Exhibit 1.1(b)
CERTIFICATE OF MERGER
MERGING
CAROLINA COCA-COLA BOTTLING COMPANY, INC.
INTO
SUMTER MERGER CORPORATION, INC
(Pursuant to Section 252 of the Delaware General Corporation Law)
SUMTER MERGER CORPORATION, INC., a corporation duly organized and
validly existing under the laws of the State of Delaware ("Sumter"), as the
surviving corporation in the above-referenced merger does hereby submit and file
this Certificate of Merger pursuant to Section 252(c) of the Delaware General
Corporation Law:
1. The name and state of incorporation of each of the constituent corporations
is as follows:
a. Carolina Coca-Cola Bottling, Company, Inc., a South Carolina corporation
b. Sumter Merger Corporation, Inc., a Delaware corporation
2. An Agreement and Plan of Merger has been approved, adopted, certified,
executed, and acknowledged by each of the constituent corporations in accordance
with subsection (c) of Section 252 of the Delaware General Corporation Law.
3. The name of the surviving corporation is Sumter Merger Corporation, Inc., a
Delaware corporation.
4. The only change in the Certificate of Incorporation of the surviving
corporation is that its name shall be relinquished and in place thereof the
surviving corporation shall be known as "Carolina Coca-Cola Bottling Company,
Inc.", a Delaware corporation.
5. The executed Agreement and Plan of Merger is on file at the office of the
surviving corporation's parent corporation, Coca-Cola Bottling Co. Consolidated,
1900 Rexford Road, Charlotte, North Carolina 28211.
6. A copy of the Agreement and Plan of Merger will be furnished by the surviving
corporation, on request and without cost, to any stockholder of any constituent
corporation.
7. The authorized capital stock of the merged corporation (Carolina Coca-Cola
Bottling Company, Inc., a South Carolina corporation) is five thousand (5,000)
shares of common stock, one hundred dollars ($100.00) par value per share.
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IN WITNESS WHEREOF, the surviving corporation has caused this
certificate to be signed by its president and attested by its secretary,
effective at 11:59 p.m. on _______ __, 1999.
Sumter Merger Corporation, Inc.
By: _______________________________
-----------------------, ------
ATTEST:
- --------------------------
John F. Henry, Jr., Secretary
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ANNEX B
FORM OF INSTALLMENT NOTE
THIS INSTALLMENT NOTE IS SUBJECT TO THE TERMS OF AN INDENTURE DATED
______________ ___, 1999 (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME, THE
"INDENTURE") BETWEEN COCA-COLA BOTTLING CO. CONSOLIDATED AND FIRST UNION
NATIONAL BANK, AS TRUSTEE (THE "TRUSTEE"). THE TERMS OF THIS INSTALLMENT NOTE
INCLUDE THOSE STATED IN THE INDENTURE AND THOSE MADE PART OF THE INDENTURE BY
REFERENCE TO THE TRUST INDENTURE ACT OF 1939, AS AMENDED (THE "TRUST INDENTURE
ACT").
THIS INSTRUMENT IS REGISTERED AS TO BOTH PRINCIPAL AND INTEREST WITH THE ISSUER
AND TRANSFER HEREOF MAY BE EFFECTED ONLY BY THE SURRENDER OF THE OLD INSTRUMENT
AND THE ISSUANCE OF A NEW INSTRUMENT BY THE ISSUER TO THE NEW HOLDER. THE HOLDER
HEREOF IS HEREBY NOTIFIED THAT THIS INSTRUMENT IS NOT LISTED NOR IS IT READILY
TRADABLE ON ANY ESTABLISHED SECURITIES MARKET.
