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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended July 3, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 33-69274
THE COCA-COLA BOTTLING GROUP (SOUTHWEST), INC.
(Exact name of registrant as specified in its charter)
NEVADA 75-1494591
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2500 WINDY RIDGE PARKWAY, SUITE 700
ATLANTA, GEORGIA 30339
(Address of principal executive offices) (Zip Code)
770-989-3000
(Registrant's telephone number, including area code)
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock.
100,000 SHARES OF $.10 PAR VALUE COMMON STOCK AS OF AUGUST 17, 1998
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THE COCA-COLA BOTTLING GROUP (SOUTHWEST), INC.
QUARTERLY REPORT ON FORM 10-Q
FOR QUARTER ENDED JULY 3, 1998
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income for the
Quarters ended July 3, 1998 and June 30, 1997.......... 1
Condensed Consolidated Statements of Income for the Six
Months ended July 3, 1998 and June 30, 1997............ 2
Condensed Consolidated Balance Sheets as of July 3, 1998
and December 31, 1997.................................. 3
Condensed Consolidated Statements of Cash Flows for the
Six Months ended July 3, 1998 and June 30, 1997........ 5
Notes to Condensed Consolidated Financial Statements..... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 9
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K......................... 11
Signatures........................................................ 12
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE COCA-COLA BOTTLING GROUP (SOUTHWEST), INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED; IN THOUSANDS)
QUARTER ENDED
---------------------
JULY 3, JUNE 30,
1998 1997
-------- --------
NET OPERATING REVENUES................................ $86,444 $63,789
Cost of sales......................................... 48,237 32,881
------- -------
GROSS PROFIT.......................................... 38,207 30,908
Selling, general, and administrative expenses......... 32,684 21,183
------- -------
OPERATING INCOME...................................... 5,523 9,725
Interest expense, net................................. 6,030 5,223
Other income (expense), net - Note D.................. 7,194 (41)
Equity in earnings (loss) of unconsolidated
subsidiary......................................... (576) 1,453
------- -------
INCOME BEFORE INCOME TAXES, DISCONTINUED OPERATIONS
AND EXTRAORDINARY ITEM............................. 6,111 5,914
Income tax expense.................................... 2,139 1,207
------- -------
NET INCOME BEFORE DISCONTINUED OPERATIONS AND
EXTRAORDINARY ITEM................................. 3,972 4,707
Loss from discontinued operations, net of income tax
benefit of $23..................................... -- (249)
------- -------
NET INCOME BEFORE EXTRAORDINARY ITEM.................. 3,972 4,458
Extraordinary loss, net of income tax benefit of $481. (894) --
------- -------
NET INCOME............................................ $ 3,078 $ 4,458
======= =======
See Notes to Condensed Consolidated Financial Statements.
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THE COCA-COLA BOTTLING GROUP (SOUTHWEST), INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED; IN THOUSANDS)
SIX MONTHS ENDED
------------------------
JULY 3, JUNE 30,
1998 1997
-------- --------
NET OPERATING REVENUES........................... $146,499 $121,682
Cost of sales.................................... 77,864 60,956
-------- --------
GROSS PROFIT..................................... 68,635 60,726
Selling, general, and administrative expenses.... 57,659 44,196
-------- --------
OPERATING INCOME................................. 10,976 16,530
Interest expense, net............................ 10,972 10,346
Other income (expense), net - Note D............. 7,194 (41)
Equity in earnings (loss) of unconsolidated
subsidiary.................................... (1,238) 1,832
-------- --------
INCOME BEFORE INCOME TAXES, DISCONTINUED
OPERATIONS AND EXTRAORDINARY ITEM............. 5,960 7,975
Income tax expense............................... 2,075 2,051
-------- --------
NET INCOME BEFORE DISCONTINUED OPERATIONS AND
EXTRAORDINARY ITEM............................ 3,885 5,924
Loss from discontinued operations, net of
income tax benefit of $199.................... -- (575)
-------- --------
NET INCOME BEFORE EXTRAORDINARY ITEM............. 3,885 5,349
Extraordinary loss, net of income tax benefit
of $908....................................... (1,686) --
-------- --------
NET INCOME....................................... $ 2,199 $ 5,349
======== ========
See Notes to Condensed Consolidated Financial Statements.
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THE COCA-COLA BOTTLING GROUP (SOUTHWEST), INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JULY 3, DECEMBER 31,
ASSETS 1998 1997
------------ ------------
(Unaudited)
CURRENT
Cash and cash investments, at cost
approximating market..................... $ 8,592 $ 3,208
Trade accounts receivable, less reserves
of $1,040 and $523, respectively......... 42,646 17,431
Inventories:
Finished goods........................... 13,364 6,643
Raw materials and supplies............... 6,124 2,818
-------- --------
19,488 9,461
Current deferred income tax assets......... 4,825 6,883
Prepaid expenses and other current assets.. 15,012 9,348
-------- --------
Total Current Assets................... 90,563 46,331
PROPERTY, PLANT, AND EQUIPMENT
Land 10,294 5,655
Buildings and improvements................. 33,885 27,818
Machinery and equipment.................... 124,999 103,064
-------- --------
169,178 136,537
Less allowances for depreciation........... 79,879 86,132
-------- --------
Net Property, Plant, and Equipment..... 89,299 50,405
FRANCHISES AND OTHER NONCURRENT ASSETS, NET... 666,296 131,901
-------- --------
$846,158 $228,637
======== ========
See Notes to Condensed Consolidated Financial Statements.
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THE COCA-COLA BOTTLING GROUP (SOUTHWEST), INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
JULY 3, DECEMBER 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1997
------------ ------------
(Unaudited)
CURRENT
Accounts payable and accrued expenses........ $ 49,562 $ 25,215
Current portion of long-term debt............ 1,798 2,015
Net liabilities of discontinued operations... -- 17
--------- --------
Total Current Liabilities................ 51,360 27,247
LONG-TERM DEBT, LESS CURRENT MATURITIES......... 466,531 251,529
DEFERRED TAX LIABILITY.......................... 188,160 --
OTHER LIABILITIES............................... 19,497 11,900
STOCKHOLDERS' EQUITY
Common stock, $.10 par value; 250,000 shares
authorized: 100,000 shares issued and
outstanding................................. 10 10
Additional paid-in capital................... 206,670 26,223
Retained deficit............................. (86,070) (88,272)
--------- --------
Total Stockholders' Equity............... 120,610 (62,039)
--------- --------
$ 846,158 $228,637
========= ========
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THE COCA-COLA BOTTLING GROUP (SOUTHWEST), INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED; IN THOUSANDS)
SIX MONTHS ENDED
------------------------
JULY 3, JUNE 30,
1998 1997
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income..................................... $ 2,199 $ 5,349
Adjustments to reconcile net income to net
cash provided by operating activities:
Net loss from discontinued operations...... -- 575
Depreciation and amortization.............. 9,998 7,555
Deferred income tax provision.............. 293 1,851
Extraordinary item......................... 2,594 --
Loss (Earnings) of unconsolidated
subsidiary............................... 1,238 (1,832)
Net changes in current assets and
liabilities.............................. (4,248) (9,102)
Gain on sale of operating division......... (7,215) --
--------- ---------
Net cash provided by operating activities...... 4,859 4,396
NET CASH USED BY DISCONTINUED OPERATIONS.......... -- (52)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant, and equipment.... (7,168) (3,215)
Disposals of property, plant, and equipment... 13,071 --
Cash investments in bottling businesses........ (11,044) --
Other investing activities..................... (1,427) (123)
--------- ---------
Net cash used in investing activities.......... (6,568) (3,338)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under credit facilities......... 308,128 6,350
Retirement of long-term debt................... (312,215) --
Payments of long-term debt..................... (1,895) (7,230)
Capital contributions.......................... 13,075 --
--------- ---------
Net cash provided (used) by financing
activities................................... 7,093 (880)
--------- ---------
NET INCREASE IN CASH AND CASH INVESTMENTS......... 5,384 126
Cash and cash investments at beginning of
period....................................... 3,208 3,182
--------- ---------
CASH AND CASH INVESTMENTS AT END OF PERIOD........ $ 8,592 $ 3,308
========= =========
See Notes to Condensed Consolidated Financial Statements.
