UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
August 27, 1998
(Date of earliest event reported)
Commission file number: 0-20704
ACX TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-1208699
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
16000 Table Mountain Parkway, Golden, Colorado 80403
(Address of principal executive offices) (Zip Code)
(303) 271-7000
(Registrant's telephone number, including area code)
Item 7. Financial Statements and Exhibits
Graphic Packaging Corporation entered into a supply agreement
(the "Supply Agreement") with Coors Brewing Company ("Coors")
to supply packaging products to Coors commencing September 1,
1998 and continuing in effect until December 31, 2002, with a
possible three-year extension of this term to be negotiated
among the parties. This Supply Agreement supersedes and
replaces the supply agreement between the parties dated
January 1, 1997 and provides, among other things, stated
quantity commitments for the packaging products to be
purchased by Coors and annual repricing of such products.
The Supply Agreement is included below as Exhibit 10.1.
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 hereunto duly authorized.
November 2, 1998 ACX TECHNOLOGIES, INC.
By:/s/ Beth A. Parish
-------------------------------
Beth A. Parish
(Controller and Principal
Accounting Officer)
EXHIBIT 10.1
NOTE: CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FROM THE
SECURITIES AND EXCHANGE COMMISSION FOR PORTIONS OF
THIS EXHIBIT
*** = confidential portion omitted and filed
separately with the SEC
SUPPLY AGREEMENT
This Supply Agreement (this "Agreement") is made effective
as of the 1st day of September, 1998 (the "Effective Date") by
and between Coors Brewing Company ("COORS"), a Colorado
corporation with its principal place of business in Golden,
Colorado, and Graphic Packaging Corporation ("GPC"), a Delaware
corporation with its principal place of business in Golden,
Colorado.
This Agreement shall supersede and replace the Supply
Agreement between the parties dated January 1, 1997 (the "1997
Supply Agreement").
1.0 PURPOSE
The purpose of this Agreement is to set forth the terms and
conditions under which GPC will provide to COORS (i) those
paperboard and label products to be packaged in the "COORS
Plants" (as defined in Section 3.1 below) listed on Schedule A
(the "Sustaining Products"), and (ii) those promotional additions
and modifications to Sustaining Products and certain other
services and items listed on Schedule B (the "Upcharge Items").
The Sustaining Products and the Upcharge Items are collectively
herein called the "Products." The Products are subdivided into
three categories of "Product Types" - "Bottle Packages," "Can
Packages" and "Labels." The Product Type of each Product is set
forth in Schedule A or Schedule B, as applicable.
2.0 TERM
This Agreement shall commence on the Effective Date and
shall continue in effect through December 31, 2002 (the "Initial
Term"), unless earlier terminated pursuant to the terms of this
Agreement. COORS and GPC mutually agree that commencing on or
before September 1, 2000, they shall commence negotiations in
good faith towards a three-year extension of this Agreement
beyond the Initial Term, with the objective of entering into such
an extension no later than December 31, 2000.
3.0 QUANTITY, OPPORTUNITY AND OBLIGATION TO SUPPLY
3.1 During the Term and except as provided in Section 17.3
or as otherwise provided in this Agreement, COORS agrees to
purchase and GPC agrees to supply COORS' requirements, as such
requirements may exist from time to time, for Products at its
three current locations: Golden, Colorado ("COORS-Golden"),
Memphis, Tennessee ("COORS-Memphis") and Elkton, Virginia
("COORS-Shenandoah" and, together with COORS-Golden and
COORS-Memphis, the "COORS Plants"). COORS makes no
representation as to volume requirements for any Product
hereunder. COORS shall have the right to acquire from third
parties or manufacture for itself incidental quantities of
Products for the sole purpose of prequalification testing,
including retail sales to demonstrate the quality, marketability,
reliability and other characteristics of such Products.
3.2 During the Term, COORS shall provide GPC with a bona
fide right to compete for all opportunities to supply additional
paperboard and label packaging products that are: (i) not
Products or (ii) related to the acquisition or construction of
new brewing and beverage production facilities by COORS, the
contract brewing of beverages by COORS or the outsourcing to any
third party by means of contract or license of any brewing or
packaging by COORS; provided, however, that COORS shall be
excused from the foregoing if by doing so, COORS reasonably
believes that it may violate commitments to third parties:
(a) existing on the date hereof, (b) existing at a brewing or
beverage production facility as of the date COORS acquires such
brewing or beverage production facilities, or (c) existing with
such contract brewer or such third party as of the date COORS
enters into such contract or license. Additional paperboard and
label packaging products may be added to the list of Products on
Schedule A or Schedule B upon the written consent of the parties.
The parties recognize that GPC may supply certain items and
services to COORS that are not Products ("One-Time Buy Items") at
COORS' request pursuant to a COORS' "Volume Authorization" form
specifying quantities, price and other pertinent characteristics
of such items on terms to be negotiated by the parties. One-Time
Buy Items shall not become Products under this Agreement unless
the parties mutually agree in writing to add such items as
Products on Schedule A or Schedule B, as applicable, which
written agreement shall specify the applicable price for such
items.
4.0 CONSIDERATION
4.1 In consideration for GPC's ongoing performance of its
obligations pursuant to the terms and provisions set forth
herein, COORS hereby agrees to pay GPC on an ongoing basis for
the supply of Products in accordance with the prices for Products
set forth on Schedule A or Schedule B, as applicable.
4.1.1 The parties hereby agree to develop as soon
as reasonably practicable a process and related procedures
to review and evaluate periodically GPC's performance under
this Agreement and ***.
Such process and procedures will also provide for
review of proposals by either party to *** which proposals
may include, among others, proposals regarding Product
specification changes. Price reductions associated with
any such change shall become effective immediately upon
implementation of such change. The parties shall track,
by each separate Product Type, *** generally in the form of
Schedule E hereto.
***
***
GPC shall use its best commercial efforts to make proposals
to ***. Proposals for freight savings attributable solely
to the reduced hauling distance resulting from using GPC's
new Golden, Colorado plant shall not be considered as ***.
If through such process the parties determine that a
proposal may be reasonably feasible to implement, COORS
will cause any proposed Product changes to be reviewed and
tested in accordance with its customary testing procedures.
COORS shall determine in its sole discretion whether any
such change should be implemented and COORS shall have no
obligation to implement any change. The parties may
consider proposals that would increase either party's plant
and operating efficiencies, however, the parties recognize
the difficulty of quantifying plant and operating efficiency
effects and agree that any potential savings realized from
increased plant or operating efficiencies shall not be
included in determining whether ***.
4.1.2 The parties shall endeavor to achieve ***.
***
If the *** for all Product Types for any applicable period
are less than the *** for all Product Types for such period,
GPC shall *** COORS *** after the end of such period;
provided, however, GPC ***, if any, existing at the time
such payment is due. COORS shall have no ***.
4.2 All invoices for products supplied by GPC to COORS
pursuant to this Agreement shall be mailed to:
Coors Brewing Company
Accounts Payable Department
P.O. Box 889
Golden, CO 80402
Payment terms hereunder shall be *** for invoices issued
on the 9th day through the 23rd day of any month that are paid
on or before the 30th day of such month (or the last calendar
day of such month, if shorter) and invoices issued on the 24th
day of any month through the 8th day of the subsequent month
that are paid on or before the 15th day of such subsequent
month. GPC shall mail invoices within 3 days of shipment for
items other than Products, for which the payment terms shall
be that invoices issued on any day of a calendar month shall
be paid as billed (without discount) on or before the 15th day
of the subsequent month. Amounts due and owing by COORS and
not paid in accordance with the payment terms herein shall
accrue interest at a rate of ***. Invoices not billed by GPC
within 60 days of GPC shipment or performance of services shall
give COORS the right to not pay such invoices as provided in
Section 5.6.
4.3 Except with respect to *** as provided for pursuant
to Section 4.4, GPC shall be responsible for and ***.
4.4 *** paid by GPC for label materials, paperboard, film,
inks and resins (collectively, "Raw Materials") used in the
production of the Products *** and relevant changes to Schedule
A and B will be made on January 1 and July 1 of each contract
year commencing January 1, 1999 based on the receipt of *** no
later than forty-five (45) days prior to the adjustment dates
shown herein. ***. GPC and COORS acknowledge and agree that
management focus and attention is required for this important
element of the price paid for the Products supplied by GPC and
the parties agree to use their best efforts to control and
reduce Raw Material costs.
The parties hereby agree to establish a "Raw Materials
Advisory Committee" consisting of representatives from each
party which shall meet every four months, commencing on or
about the first week of September, 1998, to review GPC's
purchasing strategy for Raw Materials with a view to prudently
managing and controlling such costs consistent with COORS'
quality and reliability requirements.
COORS may, from time to time, implement strategies
designed to manage the price volatility and associated risk
of Raw Materials costs including, but not limited to, the use
of various financial instruments such as options, swaps,
futures contracts and forward buys (any such arrangement is
herein called a "Commodity Financial Transaction"). It is
understood that the implementation of any Commodity Financial
Transaction will be for COORS' own account and at the sole
discretion and risk of COORS, will not affect the pricing of
the Products and COORS will retain all of the benefits and
liabilities relating to such arrangement. COORS may, however,
from time to time present GPC with proposals for a Commodity
Financial Transaction that would result in a sharing of risk
and a sharing of benefits associated therewith. GPC may elect
to participate or not to participate in such Commodity Financial
Transaction in its sole discretion. Any such proposals and
participation by GPC will be handled on a case-by-case basis.
