated:.............
Section 1.
Percentage interest of Assignor's rights assigned: .........%
Assignee's Commitment: $ .........
Section 2.
(a) Assigned Loans
Aggregate outstanding principal amount of Syndicated
Loans in Dollars assigned: $ ..............
Aggregate outstanding principal amount of Syndicated
Loans in lawful money of the Republic of France assigned: FFR..........
Aggregate outstanding principal amount of Syndicated
Loans in lawful currency of the United Kingdom of Great
Britain and Northern Ireland assigned: PS.........
Aggregate outstanding principal amount of Syndicated
Loans in lawful currency of Canada assigned: $ .........
Aggregate outstanding principal amount of Syndicated
Loans in lawful currency of the Kingdom of Belgium assigned: BEF.......
Aggregate outstanding principal amount of Syndicated
Loans in lawful currency of the Netherlands assigned: .........
(b) Retained Loans
Aggregate outstanding principal amount of Syndicated
Loans in Dollars retained: $ .........
Aggregate outstanding principal amount of Syndicated
Loans in lawful money of the Republic of France retained: FFR........
Aggregate outstanding principal amount of Syndicated
Loans in lawful currency of the United Kingdom of Great
Britain and Northern Ireland retained: PS.........
Aggregate outstanding principal amount of Syndicated
Loans in lawful currency of Canada retained: PS.........
Aggregate outstanding principal amount of Syndicated
Loans in lawful currency of the Kingdom of Belgium assigned: BEF........
<PAGE> 93
2
Aggregate outstanding principal amount of Syndicated
Loans in lawful currency of the Netherlands assigned: $.........
Effective Date: ...............
[NAME OF ASSIGNOR], as Assignor
By......................................
Title:
Dated: ...............
[NAME OF ASSIGNEE], as Assignee
By..........................................
Title:
Dated: ...............
Domestic Lending Office:
[Address]
Eurocurrency Lending Office:
[Address]
Accepted and Approved this .... day
.........., 199.
CITIBANK INTERNATIONAL PLC, as Agent
By...................................
Title:
Approved to this ..... day
of ........, 199.
COCA-COLA ENTERPRISES INC.
By..................................
Name:
Title:
<PAGE> 94
EXHIBIT D - FORM OF DESIGNATION LETTER
[DATE]
To each of the Lenders
parties to the Credit Agreement
(as defined below) and to Citibank International plc
as Agent for such Lenders
Ladies and Gentlemen:
Reference is made to the Five Year Credit Agreement dated as
of November 4, 1996 among Coca-Cola Enterprises Inc. (the "Company"), certain
other borrowers parties thereto, the Lenders named therein, Citibank
International plc, as Agent for said Lenders (the "Credit Agreement"). Terms
used herein and defined in the Credit Agreement shall have the respective
meanings ascribed to such terms in the Credit Agreement.
Please be advised that the Company hereby designates its
undersigned Subsidiary, ............ ("Designated Subsidiary"), as a "Designated
Subsidiary" under and for all purposes of the Credit Agreement.
The Designated Subsidiary, in consideration of each Lender's
agreement to extend credit to it under and on the terms and conditions set forth
in the Credit Agreement, does hereby assume each of the obligations imposed upon
a "Designated Subsidiary" and a "Borrower" under the Credit Agreement and agrees
to be bound by the terms and conditions of the Credit Agreement. In furtherance
of the foregoing, the Designated Subsidiary hereby represents and warrants to
each Lenders as follows:
(a) The Designated Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of
....................... The Designated Subsidiary 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 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
Designated Subsidiary and its Subsidiaries taken as a whole.
(b) The execution, delivery and performance by the Designated
Subsidiary of this Designation Letter, the Credit Agreement and its
Notes are within the Designated Subsidiary's corporate powers, have
been duly authorized by all necessary corporate action and do not
contravene (i) the Designated Subsidiary'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
Designated Subsidiary, any other contract binding on or affecting the
Designated Subsidiary.
(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
Designated Subsidiary of this Designation Letter, the Credit Agreement
or its Notes.
(d) This Designation Letter is, and the Notes of the
Designated Subsidiary when delivered hereunder will be, legal, valid
and binding obligations of the Designated Subsidiary enforceable
against the Designated Subsidiary in accordance with their respective
terms.
(e) There is no pending or, to the best of the Designated
Subsidiary's knowledge, threatened action or proceeding involving the
Designated Subsidiary or any of its Subsidiaries before any court,
governmental agency or arbitrator, (i) as of the date of this
Designation Letter, which is likely to
<PAGE> 95
2
materially adversely affect the financial condition or operations of
the Designated Subsidiary and its Subsidiaries taken as a whole or (ii)
which purports to affect the legality, validity or enforceability of
this Designation Letter, the Credit Agreement or any Note of the
Designated Subsidiary.
(f) 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.
(g) The Designated Subsidiary 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.
(h) The Designated Subsidiary 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.
Very truly yours,
COCA-COLA ENTERPRISES INC.
By .........................
Name:
Title:
[THE DESIGNATED SUBSIDIARY]
By..........................
Name:
Title:
<PAGE> 96
EXHIBIT E - FORM OF ACCEPTANCE BY PROCESS AGENT
[Letterhead of Process Agent]
[Date]
To each of the Lenders parties
to the Credit Agreement
(as defined below) and to
Citibank International plc, as Agent for
said Lenders
[Name of Designated Subsidiary]
Ladies and Gentlemen:
Reference is made to (i) that certain Five Year Credit
Agreement dated as of November 4, 1996 among Coca-Cola Enterprises Inc. and
certain other borrowers parties thereto, the Lenders named therein, Citibank
International plc, as Agent for the Lenders (such Credit Agreement as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "Credit Agreement"; the terms defined therein being used herein as
therein defined), and (ii) to the Designation Letter, dated ........., pursuant
to which .......... (the "Designated Subsidiary") has become a Borrower.
Pursuant to Section 9.14 of the Credit Agreement to which the
Designated Subsidiary has become subject pursuant to its Designation Letter, the
Designated Subsidiary has appointed ............... (with an office on the date
hereof at ..............., Attention: ..........) as Process Agent to receive on
behalf of the Designated Subsidiary and its property service of copies of the
summons and complaint and any other process which may be served in any action or
proceeding in any New York State or Federal court sitting in New York City
arising out of or relating to the Credit Agreement.
The undersigned hereby accepts such appointment as Process
Agent and agrees with each of you that (i) the undersigned will maintain an
office in ................ through the Termination Date and will give the Agent
prompt notice of any change of address of the undersigned, (ii) the undersigned
will perform its duties as Process Agent to receive on behalf of the Designated
Subsidiary and its property service of copies of the summons and complaint and
any other process which may be served in any action or proceeding in any New
York State or Federal court sitting in New York City arising out of or relating
to the Credit Agreement and (iii) the undersigned will forward forthwith to the
Designated Subsidiary at its address at ................ or, if different, its
then current address, copies of any summons, complaint and other process which
the undersigned receives in connection with its appointment as Process Agent.
This acceptance and agreement shall be binding upon the
undersigned and all successors of the undersigned.
Very truly yours,
[NAME OF PROCESS AGENT]
By.......................
<PAGE> 97
EXHIBIT F - FORM OF
OPINION OF COUNSEL
FOR THE COMPANY
[Effective Date]
To each of the Lenders parties
to the Five Year Credit Agreement dated
as of November 4, 1996
among Coca-Cola Enterprises Inc.,
said Lenders and Citibank International plc,
as Agent for said Lenders, and
to Citibank International plc, as Agent
Coca-Cola Enterprises Inc.
Ladies/Gentlemen:
This opinion is furnished to you at the direction of our client,
Coca-Cola Enterprises Inc. (the "Company"), pursuant to Section 3.01 of the Five
Year Credit Agreement dated as of November 4, 1996 (the "Credit Agreement")
among the Company, the Lenders parties thereto and Citibank International plc,
as Agent. Terms defined in the Credit Agreement are used herein as therein
defined.
We have acted as counsel for the Company 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 Company pursuant to Article
III of the Credit Agreement;
(3) the Certificate of Incorporation of the Company and all
amendments thereto (the "Charter"); and
(4) the by-laws of the Company 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
Company, 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 materially adversely affect or purport to
materially adversely affect the Company's right to borrow money or the Company'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 Company, certificates of public officials and of
officers of the Company, 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 Company, 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 Agent, each of the Lenders and UK Holdings
have all requisite power and authority to enter into and perform under the
Credit Agreement,
<PAGE> 98
2
and that such document has been duly authorized, executed and delivered by the
Agent, each of the Lenders and UK Holdings and constitute legal, valid and
binding obligations of the Agent, each of the Lenders and UK Holdings. With
respect to UK Holdings, we refer you to the opinion of Messrs. Allen & Overy
dated the date hereof addressed to you.
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 Company 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 Company of
the Credit Agreement and the Notes are within the Company'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 Company (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 Company is a
party. The Credit Agreement and the Notes delivered on the date hereof
have been duly executed and delivered on behalf of the Company.
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
Company 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 Company or any of its
Subsidiaries before any court, governmental agency or arbitrator which
is likely to have a materially adverse effect upon the financial
condition or the operations of the Company 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 Company or its Subsidiaries in excess of $50,000,000, such action
or proceeding would not be likely to have any materially adverse effect
on the financial conditions or operations of the Company 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 Agent for
<PAGE> 99
3
the benefit of the Lenders in New York and that a substantial amount of
the payments under the Credit Agreement and the Notes are payable to
the Agent for the benefit of the Lenders in New York), we believe that
a Georgia Court should conclude that New York has a substantial
relationship to the parties and the 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 9.04 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) Sections 2.03 or 2.07 of the
Credit Agreement to the extent said sections 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
provisions were deemed to be a penalty (although we believe that under
current Georgia case law, a court should conclude that neither of such
provisions constitutes a penalty).
6. If a court were to determine that, notwithstanding the
provisions of Section 9.11 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 Initial Borrowers, enforceable against the Initial
Borrowers 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 law), (ii) that enforceability of Section
9.04(a) of the Credit Agreement requiring payment by the Initial
Borrowers of costs of collection, including attorneys' fees, is subject
to compliance by the Lenders 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 Lenders
to accelerate the maturity of the indebtedness evidenced thereby
without notice to the Initial Borrowers, but no such lack of
enforceability will, in our judgment, substantially interfere with the
practical realization by the Lenders of the Lenders' 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 opinions set out above, we have assumed,
without independent inquiry, the following: (i) the rate of interest
payable by the Initial Borrowers 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 Lenders by the Initial Borrowers for
payment in reimbursement of the Lenders' cost and expenses or otherwise
to defray the Lenders' 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 Agent and
the Lenders. No other person or entity shall be entitled to rely on this opinion
without our express written consent in each instance. 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> 100
EXHIBIT G - FORM OF
OPINION OF COUNSEL
TO A DESIGNATED SUBSIDIARY
[Effective Date of Designation Letter]
1. The Designated Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the ...........
2. The execution, delivery and performance by the Designated Subsidiary
of the Designation Letter, the Credit Agreement and its Notes are within the
Designated Subsidiary's corporate powers, have been duly authorized by all
necessary corporate action, and do not contravene (i) the organizational
documents of the Designated Subsidiary or (ii) any law, rule or regulation
applicable to the Designated Subsidiary (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 indentures, loan or credit
agreements, leases, mortgages, security agreements, bonds, notes and other
agreements or instruments, or orders, writs, judgments, awards, injunctions and
decrees, which materially adversely affect or purport to materially adversely
affect the Designated Subsidiary's right to borrow money or the Designated
Subsidiary's obligations under the Credit Agreement, its Designation Letter or
its Notes. The Designation Letter and each Note of the Designated Subsidiary
delivered on the date hereof have been duly executed and delivered on behalf of
the Designated Subsidiary.
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 Designated Subsidiary of the
Designation Letter, the Credit Agreement or the Notes of the Designated
Subsidiary.
4. Each of the Designation Letter, the Credit Agreement and the Notes
of the Designated Subsidiary are the legal, valid and binding obligations of the
Designated Subsidiary enforceable against the Designated Subsidiary in
accordance with their respective terms.
<PAGE> 1
EXHIBIT 10.10
COCA-COLA ENTERPRISES INC.
1995 RESTRICTED STOCK AWARD PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 2, 1996)
SECTION 1. PURPOSE
The purpose of the 1995 Restricted Stock Award Plan (the "Plan") is to
advance the interest of Coca-Cola Enterprises Inc. (the "Company") and its
Subsidiaries (as defined in Section 4) by stimulating officers' and employees'
efforts to meet and exceed its business goals and strengthening their desire to
remain in the service of the Company and its Subsidiaries through financial
rewards that offer officers (including non-employee officers) and other key
employees the opportunity to acquire a financial interest in the Company through
grants of restricted shares of the Company's common stock ("Awards").
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 "disinterested directors" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, and "outside directors" within the
meaning of Section 162(m) and the regulations thereunder (including the
transition rules of Treasury Regulation Section 1.162-27) of the Internal
Revenue Code of 1986, as amended.
The Committee shall determine the persons to whom and the times at which
Awards will be granted, the number of shares to be awarded, the times within
which the Awards may be subject to or released from forfeiture, the cancellation
of any Award (with the consent of the holder thereof), and all other conditions
of the Award. The terms and conditions of the Awards need not be the same with
respect to each recipient.
The Committee may, subject to the provisions of the Plan, establish such
rules and regulations for the proper administration of the Plan, may make
interpretations and may take other action in relation to the Plan as it deems
necessary or advisable. Each interpretation or other action made or 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, its Subsidiaries,
the Committee, the Board, the affected recipients 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, without
limitation, attorneys' fees) incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal, to which they may
be a party by reason of any action taken or failure to act in connection with
the Plan or any Award granted hereunder, 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
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<PAGE> 2
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 interests of the Company.
SECTION 3. STOCK
The stock to be issued under the Plan pursuant to the Awards shall be
shares of common stock, $1 par value, of the Company (the "Stock"). The Stock
shall be made available from authorized and unissued common stock of the
Company or from shares of Stock held by the Company in its treasury. The total
number of shares of Stock that may be issued pursuant to the Awards under the
Plan may not exceed 2,040,000 shares, reduced by the number of Shares granted
under the Plan prior to the effective date of this amendment and restatement.
Shares subject to awards forfeited shall not be available for subsequent
issuance under the Plan. Such number of shares shall be subject to adjustment
in accordance with Section 8.
SECTION 4. ELIGIBILITY
Awards may be granted to all key employees and officers (including
non-employee officers) of the Company and its Subsidiaries. "Subsidiary" shall
mean any corporation or other business organization in which the Company owns,
directly or indirectly, 25% or more of the voting stock or capital at the time
of the granting of an Award. No recipient shall acquire, pursuant to the Awards
granted under the Plan, more than 30% of the aggregate number of shares of Stock
issuable pursuant to Awards under the Plan.
SECTION 5. RESTRICTIONS UPON THE STOCK
(a) Restrictions shall apply to all Stock awarded under the Plan, which
restrictions shall not be removed except upon attainment of requisite increases
in the fair market value of the Stock on the date of grant, which requisite
increases shall be established by the Committee prior to the date of any Award
under the Plan. The Committee shall certify in writing that such increases have
occurred before restrictions may be removed from the certificates evidencing
such stock. Any Stock with respect to which requisite increases have not been
obtained shall be forfeited to the Company not later than five years from the
date of grant of such Stock.
(b) Awards may contain such other provisions, not inconsistent with the
provisions of the Plan, as the Committee shall determine to be appropriate at
the time of the Award, including provisions delaying the removal of all
forfeiture restrictions until service-related conditions are satisfied, limiting
the period for measuring the performance-based requirements of Section 5(a), and
removing the nontransferability restrictions provided for under Section 6. The
grant of an Award to any officer or employee shall not affect in any way the
right of the Company or any Subsidiary to terminate the employment relationship
between the recipient and the Company or Subsidiary.
(c) For purposes of this Section 5, the "fair market value" of a share of
Stock shall be the average of the high and low market prices on the applicable
trading day or on the next preceding trading day, if such date is not a trading
day, as reported on the New York Stock Exchange Composite Transactions listing
or as otherwise determined by the Committee.
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<PAGE> 3
(d) For purposes of this Section 5, a recipient's employment shall not be
deemed to have terminated if the recipient obtains immediate employment with an
Affiliate of the Company, and termination from such subsequent employment shall
be deemed a termination from the Company unless the recipient obtains immediate
reemployment with the Company or its Subsidiaries. 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.
SECTION 6. NONTRANSFERABILITY OF AWARDS
Shares of Stock subject to Awards shall not be transferable and shall not
be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of
while the recipient is an officer or employee of the Company or an Affiliate (as
defined in Section 5(d)) unless the restrictions described in Section 5 are
removed.
SECTION 7. RIGHTS AS A SHARE OWNER
A recipient who receives an Award shall have rights as a share owner with
respect to Stock covered by such Award to receive dividends in cash or other
property or other distributions or rights in respect to such Stock, and to vote
such Stock as the beneficial owner thereof.
SECTION 8. ADJUSTMENT IN THE NUMBER OF SHARES
In the event there is any change in the number of shares of Stock
outstanding through the declaration of stock dividends, through stock splits or
through recapitalization or merger, share exchange, consolidation, combination
of shares or otherwise, the Committee or the Board shall make such adjustment,
if any, as it may deem appropriate in the number of shares of Stock subject to
an Award, the number available for Awards, or in the calculation of the
requisite price increases described in Section 5(a).
SECTION 9. TAXES
(a) If a recipient properly elects within 30 days of the date on which an
Award is granted to include in gross income for federal income tax purposes an
amount equal to the fair market value (on the date of grant of the Award) of the
Stock subject to the Award, such person shall make arrangements satisfactory to
the Committee to pay to the Company in the year of such Award any federal, state
or local taxes required to be withheld with respect to such shares.
(b) Each recipient who does not make the election described in subsection
(a) of this Section shall, no later than the date as of which the restrictions
referred to in Section 5 and such other restrictions as may have been imposed as
a condition of the Award lapse, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state or local
taxes of any kind required by law to be withheld with respect to the Stock
subject to such Award. The Company shall have the right to retain custody of any
Stock subject to an Award until such payments or satisfactory arrangements have
been made.
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<PAGE> 4
(c) If the recipient shall fail to make the tax payments described in this
Section 9, the Company and its Subsidiaries shall, to the extent permitted by
law, have the right to deduct from any payment of any kind otherwise due to the
recipient the amount of any federal, state or local taxes required by law to be
withheld with respect to the Stock subject to such Award.
SECTION 10. RESTRICTIVE LEGEND AND STOCK POWER
Each certificate evidencing Stock subject to an Award shall bear an
appropriate legend referring to the restrictions applicable to such Award. Any
attempt to dispose of Stock in contravention of such restrictions shall be
ineffective. The Committee may adopt rules which provide that the certificates
evidencing such shares may be held in custody by a bank or other institution, or
that the Company may itself hold such shares in custody until the restrictions
thereon shall have lapsed and may require as a condition of any Award that the
recipient shall have delivered a stock power endorsed in blank relating to the
Stock covered by such Award.
SECTION 11. 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, including the adoption of amendments deemed necessary or
desirable to qualify the Awards under the laws of the United States and various
states (including tax laws) and under rules and regulations promulgated by the
Securities and Exchange Commission with respect to persons who are subject to
the provisions of Section 16 of the Securities Exchange Act of 1934, as amended,
or to correct any defect or supply an omission or reconcile any inconsistency in
the Plan or in any Award granted thereunder, without the approval of the share
owners of the Company.
However, no such action shall be taken without the approval of the share
owners of the Company unless the Committee determines that approval of the share
owners would not be necessary to retain the benefits of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, or Section 162(m) of the Internal
Revenue Code of 1986, as amended.
No amendment or termination or modification of the Plan shall in any manner
affect Awards theretofore granted without the consent of the recipient unless
the Committee has made a determination that an amendment or modification is
necessary to retain the benefits of Rule 16b-3 under the Securities and Exchange
Act of 1934, as amended, or Section 162(m) of the Internal Revenue Code of 1986,
as amended, or that is not adverse to the interest of any persons to whom Awards
have theretofore been granted.
The Plan shall terminate when all shares of Stock subject to Awards under
the Plan have been issued and are no longer subject to forfeiture under the
terms hereof unless earlier terminated by the Board or the Committee.
SECTION 12. 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.
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SECTION 13. SECTION 16(B) OF THE SECURITIES EXCHANGE ACT OF 1934
Any action taken by the Committee or the Board of Directors pursuant to the
Plan, and any provision of the Plan, is null and void if it does not comply with
the requirements of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, and would otherwise result in liability under Section 16(b) of that
Act.
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<PAGE> 1
EXHIBIT 10.11
COCA-COLA ENTERPRISES INC.
1995 STOCK OPTION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 2, 1996)
SECTION 1. PURPOSE
The purpose of the 1995 Stock Option Plan (As Amended and Restated
Effective January 2, 1996) (the "Plan") is to advance the interest of Coca-Cola
Enterprises Inc. (the "Company") and its Subsidiaries (as defined in Section 4)
by encouraging and enabling the acquisition of a financial interest in the
Company by officers and other key employees through grants of stock options
("Options").
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 "disinterested directors" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, and "outside directors" within the
meaning of Section 162(m) and the regulations thereunder (including the
transition rules of Treasury Regulation Section 1.162-27) of the Internal
Revenue Code of 1986, as amended.
The Committee shall determine the persons to whom and the times at which
Options will be granted, the number of shares to be subject to each Option, the
duration of each Option, the times within which the Option may be exercised, the
cancellation of the Option (with the consent of the holder thereof) and the
other conditions of the grant of an Option. The Committee, however, may
delegate, from time to time, to the Chief Executive Officer the authority to
make Awards under the Plan or to extend the period for exercise of Options
awarded under the Plan for optionees who are not directors of the Company,
unless such delegation would jeopardize for any optionee the benefit of Rule
16b-3 under the Securities Exchange Act of 1934, as amended, or Section 162(m)
or regulations thereunder of the Internal Revenue Code of 1986, as amended. The
conditions of the grants of Options need not be the same with respect to each
optionee or with respect to each Option.
The Committee may, subject to the provisions of the Plan, establish such
rules and regulations for the proper administration of the Plan, may make
interpretations and take other action in relation to the Plan as it deems
necessary or advisable. Each interpretation or other action made or taken
pursuant to the Plan shall be final and conclusive for all purposes and upon all
persons including, but without limitation, the Company, its Subsidiaries, the
Committee, the Board, the affected optionees, 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, without
limitation, 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 or any Option granted hereunder, and against all
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<PAGE> 2
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. STOCK
The stock to be issued under the Plan shall be shares of common stock, $1
par value, of the Company (the "Stock"). The Stock shall be made available from
authorized and unissued Stock or from shares of Stock held by the Company in its
treasury. The total number of shares of Stock that may be issued under the Plan
pursuant to Options granted hereunder may not exceed 2,893,100 shares, reduced
by the number of shares issued prior to the effective date of this amendment and
restatement. Stock subject to any unexercised portion of an Option which expires
or is canceled, surrendered or terminated for any reason may again be subject to
Options granted under the Plan. Stock received in payment upon the exercise of
an Option may not be the subject of a subsequent Option.
SECTION 4. ELIGIBILITY
Options may be granted to executive officers, other persons in the senior
executive band, and in the executive band, branch managers, sales center
managers, and other officers and management employees (including non-employee
officers) of the Company and its Subsidiaries who are employed in a position
determined by the Committee to be eligible to participate in the Plan on the
date on which any grant is made.
"Subsidiary" shall mean any corporation or other business organization in
which the Company owns, directly or indirectly, 25% or more of the voting stock
or capital at the time of the granting of such Option.
No person shall be granted the right to acquire pursuant to Options granted
under the Plan more than 35% of the aggregate number of shares of Stock
originally authorized for issuance under the Plan.
SECTION 5. AWARDS OF OPTIONS
(a) Option Price. The option price shall be 100% or more of the fair
market value of the Stock on the date of grant.
(b) Payment. The option price shall be paid in full at the time of
exercise. No shares shall be issued until full payment has been received
therefor. Payment may be made in cash or, with the prior approval of and upon
the conditions established by the Committee, by delivery of shares of Stock
owned by the optionee.
(c) Value. The fair market value of shares of Stock shall be computed on
the basis of the average of the high and low market prices at which a share of
Stock shall have been sold on the date for which the valuation is made, or on
the next preceding trading day if such date was not a trading day, as reported
on the New York Stock Exchange Composite Transactions listing, or as otherwise
determined by the Committee.
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<PAGE> 3
(d) Withholding. The Company and its Subsidiaries shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the recipient the amount of any federal, state or local taxes
required by law to be withheld with respect to the Stock subject to such Award.
(e) Duration of Options. Subject to the provisions of Section 9, the
duration of Options shall be 10 years from date of grant.
(f) Time Period for Exercise of Options. Subject to the provisions of
Section 9, no Option shall be exercisable, in whole or in part, for a period of
six months after the date on which the Option is granted or, if later, six
months after the date of approval of the Plan by share owners. Thereafter, it
shall be exercisable (i) within such time periods as established by the
Committee on the date of grant, or (ii) in the absence of Committee-established
time periods, (A) to the extent of one-third of the total number of shares
subject to the Option after 12 months following the date on which the
Option is granted, (B) to the extent of an additional one-third of the total
number of shares subject to the Option after 24 months following the date on
which the Option is granted; and (C) in full after 36 months following the date
on which the Option is granted.
(g) Other Terms and Conditions. Options may contain such other provisions,
not inconsistent with the provisions of the Plan, as the Committee shall
determine appropriate from time to time. The grant of an Option to any officer
or employee shall not affect in any way the right of the Company and any
Subsidiary to terminate the relationship between the Company and the optionee.
SECTION 6. REPLACEMENT
The Committee from time to time may permit an optionee under the Plan to
surrender for cancellation any unexercised outstanding stock option or stock
appreciation rights of the Company and receive in exchange from the Company
either shares of Stock, an option for such number of shares of Stock, or both,
in amounts and with features as designated by the Committee.
SECTION 7. EXTENSION OF THE TERMS OF OPTIONS
The Committee may extend the duration of any Option for a period not to
exceed one year without changing the option price and on such other terms and
conditions as the Committee may deem advisable.
SECTION 8. NONTRANSFERABILITY OF OPTION
No Option granted pursuant to the Plan shall be transferable otherwise than
by will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of 1986, as
amended, or Title 1 of the Employee Retirement Income Security Act or the rules
thereunder. Certificate(s) representing the shares of Stock issued upon exercise
of an Option shall be issued only in the name of the optionee or in the name of
such optionee's duly authorized representative. With the exception of any Option
transferred pursuant to a qualified domestic relations order, Options shall be
exercisable, during the lifetime of an optionee, only by the optionee personally
or by the optionee's legal representative. With respect to any Option
transferred pursuant to a qualified domestic relations order, any such Option
shall be exercisable only by the designated transferee personally or the
designated transferee's legal representative.
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SECTION 9. EFFECT OF TERMINATION OF EMPLOYMENT
(a) Retirement.
(i) The Committee, in its sole discretion, may cause all outstanding
Options held by an optionee upon his or her retirement to become immediately
exercisable.
(ii) All Options exercisable upon retirement of an optionee (whether due to
Committee action or otherwise) or becoming exercisable thereafter shall expire
no later than 36 months from the date of such optionee's retirement; provided,
however, that if the optionee dies within two years after the optionee's
retirement, the Options shall expire 12 months after his or her death, unless
the Committee determines otherwise.
(b) Death or Disability While Employed.
Upon the death or disability of an optionee prior to termination of
employment, all outstanding Options held by such employee expire no later than
12 months after the employee's death or determination of disability, whichever
occurs first, unless the Committee determines otherwise.
(c) Other Termination of Employment.
(i) Upon the termination of employment of an optionee other than for a
reason other than the death, disability or retirement of the optionee ("Other
Termination of Employment"), then the Committee, in its sole discretion, may
cause all outstanding nonexercisable Options held by such optionee to become
immediately exercisable.
(ii) All Options exercisable upon the Other Termination of Employment
(whether due to Committee action or otherwise) or becoming exercisable
thereafter, shall expire no later than six months after the Other Termination of
Employment, unless the Committee determines otherwise.
(d) Definitions and other Determinations.
(i) For purposes of this Section 9, "retirement" means an optionee's
voluntary termination of employment on a date which is on or after the earliest
date on which such optionee would be eligible for an immediately payable benefit
pursuant to the terms of the defined benefit pension plan sponsored by the
Company or a Subsidiary in which the optionee participates. If the optionee does
not participate in such a plan, the date shall be determined as if the optionee
participated in the Company's defined benefit plan covering the majority of its
non-bargaining employees in the United States. With respect to non-employee
officers, "retirement" means termination of services as an officer at or after
age 55.
(ii) For purposes of this Section 9, "disability" shall be determined
according to the definition of "total and permanent disability," in effect at
the time of the determination, in the defined benefit pension plan sponsored by
the Company or a Subsidiary in which the optionee participates. If the optionee
does not participate in such a plan, the definition shall be determined as if
the optionee participated in the Company's defined benefit plan covering the
majority of its non-bargaining employees in the United States.
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(iii) For purposes of this Section 9, a recipient's employment shall not be
deemed to have terminated if the recipient obtains immediate employment with an
Affiliate of the Company, and termination from such subsequent employment shall
be deemed a termination from the Company, unless the recipient obtains immediate
reemployment with the Company or its Subsidiaries. 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.
SECTION 10. NO RIGHTS AS A SHARE OWNER
An optionee or a transferee of an Option that has been transferred pursuant
to Section 8 shall have no right as a share owner with respect to any Stock
covered by an Option or receivable upon the exercise of an Option until the
optionee or transferee shall have become the holder of record of such Stock. No
adjustments shall be made for dividends in cash or other property (except for
share dividends) or other distributions or rights in respect of such Stock for
which the record date is prior to the date on which the optionee or transferee
shall have in fact become the holder of record of the share of Stock acquired
pursuant to the Option.
SECTION 11. ADJUSTMENT IN THE NUMBER OF SHARES AND IN OPTION PRICE
In the event there is any change in the shares of Stock through the
declaration of stock dividends or stock splits or through recapitalization or
merger, share exchange, consolidation, combination of shares or otherwise, the
Committee or the Board shall make such adjustment, if any, as it may deem
appropriate in the number of shares of Stock available for Options as well as
the number of shares of Stock subject to any outstanding Option and the option
price thereof. Any such adjustment may provide for the elimination of any
fractional shares which might otherwise become subject to any Option without
payment therefor.