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THE COCA-COLA BOTTLING GROUP (SOUTHWEST), INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
The Coca-Cola Bottling Group (Southwest), Inc., (the "Company") and its wholly
owned subsidiaries have been prepared in accordance with generally accepted
accounting principles (GAAP) for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all information and footnotes required by GAAP for complete
financial statements. In the opinion of management, all adjustments consisting
of normal recurring accruals considered necessary for a fair presentation have
been included. For further information, refer to the consolidated financial
statements and footnotes included in the Company's annual report on Form 10-K
for the year ended December 31, 1997. The results of operations for the
quarter and six months ended July 3, 1998 are not necessarily indicative of
results expected for the entire year ending December 31, 1998.
NOTE B - ACQUISITIONS AND CHANGE IN OWNERSHIP
On June 5, 1998, Coca-Cola Enterprises Inc. ("CCE") became the holder of all of
the issued and outstanding stock of the Company. This was accomplished by a
merger of a wholly owned subsidiary of CCE into the Company's parent
corporation, followed by the merger of the Company's parent corporation into
CCE. Following this acquisition, the Company acquired the remaining 51%
ownership of Texas Bottling Group, Inc. and Subsidiary ("TBG") making TBG a
wholly owned subsidiary of the Company. The purchase price for the acquisition
by the Company of the remaining 51% ownership of TBG was approximately $167
million funded through a capital contribution from CCE. Shareholders of TBG
received common stock of CCE in exchange for their shares.
Prior to the acquisition, the Company owned shares of common stock of TBG
representing 49% of the ownership of TBG. The Company previously accounted for
its investment in TBG under the equity method. TBG primarily bottles and
distributes soft drinks in its franchise territories in central and southern
Texas, including the cities of San Antonio and Corpus Christi.
The purchase method of accounting has been used for the Company's acquisition of
TBG and, accordingly, the results of operations of TBG are included in
the Company's consolidated statement of income beginning with the date of
acquisition. In addition, assets and liabilities of TBG have been included in
the Company's July 3, 1998 consolidated balance sheet at their estimated fair
values at the date of acquisition. Management has determined any adjustments to
the Company's historical basis of accounting to reflect CCE's purchase of
the Company are not appropriate because of the existence of the Company's
outstanding public debt.
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THE COCA-COLA BOTTLING GROUP (SOUTHWEST), INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE B - ACQUISITIONS AND CHANGE IN OWNERSHIP (CONTINUED)
The following table summarizes unaudited pro forma financial information of the
Company as if the acquisition of TBG were completed effective January 1, 1997.
The pro forma financial information presented below for the six months ended
June 30, 1997 and July 3, 1998 reflects adjustments for the elimination of
certain transactions between the Company and TBG, amortization of the value of
the acquired franchise asset over 40 years and the income tax effect of the
amortization expense:
QUARTER ENDED SIX MONTHS ENDED
-------------------- --------------------
JULY 3, JUNE 30, JULY 3, JUNE 30,
(UNAUDITED; IN THOUSANDS) 1998 1997 1998 1997
-------- -------- -------- --------
Net Operating Revenues.......... $126,297 $112,486 $233,219 $214,057
======== ======== ======== ========
Net Income From Continuing
Operations.................... $ 1,865 $ 4,945 $ 1,307 $ 5,380
======== ======== ======== ========
Net Income (Loss)............... $ 971 $ 4,696 $ (1,849) $ 4,805
======== ======== ======== ========
The pro forma adjustments in certain cases are based on preliminary estimates of
the fair value of assets and liabilities of TBG, which may require further
adjustment when additional information is obtained as of the acquisition date
and during the one year period subsequent to acquisition. Any reallocation of
the purchase price based on final valuations of assets and liabilities should
not differ significantly from the original estimates and should not have a
material impact on the pro forma financial statements.
On April 1, 1998 Southwest Coca-Cola Bottling Company, Inc., a wholly owned
subsidiary of the Company, merged into the Company.
NOTE C - LONG-TERM DEBT
On March 11, 1998, the Company entered into a new credit agreement (the "1998
Bank Credit Agreement") with a group of banks. The 1998 Bank Credit Agreement
provided the Company with credit facilities under which the Company could borrow
up to $270 million. Also, on March 11, 1998, TBG entered into a credit agreement
(the "1998 Senior Credit Facility") with a group of banks. The 1998 Senior
Credit Facility provided TBG with a revolving credit facility under which TBG
could borrow up to $230 million.
In March 1998, the Company used proceeds from the 1998 Bank Credit Agreement to
repay amounts outstanding related to its existing credit facility with a group
of banks and other debt. The remaining unamortized cost, including the cost of
an interest rate cap agreement purchased in 1995 (approximately $1.2 million),
has been recognized, net of the income tax benefit, as an extraordinary loss in
1998.
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THE COCA-COLA BOTTLING GROUP (SOUTHWEST), INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE C - LONG-TERM DEBT (CONTINUED)
Subsequent to CCE's purchase of the Company's parent, CCE loaned the Company a
total of approximately $222 million to repay all amounts outstanding under the
Company's 1998 Bank Credit Agreement and TBG's 1998 Senior Credit Facility. The
remaining unamortized cost, approximately $1.4 million, associated with the 1998
Bank Credit Agreement, has been recognized, net of the income tax benefit, as an
extraordinary loss in 1998.
The outstanding principal balance of these new loans, together with all accrued
but unpaid interest, is due and payable in full on demand or, if no demand has
been made, on June 5, 2008. These new loans bear interest at 6% annually,
compounded monthly, payable on the last day of the fiscal year, commencing
December 31, 1998. The outstanding balance of these loans at July 3, 1998 have
been classified as long-term because CCE has agreed to not demand payment within
the next twelve months or alternatively, to refinance or to arrange refinancing
on a long-term basis.
NOTE D - SALE OF ACFS
On June 4, 1998, Automated and Custom Food Services, L.P., purchased the assets
(including approximately $2 million in cash) and assumed the liabilities of the
ACFS division of the Company and purchased certain other assets and assumed
certain other liabilities of the Company for a total purchase price, net of
liabilities, of approximately $15.1 million in cash. The sale by the Company
resulted in a gain of $7.2 million included in other income.
-8-
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PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
Unit growth of soft drink sales is measured in equivalent case sales which
convert all wholesale bottle, can and pre-mix unit sales into a value of
equivalent cases of 192 ounces each. Unit sales of post-mix are not generally
included in discussions concerning unit sales volume as post-mix sales are
essentially sales of syrup and not of packaged products. All references to net
revenues and gross profit include volumes for post-mix.