Likewise, GPC may, from time to time, in its sole discretion
implement a Commodity Financial Transaction separately from
COORS for its own account and at its sole risk and such
Commodity Financial Transaction will not affect the pricing
of the Products and GPC will retain all of the benefits and
liabilities relating to such arrangement.
4.5 ***
4.6 GPC and COORS have agreed that GPC's loss, prior to
1997, of approximately *** worth of COORS' Slide-12
bottle sleeve purchases has resulted in *** worth of GPC
overhead that is not being absorbed by COORS' purchases of
Products. To assist *** and except as otherwise provided, ***
by January 30 following the end of each calendar year through
the calendar year ending December 31, 1999 ***:
***
4.7 COORS shall reimburse GPC for the reasonable costs
incurred by GPC for Raw Materials acquired by GPC for the purpose
of fulfilling the obligations of GPC hereunder in the event that
such Raw Materials are rendered obsolete as a result of changes
by COORS in specifications or artwork for Products supplied by
GPC. Obsolete Raw Materials shall be valued at their original
price using a FIFO valuation convention. The determination of any
amounts to be reimbursed pursuant to this Section 4.7 and the
payment thereof shall be completed within 3 months of such Raw
Materials being rendered obsolete. In no event shall the volume
of raw materials eligible for such reimbursement exceed the
corresponding volume of finished Product inventory authorized by
COORS. GPC shall pay to COORS 100% of the net proceeds, if any,
realized by GPC in connection with the disposition of obsolete
Raw Materials by GPC.
4.8 The parties acknowledge that completing an order for
any Sustaining Products will be controlled by the minimum/maximum
inventory provisions of Section 5.4. One-Time Buy Items will be
negotiated on a case-by-case basis. Both parties will do
everything possible to reach a fair and reasonable range for over
or under the targeted run quantity for One-Time Buy Items. GPC
agrees that the plus/minus tolerances will be reduced with the
completion of GPC's new Golden, Colorado, plant. For non-
Sustaining Products, COORS will use its reasonable commercial
efforts to provide GPC a volume requirement form two weeks prior
to the print date; provided, however, that COORS' initiated
changes within such two-week period may be subject to additional
charges to COORS in accordance with Section 4.9.
4.9 The parties acknowledge that under certain conditions
additional shipping, production or other charges related to the
Products and not otherwise set forth on Schedule A or B, as
applicable, will be incurred subject to COORS' prior approval and
will subsequently be invoiced to COORS. Certain of such
additional charges are set forth in Schedule B and shall be
subject to good faith renegotiation prior to January 1 of each
year to take effect in such new year; provided, however, that
such additional charges shall not be changed or amended during
any calendar year. Additional charges not covered in Schedule B
may be covered in a purchase order separate from this Agreement
if requested by either COORS or GPC and approved by both parties.
5.0 DUTIES OF GPC
5.1 GPC shall deliver the Products in accordance with the
releases issued by the COORS Plant Services Designated
Representative (as defined in Section 8.2), provided that
sufficient time for production and delivery is given. If the
lead time for any order by COORS is less than allowed for in
Schedule C hereto, GPC shall inform the applicable COORS Plant
Services Designated Representative within 12 hours as to whether
or not the requested delivery schedule can be met and GPC will
identify alternate Products that it believes may be acceptable to
COORS. COORS may in its discretion elect to accept such
substitute Products or to obtain from third parties the Products
that GPC is unable to deliver timely. GPC will use its best
commercial efforts to give requests and orders by COORS top
priority and to fulfill the delivery schedule requested by COORS
regardless of whether any such request or order allows for normal
lead times. GPC shall ship all products to COORS in agreed-to
lot sizes and in full compliance with the methodologies (e.g.,
stretch-wrapped, banded, etc.) stipulated in COORS'
specifications.
5.2 A GPC Designated Representative (as defined in Section
8.3) and a representative from each supplying plant of GPC shall
meet weekly with a COORS Packaging Purchasing Designated
Representative (as defined in Section 8.1) for the purpose of
reviewing GPC and COORS inventories and current and forecasted
requirements of COORS. GPC shall deliver to a COORS Packaging
Purchasing Designated Representative prior to 10:00 a.m. (MST)
each Tuesday a perpetual inventory, accurate as of the prior
Sunday, which shall consist of finished goods, in transit,
work-in-process, yellow-tag, or held inventories for all Products
at all GPC locations.
5.3 All Products shall be at a quality level which meets or
exceeds current material specifications of COORS as set forth in
writing and provided to GPC from time to time (with respect to
each Product, the "Material Specifications"). Julian dates are
used to indentify current artwork and are listed on the Artwork
Table published by the COORS Technical Documents Department, and
GPC will be required to sign off on all new and revised
specifications. GPC shall issue without delay and upon request
from a COORS Designated Representative (as defined in Section
8.2) a returned goods authorization (a "Returned Goods
Authorization") with respect to any Products supplied by GPC that
do not meet or exceed the Material Specifications, and such
Products will be returned to GPC if they do not meet or exceed
the Material Specifications, or if they do not run on the COORS'
lines for which they are intended following a good faith effort
by the parties to assign responsibility and resolve those
instances where it is not readily apparent if the Products are
within or out of specification. A COORS Designated
Representative shall make a good-faith effort to obtain a
Returned Goods Authorization prior to returning any rejected
Products to GPC.
GPC shall not ship any Products that have been previously
returned as defective without first notifying the COORS Plant
Services Designated Representative. Such Products shall be
clearly marked as having been sorted and reshipped. If GPC fails
to so mark such Products on three or more occasions in one
calendar quarter, COORS shall have the right in its discretion to
obtain from third parties all or any portion of its requirements
for any or all Products until such time as GPC develops a
methodology to comply with this requirement that is acceptable to
COORS.
If any Product quality problem adversely affects COORS'
finished goods quality or packaging line efficiencies, COORS' may
notify GPC and GPC shall use its best commercial efforts to
propose actions to correct such problem within one week of
receipt of such notice from COORS and to replace such Products
with satisfactory Products within three weeks after receipt of
such notice from COORS. If GPC does not propose a plan
satisfactory to COORS within the one-week period described above
or if GPC does not replace the affected Products within the three-
week period described above, COORS shall have the right in its
discretion to obtain from third parties all or any portion of its
requirements for the Products affected by such quality problem
until such time as GPC establishes that such Products can (a) be
manufactured and supplied to COORS in volumes required by COORS
in accordance with the Material Specifications for such Products
and (b) run on COORS' lines.
COORS shall have the right to use up reasonable quantities
of Products that it has purchased or is obligated to purchase
from third parties pursuant to either of the two preceding
paragraphs prior to resuming purchases from GPC. The
reasonableness of such quantities shall be determined in light of
the circumstances including, without limitation, the minimum
quantities such third parties are willing to supply on
commercially reasonable terms and the lead time to obtain such
Products.
5.4 GPC shall maintain finished goods inventories of the
Products which will not go below two weeks or exceed 12 weeks
based on the weekly requirement schedules supplied by COORS. The
requirements of COORS shall be made available to GPC in
accordance with procedures in effect on the date hereof.
Exceptions to the two-week minimum, 12-week maximum finished
goods inventory for the Products shall be considered on a
case-by-case basis with the involvement of the affected brand
coordinated by the appropriate COORS Packaging Purchasing
Designated Representative who shall provide approval in writing
by means of a written release. COORS shall have the right to
request, by a Volume Authorization form, a volume of Product less
than the minimum run quantity set forth on Schedule A or B, as
applicable, and pay the applicable make-ready charge therefor set
forth on Schedule B. GPC shall have inventory of finished
product available to COORS Plants within the time periods
provided as follows:
(a) if final production point is GPC-Boulder or
GPC-Golden, then: to COORS-Golden, 2 hours; to
COORS-Memphis, 72 hours; to COORS-Shenandoah, 96 hours, or
(b) if final production point is GPC-Lawrenceburg,
then: to COORS-Golden, 48 hours; to COORS-Memphis, 24 hours;
to COORS-Shenandoah, 48 hours.
The parties agree that finished goods do not include
anything deemed to be work-in-process which includes, but is not
limited to, metalized and printed or laminated roll stock.
5.5 GPC shall use its expertise to make recommendations
which will improve the Products from a quality, runability or
pricing standpoint. GPC shall present all recommendations in the
COORS/GPC Technical Interface Meeting or Cost Savings Meeting,
and if a conceptual document is approved, testing will be
conducted and Material Specifications revised as required.
Pricing documentation shall be submitted to a COORS Packaging
Purchasing Designated Representative. COORS will be spending
testing dollars based on GPC's forecasted savings. If the Actual
Savings are less than or equal to 200% of the testing costs, GPC
shall pay 50% of COORS' testing costs.