SECTION 12. 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, including the adoption of amendments deemed necessary or
desirable to qualify the Options under the laws of various states (including tax
laws) and under rules and regulations promulgated by the Securities and Exchange
Commission with respect to persons who are subject to the provisions of Section
16 of the Securities Exchange Act of 1934, or to correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any Option granted
thereunder, without the approval of the share owners of the Company.
However, no action shall be taken without the approval of the share owners
of the Company if the Committee determines that the approval of share owners
would be necessary to retain the benefits of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, or Section 162(m) of the Internal Revenue Code
of 1986, as amended.
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No amendment or termination or modification of the Plan shall in any manner
affect any Option theretofore granted without the consent of the optionee,
except that the Committee may amend or modify the Plan in a manner that does
affect Options theretofore granted upon a finding by the Committee that such
amendment or modification is necessary to retain the benefits of Rule 16b-3 of
the Securities Exchange Act of 1934, as amended, or Section 162(m) of the
Internal Revenue Code of 1986, as amended, or that it is not adverse to the
interest of holders of outstanding Options.
The Plan shall terminate five years after the date of approval of the Plan
by the share owners of the Company unless earlier terminated by the Board or by
the Committee.
SECTION 13. 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.
SECTION 14. SECTION 16(B) OF THE SECURITIES EXCHANGE ACT OF 1934
Any action taken by the Committee or the Board pursuant to the Plan, and
any provision of the Plan, shall be null and void if it does not comply with the
requirements of Rule 16b-3 under the Securities Exchange Act of 1934 and would
otherwise result in liability under Section 16(b) of that Act.
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EXHIBIT 10.12
COCA-COLA ENTERPRISES INC.
LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1996)
SECTION 1. PURPOSE.
The purpose of the 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 Treasury Regulation
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 chief executive
officer; the chief operating officer; senior vice presidents; vice presidents,
regional operations; region vice presidents/general managers; corporate vice
presidents; region vice presidents; division vice presidents/general managers;
area vice presidents; corporate directors; and, as such positions are defined by
the Compensation Committee, senior staff of the Company and its Subsidiaries
("Participants").
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"Subsidiary" shall mean any corporation or other business organization in
which the Company owns, directly or indirectly, 25% or more of the voting stock
or capital during a Performance Period.
SECTION 4. PERFORMANCE GOAL CRITERIA.
Awards made under the Plan shall be paid solely on account of the
attainment of specified increases in cash operating profit ("COP"), as measured
period of three consecutive calendar years (the "Performance Period") beginning
on January 1 of any year the Compensation Committee designates as the beginning
of a Performance Period for which an Award shall be made under the Plan. 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
increases in the corporate-wide COP. "Average Annual Base Salary" means the
average of the base salary in effect on the last day of each year of the
three-year Performance Period for which an Award is made. Notwithstanding the
preceding, the Average Annual Base Salary used to calculate an Award paid to a
Participant may not exceed such Participant's annual base salary in effect on
January 1 that constitutes the beginning of the Performance Period for which the
Award is being paid, increased by 33 1/3%. No Award under the Plan shall exceed
160% of a Participant's Average Annual Base Salary.
SECTION 6. PAYMENT OF AWARD AND DEFINITIONS.
(i) Awards shall be paid in cash after the end of the Performance Period in
one or more installments, as determined by the Committee.
(ii) "Retirement" means 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 the terms of the
defined benefit pension plan sponsored by the Company or a Subsidiary in which
the Participant participates. If the Participant does not participate in such a
plan, the date shall be determined as if the Participant participated in the
Company's defined benefit plan covering the majority of its non-bargaining
employees in the United States.
(iii) "Disability" shall be determined according to the definition of
"total and permanent disability," in effect at the time of the determination, in
the defined benefit plan sponsored by the Company or a Subsidiary in which the
Participant participates. If the Participant does not participate in such a
plan, the definition shall be determined as if the Participant participated in
the Company's defined benefit plan covering the majority of its non-bargaining
employees in the United States.
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
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participation. To calculate the Average Annual Base Salary for a prorated Award,
each year's annual 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 whole months in which a Participant was employed
within each position for which the Award is made.
(iii) If, within a Performance Period, a Participant transfers from a
position eligible for participation under the Plan to a position ineligible for
participation, a prorated Award shall be paid to such Participant for the period
of time the Participant was employed within the eligible position. The
Participant's annual base salary in effect on the last day of the Participant's
employment in the eligible position shall be included in the calculation of the
Participant's Average Annual Base Salary, irrespective of the change of
positions. Prorated awards shall be measured according to the number of whole
months in which the Participant was employed within one or more eligible
positions.
(iv) Partial Awards under this Section 7 shall not be paid to a Participant
whose employment is terminated prior to the last day of the Performance Period
unless the reason for such termination was the Participant's death, disability,
or retirement (as defined in Section 6). 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 in an eligible
position during the Performance Period. A partial Award paid to a Participant
whose employment is terminated on account of death or disability shall be
calculated based on the increase in COP as of December of the year preceding
the Participant's termination and shall be paid in the year following such
Participant's termination of employment. A partial Award paid to a Participant
whose employment is terminated on account of retirement shall be paid in the
year following the end of the Performance Period for which the Award is made,
and subject to the Committee's discretion described in Section 8, shall be
calculated on the basis of the increase in COP through the end of the
Performance Period.
(v) For purposes of this Section 7, 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, in such event, the Participant's Award
shall be subject to proration as if the Participant transferred to a position
within the Company that is ineligible for participation in the Plan. 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.
SECTION 8. 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
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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 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) 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.
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EXHIBIT 10.16
COCA-COLA ENTERPRISES INC.
EXECUTIVE PENSION PLAN
(Effective January 1, 1996)
ARTICLE I
ESTABLISHMENT OF PLAN
COCA-COLA ENTERPRISES INC. (the "Company") hereby establishes, effective January
1, 1996, the Coca-Cola Enterprises Inc. Executive Pension Plan (the "Plan").
This Plan is an unfunded supplemental retirement plan for key management and
highly compensated employees. The purpose of the Plan is to supplement the
retirement benefits of eligible executives of the Company provided under the
Coca-Cola Enterprises Inc. Employees' Pension Plan.
ARTICLE II
DEFINITIONS
2.1 "Administrative Committee" means the committee appointed to administer
the Plan as described in Article VII.
2.2 "Beneficiary" shall have the same meaning as "Beneficiary" under the
Pension Plan.
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
2.4 "Company" means Coca-Cola Enterprises Inc., a Delaware corporation, or
its successor or successors.
2.5 "Compensation" means those amounts included in the definition of
"Compensation" under the Pension Plan determined without regard to the limits of
Code Section 401(a)(17), plus any amounts deferred by the Participant under the
Coca-Cola Enterprises Inc. Supplemental Matched Employee Savings and Investment
Plan or any other nonqualified deferred compensation arrangement between the
Company and the Participant, provided such amounts shall be considered only in
the year of deferral and not in any subsequent year, including the year(s) of
receipt.
2.6 "Controlled Group" means all members of the controlled group of
corporations, as defined in Section 1563(a) of the Code, of which the Company is
a member, but determined without regard to Sections 1563(a)(4) and 1563(e)(3)(c)
of the Code.
2.7 "Disability" shall have the same meaning as the term "Disability" under
the Pension Plan, as it may be amended from time to time.
2.8 "Early Retirement Age" means the date on which a Participant has both
attained age 55 and completed at least 5 Years of Vesting Service.
2.9 "Eligible Employee" means an Employee of the Employer that is employed
in a position classified as an Executive Band or higher position, or in a
position determined to be eligible for participation by the Administrative
Committee.
2.10 "Employee" means any common-law employee of the Employer.
2.11 "Employer" means the Company and any member of the Controlled Group
adopting the Plan with the consent of the Board.
2.12 "Final Average Earnings" means the monthly average of a Participant's
Compensation for the same number of consecutive calendar years taken into
account in the definition of "Final Average Earnings" under the Pension Plan,
unless otherwise determined by the Administrative Committee.
2.13 "Normal Retirement Age" means the date on which a Participant attains
age 65.
2.14 "Participant" means an Eligible Employee who satisfied the
requirements for participation in the Plan. Any Employee, or former Employee,
who has an interest under the Plan shall also be considered a Participant.
2.15 "Pension Plan" means the Coca-Cola Enterprises Inc.
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Employees' Pension Plan and any other qualified defined benefit pension plan
maintained by the Employer, as such plan(s) may from time to time be amended.
2.16 "Plan" means the Coca-Cola Enterprises Inc. Executive Pension Plan, as
described in this instrument.
2.17 "Plan Year" means the 12-month period beginning January 1st through
the following December 31st.
2.18 "Related Company" means any company within the controlled group of
corporations, as defined in Sections 414(b), 414(c), 414(m) and 414(o) of the
Code, of The Coca-Cola Company and any company in which the Company owns at
least 25% during an Eligible Employee's employment with that company.
2.19 "Social Security Taxable Wage Base" means, with respect to any
calendar year, the contribution and benefit base in effect under Section 230 of
the Social Security Act at the beginning of the calendar year.
2.20 "Supplemental Pension Plan" means the Coca-Cola Enterprises Inc.
Supplemental Pension Plan, as it may be amended from time to time.
2.21 "Supplemental Retirement Plan" means the Coca-Cola Enterprises Inc.
Supplemental Retirement Plan (As Amended and Restated January 1, 1991).
2.22 "Surviving Spouse" shall have the same meaning as "Surviving Spouse"
under the Pension Plan.
2.23 "Years of Benefit Service" shall have the same meaning as the term
"Years of Benefit Service" under the Pension Plan and shall be determined, for
purposes of this Plan, in the same manner as calculated under the Pension Plan.
Notwithstanding the preceding
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sentence, "Years of Benefit Service" may also, in the sole discretion of the
Administrative Committee, include service granted under an employment, severance
or settlement agreement between the Participant and the Company or a Related
Company.
2.24 "Years of Vesting Service" shall have the same meaning as the term
"Years of Vesting Service" under the Pension Plan and shall be determined, for
purposes of the Plan, in the same manner as calculated, under the Pension Plan.
Notwithstanding the preceding sentence, Years of Vesting Service may also, in
the sole discretion of the Administrative Committee, include periods of service
under an employment, severance or settlement agreement between the Participant
and the Company or a Related Company.
ARTICLE III
PARTICIPATION
3.1 Effective Date of Participation. Each Eligible Employee who is actively
employed, shall become a Participant in the Plan on the later of January 1,
1996, or the date on which an Employee becomes an Eligible Employee.
ARTICLE IV
BENEFITS
4.1 Normal Retirement Benefit.
(a) Eligibility. A Participant whose employment with the Employer
terminates upon attainment of his Normal Retirement Age shall be
eligible for a Normal Retirement Benefit under the Plan.
(b) Amount. A Normal Retirement Benefit shall be a benefit in an amount
equal to the excess, if any, of (1) over (2) below:
(1) A retirement benefit equal to 1.15% percent of the Participant's
Final Average Earnings plus .25% of the Participant's Final
Average Earnings in excess of the Social Security Taxable Wage
Base in effect the year of the Participant's termination or
retirement, as applicable, which sum shall be multiplied by the
Participant's Years of Benefit Service.
(2) The total of the retirement benefits to which the Participant
receives under the Pension Plan (excluding benefits paid pursuant
to a rollover from a defined contribution plan), the Supplemental
Pension Plan and the Supplemental Retirement Plan .
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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.
(b) Amount. An Early Retirement Benefit shall be a benefit in an amount
equal to the excess, if any, of (1) over (2) below:
(1) The amount calculated under Section 4.1(b)(1), reduced by 1.5%
for each year, up to five years, by which the Participant's first
payment under the Plan precedes age 65 and by 5% for each year by
which the Participant's first payment under the Plan precedes age
60.
(2) The total of the retirement benefits the Participant receives
under the Pension Plan (excluding benefits paid pursuant to a
rollover from a defined benefit plan), the Supplemental Pension
Plan, and the Supplemental Retirement Plan.
4.3 Deferred Retirement Benefit.
a) Eligibility. A Participant whose employment with the Employer
terminates after he has attained his Normal Retirement Age shall be
eligible for a Deferred Retirement Benefit.
(b) Amount. A Deferred Retirement Benefit shall be a benefit calculated
under Section 4.1(b) and with the amount calculated under Section
4.1(b)(1) actuarially increased to reflect the Participant's actual
retirement date.
4.4 Retirement Benefits for a Disabled Participant.
(a) Eligibility. A Participant who incurs a Disability after completing
five (5) Years of Vesting Service shall be deemed to be an active
Participant in the Plan during the period of such Disability.
(b) Amount. A Participant who is eligible for benefits under Section
4.4(a) shall be entitled to a benefit under Section 4.2(b) or, if
applicable, under Section 4.2(b), calculated as if:
(1) The Participant continued to accrue Years of Benefit Service
under this Plan during such period of Disability to the same
extent that such Participant continues to accrue Years of Benefit
Service under the Pension Plan. Notwithstanding the foregoing,
the accrual of Years of Benefit Service shall cease with the
month in which the Participant attains Normal Retirement Age,
elects to receive an Early Retirement
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Benefit, dies, or is no longer subject to a Disability, whichever
is earlier.
(2) The Participant's Final Average Earnings include Compensation for
each complete year during the period of such Disability, which
Compensation shall be equal to the Participant's Compensation in
the last complete calendar year prior to the calendar year in
which the Participant incurred such Disability.
4.5 Deferred Vested Benefit.
(a) Eligibility. A Participant whose employment with the Employer
terminates after the Participant has completed five (5) Years of
Vesting Service shall be eligible for a Deferred Vested Benefit.
(b) Amount. A Deferred Vested Benefit shall be a benefit calculated under
Section 4.1(b) or, if applicable, Section 4.2(b).
4.6 Preretirement Surviving Spouse Benefit.
(a) After Normal Retirement Age. If a Participant dies after attaining
Normal Retirement Age, but before the commencement of benefits under
this Plan or the election of the form of payment in which benefits
will be paid under the Pension Plan, the amount to be paid to the
Surviving Spouse, if any, shall be determined as the excess, if any,
of (1) over (2) below:
(1) The amount calculated under Section 4.1(b)(1), or if applicable,
4.3(b) above, and converting it into a 50% survivor annuity;
(2) The total of the survivor benefits that would be payable under
the Pension Plan (excluding benefits paid pursuant to a rollover
from a defined contribution plan), the Supplemental Pension Plan,
and the Supplemental Retirement Plan.
(b) Before Normal Retirement Age and After Early Retirement Age. If a
Participant dies (I) after attaining Early Retirement Age, (ii) before
attaining Normal Retirement Age and (iii) before the commencement of
benefits under this Plan or the election of the form of payment in
which benefits will be paid under the Pension Plan, the amount to be
paid to the Surviving Spouse, if any, shall be determined as the
excess, if any, of (1) over (2) below:
(1) The amount calculated under Section 4.2(b)(1) above, as if the
Participant had retired on the
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day before death and elected to receive his retirement benefit in
the form of an immediate joint and 50% survivor annuity, unless
the Participant had applied for retirement and died within 90
days of the election of a form of benefit other than a 50%
survivor annuity, in which case the Surviving Spouse shall
receive the survivor portion of such annuity;
(2) The total of the survivor benefits that would be payable under
the Pension Plan (excluding benefits paid pursuant to a rollover
from a defined contribution plan), the Supplemental Pension Plan,
and the Supplemental Retirement Plan.
(c) Before Early Retirement Age. If a Participant dies before attaining
Early Retirement Age, the amount to be paid to the Surviving Spouse,
if any, shall be determined as the excess, if any, of (1) over (2)
below:
(1) The amount calculated under Section 4.2(b)(1) above, as if the
Participant had terminated employment on the date of death (if
the Participant was still an Employee on the date of death);
survived to the day prior to his Early Retirement Date; retired
and elected to receive a joint and 50% survivor annuity; and died
on his Early Retirement Date;
(2) The total of the survivor benefits that would be payable to a
Surviving Spouse under the Pension Plan (excluding benefits paid
pursuant to a rollover from a defined contribution plan), the
Supplemental Pension Plan, and the Supplemental
Retirement Plan.
4.7 Postretirement Survivor Benefit. Except as provided in Section 4.6
above, no survivor benefit shall be payable hereunder unless:
(a) At the time of his death, the Participant was receiving a benefit or
had elected to receive a benefit under this Plan in a form of
distribution that provides for a survivor benefit payable to the
Participant's Beneficiary; and
(b) The Participant's Spouse or, if applicable, Beneficiary under the
Pension Plan survives him.
4.8 Pension Purchase Option Benefit.
(a) Effective January 1, 1997, a Participant may elect to rollover all or
a portion of his account balance from the Coca-Cola Enterprises Inc.
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Supplemental Matched Employee Savings and Investment Plan (SuppMESIP),
provided the Participant's account balance under the SuppMESIP and the
present value of the Participant's accrued benefits under this Plan
each equal at least $3,500.00. The amount rolled over from the
SuppMESIP shall be used to provide a Pension Purchase Option (PPO)
benefit. The Plan shall, in no event, accept rollover contributions
from a plan other than the SuppMESIP.
(b) A PPO benefit shall be a monthly benefit, the amount of which shall be
determined as the actuarial equivalent of the balance of the
Participant's PPO Account on the date such account is established. The
PPO benefit will commence on the date elected by the Participant under
the SuppMESIP and will be paid, in accordance with the Participant's
election, in any form of annuity available under the Pension Plan at
the commencement of the PPO benefit. A PPO benefit paid as a single
life annuity will contain a cash refund feature, as described in
paragraph (d), below. The actuarial equivalence of the PPO benefit
shall be determined using a mortality table derived by taking a fixed
blend of 50 percent of the 1983 Group Annuity Table for Males and 50
percent of the 1983 Group annuity Table for Females and using an
interest rate of 7 percent.
(c) A Participant's PPO benefit shall commence as soon as practicable
after a date a PPO Account has been established on behalf of the
Participant.
(d) If a Participant's benefit under the Plan is to be paid as a single
life annuity and the Participant should die prior to his receipt of
his total PPO benefit, under the cash refund feature any remaining
amounts will be paid in cash to the designated beneficiary, or if
there is no such Beneficiary designated, then to the Participant's
estate.
(e) For purposes of this Section 4.8, "PPO Account" means an account
established on behalf of a Participant who has elected a direct
rollover of a cash amount not less than $3,500.00 from the SuppMESIP
into this Plan.
4.9 Preservation of Supplemental Retirement Plan Benefit. Notwithstanding
any provision of this Article IV to the contrary, in the event a Participant's
benefit under this Plan would be less than the benefit to which he is entitled
under the Supplemental Retirement Plan, such Participant's benefit under this
Plan shall be increased to equal the amount of his benefit under the
Supplemental Retirement Plan.
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4.10 Commencement and Form of Payment of Benefits. Except for benefits paid
under Section 4.8, benefits under this Plan shall not commence until the
Participant has elected to commence benefits under the Pension Plan and shall be
distributed in accordance with the manner in which the Participant elects to
have benefits under the Pension Plan distributed. Notwithstanding the foregoing,
if the present value of a Participant's benefit under this Plan is equal to or
less than $3,500, such benefit shall be paid as a single-sum payment.
4.11 Calculation of Benefits Under Other Plans. Benefits described in
Sections 4.1(b)(2), 4.2(b)(2), 4.6(b)(2) shall be calculated on an actuarially
equivalent basis, applying the definition of "Actuarial Equivalence" under the
Pension Plan, as if payment of such benefit was to commence at the same time and
to be made in the same form of distribution as benefits payable under this Plan.
4.12 Condition on Payment of Benefits. Benefits under this Plan shall not
commence unless and until the Participant has executed an Agreement Not to
Compete with the Employer. The Agreement Not to Compete, as it may be amended
from time to time, shall be incorporated as an Appendix to the Plan.
4.13 Limitation on Plan Benefits. The amount of the benefits payable under
this Plan, the Pension Plan (excluding benefits paid pursuant to a rollover from
a defined contribution plan), the Supplemental Pension Plan, and the
Supplemental Retirement Plan shall not exceed an amount equal to two times the
applicable limit under Section 415 of the Code. The benefits of this Plan shall
be reduced to the extent necessary to satisfy this Section 4.13. Notwithstanding
the foregoing, benefits payable under this Plan pursuant to Section 4.8 shall
not be included in the amounts subject to the limitations of this Section 4.13.
4.14 Employment with Related Company. For purposes of determining a
Participant's eligibility for benefits under this Article IV, a Participant's
employment with the Employer shall not be considered terminated if he is
employed by a Related Company immediately after his employment with the Employer
terminates, in which case his employment termination date shall be the later of
the date his employment with the Employer or Related Company terminates,
whichever is later.
ARTICLE V
FORFEITABILITY
5.1 Forfeitability of Benefits for Competition with Company. Any benefits
accrued under the Plan on behalf of a Participant shall be forfeited, any
benefits which a Participant is receiving shall cease, and, unless otherwise
determined by the Administrative Committee, all rights under the Plan shall be
extinguished if a Participant breaches the terms of the Agreement Not to Compete
executed by such Participant as a condition of the payment of benefits under
Section 4.12.
8
<PAGE> 9
ARTICLE VI
PLAN ADMINISTRATION
6.1 Administrative Committee. The Plan shall be administered by an
Administrative Committee which shall consist of at least three members appointed
by the Company.
6.2 Administrative Committee Action. Action of the Administrative Committee
may be taken with or without a meeting of its members; provided, however, that
any action shall be taken only upon the vote or other affirmative expression of
a majority of committee members qualified to vote with respect to such action.
If a member of the Administrative Committee is a Participant in the Plan, he
shall not participate in any decision which solely affects his own benefits
under the Plan.
6.3 Rights and Duties. The Administrative Committee shall administer the
Plan and shall have all powers necessary to accomplish that purpose, including,
but not limited to, the following:
(a) to construe, interpret, and administer the Plan with its decisions to
be final and binding on all parties;
(b) determinations required by the Plan, and to maintain all necessary
records of the Plan;
(c) to compute and certify to the Company the amount of benefits payable
to Participants or their Beneficiaries, and to determine the time and
manner in which such benefits are to be paid.
6.4 Compensation, Indemnity, and Liability. The Administrative Committee
shall serve as such without bond and without compensation for services
hereunder. All expenses of the Plan and the Administrative Committee shall be
paid by the Company. No member of the Administrative Committee shall be liable
for any act or omission of any other member, nor any act or omission on his own
part, except his own willful misconduct. The Company shall indemnify and hold
harmless each member of the Administrative Committee against any and all
expenses and liabilities, including reasonable legal fees and expenses arising
out of his membership on the Administrative Committee, except for expenses or
liabilities arising out of his own willful misconduct.
6.5 Taxes. If all or any portion of a Participant's benefit under this Plan
shall become liable for the payment of any estate, inheritance, or other tax
which the Company shall be required to pay or withhold, the Company shall have
the full power and authority to withhold and pay such tax out of any monies or
other property credited to the Account of such Participant at the time the
Account is distributable to the Participant under the terms of the Plan.
9
<PAGE> 10
ARTICLE VII
CLAIMS PROCEDURE
7.1 Claims for Benefits. If a Participant or Beneficiary does not receive
payment of any benefits which he believes are due and payable under the Plan, he
may make a claim for benefits to the Administrative Committee. The claim for
benefits must be in writing and addressed to the Administrative Committee or to
the Company. If the claim for benefits is denied, the Administrative Committee
shall notify the Participant or Beneficiary in writing within ninety (90) days
after receipt of the claim. However, if special circumstances require an
extension of time for processing the claim, the Administrative Committee shall
provide notice of the extension to the Participant or Beneficiary prior to the
termination of the initial ninety (90) day period, and such extension shall not
exceed one additional, consecutive ninety (90) day period. Any notice of a
denial of benefit shall inform the Participant or Beneficiary of the basis for
the denial, any additional material or information necessary to perfect such
claim, and the steps which must be taken to have such claim reviewed.
7.2 Appeals. Each Participant or Beneficiary whose claim for benefits has
been denied may file a written request for review of his claim with the
Administrative Committee. The request for review must be filed within sixty (60)
days after the Participant or Beneficiary received the written notice denying
his claim. The final decision of the Administrative Committee will be made
within sixty (60) days after receipt of the request for review and shall be
communicated in writing, setting forth the basis for the Administrative
Committee's decision. If there are special circumstances which require an
extension of time for completing the review, the Administrative Committee's
decision shall be rendered not later than one-hundred twenty (120) days after
the receipt of the request for review.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.1 Amendment. The Company or Administrative Committee shall have the right
to amend the Plan in whole or in part at any time; provided, however, that no
amendment shall reduce the benefits accrued on behalf of any Participant as of
the effective date of such amendment. Any amendment shall be in writing and
executed by a duly authorized officer of the Company or a majority of members of
the Administrative Committee.
8.2 Termination of the Plan. The Company reserves the right to discontinue
and terminate the Plan at any time, in whole or in part, for any reason. In the
event of termination of the Plan, the benefits accrued under the Plan on behalf
of any Participant, as of the effective date of such termination, shall not be
reduced and shall be distributed at a time and in the manner determined by the
Administrative Committee.
10
<PAGE> 11
ARTICLE IX
MISCELLANEOUS
9.1 Limitation on Participant's Rights. Participation in this Plan shall
not give any Participant the right to be retained in the Company's employ or any
rights or interest in this Plan or any assets of the Company other than as
herein provided. The Company reserves the right to terminate the employment of
any Participant without any liability for any claim against the Company under
this Plan, except to the extent provided herein.
9.2 Benefits Unfunded. The benefits provided by this Plan shall be
unfunded. All amounts payable under the Plan to Participants shall be paid from
the general assets of the Company, and nothing contained herein shall require
the Company to set aside or hold in trust any amounts or assets for the purpose
of paying benefits. Participants shall have the status of general unsecured
creditors of the Company with respect to amounts of Compensation they defer
under the Plan or any other obligation of the Company to pay benefits pursuant
hereto. Any funds of the Company available to pay benefits under the Plan shall
be subject to the claims of general creditors of the Company and may be used for
any purpose by the Company.
Notwithstanding the preceding paragraph, the Company may at any time
transfer assets to a trust for purposes of paying all or any part of its
obligations under this Plan. However, to the extent provided in the trust
agreement only, such transferred amounts shall remain subject to the claims of
general creditors of the Company. To the extent that assets are held in a trust
when a Participant's benefits under the Plan become payable, the Administrative
Committee shall direct the trustee to pay such benefits to the Participant from
the assets of the trust.
9.3 Other Plans. This Plan shall not affect the right of any Eligible
Employee or Participant to participate in and receive benefits under any
employee benefit plans which are now or hereafter maintained by the Company,
unless the terms of such other employee benefit plan or plans specifically
provide otherwise.
9.4 Governing Law. This Plan shall be construed, administered, and governed
in all respects in accordance with applicable federal law and, to the extent not
preempted by federal law, in accordance with the laws of the State of Georgia.
If any provisions of this instrument shall be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions hereof
shall continue to be fully effective.
9.5 Gender, Number, and Headings. In this Plan, whenever the context so
indicates, the singular or plural number and the masculine, feminine, or neuter
gender shall be deemed to include the other. Headings and subheadings in this
Plan are inserted for convenience of reference only and are not considered in
the construction of the provisions hereof.
11
<PAGE> 12
9.6 Successors and Assigns; Nonalienation of Benefits. This Plan shall
inure to the benefit of and be binding upon the parties hereto and their
successors and assigns; provided, however, that the amounts credited to the
Account of a Participant shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, charge,
garnishment, execution or levy of any kind, either voluntary or involuntary, and
any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge or otherwise dispose of any right to any benefits payable hereunder shall
be void, including, without limitation, any assignment or alienation in
connection with a separation, divorce, child support or similar arrangement.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its
duly authorized officers this 19th day of December, 1996.
COCA-COLA ENTERPRISES INC.
S/ JARRATT H. JONES
By: _____________________________
VICE PRESIDENT, HUMAN RESOURCES
Title:_____________________________
S/ LAURIE CLARK
Attest:___________________________
LEGAL ASSISTANT
Title:_____________________________
12
<PAGE> 13
APPENDIX A
Agreement Not to Compete
In return for entitlement to retirement benefits under the Coca-Cola Enterprises
Inc. Executive Pension Plan, the undersigned agrees not to compete with
Coca-Cola Enterprises Inc. for a period of two years following my termination of
employment for any reason.
Specifically, I agree that I will not:
1. Participate in the management or operations of any business manufacturing,
producing or distributing liquid, nonalcoholic refreshments, with the
exception of The Coca-Cola Company and any licensee of The Coca-Cola
Company.
2. Participate in the ownership of any such business, with the exception of
the ownership of stock of a public company, provided the ownership of such
stock does not exceed 1% of the total outstanding shares. This ownership
limitation does not apply to any company in which Coca-Cola Enterprises
Inc. or The Coca-Cola Company owns at least 25%.
I further agree that the geographic territory covered by this agreement is that
territory in which Coca-Cola Enterprises holds manufacturing, production or
distribution rights for products of The Coca-Cola Company on the date this
agreement is executed.
I further agree that the terms of this agreement, including the geographic
restrictions on my future employment, are reasonable in light of my
responsibilities in the management and supervision of the operations of the
Company and the adequacy of consideration given in exchange for this agreement.
If any court in any jurisdiction, however, determines that the terms of this
agreement are more restrictive than necessary to protect the legitimate
interests of the Company, such court may modify any term of this agreement in a
manner that renders it enforceable.
I further agree that if I breach this agreement, I will forfeit all benefits
accrued on my behalf under the Coca-Cola Enterprises Inc. Executive Pension Plan
and shall have no further rights thereunder.
------------------------------------
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Date
<PAGE> 1
EXHIBIT 10.33
BOTTLER'S AGREEMENT
THIS BOTTLER'S AGREEMENT (the "Agreement") is entered into with effect from
July 26, 1996, by and among THE COCA-COLA COMPANY, a corporation organized
and existing under the laws of the State of Delaware, U.S.A., with principal
offices at One Coca-Cola Plaza, N.W., in the City of Atlanta, State of
Georgia, U.S.A.; THE COCA-COLA EXPORT CORPORATION, a corporation organized
and existing under the laws of the State of Delaware, U.S.A., with principal
offices at One Coca-Cola Plaza, N.W., in the City of Atlanta, State of
Georgia, U.S.A. (The Coca-Cola Company and The Coca-Cola Export Corporation
hereinafter collectively or severally referred to as the "Company" unless
otherwise specified); and Coca-Cola Beverages S.A., a corporation organized
and existing under the laws of the Republic of France with principal offices
at Le Ponant de Paris, 21 rue Leblanc, 75513, Paris, Cedex 15, France
(hereinafter referred to as the "Bottler").