On June 5, 1998, Coca-Cola Enterprises Inc. ("CCE") became the holder of all of
the issued and outstanding stock of the Company. This was accomplished by a
merger of a wholly owned subsidiary of CCE into the Company's parent
corporation, followed by the merger of the Company's parent corporation into
CCE. Following this acquisition, the Company acquired 51% ownership of Texas
Bottling Group, Inc. ("TBG") making TBG a wholly owned subsidiary of the
Company.
RESULTS OF OPERATIONS
Net Operating Revenues: Net revenues for the second quarter of 1998 increased
36% to $86 million compared to $64 million for the same period in 1997. Net
revenues for the first six months of 1998 increased 20% to $146 million compared
to $122 million for the same period in 1997. The 1998 periods include the
results of TBG from the date of acquisition, June 5, 1998. Excluding the TBG
results, net revenues for both the second quarter and first six months of 1998
increased 3.7%. The increase in net revenues was due to an increase in sales
volume and three additional days included in the second-quarter 1998 period as
compared to the same period in 1997.
Equivalent case sales increased 62.5% and 37.9% for the second quarter and first
six months of 1998, respectively, compared to the same periods in 1997.
Equivalent case sales adjusted to exclude TBG results and the additional three
days in 1998 increased 9.1% and 8.6% for the second quarter and first six months
of 1998, respectively, compared to the same period in 1997. Net revenues per
case did not change significantly for the second quarter and first six months of
1998.
Gross Profit: Gross profit for the second quarter of 1998 increased 24% to $38
million compared to $31 million for the same period in 1997. Gross profit for
the first six months of 1998 increased 13% to $69 million compared to $61
million for the same period in 1997. The increase in gross profit was due to the
impact of TBG on consolidated results in addition to sales volume increases
partially offset by higher raw material costs primarily for soft drink
concentrates and sugars. Gross profit as a percentage of net revenues was 44%
and 47% for the second quarter and first six months of 1998, respectively,
compared to 48% and 50% for the same periods in 1997.
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Selling, general, and administrative expenses: Selling, general, and
administrative expenses for the second quarter of 1998 increased 54% to $33
million from $21 million for the same period in 1997. Selling, general, and
administrative expenses for the first six months 1998 increased 30% to $58
million from $44 million for the same period in 1997. This increase was due
primarily to selling, general, and administrative expenses relating to TBG from
the date of acquisition in addition to increases in labor expense associated
with hiring for key sales positions, stock appreciation rights expense, bad debt
expense, and a reduction of casualty insurance expense in 1997.
Operating Income: As a result of the above, operating income for the second
quarter of 1998 decreased 43% to $6 million compared to $10 million for the same
period in 1997. Operating income for the first six months of 1998 decreased 34%
to $11 million compared to $17 million for the same period in 1997. Operating
income as a percentage of net revenues was 6% and 7% for the second quarter and
first six months of 1998, respectively, compared to 15% and 14% for the same
periods in 1997.
Interest expense, net: Net interest expense was $6 million and $11 million for
the second quarter and first six months of 1998, respectively, compared to $5
million and $10 million for the same periods in 1997, due primarily to the
additional interest associated with TBG's outstanding debt assumed by the
Company in connection with the purchase of TBG.
Equity in earnings (loss) of unconsolidated subsidiary: The Company recognized
equity in the loss of TBG of $0.6 million and $1.2 million in the second quarter
and first half of 1998, respectively. TBG recognized a net loss of $2.5 million
for the period January 1, 1998 to June 5, 1998. On June 5, 1998, TBG became a
wholly owned subsidiary of the Company and the results of operations of TBG are
included in the Company's consolidated statements of income beginning with the
date of acquisition.
Other income (expense), net: On June 4, 1998, the Company sold its ACFS division
for a total purchase price, net of liabilities, of approximately $15.1 million
in cash. The sale by the Company resulted in a gain of $7.2 million recognized
in other income.
LIQUIDITY AND CAPITAL RESOURCES
The primary sources of cash for the first half of 1998 consisted of those
provided by operations of $4.9 million, net cash received from the sale of ACFS
of $13 million, and from borrowings under credit facilities of $308 million. Our
primary uses of cash were for the retirement of long-term debt of $312 million
and for the acquisition of TBG for a net cash cost of $11 million.
The Company's business is subject to seasonality due to the influence of weather
conditions on consumer demand for soft drinks, which affects working capital.
This seasonality results from a combination of higher unit sales in the second
and third quarters versus the first and forth quarters of the year and the
methods of accounting for fixed costs such as depreciation, amortization, and
interest expense which are not significantly impacted by business seasonality.
Therefore, operating results for the second quarter and six months ended July 3,
1998 are not indicative of results that may be expected for the year ending
December 31, 1998.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K):
Exhibit Incorporated by Reference
Number Description or Filed Herewith
- ------- ------------------------------------------ -------------------------
3 By-Laws Filed Herewith
4.1 Revolving Credit Note between The Coca- Filed Herewith
Cola Bottling Group (Southwest), Inc. and
Coca-Cola Enterprises Inc.
4.2 Revolving Credit Note between The Texas Filed Herewith
Bottling Group, Inc. and Coca-Cola
Enterprises Inc.
27 Financial Data Schedule (for SEC use only) Filed Herewith
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended July 3, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE COCA-COLA BOTTLING GROUP
(SOUTHWEST), INC.
(Registrant)
Date: August 17, 1998 /s/ John R. Alm
-------------------------------
John R. Alm
Executive Vice President and
Chief Financial Officer
Date: August 17, 1998 /s/ O. Michael Whigham
-------------------------------
O. Michael Whigham
Vice President, Controller and
Principal Accounting Officer
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EXHIBIT 3
THE COCA-COLA BOTTLING GROUP (SOUTHWEST), INC.
BY-LAWS
As adopted and in effect on June 5, 1998
<PAGE> 2
ARTICLE ONE
Offices
1.1 Registered Office and Agent. The corporation shall maintain a
registered office in the State of Nevada and shall have a registered
agent whose business office is identical with such registered office.
1.2 Other Offices. The corporation may have offices at such place or
places within or without the State of Nevada as the Board of Directors
may from time to time appoint or the business of the corporation may
require or make desirable.
ARTICLE TWO
Shareholders' Meetings
2.1 Place of Meetings. Meetings of the shareholders shall be held at
any place within or without the State of Nevada as set forth in the
notice thereof or, in the event of a meeting held pursuant to waiver
of notice, as may be set forth in the waiver or, if no place is so
specified, at the registered office of the corporation.
2.2 Annual Meetings. The annual meeting of shareholders shall be held
on the second Friday in March unless that day be a legal holiday, and
in that event, on the next succeeding business day, or at such other
date and time as shall be designated by the Board of Directors and
stated in the notice of the meeting, for the purpose of electing
directors and transacting any and all business that may properly come
before the meeting.
2.3 Special Meetings. Special meetings of the shareholders may be
called at any time by the President, the Board of Directors, or by the
holder of fifty percent (50%) or more of all the shares entitled to
vote.