Savings identified from COORS' approved specification
changes to the Products, freight or any other associated COORS'
approved logistical savings (but not including line efficiency
changes) shall be passed on to COORS in accordance with Section
4.1. Freight savings attributable solely to the reduced hauling
distance resulting from using GPC's new Golden, Colorado plant
shall not be considered Actual Savings.
5.6 Within 60 days after the delivery of Products to COORS
or within 60 days after a project has been put "on hold," GPC
shall bill for all costs quoted or otherwise incurred. Failure
to bill within the 60 days shall result in the right of COORS to
refuse payment relating to any goods supplied, work-in-progress
or services received for which payment is sought by such late
billing.
5.7 GPC shall pay for all cylinder and plate maintenance
and for all GPC-initiated changes. GPC shall pay for backup
cylinders and plates which GPC determines are required. Subject
to Section 6.5, GPC shall be responsible for all backup cylinder
and plate re-etch costs. As requested, GPC will provide a COORS
Packaging Purchasing Designated Representative with a by-brand
update of COORS-owned cylinders and plates. This update will be
provided within one week of any such request.
5.8 Written authorization to strip cylinders and plates
must be obtained from a COORS Designated Representative. GPC
will be responsible for all costs associated with unauthorized
stripping of cylinders and plates.
5.9 During the Term and for a period of three years
following expiration or termination of this Agreement, GPC agrees
to maintain its financial information in accordance with
generally accepted accounting principles and practices
consistently applied. GPC shall grant to COORS, or to others
designated by COORS, reasonable access to specific accounting
records, invoices and records of payment with respect to (a)
COORS inventories of finished goods held by GPC and (b) GPC's
suppliers of Raw Materials and services specifically used in
Products.
5.10 GPC shall bear the cost of all incremental freight
associated with GPC's failure to manufacture Products to support
COORS' schedule requirements, provided COORS has provided notice
of the requirements in accordance with GPC's lead times set forth
in Schedule C.
5.11 GPC shall require all jobsite personnel and
subcontractors to attend a Workplace Hazard and Awareness
Management (WHAM) training seminar at COORS prior to working on
COORS' property. GPC shall contact the COORS' Environmental
Coordinator Tom Schnickel, telephone (303) 277-5361, to schedule
training. The training sessions will approximately 1-1/2 hours
on COORS' property. This includes all personnel brought on site
during the duration of the contract. "Area specific" training
will be required prior to personnel beginning work.
5.12 Upon receipt of a written request by COORS (a "Drawing
Request"), and subject to the requirements and limitations set
forth below in this Section 5.12, GPC shall provide copies of
dimensional drawings and designs it has developed for Products to
third party manufacturers and consultants to COORS. Each Drawing
Request shall set forth (a) the specific Product for which
dimensional drawings and designs are sought and (b) the third
party manufacturer or consultant to which such drawings and
designs are to be supplied. GPC shall have the following options
to provide drawings and designs pursuant to the Drawing Request:
(i) GPC will provide the drawings and designs as they exist; or
(ii) GPC will provide the drawings and designs as they exist, but
will notify COORS in writing that they are considered
confidential and will require that COORS obtain from each third
party manufacturer or consultant designated in a Drawing Request
a form of confidentiality agreement mutually acceptable to COORS
and GPC relating to the dimensional drawings and designs to be
supplied and any information contained therein; or (iii) GPC may
redact portions of any dimensional drawing or design to be
supplied pursuant to a Drawing Request; provided, however, that
in such case GPC will discuss with COORS in good faith the
reasons for redacting any dimensional drawing or design.
5.13 Volumes in excess of those authorized by COORS on any
Volume Authorization form shall be to GPC's account, unless COORS
chooses to offer some other solution for using the excess volume.
6.0 DUTIES OF COORS BREWING COMPANY
6.1 For Sustaining Products, COORS shall use its best
commercial efforts to provide a firm two-week Products
requirement list and an additional ten-week Products requirement
forecast. COORS initiated changes within such two-week period
may be subject to additional charges to COORS in accordance with
Section 4.9.
6.2 COORS Designated Representatives shall release to GPC
in writing weekly shipment requirements of each COORS Plant for
the Products. The time parameters set forth in any such release
shall be consistent with the lead times to be provided GPC in
accordance with Schedule C hereto or as otherwise agreed to among
the parties. Any changes to the weekly shipment requirements of
COORS subsequent to the release of such requirements to GPC shall
be made by a COORS Designated Representative. COORS shall be
responsible for any costs or expenses incurred by GPC to revise
any supply shipments previously sent pursuant to the release of a
COORS Designated Representative; provided, however, that GPC will
use its best commercial efforts to keep any such costs or
expenses to a minimum.
6.3 With respect to any new Product or revision of an
existing Product to be supplied by GPC, a COORS Designated
Representative shall provide GPC with the applicable Material
Specifications. Frozen artwork shall be given to GPC through the
COORS Company/Technical Documents, Quality Assurance or Product
Managers. COORS' approval of GPC's color keys shall be deemed
COORS' authorization for GPC to proceed with respect to the
applicable Sustaining Products. All frozen artwork presented to
GPC shall include three Fiery thermal outputs, a digital
tape/disk and a signed checklist sheet.
6.4 With regard to new or non-Sustaining Product packaging
supplies, COORS Packaging Purchasing Designated Representative
shall issue (1) purchase orders to cover art and engraving costs
and (2) Volume Authorization forms prior to GPC production.
6.5 COORS shall be required to purchase all original
cylinders and plates. As set forth in Section 5.7, backup
cylinders and plates and cylinder and plate maintenance costs,
including re-etching of current artwork, shall be the
responsibility of GPC. COORS shall be responsible for re-etch
costs on original and backup cylinders and plates resulting from
COORS-initiated specification changes. If specification or
artwork changes require new cylinders or plates, COORS shall
purchase these through GPC. All costs for cylinders, plates,
etching and artwork preparation shall be on a pass-through basis
with no markup by GPC. Appropriate backup will be attached to
each GPC invoice for cylinders, plates, etching and artwork
preparation.
6.6 COORS shall pay for finished goods inventories run by
GPC at the request of COORS which are not released within 12
weeks from the date they were produced. These will be referred
to as "Billed Not Shipped" ("BNS") inventory and will incur a
$3.00 per pallet per month warehousing charge. BNS inventories
will be included on GPC's weekly inventory reports to COORS and
will be clearly marked as such for easy identification during
routine inspections of GPC's warehouses.
6.7 COORS shall determine whether to ship or destroy
obsolete or BNS inventories within six months from date of
production. Exceptions must be negotiated on a case-by-case
basis; provided, however, storage beyond six months will be
$10.00 per pallet per month and may be stored off site.
7.0 SHIPPING TERMS
Unless specified otherwise, all shipments made pursuant to
this Agreement shall be made under the following terms:
- Shipments to COORS-Golden
or Rocky Mountain Bottle
Company from GPC-Boulder
or GPC-Golden: FOB Origin - Freight Collect
- Shipments to all other
COORS Plants: FOB Destination - Freight Prepaid
Any premium freight shipments that are to be charged to COORS
shall have the prior approval of COORS and COORS shall be
responsible for any approved incremental freight costs. The
parties agree to cooperate fully in implementing strategies to
reduce COORS' freight costs, including changes to freight terms.
COORS shall have the option to elect to take delivery of all or
any portion of the Products at GPC's applicable plant and, if
COORS elects to do so, COORS shall be responsible for freight
charges and shipping arrangements for such Products.