W I T N E S S E T H:
WHEREAS,
A. The Company is engaged in the manufacture and sale of certain
concentrates and beverage bases (hereinafter referred to as the
"Beverage Bases"), the formulae for which are industrial secrets of The
Coca-Cola Company, from which non-alcoholic beverage syrups
(hereinafter referred to as the "Syrups") are prepared, and is also
engaged in the manufacture and sale of the Syrups, which are used in
the preparation of certain non-alcoholic beverages which are more fully
described in Appendix I (hereinafter referred to as the "Beverages")
and which are offered for sale in bottles and other containers and in
other forms or manners.
B. The Coca-Cola Company is the owner of the trademarks set forth in
Appendix II that distinguish the said Beverage Bases, Syrups and
Beverages and is also the owner of various trademarks consisting of
distinctive containers in various sizes in which the Beverages have
been marketed for many years and of the trademarks consisting of
Dynamic Ribbon devices which are used in the advertising and marketing
of certain of the Beverages (all of the said trademarks being
collectively or severally referred to hereinafter as the "Trademarks").
C. The Coca-Cola Company has designated and authorized certain third
parties to manufacture the Beverage Bases for sale to duly appointed
bottlers (said third parties being hereinafter referred to as
"Authorized Suppliers").
D. The Company has the right to authorize third parties to prepare,
package, distribute or sell the Beverages in France.
E. The Bottler desires to prepare and package the Beverages for
distribution and sale in and throughout a territory defined and
described in this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
I. AUTHORIZATION
1. The Company hereby authorizes the Bottler, and the Bottler undertakes,
subject to the terms and conditions contained herein, to prepare and
package the Beverages in authorized containers, and to distribute and
sell the same under the Trademarks, in and throughout the territory
which is defined and described in Appendix III (hereinafter referred to
as the "Territory").
2. The Company shall, during the term of this Agreement, in its
discretion, approve for each of the Beverages the container types,
sizes, shapes and other distinguishing characteristics (hereinafter
referred to as "Authorized Containers") which the Bottler is authorized
to use under this Agreement for the packaging of each of the Beverages.
The list of Authorized Containers in respect of each of the Beverages
as of the effective date hereof is set forth in Appendix IV. The
Company may, by giving written notice to the Bottler, authorize the
Bottler to use additional Authorized Containers in the preparation,
distribution and sale of one or more of the Beverages. Except as
provided in Appendix IV, the Company under this Clause 2 further
reserves the right to cancel its authorization of each of the
Authorized Containers for any of the Beverages upon six (6) months'
written notice to the Bottler. It is recognized among the parties
hereto that the Company will exercise its right to cancel its
authorization in respect of any of the Authorized Containers in good
faith so as to enable the Bottler to prepare, package, distribute and
sell the Beverages under this Agreement. In the event of such
cancellation, the provisions of Clause 29(c) shall apply to containers
in respect of which authorization has been cancelled.
3. The Schedules, if any, attached hereto identify the nature of the
supplemental authorizations which may be granted from time to time to
the Bottler pursuant to this Agreement and govern the particular rights
and obligations of the parties in respect of the supplemental
authorizations.
II. OBLIGATIONS OF THE COMPANY
4. The Company or Authorized Suppliers will sell and deliver to the
Bottler such quantities of the Beverage Bases as may be ordered by the
Bottler from time to time, provided that:
(a) the Bottler will order, and the Company or Authorized
Suppliers will sell and deliver to the Bottler, only such
quantities of the Beverage Bases as may be necessary and
sufficient to implement this Agreement; and
(b) the Bottler will use the Beverage Bases exclusively for the
preparation of the Beverages as
Bottler's Agreement Page 1
<PAGE> 2
prescribed from time to time by the Company, and the Bottler
undertakes not to sell the Beverage Bases nor permit the same
to fall into the hands of third parties without the prior
written consent of the Company.
The Coca-Cola Company shall retain the sole and exclusive right at any
time to determine the formulae, composition or ingredients for the
Beverages and the Beverage Bases.
5. The Company, for the term of this Agreement, except as provided for in
Clause 11, will refrain from distributing or selling or from
authorizing third parties to distribute or sell throughout the
Territory the Beverages in Authorized Containers, reserving the
rights, however, to prepare and package the Beverages in Authorized
Containers in the Territory for sale outside the Territory and to
prepare, package, distribute and sell or authorize third parties to
prepare, package, distribute or sell the Beverages in the Territory
in any other manner or form.
III. OBLIGATIONS OF THE BOTTLER RELATIVE TO MARKETING
OF THE BEVERAGES, FINANCIAL CAPACITY AND PLANNING
6. The Bottler shall have a continuing obligation to develop, stimulate
and satisfy fully the demand for each of the Beverages within the
Territory. The Bottler therefore covenants and agrees with the Company:
(a) to prepare, package, distribute and sell such quantities of
each of the Beverages as shall in all respects satisfy fully
every demand for each of the Beverages within the Territory;
(b) to make every effort and to employ all proven, practical and
approved means to develop and exploit fully the potential of
the business of preparing, packaging, marketing and
distributing each of the Beverages throughout the Territory by
creating, stimulating and expanding continuously the future
demand for each of the Beverages and by satisfying fully and
in all respects the existing demand therefor;
(c) to invest all the capital and incur all expenses required for
the organization, installation, operation, maintenance and
replacement within the Territory of such manufacturing,
warehousing, marketing, distribution, delivery, transportation
and other facilities and equipment as shall be necessary to
implement this Agreement;
(d) to provide competent and well-trained management, and to
recruit, train, maintain and direct all personnel required,
sufficient in every respect, to perform all of the obligations
of the Bottler under this Agreement;
(e) not to sell and/or distribute the Beverages, without the prior
written consent of the Company, outside the Territory or to
anyone who intends to resell the Beverages outside the
Territory; the foregoing prohibition does not apply if the
Territory is a Member State or within a Member State of the
European Economic Area and the sale results from an order from
a customer in another Member State or for export to another
Member State;
(f) not to actively seek customers nor maintain a branch outside
the Territory; however, the Bottler shall have the right to
fill unsolicited orders for the Beverages from any customer
located within another Member State or for export to another
Member State of the European Economic Area.
7. The parties agree that, to develop and stimulate demand for each of the
Beverages, advertising and other forms of marketing activities are
required. The Bottler agrees, therefore, to spend such funds for the
advertising and marketing of the Beverages as may be required to
maintain and to increase the demand for each of the Beverages in the
Territory. The Company may, in its sole discretion, contribute to such
advertising and marketing expenditures. The Company may also undertake
at its own expense any advertising or promotional activity that the
Company deems appropriate to conduct in the Territory, but this shall
in no way affect the obligations of the Bottler to spend funds for the
advertising and marketing of each of the Beverages so as to stimulate
and develop the demand for each of the Beverages in the Territory.
8. The Bottler shall submit to the Company, for its prior approval, all
advertising and all promotions relating to the Trademarks or the
Beverages and shall use, publish, maintain or distribute only such
advertising or promotional material relating to the Trademarks or to
the Beverages as the Company shall approve and authorize.
9. The Bottler shall maintain the consolidated financial capacity
reasonably necessary to assure that the Bottler will be capable of
performing its obligations under this Agreement. The Bottler shall
maintain accurate books, accounts and records and shall provide to the
Company, upon the Company's request, such financial and accounting
information as shall enable the Company to determine the Bottler's
compliance with its obligations under this Agreement.
10. The Bottler covenants and agrees:
(a) to deliver to the Company once in each calendar year a program
(hereinafter referred to as the "Annual Program") which shall
be acceptable to the Company as to form and substance. The
Annual Program shall include but shall not be limited to the
marketing, management, financial, promotional and advertising
plans of the Bottler showing in detail the activities
contemplated for the ensuing twelve-month period or such other
period as the Company may prescribe. The Bottler shall
prosecute diligently the Annual Program and shall report
quarterly or at such other intervals as the Company may
request in connection with the implementation of the Annual
Program;
(b) to report on a monthly basis, or at such other intervals as
the Company may request, to the Company, sales of each of the
Beverages in such detail and containing such information as
may be requested by the Company.
Bottler's Agreement Page 2
<PAGE> 3
11. The Bottler recognizes that the Company has entered into or may enter
into agreements similar to this Agreement with other parties outside
the Territory and accepts the limitations such agreements may
reasonably impose on the Bottler in the conduct of its business under
this Agreement. The Bottler further agrees to conduct its business in
such manner as to avoid conflicts with such other parties, and in the
event of disputes nevertheless arising with such other parties, to make
every effort to settle them amicably. The Bottler will not oppose
without valid reason any additional measures the adoption of which is
considered by the Company as necessary and justified in order to
protect and improve the sales and distribution system for the
Beverages; for instance, those which might be adopted concerning the
supply of large and/or special buyers whose field of activity
transcends the boundaries of the Territory - even if such measures
should entail a restriction of the Bottler's rights or obligations
within reasonable limits not affecting the substance of this Agreement,
including measures taken in compliance with the Rules of Competition of
the European Economic Area.
12. (a) The Bottler, recognizing the important benefit to itself
and all the other parties referred to in Clause 11 above, of a
uniform external appearance of the distribution and other
equipment and materials used under this Agreement, agrees to
accept and apply the standards adopted and issued from time to
time by the Company for the design and decoration of trucks
and other delivery vehicles, cases, cartons, coolers, vending
machines and other materials and equipment used in the
distribution and sale of the Beverages under this Agreement.
(b) The Bottler further agrees to maintain and to replace such
equipment at such intervals as are reasonably necessary and
not to use such equipment to distribute or sell any products
which are not identified by the Trademarks without the prior
written consent of the Company.
13. (a) In the event any of the Beverages prepared, packaged,
distributed or sold by the Bottler are found either in the
territory of another bottler authorized by the Company to
distribute and sell the Beverages in a territory within
France or in a territory within a state that is not a
Member State of the European Economic Area (hereinafter the
"Injured Bottler") then, in addition to all other remedies
available to the Company:
(1) the Company may charge the Bottler an amount of
compensation for the Beverages found in the Injured
Bottler's territory to include all lost profits,
expenses and other costs incurred by the Company and
the Injured Bottler;
(2) the Company may purchase any of the Beverages
prepared, packaged, distributed or sold by the
Bottler which are found in the Injured Bottler's
territory, and the Bottler shall, in addition to any
other obligation it may have under this Agreement,
reimburse the Company for the Company's cost of
purchasing, transporting and/or destroying such
Beverages; and
(3) if the phenomenon persists or reoccurs after the
Company has requested the Bottler, in writing, to end
or prevent it, by discharging the Bottler's
obligation under Clauses 6(e) and (f), the Company
may, in its sole discretion, cancel forthwith the
authorization for the Authorized Container(s) of the
type which were found in the Injured Bottler's
territory.
(b) In the event that Beverages prepared, packaged, distributed or
sold by the Bottler are found in the territory of an Injured
Bottler, the Bottler shall make available to representatives
of the Company all sales agreements and other records relating
to such Beverages and assist the Company in all investigations
relating to the sale and distribution of such Beverages
outside the Territory.
(c) The Bottler shall immediately inform the Company if at any
time any solicitation or offer to purchase Beverages is made
to the Bottler by a third party which the Bottler knows or has
reason to believe or suspect would result in the Beverages
being marketed, sold, resold, distributed or redistributed
outside the Territory in breach of Clauses 6(e) and (f) of
this Agreement.
IV. OBLIGATIONS OF THE BOTTLER RELATIVE TO THE TRADEMARKS
14. The Bottler recognizes the validity of the Trademarks and the ownership
thereof by The Coca-Cola Company.
15. Nothing herein shall give the Bottler any interest in the Trademarks or
the goodwill attaching thereto or in any label, design, container or
other visual representations thereof or used in connection therewith.
It is agreed and understood by the parties that there is extended to
the Bottler under this Agreement a mere temporary permission uncoupled
with any right or interest and without payment of any fee or royalty
charge, to use said Trademarks, labels, designs, containers or other
visual representations thereof, only in connection with the
preparation, packaging, distribution and sale of the Beverages in
Authorized Containers; said use to be in such manner and with the
result that all goodwill relating to the same shall accrue to The
Coca-Cola Company as the source and origin of such Beverages, and the
Company shall be absolutely entitled to determine in every instance the
manner of presentation and such other steps necessary or desirable to
secure compliance with this Clause 15.
16. The Bottler shall not adopt or use any name, corporate name, trading
name, title of establishment or other commercial designation which
includes the words "Coca-Cola", "Coca", "Cola", "Coke" or any of them
or any name that is confusingly similar to any of them or any graphic
or visual representation of the Trademarks or any other trademark or
industrial property owned by The Coca-Cola Company, without the prior
written consent of The Coca-Cola Company.
17. The Bottler undertakes in accordance with applicable law:
(a) during the term of this Agreement and for a period of two (2)
years after its termination not to prepare, package,
distribute, sell, deal in or in any manner whatsoever be
concerned with any concentrate, syrup or beverage which is
likely to be passed off for or appear as an imitation of the
Beverage Bases, the Syrups or the Beverages;
Bottler's Agreement Page 3
<PAGE> 4
(b) not at any time to prepare, package, distribute, sell, deal in
or otherwise be concerned with any product under any get-up or
in any container which is an imitation of the get-up or
container used by the Company, or which is likely to be
confused or used in unfair competition therewith;
(c) not at any time to prepare, package, distribute, sell, deal in
or otherwise be concerned with any product under any trademark
or other designation which is an imitation or infringement of
the Trademarks; and without in any way limiting the generality
of the foregoing, it is expressly stipulated that use of the
words "Coca", "Coke" or "Coca-Cola" in any form or fashion, or
any graphic or phonetic rendering of them, on any product
other than that of The Coca-Cola Company, would constitute
such imitation, unfair competition or infringement.
The covenants herein contained apply not only to the operations
with which the Bottler may be directly concerned, but also to
operations with which the Bottler may be indirectly concerned
through ownership, control, management, partnership or in similar
manner whether located within or outside the Territory. The Bottler
covenants not to acquire or hold, directly or indirectly, any
ownership interest in, or enter into any contract or arrangement
with respect to the management or control of, any person or legal
entity, within or outside the Territory, that engages in any of the
activities prohibited under this Clause.
18. This Agreement reflects the mutual interest of the parties and in the
event that either:
(a) a third party which is, in the opinion of the Company,
directly or indirectly through ownership, control, management
or otherwise, concerned with the manufacture, preparation,
packaging, distribution or sale of any products specified in
Clause 17 hereof, shall acquire or otherwise obtain control or
any direct or indirect influence on the management of the
Bottler; or
(b) any real or legal person having majority ownership or direct
or indirect control of the Bottler or who is directly or
indirectly controlled either by the Bottler or by any third
party which has control or any direct or indirect influence,
in the opinion of the Company, on the management of the
Bottler, shall engage in the preparation, packaging,
distribution or sale of any products specified in Clause 17
hereof;
then the Company shall have the right to terminate this Agreement
forthwith unless the third party making such acquisition as specified
in subclause (a) hereof or the person, entity, firm or company referred
to in subclause (b) hereof shall, on being notified in writing by the
Company of its intention to terminate as
aforesaid, agree to discontinue, and shall in fact discontinue, the
manufacture, preparation, packaging, distribution or sale of such
products within a reasonable period not exceeding six (6) months from
the date of notification.
V. OBLIGATIONS OF THE BOTTLER RELATIVE TO THE PREPARATION
AND PACKAGING OF THE BEVERAGES
19. (a) The Bottler covenants and agrees with the Company to use,
in preparing the Syrups for each of the Beverages, only the
Beverage Bases purchased from the Company or Authorized
Suppliers and to use the Syrups only for the preparation and
packaging of the Beverages in strict adherence to and
compliance with the instructions issued to the Bottler from
time to time by the Company in writing. The Bottler further
covenants and agrees with the Company that in preparing,
packaging and distributing the Beverages the Bottler shall at
all times conform to the manufacturing standards, hygienic and
otherwise, established from time to time by the Company and
comply with all legal requirements, and the Bottler shall
permit the Company, its officers, agents and designees at all
times to enter and inspect the plant, facilities, equipment
and methods used by the Bottler in the preparation, packaging,
storage and handling of the Beverages, to ascertain whether
the Bottler is complying with the terms of this Agreement.
(b) The Bottler, recognizing the importance of identifying the
source of manufacture of the Beverages in the market, agrees
to use identification codes on all packaging materials for the
Beverages, including Authorized Containers and non-returnable
cases. The Bottler further agrees to install, maintain and use
the necessary machinery and equipment required for the
application of such identification codes. The Company shall
provide the Bottler, from time to time, with necessary
instructions, in writing, regarding the forms of the
identification codes to be used by the Bottler and the
production and sales records to be maintained by the Bottler.
(c) In the event the Company determines or becomes aware of the
existence of any quality or other technical problems relating
to any of the Beverages or Authorized Containers in respect of
any of the Beverages, the Company may require the Bottler to
take all necessary action to withdraw immediately any such
Beverages from the market. The Company shall notify the
Bottler by telephone, cable, telex, facsimile or any other
form of immediate communication of the decision by the Company
to require the Bottler to withdraw any such Beverages from the
market and the Bottler shall, upon receipt of such notice,
immediately cease distribution of such Beverages and take such
other action as may be required by the Company in connection
with the withdrawal of such Beverages from the market.
(d) In the event the Bottler determines or becomes aware of the
existence of quality or other technical problems relating to
any of the Beverages or Authorized Containers in respect of
any of the Beverages, then the Bottler shall immediately
notify the Company by
telephone, cable, telex, facsimile or any other form of
immediate communication. This notification shall include: (1)
identity and quantities of the Beverages involved, including
the Authorized Containers, (2) coding data and (3) any other
relevant data including data that will assist in tracing such
Beverages.
20. The Bottler shall submit to the Company, at the Bottler's expense,
samples of the Syrups, of the Beverages and of materials used in the
preparation of the Syrups and the Beverages in accordance with such
instructions as may be given in writing from time to time by the
Company.
Bottler's Agreement Page 4
<PAGE> 5
21. (a) In the packaging, distribution and sale of the Beverages,
the Bottler shall use only such Authorized Containers,
closures, cases, cartons, labels and other packaging materials
approved from time to time by the Company, and the Bottler
shall purchase such items only from manufacturers who have
been authorized by The Coca-Cola Company to manufacture the
items to be used in connection with the Trademarks and the
Beverages. The Coca-Cola Company shall use its best efforts to
approve two or more manufacturers of such items, it being
understood that said approved manufacturers may be located
within or outside the Territory.
(b) The Bottler shall inspect such Authorized Containers,
closures, cases, cartons, labels and other packaging materials
and shall use only those items which comply with the standards
established by applicable laws in the Territory in addition to
the standards and specifications prescribed by the Company.
The Bottler shall assume independent responsibility in
connection with the use of such Authorized Containers,
closures, cases, cartons, labels and other packaging materials
which conform to such standards.
(c) The Bottler shall maintain at all times a sufficient stock of
Authorized Containers, closures, labels, cases, cartons and
other packaging materials to satisfy fully the demand for each
of the Beverages in the Territory.
22. (a) The Bottler recognizes that increases in the demand for
the Beverages, as well as changes in the list of Authorized
Containers, may from time to time require modifications or
other changes in respect of its existing manufacturing,
packaging, delivery or vending equipment or require the
purchase of additional manufacturing, packaging, delivery or
vending equipment. The Bottler agrees, therefore, to make such
modifications to existing equipment and to purchase and
install such additional equipment as necessary with sufficient
lead time to enable the introduction of new Authorized
Containers and the preparation and packaging of the Beverages
in accordance with the continuing obligations of the Bottler
to develop, stimulate and satisfy fully every demand for each
of the Beverages in the Territory.
(b) In the event the Bottler uses refillable Authorized Containers
in the preparation and packaging of all or any of the
Beverages, the Bottler agrees to invest the necessary capital
and to appropriate and expend such funds as may be required
from time to time to establish and maintain an adequate
inventory of refillable Authorized Containers. In order to
ensure the continuing quality and appearance of the said
inventory of refillable Authorized Containers, the Bottler
further agrees to replace all or part of the said inventory of
refillable Authorized Containers as may be reasonably
necessary and in accordance with the obligations of the
Bottler hereunder.
(c) The Bottler agrees not to refill or otherwise reuse any
nonrefillable Authorized Containers that have been previously
used.
23. The Bottler shall be solely responsible in the carrying out of its
obligations hereunder for compliance with all regulations and laws
applicable in the Territory and shall inform the Company forthwith of
any such provision which would prevent or limit in any way the strict
compliance by the Bottler with its obligations hereunder.
VI. CONDITIONS OF PURCHASE AND SALE
24. The Bottler shall, in accordance with the provisions of this Agreement,
purchase the Beverage Bases required for the preparation and packaging
of the Beverages only from the Company or Authorized Suppliers.
25. (a) The Company reserves the right by giving notice to the
Bottler to establish in its sole discretion the prices of the
Beverage Bases, including the conditions of shipment and
payment and the currency or currencies acceptable to the
Company and its Authorized Suppliers in payment and to
designate one or more Authorized Suppliers, the supply point
and/or alternate supply points for each of the Beverage Bases.
(b) The Company reserves the right by giving written notice to the
Bottler to change the Authorized Suppliers and to revise from
time to time and at any time in its sole discretion the price
of any of the Beverage Bases, the conditions of shipment
(including the supply point) and the currency or currencies
acceptable to the Company or its Authorized Suppliers.
(c) If the Bottler is unwilling to pay the revised price in
respect of the Beverage Base for the Beverage "Coca-Cola",
then the Bottler shall so notify the Company in writing within
thirty (30) days from receipt of the written notice from the
Company revising the aforesaid price. In this event, this
Agreement shall terminate automatically three (3) calendar
months after receipt of the Bottler's notification.
(d) Except as provided in subclause (c) hereof in respect of the
Beverage Base for the Beverage "Coca-Cola", if the Bottler is
unwilling to pay the revised price in respect of the Beverage
Base(s) for any one or more of the other Beverages, then the
Bottler shall so notify the Company in writing within thirty
(30) days from receipt of the written notice from the Company
revising the aforesaid price or prices. In this event, the
Company, in its
discretion and with regard to the present and prospective
circumstances in the market, shall either (i) notify the
Bottler in writing that the Agreement shall terminate, in
which event this Agreement shall terminate three (3) calendar
months after the date of the Company's notice of termination
to the Bottler, or (ii) notify the Bottler in writing that the
Bottler's authorization in respect of that Beverage or those
Beverages for which the Bottler is unwilling to pay the
revised price is cancelled, such cancellation to be effective
three (3) calendar months after the date of the Company's
notice of such cancellation of authorization(s) to the
Bottler. In the event of the cancellation of an authorization
of a Beverage or Beverages pursuant to this subclause, the
provisions of Clause 29 shall apply in respect of that
Beverage or those Beverages, and, notwithstanding any other
provision of this Agreement, the Company shall have no further
obligation to the Bottler in respect of that Beverage or those
Beverages for
Bottler's Agreement Page 5
<PAGE> 6
which authorizations have been cancelled, and the Company
shall be entitled to prepare, package, distribute or sell, or
to grant authorizations to a third party to prepare, package,
distribute or sell, that Beverage or those Beverages in the
Territory.
(e) Any failure on the part of the Bottler to notify the Company
in respect of the revised price of any one or more of the
Beverage Bases pursuant to subclause (c) and (d) hereof shall
be deemed to be acceptance by the Bottler of the revised
price.
(f) The Bottler undertakes to collect from or charge to retail
outlets, for each refillable Authorized Container and each
returnable case delivered to the said retail outlets, such
deposits as the Company may determine from time to time by
giving written notice to the Bottler, and to make all
reasonably diligent efforts to recover all empty refillable
Authorized Containers and returnable cases and, upon recovery,
to refund or to credit the deposits for said refillable
Authorized Containers and returnable cases returned undamaged
and in good condition.
VII. DURATION AND TERMINATION OF AGREEMENT
26. (a) This Agreement shall be effective from July 26, 1996 and shall
expire, without notice, on July 26, 2006 unless it has been
earlier terminated as provided herein. It is recognized and
agreed among the parties hereto that the Bottler shall have no
right to claim a tacit renewal of this Agreement.
(b) If the Bottler has fully complied with all the terms,
covenants, conditions and stipulations of this Agreement
throughout its term and the Bottler is capable of the
continued promotion, development and exploitation of the full
potential of the business in the preparation, packaging,
distribution and sale of each of the Beverages, the Bottler
may request an extension of this Agreement for an additional
term of ten (10) years. The Bottler may request such extension
by giving written notice to the Company at least six (6)
months but not more than twelve (12) months prior to the
expiration date of this Agreement. The request by the Bottler
for such extension shall be supported by such documentation as
the Company may request including documentation relating to
the Bottler's compliance with the performance obligations
under this Agreement and including documentation supporting
the continued capability of the Bottler to develop, stimulate
and satisfy fully the demand for each of the Beverages within
the Territory. If the Bottler has, in the sole discretion of
the Company, satisfied the conditions for the extension of
this Agreement, then the Company may, by written notice, agree
to extend this Agreement for such additional term.
(c) At the expiration of any such additional term, this Agreement
shall expire finally without further notice, and the Bottler
shall have no right to claim a tacit renewal of this
Agreement.
27. (a) This Agreement may be terminated by the Company or the
Bottler forthwith and without liability for damages by written
notice given by the party entitled to terminate to the other
party:
(1) if the Company, the Authorized Suppliers or the
Bottler cannot legally obtain foreign exchange to
remit abroad in payment of imports of the Beverage
Bases or the ingredients or materials necessary for
the manufacture of the Beverage Bases, the Syrups or
the Beverages; or
(2) if any part of this Agreement ceases to be in
conformity with the laws or regulations applicable in
the country in which the Territory is located and, as
a result thereof, or as a result of any other laws
affecting this Agreement, any one of the material
stipulations herein cannot be legally performed or
the Syrups cannot be prepared, or the Beverages
cannot be prepared or sold in accordance with the
instructions issued by the Company pursuant to Clause
19 above, or if any of the Beverage Bases cannot be
manufactured or sold in accordance with the Company's
formulae or with the standards prescribed by it.
(b) This Agreement may be terminated forthwith by the Company
without liability for damages:
(1) if the Bottler becomes insolvent, or if a petition in
bankruptcy is filed against or on behalf of the
Bottler which is not stayed or dismissed within one
hundred and twenty (120) days, or if the Bottler
passes a resolution for winding up, or if a winding
up or judicial management order is made against the
Bottler, or if a receiver is appointed to manage the
business of the Bottler, or if the Bottler enters
into any judicial or voluntary scheme of composition
with its creditors or concludes any similar
arrangements with them or makes an assignment for the
benefit of creditors; or
(2) in the event of the Bottler's dissolution,
nationalization or expropriation, or in the event of
the confiscation of the
production or distribution assets of the Bottler.
28. (a) This Agreement may also be terminated by the Company or
the Bottler if the other party fails to observe any one or
more of the terms, covenants, or conditions of this Agreement,
and fails to remedy such default(s) within sixty (60) days
after such party has been given written notice of such
default(s).
(b) In addition to all other remedies to which the Company may be
entitled hereunder, if at any time the Bottler fails to follow
the instructions or to maintain the standards prescribed by
the Company or required by applicable laws in the Territory
for the preparation of the Syrups or the Beverages, the
Company shall have the right to prohibit the production of the
Syrups or the Beverages until the default has been corrected
to the Company's satisfaction, and the Company may demand the
withdrawal from the trade, at the Bottler's expense, of any
Beverages not in conformity with or not manufactured in
conformity with such instructions, standards or requirements,
and the Bottler shall promptly comply with such prohibition or
demand. During the period of such prohibition of production,
the Company shall be entitled to suspend deliveries of the
Beverage Bases to the Bottler and shall also be entitled to
supply, or to cause or permit others to supply, the Beverages
in
Bottler's Agreement Page 6
<PAGE> 7
Authorized Containers in the Territory. No prohibition or
demand shall be deemed a waiver of the rights of the Company
to terminate this Agreement pursuant to this Clause.
29. Upon the expiration or earlier termination of this Agreement or upon
cancellation of the authorization for a Beverage(s) and then only in
respect of that Beverage(s) as the case may be:
(a) the Bottler shall not thereafter prepare, package, distribute
or sell the Beverage(s) or make any use of the Trademarks,
Authorized Containers, cases, closures, labels, packaging
material or advertising material used or which are intended
for use by the Bottler in connection with the preparation,
packaging, distribution and sale of the Beverage(s);
(b) the Bottler shall forthwith eliminate all references to the
Company, the Beverage(s) and the Trademarks from the premises.
delivery vehicles, vending and other equipment of the Bottler
and from all business stationery and all written, graphic,
electromagnetic, digital or other promotional or advertising
material used or maintained by the Bottler, and the Bottler
shall not thereafter hold forth in any manner whatsoever that
the Bottler has any connection with the Company, the
Beverage(s) or the Trademarks;
(c) the Bottler shall forthwith deliver to the Company or a third
party, in accordance with such instructions as the Company
shall give, all of the Beverage Bases, Syrups, Beverages in
Authorized Containers, usable Authorized Containers bearing
the Trademarks or any of them, cases, closures, labels,
packaging material and advertising material for the
Beverage(s) still in the Bottler's possession or under its
control, and the Company shall, upon delivery thereof,
pursuant to such instructions, pay to the Bottler a sum equal
to the reasonable market value of such supplies or materials,
provided that the Company will accept and pay for only such
supplies or materials as are in first-class and usable
condition; and provided further that all Authorized
Containers, closures, labels, packaging material and
advertising material bearing the name of the Bottler and any
such supplies and materials which are unfit for use according
to the Company's standards shall be destroyed by the Bottler
without cost to the Company; and provided further that, if
this Agreement is terminated in accordance with the provisions
of Clauses 18 or 27(a) or as a result of any of the
contingencies specified in Clause 34 (including termination by
operation of law), or if the Agreement is terminated by the
Bottler for any reason other than in accordance with or as a
result of the operation of Clauses 25 or 28 or upon the
cancellation of the authorization for a Beverage(s) pursuant
to Clause 25(d) or Clause 30, the Company shall have the
option, but no obligation, to purchase from the Bottler the
supplies and materials referred to above; and
(d) all rights and obligations hereunder, whether specifically set
out or whether accrued or accruing by use, conduct or
otherwise, shall expire, cease and end, excepting all
provisions concerning the obligations of the Bottler as set
forth in Clauses 13(a)(1) and (2), 14, 15, 17, 29, 35(a), (b),
(c) and (d), and 36, all of which shall continue in full force
and effect; provided always that this provision shall not
affect any rights the Company may have against the Bottler in
respect of any claim for nonpayment of any debt or account
owed by the Bottler to the Company or its Authorized
Suppliers.