2.4 Notice of Meetings. Unless waived as contemplated in Section 5.2
or by attendance at the meeting, either in person or by proxy, for any
purpose other than to object to the transaction of business, a written
or printed notice of each shareholders' meeting stating the place, day
and hour of the meeting shall be delivered not less than ten days nor
more than sixty days before the date thereof, either personally or by
mail, by or at the direction of the President or Secretary or other
person calling the meeting, to each shareholder of record entitled to
vote at such meeting. In the case of an annual or substitute annual
meeting, the notice of the meeting need not state the purpose or
purposes of the meeting unless the purpose or purposes constitute a
matter which the Nevada Revised Statutes requires to be stated
<PAGE> 3
in the notice of the meeting. In the case of a special meeting, the
notice of meeting shall state the purpose or purposes for which the
meeting is called.
2.5 Quorum. At all meetings of the shareholders, the presence, in
person or by proxy of the holders of more than one-half of the shares
outstanding and entitled to vote shall constitute a quorum. If a
quorum is present, a majority of the shares outstanding and entitled
to vote which are represented at any meeting shall determine any
matter coming before the meeting unless a different vote is required
by statute, by the Articles of Incorporation or by these by-laws. The
stockholders at a meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum.
2.6 Voting of Shares. Except as otherwise provided by statute or the
Articles of Incorporation, each outstanding share having voting rights
shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders except as otherwise provided herein. Voting on
all matters shall be voice vote or by show of hands unless any
qualified voter, prior to the voting on any matter, demands a vote by
ballot, in which case each ballot shall state the name of the
shareholder voting and the number of shares voted by such shareholder,
and if such ballot be cast by proxy, it shall also state the name of
such proxy.
2.7 Proxies. A shareholder entitled to vote pursuant to Section 2.6
may vote in person or by proxy executed in writing by the shareholder
or by an attorney-in-fact. A proxy shall not be valid after eleven
(11) months from the date of its execution, unless a longer period is
expressly stated therein. If the validity of any proxy is questioned
it must be submitted to the Secretary of the shareholders' meeting for
examination or to a proxy officer or committee appointed by the person
presiding at the meeting. The Secretary of the meeting or, if
appointed, the proxy officer or committee shall determine the validity
or invalidity of any proxy submitted and reference by the Secretary in
the minutes of the meeting to the validity of the proxy shall be
received as prima facie evidence of the facts stated for the purpose
of establishing the presence of quorum at such meeting and for all
other purposes.
2.8 Presiding Officer. The Chairman of the Board of Directors, or in
his or her absence, the President, shall serve as Chairman of every
shareholders' meeting unless some other person is elected to serve as
Chairman by a majority vote of the shares represented at the meeting.
The Chairman shall appoint such person as he or she deems required to
assist with the meeting.
<PAGE> 4
2.9 Adjournments. Any meeting of the shareholders, whether or not a
quorum is present, may be adjourned by the holders of a majority of
the voting shares represented at the meeting to reconvene at a
specific time and place. It shall not be necessary to give any notice
of the reconvened meeting or of the business to be transacted, if the
time and place of the reconvened meeting are announced at the meeting
which was adjourned, except that if the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record entitled to vote at the meeting.
At any such reconvened meeting at which a quorum is represented or
present, any business may be transacted which could have been
transacted at the meeting which was adjourned.
2.10 Action of Shareholders Without a Meeting. Any action which may be
taken at a meeting of the shareholders may be taken without a meeting
if a written consent, setting forth the action authorized, shall be
signed by each of the shareholders entitled to vote on such action.
Such written consent shall have the same effect as a unanimous vote of
the shareholders at a special meeting called for the purpose of
considering the action authorized and shall be filed in the minute
book of the corporation by the officer having custody of the corporate
books and records.
ARTICLE THREE
The Board of Directors
3.1 General Powers. The business and affairs of the corporation shall
be managed by the Board of Directors. In addition to the powers and
authority expressly conferred upon it by these by-laws, the Board of
Directors may exercise all such powers of the corporation and do all
such lawful acts and things except those acts and things which by law,
by a legal agreement among stockholders, by the Articles of
Incorporation or by these by-laws are required to be done by the
shareholders.
3.2 Number, Election and Term of Office. Except when state law permits
a lesser number, the number of directors of the corporation shall be
not less than three (3) nor more than nine (9), the precise number to
be fixed by resolution of the shareholders from time to time. Except
as provided in Section 3.4, the directors shall be elected by the
affirmative vote of a majority of the shares represented at the annual
meeting. Directors need not be residents of the State of Nevada or
shareholders of the corporation. Each director, except in case of
death, resignation, retirement, disqualification or removal,
<PAGE> 5
shall serve until the next succeeding annual meeting and thereafter
until his or her successor shall have been elected and qualified.
3.3 Removal. Any director may be removed from office with or without
cause by the affirmative vote of the holders of a majority of the
shares entitled to vote at an election of directors. Removal action
may be taken at any shareholders' meeting with respect to which notice
of such purpose has been given, and a removed director's successor may
be elected at the same meeting to serve the unexpired term.
3.4 Vacancies. A vacancy occurring in the Board of Directors, except
by reason of removal of a director, may be filled for the unexpired
term, and until the shareholders shall have elected a successor, by
affirmative vote of a majority of the directors remaining in office
though less than a quorum of the Board of Directors.
3.5 Compensation. Directors may receive such compensation for their
services as directors as may from time to time be fixed by vote of the
Board of Directors or the shareholders. A director may also serve the
corporation in a capacity other than that of a director and receive
compensation, as determined by the Board of Directors, for services
rendered in that other capacity.
3.6 Committees of the Board of Directors. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may
designate from among its members an executive committee and one or
more other committees, each consisting of three or more directors.
Except as prohibited by law, each committee shall have the authority
set forth in the resolution establishing said committee.
ARTICLE FOUR
Meetings of the Board of Directors
4.1 Regular Meetings. Regular meetings of the Board of Directors shall
be held immediately after the annual meeting of shareholders or any
meeting held in lieu thereof. In addition, the Board of Directors may
schedule other meetings to occur at regular intervals throughout the
year.
4.2 Special Meetings. Special meetings of the Board of Directors may
be called by or at the request of the Chairman of the Board of
Directors or the President, or in their absence by the Secretary of
the corporation, or by any two directors in office at
<PAGE> 6
that time, except that when the Board of Directors consists of only
one Director, then one director may call a special meeting.
4.3 Place of Meetings. Directors may hold their meetings at any place
within or without the State of Oklahoma as the Board of Directors may
from time to time establish for regular meetings or as is set forth in
the notice of special meetings or, in the event of a meeting held
pursuant to waiver of notice, as may be set forth in the waiver.
4.4 Notice of Meetings. No notice shall be required for any regularly
scheduled meeting of the directors of the corporation. Unless waived
as contemplated in Section 5.2, the Chairman of the Board of
Directors, the President or Secretary of the corporation or any
director thereof shall give notice to each director of each special
meeting which notice shall state the time, place and purposes of the
meeting. Such notice shall be given by mailing a notice of the meeting
at least ten days before the date of the meeting, or by telephone,
telegram, cablegram or facsimile transmission or personal delivery at
least two days before the date of the meeting. Notice shall be deemed
to have been given by telegram or cablegram at the time notice is
filed with the transmitting agency. Attendance by a director at a
meeting shall constitute waiver of notice of such meeting, except
where a director attends a meeting for the express purpose of
objecting to the transaction of business because the meeting is not
lawfully called.