INSTALLMENT NOTE
$_____________________________ ISSUE DATE: ___________, 1999
FOR VALUE RECEIVED and pursuant to that certain Agreement and Plan of
Merger dated as of March 26, 1999 (the "APM") by and among Coca-Cola Bottling
Co. Consolidated, a Delaware corporation ("CONSOLIDATED"), Sumter Merger
Corporation, Inc., a Delaware corporation and a wholly owned subsidiary of
Consolidated ("NEWCO"), and Carolina Coca-Cola Bottling Company, Inc., a South
Carolina corporation ("COKE-CAROLINA"), the undersigned, Consolidated (the
"ISSUER") hereby promises to pay to the order of ________________________ (the
"HOLDER") or the assigns of Holder, the sum of __________________________
_______________ plus accrued interest as provided below.
This Installment Note has the following terms:
Maturity:
seven (7) years from date of issue
Interest Rate:
five and three quarters percent (5.75%) simple interest per annum, fixed
rate
Interest Payment Dates:
accrued and unpaid interest will be paid quarterly in arrears on the
last day of the calendar quarter, except for the final interest payment,
which will be paid on the maturity date
Payments of Principal:
twenty percent (20%) of the original principal balance will be paid in
conjunction with the interest payment occurring on December 31st of
2001, 2002, 2003, and 2004, with the balance of the outstanding
principal plus all accrued and unpaid interest being paid on
________________, 2006
All payments shall be made in lawful money of the United States to the
registered holder of this Installment Note in accordance with the provisions of
the Indenture.
TIME IS OF THE ESSENCE OF THIS INSTALLMENT NOTE.
This Installment Note may NOT be prepaid in whole or in part (i) except
pursuant to a redemption offer as described in the Indenture or (ii) except as
expressly authorized below.
THIS INSTALLMENT NOTE IS SUBJECT TO THE ISSUER'S RIGHTS OF OFFSET AS SET
FORTH IN ARTICLE VI OF THE APM.
The following are events of default under the Indenture: (a) the
Issuer's failure to pay or perform any obligation, liability or indebtedness of
the Issuer to the Holder under this Installment Note as and when due (whether
upon demand, at maturity or by acceleration, and subject to the terms of this
Installment Note, the Indenture and the APM); (b) the commencement of a
proceeding by or against the Issuer for dissolution (other than administrative
dissolution where prompt re-instatement efforts are initiated and followed
through to completion); (c) the insolvency of or the business failure of the
Issuer; (d) the appointment of a custodian, trustee, liquidator or receiver for
a material portion of the property of the Issuer; (e) an assignment for the
benefit of creditors of a material portion of the property of the Issuer; or (f)
the filing of a petition under bankruptcy, insolvency or debtor's relief law or
the filing of a petition for any adjustment of indebtedness, composition or
extension by or against the Issuer. Whenever there is a default under this
Installment Note, the entire balance outstanding hereunder (however acquired or
evidenced) shall, at the option of the Trustee, or as otherwise provided in the
Indenture, become immediately due and payable in accordance with the Indenture.
Additionally, the Holder shall have all rights and remedies available under the
APM and the Indenture.
During the existence of any such default arising from the failure to pay
principal or interest under this Note, the Issuer further promises to pay, on
demand, to the extent permitted by applicable law, additional interest on
overdue installments of principal and, to the extent permitted by law, of
interest at the rate of eight percent (8%) per annum.
Except in connection with the Issuer's exercise of its right of offset
as set forth in Article VI of the APM: (a) the Issuer hereby waives presentment,
protest and demand, notice of protest,
demand and dishonor and nonpayment of this Note, agrees to pay all reasonable
costs of collection when incurred (including without limitation reasonable
attorneys' fees), and agrees to perform and comply with each of the covenants,
agreements, conditions, provisions and agreements of the Issuer contained in
each and every instrument evidencing or securing said indebtedness; (b) the
Issuer agrees that its liabilities under this Note are absolute and
unconditional without regard to the liability of any other party; and (c) the
Issuer hereby waives the right to interpose any set-off, counterclaim, or
defense or any nature or description whatsoever in connection with any Holder's
enforcement of its rights under this Note.