8.0 DESIGNATED REPRESENTATIVES
8.1 For purposes of this Agreement, any individual serving
in the capacity and at the address set forth below shall be a
"COORS Packaging Purchasing Designated Representative:"
COORS-Golden
Primary: Materials Management Agent - Packaging Materials
Coors Brewing Company
Mail Number BC335
Golden, CO 80401
Telephone: (303) 277-6537
Alternate: Buyer
Coors Brewing Company
Mail Number BC335
Golden, CO 80401
Telephone: (303) 277-5261 or 277-2888
Alternate: Packaging Purchasing Team Manager
Coors Brewing Company
Mail Number BC335
Golden, CO 80401
Telephone: (303) 277-5883
COORS-Shenandoah
Primary: Purchasing Manager
Coors Brewing Company - Shenandoah
P.O. Box 25
Route 4, Highway 340
Elkton, VA 22827
Telephone: (703) 289-8138
Alternate: Director-Logistics
Coors Brewing Company - Shenandoah
P.O. Box 25
Route 4, Highway 340
Elkton, VA 22827
Telephone: (703) 289-8227
COORS-Memphis
Primary: Purchasing Manager
Coors Brewing Company - Memphis
5151 East Raines Road
Mail Number M100
Memphis, TN 38118
Telephone: (901) 375-2024
Alternate: Finance Director
Telephone: (901) 375-2026
8.2 For purposes of this Agreement, any individual serving
in the capacity and at the address set forth below shall be a
"COORS Plant Services Designated Representative" (who, together
with each of the COORS Packaging Purchasing Designated
Representatives, shall each be a "COORS Designated
Representative"):
COORS-Golden
Primary: Packaging Supplies Analyst
Multi-Plant Scheduling Purchasing
Coors Brewing Company
Mail Number BC110
Golden, CO 80401
Telephone: (303) 277-2426
Alternate: Packaging Supplies Manager
Multi-Plant Scheduling Purchasing
Coors Brewing Company
Mail Number BC110
Golden, CO 80401
Telephone: (303) 277-3277
COORS-Shenandoah
Primary: Critical Materials Analyst
Coors Brewing Company - Shenandoah
P.O. Box 25
Route 4, Highway 340
Elkton, VA 22827
Telephone: (703) 289-8086
Alternate: Scheduling Planner
Coors Brewing Company - Shenandoah
P.O. Box 25
Route 4, Highway 340
Elkton, VA 22827
Telephone: (703) 289-8028
COORS-Memphis
Primary: Inventory Control Analyst
Coors Brewing Company - Memphis
5151 East Raines Road
Mail Number M100
Memphis, TN 38118
Telephone: (901) 375-2878
Alternate: Plant Services Supervisor
Coors Brewing Company - Memphis
5151 East Raines Road
Mail Number M100
Memphis, TN 38118
Telephone: (901) 375-2035
8.3 For purposes of this Agreement, any individual serving
in the capacity and at the address set forth below shall be a
"GPC Designated Representative:"
COORS-Golden
Primary: Account Representative
Graphic Packaging Corporation
14062 Denver West Parkway, Suite 250
Golden, CO 80401
Telephone: (303) 215-4636
Alternate: General Sales Manager
Graphic Packaging Corporation
14062 Denver West Parkway, Suite 250
Golden, CO 80401
Telephone: (303) 215-4629
Alternate: Graphic Packaging Corporation - Boulder, CO
3825 Walnut Street
Boulder, CO 80403
Telephone: (303) 444-4674
Graphic Packaging Corporation - Lawrenceburg, TN
2006 Liberty Avenue
Lawrenceburg, TN 38464
Telephone: (615) 762-6486
9.0 COMMITMENT TO RECYCLING
GPC understands that COORS places a high priority on being
able to have its packaging products be 100% recyclable and for
those same packaging products to be produced from as high a
percentage of post-consumer, recycled material as is possible.
GPC shall use its best commercial efforts, including, but not
limited to, committing research and development funds, to the
mutually beneficial effort to finding sources and testing
materials. GPC shall not pass through costs for recycled
materials to COORS that are greater than non-recycled material
costs without COORS' prior written approval.
10.0 PERFORMANCE EVALUATION CRITERIA
A representative from each COORS Plant shall meet with
representatives from GPC at least once every three months (or
more frequently as the parties may agree from time to time) for a
performance review according to criteria and format detailed in
the Supplier Performance Rating, Coors Brewing Company, a copy of
which has been supplied to GPC prior to the date hereof. If GPC
is designated as a "Supplier in Development" as defined in COORS'
Supplier Performance Rating for three consecutive quarters COORS
shall have the right in its discretion to obtain from third
parties all or any portion of its requirements for any or all
Products until GPC has demonstrated the ability to exceed such
rating for two consecutive quarters.
11.0 INSPECTION
COORS may, at its option, inspect and test any Products
ordered hereunder at any time and place to the extent
practicable, including during the period of manufacture and prior
to delivery. GPC agrees to permit reasonable access to its
facilities during normal business hours for such inspections and
tests; provided, however, that COORS shall not materially
interfere with the operations of GPC during the course of any
such inspections or tests. All Products shall be received
subject to final inspection by COORS within a commercially
reasonable time. GPC must obtain COORS' written consent prior to
shipment if GPC desires other inspection arrangements. The
inspection, testing, approval or acceptance by COORS of any
Products provided hereunder shall not relieve GPC of its
obligations with respect thereto.
12.0 EARLY TERMINATION
12.1 Notwithstanding any other provision of this Agreement,
either party may terminate this Agreement upon (a) a breach of
any term of this Agreement by the other party if such breach is
not cured or remedied in accordance with Section 13.1; (b) the
entry of a decree or order by a court for relief in respect of
the other party under bankruptcy or similar laws or the
appointment of a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of or for the
other party or any substantial part of its property; or (c) the
commencement by the other party of a voluntary case under
bankruptcy or similar laws, or the consent or acquiescence by
the other party to the filing of any such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator (or other similar
official) of such other party or any substantial part of its
property, or the making by it of an assignment for the benefit
of creditors.
12.2 No termination of this Agreement shall relieve COORS
from paying amounts due for Products produced by GPC prior to
such termination to the extent such Products are produced in
accordance with the provisions hereof, which amounts will become
immediately due and payable upon any termination of this
Agreement.
13.0 BREACH AND CURE; EXCUSABLE DELAYS
13.1 In the event that any party believes the other party is
in breach of the terms hereof, it shall provide written notice of
such purported breach describing such breach with particularity
(in fact and in legal impact) and the purported breaching party
shall be granted 30 days from its actual receipt of such notice
to cure said breach if it concurs that the acts or omissions
described in the notice do constitute breach, in which case the
breach shall be deemed to have never occurred. If, pursuant to
Section 22.0, it is determined that (a) any action or inaction of
the purported breaching party in fact constitutes a breach of the
terms hereof and (b) such purported breaching party had bona fide
grounds to challenge the accusation of such breach, then the
breaching party shall have 15 days from the date of such
determination to cure said breach and if so cured by the breaching
party the breach shall be deemed to have never occurred.
13.2 Upon written notice to the other party, COORS or GPC
may suspend performance hereunder in the event of war, fire,
labor difficulties, acts of God and other forces which are beyond
the control of the parties affected. If the event causing the
suspension of performance causes GPC to be unable to supply
Products ***, COORS may immediately pursue ***; provided,
however, that upon written request of GPC (to be supplied within
24 hours of notification pursuant to this Section 13.2) whereby
GPC undertakes *** COORS for *** prices set forth in Schedule
A or B, as applicable (or otherwise used in the ordinary course
of dealings between COORS and GPC immediately prior to such
suspension) ***, COORS shall not *** (it being understood that
not less than 15 days prior to the end of *** or any ***, GPC
must reaffirm such undertakings for any ***); and further
provided, however, that the rights and obligations of GPC and
COORS shall resume upon the later to occur of (i) GPC
informing COORS that GPC is capable of full performance hereunder
and (ii) the earliest opportunity that *** (including the election
of GPC ***). This Section 13.2 may be applied on a Product
specific basis when applicable. Notwithstanding anything to the
contrary, COORS shall have the right *** with respect to any
Product or Products, effective on a date it shall designate, if
after 180 days following its notice of suspension under this
Section 13.2, GPC has not informed COORS that GPC is capable of
full performance with respect to such Product or Products
hereunder.
13.3 To prevent any suspension of performance by GPC under
Section 13.2, each of GPC and COORS agree to use its best efforts
to agree upon, by September 1,1998, a back-up plan for the supply
of Product to COORS in the case of a catastrophe that renders GPC
unable to supply Product to COORS at the levels required by this
Agreement, which plan will include, without limitation, (a)
provisions for the maintenance of specified levels of Product
inventories by COORS at the COORS Plants, (b) maintenance and
rotation of specified levels of Product inventories by GPC at
offsite facilities in addition to inventory levels otherwise
required under this Agreement, (c) agreements between GPC, COORS
and potential third-party suppliers of Products for such
third-party suppliers to supply Products to COORS in the event of
a catastrophe, but only with respect to those Products that
suppliers other than GPC have the technical know-how to
manufacture. Test runs of Products will be conducted to ensure
the ability of third-party suppliers to produce Products meeting
COORS quality requirements.
14.0 WARRANTIES
14.1 TITLE
GPC warrants good title to all Products furnished to
COORS by GPC. This warranty of title shall continue without
limitation as to time. If any failure to comply with this
warranty appears at any time, GPC shall defend the sale of the
Products at issue against all and every person or persons
whomsoever and shall indemnify and save COORS harmless from and
against any losses, damages, expenses and liabilities of every
kind arising out of such failure.
14.2 DESIGN
Where GPC, under this Agreement is to furnish, or is
responsible for, the design for any Products or for a process,
GPC guarantees that the same shall meet the performance
requirements specified therefor in this Agreement.
14.3 GOODS
GPC warrants that all Products will be free from
defects in materials and workmanship, will conform to applicable
Material Specifications, will be merchantable and will be fit for
the purpose for which they were made, advertised or intended and
will perform on COORS' packaging lines as required by COORS.
Unless otherwise provided herein, GPC warrants all Products for a
period of six months from the date of production; provided,
however, that any warranty provided under this Section 14.3 shall
be based on, and adjudged pursuant to, the Material
Specifications applicable to the Product in question at the time
such Product was produced. These warranties are in addition to
all other express or implied warranties required by law. All
warranties shall survive acceptance and payment and shall run to
COORS and its customers. COORS shall not be required to obtain
GPC's permission to return any Products to GPC which are not in
conformity with this warranty; provided, however, that a COORS
Designated Representative shall make a good-faith effort to
obtain a Returned Goods Authorization prior to returning
non-conforming Products to GPC.