4.5 Quorum. At meetings of the Board of Directors, more than one-half
of the directors then in office shall be necessary to constitute a
quorum for the transaction of business. In no case shall less than two
directors constitute a quorum, except that when the Board of Directors
consists of only one director, then one director shall constitute a
quorum.
4.6 Vote Required for Action. Except as otherwise provided in these
by-laws or by law, the act of a majority of the directors present at a
meeting at which there is a quorum shall be the act of the Board of
Directors.
4.7 Action by Directors Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors, or of
any committee thereof, may be taken without a meeting if a written
consent thereto shall be signed by all the directors or members of the
committee and such written consent is filed with the minutes of the
proceedings of the Board or the committee. Such consent shall have the
same force and effect as a unanimous vote of the Board of Directors at
a duly called and duly constituted meeting.
<PAGE> 7
4.8 Adjournments. A meeting of the Board of Directors, whether or not
a quorum is present, may be adjourned by a majority of the directors
present to reconvene at a specific time and place. It shall not be
necessary to give notice of the reconvened meeting or of the business
to be transacted, other than by announcement at the meeting which was
adjourned. At any such reconvened meeting at which a quorum is
present, any business may be transacted which could have been
transacted at the meeting which was adjourned.
4.9 Participation by Conference Telephone. Members of the Board of
Directors, or members of any committee of the Board of Directors, may
participate in a meeting of the Board of Directors or of such
committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting
can hear each other. Participation in a meeting pursuant to this
Section 4.9 shall constitute presence in person at such meeting.
ARTICLE FIVE
Notice and Waiver
5.1 Procedure. Whenever these by-laws require notice to be given to
any shareholder or director, the notice shall be given as prescribed
in Section 2.4 or 4.4 for any shareholder or director respectively.
Whenever notice is given to a shareholder or director by mail, the
notice shall be sent first class mail by depositing the same in a post
office or letter box in a postage prepaid sealed envelope addressed to
the shareholder or director at his or her address as it appears on the
books of the corpora tion, and such notice shall be deemed to have
been given at the time the same is deposited in the United States
Mail.
5.2 Waiver. Whenever any notice is required to be given to any
shareholder or director by law, by the Articles of Incorporation or by
these by-laws, a waiver thereof in writing signed by the director or
shareholder entitled to such notice or by the proxy of such
shareholder, whether before or after the meeting to which the waiver
pertains, shall be deemed equivalent thereto.
<PAGE> 8
ARTICLE SIX
Officers
6.1 Number. The Officers of the corporation shall be elected by the
Board of Directors and shall consist of a Chairman of the Board of
Directors, a President, one or more Vice Presidents as determined or
designated by the Board of Directors, a Secretary and a Treasurer. The
Board of Directors may elect a Vice Chairman and a Controller and one
or more of the following: Assistant Secretary, Assistant Treasurer and
Assistant Controller. Any two or more offices may be held by the same
person, except the offices of Chairman of the Board of Directors,
President and Secretary.
The corporation may have a General Counsel who shall be appointed
by the Board of Directors and shall have general supervision of all
matters of a legal nature concerning the corporation, unless the Board
of Directors has also appointed a General Tax Counsel, in which event
the General Tax Counsel shall have general supervision of all tax
matters of a legal nature concerning the corporation.
The corporation may have a Chief Financial Officer who shall be
appointed by the Board of Directors and shall have general supervision
over the financial affairs of the corporation.
6.2 Election and Term. All Officers shall be elected by the Board of
Directors and shall serve at the will of the Board of Directors and
until their successors have been elected and have qualified or until
their earlier death, resignation, removal, retirement or
disqualification.
6.3 Compensation. The compensation of all Officers of the corporation
shall be fixed by the Board of Directors.
6.4 Removal. Any officer or agent elected by the Board of Directors
may be removed by the Board of Directors at any meeting with respect
to which notice of such purpose has been given to the members thereof.
6.5 Chairman of the Board of Directors. The Board of Directors may
appoint a Chairman of the Board of Directors, who shall preside as
chairman of all meetings of the directors and all meetings of the
shareholders of the corporation, and who shall perform such other
duties as may be assigned from time to time by the Board of Directors.
In the absence of, or in the case of a vacancy in the office of, the
Chairman of the Board of Directors, a chairman selected by the
Chairman of the Board of Directors or, if he fails to do so, by the
directors, shall preside.
<PAGE> 9
6.6 President. The President shall be the Chief Executive Officer of
the corporation and shall be in charge of the day-to-day affairs of
the corporation, subject to the direction of the Board of Directors
and the Chairman of the Board of Directors, and shall have such other
powers and perform such duties as may be assigned by the Chairman of
the Board of Directors or the Board of Directors. In the absence or
disability of the President his or her duties shall be performed by
such Vice Presidents as the Chairman of the Board of Directors or the
Board of Directors may designate. The President shall also have the
power to make and execute contracts on the corporation's behalf and to
delegate such power to others.
6.7 Vice Presidents. The Vice President shall, in the absence or
disability of the President, or at the direction of the President,
perform the duties and exercise the powers of the President. If the
corporation has more than one Vice President, the one designated by
the Board of Directors shall act in lieu of the President. Any Vice
President shall have the power and authority to vote in behalf of the
corporation any shares of stock, or equity interest in any
corporation, partnership, association or other entity, owned of record
or beneficially by the corporation. Vice Presidents shall perform
whatever duties and exercise such powers as the Board of Directors may
from time to time assign.
6.8 Secretary. The Secretary shall keep accurate records of the acts
and proceedings of all meetings of shareholders, directors and
committees of directors. He or she shall have authority to give all
notices required by law or these by-laws. He or she shall be custodian
of the corporate books, records, contracts and other documents. The
Secretary may affix the corporate seal to any lawfully executed
documents requiring it and shall sign such instruments as may require
his or her signature. The Secretary shall perform such additional
duties and have such additional powers as may be assigned to him or
her from time to time by the Chairman of the Board of Directors or the
Board of Directors.
6.9 Treasurer. The Treasurer shall have custody of all funds and
securities belonging to the corporation and shall receive, deposit or
disburse the same under the direction of the Board of Directors. The
Treasurer shall keep full and true accounts of all receipts and
disbursements and shall make such reports of the same to the Board of
Directors and President upon request. The Treasurer shall perform such
additional duties and have such additional powers as may be assigned
to him or her from time to time by the Chairman of the Board of
Directors or the Board of Directors.
<PAGE> 10
6.10 Controller. The Controller shall keep or cause to be kept in the
books of the corporation provided for that purpose a true account of
all transactions and of the assets and liabilities of the corporation.
The Controller shall prepare and submit to the Chief Financial Officer
periodic balance sheets, profit and loss statements and such other
schedules as may be required to keep the Chief Financial Officer and
the Chairman of the Board of Directors currently informed of the
operations and financial condition of the corporation, cause adequate
internal audits of the financial transactions of the corporation to be
made, prepare and submit annual budgets, and perform such other duties
as may be assigned by the Chief Financial Officer.
6.11 Assistant Secretary and Assistant Treasurer. The Assistant
Secretary and Assistant Treasurer shall, in the absence or disability
of the Secretary or the Treasurer, respectively, perform the duties
and exercise the powers of those offices, and they shall, in general,
perform such other duties as shall be assigned to them by the Board of
Directors or by the person appointing them. Specifically, the
Assistant Secretary may affix the corporate seal to all necessary
documents and attest the signature of any officer of the corporation.