This Installment Note is subject to all of the terms of the Indenture
and the Trust Indenture Act, and holders of the Installment Notes are referred
to the Indenture and such Act for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Issuer, the
Trustee and each Holder and of the terms upon which the Installment Notes are,
and are to be, authenticated and delivered. The terms of this Installment Note
contained herein do not purport to be complete and are qualified by reference to
the Indenture. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
This Installment Note shall not be valid until the Trustee or an
authenticating agent manually signs the certificate of authentication on this
Installment Note.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Issuer executes this Installment Note effective
on the ____ day of _____________, 1999.
COCA-COLA BOTTLING CO. CONSOLIDATED
------------------------------
By:__________________, __________
Attest: _________________________
________________, Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
First Union National Bank, as Trustee, certifies that this is one of the
Notes referred to in the Indenture.
By:________________________________________
Authorized Signatory
ANNEX C
FORM OF SHAREHOLDERS' EQUITY ESCROW AGREEMENT
SHAREHOLDERS' EQUITY ESCROW AGREEMENT
The Undersigned, Coca-Cola Bottling Co. Consolidated, a Delaware
corporation ("Consolidated"); Sumter Merger Corporation, Inc., a Delaware
corporation and wholly-owned subsidiary of Consolidated ("Newco"), W. S. Heath,
A. T. Heath, III and R. Bland Roper as the "Shareholders' Representatives", and
SunTrust Bank, Atlanta, a Georgia Banking Corporation, as escrow agent (the
"Escrow Agent") hereby enter into this Shareholders' Equity Escrow Agreement as
of the ____ day of ________, 1999 (hereinafter this "Escrow Agreement"). Unless
otherwise defined, all capitalized terms used herein shall have the meanings
assigned to them in that certain Agreement and Plan of Merger entered into as of
March 26, 1999 by and among Consolidated, Newco, and Carolina Coca-Cola Bottling
Company ("Coke-Carolina") (the "APM").
ARTICLE I
Items Deposited with Escrow Agent
1.0 Escrow Agent Acceptance. The Escrow Agent hereby accepts its appointment as
Escrow Agent and agrees to hold the Shareholders' Equity Escrow Fund (as defined
herein) in accordance with this Escrow Agreement and agrees to invest such funds
pursuant thereto and no additional duties or obligations shall be implied
hereunder.
1.1 Items Deposited at Closing. The following items are hereby deposited with
the Escrow Agent by the indicated parties to be held and administered by the
Escrow Agent pursuant to the terms of this Escrow Agreement:
a. By Consolidated, Newco and the Shareholders' Representatives: a
photocopy of the executed APM dated as of March 26, 1999 (with the
amount of the Base Merger Consideration redacted); and
b. By Newco: the amount of cash as specified by Section 2.1 (f)(i)
of the APM (the "Shareholders' Equity Escrow Fund").
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1.2 Items Deposited Post-Closing. Subsequent to the Closing, Consolidated shall
cause its certified public accounting firm to deliver to the Escrow Agent (as
provided in Article II of the APM) the Final Closing Date Balance Sheet together
with its calculation of the Post-Closing Adjustment.
ARTICLE II
Deposit, Investment and Disbursement of Funds
2.1 General. The above-listed items shall be held by the Escrow Agent in escrow
under the following instructions, to wit:
Cash. The Escrow Agent shall hold the Shareholders' Equity Escrow
Fund and invest the same in Federated Treasury Obligations Money Market Fund.
2.2 Distribution of Shareholder's Equity Escrow.
(a) Distribution of Income. All income earned on cash held in the
Shareholders' Equity Escrow Fund shall be paid to the Shareholders'
Representatives to be distributed to the shareholders in accordance with their
respective interests in the cash in the Shareholders' Equity Escrow Fund.
(b) Distribution of Corpus. The Shareholders' Equity Escrow Fund will be
distributed as specified in Section 2.2(b) of the APM.
2.3 Reliance on Directions or Agreements. Where directions, instructions or
agreements from more than one of the undersigned are required, such directions,
instructions or agreements may be given by counterpart instruments.