Products not manufactured or supplied in conformity to
COORS' Material Specifications or that do no perform on COORS
packaging lines as required by COORS may, at COORS' option: (a)
be retained at an equitable adjustment in price, (b) be returned
for replacement, correction, credit or refund, or (c) purchased
from an alternate supplier if GPC is unable to supply replacement
Products timely to ensure continuity of supply to COORS'
customers. GPC shall not ship replacement Products or repaired
Products to COORS unless expressly requested and authorized by
COORS. All returns, replacements and corrections resulting from
nonconforming Products pursuant to this Section 14.3 shall be at
GPC's expense, including all labor, materials, repair service,
transportation and other necessary charges. GPC assumes all risk
of loss or damage to goods returned by COORS while such goods are
in transit.
15.0 INDEMNIFICATION
15.1 GPC shall, at its expense, hold harmless and defend
COORS against any claim or action for the infringement of any
patent, copyright or trademark by GPC and shall indemnify COORS
against all damages, costs and expenses arising from such alleged
infringement by reason of the manufacture, sale or the use of the
Products. COORS agrees to give GPC prompt notice in writing of
any such claim or action for infringement and full opportunity to
conduct the defense thereof. Upon such notice GPC shall, at its
expense, either procure for COORS the right to continue using the
Products, replace same with noninfringing goods, or modify same
so they become noninfringing. Said replacement or modification
shall be acceptable to COORS. At COORS' election, GPC shall
remove the Products and refund the purchase price, including
transportation costs thereof.
15.2 COORS shall, at its expense, hold harmless and defend
GPC against any claim or action for the infringement of any
copyright or trademark of COORS incorporated or otherwise used in
the artwork or other Material Specifications to be conformed with
or reproduced by GPC in the production of any Product and shall
indemnify and hold harmless GPC against all damages, costs and
expenses arising from such alleged infringement by reason of the
manufacture, supply, sale or use of any Product. GPC agrees to
give COORS prompt notice in writing of any such claim or action
for infringement and full opportunity to conduct the defense
thereof. Upon such notice, COORS shall, at its expense, either
procure for GPC the right to continue to produce the Products
using the artwork or applying the Material Specifications in
question or instruct GPC to modify such artwork or Material
Specifications so as to cause the applicable Products to become
noninfringing. The cost of any modification to a Product in
accordance with this Section 15.2, both at the time of such
modification and going forward to the extent there are ongoing
costs, shall be at the sole expense of COORS or may be otherwise
rejected by GPC.
16.0 COMPLIANCE
16.1 GPC warrants that the facilities used and processes
employed in the manufacture and delivery of the Products provided
hereunder comply with all applicable federal, state, local or
agency laws or regulations. GPC agrees to indemnify and hold
COORS harmless for any expenses, including legal fees and fines,
resulting from GPC failure to comply with said laws or
regulations.
16.2 COORS warrants that all artwork and Material
Specifications with respect to each Product complies with all
applicable federal, state, local or agency laws or regulations.
COORS agrees to indemnify and hold GPC harmless for any expenses,
including legal fees and fines, resulting from the failure of
such artwork or Material Specifications to comply with such laws
or regulations.
17.0 EQUAL OPPORTUNITY; SPECIAL REQUIREMENTS
17.1 If this Agreement is subject to the regulations of the
Office of Federal Contract Compliance Programs and Executive
Orders 11246 and 11758 as amended, the Equal Opportunity
Regulations at 41 CFR Subsection 601.4 and Affirmative Action
Regulations at 41 CFR Subsections 250.4 and 741.4 are
incorporated herein by reference, and GPC shall comply with all
the requirements of these regulations in performing hereunder.
17.2 It is COORS' policy that qualified, competitive
minority suppliers, contractors, subcontractors and employees of
GPC shall have equal opportunities to furnish materials and
services for this project. GPC is encouraged to utilize minority
businesses and employees whenever practicable. GPC will report
expenditures to minority suppliers quarterly on attached Schedule
D.
17.3 GPC acknowledges that COORS sells its products to a
broad and diverse market composed of a variety of demographic,
social and cultural backgrounds. It is a policy of COORS, based
on objectives of good corporate citizenship and sound economic
policy, to seek out competitive minority suppliers for its
Product requirements. GPC acknowledges the importance to COORS
of its minority supplier policy and agrees that it will endeavor
to support COORS in the execution of such policy. Accordingly,
COORS and GPC agree that COORS shall have the right to propose (a
"Minority Supplier Proposal") to GPC the allocation of production
of up to 6% of total Product requirements of COORS to suppliers
owned by African-American individuals ("African-American
Suppliers") and the allocation of production of up to 8% of total
Product requirements of COORS to suppliers owned by Hispanic
individuals ("Hispanic Suppliers" and, together with African-
American Suppliers, "Minority Suppliers"). Each Minority
Supplier Proposal shall set forth the Products and amount of
requirements of such Products that would be provided by a
Minority Supplier, as well as the terms of any actions,
concessions, agreements or other arrangements that may be entered
into between COORS and GPC to mitigate financial losses that
would be incurred by GPC as the result of losing the right to
supply such Products. COORS may not allocate its Product
requirements to a Minority Supplier pursuant to this Section 17.3
unless it is pursuant to a Minority Supplier Proposal that
results in an arrangement mutually acceptable to COORS and GPC in
their respective sole discretion. COORS and GPC acknowledge and
agree that they will consider and negotiate in good faith the
allocation of Product requirements of COORS to a Minority
Supplier pursuant to the terms of a Minority Supplier Proposal,
and that economic and social factors will be taken into account
by both parties in negotiating the final terms of any
arrangement.
18.0 ASSIGNMENT
Except in the case of a merger, consolidation or sale of all
or substantially all of the capital stock or assets of COORS or
GPC, neither COORS nor GPC shall have the right or power to
assign or subcontract its rights or obligations hereunder without
the express written consent of the other party. Any attempt to
do so without such consent shall be null and void and shall give
the non-consenting party the right to cancel and terminate this
Agreement. In the event consent is properly given, the
provisions of this Agreement shall bind and benefit the parties
hereto and their representatives, successors and assigns.
19.0 WAIVER
No waiver, amendment or modification of any of the
provisions of this Agreement shall be binding on COORS or GPC
unless evidenced by a written amendment duly signed by COORS and
GPC.
20.0 TAXES
All prices set forth on Schedules A and B are exclusive of
taxes, which shall be added to the cost of all Products supplied
hereunder in accordance with applicable federal, state and local
tax regulations and provisions.
21.0 GOVERNING LAW AND VENUE
This Agreement shall be deemed to have been made and
accepted in Jefferson County, Colorado, and the laws of the State
of Colorado shall govern this Agreement and any interpretations
or constructions thereof.
22.0 DISPUTES
Except as otherwise provided, any dispute, claim or
controversy arising out of or relating to this Agreement or the
breach, termination or validity thereof, including but not
limited to any disagreement or impasse regarding negotiations
over pricing adjustments or amounts due and owing in accordance
with Section 4.0, shall be resolved in accordance with the
procedures set forth in this Section 22.0. These procedures
shall be the sole and exclusive process for the resolution of any
such dispute.
If the parties are unable to resolve any disagreement or
dispute, either party may refer the matter to the Chief Executive
Officers (the "CEOs") of the other party by giving the other
party written notice ("NOTICE"). Within 20 days after delivery
of NOTICE, the CEOs of both parties shall meet at a mutually
acceptable time and place to exchange relevant information and to
attempt to resolve the dispute. If the matter has not been
resolved within 45 days after delivery of NOTICE, or if the CEOs
fail to meet within 20 days after delivery of NOTICE, either
party may initiate mediation and, if applicable, arbitration
proceedings as set forth herein.
All negotiations pursuant to this clause are confidential
and shall be treated as compromise and settlement negotiations
for purposes of the Federal Rules of Evidence and State Rules of
Evidence.
In the event a dispute exists between COORS and GPC and the
respective CEOs are unable to resolve the dispute, the parties
agree to participate in a nonbinding mediation procedure as
follows:
A mediator will be selected by having counsel for
each party agree on a person to act as mediator.
The parties' counsel as well as the CEOs of each
party and not more than two (2) other participants
from each party will appear before the mediator at
a time and place determined by the mediator, but
not more than sixty (60) days after delivery of
NOTICE. The fees of the mediator or other costs
of mediation will be shared equally by the
parties.
Each party's counsel will have 45 minutes to
present a review of the issue and argument before
the mediator. After each counsel's presentation,
the other counsel may present specific
counter-arguments not to exceed 10 minutes. The
45-minute and 10-minute periods will be exclusive
of the time required to answer questions from the
mediator or attendees.
After both presentations, the CEOs may ask
questions of the other side. At the conclusion of
both presentations and the question periods, the
CEOs and their counsels will meet together to try
and resolve the dispute. The length of the
meeting will be as agreed between the parties.
Either party may abandon the procedure at the end
of the presentations and question periods if it
feels it is not productive to go further. This
mediation procedure is not binding on either
party.
The duties of the mediator are to be sure that the
above set-out time periods are adhered to and to
ask questions so as to clarify the issues and
understanding of the parties. The mediator may
also offer possible resolutions of the issue but
has no duty to do so.