30. In addition to all other remedies of the Company in respect of any
breach by the Bottler of the terms, covenants and conditions of this
Agreement and where such breach relates only to the preparation,
packaging, distribution and sale by the Bottler of one or more, but not
all of the Beverages, then the Company may elect to cancel the
authorizations granted to the Bottler pursuant to this Agreement in
respect only of that Beverage or those Beverages. In the event of the
cancellation by the Company of authorizations to the Bottler pursuant
to this Clause, the provisions of Clause 29 shall apply in respect of
that Beverage or those Beverages, the Company shall have no further
obligations to the Bottler in respect of that Beverage or those
Beverages in respect of which authorizations have been cancelled and
the Company shall be entitled to prepare, package, distribute or sell
or to grant authorizations to a third party in connection with the
preparation, packaging, distribution and sale of that Beverage or those
Beverages in the Territory.
VIII. GENERAL PROVISIONS
31. It is recognized and acknowledged among the parties hereto that the
Company has a vested and legitimate interest in maintaining, promoting
and safeguarding the overall performance, efficiency and integrity of
the Company's international bottling, distribution and sales system. It
is further recognized and acknowledged among the parties hereto that
this Agreement has been entered into by the Company intuitu personae
and in reliance upon the identity, character and integrity of the
owners, controlling parties and managers of the Bottler, and the
Bottler warrants having made to the Company prior to the execution
hereof a full and complete disclosure of the owners and of any third
parties having a right to, or power of, control or management of the
Bottler. It is therefore agreed among the parties hereto that
notwithstanding the provisions of Clause 18 or any other provision of
this Clause 31, in the event of any change, due to any cause, of the
real persons or legal entities having direct or indirect ownership or
control of the Bottler, including any changes of share-owner
composition of such entities, the Company, in its sole discretion, may
terminate this Agreement forthwith and without liability for damages.
Furthermore, the Bottler covenants and agrees with the Company:
(a) not to assign, transfer, pledge or in any way encumber this
Agreement or any interest herein or rights hereunder, in whole
or in part, to any third party or parties, without the prior
written consent of the Company;
(b) not to delegate performance of this Agreement, in whole or in
part, to any third party or parties, without the prior written
consent of the Company;
(c) to notify the Company promptly in the event of or upon
obtaining knowledge of any third party action which may or
will result in any change in the ownership or control of the
Bottler;
(d) to make available from time to time and at the request of the
Company complete records of current
Bottler's Agreement Page 7
<PAGE> 8
ownership of the Bottler and full information concerning any
third party or parties by whom it is controlled directly or
indirectly;
(e) to the extent the Bottler has any legal control over changes
in the ownership or control of the Bottler, not to initiate or
implement, consent to or acquiesce in any such change without
the prior written consent of the Company; and
(f) if the Bottler is organized as a partnership, not to change
the composition of such partnership by the inclusion of any
new partners or the release of existing partners without the
prior written consent of the Company.
In addition to the foregoing provisions of this Clause, if a proposed
change in ownership or control of the Bottler involves a direct or
indirect transfer to or acquisition of ownership or control of the
Bottler by a person or entity authorized or licensed by the Company to
manufacture, sell, distribute or otherwise deal in any Beverages and/or
any Trademarks of the Company (the "Acquiror Bottler"), the Company may
request any and all information it considers relevant from both the
Bottler and the Acquiror Bottler in order to make its determination
whether to consent to such change. In any such circumstances, the
parties hereto, recognizing and acknowledging the vested and legitimate
interest of the Company in maintaining, promoting and safeguarding the
overall performance, efficiency and integrity of the Company's
international bottling, distribution and sales system, expressly agree
that the Company may consider all or any factors, and apply all or any
criteria that it considers relevant in making such determination.
32. The Bottler shall, prior to the issue, offer, sale, transfer, trade or
exchange of any of its shares of stock or other evidence of ownership,
its bonds, debentures or other evidence of indebtedness, or the
promotion of the sale of the above, or stimulation or solicitation of
the purchase or an offer to sell thereof, obtain the written consent
of the Company whenever the Bottler uses in this connection the name of
the Company or the Trademarks or any description of the business
relationship with the Company in any prospectus, advertisement or
other sales efforts. The Bottler shall not use the name of the Company
or the Trademarks or any description of the business relationship with
the Company in any prospectus or advertisement used in connection with
the Bottler's acquisition of any shares or other evidence of ownership
in a third party without the Company's prior written approval.
33. The Company may assign any of its rights and delegate all or any of its
duties or obligations under this Agreement to one or more of its
subsidiaries or related companies upon written notice to the Bottler;
provided, however, that any such delegation shall not relieve the
Company from any of its contractual obligations under this Agreement.
In addition, the Company in its sole discretion, may through
written notice to the Bottler, appoint a third party as its
representative to ensure that the Bottler carries out its obligations
under this Agreement, with full powers to oversee the Bottler's
performance and to require from the Bottler its compliance with all
the terms and conditions of this Agreement. The Company may change or
retract such appointment at any time by written notice sent to the
Bottler.
34. Neither the Company nor the Bottler shall be liable for failure to
perform any of its obligations hereunder when such failure is caused by
or results from:
(a) strike, blacklisting, boycott or sanctions, however incurred;
or
(b) act of God, force majeure, public enemies, authority of law
and/or legislative or administrative measures (including the
withdrawal of any government authorization required by any of
the parties to carry out the terms of this Agreement),
embargo, quarantine, riot, insurrection, declared or
undeclared war, state of war or belligerency or hazard or
danger incident thereto; or
(c) any other cause whatsoever beyond its control.
In the event the Bottler is unable to perform its obligations as a
consequence of any of the contingencies set forth in this Clause, and
for the duration of such inability, the Company and Authorized
Suppliers shall be relieved of their obligations under Clauses 4 and 5;
and provided that, if any such failure by any party hereto shall
persist for a period of six (6) months or more, any of the parties
hereto may terminate this Agreement.
35. (a) The Coca-Cola Company reserves the sole and exclusive
right to institute any civil, administrative or criminal
proceedings or action, and generally to take or seek any
available legal remedy it deems desirable for the protection
of its reputation and industrial property rights as well as
for the protection of the Beverage Bases, the Syrups and the
Beverages and to defend any action affecting these matters. At
the request of The Coca-Cola Company, the Bottler will render
assistance in any such action. The Bottler shall not have any
claim against the Company as a result of such proceedings or
action or for any failure to institute or defend such
proceedings or action. The Bottler shall promptly notify the
Company of any litigation or proceedings instituted or
threatened affecting these matters. The Bottler shall not
institute, without the prior written consent of the Company,
any legal or administrative proceedings against any third
party which may affect the interests of the Company.
(b) The Coca-Cola Company has the sole and exclusive right and
responsibility to initiate and defend all proceedings and
actions relating to the Trademarks. The Coca-Cola Company may
initiate or defend any such proceedings or actions in its own
name or require the Bottler to institute or defend such
proceedings or actions either in its own name or in the joint
names of the Bottler and The Coca-Cola Company.
(c) The Bottler agrees to consult with the Company on all product
liability claims, proceedings or actions brought against the
Bottler in connection with the Beverages or Authorized
Containers and to take such action with respect to the defense
of any such claim or lawsuit as the Company may reasonably
request in order to protect the interests of the Company in
the Beverages, the Authorized Containers or the goodwill
associated with the Trademarks.
Bottler's Agreement Page 8
<PAGE> 9
(d) The Bottler shall indemnify and hold harmless the Company, its
affiliates and their respective officers, directors and
employees from and against all costs, expenses, damages,
claims, obligations and liabilities whatsoever arising from
facts or circumstances not attributable to the Company
including, but not limited to, all costs and expenses incurred
in settling or compromising any of the same arising out of the
preparation, packaging, distribution, sale or promotion of the
Beverages by the Bottler, including, but not limited to, all
costs arising out of the acts or defaults, whether negligent
or not, of the Bottler, the Bottler's distributors, suppliers
and wholesalers.
(e) The Bottler shall obtain and maintain a policy of insurance
with insurance carriers satisfactory to the Company giving
full and comprehensive coverage both as to amount and risks
covered in respect of matters referred to in Clause 35(d)
above (including the indemnity contained therein) and shall on
request produce evidence satisfactory to the Company of the
existence of such insurance. Compliance with this Clause 35(e)
shall not limit or relieve the Bottler from its obligations
under Clause 35 (d) hereof.
36. The Bottler covenants and agrees with the Company:
(a) that it will make no representations or disclosures to public
or government authorities or to any other third party relating
to the Beverage Bases, the Syrups or the Beverages without the
prior written consent of the Company;
(b) that it will at all times, both during the continuance and
after termination of this Agreement, keep strictly
confidential all secret and confidential information
including, without limiting the generality of the foregoing,
mixing instructions and techniques, sales, marketing and
distribution information and projects and plans relating to
the subject matter of this Agreement which the Bottler may
receive from the Company or in any other manner and to ensure
that such information shall be made known only on a need-to-
know basis to those officers, directors and employees bound by
reasonable provisions incorporating the nondisclosure and
secrecy obligations set out in this Clause 36;
(c) that upon the expiration or earlier termination of this
Agreement, the Bottler will make necessary arrangements to
deliver to the Company in accordance with instructions as may
be given by the Company, all written, graphic,
electromagnetic, computerized, digital or other materials
comprising or containing any information subject to the
obligation of confidence hereunder.
37. In the event any provisions of this Agreement are or become legally
ineffective or invalid, the validity or effect of the remaining
provisions of this Agreement shall not be affected; provided that the
invalidity or ineffectiveness of the said provisions shall not prevent
or unduly hamper performance hereunder or prejudice the ownership or
validity of the Trademarks. The right to terminate in accordance with
Clause 27(a)(2) is not affected hereby.
38. (a) As to all matters herein mentioned, this Agreement
constitutes the only agreement between the Company and the
Bottler, all prior agreements of any kind whatsoever between
these parties relating to the subject matter hereof being
cancelled hereby; provided, however, that any written
representations made by the Bottler upon which the Company
relied in entering into this Agreement shall remain binding
upon the Bottler.
(b) Any waiver or modification of, or alteration or addition to,
this Agreement or any of its provisions shall not be binding
upon the Company or the Bottler unless the same shall be
executed respectively by duly authorized representatives of
The Coca-Cola Company, The Coca-Cola Export Corporation and
the Bottler.
(c) All written notices given pursuant to this Agreement shall be
by cable, telegram, telex, facsimile, hand delivery or
registered mail and shall be deemed to be given on the date
such notice is dispatched, such registered letter is mailed,
or such hand delivery is effected. Such written notices shall
be addressed to the last known address of the party concerned.
Any change of address by any of the parties hereto shall be
promptly furnished in writing to the other party or parties.
39. Failure of the Company to exercise promptly any right herein granted,
or to require strict performance of any obligation undertaken herein by
the Bottler, shall not be deemed to be a waiver of such right or of the
right to demand subsequent performance of any and all obligations
herein undertaken by the Bottler.
40. The Bottler is an independent contractor and not the agent of the
Company. The Bottler agrees that it will not represent that it is an
agent of the Company nor hold itself out as such.
41. The headings herein are solely for the convenience of the parties and
shall not affect the interpretation of this Agreement.
42. This Agreement shall be interpreted, construed and governed by and in
accordance with the laws of the Republic of France Any dispute arising
hereunder shall be referred to the courts Paris.
43. The Appendices and Schedules which are attached hereto shall, for all
purposes, be deemed and by this reference are made a part of this
Agreement and shall be executed respectively by duly authorized
representatives of The Coca-Cola Company, The Coca-Cola Export
Corporation and the Bottler.
IN WITNESS WHEREOF, The Coca-Cola Company and The Coca-Cola Export Corporation
in Atlanta Georgia, U.S.A. and the Bottler in Paris, France have caused these
presents to be executed in triplicate by the duly authorized person or persons
on their behalf on the dates indicated below.
-------------------------------------
COCA-COLA BEVERAGES S.A. THE COCA-COLA COMPANY
BY: s/ M. Coombs BY: s/ Joseph R. Gladden, Jr.
---------------------- -------------------------
Authorized Representative Authorized Representative
Date: July 26, 1996 Date: July 26, 1996
THE COCA-COLA EXPORT
CORPORATION
BY: s/ William J. Davis
-------------------------
Authorized Representative
Date: July 26, 1996
Bottler's Agreement Page 9
<PAGE> 10
Appendix I
BEVERAGES
Location: Paris
Date: July 26, 1996
For the purposes of the Bottler's Agreement entered into among The Coca-Cola
Company, The Coca-Cola Export Corporation and the undersigned Bottler with
effect from July 26, 1996, the Beverages referred to in recital Paragraph A
thereof are:
Aquarius
Bonaqua
Coca-Cola
Coca-Cola light
caffeine free
Coca-Cola caffeine free
Coca-Cola light
cherry Coca-Cola
Fanta cassis
Fanta citron
Fanta lemon
Fanta light
Fanta orange
Fanta still lemon
Fanta still orange
Finley
Kinley bitter lemon
Kinley tonic water
Lift orange
Minute Maid apple
Minute Maid apricot
Minute Maid grapefruit
Minute Maid orange
Minute Maid pineapple
Minute Maid tomato
Minute Maid tropical
Sprite
Sprite light
The description of the Beverages in this Appendix I supersedes as of July 26,
1996 all prior descriptions and Appendices relating to the Beverages for
purposes of recital Paragraph A of the said Bottler's Agreement.
-------------------------------------------------
COCA-COLA BEVERAGES S.A. THE COCA-COLA COMPANY
S/ M. COOMBS S/ JOSEPH R. GLADDEN, JR.
By:------------------------ By:--------------------------
Authorized Representative Authorized Representative
Date: July 26, 1996 Date: July 26, 1996
THE COCA-COLA EXPORT CORPORATION
S/ WILLIAM J. DAVIS
By:----------------------------
Authorized Representative
Date: July 26, 1996
<PAGE> 11
Appendix II
TRADEMARKS
Location: Paris
Date: July 26, 1996
For the purposes of the Bottler's Agreement entered into among The Coca-Cola
Company, The Coca-Cola Export Corporation and the undersigned Bottler with
effect from July 26, 1996, the Trademarks of The Coca-Cola Company referred to
in recital Paragraph B thereof are:
Trademark
Aquarius, Bonaqua, Coca-Cola, Coke, Coca-Cola light, Coke light, cherry
Coca-Cola, cherry Coke, Distinctive Bottle, Dynamic Ribbon device, Fanta, Fanta
light, Finley, Kinley, Lift, Minute Maid, Sprite, Sprite light, including all
transliterations and all related trade dress applications, registrations and
copyrights
The description of the Trademarks in this Appendix II supersedes as of July 26,
1996 all prior descriptions and Appendices relating to the Trademarks for
purposes of recital Paragraph B of the said Bottler's Agreement.
---------------------------------------------------------------
COCA-COLA BEVERAGES S.A. THE COCA-COLA COMPANY
S/ M. COOMBS S/ JOSEPH R. GLADDEN, JR.
By:------------------------ By:--------------------------
Authorized Representative Authorized Representative
Date: July 26, 1996 Date: July 26, 1996
THE COCA-COLA EXPORT CORPORATION
S/ WILLIAM J. DAVIS
By:----------------------------
Authorized Representative
Date: July 26, 1996
<PAGE> 12
Appendix III
TERRITORY
Location: Paris
Date: July 26, 1996
For the purposes of the Bottler's Agreement entered into among The Coca-Cola
Company, The Coca-Cola Export Corporation and the undersigned Bottler with
effect from July 26, 1996, the Territory referred to in Clause 1 thereof is:
Metropolitan France, with the exception of:
A. the departments of Corse;
B. the departments of Ariege, Aude, Gers, Hautes-Pyrenees, Tarn,
Tarn-et-Garonne, Haute Garonne, Pyrenees-Orientales; and
C. the departments of Alpes-Maritimes, Var and the Principality
of Monaco.
The description of the Territory in this Appendix III supersedes as of July 26,
1996 all prior descriptions and Appendices relating to the Territory for all the
purposes of the said Bottler's Agreement.
-------------------------------------------------
COCA-COLA BEVERAGES S.A. THE COCA-COLA COMPANY
S/ M. COOMBS S/ JOSEPH R. GLADDEN, JR.
By:------------------------ By:--------------------------
Authorized Representative Authorized Representative
Date: July 26, 1996 Date: July 26, 1996
THE COCA-COLA EXPORT CORPORATION
S/ WILLIAM J. DAVIS
By:----------------------------
Authorized Representative
Date: July 26, 1996
<PAGE> 13
Appendix IV
AUTHORIZED CONTAINERS
Location: Paris
Date: July 26, 1996
Pursuant to the provisions of Clause 2 of the Bottler's Agreement entered into
among The Coca-Cola Company, The Coca-Cola Export Corporation (The Coca-Cola
Company and The Coca-Cola Export Corporation hereinafter collectively or
severally referred to as the "Company") and the undersigned Bottler with effect
from July 26, 1996, the Company authorizes the Bottler to prepare, distribute
and sell the Beverages in the following containers, which for the purposes of
the said Bottler's Agreement shall be deemed "Authorized Containers."
Coca-Cola Refillable Glass Bottle 0.20 litre
Coca-Cola light Refillable Glass Bottle 0.20 litre
Fanta orange Refillable Glass Bottle 0.20 litre
Kinley bitter lemon Refillable Glass Bottle 0.20 litre
Kinley tonic water Refillable Glass Bottle 0.20 litre
Sprite Refillable Glass Bottle 0.20 litre
Coca-Cola Refillable Glass Bottle 0.33 litre
Coca-Cola light Refillable Glass Bottle 0.33 litre
Fanta orange Refillable Glass Bottle 0.33 litre
Sprite Refillable Glass Bottle 0.33 litre
Coca-Cola Refillable Glass Bottle 1.00 litre
Coca-Cola light Refillable Glass Bottle 1.00 litre
Fanta orange Refillable Glass Bottle 1.00 litre
Sprite Refillable Glass Bottle 1.00 litre
Coca-Cola Non-Refillable Glass Bottle 0.25 litre
Coca-Cola light Non-Refillable Glass Bottle 0.25 litre
Fanta orange Non-Refillable Glass Bottle 0.25 litre
Sprite Non-Refillable Glass Bottle 0.25 litre
Coca-Cola Non-Refillable Glass Bottle 0.50 litre
Coca-Cola light Non-Refillable Glass Bottle 0.50 litre
Fanta orange Non-Refillable Glass Bottle 0.50 litre
Coca-Cola Refillable PET Bottle 1.50 litre
Coca-Cola light Refillable PET Bottle 1.50 litre
caffeine free Coca-Cola light Refillable PET Bottle 1.50 litre
<PAGE> 14
Fanta light Refillable PET Bottle 1.50 litre
Fanta orange Refillable PET Bottle 1.50 litre
Sprite Refillable PET Bottle 1.50 litre
Sprite light Refillable PET Bottle 1.50 litre
Coca-Cola Refillable PET Bottle 2.00 litre
Coca-Cola light Refillable PET Bottle 2.00 litre
Coca-Cola Non-Refillable PET Bottle 0.33 litre
Fanta orange Non-Refillable PET Bottle 0.33 litre
Sprite Non-Refillable PET Bottle 0.33 litre
Aquarius Non-Refillable PET Bottle 0.50 litre
Fanta orange Non-Refillable PET Bottle 0.50 litre
Sprite Non-Refillable PET Bottle 0.50 litre
Aquarius Non-Refillable PET Bottle 1.00 litre
cherry Coca-Cola Non-Refillable PET Bottle 1.00 litre
Coca-Cola Non-Refillable PET Bottle 1.50 litre
Coca-Cola light Non-Refillable PET Bottle 1.50 litre
caffeine free Coca-Cola Non-Refillable PET Bottle 1.50 litre
caffeine free Coca-Cola light Non-Refillable PET Bottle 1.50 litre
Fanta citron Non-Refillable PET Bottle 1.50 litre
Fanta lemon Non-Refillable PET Bottle 1.50 litre
Fanta light Non-Refillable PET Bottle 1.50 litre
Fanta orange Non-Refillable PET Bottle 1.50 litre
Sprite Non-Refillable PET Bottle 1.50 litre
Sprite light Non-Refillable PET Bottle 1.50 litre
Coca-Cola Non-Refillable PET Bottle 2.00 litre
Coca-Cola Non-Refillable PET Contour Bottle 0.50
litre
Coca-Cola light Non-Refillable PET Contour Bottle 0.50
litre
Coca-Cola Non-Refillable PET Contour Bottle 1.50
litre
Coca-Cola light Non-Refillable PET Contour Bottle 1.50
litre
<PAGE> 15
Fanta Non-Refillable PET Multiproduct
Proprietary Bottle 1.50 litre
Sprite Non-Refillable PET Multiproduct
Proprietary Bottle 1.50 litre
Coca-Cola Can 0.25 litre
Aquarius Can 0.33 litre
Bonaqua Can 0.33 litre
Coca-Cola Can 0.33 litre
Coca-Cola light Can 0.33 litre
caffeine free Coca-Cola Can 0.33 litre
caffeine free Coca-Cola light Can 0.33 litre
cherry Coca-Cola Can 0.33 litre
Fanta cassis Can 0.33 litre
Fanta citron Can 0.33 litre
Fanta lemon Can 0.33 litre
Fanta light Can 0.33 litre
Fanta orange Can 0.33 litre
Finley Can 0.33 litre
Kinley bitter lemon Can 0.33 litre
Kinley tonic water Can 0.33 litre
Sprite Can 0.33 litre
Sprite light Can 0.33 litre
Coca-Cola Can 0.50 litre
It is recognized and agreed among the parties hereto, that during the term of
the said Bottler's Agreement, the Company shall not exercise its right under
Clause 2 of the Bottler's Agreement to cancel the authorization in respect of
those Authorized Containers which are described as Refillable Glass Bottles in
this Appendix.
This authorization supersedes as of July 26, 1996 any prior authorizations
entered into among the Company and the Bottler in connection with the subject
matter of this Appendix IV.
-------------------------------------------------
COCA-COLA BEVERAGES S.A. THE COCA-COLA COMPANY
S/ M. COOMBS S/ JOSEPH R. GLADDEN, JR.
By:------------------------ By:--------------------------
Authorized Representative Authorized Representative
Date: July 26, 1996 Date: July 26, 1996
THE COCA-COLA EXPORT CORPORATION
S/ WILLIAM J. DAVIS
By:----------------------------
Authorized Representative
Date: July 26, 1996
<PAGE> 16
Schedule A
AUTHORIZATION IN RESPECT OF SYRUPS FOR POST-MIX BEVERAGES
Location: Paris
Date: July 26,1996
Pursuant to the provisions of Clause 3 of the Bottler's Agreement entered into
among The Coca-Cola Company, The Coca-Cola Export Corporation (The Coca-Cola
Company and The Coca-Cola Export Corporation hereinafter collectively or
severally referred to as the "Company") and the undersigned Bottler with effect
from July 26, 1996, the Company hereby grants a non-exclusive authorization to
the Bottler to prepare, package, distribute and sell syrups for the following
Beverages:
Coca-Cola
Coca-Cola light
Fanta cassis
Fanta citron
Fanta orange
Finley
Kinley bitter lemon
Kinley tonic water
Sprite
(said syrups being hereinafter referred to in this Schedule A as "PostMix
Syrups") to (i) retail dealers in the Territory for use in dispensing the
Beverages through Post-Mix Dispensers in or adjoining the establishments of
retail outlets; and/or to (ii) certain distributors in the Territory
(hereinafter referred to as "Distributors") who will in turn sell and distribute
the Post-Mix Syrups to retail dealers; and/or (iii) to operate Post-Mix
Dispensers and sell the Beverages dispensed therefrom directly to consumers,
subject to the following conditions:
1. The Bottler shall not sell any Post-Mix Syrups to a retail outlet, and
shall ensure that the Distributors shall not sell any Post-Mix Syrups
to a retail outlet, for use in any Post-Mix Dispenser, or operate any
Post-Mix Dispenser unless the following conditions are met:
(a) There is available an adequate source of safe, potable water.
(b) All Post-Mix Dispensers are of a type approved by the Company
and conform in all respects to the hygienic and other
standards which the Company shall issue in writing to
<PAGE> 17
the Bottler in connection with the preparation, packaging and
sale of the Post-Mix Syrups. The Bottler shall at all times
maintain a list of all its retail outlets and/or Distributors
to whom it has leased or otherwise handed over Post-Mix
Dispensers.
(c) The Beverages dispensed through the Post-Mix Dispensers are in
strict adherence to and compliance with the instructions for
the preparation of the Beverages from Post-Mix Syrups as
issued in writing to the Bottler from time to time by the
Company.
2. The Bottler shall take samples of the Beverages dispensed through the
Post-Mix Dispensers operated by retail outlets to whom the Bottler
and/or the Distributor has supplied the Post-Mix Syrups or which are
operated by the Bottler, in accordance with such instructions and at
such intervals as may be notified by the Company in writing and shall
submit said samples at the Bottler's expense to the Company for
inspection.
3. The Bottler shall maintain adequate numbers of trained personnel to
enable the Bottler to make periodic inspections of the PostMix
Dispensers in accordance with the instructions of the Company in order
to ensure compliance with the provisions set forth under Clause 1
above.
4. The Bottler shall, on its own initiative and responsibility,
discontinue immediately the sale of Post-Mix Syrups to any retail
outlet and/or ensure that the Distributors shall immediately
discontinue the sale of Post-Mix Syrups to any retail outlet which
fails to comply with the standards prescribed by the Company.
5. The Bottler shall discontinue the sale of Post-Mix Syrups to any retail
outlet and/or ensure that the Distributors shall discontinue the sale
of Post-Mix Syrups to any retail outlet when notified by the Company
that any of the Beverages dispensed through a Post-Mix Dispenser
located in or adjoining the establishment of the retail outlet do not
comply with the standards prescribed by the Company for the Beverages
or that the Post-Mix Dispenser is not of a type approved by the
Company.
6. The Bottler shall ensure that or cause the Distributors to ensure that
the Company shall have the right to enter and inspect the premises of
each retail outlet and to take any samples they may deem necessary to
ensure proper quality control.
7. The Bottler agrees:
(a) To sell and distribute the Post-Mix Syrups only in containers
of a type approved by the Company and to use on said
containers only labels which have been approved by the
<PAGE> 18
Company.
(b) To exert every influence to persuade retail outlets to use a
standard glass, paper cup or other container approved by the
Company and with markings approved by the Company to the end
that the Beverages served to the consumer will be
appropriately identified and will be served in an attractive
and sanitary container.
(c) To ensure that the Distributors comply with the obligations
set forth under Clauses 7(a) and 7(b) above.
8. The Company shall notify the Bottler from time to time and the Bottler
shall in turn notify the Distributors about the deposit amount
appropriate at that time which the Bottler shall have to charge for
every returnable Post-Mix Syrup container delivered to any retail
outlet.
9. Nothing in this agreement shall relieve the Bottler from its direct
responsibility toward the Company for any or all of the obligations
arising hereunder, regardless of whether the Bottler has passed on to
the Distributors any of its obligations.
10. The authorization given to the Bottler to sell and distribute the
Post-Mix Syrups to certain Distributors in the Territory is given with
the clear understanding that the Company reserves the right to withdraw
the authorization at any time, with respect to any one, some or all of
the Distributors by giving the Bottler thirty (30) days written notice.
Furthermore, the Bottler's arrangements with each of the Distributors
shall expressly state (1) that the Distributor's services may be
terminated at any time by the Bottler, and that they shall terminate
automatically in the event of the withdrawal of this authorization or
termination of the Bottler's Agreement for whatever reason; and (2)
that the Distributors are not to spend money on or otherwise contribute
to the cost of any advertising for the Post-Mix Syrups or Beverages.
11. The Bottler shall not give any Distributor any exclusive rights,
territorial or otherwise. The Bottler shall not sell or distribute the
Post-Mix Syrups to Distributors for resale or redistribution outside of
the Territory.
12. The Bottler shall immediately notify the Company of the names and
addresses, and any changes thereof, of all Distributors who are
appointed pursuant to this authorization and the Bottler shall supply
the Company periodically, upon the Company's request, with details of
sales made to such Distributors.
Except as modified in this Schedule, all of the terms, covenants and conditions
contained in the said Bottler's Agreement shall apply to this supplemental
authorization to the Bottler to prepare, package, distribute and sell the
Post-Mix Syrups and, in this regard, it is
<PAGE> 19
expressly agreed among the parties hereto that the terms, conditions, duties and
obligations of the Bottler, as set forth in the said Bottler's Agreement, shall
be incorporated herein by reference and, unless the context otherwise indicates
or requires, any reference in the said Bottler's Agreement to the term
"Beverages" shall be deemed to refer to the term "Post-Mix Syrups" for the
purpose of this supplemental authorization to the Bottler.
This authorization may be terminated by any party hereto upon ninety (90) days'
advance written notice, provided that it shall terminate automatically upon the
expiration or earlier termination of the said Bottler's Agreement.
This authorization supersedes as of July 26, 1996 any prior authorizations
entered into among the Company and the Bottler in connection with the subject
matter of this Schedule A.
-------------------------------------------------
COCA-COLA BEVERAGES S.A. THE COCA-COLA COMPANY
S/ M. COOMBS S/ JOSEPH R. GLADDEN, JR.