2.4 Actions of Escrow Agent. It is further agreed by the undersigned that:
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(a) The Escrow Agent acts hereunder as a depository only, and is not
responsible or liable in any manner whatsoever for the genuineness or
validity of this Escrow Agreement.
(b) The Escrow Agent shall be protected in acting upon written notice,
request, waiver, consent, certificate, receipt, authorization, power of
attorney or other paper or document which the Escrow Agent in good faith
believes to be genuine and what it purports to be.
(c) The Escrow Agent shall not be liable for anything which it may do or
refrain from doing in connection herewith, other than gross negligence
or willful misconduct on part of the Escrow Agent.
(d) The Escrow Agent may consult with legal counsel in the event of any
dispute or question as to the construction of any of the provisions
hereof or its duties hereunder, and it shall incur no liability and
shall be fully protected in acting in accordance with the opinion and
instructions of such counsel. In such event, the legal fees and expenses
of counsel shall be paid one-half by Newco and one-half by the
Shareholders.
(e) In the event of any disagreement between any of the parties to this
Escrow Agreement or between them or any of them and any other person,
resulting in adverse claims or demands being made in connection with the
subject matter of this escrow or in the event that the Escrow Agent, in
good faith, shall be in doubt as to what action it should take
hereunder, the Escrow Agent may, at its option, file a suit in
interpleader in a court of competent jurisdiction, or refuse to comply
with any claims or demands on it, or refuse to take any other action
hereunder, so long as such disagreement continues or such doubt exists,
and in any such event, the Escrow Agent shall not be or become liable in
any way or to any person for its failure or refusal to act, and the
Escrow Agent shall be entitled to continue so to refrain from acting
until (i) the rights of all parties shall have been fully and finally
adjudicated by a court of competent jurisdiction, or (ii) all
differences shall have been adjusted and all doubt resolved by agreement
among all of the interested persons, and the Escrow Agent shall have
been notified thereof in writing
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signed by all such persons. The rights of the Escrow Agent under this
paragraph are cumulative of all other rights which it may have by law or
otherwise. The filing of such legal action shall not deprive the Escrow
Agent of its compensation earned prior to such filing.
(f) The Escrow Agent shall not have any liabilities or responsibilities
arising under any other agreement to which the Escrow Agent is not a
party, except to recognize the definition of terms contained in the APM
and the specific references to the APM contained herein (as redacted),
even though reference thereto may be made herein or a copy thereof
provided in connection with this Escrow Agreement.
(g) Newco and the Shareholders hereby agree to jointly and severally
indemnify and hold harmless the Escrow Agent against any and all cost,
losses, claims, damages, liabilities, expenses of every kind and nature,
including reasonable costs of investigation, court costs, and reasonable
attorneys' fees, expenses and disbursements which may be incurred by the
Escrow Agent without gross negligence or willful misconduct on the part
of the Escrow Agent, arising out of or in connection with its entering
into this Escrow Agreement or carrying out its duties hereunder in
connection with its acceptance of appointment as the Escrow Agent
hereunder, including any litigation arising from this Escrow Agreement
or involving the subject matter hereof. One-half of such indemnification
amounts shall be paid by the Shareholders and one-half of such
indemnification amounts shall be paid by Newco. The Escrow Agent shall
not be liable for any action taken or admitted by it in good faith and
believed by it to be authorized hereby, nor for action taken or omitted
by it in accordance with the advise of its counsel. The parties to this
Escrow Agreement agree that the indemnification afforded to the Escrow
Agent pursuant to this paragraph (g) shall survive the termination of
this Escrow Agreement.
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ARTICLE III
General Provisions.
3.1 Compensation of Escrow Agent. The Escrow Agent's fee for acting as escrow
agent hereunder shall be $2,500.00 payable as follows: annually, in advance.
3.2 Costs, Fees and Expenses. Fifty percent (50%) of all fees and expenses of
the Escrow Agent shall be paid by Newco. The remaining fifty percent (50%) shall
be paid out of the Shareholder Expense Fund.