After applying the mediation procedure set forth
above, or if either party refuses to take part in
the mediation process, the parties hereby agree to
submit all controversies, claims and matters of
difference that are unresolved to arbitration in
Denver, Colorado, according to the rules and
practices of the American Arbitration Association
from time to time in force, except that insofar as
such rules and practices are unenforceable under
or directly supplemented by the Colorado Rules of
Civil Procedure or any other provisions of
Colorado law then in force, such Colorado rules
and provisions shall govern. This submission and
agreement to arbitrate shall be specifically
enforceable. Arbitration may proceed in the
absence of either party if notice of the
proceedings has been given to such party. The
arbitrators are not empowered to award damages in
excess of compensatory damages, and each party
hereby irrevocably waives any damages in excess of
compensatory damages. The parties agree to abide
by all awards rendered in such proceedings. Such
awards shall be final and binding on all parties
to the extent and in the manner provided by the
Colorado Rules of Civil Procedure. All awards may
be filed with the clerk of one or more courts,
state or federal, having jurisdiction over the
party against whom such award is rendered or such
party's property, as a basis of judgment and of
the issuance of execution or its collection.
23.0 AMENDMENTS
This Agreement may not be amended except in writing properly
executed by the parties hereto. Except as specifically amended,
this Agreement shall remain in full force and effect.
24.0 RISK OF LOSS
GPC shall bear the risk of loss on rejected Products after
receipt of notice or rejection from COORS. If risk of loss
passes at the shipping point and if GPC fails to label, pack or
load the Products in an appropriate manner or to ship in the
manner directed by COORS, GPC shall reimburse COORS for any loss,
liability or claim resulting therefrom.
25.0 CONFIDENTIAL INFORMATION
25.1 Any specifications, drawings, business or technical
information that may be furnished or disclosed to either party in
conjunction with this Agreement or that either party may be
exposed to as a result of entering the property of the other
while acting or performing pursuant to the terms of this
Agreement shall be kept confidential, shall not be used for other
purposes and shall be returned to the owner or originator thereof
at such party's request.
25.2 So long as this Agreement is in effect, without the
prior consent of the other party, which may be withheld for any
reason or no reason at the sole discretion of that party, neither
COORS nor GPC shall, nor shall either of them permit their
respective affiliates to, issue or cause the publication of any
press release or other public statement or announcement of any
nature with respect to this Agreement (including the existence
hereof) or the transactions contemplated hereby except as may be
required by law or by obligations pursuant to any listing
agreement with a national securities exchange. If either COORS
or GPC is required by law or obligation pursuant to any
applicable listing agreement to disclose any information with
respect to this Agreement or the transactions contemplated
hereby, such party shall provide the other party with prompt
notice of such required disclosure.
26.0 INSURANCE
Both parties shall purchase and maintain during the
performance of this Agreement at least the following types of
insurance and minimum coverages:
A) Comprehensive General Liability Insurance with a
combined single limit, including bodily injury and
property damage, of $1,000,000 per occurrence;
B) Automobile Liability Insurance with a combined
single limit, including bodily injury and property
damage, of $1,000,000 per occurrence;
C) Statutory Workers' Compensation and Occupational
Disease Disability Insurance; and
D) Employers Liability Insurance with a limit of
$500,000 per occurrence.
Notwithstanding the above requirements, either party may
self-insure item "C" above. In the event of any material changes
to either party's existing coverages, that party shall furnish to
the other party evidence of such insurance coverage in the form
of Certificates of Insurance, together with evidence that the
insurance carrier has assumed the liability of the other party
hereunder by way of contractual liability coverage provided
either under a properly executed Assumption of Contractual
Liability endorsement, a properly executed Broad Form Liability
endorsement, or by a Certificate of Contractual Liability
Insurance. All Certificates of Insurance shall provide that the
other party shall be given at least 30 days written notice prior
to any material change, substitution or cancellation prior to the
stated expiration date. With regard to items "A" and "B" above,
all insurance policies shall be "occurrence" policies rather than
"claims-made" policies.
27.0 YEAR 2000
27.1 COORS reserves the right to verify GPC's ability to
provide Products beyond the year 1999.
27.2 GPC's facilities and processes are designed to
function beyond the year 1999.
27.3 GPC represents and warrants that the Products are
designed to be used prior to, during, and after calendar year
2000 and Leap Year and are not adversely affected by the use of
data comprising or relating to calendar dates on or after January
1, 2000, or the time periods which include such dates.
27.4 If GPC cannot demonstrate to COORS' reasonable
satisfaction that all year 2000 problems will be resolved in time
to ensure uninterrupted supply of Products, COORS will have the
right to pursue alternate sources of Product supply until such
time as GPC has resolved such problems.
28.0 INDEPENDENT CONTRACTOR
The parties expressly understand and agree that GPC is
acting as an independent contractor unrelated to COORS or its
subsidiaries or affiliates. GPC shall be solely responsible for
the supervision, control and direction of its employees,
servants, agents, or subcontractors performing work under this
Agreement. GPC shall be responsible for paying its employees,
agents, servants, or subcontractors; for withholding any and all
required filing and payments for income taxes, unemployment taxes
and social security taxes; and for all benefit payments and
programs. Nothing in this Agreement is intended to create a
relationship, express or implied, of employer/employee or
principal/agent or master/servant between COORS and GPC or
between COORS and any of GPC's employees, agents, servants, or
subcontractors. GPC shall not incur any expense or obligation or
make any representations or warranties to third parties binding
upon or in the name of COORS or any of COORS' subsidiaries or
affiliates.
In this section, COORS shall mean COORS and its subsidiaries
and affiliated companies and their respective officers, agents,
representatives and employees. GPC shall mean GPC and its
subsidiaries and affiliated companies and their respective
officers, agents, representatives and employees.
29.0 ENTIRE AGREEMENT
These terms and conditions, together with any other terms
stated in any order releases issued by COORS pursuant to this
Agreement and in any referenced attachments, constitute the
entire agreement of the parties and shall terminate and supersede
all prior oral or written agreements, including (i) that Blanket
Supply Agreement dated December 22, 1992, and (ii) the 1997
Supply Agreement, each between COORS and GPC. GPC's acceptance
of orders from COORS is expressly conditioned on GPC's acceptance
of the terms and conditions stated herein. COORS hereby notifies
GPC of its objection to any additional or different terms
proposed by GPC in connection with this Agreement.
30.0 COUNTERPARTS
This Agreement may be executed in counterparts, all of which
shall be considered one and the same agreement and shall become
effective when two or more counterparts have been signed by both
of the parties and delivered to the other party.
31.0 HEADINGS
The headings contained in this Agreement are for reference
only and shall not affect in any way the meaning or
interpretation of this Agreement.
32.0 SEVERABILITY
Any provision of this Agreement which is invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity, illegality, or
unenforceability, without affecting in any way the remaining
provisions hereof in such jurisdiction or rendering that or any
other provision of this Agreement invalid, illegal or
unenforceable in any other jurisdiction.
BY SIGNING BELOW, both parties hereto accept this Agreement.
COORS BREWING COMPANY GRAPHIC PACKAGING CORPORATION
By: /s/ W. Leo Kiely III By: /s/ David A. Tolley
- --------------------------- -----------------------------
Name: W. Leo Kiely III Name: David Tolley
Title: President & Chief Title: President, Specialty
Operating Officer Folding Carton Division
Date: 8/27/98 Date: 8/27/98
<TABLE>
SCHEDULE A
SUSTAINING PRODUCTS
I. CAN SECONDARY PACKAGES
<CAPTION>
CLAYCOAT COMPOSIPAC COMPOSIPAC II
CLAYCOAT MINIMUM COMPOSIPAC MINIMUM COMPOSIPAC MINIMUM RUN
PRICE RUN QTY. PRICE RUN QTY. II PRICE QTY.
($/1000) (000's) ($/1000) (000's) ($/1000) (000's)
<S> <C> <C> <C> <C> <C> <C>
COORS ORIGINAL
6-Pack Can Wrap *** *** ***
- - Golden
12-Pack Can *** *** ***
Sleeve - Golden
18-Pack Can *** *** ***
Sleeve - Golden
24-Pack Flat *** *** ***
Can Sleeve
- - Golden
24-Pack Twin *** *** ***
Stack Can
Sleeve - Golden
30-Pack Twin *** *** ***
Stack Can
Sleeve - Golden
24 T.S. Divider *** ***
- - Golden *** ***
30 T.S. Divider *** ***
- - Golden
NI = Not Included
</TABLE>
<TABLE>
SCHEDULE A
CAN SECONDARY PACKAGES
<CAPTION>
CLAYCOAT COMPOSIPAC COMPOSIPAC II
CLAYCOAT MINIMUM COMPOSIPAC MINIMUM COMPOSIPAC MINIMUM RUN
PRICE RUN QTY. PRICE RUN QTY. II PRICE QTY.
($/1000) (000's) ($/1000) (000's) ($/1000) (000's)
<S> <C> <C> <C> <C> <C> <C>
COORS ORIGINAL
I.S.