By:------------------------ By:--------------------------
Authorized Representative Authorized Representative
Date: July 26, 1996 Date: July 26, 1996
THE COCA-COLA EXPORT CORPORATION
S/ WILLIAM J. DAVIS
By:----------------------------
Authorized Representative
Date: July 26, 1996
<PAGE> 20
Schedule B
AUTHORIZATION IN RESPECT OF PRE-MIX BEVERAGES
(NOT APPLICABLE)
<PAGE> 21
Schedule C
SUPPLEMENTAL AUTHORIZATION FOR DISTRIBUTION
Location: Paris
Date: July 26, 1996
Pursuant to the provisions of Clause 3 of the Bottler's Agreement entered into
among The Coca-Cola Company, The Coca-Cola Export Corporation (The Coca-Cola
Company and The Coca-Cola Export Corporation hereinafter collectively or
severally referred to as the "Company") and the undersigned Bottler with effect
from July 26, 1996, the Company hereby grants a supplemental non-exclusive
authorization to the Bottler to purchase from the Company or its designee the
Beverages in the following containers (hereinafter the "Authorized Containers")
and to sell and distribute them throughout the Territory:
Minute Maid apple Refillable Glass Bottle 0.20 litre
Minute Maid apricot Refillable Glass Bottle 0.20 litre
Minute Maid grapefruit Refillable Glass Bottle 0.20 litre
Minute Maid orange Refillable Glass Bottle 0.20 litre
Minute Maid pineapple Refillable Glass Bottle 0.20 litre
Minute Maid tomato Refillable Glass Bottle 0.20 litre
Minute Maid orange Refillable Glass Bottle 1.00 litre
Minute Maid apple Can 0.33 litre
Minute Maid orange Can 0.33 litre
Minute Maid tomato Can 0.33 litre
Minute Maid tropical Can 0.33 litre
Fanta still lemon Non-Refillable Aseptic Package 0.20 litre
Fanta still orange Non-Refillable Aseptic Package 0.20 litre
Minute Maid apple Non-Refillable Aseptic Package 0.20 litre
Minute Maid grapefruit Non-Refillable Aseptic Package 0.20 litre
Minute Maid orange Non-Refillable Aseptic Package 0.20 litre
Minute Maid tropical Non-Refillable Aseptic Package 0.20 litre
Minute Maid apple Non-Refillable Aseptic Package 0.25 litre
Minute Maid orange Non-Refillable Aseptic Package 0.25 litre
Minute Maid tropical Non-Refillable Aseptic Package 0.25 litre
Minute Maid apple Non-Refillable Aseptic Package 1.00 litre
Minute Maid grapefruit Non-Refillable Aseptic Package 1.00 litre
Minute Maid orange Non-Refillable Aseptic Package 1.00 litre
<PAGE> 22
Minute Maid tomato Non-Refillable Aseptic Package 1.00 litre
Minute Maid tropical Non-Refillable Aseptic Package 1.00 litre
Minute Maid orange Non-Refillable PET Bottle 0.50 litre
Minute Maid orange Frozen Package 1.00 litre
Fanta still orange Post-Mix Bag-in-Box
Minute Maid orange Post-Mix Bag-in-Box
subject to the following conditions:
(a) This authorization shall expire on July 26, 1999; however, it
will be automatically renewed for successive periods of one
(1) year, in case none of the parties gives notice to the
others ninety (90) days before the expiration of the initial
term or subsequent extensions thereof of its intention to
terminate this authorization, provided that this authorization
shall terminate automatically upon the expiration or earlier
termination of the said Bottler's Agreement.
(b) The stipulations, covenants, agreements, terms, conditions and
provisions of the Bottler's Agreement shall apply to and be
effective for this authorization.
This authorization supersedes as of July 26, 1996 any prior authorizations
entered into between the Company and the Bottler in connection with the subject
matter of this Schedule C.
-------------------------------------------------
COCA-COLA BEVERAGES S.A. THE COCA-COLA COMPANY
S/ M. COOMBS S/ JOSEPH R. GLADDEN, JR.
By:------------------------ By:--------------------------
Authorized Representative Authorized Representative
Date: July 26, 1996 Date: July 26, 1996
THE COCA-COLA EXPORT CORPORATION
S/ WILLIAM J. DAVIS
By:----------------------------
Authorized Representative
Date: July 26, 1996
<PAGE> 23
Schedule D
AUTHORIZATION FOR PROMOTIONAL DISTRIBUTION
DURING SPORTING EVENTS
Location: Paris
Date: July 26, 1996
Pursuant to the provisions of Clause 3 of the Bottler's Agreement entered into
among The Coca-Cola Company, The Coca-Cola Export Corporation (The Coca-Cola
Company and The Coca-Cola Export Corporation hereinafter collectively or
severally referred to as the "Company") and the undersigned Bottler with effect
from July 26, 1996, the Company hereby grants the Bottler the non-exclusive
authorization to distribute the following Beverages during individual sporting
events in the following containers (hereinafter the "Authorized Containers")
within the Territory (as defined in the Bottler's Agreement):
Coca-Cola Can 0.15 litre
Fanta orange Can 0.15 litre
Sprite Can 0.15 litre
subject to the following terms and conditions:
(a) This authorization may be withdrawn by the Company at any time
provided that it shall terminate automatically upon the
expiration or earlier termination of the said Bottler's
Agreement.
(b) Upon the termination or cancellation of this authorization,
the Bottler shall immediately discontinue such sale and/or
distribution to said individual sporting events.
(c) Except as supplemented or modified herein, the stipulations,
covenants and conditions of the said Bottler's Agreement shall
continue in full force and effect.
This authorization supersedes any prior authorizations entered into among the
Company and the Bottler in connection with the subject matter of this Schedule
D.
-------------------------------------------------
COCA-COLA BEVERAGES S.A. THE COCA-COLA COMPANY
S/ M. COOMBS S/ JOSEPH R. GLADDEN, JR.
By:------------------------ By:--------------------------
Authorized Representative Authorized Representative
Date: July 26, 1996 Date: July 26, 1996
THE COCA-COLA EXPORT CORPORATION
S/ WILLIAM J. DAVIS
By:----------------------------
Authorized Representative
Date: July 26, 1996
<PAGE> 24
SCHEDULE E
SUPPLEMENTAL AUTHORIZATION FOR DISTRIBUTION OF CANS
(NOT APPLICABLE)
<PAGE> 25
SCHEDULE F
SPECIAL AUTHORIZATION TO SELL TO
DISTRIBUTORS OUTSIDE THE TERRITORY
(NOT APPLICABLE)
<PAGE> 26
SCHEDULE TO EXHIBIT 10.33
All of the Company's bottlers having territories within the European Union
(currently the bottlers in Belgium, France, Great Britain and the Netherlands)
have bottler's agreements with The Coca-Cola Company and The Coca-Cola Export
Corporation substantially in the form of the foregoing bottler's agreement with
Coca-Cola Beverages S.A dated July 26, 1996, with no material differences.
<PAGE> 1
EXHIBIT 10.34
SUPPLEMENTAL AGREEMENT
TO THE BOTTLER'S AGREEMENT
This Supplemental Agreement (the "Supplemental Agreement") is
entered into with effect from July 26, 1996, by and among The
Coca-Cola Company and The Coca-Cola Export Corporation
(hereinafter collectively or severally referred to as the
"Company") and S.A. Coca-Cola Beverages Belgium N.V., Coca-Cola
Beverages S.A., Coca-Cola Production, S.A. and Coca-Cola
Beverages Nederland B.V. (hereinafter collectively or severally
referred to as the "Bottler(s)").
WHEREAS, each Bottler has entered into a Bottler's Agreement with
the Company (hereinafter collectively or severally referred to as
the "Bottler's Agreement(s)") dated July 26, 1996 concerning the
preparation, packaging, distribution and sale of certain non-
alcoholic beverages under trademarks owned by The Coca-Cola
Company (hereinafter referred to as the "Beverages") and covering
a territory particularly described in each Bottler's Agreement
(hereinafter collectively or severally referred to as the
"Territory(ies)");
WHEREAS, in an effort to maximize the beverage production and
distribution efficiencies of their industrial and commercial
facilities, the Bottlers desire to have the flexibility to
exercise the production and/or distribution rights under their
respective Bottler's Agreements in the territory(ies) covered by
any of the Bottler's Agreements; and
WHEREAS, subject to the terms of this Supplemental Agreement, the
Company is desirous to authorize each Bottler to prepare and
package and/or distribute and sell the Beverages in the
Territory(ies);
NOW, THEREFORE:
1. In addition to the rights granted to each Bottler under
Clause I of each Bottler's Agreement to prepare, package,
distribute and sell the Beverages in authorized containers
in and throughout a specific Territory, the Bottlers are
hereby authorized to prepare and package and/or sell or
distribute the Beverages throughout any one or more of the
Territories.
2. Notwithstanding the provision under 1) above, each Bottler
shall, throughout the duration of this Supplemental
Agreement, be primarily responsible to the Company for
fulfilling all of its obligations under the Bottler's
Agreement it has entered into with the Company, including
but not limited to its obligation to prepare and present to
the Company once in each calendar year, a program (the
"Annual Program") which shall include but shall not be
<PAGE> 2
limited to the marketing, management, financial, promotional
and advertising plans of the Bottler showing in detail the
activities contemplated for the ensuing twelve-month period
or such other period as the Company may prescribe, and which
shall be acceptable to the Company as to form and substance.
The Bottler shall continue to prosecute diligently such
Annual Program and shall report quarterly or at such other
intervals as the Company may request in connection with the
implementation of the Annual Program. The Bottler shall also
report on a monthly basis, or at such other intervals as the
Company may request, to the Company, sales of each of the
Beverages in each of the Territories and in such detail and
containing such information as may be requested by the
Company.
3. Appendices I, II and IV of the Bottler's Agreements reflect,
with the exception of Coca-Cola Production S.A.'s (CCP) and
Coca-Cola Beverages Nederland B.V.'s (CCBN) Bottler's
Agreements, combined lists arrived at by combining the
products and packages that each Bottler is authorized to
prepare, package, sell or distribute under its Bottler's
Agreement. (At present, CCP's Bottler's Agreement reflects
only a combined list for carbonated Beverages in cans and at
present in CCBN's Bottler's Agreement, the canned Beverages
are listed on Schedule D and not on Appendix IV because CCBN
is not a producer but only a distributor of the canned
Beverages.) Because these appendices are not confined to the
specific Beverages and Authorized Containers to be produced,
packaged, sold or distributed in each Territory, but are
broader in scope, no Bottler shall be engaged in production,
packaging, sale or distribution activities in any of the
other Bottlers' Territories (i) at the expense of neglecting
the development of the Company's Beverages in the Territory
defined in the Bottler's Agreement it has entered into with
the Company, and (ii) unless its obligations under the
Bottler's Agreement it has entered into with the Company are
fulfilled to the satisfaction of the Company.
4. Notwithstanding the foregoing, no Bottler shall initiate the
production, packaging, sale or distribution of any Beverage
or any Authorized Container in any Territory, which at such
time is not produced, packaged, sold or distributed within
that Territory, without the prior express agreement on a
customer and consumer program acceptable to the Company or
its designated entity, for the Beverage or Container in
question.
5. Each Bottler shall comply with all applicable laws and
regulations in effect in any Territory where it produces,
packages, sells or distributes the Beverages.
6. It is the desire of the parties that this Supplemental
Agreement remain in force for the duration of the Bottler's
Agreement(s). However, the system of operation authorized
under this Supplemental Agreement is a new concept which has
not been implemented by the Company with independent
<PAGE> 3
entities before. It is therefore possible that unforeseen
difficulties may arise in its application. The Company
therefore retains the rights to (i) withdraw selectively the
authorization of any of the Bottlers to operate in the
Territories of the others: or (ii) terminate this
Supplemental Agreement at any time during its validity by
giving the Bottlers ninety (90) days' prior written notice
of its intention to terminate.
7. This Supplemental Agreement shall be interpreted construed
and governed by and in accordance with the laws of Belgium.
Any dispute arising hereunder shall be referred to the
courts of Brussels.
Except as herein modified, the Bottler's Agreements and all of
their stipulations, covenants, agreements, terms, conditions and
provisions shall remain in full force and effect.
IN WITNESS WHEREOF, The Coca-Cola Company, The Coca-Cola Export
Corporation, S.A. Coca-Cola Beverages Belgium N.V., Coca-Cola
Beverages S.A., Coca-Cola Production S.A. and Coca-Cola Beverages
Nederland B.V. have caused this Supplemental Agreement to be
signed and acknowledged by their duly qualified representative.
THE COCA-COLA COMPANY THE COCA-COLA EXPORT CORPORATION
BY: JOSEPH R. GLADDEN, JR. BY: WILLIAM J. DAVIS
------------------------- -------------------------
Authorized Representative Authorized Representative
Date: July 26, 1996 Date: July 26, 1996
S.A. COCA-COLA BEVERAGES COCA-COLA BEVERAGES S.A.
BELGIUM N.V.
BY: BENOIT CRABEELS BY: M. COOMBS
------------------------- -------------------------
Authorized Representative Authorized Representative
Date: July 26, 1996 Date: July 26, 1996
COCA-COLA PRODUCTION S.A. COCA-COLA BEVERAGES NEDERLAND B.V.
BY: ROBERT PAGANI BY: JAN VAN DEN BROEK
------------------------- -------------------------
Authorized Representative Authorized Representative
Date: July 26, 1996 Date: July 26, 1996
<PAGE> 1
<TABLE>
EXHIBIT 11
EARNINGS PER SHARE
COCA-COLA ENTERPRISES INC.
(In millions except per share data)
<CAPTION> 1996 1995 1994
----------------- ----------------- -----------------
Fully Fully Fully
Primary Diluted Primary Diluted Primary Diluted
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Income:
Net income (loss) $ 114 $ 114 $ 82 $ 82 $ 69 $ 69
Preferred stock dividend
requirements 8 8 2 2 2 2
----- ----- ------ ------ ------ ------
Net income (loss) applicable
to common share owners $ 106 $ 106 $ 80 $ 80 $ 67 $ 67
===== ===== ====== ====== ====== ======
Number of Shares:
Weighted average
shares outstanding (A) 125 125 129 129 130 130
===== ===== ====== ====== ====== ======
Per Share Data (B):
Net income (loss) $0.91 $0.91 $0.63 $0.63 $ 0.53 $ 0.53
Preferred stock dividends 0.06 0.06 0.01 0.01 0.01 0.01
Net income (loss) applicable
to common share owners 0.85 0.85 0.62 0.62 0.52 0.52
(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>
<PAGE> 1
<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
--------------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Computation of Earnings:
Earnings (loss) from continuing
operations before income taxes
and cumulative effect of
accounting changes $194 $145 $127 $ 55 $(12)
Add:
Interest expense 332 319 314 332 315
Amortization of
capitalized interest 2 1 1 1 1
Amortization of debt
premium/discount 23 12 2 3 2
Interest portion of rent expense 12 10 9 8 8
---- ---- ---- ---- ----
Earnings as adjusted $563 $487 $453 $399 $314
==== ==== ==== ==== ====
Computation of Fixed Charges
and Combined Fixed Charges
and Preferred Stock Dividends:
Interest expense $332 $319 $314 $332 $315
Capitalized interest 2 4 3 1 1
Amortization of debt
premium/discount 23 12 2 3 2
Interest portion of rent expense 12 10 9 8 8
---- ---- ---- ---- ----
Fixed Charges 369 345 328 344 326
Preferred stock dividends (a) 13 3 3 - -
---- ---- ---- ---- ----
Combined Fixed Charges and
Preferred Stock Dividends $382 $348 $331 $344 $326
==== ==== ==== ==== ====
Ratio of earnings to fixed
charges 1.53 1.41 1.38 1.16 (b)
==== ==== ==== ==== ====
Ratio of earnings to combined
fixed charges and preferred
stock dividends 1.47 1.40 1.37 1.16 (b)
==== ==== ==== ==== ====
(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.
</TABLE>
<PAGE> 1
EXHIBIT 13
COCA-COLA ENTERPRISES INC.
MANAGEMENT'S FINANCIAL REVIEW
Coca-Cola Enterprises Inc. ("the Company") is the world's largest marketer,
distributor, and producer of bottled and canned liquid nonalcoholic
refreshments. In the United States we operate through exclusive and
perpetual rights in franchise territories containing approximately 58%
of all bottle and can product sales of The Coca-Cola Company. We own
bottling franchise territories in 41 of the 50 United States and we are
the sole licensed bottler for products of The Coca-Cola Company in Belgium,
the Netherlands, and most of France. In February 1997 we expanded our
territories to include Great Britain.
BUSINESS OBJECTIVES AND STRATEGIES
We are pleased with the Company's solid 1996 operating performance and our
outlook for the future. We continue to see strong momentum in our domestic
business and significant opportunities for profitable growth in our newly
acquired European territories. Our greatest challenge is in maintaining
and accelerating our current operating momentum in what we believe will be
a tough competitive market while directing our cash resources toward
profitable high-return projects and capitalizing on our international
and domestic opportunities.
To ensure a continued focus on building share-owner value, we have
defined our objectives and strategies. Our primary operating objective is
to increase long-term operating cash flows through profitable increases
in sales volume. We plan to achieve our operating objective through
the continued execution of the following key strategies:
- Creating and executing innovative and superior marketing programs
at the local level.
- Balancing volume growth with improved margins and sustainable
increases in market share.
- Developing profitable business partnerships with our customers.
- Integrating our international and domestic acquisitions.
- Structuring our compensation plans to help focus our employees on
enhancing share-owner value.
Our primary financial objective is to deliver a superior investment return
to our share owners. We strive to achieve this objective through the
continued implementation and execution of the following key strategies:
- Allocating resources appropriately between capital expenditures,
infrastructure investment, share repurchases, acquisitions, and
debt repayment.
- Maintaining a capital structure which maximizes our financial
flexibility, given current investment opportunities.
- Continuing to evaluate acquisition opportunities that will result in
long-term value.
- 18 -
<PAGE>
INTERNATIONAL AND DOMESTIC EXPANSION
We believe our local market-driven operating philosophy and our
decentralized operating structure are transportable outside the United
States. Our recent acquisition in Great Britain, combined with our current
operations in Belgium, France, the Netherlands, and the United States,
enhances our position as a leader in the worldwide liquid nonalcoholic
refreshment business. The following discusses our acquisition activity
for 1996 and also includes information regarding our recent acquisition
in February 1997.
International Acquisitions
On July 26, 1996, we acquired The Coca-Cola Company's bottling and canning
operations in France and Belgium for a transaction value (purchase price
and assumed debt, net of acquired cash) of approximately $915 million.
These franchise territories encompass most of France and all of Belgium.
The entities acquired were Coca-Cola Beverages S.A. (French bottler),
Coca-Cola Production S.A. (French canner), and S.A. Beverage Sales Holding
N.V. (owner of the Belgian bottler). For full-year 1996 the French bottler
sold 168 million unit cases and the Belgian bottler sold 98 million unit
cases.
On February 10, 1997, we purchased Coca-Cola & Schweppes Beverages Limited
("CCSB") from The Coca-Cola Company and Cadbury Schweppes plc for an
aggregate transaction value (purchase price, assumed debt, and other
long-term obligations) of approximately 1.2 billion British pounds sterling,
or approximately $2 billion. CCSB produces and distributes beverage
products of The Coca-Cola Company and Cadbury Schweppes plc in Great Britain.
In 1996 CCSB sold 408 million unit cases.
Under favorable market and weather conditions, these newly acquired
international operations are expected to enhance the Company's consolidated
results of operations during the second and third quarters of 1997. For
full-year 1997 we expect the above acquisitions to be dilutive by
approximately 5 cents per common share after taxes based on current
marketing plans and the competitive environment.
Domestic Acquisitions
On February 21, 1996, we acquired Ouachita Coca-Cola Bottling Company,
Inc. ("Ouachita") for a transaction value (purchase price and issued and
assumed debt) of approximately $313 million. The purchase price was paid
through a combination of cash, shares of the Company's common stock from
treasury, and two types of convertible preferred stock as selected by
individual Ouachita share owners. Ouachita operates in portions of Arkansas,
Louisiana, and Mississippi.
Additionally, on August 12, 1996, we acquired Coca-Cola Bottling Company
West, Inc. and a related company, Grand Forks Coca-Cola Bottling Co.
(collectively "Coke West") for a transaction value (purchase price and
assumed debt) of approximately $158 million. Coke West operates franchise
territories in portions of Minnesota, Montana, North Dakota, South Dakota,
and Wyoming.
SHARE-OWNER PARTNERSHIP IN OUR OBJECTIVES
The Coca-Cola Company owns approximately 45% of our outstanding common
shares. The products of The Coca-Cola Company account for approximately
91% of our total revenues. Our fourteen-member Board of Directors includes
four current or former executives of The Coca-Cola Company, one of whom
serves as our chairman. All directors serving on our Board are accomplished
individuals and are elected by our share owners.
- 19 -
<PAGE>
MANAGEMENT'S FINANCIAL REVIEW
Management's Financial Review should be read in conjunction with the
Company's consolidated financial statements and the accompanying footnotes
and the cautionary statements at the end of this section.
OPERATIONS REVIEW - 1996
- ------------------------
In the opinion of management, cash operating profit, or net income before
deducting interest, taxes, depreciation, amortization, and other
nonoperating items, represents one of the key standards for measuring
the Company's operating performance. For comparative purposes, operating
results, including cash operating profit, are adjusted for impacts of
acquisitions and one-time items. Accordingly, "comparable" results in
this review are determined as follows:
* 1996 operating results are adjusted to (i) exclude the impact of
the 1996 international acquisition and (ii) exclude a $10 million
($0.05 per common share after taxes) favorable supplier settlement
in first-quarter 1996.
* 1995 operating results are adjusted to (i) include the proforma
impact of the 1996 domestic acquisitions, as if the acquisitions
were owned and operated by the Company for the same period in 1995
as in 1996 and (ii) exclude a $9 million ($0.04 per common share
after taxes) gain from the sale of The Coca-Cola Bottling Company
of the Mid South ("Mid South") in first-quarter 1995.
Overview
In 1996 the Company's cash operating profit results reflect strong,
broad-based domestic volume growth, increased net revenues per case, and
a slight decrease in domestic cost of sales per case. A reported 33%
increase in 1996 net income applicable to common share owners is also
attributable to the above factors and is further impacted by a lower
effective tax rate for 1996. Net income per common share for 1996 was
$0.85, reflecting a 37% increase over 1995.
Cash operating profit is used as a key standard by which management
measures operating performance. Cash operating profit is a supplement
to and not an alternative to operating income as an indicator of
operating performance, or an alternative to cash flows from operating
activities as a measure of liquidity, both of which are defined by
generally accepted accounting principles ("GAAP"). In 1996 cash
operating profit reached approximately $1.2 billion, reflecting 18% growth
over 1995 actual results. On a comparable basis, cash operating profit
reflected a 10% growth rate.
Based on the current outlook, we expect to generate comparable cash
operating profit growth of approximately 9% in 1997. We plan to achieve
this objective through the successful execution of our operating strategies.
Earnings per share increased 37% over 1995 levels. Reported 1996 net
income per common share was $0.85 compared to reported 1995 results of
$0.62 per common share. After excluding the first-quarter 1996 supplier
settlement and the first-quarter 1995 gain on the sale of the Company's
interest in Mid South, adjusted 1996 results were $0.80 per common share,
or 38% above adjusted 1995 earnings of $0.58 per common share. The
Company is currently expecting adjusted earnings per share to increase
in 1997 by approximately 25%.
Net operating revenues are comprised principally of wholesale sales to
retailers which account for approximately 96% of our net revenues. Reported
net operating revenues for 1996 exceeded $7.9 billion representing a
17% increase over 1995. The increase in net operating revenues results
from a 14.5% increase in bottle and can physical case sales volume,
partially attributable to the 1996 acquisitions, and a 3% increase in
net revenues per case.
Volume growth in 1996 resulted from strong domestic carbonated brand
performance attributable to Coca-Cola classic, Barq's, Cherry Coke, and
Sprite. Sprite continues to produce double-digit growth outpacing its
17% 1995 domestic growth rate. Domestic noncarbonated brand growth exceeded
the carbonated brand performance with double-digit growth in Cool from
Nestea, PowerAde, and the Company's primary still water products, NAYA
and Evian. The Company's fastest growing package category was the 20-ounce
and 1-liter size contour plastic bottle.
On a unit case basis, 91% of the Company's 1996 volume was from domestic
operations and 9% was from international operations. In 1997 the Company
expects that more than 25% of its volume and revenues will be from
international operations. The significant increase in the international
contribution to volume will be the result of including the Belgian and
French bottlers for a full year and the acquisition of the British bottler
for 10 months.
"Constant territory" physical case volume is defined as prior-year results
adjusted to include volume of all acquired companies for the same periods
in 1995 as those periods for which the entities were owned in 1996.
Constant territory bottle and can physical case volume for 1996 increased
over 1995 levels by 5.5%, following a 4.5% growth rate in 1995. The 1996
growth results from a 6% increase in domestic volume, higher than
projected industry growth rates, combined with a 2% international volume
growth. The 2% international constant territory volume growth rate is a
reflection of the unfavorable weather conditions in Europe during 1996.
- 20 -
<PAGE>
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF INCOME
(In millions except per share data)
Year Ended December 31,
------------------------------
1996 1995 1994
------ ------ ------
Net Operating Revenues........... $7,921 $6,773 $6,011
Cost of sales (purchases from
The Coca-Cola Company -- $2,150,
$1,828, and $1,683,
respectively)................... 4,896 4,267 3,703
------ ------ ------
Gross Profit...................... 3,025 2,506 2,308
Selling, general, and
administrative expenses......... 2,480 2,038 1,868
------ ------ ------
Operating Income.................. 545 468 440
Interest expense, net............. 351 326 310
Other nonoperating deductions, net - 6 3
Gain from sale of ownership
interest in bottling operation.. - 9 -
------ ------ ------
Income Before Income Taxes........ 194 145 127
Income tax expense................ 80 63 58
------ ------ ------
Net Income........................ 114 82 69
Preferred stock dividends......... 8 2 2
------ ------ ------
Net Income Applicable to Common
Share Owners.................... $ 106 $ 80 $ 67
====== ====== ======
Average Common Shares Outstanding. 125 129 130
====== ====== ======
Net Income Per Share Applicable
to Common Share Owners.......... $ 0.85 $ 0.62 $ 0.52
====== ====== ======
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
- ---------------------------------------------------------------------------
In 1997 the Company again expects to outperform domestic industry growth
projections. International volume growth is expected to outpace domestic
growth as marketing strategies to increase per capita consumption are
employed in the newly acquired territories.
Net revenues per case and cost of sales per case increased 3% and 1%,
respectively, over last year. However, 1996 reported growth rates are
distorted when compared to 1995 results which do not include the operating
results of the Company's significant international acquisition that occurred
in third-quarter 1996. Therefore, management believes that its domestic
operating results provide a better indication of underlying business trends.
In 1996 domestic bottle and can net revenues per case increased 1.5% over
1995 and domestic bottle and can cost of sales per case decreased by 1%,
after adjusting for the favorable first-quarter 1996 supplier settlement.
The increase in net revenues per case in 1996, compared to 1995, reflects
favorable product, package, and channel mix shifts. Packaging cost
decreases created a favorable domestic cost environment throughout 1996.
As a reflection of our decentralized organization and operating philosophy,
we manage net revenues per case locally based on individual market
conditions and opportunities. In 1997 we expect the marketplace to
continue to be highly competitive.
Selling, general, and administrative expenses increased 22% in 1996 as
compared to 1995. Additional costs associated with the 1996 international
and domestic acquisitions led to reported increases in selling, general,
and administrative expenses. Selling, general, and administrative expenses
as a percent of net operating revenues increased from 30% of revenues in
1995 to 31% of revenues in 1996, because of the Company's current year
investment in its infrastructure, including personnel and information
systems.
Interest expense increased in 1996 as compared to 1995, reflecting a
higher 1996 debt balance resulting primarily from the 1996 international
and domestic acquisitions. For 1996 the weighted average cost of debt
was 7.2% as compared to the 1995 weighted average cost of debt of 7.5%.
Net interest expense for 1996 of $351 million will increase in 1997
primarily as a result of the full-year effect of the 1996 acquisitions
and the 1997 acquisition of the British bottler. In 1997 net interest
expense is expected to be between $530 and $540 million.
Income tax expense as a percentage of earnings before income taxes
decreased reflecting a lower effective tax rate of 41% for 1996 as
compared to 44% for 1995. The favorable change in the effective tax rate
was principally due to the tax effect of the Company's expanded operations in
Europe combined with the higher level of pretax profits in 1996. In 1997,
assuming that the Company has higher pretax profits as anticipated, the
effective tax rate should be lower than the 41% rate experienced in 1996.
- 21 -
<PAGE>
CASH FLOW AND LIQUIDITY REVIEW - 1996
- -------------------------------------
Capital Resources
In addition to our operating cash flows, our 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
short-term and long-term capital resources available to us are more than
sufficient to fund our capital expenditure and working capital
requirements, scheduled debt payments, interest and income tax
obligations, dividends to our share owners, and plans for share repurchases.
We have available for issuance $3.1 billion in debt securities under a
registration statement with the Securities and Exchange Commission. We
satisfy seasonal working capital needs and other financing requirements
with bank borrowings and short-term borrowings under our commercial paper
program. Our commercial paper program is supported by a $1.5 billion
multicurrency revolving bank credit agreement maturing in November 2001
and a $1 billion short-term credit facility. An aggregate of $648 million
in commercial paper borrowings supported by these agreements was
outstanding at December 31, 1996. The Company intends to continue to
refinance borrowings under its commercial paper program with long-term
fixed and floating rate financings. Additionally, the Company has $366
million available for our international bottlers under short-term bank
credit facilities.
Summary of Cash Activities
Cash and cash investments increased $39 million during 1996. Our principal
sources of cash consisted of operating cash flows of $1,006 million and
proceeds from the issuance of debt aggregating $875 million. Our primary
uses of cash were capital expenditures totaling $622 million, long-term
debt payments totaling $359 million, share repurchases aggregating $183
million, and domestic and international acquisitions of $676 million.
Operating Activities
Net cash derived from operating activities in 1996
increased 56% over 1995, primarily resulting from higher net income and
non-cash expenses aided by positive changes in working capital in 1996.
The increase in depreciation expense in 1996 is caused by increased capital
spending and the 1996 domestic and international acquisitions. The
increase in amortization expense in 1996 reflects additional franchise
amortization from the 1996 acquisitions.