6.12 Bonds. The Board of Directors may by resolution require any and
all of the officers, agents or employees of the corporation to give
bonds to the corporation, with sufficient surety or sureties,
conditioned on the faithful performance of the duties of their
respective offices or positions and to comply with such other
conditions as may from time to time be required by the Board of
Directors.
ARTICLE SEVEN
Dividends
7.1 Time and Conditions of Declaration. Dividends upon the outstanding
shares of the corporation may be declared by the Board of Directors at
any regular or special meeting and paid in cash, property or in shares
of capital stock.
7.2 Reserves. Before the payment of any dividend or the making of any
distribution of profit, there shall be set aside out of the earned
surplus or current net earnings of the corporation such sums as the
Board of Directors from time to time in its absolute discretion deems
proper as a reserve fund to meet contingencies, to pay and discharge
indebtedness, or to fulfill other purposes which the Board of
Directors shall deem to be in the best interest of the corporation.
<PAGE> 11
7.3 Stock Dividends - Unissued Shares. Dividends may be declared by
the Board of Directors and paid in the authorized but unissued shares
of the corporation out of any unreserved and unrestricted surplus of
the corporation; provided that such shares shall be issued at not less
than the par value thereof, and there shall be transferred to stated
capital at the time such dividend is paid an amount of surplus at
least equal to the aggregate par value of the shares to be issued as a
dividend.
7.4 Stock Splits. A split or division of the issued shares of any
class into a greater number of shares of the same class without
increasing the stated capital of the corporation shall not be
construed to be a stock dividend within the meaning of this Article.
ARTICLE EIGHT
Shares
8.1 Authorization and Issuance of Shares. The par value and the
maximum number of shares, of any class, of the corporation which may
be issued and outstanding shall be as set forth from time to time in
the Articles of Incorporation of the corporation. The Board of
Directors may, by resolution fixing the number of shares to be issued
and the amount and kind of consideration to be received, increase or
decrease the number of issued and outstanding shares of the
corporation within the maximum authorized by the Articles of
Incorporation and the minimum requirements of the Articles of
Incorporation and of Nevada law.
8.2 Stock Certificates. The interest of each shareholder shall be
evidenced by a certificate or certificates representing shares of the
corporation which shall be in such form as the Board of Directors may
from time to time adopt in accordance with Nevada law. Stock
certificates shall be consecutively numbered, shall be in registered
form, and shall indicate the date of issue and all such information
shall be entered on the corporation's books. Each certificate for
shares of the corporation, the transfer of which is restricted by law,
by these by-laws or by contract, shall bear a legend conspicuously
noting the existence of such restriction. Each certificate shall be
signed by the Chairman of the Board of Directors or the President or a
Vice President and the Secretary or an Assistant Secretary and shall
be sealed with the seal of the corporation or a facsimile thereof;
provided, however, that where such certificate is signed by a transfer
agent, or registered by a registrar, the signature of any such officer
may be facsimile. In case any officer or officers who shall have
signed or whose facsimile signature shall have been placed upon a
stock certificate shall have ceased for any reason
<PAGE> 12
to be such officer or officers of the corporation before such
certificate is issued, such certificate may be issued by the
corporation with the same effect as if the person or persons who
signed such certificate or whose facsimile signatures shall have been
used thereon had not ceased to be such officer or officers.
8.3 Rights of Corporation with Respect to Registered Owners. Prior to
due presentation for transfer of registration of its shares, the
corporation may treat the registered owner of the shares as the person
exclusively entitled to vote such shares, to receive any dividend or
other distribution with respect to such shares, and for all other
purposes; and the corporation shall not be bound to recognize any
equitable or other claim to or interest in such shares on the part of
any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by law.
8.4 Transfer of Stock. Transfers of shares, duly endorsed or
accompanied by proper evidence of succession, assignation or authority
to transfer, shall be made upon the transfer books of the corporation,
kept at the office of the transfer agent designated to transfer the
shares, only upon direction of the person named in the certificate, or
by an attorney lawfully constituted in writing; and before a new
certificate is issued, the old certificate shall be surrendered for
cancellation or, in the case of a certificate alleged to have been
lost, stolen, or destroyed, the provisions of Section 8.5 of these
by-laws must be completed.
8.5 Lost, Stolen or Destroyed Certificates. Any person claiming a
stock certificate to be lost, stolen or destroyed shall make an
affidavit or affirmation of the fact in such manner as the Board of
Directors may require and shall, if the Board of Directors so
requires, give the corporation a bond of indemnity in form and amount
and with one or more sureties satisfactory to the Board of Directors,
as the Board of Directors may require, whereupon an appropriate new
certificate may be issued in lieu of the one alleged to have been
lost, stolen or destroyed.
8.6 Fixing of Record Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any dividend,
or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors may fix in advance a date as
the record date, such date to be not more than fifty (50) days (and,
in the case of a shareholders' meeting, not less than ten (10) days)
prior to the date on which the particular action requiring such
determination of shareholders is to be taken.
<PAGE> 13
8.7 Record Date if None Fixed. If no record date is fixed, as provided
in Section 8.6 of these by-laws, then the record date for any
determination of shareholders which may be proper or required by law,
shall be the date on which notice is mailed, in the case of a
shareholders' meeting; the date on which the Board of Directors
approves a resolution declaring a dividend, in the case of a payment
of a dividend; and the date on which any other action, the
consummation of which requires a determination of shareholders, is to
be taken, in the case of such action.
ARTICLE NINE
Indemnification
9.1 Indemnification. The corporation may indemnify its officers,
directors, employees and agents to the extent permitted by the Nevada
Revised Statutes. The corporation may purchase and maintain insurance
on behalf of any such officers and directors against any liabilities
asserted against such persons whether or not the corporation would
have the power to indemnify such officers and directors against such
liability under the laws of the State of Nevada.
ARTICLE TEN
Books and Records
10.1 Inspection of Books and Records. The Board of Directors shall
have power to determine which accounts, books and records of the
corporation shall be opened to the inspection of shareholders, except
such as may by law be specifically open to inspection, and shall have
power to fix reasonable rules and regulations not in conflict with the
applicable law for the inspection of accounts, books and records which
by law or by determination of the Board of Directors shall be open to
inspection.
10.2 Fiscal Year. The Board of Directors is authorized to fix the
fiscal year of the corporation and to change the same from time to
time as it deems appropriate. Unless the Board of Directors shall
otherwise determine, the fiscal year of the corporation for each year
shall end on the last Friday closest to December 31 in such year, or
if December 31 is the last Friday in each year, shall end on December
31.
10.3 Seal. The corporate seal shall be in such form as the Board of
Directors may from time to time determine.
<PAGE> 14
10.4 Annual Statement. The Board of Directors shall present at each
annual meeting, and at any special meeting of the shareholders, when
called for by the vote of the shareholders, a full and clear statement
of the business and condition of the corporation.
ARTICLE ELEVEN
Amendments
11.1 Power to Amend By-Laws. The Board of Directors shall have power
to alter, amend or repeal these by-laws or adopt new by-laws, but any
by-laws adopted by the Board of Directors may be altered, amended or
repealed, and new by-laws adopted by the shareholders. The
shareholders may prescribe that any by-law or by-laws adopted by them
shall not be altered, amended or repealed by the Board of Directors.