12-Pack Can *** *** ***
Sleeve
- - Memphis
COORS LIGHT
I.S.
12-Pack Can *** *** ***
Sleeve
- - Memphis
NI = Not Included
</TABLE>
<TABLE>
SCHEDULE A
CAN SECONDARY PACKAGES
<CAPTION>
CLAYCOAT COMPOSIPAC COMPOSIPAC II
CLAYCOAT MINIMUM COMPOSIPAC MINIMUM COMPOSIPAC II MINIMUM RUN
PRICE RUN QTY. PRICE RUN QTY. PRICE QTY.
($/1000) (000's) ($/1000) (000's) ($/1000) (000's)
<S> <C> <C> <C> <C> <C> <C>
COORS LIGHT
6-Pack Can *** *** ***
Wrap
Golden/Memphis/
Shenandoah
12-Pack Can *** *** ***
Sleeve
Golden/Memphis/
Shenandoah
18-Pack Can *** *** ***
Sleeve
Golden/
Shenandoah
24-Pack Flat *** *** ***
Can Sleeve -
Golden/Memphis/
Shenandoah
24-Pack Twin *** *** ***
Stack Can
Sleeve
Golden/
Shenandoah
30-Pack Twin *** *** ***
Stack Can
Sleeve
Golden/
Shenandoah
10 Oz. 12- *** *** ***
Pack Can
Sleeve -
Memphis
10 Oz. 24- *** *** ***
Pack Can
Sleeve -
Memphis
16 Oz. 24- *** *** ***
Pack Can
Sleeve -
Memphis
24 T.S. *** ***
Divider - *** ***
Golden/
Shenandoah
30 T.S. *** ***
Divider -
Golden/
Shenandoah
NI = Not Included
</TABLE>
<TABLE>
SCHEDULE A
CAN SECONDARY PACKAGES
<CAPTION>
CLAYCOAT COMPOSIPAC COMPOSIPAC II
CLAYCOAT MINIMUM COMPOSIPAC MINIMUM COMPOSIPAC II MINIMUM RUN
PRICE RUN QTY. PRICE RUN QTY. PRICE QTY.
($/1000) (000's) ($/1000) (000's) ($/1000) (000's)
<S> <C> <C> <C> <C> <C> <C>
EXTRA GOLD
6-Pack Can *** *** ***
Wrap - Golden
12-Pack Can *** *** ***
Sleeve -
Golden
15-Pack Can *** *** ***
Sleeve -
Golden
24-Pack Flat *** *** ***
Can Sleeve -
Golden
30-Pack Twin *** *** ***
Stack Can
Sleeve -
Golden
30 T.S. *** ***
Divider -
Golden
KEYSTONE
6-Pack Can *** *** ***
Wrap - Golden
12-Pack Can *** *** ***
Sleeve -
Golden
24-Pack Flat *** *** ***
Can Sleeve -
Golden
18-Pack Flat *** *** ***
Can Sleeve -
Golden
NI = Not Included
</TABLE>
<TABLE>
SCHEDULE A
CAN SECONDARY PACKAGES
<CAPTION>
CLAYCOAT COMPOSIPAC COMPOSIPAC II
CLAYCOAT MINIMUM COMPOSIPAC MINIMUM COMPOSIPAC II MINIMUM RUN
PRICE RUN QTY. PRICE RUN QTY. PRICE QTY.
($/1000) (000's) ($/1000) (000's) ($/1000) (000's)
<S> <C> <C> <C> <C> <C> <C>
KEYSTONE
LIGHT
6-Pack Can Wrap *** *** ***
- - Golden
12-Pack Can *** *** ***
Sleeve - Golden
18-Pack Can *** *** ***
Sleeve -
Golden/
Shenandoah
24-Pack Flat *** *** ***
Can Sleeve -
Golden
30-Pack Twin *** *** ***
Stack Can
Sleeve - Golden
30 T.S. Divider *** ***
- - Golden
KEYSTONE ICE
6-Pack Can Wrap *** *** ***
- - Golden
12-Pack Can *** *** ***
Sleeve - Golden
24-Pack Flat *** *** ***
Can Sleeve -
Golden
18-Pack Flat *** *** ***
Can Sleeve -
Golden
NI = Not Included
</TABLE>
<TABLE>
SCHEDULE A
CAN SECONDARY PACKAGES
<CAPTION>
CLAYCOAT COMPOSIPAC COMPOSIPAC II
CLAYCOAT MINIMUM COMPOSIPAC MINIMUM COMPOSIPAC II MINIMUM RUN
PRICE RUN QTY. PRICE RUN QTY. PRICE QTY.
($/1000) (000's) ($/1000) (000's) ($/1000) (000's)
<S> <C> <C> <C> <C> <C> <C>
KEYSTONE DRY
12-Pack Can *** *** ***
Sleeve -
Golden
COORS NA
6-Pack Can *** *** ***
Wrap - Memphis
12-Pack Can *** *** ***
Sleeve -
Memphis
KILLIAN RED
6-Pack Can *** *** ***
Wrap -
Golden/
Shenandoah
ZIMA
6-Pack Can *** *** ***
Wrap - Memphis
INTERNATIONAL
12-Pack 10 Oz. *** *** ***
Light Can
Sleeve
24-Pack 10 Oz. *** *** ***
Light Can
Sleeve
NI = Not Included
</TABLE>
<TABLE>
SCHEDULE A
SUSTAINING PRODUCTS
II. BOTTLE SECONDARY PACKAGES
<CAPTION)
CLAYCOAT COMPOSIPAC COMPOSIPAC
CLAYCOAT MINIMUM COMPOSIPAC MINIMUM COMPOSIPAC II MINIMUM
PRICE RUN QTY. PRICE RUN QTY. II PRICE RUN QTY.
($/1000) (000's) ($/1000) (000's) ($/1000) (000's)
<S> <C> <C> <C> <C> <C> <C>
COORS ORIGINAL
Convenience *** ***
Bottle Carrier
- - Golden
LNNR Bottle *** ***
Carrier
- - Golden
16 Oz. 4-Pack *** ***
Bottle Carrier
- - Golden
COORS LIGHT
Convenience *** *** *** ***
Bottle Carrier ***
- - Golden/Memphis/ ***
Shenandoah
LNNR Bottle *** *** *** ***
Carrier ***
- - Golden/Memphis/ ***
Shenandoah
7 Oz. Bottle *** ***
Carrier
- - Memphis
16 Oz. 4-Pack *** ***
Bottle Carrier
- - Golden/Memphis
</TABLE>
<TABLE>
SCHEDULE A
BOTTLE SECONDARY PACKAGES
<CAPTION>
CLAYCOAT COMPOSIPAC COMPOSIPAC
CLAYCOAT MINIMUM COMPOSIPAC MINIMUM COMPOSIPAC II MINIMUM
PRICE RUN QTY. PRICE RUN QTY. II PRICE RUN QTY.
($/1000) (000's) ($/1000) (000's) ($/1000) (000's)
<S> <C> <C> <C> <C> <C> <C>
EXTRA GOLD
Convenience *** ***
Bottle Carrier
- - Golden
LNNR Bottle *** ***
Carrier
- - Golden
KEYSTONE LIGHT
LNNR Bottle *** ***
Carrier
- - Golden
Coors NA
LNNR Bottle *** ***
Carrier
- - Memphis
KILLIAN RED
LNNR Bottle *** ***
Carrier
- - Golden/
Shenandoah
KILLIAN HONEY
LNNR Bottle *** ***
Carrier
- - Memphis
</TABLE>
<TABLE>
SCHEDULE A
BOTTLE SECONDARY PACKAGES
<CAPTION>
CLAYCOAT COMPOSIPAC COMPOSIPAC
CLAYCOAT MINIMUM COMPOSIPAC MINIMUM COMPOSIPAC II MINIMUM
PRICE RUN QTY. PRICE RUN QTY. II PRICE RUN QTY.
($/1000) (000's) ($/1000) (000's) ($/1000) (000's)
<S> <C> <C> <C> <C> <C> <C>
ZIMA
LNNR Bottle *** ***
Carrier
- - Memphis
8 Oz. 4-Pack *** ***
Bottle Carrier
- - Memphis
ZIMA CITRIX
LNNR Bottle *** ***
Carrier
- - Memphis
COORS DRY
LNNR Bottle *** ***
Carrier
- - Golden
BLANK
12 Oz. LNNR *** ***
Bottle Carrier
7 Oz. LNNR *** ***
Bottle Carrier
INTERNATIONAL
12 Oz. Light *** ***
LNNR Bottle
Carrier
12 Oz. Original *** ***
LNNR-Australia
</TABLE>
SCHEDULE A
SUSTAINING PRODUCTS
III. BOTTLE METALLIZED LABELS
MINIMUM
PRICE RUN QTY.