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) totaling $572 million as of December 31, 1996 have arisen
principally from tax deductions for accelerated franchise amortization for
tax purposes. The cost of franchise assets is amortized over the 40-year
maximum period allowed under GAAP. We believe these assets, in actuality,
do not decline in value but that the values are enhanced by our efforts.
For tax purposes, franchise assets are amortized primarily over 10 years.
Since the Company completed its 10th fiscal year in 1995, the franchise
asset created at the Company's formation was fully amortized for tax
purposes in 1996. Cash income tax obligations increased between 1995 and
1996, resulting from the reduction in the Company's tax deduction for
amortization.
Investing Activities
The significant increase in net cash used in investing activities in 1996
compared to 1995 is primarily a result of the 1996 domestic and international
acquisitions of $676 million in cash, net of cash acquired. Capital
expenditures in 1996 increased 24% over 1995 primarily because of the
expansion of our cold drink program and the 1996 acquisitions. We expect
1997 capital expenditures to be from $800 to $900 million, including
estimates for capital spending by the international operations acquired
in 1997. We anticipate 20 to 30 percent of total capital expenditures
will be invested in our international operations, corresponding with the
anticipated 1997 volume of our international markets.
Since inception, the Company has acquired a number of bottling companies
for a total purchase price of approximately $9.2 billion. Our sources of
capital allow us to maintain financial flexibility as we continue to
evaluate current investment opportunities under a disciplined acquisition
strategy of acquiring businesses which offer us opportunities to implement
our operating strategies, achieve our desired rates of return, and
increase share-owner value over the long term.
Financing Activities
Financing activities provided a net $319 million in 1996 as compared to a
net $38 million used in 1995. In 1996 we issued $875 million of public
long-term debt and used the proceeds to refinance commercial paper
obligations.
During the first four months of 1996, we completed our August 1994 share
repurchase program by repurchasing 6,578,300 shares of common stock at
a total cost of $183 million. On April 11, 1996, the Board of Directors
approved a new 10 million share common stock repurchase program. There
have been no repurchases under this new program. Management considers
market conditions and alternative uses of cash and/or debt, balance sheet
ratios, and share-owner returns when evaluating the timing of share
repurchases. Repurchased shares are available for general corporate
purposes including acquisition financing and the funding of employee
benefit plans. Stock options exercised provided cash of $10 million
in both 1996 and 1995.
- 22 -
<PAGE>
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Year Ended December 31,
-------------------------------
1996 1995 1994
------ ------ ------
Cash Flows From Operating Activities
Net income............................ $ 114 $ 82 $ 69
Adjustments to reconcile net income
to net cash derived from operating
activities:
Depreciation...................... 392 318 282
Amortization...................... 235 211 179
Deferred income tax provision..... (2) 22 46
Gain from sale of ownership
interest in bottling operation.. - (9) -
Net changes in current assets and
current liabilities............. 218 (12) 58
Additional nonoperating cash
flows........................... 49 32 (3)
------ ------ ------
Net cash derived from
operating activities................ 1,006 644 631
------ ------ ------
Cash Flows From Investing Activities
Purchases of fixed assets............. (622) (501) (366)
Fixed asset sales..................... 12 16 18
Cash investments in bottling and
other businesses, net of cash
acquired ($533 million was paid to
The Coca-Cola Company for bottling
operations in 1996)................. (676) (158) (20)
Sale of ownership interest in bottling
operations.......................... - 17 -
Additional investing activities....... - 6 (6)
------ ------ -----
Net cash used in investing activities. (1,286) (620) (374)
------ ------ -----
Cash Flows From Financing Activities
Issuance of long-term debt............ 875 301 355
Payments on long-term debt............ (359) (315) (562)
Stock purchases for treasury.......... (183) (41) (28)
Cash dividend payments on common and
preferred stock..................... (19) (7) (7)
Exercise of employee stock options.... 10 10 15
Additional financing activities....... (5) 14 (19)
------ ------ ------
Net cash derived from (used in)
financing activities................ 319 (38) (246)
------ ------ ------
Net Increase (Decrease) in Cash and
Cash Investments During Each Year... 39 (14) 11
Cash and cash investments at beginning
of each year........................ 8 22 11
------ ------ ------
Cash and Cash Investments at End of
Each Year........................... $ 47 $ 8 $ 22
====== ====== ======
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
- 23 -
<PAGE>
FINANCIAL POSITION - 1996
- -------------------------
Assets
The overall increase in total assets at December 31, 1996 as compared to
balances at December 31, 1995 is due primarily to the domestic and
international acquisitions made during the year. The French and Belgian
acquisition alone accounted for the following increases: (i) $139 million in
trade accounts receivable, (ii) $63 million in inventories, (iii)
approximately all of the increase in other current assets, (iv) $405
million of property, plant, and equipment, and (v) $690 million in purchased
franchise assets. At December 31, 1996, the Company had $140 million of
current deferred tax assets resulting principally from the anticipated
utilization of net operating losses to reduce taxable income.
Liabilities and Equity
Accounts payable and accrued expenses and other long-term liabilities
increased primarily as a result of current year acquisitions. Total
long-term debt increased during 1996 from the issuance of: (i) $300
million of 7% Debentures due October 1, 2026, (ii) $300 million of
6.7% Debentures due October 15, 2036, (iii) $250 million of 6.95%
Debentures due November 15, 2026, (iv) $25 million of Medium-Term Notes,
and (v) acquired debt from the 1996 acquisitions of approximately
$586 million. This increase was offset by a net decrease of $129 million
in commercial paper and scheduled maturity payments on long-term obligations.
Our net debt to total capital plus deferred taxes ratio increased from
approximately 55% at December 31, 1995 to 57% at December 31, 1996 due to
the increase in debt associated with the 1996 acquisitions. Deferred
income taxes increased $439 million in 1996 as compared to 1995, primarily
as a result of the deferred tax liabilities acquired through the expansion
of the international operations. The decrease of $17 million in the
cumulative effect of currency translations results from the decrease in
the value of the U.S. dollar against foreign currencies.
Environmental Contingencies
The Company incurs costs to satisfy various federal and state regulations
involving materials discharge, waste water treatment, and underground
storage tanks. These costs, excluding routine maintenance and monitoring
costs, totaled approximately $5 million, $6 million, and $12 million in
1996, 1995, and 1994, respectively. We believe any amount the Company may
be required to pay in excess of amounts previously funded or accrued would
not have a materially adverse effect on the Company's financial position,
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 and state Superfund
sites. We believe that any ultimate Superfund liability under these PRP
designations will not have a materially adverse effect on the Company's
financial position, cash flows, or results of operations. At December 31,
1996, there were five federal sites and one state site for which the
Company's involvement or liability as a PRP was unresolved. In addition,
there were 17 other federal and seven state sites for which it has been
concluded that either the Company had no responsibility, the 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 Company's use
in relation to other users. As to any site where the Company may be liable,
we have determined there are other PRPs who are financially solvent as well
and that any hazardous waste deposited by the Company is minimal when
compared to amounts deposited by financially solvent PRPs.
- 24 -
<PAGE>
COCA-COLA ENTERPRISES INC.
CONSOLIDATED BALANCE SHEETS
(In millions except per share data)
December 31,
-------------------
1996 1995
------ ------
ASSETS
Current
Cash and cash investments, at
cost approximating market.............. $ 47 $ 8
Trade accounts receivable, less
reserves of $45 and $33 million,
respectively........................... 668 510
Amounts receivable from The Coca-Cola
Company, net........................... - 6
Inventories:
Finished goods......................... 221 151
Raw materials and supplies............. 96 74
------- -------
317 225
Current deferred income tax assets....... 140 130
Prepaid expenses and other current
assets................................. 147 103
------- -------
Total Current Assets................... 1,319 982
Property, Plant, and Equipment
Land..................................... 213 182
Buildings and improvements............... 860 700
Machinery and equipment.................. 3,558 2,774
------- -------
4,631 3,656
Less allowances for depreciation......... 1,881 1,587
------- -------
2,750 2,069
Construction in progress................. 62 89
------- -------
Net Property, Plant, and Equipment......... 2,812 2,158
Franchises and Other Noncurrent
Assets, Net.............................. 7,103 5,924
------- -------
$11,234 $ 9,064
======= =======
LIABILITIES AND SHARE-OWNERS' EQUITY
Current
Accounts payable and accrued
expenses................................ $ 1,181 $ 796
Amounts payable to The Coca-Cola Company,
net..................................... 18 -
Payments due on long-term debt............ 491 63
------- -------
Total Current Liabilities............. 1,690 859
Long-Term Debt.............................. 4,814 4,138
Retirement and Insurance Programs and
Other Long-Term Obligations............... 699 600
Long-Term Deferred Income Tax Liabilities... 2,481 2,032
Share-Owners' Equity
Preferred stock........................... 134 30
Common stock, $1 par value -- Authorized
500,000,000 shares; Issued 146,763,463
and 145,094,936 shares, respectively...... 147 145
Additional paid-in capital.................. 1,434 1,346
Reinvested earnings......................... 237 144
Cumulative effect of currency translations.. 21 38
Cost of common stock in treasury
(21,328,590 and 16,543,458 shares,
respectively)............................. (423) (268)
------- ------
Total Share-Owner's Equity.................. 1,550 1,435
------- ------
$11,234 $9,064
======= ======
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>
Additional
Three Years Ended Preferred Common Paid-in Reinvested Currency Treasury Share-Owners'
December 31, 1996 Stock Stock Capital Earnings Translations Stock Equity
- -------------------------------- --------- ------ ---------- ---------- ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1993... $ 29 $ 142 $ 1,280 $ 9 $ (3) $(197) $1,260
Issuance of management stock
performance awards............ - 1 30 - - - 31
Unamortized cost of management
stock performance awards...... - - (31) - - - (31)
Expense amortization of
management stock performance
awards........................ - - 7 - - - 7
Forfeiture of management stock
performance awards............ - - 1 - - (1) -
Purchase of common stock for
treasury (refer to Note 8).... - - - - - (28) (28)
Exercise of employee stock
options....................... - 1 14 - - - 15
Currency translations........... - - - - 24 - 24
Dividends on common stock
(per share-$0.05)............. - - - (6) - - (6)
Dividends on preferred stock
(refer to Note 7)............. - - - (2) - - (2)
Net income...................... - - - 69 - - 69
------ ----- ------ ----- ----- ----- ------
Balances at December 31, 1994... 29 144 1,301 70 21 (226) 1,339
Issuance of management stock
performance awards............ - - 18 - - - 18
Unamortized cost of management
stock performance awards...... - - (18) - - - (18)
Expense amortization of
management stock performance
awards........................ - - 36 - - - 36
Forfeiture of management stock
performance awards............ - - - - - (1) (1)
Purchase of common stock for
treasury (refer to Note 8).... - - - - - (41) (41)
Exercise of employee stock
options....................... - 1 9 - - - 10
Currency translations........... - - - - 17 - 17
Dividends on common stock (per
share-$0.05).................. - - - (6) - - (6)
Dividends on preferred stock
(refer to Note 7)............. - - - (2) - - (2)
Preferred stock accretion (refer
to Note 7).................... 1 - - - - - 1
Net income...................... - - - 82 - - 2
----- ----- ------ ----- ----- ----- ------
Balances at December 31, 1995... 30 145 1,346 144 38 (268) 1,435
Issuance of management stock
performance awards............ - 1 89 - - - 90
Unamortized cost of management
stock performance awards...... - - (90) - - - (90)
Expense amortization of
management stock performance
awards........................ - - 40 - - - 40
Forfeiture of management stock
performance awards............ - - - - - (1) (1)
Tax effect of management stock
performance awards............ - - 9 - - - 9
Purchase of common stock for
treasury (refer to Note 8).... - - - - - (183) (183)
Exercise of employee stock
options, including tax effect. - 1 15 - - - 16
Issuance of shares to effect
acquisition................... 155 - - - - 1 156
Currency translations........... - - - - (17) - (17)
Conversion of preferred stock
to common stock............... (53) - 25 - - 28 -
Dividends on common stock (per
share-$0.10).................. - - - (13) - - (13)
Dividends on preferred stock
(refer to Note 7)............. - - - (8) - - (8)
Preferred stock accretion
(refer to Note 7)............. 2 - - - - - 2
Net income...................... - - - 114 - - 114
------ ------ ------ ------ ----- ------ ------
Balances at December 31, 1996... $ 134 $ 147 $1,434 $ 237 $ 21 $ (423) $1,550
====== ====== ====== ====== ===== ====== ======
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
- 26 -
<PAGE>
INTEREST RATE AND CURRENCY RISK MANAGEMENT
- ------------------------------------------
Interest Rates
The Company uses interest rate swap agreements and other risk management
instruments to manage its fixed/floating debt profile. The use of swap
agreements (increased) decreased interest expense by $(1) million and
$3 million in 1996 and 1995, respectively. A 1% increase or decrease in
market interest rates would have increased or decreased interest expense
for 1996 and 1995 by $15 million and $11 million, respectively.
Interest rate swap agreements 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 to
interest rate swap agreements and other risk management instruments and
does not believe there is a significant risk of nonperformance by any
of the counterparties.
Currency
Our international operations represented approximately 17% of consolidated
net assets and 11% of consolidated net revenues in 1996. Because of our
current operations in Belgium, France, and the Netherlands, and the recent
acquisition in Great Britain, we are exposed to fluctuations in the exchange
rates for the Belgian franc, the French franc, the Dutch florin, and the
British pound sterling. We attempt to reduce our exposure to currency
fluctuations through the use of currency swap agreements and other risk
management instruments. The use of currency swap agreements had a $4
million favorable impact on interest expense during 1996. The Company did
not use currency swap agreements in 1995.
As currency exchange rates fluctuate, translation of the statements of
income of international businesses into U.S. dollars will affect
comparability of revenues and expenses between years. None of the
components of consolidated statements of income was materially affected
by exchange rate fluctuations in 1996 and 1995.
ACCOUNTING DEVELOPMENTS
- -----------------------
Generally accepted accounting principles are under continual review by
authoritative accounting bodies responsible for establishing these
principles. We continually monitor activities by these authoritative
accounting bodies and implement changes as appropriate. There are no
recent accounting pronouncements that have a material impact on the
Company's financial statements.
CAUTIONARY STATEMENTS
- ---------------------
Certain expectations and projections regarding future performance of the
Company referenced in this Annual Report are forward-looking statements
involving risks and uncertainties. These expectations and projections
are based on currently available competitive, financial, and economic
data and the Company's operating plans. We caution readers that in
addition to the important factors described elsewhere in the annual
report, the following factors, among others, could cause the Company's
actual consolidated results in 1997 and thereafter to differ significantly
from those expressed in any forward-looking statements.
Marketplace - The Company's response to continued and increased
competition may result in lower than expected net pricing of our
products. In addition, competitive pressures may cause channel
and product mix shifts away from more profitable cold drink
channels and packages and adversely affect the Company's overall
pricing. Also, weather conditions, particularly in Europe, can
have a significant impact on the Company's sales volume. Net
pricing, volume, and costs of goods are the primary determinants
of the Company's net earnings.
Raw Materials - Our forecast of earnings and cash operating profit
assumes no significant increases in the cost of raw materials,
ingredients, packaging materials, or supplies. If significant
cost increases occur, and the Company is unable to increase
its pricing to customers by comparable amounts, the Company's
earnings and cash operating profit would be adversely affected.
Funding From Franchisers - Material changes in the performance
requirements or decreases in levels of funding provided
historically under our marketing programs with The Coca-Cola
Company and other franchisers, or our inability to meet the
performance requirements for the anticipated levels of such
marketing support payments, would adversely affect future
earnings. The Coca-Cola Company is under no obligation to
continue with past levels of funding.
Financing Considerations - Both changes from our expectations
in interest rates and foreign exchange rates can have a
material impact on the Company's earnings. The Company may
not be able to mitigate completely the effect of significant
interest rate or currency exchange rate fluctuations.
- 27 -
<PAGE>
OPERATIONS REVIEW - 1995 - 1994
- -------------------------------
In the opinion of management, the most meaningful comparison of operating
results between 1995 and 1994 excludes the 1995 impact of our gain on the
sale of our ownership interest in Mid South and includes the effect of
our acquisition of Wichita Coca-Cola Bottling Company ("Wichita") as if
it occurred on January 1, 1994. "Comparable" results in this section
refer to the results of operations adjusted for these items.
Operating income and earnings per share increased 6% and 19%, respectively,
over 1994 levels. This operating income growth includes an increase of
2% resulting from the acquisition of Wichita. With strong volume growth
and record net revenues per case increases, we offset the effect on the
Company of the most significant cost increase affecting our industry in
the past 10 years (see "Cost of wholesale sales per physical case" below).
Although gross profit and operating margins decreased, our operating
performance, combined with favorable net interest expense as a percent
of net revenues and a lower effective tax rate, produced growth in earnings
per share applicable to common share owners of 11%, excluding the gain
on Mid South.
Cash operating profit is one of the key standards by which management
measures the Company's performance. Actual 1995 cash operating profit
increased 11% over 1994, with comparable results increasing 9%.
Net operating revenues are comprised principally of wholesale sales to
retailers accounting for approximately 96% of our net revenues and gross
profit in 1995. Reported net operating revenues for 1995 increased 13%
over 1994, while comparable net operating revenues increased 11% over
1994. The increase in comparable net operating revenues results primarily
from a 4.5% increase in bottle and can physical case sales volume and
a 7% increase in net revenues per case.
Volume growth in 1995 reflected solid growth in core brands such as
Coca-Cola classic and diet Coke, partially caused by consumer demand for
the 20-ounce contour bottle and double-digit growth in Sprite.
Noncarbonated beverages also contributed to 1995 volume growth as Fruitopia,
PowerAde, and Nestea products all grew by double-digit rates. In total,
noncarbonated beverages were 5% of total cases sold in 1995.
Net revenues per case growth in 1995 was the largest in the Company's
history. This growth of 6.5% resulted from the significantly higher
selling prices we established to offset aluminum can cost increases and
to achieve our cash operating profit growth objective.
Cost of wholesale sales per physical case for 1995 increased 10% over 1994.
Aluminum can cost increases which went into effect January 1, 1995 were the
major cause of the significant cost of sales increases and gross margin
decreases.
Selling, general, and administrative expenses for 1995 increased 9% from
1994, primarily a result of increased case sales volume, acquisitions
during 1995, and accelerated cost recognition of $25 million resulting from
shortening the estimated vesting period of stock awards and stock options
in the fourth quarter of 1995. This accelerated vesting was triggered by
the favorable performance of the Company's stock during the fourth quarter
of 1995. Selling, general, and administrative expenses as a percentage
of sales decreased from 31% in 1994 to 30% in 1995.
Interest expense increased in 1995 as compared to 1994, reflecting an
increased 1995 debt balance resulting primarily from the Wichita acquisition
and share repurchase activity, and a higher weighted average borrowing
rate of 7.5% during 1995 as compared to 7.2% during 1994.
Income taxes decreased as a percentage of earnings before income taxes in
1995, reflecting a lower effective tax rate of 44% for 1995 as compared to
46% for 1994. The change in the effective tax rate was principally a result
of the level of pretax income in each period relative to nondeductible
expenses.
CASH FLOW REVIEW -- 1995 - 1994
- -------------------------------
Operating Activities
Net cash provided by operating activities in 1995 increased 2% over 1994,
primarily resulting from a higher net income level in 1995 offset by
working capital changes. The increase in depreciation expense in 1995
results from increased capital spending and the Wichita acquisition.
The increase in amortization expense in 1995 primarily reflects: (i)
franchise amortization resulting from the Wichita acquisition, (ii) expense
related to additional restricted stock grants, and (iii) accelerated cost
recognition of stock awards and stock options.
Investing Activities
Net cash used in investing activities in 1995 increased 66% over 1994,
primarily as a result of the acquisition of Wichita for $150 million in
cash (net of cash acquired) in January 1995. Later in 1995, an additional
$7 million in purchase price was paid to the Wichita sellers because of tax
benefits accruing to the Company. Also in January 1995, we sold our 50%
ownership interest in Mid South resulting in a pretax gain of $9 million
($0.04 per common share after-tax). Capital expenditures in 1995 increased
37% over 1994 primarily because of the expansion of our cold drink program.
Financing Activities
In 1995 we used $38 million for financing activities as compared to $246
million in 1994 due principally to decreased debt repayments in 1995.
Stock options exercised provided cash of $10 million in 1995 as compared
to $15 million provided in 1994. We repurchased common stock in 1995
under our current share repurchase program at a cost of $41 million as
compared to a repurchase cost of $28 million during 1994. Other financing
activities primarily include the return of a collateral deposit on
interest rate swap agreements and changes in the market value of Eurodollar
futures contracts.
- 28 -
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Significant Accounting Policies
The Company's Business - 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's territories include more than half of the United States and
portions of Western Europe, including Belgium, the Netherlands, and most
of France. In February 1997 the Company expanded its territories to include
Great Britain.
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 December 31. For quarterly
reporting convenience, the Company reports on a Friday closest to the end
of the quarterly calendar period. Management of the Company is required
to make estimates and assumptions that affect amounts reported in the
financial statements and accompanying notes prepared in accordance with
generally accepted accounting principles ("GAAP"). Actual results could
differ from those estimates.
Cash Investments - Cash investments include all highly liquid cash
investments purchased with original maturity dates less than three months.
The fair value of cash and cash investments approximates the amounts shown
in the financial statements.
Risk of Accounts Receivable Losses - The Company sells its products to
chain store and other customers and extends credit based on an evaluation
of the customer's financial condition, generally without requiring
collateral. Potential losses on receivables are dependent on each
individual customer's financial condition. The Company monitors its
exposure to losses on receivables and maintains allowances for potential
losses or adjustments. The Company's accounts receivable are typically
collected within 30 days.
Inventories - The Company values its inventories at the lower of cost or
market. Cost is determined using the first-in, first-out (FIFO) method.
Property, Plant, and Equipment - Property, plant, and equipment are stated
at cost. Depreciation expense is computed using the straight-line method
over the estimated useful lives of 20 to 40 years for buildings and
improvements and three to 14 years for machinery and equipment. Leasehold
improvements are amortized over the shorter of the asset's life or the
remaining contractual lease term.
Franchises and Other Noncurrent Assets, Net - Franchise agreements contain
performance requirements and convey to the franchisee the rights to
distribute and sell products of the franchiser within specified territories.
The majority of the Company's franchise agreements are perpetual, reflecting
a long and ongoing relationship with The Coca-Cola Company and other
franchisers. The Company's agreements covering its current operations in
Belgium, France, and the Netherlands are not perpetual because The Coca-Cola
Company does not grant perpetual franchise rights outside the United States.
The Company believes these agreements will continue to be renewed at each
expiration date, and therefore, are essentially perpetual.
Franchise costs are amortized on a straight-line basis over the maximum
allowed period of benefit under GAAP of 40 years. Accumulated franchise
amortization amounted to $1,257 million and $1,069 million at December 31,
1996 and 1995, respectively. Other noncurrent assets are not significant.
In the event facts and circumstances indicate the cost of franchises or
other assets may be impaired, an evaluation of recoverability would then
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.
Management Stock Performance Plans - The Company accounts for stock-based
compensation plans under APB Opinion No. 25 and related Interpretations.
As part of the Company's overall management compensation program, the
Company issues stock compensation awards to key executives that vest over
time based solely on aggressive stock performance goals. The Company
believes these awards enhance the focus of key executives on share-owner
value, resulting in higher stock values for our share owners. The costs
associated with these plans are charged to additional paid-in capital upon
award as an unearned compensation intangible asset and amortized over the
estimated vesting period as compensation amortization expense. Changes to
the total estimated vesting period are based on management's judgment and
the impact of these changes is reflected in the financial statements in the
period of change and subsequent periods.
Insurance Programs - In general, the Company is self-insured for costs of
workers' compensation, casualty, and health and welfare claims. The
Company uses commercial insurance for casualty and workers' compensation
claims as a risk reduction strategy to minimize catastrophic losses.
Workers' compensation and casualty losses are accrued using actuarial
assumptions followed in the insurance industry, adjusted for company-
specific history and expectations.
Environmental Compliance and Remediation - Environmental maintenance,
monitoring, and other similar compliance costs are expensed as incurred.
Environmental remediation costs are accrued when environmental assessments
and/or the need for remediation are probable and the cost can be reasonably
estimated. Environmental remediation costs that improve the condition of the
property, as compared to the condition when the asset was constructed or
acquired, are capitalized.
- 29 -
<PAGE>
COCA-COLA ENTERPRISES INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Foreign Currency Translation - Assets and liabilities of foreign operations
are translated from the local currency into U.S. dollars at the approximate
rate of currency exchange at the end of the fiscal period. Translation
gains and losses of foreign operations that use local currencies as the
functional currency are accumulated and reported as a separate component
of share-owners' equity. Revenues and expenses are translated at average
monthly exchange rates. Transaction gains and losses arising from exchange
rate fluctuations on transactions denominated in a currency other than
the local functional currency are included in the results of operations.
Derivative Financial Instruments - The Company uses interest rate swap
agreements, futures contracts, and options to manage interest rate
exposures. The Company specifically designates these agreements as hedges
of debt instruments and recognizes interest differentials as adjustments
to interest expense in the period the differentials occur.
The Company is exposed to financial risks from movements in foreign
exchange rates through its international operations. To manage these
risks, the Company selectively uses currency swap agreements, forwards,
and options and specifically designates these instruments as hedges of net
investments in foreign subsidiaries or as hedges of foreign currency
commitments. Realized and unrealized gains and losses from hedges of net
investments are included in the cumulative effect of currency translations
as a component of share-owners' equity. Gains and losses on the interest
rate exchange component of currency swap agreements are recognized as
adjustments to interest expense in the period the gains and losses occur.
Realized and unrealized gains and losses from hedges of firm commitments are
recognized as adjustments to the gains and losses resulting from the
underlying hedged transactions. The Company does not hold or issue
financial instruments for trading purposes.
Marketing Costs and Support Arrangements - The Company directs various
advertising and marketing programs supported by The Coca-Cola Company or
other franchisers. Under these programs, certain costs incurred by the
Company are reimbursed by the applicable franchiser. Depending on the
objective of each specific program, marketing funds are recognized as
either a reduction of sales discounts and allowances in net revenues or
a reduction of operating expenses. Franchiser funding is recognized when
performance measures are met or as funded costs are incurred.
Net Income Per Common Share Applicable to Common Share Owners - Net income
per common share applicable to common share owners is computed by dividing
net income applicable to common share owners by the weighted average number
of common shares outstanding.
Note 2 - Acquisitions and Divestitures
When acquiring The Coca-Cola Company's franchised bottling operations, the
Company purchases the right to market, distribute, and produce beverage
products of The Coca-Cola Company in specified territories. When
acquisitions of other franchiser product rights occur, similar rights are
also obtained. The purchase method of accounting has been used for all
acquisitions, and accordingly, the results of operations of acquired
companies are included in the Company's consolidated statements of
income beginning with the date of acquisition. In addition, the assets
and liabilities of companies acquired in 1996 are included in the Company's
consolidated balance sheet at the preliminary estimates of their fair values
on the date of acquisition.
The following discusses the Company's acquisition activity for 1996, 1995,
and 1994 and also includes information regarding the Company's acquisition
that occurred on February 10, 1997.
International Acquisitions
On February 10, 1997, the Company purchased Coca-Cola & Schweppes
Beverages Limited ("CCSB") from The Coca-Cola Company and Cadbury
Schweppes plc for an aggregate transaction value (purchase price, assumed
debt, and other long-term obligations) of 1.2 billion British pounds
sterling, or approximately $2 billion translated at the exchange rate on
the acquisition date. CCSB produces and distributes beverage products of
The Coca-Cola Company and Cadbury Schweppes plc in Great Britain. CCSB
has entered into long-term contracts to continue to produce and distribute
products of both The Coca-Cola Company and Cadbury Schweppes plc in the
acquired territories.
On July 26, 1996, the Company acquired The Coca-Cola Company's bottling and
canning operations in France and Belgium for a transaction value (purchase
price and assumed debt, net of cash acquired) of approximately $915 million.
These franchise territories encompass most of France and all of Belgium.
The entities acquired were Coca-Cola Beverages S.A. (French bottler),
Coca-Cola Production S.A. (French canner), and S.A. Beverage Sales Holding
N.V. (owner of the Belgian bottler).
Domestic Acquisitions
On February 21, 1996, the Company acquired Ouachita Coca-Cola Bottling
Company, Inc. ("Ouachita") for a transaction value (purchase price and
issued and assumed debt) of approximately $313 million. Later in 1996,
an additional $2.5 million in purchase price was paid to the sellers
primarily for additional working capital amounts acquired. The purchase
price was paid through a combination of cash, shares
- 30 -
<PAGE>
of the Company's common stock from treasury, and one of two types of
convertible preferred stock (refer to Note 7). Ouachita operates in portions
of Arkansas, Louisiana, and Mississippi.
On August 12, 1996, the Company acquired Coca-Cola Bottling Company West,
Inc. and a related company, Grand Forks Coca-Cola Bottling Co.,
(collectively, "Coke West") for a transaction value (purchase price and
assumed debt) of approximately $158 million. Coke West operates franchise
territories in portions of Minnesota, Montana, North Dakota, South Dakota,
and Wyoming.
The following table summarizes unaudited proforma financial information of
the Company as if the acquisitions discussed above were effective January 1,
1995. The unaudited proforma financial information for the years ended
December 31, 1996 and 1995 reflects adjustments for: (i) the repayment of
assumed debt, (ii) financing of the transactions at an interest cost of
approximately 7.5%, (iii) amortization of the value of the acquired
franchise assets over 40 years, (iv) contractual changes to the business
of certain of the acquired companies, and (v) the income tax effect of
the foregoing (in millions except per share data):
1996 1995
------- -------
Net Operating Revenues......... $10,307 $ 9,795
Cost of sales.................. 6,444 6,245
------- -------
Gross Profit................... 3,863 3,550
Selling, general, and
administrative expenses...... 3,155 2,888
------- -------
Operating Income............... 708 662
Interest expense, net.......... 564 570
Other nonoperating income
(deductions), net............ 5 (16)
------- -------
Income Before Income Taxes..... 149 76
Income tax expense............. 61 28
------- -------
Net Income..................... 88 48
Preferred stock dividends...... 9 10
------- -------
Net Income Applicable to Common
Share Owners................. $ 79 $ 38
======= =======
Net Income Per Share Applicable
to Common Share Owners....... $ 0.63 $ 0.29
======= =======
The above unaudited proforma information includes the impact of the 1997
CCSB acquisition.