11.2 Conditions. Action taken by the shareholders with respect to
by-laws shall be taken by an affirmative vote of a majority of all
shares entitled to elect directors, and action by the Board of
Directors with respect to by-laws, shall be taken by an affirmative
vote of a majority of all directors then holding office.
<PAGE> 1
EXHIBIT 4.1
REVOLVING CREDIT NOTE
$102,100,047.22 June 5, 1998
FOR VALUE RECEIVED, the undersigned THE COCA-COLA
BOTTLING GROUP (SOUTHWEST), INC., a Nevada corporation (the "Company")
promises to pay at the earlier of demand or maturity as set forth
below to the order of COCA-COLA ENTERPRISES INC., a Delaware
corporation (hereinafter "Payee"; Payee or any subsequent holder(s)
hereof being hereinafter referred to as "Holder") at 2500 Windy Ridge
Parkway, Atlanta, Georgia 30339, or at such other place as the Holder
may from time to time designate in writing, in lawful money of the
United States of America, the principal sum of One Hundred Two Million
One Hundred Thousand Forty-Seven and 22/100 Dollars ($102,100,074.22)
or so much thereof as may have been advanced hereunder and remain
outstanding, together with interest on the outstanding principal sum
at the annual rate of six percent (6%).
Interest shall be compounded monthly and shall be
paid on the last day of the fiscal year, commencing December 31, 1998,
and on the last day of each fiscal year thereafter. Interest shall be
computed on the basis of a 360-day year for the actual number of days
involved and on the weighted daily average amount outstanding
hereunder.
The entire outstanding principal balance, together
with all accrued but unpaid interest and all other sums owing
hereunder shall be due and payable in full at the demand of Holder or,
if no demand has been made, on June 5, 2008. All payments hereon shall
be credited first to accrued interest, next to any other sums due
hereunder, and the remainder to the unpaid principal balance, until
all sums hereunder have been paid in full. The Company shall have the
right to prepay this Note at any time, without premium or penalty.
Within the limits of the principal sum set forth
above, and subject to the terms and conditions set forth in this
instrument, the Company may borrow, repay and reborrow under the terms
of this instrument; provided, however, that the Company may neither
borrow nor reborrow should an Event of Default, as defined herein,
have occurred. The Company shall give the Holder five days' notice of
any borrowings permitted hereunder.
Any one or more of the following such constitute an
"Event of Default" hereunder:
(a) The Company fails to pay when due any
payment of principal or interest on the Note or any other sum
payable hereunder within five days after notice thereof to
the Company by the Holder, such notice to be in writing and
<PAGE> 2
delivered to the address for notices specified on the
signature page of this Note, or to such other address as the
Company may specify in a written notice personally delivered
to the chief financial officer of the Holder.
(b) Coca-Cola Enterprises Inc. ceases to
own, directly or indirectly, all of the issued and
outstanding capital stock of the Company and its
Subsidiaries; or
(c) substantially all of the assets of the
Company or of any Subsidiary shall have been transferred to
any entity other than Coca-Cola Enterprises Inc. or a
Subsidiary.
As used herein, a "Subsidiary" of the Company or of
Coca-Cola Enterprises Inc. is any entity of which more than 50% of the
total voting power of all outstanding shares, interests,
participations, rights or other equivalents, however designated,
entitled to elect the directors of other management of such entity is
owned of record, directly or beneficially, by (as the case may be):
(i) the Company or Coca-Cola Enterprises Inc.; or (ii) a Subsidiary of
the Company or Coca-Cola Enterprises Inc.; or (iii) the Company and
one or more of its Subsidiaries, or Coca-Cola Enterprises Inc. and one
or more of its Subsidiaries.
Upon the occurrence of an Event of Default, the
Holder of this Note may elect to mature this Note in its entirety,
including principal and interest then accrued, whereupon, without
notice, presentation or demand, all of the same shall at once become
due and payable. The Company agrees to pay all costs of collection,
including, but not limited to, reasonable attorney's fees and court
costs incurred by the Holder as a result of the Event of Default.
This Note is intended as a contract under and shall
be construed and enforceable in accordance with the laws of the State
of Georgia.
Presentment for payment, demand, protest and notice
of demand, protest and nonpayment and all other notices other than as
set forth herein are hereby waived by the Company. No course of
dealing between the Company and the Holder, nor delay or failure on
the part of the Holder to exercise or enforce any right or remedy
provided for herein or otherwise available to the Holder, including
without limitation, failure to accelerate the debt evidenced hereby by
reason of default hereunder, acceptance of a past due installment, or
indulgences granted from time to time shall be construed (i) as a
novation of this Note or as a reinstatement of the indebtedness
evidenced hereby or as a waiver of such right of acceleration or of
the right of Holder thereafter to insist upon strict compliance with
the terms of this Note, or (ii) to prevent the exercise of such right
of acceleration or any other right granted hereunder or by the laws of
the State of Georgia. The Company hereby expressly waives the benefit
of any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or in
conflict with the foregoing.
2
<PAGE> 3
Past due principal and (to the extent legally
enforceable) interest hereunder shall, at the option of Holder, bear
interest from the due date until paid at either the rate of interest
provided herein, plus 100 basis points, or the maximum legal rate
permitted under the laws of the State of Georgia for obligations of
this type, whichever is less. Nothing contained in this Note shall be
construed to permit the Holder to receive at any time interest, fees
or other charges in excess of the amounts which the Holder is legally
entitled to charge and receive under any law to which such interest,
fees or charges are subject. In no event whatsoever shall the
compensation payable to the Holder by the Company hereunder, howsoever
characterized or computed, exceed the highest rate permissible under
any law to which such compensation is subject. There is no intention
that the Holder shall contract for, charge or receive compensation in
excess of the highest lawful rate, and, in the event it should be
determined that any excess has been charged or received, then, ipso
facto, such rate shall be reduced to the highest lawful rate so that
no amounts shall be charged which are in excess thereof.
No extension of time for the payment of this Note or
any installment due hereunder, made by agreement with any person now
or hereafter liable for the payment of this Note, shall operate to
release, discharge, modify, change or affect the original liability of
the Company under this Note, either in whole or in part unless Holder
agrees otherwise in writing.
This Note may not be changed orally, but only in
writing, signed by the party against who enforcement of any waiver,
change, modification or discharge is sought.
Wherever possible, each provision of this Note shall
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Note shall be prohibited
by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Note.
As used herein the terms "Company" and "Holder"
shall be deemed to include their respective heirs, successors, legal
representatives and assigns, whether by voluntary action of the
parties or by operation of law.
3
<PAGE> 4
IN WITNESS WHEREOF, this Note is executed as of the
date first above written.
THE COCA-COLA BOTTLING GROUP
(SOUTHWEST), INC.