$/1,000) (000'S)
COORS ORIGINAL
12 Oz. Body Labels - Golden *** ***
12 Oz. Neck Labels - Golden *** ***
16 Oz. Labels - Golden *** ***
22/24 Oz. Labels - Memphis *** ***
32 Oz. Labels - Golden *** ***
40 Oz. Labels - Golden *** ***
W/M Neck Labels - Golden *** ***
COORS LIGHT
12 Oz. Body Labels *** ***
Golden/Memphis/Shenandoah ***
12 Oz. Neck Labels *** ***
Golden/Memphis/Shenandoah ***
7 Oz. Body Labels - Memphis *** ***
7 Oz. Neck Labels - Memphis *** ***
16 Oz. Labels - Golden/Memphis *** ***
22/24 Oz. Labels - Memphis *** ***
32 Oz. Labels - Golden/Memphis *** ***
40 Oz. Labels - Golden/Memphis *** ***
W/M Neck Labels - Golden/Memphis *** ***
EXTRA GOLD
12 Oz. Body Labels - Golden *** ***
12 Oz. Neck Labels - Golden *** ***
32 Oz. Labels - Golden *** ***
40 Oz. Labels - Golden *** ***
W/M Neck Labels - Golden *** ***
KEYSTONE LIGHT
12 Oz. Body Labels - Golden *** ***
12 Oz. Neck Labels - Golden *** ***
32 Oz. Labels - Golden *** ***
COORS NA
12 Oz. Body Labels - Memphis *** ***
12 Oz. Neck Labels - Memphis *** ***
KILLIAN RED
12 Oz. Body Labels *** ***
Golden/Shenandoah
12 Oz. Neck Labels *** ***
Golden/Shenandoah
22/24 Oz. Labels - Memphis *** ***
KILLIAN HONEY
12 Oz. Body Labels - Memphis *** ***
12 Oz. Neck Labels - Memphis *** ***
ZIMA
12 Oz. Body Labels - Memphis *** ***
12 Oz. Neck Labels - Memphis *** ***
22/24 Oz. Body Labels - Memphis *** ***
22/24 Oz. Neck Labels - Memphis *** ***
8 Oz. Body Labels - Memphis *** ***
8 Oz. Neck Labels - Memphis
ZIMA CITRIX
12 Oz. Body Labels - Memphis *** ***
12 Oz. Neck Labels - Memphis *** ***
COORS DRY
12 Oz. Body Labels - Golden *** ***
12 Oz. Neck Labels - Golden *** ***
INTERNATIONAL
Light
7 Oz. Puerto Rico (PR)
Body Label (BL) *** ***
12 Oz. PR BL *** ***
12 Oz. Internationl BL *** ***
12 Oz. Korean Off-Premise BL *** ***
Original Coors
12 Oz. Australian BL - Old Copy *** ***
- Enhanced Graphics *** ***
12 Oz. Japan BL - Old Copy *** ***
- New Copy *** ***
12 Oz. Taiwan BL *** ***
16 Oz. Taiwan BL *** ***
22 Oz. Taiwan BL *** ***
40 Oz. Taiwan BL *** ***
Japan Neck Label (NL) *** ***
Australian NL *** ***
Zima
8 Oz. Japan BL *** ***
12 Oz. Japan BL *** ***
'Z' Japan NL *** ***
SCHEDULE A
All prices shown on Schedule A are delivered prices to
GPC-Boulder, GPC-Golden, COORS-Elkton, and COORS-Memphis.
In the event COORS elects to pick up Products at GPC's
facilities, the following freight allowances will be given
by GPC to COORS:
- GPC-Boulder to Elkton = ***
to Memphis = ***
- GPC-Lawrenceburg to Elkton = ***
to Memphis = ***
to Golden = ***
These allowances are applicable for 1998 and will be reviewed
and updated January 1 of each year.
SCHEDULE B
***, PROMOTIONAL PRICING & OTHER
Promotion Description *** - Per/1000 (M)
o Inside Flexography - All Dies
(does not include A&E)
- one color, one panel only ***
o Embossing/Debossing (Non-
Micro Embossed)
(does not include tooling)
- 12-12 ***
- 18-12 ***
- 24-12 Flat ***
- 24-12 Twin Stack ***
- 30-12 Twin Stack ***
o Additional Colors ***
o In-Pack Sticker/Coupon Application
***
Description Quantity/Speed *** Per/M
12-12 *** ***
*** ***
*** ***
18-12 *** ***
24-12 Flat *** ***
24-12 Twin Stack *** ***
30-12 Twin Stack *** ***
o On-Pack Sticker/Coupon Application
***
Description Quantity *** Per/M
12-12 *** ***
12-12 *** ***
15-12, 18-12, 24-12 Flat, *** ***
24-12 Twin Stack *** ***
30-12 Twin Stack *** ***
o Polyester Film
Description Quantity *** Per/M
12-12 *** ***
18-12 *** ***
24-12 Flat *** ***
24-12 Twin Stack *** ***
30-12 Twin Stack *** ***
***
o Holographic - Single Film, 1 Side Chemically Treated
Description Quantity *** Per/M
12-12 *** ***
18-12 *** ***
24-12 Flat *** ***
24-12 Twin Stack *** ***
***
***
MISCELLANEOUS COST
Over-the-road freight versus ***
standard piggyback trailers.
***
Freight costs for cylinders. ***
Obsolete raw material. ***
Obsolete finished product. ***
Transloading fee for finished ***
shipped from GPC-Lawrenceburg,
TN to GPC-Boulder, CO only.
Expedited artwork preparation ***
and proofing costs to meet the
target date.
BRIDGE RUNS/MAKE-READIES
Print runs below the minimum run quantities listed on Schedule A
may be subject to the following charges:
Product Rotogravure Press Flexographic Press
6-packs *** ***
12-packs *** ***
15-packs *** ***
18-packs *** ***
24-pack 12 Oz. Flat *** ***
24-pack 16 Oz. Flat *** ***
24-pack Twin Stack *** ***
30-pack Twin Stack *** ***
Bottle Carriers *** ***
Labels *** ***
* GPC acknowledges that prices will decrease when the new
GPC-Golden plant is operational.
***
SCHEDULE C
REQUIRED LEAD TIMES FOR PRODUCTION,
SHIPPING OR CHANGES
NORMAL LEAD TIME NORMAL LEAD TIME
REQUIRED FOR REQUIRED FOR
COMPOSIPAC PRODUCTS COMPOSIPAC II
EVENT PRODUCTS
Finished goods GPC shall deliver
delivery finished goods to
COORS in accordance
with the timelines
listed in paragraph
5.4
New graphics with Straight-Line
existing Products Graphics:
and material (i.e., maintenance,
specifications. promotional snipe -
(For purposes of primary or
providing guidelines secondary)
only. Deviations
from these *** from
guidelines will be when COORS gives
necessary from time final art to GPC.
to time and will be *** to
negotiated on a case- print, finish and
by-case basis). ship to COORS.
Process Graphics:
(i.e., Coors Dry)
*** from
when COORS gives
final art to GPC.
(Board art must
accompany any
magnetic tape art
along with
transparencies or
color keys for
reference.)
*** to print,
finish and ship to
COORS.
Converted Graphics:
(i.e., Legend)
***
from when COORS
gives final art to
GPC. ***
to print, finish and
ship to COORS.
If any package is
released late to
GPC, expediting
costs or scheduling
penalties will
occur.
NOTE:
***
Any changes or short
lead times will
result in additional
costs to expedite
delivery. GPC will
make best efforts to
define those
additional costs
prior to final
COORS' decision.
Repeat orders on Availability if ***
Products where from receipt of order.
COORS' requirements
exceed inventory
levels covered in
Section 5.4.
SCHEDULE D
RECORD OF MINORITY EXPENDITURES
Actual dates of expenditures: From __________ To ___________
Company Name: _______________________________________________
Company Address _____________________________________________
Company Contact: ____________________________________________
Company Phone #: ____________________________________________
Definition: A minority owned business is a business that is
51% owned, operated and controlled by a minority
individual.
*Ethnic Minority codes:
1) Hispanic A) Hispanic Female
2) Black Male B) Black Female
3) Indian/Alaskan Male C) Indian/Alaskan Female
4) Asian Male D) Asian Female
*Other Codes: E) Caucasion Female
To calculate direct dollars, take 100% of minority expenditures
that were directly used in the products or services sold to
Coors.
To calculate indirect dollars, take your indirect minority
expenditures and multiply by the percentage that Coors'
business represents.
o Step 1) Tabulate your total annual sales
o Step 2) Tabulate your total annual sales to Coors
o Step 3) Calculate percentage that sales to Coors
represents
o Step 4) Multiply your total indirect minority purchases
for the reporting period by the percentage of
total business with Coors
SCHEDULE E
COST REDUCTION INITIATIVES
1999 IMPACT
ANNUAL ESTIMATED ACTUAL
LEAD BALLPARK MATERIAL IMPLMT. IMPLMT.
INITIATIVE GROUP LEAD SAVINGS SAVINGS DATE DATE
- ---------- ----- ---- -------- -------- --------- -------
SCHEDULE E (continued)
COST REDUCTION INITIATIVES
1999 IMPACT
ESTIMATED 7-15-98
IMPLMT. IMPLMT.
1998 1998 ART
SAVINGS SAVINGS COSTS ADBLOCKS/COMMENTS
- --------- ------- ------- ---------------------------------