Excluding the proforma results of CCSB, the Company's summarized unaudited
proforma financial information is as follows (in millions except per share
data):
1996 1995
-------- --------
Net Operating Revenues......... $ 8,796 $ 8,303
======== ========
Net Income Applicable to
Common Share Owners.......... $ 102 $ 64
======== ========
Net Income Per Share Applicable
to Common Share Owners....... $ 0.82 $ 0.50
======== ========
In January 1995 the Company acquired all the issued and outstanding shares
of stock of Wichita Coca-Cola Bottling Company, Inc. ("Wichita") for a
purchase price of $157 million in cash. Also in January 1995, the Company
sold its 50% ownership interest in The Coca-Cola Bottling Company of the
Mid South ("Mid South") to Ouachita for $17 million. This sale resulted
in a pre-tax gain of $9 million ($0.04 per common share after taxes).
The Company's interest in Mid South was reacquired through the Ouachita
acquisition in February 1996.
In 1994 the Company acquired: (i) a bottling operation in Shelbyville,
Kentucky for an aggregate purchase price of approximately $6 million,
(ii) approximately $8 million of the preferred stock of a manufacturer
supplying certain packaging used in the Company's manufacturing process,
and (iii) approximately 4% of the outstanding common stock (9% of the
voting shares) of The Coca-Cola Bottling Company of New York, Inc.
("New York") from The Coca-Cola Company for $6 million in cash. The
Company has a five-year right of first refusal on the remaining New York
shares held by The Coca-Cola Company, with the option to enter into
negotiations for these shares after two years.
The preceding acquisitions were initially financed through short-term bank
borrowings, commercial paper, and seller financing. The Company refinances
portions of the short-term borrowings on a longer-term basis. With respect
to international acquisitions, the Company has financed the acquisitions
in local currency (or alternatively, executed currency agreements) to
eliminate exposure to fluctuating currencies on the Company's acquisition
cost.
- 31 -
<PAGE>
COCA-COLA ENTERPRISES INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3 - Accounts Payable and Accrued Expenses
At December 31 accounts payable and accrued expenses consists of the
following (in millions):
1996 1995
-------- --------
Trade accounts payable.......... $ 308 $ 177
Accrued advertising costs....... 203 120
Accrued compensation costs...... 146 84
Accrued insurance costs......... 74 84
Accrued interest costs.......... 96 82
Deposits on containers and
shells........................ 97 74
Accrued taxes................... 104 65
Unearned revenues............... 51 44
Additional accrued expenses..... 102 66
-------- --------
$ 1,181 $ 796
======== ========
Note 4 - Long-Term Debt
At December 31 long-term debt consists of the following (in millions):
1996 1995
------ ------
Commercial Paper, weighted
average interest rates of
5.5% - 1996 and 5.7% - 1995:
Amounts designated under
foreign currency swap
agreements...................... $ 481 $ -
Other commercial paper............ 167 777
------ ------
648 777
Foreign-denominated bank loans,
weighted average interest rate
of 3.4%............................. 370 -
6.50% Notes due 1997.................. 300 300
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............. 142 154
8.35% Zero Coupon Notes due 2020 (net
of unamortized discount of $1,649
and $1,671, respectively)........... 283 261
8.00% and 8.50% Debentures due 2022... 1,000 1,000
6.75% Debentures due 2023............. 250 250
6.95% and 7.00% Debentures due 2026... 550 -
6.70% Debentures due 2036............. 300 -
Additional debt....................... 262 259
------ ------
$5,305 $4,201
====== ======
Aggregate maturities of long-term debt during the next five years are as
follows (in millions): 1997 - $491; 1998 - $9; 1999 - $204; 2000 - $5;
and 2001 - $875.
The Company's commercial paper program is supported by a $1 billion
short-term credit facility and a $1.5 billion multicurrency revolving
bank credit agreement maturing in November 2001. Additionally, the
Company has available for issuance approximately $3.1 billion in debt
securities under a registration statement with the Securities and Exchange
Commission. The Company has exchanged approximately $481 million of its
commercial paper borrowings to 1.8 billion French francs and 4.1 billion
Belgian francs. The Company intends to renew these 30-day swap agreements
as they expire.
The Company has available local currency-denominated credit facilities with
Belgian, Dutch, and French banks totaling approximately $736 million of
which $370 million is outstanding at December 31, 1996. Loans under these
facilities are for renewable periods not to exceed 12 months and are
supported by the Company's $1.5 billion multicurrency revolving bank
credit agreement maturing November 2001. Accordingly, approximately $220
million of the local currency-denominated bank loans have been classified
as long-term debt.
The revolving bank credit agreement and the outstanding Notes and
Debentures contain various provisions which, among other things, require
the Company to maintain a defined leverage ratio and limit the incurrence
of certain liens or encumbrances in excess of defined amounts. None of
these restrictions negatively impacts the Company's liquidity or capital
resources at this time.
Note 5 - Derivative Financial Instruments
Interest Rate Risk Management - The Company uses interest rate swap
agreements and other risk management instruments to manage its
fixed/floating debt profile. The use of swap agreements (increased)
decreased interest expense by $(1) million, $3 million, and $12 million
in 1996, 1995, and 1994, respectively. Activities in 1996 and 1995
relating to significant interest rate swap agreements and other risk
management instruments are discussed below.
The Company is party to an interest rate swap agreement with notional amounts
outstanding at December 31, 1996 and 1995 of $242 million and $250 million,
respectively. This agreement, which has a final maturity date of 2023,
changes the fixed interest rate on $250 million of 8% Debentures due
2022 to a floating interest rate. The notional amount can decrease
quarterly dependent upon interest rate fluctuations. The expiration date of
the swap agreement is the earlier of (i) the notional amount being reduced
to zero or (ii) the final maturity date.
The above fixed-to-floating interest rate swap agreement is subject to a
bilateral security agreement allowing one party to the agreement to require
the second party to establish a cash collateral account equal to the fair
value of the swap agreement adjusted by a threshold amount. Collateral
amounts deposited
- 32 -
<PAGE>
by the Company totaled $7 million and $9 million at December 31, 1996 and
1995, respectively.
The Company uses LIBOR caps to limit the effect of increases in interest
rates on specified amounts of commercial paper to a maximum rate. Premiums
paid for LIBOR caps are amortized to interest expense over the contract
term. At December 31, 1996 and 1995, the Company had LIBOR caps outstanding
of $1.2 billion and $450 million, respectively. No payments were received
during 1996 or 1995 under LIBOR cap agreements.
Currency Risk Management - The Company uses currency swap agreements and
other risk management instruments to manage its exposure to currency
fluctuations. At December 31, 1996, the Company had currency swap
agreements exchanging U.S. dollars into Belgian francs and French francs
in the amounts of $129 million and $352 million, respectively. The currency
swap agreements hedge the Company's net investment related to its U.S.
dollar-denominated debt resulting from the 1996 international acquisition.
In addition to exchanging currencies, the agreements exchange interest rates.
The impact of the exchanges was a decrease in interest expense of $4 million
during 1996.
Credit Risk - The Company is exposed to credit losses in the event of
nonperformance by counterparties on exchange agreements. The Company
does not believe significant risks exist under any of these instruments.
Amounts payable to the Company under the agreements at December 31, 1996
and 1995 were not significant.
Note 6 - Fair Values of Financial Instruments
The carrying amounts and fair values of the Company's financial
instruments at December 31 are summarized as follows (in millions;
(liability)/asset):
1996 1995
----------------- -----------------
Carrying Fair Carrying Fair
Amount Values Amount Values
-------- ------ -------- ------
Cash and cash investments.. $ 47 $ 47 $ 8 $ 8
Long-term debt............. (5,305) (5,529) (4,201) (4,685)
Futures contracts.......... - - - (1)
Interest rate swap
agreements............... - (15) - (12)
The following methods and assumptions are used in estimating fair values
for financial instruments:
Cash and cash investments - The carrying amount reported in the balance
sheets for cash and cash investments approximates fair value.
Long-term debt - The term of commercial paper instruments and the variable
interest rate on variable rate debt result in the recorded liabilities of
these instruments approximating their fair values. The fair values of the
Company's long-term debt, representing the estimated amounts at which the
debt could be exchanged on the open market, are determined using 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. Included in the
1996 carrying amount and fair values for long-term debt is $2 million for
foreign currency swap agreements. No such agreements existed at December 31,
1995.
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 and foreign currency swap agreements are estimated
based on valuations from investment banks.
Note 7 - Preferred Stock
The Company issued 936,965 of 1,110,000 shares of voting convertible
preferred stock authorized, Ouachita Series A ("Series A"), and issued
95,955 of 350,000 shares of voting convertible preferred stock authorized,
Ouachita Series B ("Series B"), in the acquisition of Ouachita in
February 1996. Series A and Series B each have stated values of $150 per
share and convert to common stock no later than two years from date of
issuance under specific conversion ratios applicable independently to each
series. Series A pays quarterly dividends equaling 4% annually. Series B
does not pay dividends. During 1996, 55,951 shares of Series A preferred
stock were converted into 243,260 shares of common stock. During 1996,
95,938 shares of Series B preferred stock were converted into 555,027
shares of common stock. The increase in additional paid-in capital
resulting from the difference between the recorded value of the converted
preferred stock and the cost of treasury stock issued was approximately
$10 million.
The Company issued 1,000,000 shares of nonvoting convertible preferred
stock with a stated value of $35 per share to facilitate the 1993
acquisition of the Coca-Cola Bottling Company of Northeast Arkansas, Inc.
During 1996 all outstanding shares of this preferred stock issue were
converted into 1,000,000 shares of common stock. The increase in
additional paid-in capital resulting from the difference between the recorded
value of the converted preferred stock and the cost of treasury stock
issued was approximately $15 million.
Note 8 - Share Repurchases
The Company completed the August 1994 10 million share repurchase program
in 1996. On April 11, 1996, the Board of Directors approved an additional
share repurchase program for up to 10 million shares of the Company's
common stock. There have been no repurchases under this program.
Repurchased shares are added to treasury stock and are available for
general corporate purposes including the funding of various employee
benefit and compensation plans.
- 33 -
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 9 - Stock-Based Compensation Plans
The Company applies APB Opinion No. 25 and related Interpretations in
accounting for its stock-based compensation plans. FASB Statement
No. 123 "Accounting for Stock-Based Compensation" ("SFAS 123"), if fully
adopted, changes the methods for recognition of cost on plans similar to
those of the Company. Adoption of the cost recognition requirements of
SFAS 123 is optional; however, proforma disclosures as if the Company
adopted the cost recognition requirements in 1995 follow.
The Company's stock option plans provide for the granting of nonqualified
stock options to certain key employees. Generally, options outstanding
under the Company's stock option plans: (i) are granted at prices which
equal or exceed the market value of the stock on the date of grant, (ii) vest
ratably over a three-year service vesting period, and (iii) expire ten
years subsequent to award. For certain senior executives receiving awards
during 1994 and 1996, options awarded were stock performance-based options
that become exercisable solely upon attainment of certain increases in the
market price of the Company's stock within five years from date of grant.
Compensation cost for stock performance-based option plans was $18 million,
$5 million, and $1 million for 1996, 1995, and 1994, respectively. At
December 31, 1996, all stock performance-based options awarded during 1994
are exercisable, and two-fifths of the 1996 awards are exercisable (a
portion of the 1996 exercisable awards are pending Board of Directors'
approval).
A summary of the status of the Company's stock options as of December 31,
1996, 1995, and 1994 and changes during the year ended on those dates is
presented below (shares in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
---------------------- --------------------- --------------------
Wtd. Avg. Wtd. Avg. Wtd. Avg.
Shares Exer. Price Shares Exer. Price Shares Exer. Price
------ ------------ ------ ----------- ------ -----------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of
year........... 6,145 $15.93 6,333 $15.71 6,042 $14.89
Granted......... 1,920 27.06 539 17.88 1,607 18.50
Exercised....... (576) 15.62 (599) 15.28 (917) 15.32
Forfeited....... (121) 19.81 (128) 16.35 (399) 15.40
------ ----- -----
Outstanding at
end of year.... 7,368 $18.79 6,145 $15.93 6,333 $15.71
====== ===== =====
Options
exercisable at
end of year.... 5,406 3,858 2,923
====== ===== =====
Options
available for
future grant... 973 2,354 680
====== ===== =====
Weighted average
fair value of
options granted
during the
year........... $10.12 $7.58
====== =====
</TABLE>
The fair value of each option granted during 1996 is estimated on the date
of grant using the Black-Scholes option-pricing model with the following
assumptions: (i) dividend yield of 0.3%, (ii) expected volatility of 25%,
(iii) risk-free interest rate of 6.19%, and (iv) expected life of 6 years.
The following table summarizes information about stock options outstanding
at December 31, 1996 (shares in thousands):
<TABLE>
<CAPTION>
Options Outstanding Options Excercisable
------------------------------------- -----------------------
Range of Number Remaining Wtd. Avg. Number Wtd. Avg.
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices at 12/31/96 Life Price at 12/31/96 Price
- ---------- ----------- ----------- --------- ----------- ---------
<C> <C> <C> <C> <C> <C>
$13 to $18 5,114 5.50 years $15.58 4,645 $15.36
18 to 28 2,254 8.65 years 26.07 761 25.06
----- -----
13 to 28 7,368 6.46 years 18.79 5,406 16.72
===== =====
</TABLE>
Of the 1,962,000 options unexercisable at December 31, 1996, 770,000 are
stock performance-based options.
- 34 -
<PAGE>
The Company's restricted stock award plans provide for awards to officers
and certain key employees of the Company. For awards granted prior to 1994,
restricted stock vests generally (i) when a participant retires, becomes
disabled, or dies, or (ii) based on the attainment of certain market price
levels of the Company's stock. For awards granted during 1994 and 1995,
restricted stock vests generally only upon attainment of certain increases
in the market price of the Company's common stock within five years from
the date of grant. For awards granted during 1996, restricted stock vests
generally only (i) upon attainment of certain increases in the market price
of the Company's stock within five years from the date of grant and (ii)
after continued employment for a period of up to five years once the stock
performance criterion is met.
All restricted stock awards entitle the participant to full dividend and
voting rights. Unvested shares are restricted as to disposition and
subject to forfeiture under certain circumstances. Upon issuance of
restricted shares, unearned compensation is charged to share-owners' equity
for the cost of restricted stock and recognized as amortization expense
ratably over the vesting periods, as applicable. The amount of unearned
compensation recognized as expense was $22 million, $31 million, and $5
million for 1996, 1995, and 1994, respectively. At December 31, 1996,
all restricted shares issued prior to 1996 have vested, except for 10,000
shares. For awards granted prior to 1994, upon vesting of the restricted
stock, the Company pays a cash amount to cover a portion of the employee's
taxes. Expense recognized for this cost was $7 million, $9 million, and $1
million for 1996, 1995, and 1994, respectively.
A summary of restricted stock award activity follows (shares in thousands):
1996 1995 1994
------ ------ ------
Awards available for grant
- beginning of year......... 1,385 40 186
New awards authorized......... - 2,040 725
Available awards terminated... - (40) (186)
Restricted shares awarded..... (1,085) (655) (685)
------ ------ ------
Awards available for grant -
end of year................. 300 1,385 40
====== ====== ======
Restricted shares forfeited... 43 43 74
====== ====== ======
Weighted average market value
of stock on grant date...... $27.06 $17.88 $17.69
====== ====== ======
If compensation cost for the Company's 1996 and 1995 grants for stock-based
compensation plans had been determined on a basis consistent with SFAS 123,
the Company's net income, net income applicable to common share owners, and
net income per share applicable to common share owners for 1996 and 1995
would approximate the proforma amounts below (in millions except per share
data):
1996 1995
----------------------- ----------------------
As Reported Proforma As Reported Proforma
----------- -------- ----------- --------
Net income........ $ 114 $ 121 $ 82 $ 83
===== ===== ===== =====
Net income
applicable to
common share
owners.......... $ 106 $ 113 $ 80 $ 81
===== ===== ===== =====
Net income per
share applicable
to common share
owners........... $0.85 $0.91 $0.62 $0.63
===== ===== ===== =====
The effects of applying SFAS 123 in this proforma disclosure may not be
indicative of future results. SFAS 123 does not apply to awards prior to
1995 and additional awards in future years are anticipated.
- 35 -
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10 - Pension and Certain Benefit Plans
The Company sponsors a number of defined benefit plans covering both
domestic and international employees. Additionally, the Company
participates in various domestic and international multiemployer pension
plans. Total pension expense for multiemployer plans was $11 million in
1996, $8 million in 1995, and $7 million in 1994. Benefits under Company-
sponsored plans are based on years of service and employee compensation.
The Company's funding policy is to make annual contributions to the extent
such contributions are tax deductible but not less than the minimum
contribution required by applicable regulations.
The components of net pension expense for Company-sponsored plans are as
follows (in millions):
1996 1995 1994
------ ------ ------
Domestic Plans:
Service cost............. $ 23 $ 18 $ 21
Interest cost on projected
benefit obligation..... 36 32 30
Actual return on assets.. (68) (75) (10)
Net amortization and
deferral............... 31 41 (26)
---- ---- ----
Net pension expense........ $ 22 $ 16 $ 15
==== ==== ====
International Plans:
Service cost............. $ 2 $ 2 $ 1
Interest cost on projected
benefit obligation..... 2 2 2
Actual return on assets.. (2) (2) (1)
Net amortization and
deferral............... 1 - -
---- ---- ----
Net pension expense...... $ 3 $ 2 $ 2
==== ==== ====
The following table reconciles the funded status of Company-sponsored plans
to amounts recognized in the consolidated balance sheets at December 31,
1996 and 1995 segregated by (i) domestic and international plans whose
assets exceed the accumulated benefit obligation ("ABO") and (ii) domestic
and international plans whose ABO exceeds assets (in millions):
Domestic Plans International Plans
-------------------------------- -------------------------
1996 1995 1996 1995
---------------- --------------- ---------------- ------
Assets ABO Assets ABO Assets ABO Assets
Exceed Exceeds Exceed Exceeds Exceed Exceeds Exceed
ABO Assets ABO Assets ABO Assets ABO
------ ------- ------ ------- ------ ------- ------
Actuarial
present value
of benefit
obligations:
Vested benefit
obligation..... $(372) $ (51) $(345) $ (33) $ (19) $ - $ (14)
===== ===== ===== ===== ===== ===== =====
Accumulated
benefit
obligation..... $(396) $ (62) $(368) $ (62) $ (25) $ (9) $ (21)
===== ===== ===== ===== ===== ===== =====
Projected
benefit
obligation..... $(465) $ (68) $(422) $ (67) $ (41) $ (14) $ (30)
Plan assets
(primarily
listed stocks,
bonds, and
government
securities) at
fair value..... 476 40 419 37 31 - 23
----- ----- ----- ---- ---- ----- ----
Plan assets in
excess of (less
than) projected
benefit
obligation...... 11 (28) (3) (30) (10) (14) (7)
Unrecognized net
(gain) loss..... (41) 12 (9) 15 (9) - (6)
Unrecognized prior
service cost
(asset).......... (4) - (3) (6) - - -
Unrecognized net
transition
(asset) liability
and other........ (4) 7 (9) 10 - - -
---- ---- ---- ---- ---- ---- ----
Pension liability
included in the
consolidated
balance sheets... $(38) $(9) $ (24) $ (11) $ (19) $ (14) $(13)
==== === ===== ===== ===== ===== ====
- 36 -
<PAGE>
Actuarial assumptions used in determining the projected benefit obligation
are established as of September 30th of each fiscal year. Significant
assumptions are listed as follows:
1996 1995 1994
------ ------ ------
Domestic Plans:
Discount rate............... 7.5% 7.5% 8.25%
Expected return on plan
assets..................... 8.5% 8.5% 8.5%
Rate of increase in future
compensation............... 5.0% 5.0% 5.0%
International Plans:
Discount rate............... 7.1% 7.5% 8.25%
Expected return on plan
assets..................... 7.4% 7.5% 8.25%
Rate of increase in future
compensation............... 4.1% 3.0% 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 7% of a
participant's compensation. Expenses related to this plan were $19
million in 1996, $15 million in 1995, and $11 million in 1994.
Note 11 - Postretirement Benefits Plan
The Company sponsors an unfunded defined benefit postretirement plan
providing healthcare and life insurance benefits to substantially all
nonunion and certain union U.S. employees who retired or terminated after
qualifying for such benefits. International retirees are covered primarily
by government-sponsored programs and the specific cost to the Company for
these and other postretirement healthcare programs is not significant.
Postretirement benefits expense is comprised of the following components
(in millions):
1996 1995 1994
------ ------ ------
Service cost attributed
to service.................. $ 5 $ 4 $ 4
Interest cost on accumulated
postretirement benefit
obligation.................. 16 14 13
Net amortization and deferral. (9) (8) (9)
---- ---- ----
Postretirement benefits
expense..................... $ 12 $ 10 $ 8
==== ==== ====
Amounts recognized in the consolidated balance sheets at December 31
represent unfunded previously expensed obligations as follows (in millions):
1996 1995
------ ------
Accumulated postretirement benefit
obligation:
Retirees.......................... $128 $125
Fully eligible active plan
participants.................... 10 14
Other active plan participants.... 59 67
---- ----
197 206
Unamortized excess prior service
cost asset........................ 113 123
Unrecognized net gain (loss)........ 10 (16)
---- ----
Accrued postretirement benefit
obligation........................ $320 $313
==== ====
Actuarial assumptions used in determining the accumulated postretirement
benefit obligation are established as of September 30th of each fiscal year.
Significant assumptions are listed as follows:
1996 1995 1994
------ ------ ------
Discount rate.................. 7.5% 7.5% 8.25%
Rate of increase in cost of
benefits:
Pre-Medicare.................. 3.5% 10.5% 11.7%
Post-Medicare................. 3.5% 9.0% 9.3%
The postretirement benefit plan is a defined dollar benefit plan limiting
the effect of medical inflation to a maximum of 3.5% per year after 1995.
Because the plan has established dollar limits for determining Company
contributions, the effect of a 1% increase in the assumed healthcare cost
trend rate is not significant.
- 37 -
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 are as follows (in
millions):
1996 1995 1994
------ ------ ------
Current:
Domestic
Federal................... $ 61 $ 29 $ 4
State and local........... 12 12 6
International............... - - 2
---- ---- ----
Total current provision....... 73 41 12
Deferred:
Domestic
Federal................... (6) 20 38
State and local........... 4 3 9
International............... - (1) (1)
---- ---- ----
Total deferred provision...... (2) 22 46
Additional paid-in capital from
benefit of stock compensation
plans........................ 9 - -
---- ---- ----
Total provision for income taxes $ 80 $ 63 $ 58
==== ==== ====
A reconciliation of the expected income tax expense at the statutory U.S.
Federal rate to the Company's actual income tax provision follows (in
millions):
1996 1995 1994
------ ------ ------
U.S. federal statutory
expense..................... $ 68 $ 51 $ 45
U.S. state expense - net of
federal benefit............. 5 5 3
Taxation of international
operations.................. 1 - -
State benefits valuation
allowance provision......... 6 5 7
Nondeductible items........... 3 3 2
Other, net.................... (3) (1) 1
---- ---- ----
$ 80 $ 63 $ 58
==== ==== ====
Deferred income taxes are recognized for tax consequences of temporary
differences between the financial and tax bases of existing assets and
liabilities by applying enacted statutory tax rates to such differences.
Significant components of the Company's deferred tax liabilities and
assets as of December 31 are as follows (in millions):
1996 1995
------ ------
Deferred tax liabilities:
Franchise assets.................... $2,624 $2,200
Property, plant, and equipment...... 292 225
------ ------
Total deferred tax liabilities........ 2,916 2,425
Deferred tax assets:
Net operating loss carryforwards.... (306) (319)
Employee and retiree benefit
accruals.......................... (255) (217)
Alternative minimum tax credits..... (76) (29)
Other, net.......................... (73) (78)
------ ------
Total deferred tax assets............. (710) (643)
Valuation allowance for deferred tax
assets............................. 135 120
------ ------
Net deferred tax liabilities.......... 2,341 1,902
Current deferred tax assets 140 130
------ ------
Total deferred tax liabilities $2,481 $2,032
====== ======
Deferred tax assets are recognized for the tax benefit of deducting
timing differences and federal, foreign, and state net operating loss
and tax credit carryforwards. Valuation allowances are recognized on
these assets if it is believed that some or all of the deferred tax
assets will not be realized. Management believes the majority of
deferred tax assets will be realized because of the depletion of certain
significant tax deductions and anticipated future taxable income resulting
from operations. Valuation allowances of $135 million and $120 million
as of December 31, 1996 and 1995, respectively, were established for the
remaining deferred tax assets. Included in the valuation allowance as
of December 31, 1996 and 1995 were $79 million and $68 million,
respectively, for net operating loss carryforwards of acquired companies.
Federal tax operating loss carryforwards aggregating $572 million have
arisen principally from tax deductions relating to various bottling
companies acquired in 1986 that result from elections filed under Section
338 of the Internal Revenue Code. These carryforwards are available in
varying amounts to offset future federal taxable income through their
expiration in years 2000 through 2010.
- 38 -
<PAGE>
Deferred tax assets recognized for the tax benefit of the aforementioned
losses are classified in the balance sheet based on the expected reversal
date. Accordingly, the tax benefit of net operating losses and other
temporary differences expected to reverse within one year of $140 million
at December 31, 1996 is classified as a current asset.
The Company's earnings from foreign subsidiaries are considered to be
indefinitely reinvested and, accordingly, no provision for U.S. federal
and state income taxes has been made. Upon distribution of foreign
subsidiary earnings in the form of dividends or otherwise, the Company would be
subject to both U.S. income taxes (subject to an adjustment for foreign
tax credits) and withholding taxes payable to the various foreign countries.
At December 31, 1996 and 1995, the Company's foreign subsidiaries had no
distributable earnings.
Note 13 - Related Party Transactions
The Coca-Cola Company owns approximately 45% of the Company's outstanding
common shares. The Company generates approximately 91% of its product
sales volume from the sale of products of The Coca-Cola Company. The
Company and The Coca-Cola Company have entered into various transactions
and agreements in the ordinary course of business. Certain of these
transactions and agreements are disclosed in other sections of the
accompanying financial statements and related notes. The following
outlines other significant transactions between the Company and The
Coca-Cola Company and its affiliates:
Marketing Support Arrangements - The Coca-Cola Company engages in a
variety of marketing programs, local media advertising, and other
similar arrangements to promote the sale of products of The Coca-Cola
Company in territories operated by the Company. In 1996, 1995, and 1994
total direct marketing support paid or payable to the Company, or on
behalf of the Company by The Coca-Cola Company, approximated $448 million,
$343 million, and $319 million, respectively. Pursuant to cooperative
advertising and trade arrangements with The Coca-Cola Company, the Company
paid The Coca-Cola Company $123 million, $82 million, and $71 million in
1996, 1995, and 1994, respectively, for local media and marketing program
expense. In addition, to partially fund costs associated with an increased
rate of cold drink equipment placement and cold drink market and
infrastructure development, funding paid or payable to the Company by
The Coca-Cola Company approximated $120 million, $55 million, and $34 million
in 1996, 1995, and 1994, respectively.
Fountain Syrup and Package Product Sales - The Company sells fountain syrup
back to The Coca-Cola Company in certain territories and delivers this
syrup to certain major fountain accounts of The Coca-Cola Company. The
Company will, on behalf of The Coca-Cola Company, invoice and collect
amounts receivable for these fountain sales. In addition, the Company also
sells bottle and can beverage products to The Coca-Cola Company at prices
which are generally similar to the prices charged by the Company to its
major customers. During 1996, 1995, and 1994 The Coca-Cola Company paid
the Company approximately $295 million, $253 million, and $235 million,
respectively, for fountain syrup, bottle and can products, and delivery
and billing services.
Note 14 - Environmental Matters
The Company incurs costs to satisfy various federal and state regulations
involving materials discharge, waste water treatment, and underground
storage tanks. These costs, excluding routine maintenance and monitoring
costs, totaled approximately $5 million, $6 million, and $12 million in
1996, 1995, and 1994, respectively. The Company believes any amount it
may be required to pay in excess of amounts previously funded or accrued
would not have a materially adverse effect on its financial position, 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 and state Superfund
sites. The Company believes any ultimate Superfund liability under these
PRP designations will not have a materially adverse effect on its financial
position, cash flows, or results of operations. At December 31, 1996,
there were five federal sites and one state site for which the Company's
involvement or liability as a PRP was unresolved. In addition, there were
17 other federal and seven state sites for which it has been concluded that
the Company either had no responsibility, the 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 Company's use
in relation to other users. As to any site where the Company may be liable,
the Company has determined there are other PRPs who are financially solvent
as well, and that any hazardous waste deposited by the Company is minimal
when compared to amounts deposited by financially solvent PRPs.
- 39 -
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 15 - Geographic Operating Information
The Company operates in one industry: the marketing, distribution, and
production of bottle and can beverage products. On December 31, 1996, the
Company operated in 41 states (referred to as the "Domestic" territories),
and Belgium, France, and the Netherlands (collectively referred to as the
"European" territories).
Prior to the third-quarter 1996 Belgian and French acquisition, the Company's
net operating revenues in geographic areas outside the United States were
less than 5%. During 1996 there were no material amounts of sales or
transfers among geographic areas and no material amounts of United States
export sales. Selected information by geographic territory as of and for the
year ended December 31, 1996 follows (in millions):
Domestic European(A) Consolidated(B)
-------- ----------- ---------------
Net operating revenues $ 7,091 $ 830 $ 7,921
Operating income 618 3 545
Identifiable assets 9,099 1,889 11,234
Capital expenditures 544 51 622
Depreciation and
amortization 523 62 627
(A) European information presented includes short periods for entities
acquired in 1996 and, therefore, is not indicative of full-year results.
(B) Consolidated amounts include amounts not specifically allocated to
geographic operating locations. These unallocated amounts include:
(i) general company costs of $76 million, (ii) assets maintained for
general company purposes, principally cash and cash investments, fixed
assets, deferred taxes and deferred costs, aggregating $246 million,
(iii) capital expenditures for general company use totaling $27 million,
and (iv) depreciation and amortization on general company assets of $42
million.