/s/ Vicki R. Palmer
----------------------------
Vicki R. Palmer (SEAL)
Vice President and Treasurer
4
<PAGE> 1
EXHIBIT 4.2
REVOLVING CREDIT NOTE
$119,879,131.11 June 5, 1998
FOR VALUE RECEIVED, the undersigned THE TEXAS
BOTTLING GROUP, INC., a Nevada corporation (the "Company") promises to
pay at the earlier of demand or maturity as set forth below to the
order of COCA-COLA ENTERPRISES INC., a Delaware corporation
(hereinafter "Payee"; Payee or any subsequent holder(s) hereof being
hereinafter referred to as "Holder") at 2500 Windy Ridge Parkway,
Atlanta, Georgia 30339, or at such other place as the Holder may from
time to time designate in writing, in lawful money of the United
States of America, the principal sum of One Hundred Nineteen Million
Eight Hundred Seventy-Nine Thousand One Hundred Thirty-One and 11/100
Dollars ($119,879,131.11) or so much thereof as may have been advanced
hereunder and remain outstanding, together with interest on the
outstanding principal sum at the annual rate of six percent (6%).
Interest shall be compounded monthly and shall be
paid on the last day of the fiscal year, commencing December 31, 1998,
and on the last day of each fiscal year thereafter. Interest shall be
computed on the basis of a 360-day year for the actual number of days
involved and on the weighted daily average amount outstanding
hereunder.
The entire outstanding principal balance, together
with all accrued but unpaid interest and all other sums owing
hereunder shall be due and payable in full at the demand of Holder or,
if no demand has been made, on June 5, 2008. All payments hereon shall
be credited first to accrued interest, next to any other sums due
hereunder, and the remainder to the unpaid principal balance, until
all sums hereunder have been paid in full. The Company shall have the
right to prepay this Note at any time, without premium or penalty.
Within the limits of the principal sum set forth
above, and subject to the terms and conditions set forth in this
instrument, the Company may borrow, repay and reborrow under the terms
of this instrument; provided, however, that the Company may neither
borrow nor reborrow should an Event of Default, as defined herein,
have occurred. The Company shall give the Holder five days' notice of
any borrowings permitted hereunder.
Any one or more of the following such constitute an
"Event of Default" hereunder:
(a) The Company fails to pay when due any
payment of principal or interest on the Note or any other sum
payable hereunder within five days after
<PAGE> 2
notice thereof to the Company by the Holder, such notice to
be in writing and delivered to the address for notices
specified on the signature page of this Note, or to such
other address as the Company may specify in a written notice
personally delivered to the chief financial officer of the
Holder.
(b) Coca-Cola Enterprises Inc. ceases to
own, directly or indirectly, all of the issued and
outstanding capital stock of the Company and its
Subsidiaries; or
(c) substantially all of the assets of the
Company or of any Subsidiary shall have been transferred to
any entity other than Coca-Cola Enterprises Inc. or a
Subsidiary.
As used herein, a "Subsidiary" of the Company or of
Coca-Cola Enterprises Inc. is any entity of which more than 50% of the
total voting power of all outstanding shares, interests,
participations, rights or other equivalents, however designated,
entitled to elect the directors of other management of such entity is
owned of record, directly or beneficially, by (as the case may be):
(i) the Company or Coca-Cola Enterprises Inc.; or (ii) a Subsidiary of
the Company or Coca-Cola Enterprises Inc.; or (iii) the Company and
one or more of its Subsidiaries, or Coca-Cola Enterprises Inc. and one
or more of its Subsidiaries.
Upon the occurrence of an Event of Default, the
Holder of this Note may elect to mature this Note in its entirety,
including principal and interest then accrued, whereupon, without
notice, presentation or demand, all of the same shall at once become
due and payable. The Company agrees to pay all costs of collection,
including, but not limited to, reasonable attorney's fees and court
costs incurred by the Holder as a result of the Event of Default.
This Note is intended as a contract under and shall
be construed and enforceable in accordance with the laws of the State
of Georgia.
Presentment for payment, demand, protest and notice
of demand, protest and nonpayment and all other notices other than as
set forth herein are hereby waived by the Company. No course of
dealing between the Company and the Holder, nor delay or failure on
the part of the Holder to exercise or enforce any right or remedy
provided for herein or otherwise available to the Holder, including
without limitation, failure to accelerate the debt evidenced hereby by
reason of default hereunder, acceptance of a past due installment, or
indulgences granted from time to time shall be construed (i) as a
novation of this Note or as a reinstatement of the indebtedness
evidenced hereby or as a waiver of such right of acceleration or of
the right of Holder thereafter to insist upon strict compliance with
the terms of this Note, or (ii) to prevent the exercise of such right
of acceleration or any other right granted hereunder or by the laws of
the State of Georgia. The Company hereby expressly waives the benefit
of any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or in
conflict with the foregoing.
2
<PAGE> 3
Past due principal and (to the extent legally
enforceable) interest hereunder shall, at the option of Holder, bear
interest from the due date until paid at either the rate of interest
provided herein, plus 100 basis points, or the maximum legal rate
permitted under the laws of the State of Georgia for obligations of
this type, whichever is less. Nothing contained in this Note shall be
construed to permit the Holder to receive at any time interest, fees
or other charges in excess of the amounts which the Holder is legally
entitled to charge and receive under any law to which such interest,
fees or charges are subject. In no event whatsoever shall the
compensation payable to the Holder by the Company hereunder, howsoever
characterized or computed, exceed the highest rate permissible under
any law to which such compensation is subject. There is no intention
that the Holder shall contract for, charge or receive compensation in
excess of the highest lawful rate, and, in the event it should be
determined that any excess has been charged or received, then, ipso
facto, such rate shall be reduced to the highest lawful rate so that
no amounts shall be charged which are in excess thereof.
No extension of time for the payment of this Note or
any installment due hereunder, made by agreement with any person now
or hereafter liable for the payment of this Note, shall operate to
release, discharge, modify, change or affect the original liability of
the Company under this Note, either in whole or in part unless Holder
agrees otherwise in writing.
This Note may not be changed orally, but only in
writing, signed by the party against who enforcement of any waiver,
change, modification or discharge is sought.
Wherever possible, each provision of this Note shall
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Note sh all be prohibited
by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Note.
As used herein the terms "Company" and "Holder"
shall be deemed to include their respective heirs, successors, legal
representatives and assigns, whether by voluntary action of the
parties or by operation of law.
3
<PAGE> 4
IN WITNESS WHEREOF, this Note is executed as of the
date first above written.
TEXAS BOTTLING GROUP, INC.
/s/ Vicki R. Palmer
----------------------------
Vicki R. Palmer (SEAL)
Vice President and Treasurer
4
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS OF THE FILER FOR THE PERIOD ENDED JULY 3, 1998
INCLUDED IN ITS QUARTERLY REPORT ON FORM 10-Q FOR THE SIX MONTHS ENDED JULY 3,
1998 (COMMISSION FILE NO. 33-69274) AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUL-03-1998
<CASH> 8,592
<SECURITIES> 0
<RECEIVABLES> 43,686
<ALLOWANCES> 1,040
<INVENTORY> 19,488
<CURRENT-ASSETS> 90,563
<PP&E> 169,178
<DEPRECIATION> 79,879
<TOTAL-ASSETS> 846,158
<CURRENT-LIABILITIES> 51,360
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> 120,600
<TOTAL-LIABILITY-AND-EQUITY> 846,158
<SALES> 146,499
<TOTAL-REVENUES> 146,499
<CGS> 77,864
<TOTAL-COSTS> 57,659
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,972
<INCOME-PRETAX> 5,960
<INCOME-TAX> 2,075
<INCOME-CONTINUING> 3,885
<DISCONTINUED> 0
<EXTRAORDINARY> (1,686)
<CHANGES> 0
<NET-INCOME> 2,199
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