Note 16 - Commitments and Contingencies
The Company purchases substantially all of its PET (plastic) bottles from
manufacturing cooperatives and other entities involved in the manufacture
of plastic bottles. The Company has guaranteed payment of up to $236
million of indebtedness owed by these manufacturing cooperatives to third
parties. At December 31, 1996, these cooperatives had approximately $147
million of indebtedness guaranteed by the Company. The Company has also
provided letters of credit aggregating $101 million primarily in connection
with self-insurance programs.
As of December 31, 1996, the Company has entered into long-term purchase
agreements with various suppliers. Subject to the supplier's quality and
performance, the purchase commitments covered by these agreements aggregate
approximately $1,215 million in 1997, $800 million in 1998, $736 million
in 1999, $745 million in 2000, and $62 million in 2001.
The Company leases office and warehouse space, computer hardware, and
machinery and equipment under lease agreements expiring at various dates
through 2019. At December 31, 1996, future minimum lease payments under
noncancellable operating leases aggregate approximately $107 million. Rent
expense was approximately $35 million, $31 million, and $28 million during
1996, 1995, and 1994, respectively.
In the first quarter of 1996 the Company recorded a settlement totaling
$10 million ($0.05 per common share after taxes) in settlement of claims
against certain suppliers. The amount of the settlement award is included
as a reduction of cost of sales.
- 40 -
<PAGE>
Note 17 - Supplemental Disclosures of Cash Flow Information
Cash payments during the year were as follows (in millions):
1996 1995 1994
------ ------ ------
Interest (net of capitalized
amount)........................ $ 318 $ 320 $ 328
====== ====== ======
Income taxes..................... $ 39 $ 31 $ 3
====== ====== ======
Changes in current assets and liabilities pertaining to operating activities
were as follows (in millions):
1996 1995 1994
------ ------ ------
Decrease/(increase) in trade
accounts and other
receivables.................... $ 66 $ (35) $ (12)
Decrease/(increase) in
inventories.................... 24 17 (35)
Decrease/(increase) in prepaid
expenses and other assets...... 10 (20) (9)
Increase in accounts payable and
accrued expenses............... 118 26 114
------ ------ ------
Net change in current assets and
liabilities.................... $ 218 $ (12) $ 58
====== ====== ======
In conjunction with the acquisitions of bottling operations, the fair
values of assets acquired, cash paid, equity and debt issued, and
liabilities assumed were as follows (in millions):
1996 1995 1994
------ ------ ------
Fair values of assets acquired,
net of cash..................... $2,244 $ 170 $ 24
Liabilities assumed............... (1,370) (12) (4)
Equity issued..................... (156) - -
Debt issued....................... (42) - -
------ ------ ------
Cash paid, net of cash acquired... $ 676 $ 158 $ 20
====== ====== ======
- 41 -
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 18 - Subsequent Event
On February 18, 1997, the Company's Board of Directors approved a proposal
to amend the Company's certificate of incorporation to increase the
authorized common shares from 500 million to 1 billion and to effect a
3-for-1 stock split. The split is contingent upon share-owner approval at
the April 21, 1997 annual meeting of share owners. Because certain holders
of more than a majority of the Company's common stock have advised the
Company of their intention to vote in favor of the proposed stock split,
approval of the proposal is reasonably assured. If ultimate approval is
received, the stock split will be payable to share owners of record on
May 1, 1997. Because ultimate approval is pending until April 21, 1997,
financial information contained elsewhere in this annual report has not been
adjusted to reflect the impact of the proposed stock split.
Earnings per common share amounts, after giving retroactive effect to the
3-for-1 stock split, are presented below for all of the per share amounts
disclosed in the financial statements and the notes to the financial
statements (full-year information):
Years Ended December 31,
--------------------------------
1996 1995 1994
------ ------ ------
Average common shares
outstanding (in millions)........ 375 387 390
Net income per common share
(unaudited):
Reported........................ $0.28 $0.21 $0.17
===== ===== =====
Proforma (giving effect for the
1996 acquisitions and the 1997
acquisition of CCSB).......... $0.21 $0.10
===== =====
Proforma (giving effect for the
1996 acquisitions)............ $0.27 $0.17
===== =====
Proforma (giving effect for SFAS
123).......................... $0.30 $0.21
===== =====
Quarters Ended 1996
-----------------------------------
First Second Third Fourth
----- ------ ----- ------
Net income per common share
(unaudited):
Reported....................... $0.01 $0.15 $0.10 $0.02
===== ===== ===== =====
Proforma (giving effect for
the 1996 acquisitions and
the 1997 acquisition of
CCSB)......................... $(0.09) $0.23 $0.06 $0.01
====== ===== ===== =====
Quarters Ended 1995
-----------------------------------
First Second Third Fourth
----- ------ ----- ------
Net income per common share
(unaudited):
Reported.................... $0.01 $0.12 $0.09 $(0.01)
===== ===== ===== ======
Proforma (giving effect for
the 1996 acquisitions and
the 1997 acquisition of
CCSB)..................... $(0.06) $0.17 $0.11 $(0.12)
====== ===== ===== ======
- 42 -
<PAGE>
Note 19 - Quarterly Financial Information
Unaudited quarterly financial information follows (in millions except per
share data):
<TABLE>
<CAPTION>
Fiscal
1996 First(A) Second Third Fourth(A) Year
---- -------- ------ ------- --------- ------
<S> <C> <C> <C> <C> <C>
Net operating revenues....... $ 1,600 $2,016 $ 2,187 $ 2,118 $7,921
======== ====== ======= ========= ======
Gross profit................. $ 630(B) $ 763 $ 824 $ 808 $3,025
======== ====== ======= ========= ======
Net income applicable to
common share owners........ $ 5(B) $ 57 $ 37(C) $ 7 $ 106
======== ====== ======= ========= ======
Net income per share
applicable to common share
owners..................... $ 0.04(B) $ 0.46 $ 0.29(C) $ 0.06 $ 0.85
======== ====== ======= ========= ======
Proforma net income (loss)
per common share (G)....... $ (0.26) $ 0.68 $ 0.19 $ 0.02 $ 0.63
======== ====== ======= ========= ======
Fiscal
1995 First(A) Second Third Fourth(A) Year
---- -------- ------ ------- --------- ------
Net operating revenues....... $ 1,462 $1,827 $1,841 $ 1,643 $6,773
======== ====== ====== ========= ======
Gross profit................. $ 561 $ 674 $ 658 $ 613 $2,506
======== ====== ====== ========= ======
Net income (loss) applicable
to common share owners..... $ 2(D) $ 46 $ 35 $ (3)(E) $ 80
======== ====== ====== ========= ======
Net income (loss) per share
applicable to common share
owners..................... $ 0.02(D) $ 0.35 $ 0.27 $ (0.03)(E) $ 0.62(F)
======== ====== ====== ========= ======
Proforma net income (loss)
per common share (G)....... $ (0.19) $ 0.50 $ 0.33 $ (0.35) $ 0.29
======== ====== ====== ========= ======
- -------------------------------
For quarterly reporting, the Company reports on a Friday closest to the end
of the quarterly calendar period for reporting convenience.
(A) Each quarter presented includes 91 days, except for the first quarter
of 1996 (89 days), the fourth quarter of 1996 (95 days), the first
quarter of 1995 (90 days), and the fourth quarter of 1995 (93 days).
(B) In the first quarter of 1996 the Company recorded a $10 million ($0.05
per common share after taxes) favorable supplier settlement.
(C) During the third quarter of 1996 the Company shortened the estimated
vesting period on management stock and performance option awards
because of the Company's stock performance in that quarter resulting
in additional costs of $19 million ($0.10 per common share after taxes).
(D) In January 1995 the Company sold its 50% ownership interest in Mid South
for $17 million, resulting in a $9 million pretax gain ($0.04 per common
share after taxes).
(E) During the fourth quarter of 1995 the Company shortened the estimated
vesting period on management stock and performance option awards
because of the Company's stock performance in that quarter resulting
in additional costs of $25 million ($0.12 per common share after taxes).
(F) Due to the method used in calculating per share data as prescribed by
Accounting Prinicples Board Opinion No. 15 and the timing of share
repurchases by the Company, the quarterly per share data does not
total full-year per share data.
(G) Proforma net income (loss) per common share presents information as if
all international and domestic acquisitions described in Note 2 were
effective January 1, 1995.
</TABLE>
- 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, 1996 and 1995, and the related
consolidated statements of income, share-owners' equity, and cash flows for
each of the three years in the period ended December 31, 1996. 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
signficiant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe 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, 1996 and 1995, and the
consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Atlanta, Georgia
January 21, 1997, except for the
1997 acquisition described in
Note 2, as to which the date is
February 10, 1997, and except for
the subsequent event described in
Note 18, as to which the date is
February 18, 1997.
- 45 -
<TABLE>
COCA-COLA ENTERPRISES INC.
SELECTED FINANCIAL DATA
(In millions except per share data)
<CAPTION>
Fiscal Year
-----------------------------------------------------------------------------------------------------
1996 1991
------------------- --------------------
Proforma(A) Reported 1995(B) 1994 1993(C) 1992(D) Proforma(E) Reported 1990 1989 1988 1987
---------- -------- ------ ------ ------ ------- ---------- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS SUMMARY
Net operating revenues.. $10,307 $ 7,921 $6,773 $6,011 $5,465 $5,127 $5,027 $3,915 $3,933 $3,822 $3,821 $3,327
Cost of sales........... 6,444 4,896 4,267 3,703 3,372 3,219 3,170 2,420 2,400 2,350 2,303 1,953
------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Gross profit............ 3,863 3,025 2,506 2,308 2,093 1,908 1,857 1,495 1,533 1,472 1,518 1,374
Selling, general, and
administrative
expenses.............. 3,155 2,480 2,038 1,868 1,708 1,602 1,687 1,375 1,208 1,162 1,164 1,037
------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Operating income........ 708 545 468 440 385 306 170 120 325 310 354 337
Interest expense, net... 564 351 326 310 328 312 312 210 200 193 202 160
Other nonoperating
income (deductions),
net................... 5 - (6) (3) (2) (6) (3) (2) 3 10 12 (4)
Gain from sale of bottling
operations............ - - 9 - - - - - 56 11 104 -
------- ------ ------ ------ ------ ----- ------ ------ ------ ------ ------ ------
Income (loss) before
income taxes and
cumulative effect of
changes in accounting
principles............ 149 194 145 127 55 (12) (145) (92) 184 138 268 173
Income tax expense
(benefit)............. 61 80 63 58 70 3 (17) (9) 91 66 115 85
------- ------ ------ ------ ------ ----- ------ ------ ------ ------ ------ ------
Income (loss) before
cumulative effect of
changes in accounting
principles............ 88 114 82 69 (15) (15) (128) (83) 93 72 153 88
Cumulative effect of
changes in accounting
principles............ - - - - - (171) - - - - - -
------- ------ ------ ------ ------ ----- ------ ------ ------ ------ ------ ------
Net income (loss)....... 88 114 82 69 (15) (186) (128) (83) 93 72 153 88
Preferred stock
dividends............. 9 8 2 2 - - 9 9 16 18 10 -
------- ------ ------ ------ ------ ----- ------ ------ ------ ------ ------ ------
Net income (loss)
applicable to common
share owners.......... $ 79 $ 106 $ 80 $ 67 $ (15) $(186) $ (137) $ (92) $ 77 $ 54 $ 143 $ 88
======= ====== ====== ====== ====== ===== ====== ====== ====== ====== ====== ======
- -------------------------------------------------------------------------------------------------------------------------------
OTHER OPERATING DATA
Depreciation expense.... $ 483 $ 392 $ 318 $ 282 $ 254 $ 227 $ 205 $ 160 $ 150 $ 148 $ 143 $ 123
Amortization expense.... 319 235 211 179 165 162 125 91 86 81 82 72
- -------------------------------------------------------------------------------------------------------------------------------
SHARE AND PER SHARE DATA
Average common shares
outstanding........... 125 125 129 130 129 129 129 116 119 130 139 140
Net income (loss) per
common share before
cumulative effect of
changes in accounting
principles............ $ 0.63 $ 0.85 $ 0.62 $ 0.52 $(0.11) $(0.11) $(1.06) $ (0.79) $ 0.65 $ 0.41 $ 1.03 $0.63
Net income (loss) per share
applicable to common
share owners.......... 0.63 0.85 0.62 0.52 (0.11) (1.45) (1.06) (0.79) 0.65 0.41 1.03 0.63
Dividends per common
share................. 0.10 0.10 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05
Closing stock price..... 48 1/2 48 1/2 26 7/8 18 15 1/4 12 1/4 15 3/8 15 3/8 15 1/2 16 15 14 1/4
- -------------------------------------------------------------------------------------------------------------------------------
YEAR-END FINANCIAL POSITION
Property, plant, and
equipment, net........ $ 3,156 $ 2,812 $2,158 $1,963 $1,890 $1,733 $1,706 $ 1,706 $1,373 $1,286 $1,180 $1,038
Franchises and other
noncurrent assets,
net................... 9,816 7,103 5,924 5,965 6,046 5,651 4,265 4,265 3,153 2,952 3,001 2,760
Total assets............ 14,674 11,234 9,064 8,738 8,682 8,085 6,677 6,677 5,021 4,732 4,669 4,250
Long-term debt.......... 7,315 5,305 4,201 4,187 4,391 4,131 4,091 4,091 2,537 2,305 2,211 2,157
Share-owners' equity.... 1,550 1,550 1,435 1,339 1,260 1,254 1,442 1,442 1,627 1,680 1,808 1,526
- ------------------------------------------------------------------------------------------------------------------------------------
Fiscal periods presented are calendar years, beginning after 1991, and
fiscal years ending on the Friday nearest December 31 prior to 1991. The
Company acquired subsidiaries in each year presented and divested
subsidiaries in certain periods. Such transactions, except for: (i) the
1997 acquisition of Coca-Cola & Schweppes Beverages Limited ("CCSB"),
(ii) the acquisition of Coca-Cola Beverages S.A., Coca-Cola Production S.A.,
and S.A. Beverage Sales Holding N.V. (collectively "the French and Belgian
bottlers"), (iii) the acquisition of Johnston Coca-Cola Bottling Group, Inc.
("Johnston"), and (iv) gains from the sale of certain bottling operations,
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) The 1996 proforma Operations Summary, Other Operating Data and Share
and Per Share Data give effect to the following acquisitions as though
each had been owned for a full year beginning January 1, 1996: Coca-Cola
& Schweppes Beverages Limited, the French and Belgian bottlers, Coca-Cola
Bottling Company West, Inc., Grand Forks Coca-Cola Bottling Co., and
Ouachita Coca-Cola Bottling Company, Inc. ("Ouachita").
(B) In January 1995 the Company sold its 50% ownership interest in The
Coca-Cola Bottling Company of the Mid South ("Mid South") to Ouachita.
The Company's interest in Mid South was reacquired through the Ouachita
acquisition in February 1996.
(C) A one-time charge of $40 million ($0.31 per common share) in income
tax expense 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.
(D) The adoption of SFAS 106 and SFAS 109 resulted in one-time charges to
income. Fiscal periods prior to 1992 were not restated for these
accounting changes.
(E) The 1991 proforma 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. A
restructuring charge in 1991 of $152 million is included in selling,
general, and administrative expenses.
- 46 - and - 47 -
<PAGE>
</TABLE>
<PAGE> 1
<TABLE>
<CAPTION>
EXHIBIT 21
COCA-COLA ENTERPRISES INC.
AND ITS SUBSIDIARIES(1)
Owner of Shares
(*unless
Jurisdiction otherwise
in which noted ownership Other names under
Name organized is 100%) which engaged in business
---- ------------ --------------- -------------------------
<S> <C> <C>
Coca-Cola Enterprises Inc. (Registrant) ("CCE"). . . . . Delaware N/A The Atlanta Coca-Cola Bottling Company
Atlanta Ice Makers
Brevard Coca-Cola Bottling Company
Brooksville Coca-Cola Bottling Company
CCE Bottling Group
Coca-Cola Bottling Co. of the Virgin Islands
(St. Croix)
Coca-Cola Bottling Co. of the Virgin Islands
(St. Thomas)
Coca-Cola Bottling Company of Cody
Coca-Cola Bottling Company of Colorado/
Northern Wyoming
Coca-Cola Bottling Company of Gillette
Coca-Cola Bottling Company of Goodland
Coca-Cola Bottling Company of Greeley
Coca-Cola Bottling Company of Miami
Coca-Cola Bottling Company of New England
Coca-Cola Bottling Company of Riverton
Coca-Cola Bottling Company of Sheridan
Coca-Cola Bottling Company of
West Point/LaGrange
Colorado Coca-Cola Bottling Company
Colorado Springs Coca-Cola Bottling Company
Daytona Coca-Cola Bottling Company
Denver Coca-Cola Bottling Company
Enterprises Media
Florida Coca-Cola Bottling Company
Fort Myers Coca-Cola Bottling Company
Ft. Pierce Coca-Cola Bottling Company
Gainesville Coca-Cola Bottling Company
Highlands Coca-Cola Bottling Company
Jacksonville Coca-Cola Bottling Company
Lamar Coca-Cola Bottling Company
Ocala Coca-Cola Bottling Company
Orlando Coca-Cola Bottling Company
Pueblo Coca-Cola Bottling Company
Punta Gorda Coca-Cola Bottling Company
Rome Coca-Cola Bottling Company
Sarasota Coca-Cola Bottling Company
St. Petersburg Coca-Cola Bottling Company
Tallahassee Coca-Cola Bottling Company
Tampa Coca-Cola Bottling Company
The Mid-Atlantic Coca-Cola Bottling Company
Valdosta Coca-Cola Bottling Company
</TABLE>
<PAGE> 2
<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>
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
Waco Coca-Cola Bottling Company
The Laredo Coca-Cola Bottling Company, Inc. . . . . Texas Austin McAllen Coca-Cola Bottling Company
Valley 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 Imperial Valley
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
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
Southern California
Coca-Cola Bottling Company of Spokane
Coca-Cola Bottling Company of Washington
Diamond Head Beverages
Enterprises Media
Medford Coca-Cola Bottling Company
Pacific Coca-Cola Bottling Company
Pacific Coca-Cola Bottling Company of
Marysville
Phoenix Coca-Cola Bottling Company
Prescott Coca-Cola Bottling Company
Yuma Coca-Cola Bottling Company
</TABLE>
<PAGE> 3
<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>
Bottling Holdings (International) Inc. ("BHI"). . . . . .Delaware CCE
Bottling Holdings (Great Britain) Ltd. ("BHGB"). . .United Kingdom BHI
Amalgamated Beverages Great Britain
Limited ("ABGB"). . . . . . . . . . . . . . .United Kingdom BHGB
Coca-Cola Enterprises (European Services)
Limited ("CCES"). . . . . . . . . . . . . . . United Kingdom BHGB
Coca-Cola & Schweppes Beverages
Limited ("CCSB") . . . . . . . . . . . . . .United Kingdom CCES
Frontier Refreshment Services Limited. . . .United Kingdom CCSB
Vendleader Limited. . . . . . . . . . . . . United Kingdom CCSB
Bottling Holdings (Netherlands) B.V. ("BHN"). . . . Netherlands BHI
Coca-Cola Beverages Nederland B.V. . . . . . . . Netherlands BHN
Coca-Cola Beverages SA ("CCBS"). . . . . . . . . . .France BHI
Coca-Cola Immobilier SA . . . . . . . . . . . . . France CCBS
Coca-Cola Production SA . . . . . . . . . . . . . . France BHI
S.A. Coca-Cola Beverages Belgium N.V. . . . . . . . Belgium BHI
S.A. Coca-Cola Bottlers Belgium N.V. . . . . . . . Belgium BHI
CCT Acquisition Corporation, Inc. ("CCT"). . . . . . . . Delaware CCE
Coca-Cola Bottling Company of Johnson City . . . . . Tennessee CCT (75.06%) Coca-Cola Enterprises-Atlanta Region
Roddy Coca-Cola Bottling Company, Inc. . . . . . . . Tennessee CCT (59.8%) Coca-Cola Enterprises-Atlanta Region
Dr Pepper Bottling Company of Knoxville
Dr Pepper Company of Knoxville
Knoxville Coca-Cola Bottling Company
</TABLE>
<PAGE> 4
<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>
The Coca-Cola Bottling Company of
Memphis, Tenn. ("Memphis"). . . . . . . . . . . . . . Delaware CCE CCE Bottling Group
CCE-South
Canners of Eastern Arkansas
Coca-Cola Bottling Company of Arkansas
The Coca-Cola Bottling Company of Brownsville
Coca-Cola Bottling Company of Clarksdale
Coca-Cola Bottling Company of Flippin
Coca-Cola Bottling Company of Greenville
Coca-Cola Bottling Company of Little Rock
Coca-Cola Bottling Company of Marianna
Coca-Cola Bottling Company of Mississippi
Coca-Cola Bottling Company of Morrilton
Coca-Cola Bottling Company of Sardis
Coca-Cola Bottling Company of Searcy
Enterprises Media
Jonesboro Coca-Cola Bottling Company
Coca-Cola Bottling Company of Shreveport. . . . . . Arkansas Memphis Enterprises Media
Coca-Cola Bottling Company of Texarkana . . . . . . Texas Memphis CCE Bottling Group
Enterprises Media
Memphis Beverage Production Company . . . . . . . . Tennessee Memphis Coca-Cola Bottling Group of Memphis
West Memphis Production Center
Coca-Cola Bottling Company West, Inc.. . . . . . . . . . North Dakota CCE Coca-Cola Bottling Company of Montana
Coca-Cola Enterprises (International) Inc. . . . . . . . Delaware CCE
Enterprises Consulting, Inc. ("ECI") . . . . . . . . . . Delaware CCE
</TABLE>
<PAGE> 5
<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>
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 Bloomington
Coca-Cola Bottling Company of Michigan
Coca-Cola Bottling Company of Minot
Coca-Cola Bottling Company of Mt. Pleasant
Coca-Cola Bottling Company of Muskegon
Coca-Cola Bottling Company of Ohio/Kentucky
Coca-Cola Bottling Company of Ottumwa
Coca-Cola Bottling Company of Port Huron
Coca-Cola Bottling Company of St. Louis
The Coca-Cola Bottling Company of Cedar Rapids
The Coca-Cola Bottling Company of Mid-America
Coca-Cola Enterprises-Atlanta Region
Danville Coca-Cola Bottling Company
Dayton Coca-Cola Bottling Company
Decatur Coca-Cola Bottling Company
DuQuoin Coca-Cola Bottling Company
Dr Pepper Bottling Company of Detroit
Enterprises Media
Erie Coca-Cola Bottling Company
Galesburg Coca-Cola Bottling Company
Johnston Coca-Cola Bottling Company
Lincoln 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
Bluegrass Coca-Cola Bottling Company . . . . . . . Kentucky JCCBG Coca-Cola Bottling Company of Louisville
Coca-Cola Bottling Company of Ohio/Kentucky
Central States Coca-Cola Bottling Company
Evansville Coca-Cola Bottling Company
Hopkinsville Coca-Cola Bottling Company
Jasper Coca-Cola Bottling Company
Louisville Coca-Cola Bottling Company
Mid-States Coca-Cola Bottling Company
</TABLE>
<PAGE> 6
<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>
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
Enterprises Media
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 CCE Bottling Group
CCE-South
Dr Pepper Bottling Company of New Orleans
Enterprises Media
The Coca-Cola Bottling Company of New Iberia
Hygeia Coca-Cola Bottling Company . . . . . . . . . Florida Louisiana CCE Bottling Group
Enterprises Media
Ouachita Coca-Cola Bottling Company, Inc. ("Ouachita"). Louisiana CCE
Alexandria Coca-Cola Bottling Company, Ltd. . . . Louisiana Ouachita
Coca-Cola Bottling Company, Inc. of Vicksburg. . . Mississippi Ouachita
Jackson Coca-Cola Bottling Company . . . . . . . . Mississippi Ouachita
Natchez Coca-Cola Bottling Company, Inc. . . . . . Mississippi Ouachita
Coca-Cola Bottling Company of
South Arkansas. . . . . . . . . . . . . . . . . Arkansas Ouachita
Vending Holding Company ("VHC") . . . . . . . . . . . . Georgia CCE
The Wave Insurance Company, Ltd. . . . . . . . . . . . . Bermuda CCE (99%)
</TABLE>
- -----------------
(1) This list omits certain subsidiaries which, considered in the
aggregate as a single subsidiary, would not constitute a significant
subsidiary.
<PAGE> 1
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 21, 1997
(except for the 1997 acquisition described in Note 2, as to which the date is
February 10, 1997 and except for the subsequent event described in Note 18, as
to which the date is February 18, 1997), 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, 1996.
* Registration Statement No. 33-18039 on Form S-8, as amended, dated
October 21, 1987 and related Prospectus
* Registration Statement No. 33-18495 on Form S-8, as amended, 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 18, 1991
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
* Registration Statement No. 33-58695 on Form S-8, as amended, dated
May 18, 1995 and related Prospectus
* Registration Statement No. 33-58697 on Form S-8, as amended, dated
May 18, 1995 and related Prospectus
* Registration Statement No. 33-58699 on Form S-8, as amended, dated
May 18, 1995 and related Prospectus
* Registration Statement No. 33-62757 on Form S-3, as amended, dated
November 14, 1995 and related Prospectus
* Registration Statement No. 33-65257 on Form S-8 dated December 21, 1995
and related Prospectus
* Registration Statement No. 33-65261 on Form S-8 dated December 21, 1995
and related Prospectus
* Registration Statement No. 33-65413 on Form S-8 dated December 27, 1995
and related Prospectus
* Registration Statement No. 333-18569 on Form S-3 dated December 23, 1996
and related Prospectus
/s/ ERNST & YOUNG LLP
Atlanta, Georgia
March 5, 1997
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, SUMMERFIELD K. JOHNSTON, JR., Vice
Chairman, Chief Executive Officer and a Director of Coca-Cola Enterprises Inc.
(the "Company"), do hereby appoint John R. Alm, Senior Vice President and Chief
Financial Officer of the Company, Philip H. Sanford, Senior Vice President,
Finance and Administration of the Company, Lowry F. Kline, Senior Vice President
and 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, 1996, 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 18th day of February,
1997.
S/ SUMMERFIELD K. JOHNSTON, JR.
--------------------------------------
Vice Chairman, Chief Executive Officer
and Director
Coca-Cola Enterprises Inc.
<PAGE> 2
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 John R. Alm,
Senior Vice President and Chief Financial Officer of the Company, Philip H.
Sanford, Senior Vice President, Finance and Administration of the Company, Lowry
F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ L. PHILLIP HUMANN
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 3
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 John R. Alm,
Senior Vice President and Chief Financial Officer of the Company, Philip H.
Sanford, Senior Vice President, Finance and Administration of the Company, Lowry
F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ E. NEVILLE ISDELL
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 4
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 John R. Alm, Senior Vice President and Chief
Financial Officer of the Company, Philip H. Sanford, Senior Vice President,
Finance and Administration of the Company, Lowry F. Kline, Senior Vice President
and 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, 1996, 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 18th day of February,
1997.
S/ HENRY A. SCHIMBERG
----------------------------------
President, Chief Operating Officer
and Director
Coca-Cola Enterprises Inc.
<PAGE> 5
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 John R. Alm, Senior Vice President and Chief Financial Officer of the
Company, Philip H. Sanford, Senior Vice President, Finance and Administration of
the Company, Lowry F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ M. DOUGLAS IVESTER
----------------------------------
Chairman of the Board of Directors
Coca-Cola Enterprises Inc.
<PAGE> 6
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 John R. Alm,
Senior Vice President and Chief Financial Officer of the Company, Philip H.
Sanford, Senior Vice President, Finance and Administration of the Company, Lowry
F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ JOHN L. CLENDENIN
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 7
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 John R. Alm,
Senior Vice President and Chief Financial Officer of the Company, Philip H.
Sanford, Senior Vice President, Finance and Administration of the Company, Lowry
F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ JOHNNETTA B. COLE
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 8
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 John R. Alm,
Senior Vice President and Chief Financial Officer of the Company, Philip H.
Sanford, Senior Vice President, Finance and Administration of the Company, Lowry
F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ T. MARSHALL HAHN, JR.
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 9
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 John R. Alm,
Senior Vice President and Chief Financial Officer of the Company, Philip H.
Sanford, Senior Vice President, Finance and Administration of the Company, Lowry
F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ CLAUS M. HALLE
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 10
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 John R. Alm,
Senior Vice President and Chief Financial Officer of the Company, Philip H.
Sanford, Senior Vice President, Finance and Administration of the Company, Lowry
F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ JOHN E. JACOB
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 11
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 John R. Alm,
Senior Vice President and Chief Financial Officer of the Company, Philip H.
Sanford, Senior Vice President, Finance and Administration of the Company, Lowry
F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ ROBERT A. KELLER
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 12
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 John R. Alm,
Senior Vice President and Chief Financial Officer of the Company, Philip H.
Sanford, Senior Vice President, Finance and Administration of the Company, Lowry
F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ FRANCIS A. TARKENTON
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 13
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 John R. Alm,
Senior Vice President and Chief Financial Officer of the Company, Philip H.
Sanford, Senior Vice President, Finance and Administration of the Company, Lowry
F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ HOWARD G. BUFFETT
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE> 14
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 John R. Alm,
Senior Vice President and Chief Financial Officer of the Company, Philip H.
Sanford, Senior Vice President, Finance and Administration of the Company, Lowry
F. Kline, Senior Vice President and 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, 1996, 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 18th day of February,
1997.
S/ SCOTT L. PROBASCO
------------------------------------
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 ENTERPRISES FOR THE YEAR ENDED
DECEMBER 31, 1996, 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-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 47
<SECURITIES> 0
<RECEIVABLES> 713
<ALLOWANCES> 45
<INVENTORY> 317
<CURRENT-ASSETS> 1,319
<PP&E> 4,693
<DEPRECIATION> 1,881
<TOTAL-ASSETS> 11,234
<CURRENT-LIABILITIES> 1,690
<BONDS> 4,814
0
134
<COMMON> 147
<OTHER-SE> 1,269
<TOTAL-LIABILITY-AND-EQUITY> 11,234
<SALES> 7,921
<TOTAL-REVENUES> 7,921
<CGS> 4,896
<TOTAL-COSTS> 4,896
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 351
<INCOME-PRETAX> 194
<INCOME-TAX> 80
<INCOME-CONTINUING> 114
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 114
<EPS-PRIMARY> .85
<EPS-DILUTED> .85
</TABLE>