3.3 Resignation of Escrow Agent. The Escrow Agent may resign as Escrow Agent
hereunder at any time by providing thirty (30) days written notice to the other
parties hereto, whereupon the Escrow Agent shall deliver the Shareholders'
Equity Escrow Fund to a substitute escrow agent selected by the mutual agreement
of Newco and the Shareholders' Representatives.
3.4 Counterparts. This Escrow Agreement may be executed in any number of
counterparts, all of which when taken together shall constitute one and the same
instrument.
3.5 Binding Effect. This Escrow Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective legal representatives,
successors and assigns.
3.6 Governing Law. The terms of this Escrow Agreement shall be construed in
accordance with the laws of the State of Georgia.
3.7 Severability. If any provision of this Escrow Agreement is unenforceable,
the remaining provisions shall, to the extent possible, be carried into effect
taking into account the general purpose and spirit of this Escrow Agreement.
3.8 Notices. Any notice, demand, request, consent, approval or other
communications required or permitted to be given hereunder shall be in writing
and shall be delivered personally or sent by nationally recognized overnight
courier (utilizing guaranteed next business morning
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delivery), addressed to the party to be notified at the following address, or to
such other address as such party shall specify by like notice:
(a) If to Consolidated or Newco, to:
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, NC 28211
Facsimile: (704) 551-4449
Telephone: (704) 551-4400
Tax I.D. #:
Attention: Mr. Robert D. Pettus, Jr.
with a required copy to:
Witt, Gaither & Whitaker, P.C.
1100 SunTrust Bank Building
Chattanooga, TN 37402
Facsimile: (423) 266-4138
Phone: (423) 265-8881
Attention: John F. Henry, Jr., Esq.
(b) If to Shareholders' Representatives, to:
W. S. Heath
72 Paisley Park
Sumter, SC 29150-3114
Phone:
A. T. Heath, III
21 Swan Lake Drive
Sumter, SC 29150-4740
Phone:
and
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R. Bland Roper
112 1/2 West Main Street
Laurens, SC 29360
Facsimile: (864) 984-2539
Phone: (864) 984-2538
with a required copy to:
Overend & Company, Inc.
Suite 200
4401 Northside Pkwy.
Atlanta, GA 30327
Facsimile: (404) 262-2801
Phone: (404) 262-2800
Attention: Mr. George D. Overend
with a further required copy to:
Sutherland Asbill & Brennan LLP
999 Peachtree Street, NE
Atlanta, GA 30309-3996
Facsimile: (404) 853-8806
Attention: Mr. Thomas B. Hyman, Jr.
(c) If to Escrow Agent:
SunTrust Bank, Atlanta
Corporate Trust Department
3495 Piedmont Road
Building 10-Suite 810
Atlanta, GA 30305-1727
Facsimile: (404) 240-2030
Phone: (404) 240-1954
Attention: Ms. Rebecca Fischer
Or to such other representative or to such other address as may be
designated in a notice given pursuant hereto.
IN WITNESS WHEREOF, the undersigned hereby set forth their hands as of the date
and year first above written.
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Shareholders' Representatives
- -----------------------------------
W. S. Heath, Shareholders' Representative
- ----------------------------------
A. T. Heath, III, Shareholders' Representative
- ---------------------------------
R. Bland Roper, Shareholders' Representative
Coca-Cola Bottling Co. Consolidated
By: ___________________________
-------------------, -------------
Sumter Merger Corporation, Inc.
By: ___________________________
-------------------, --------------
SunTrust Bank, Atlanta, as Escrow Agent
By: ___________________________
-------------------, -------------
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Exhibit A
Wire Transfer Instructions
--------------------------
to be supplied
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ANNEX D
FORM OF INDEMNIFICATION ESCROW AGREEMENT
INDEMNIFICATION ESCROW AGREEMENT
The Undersigned, Coca-Cola Bottling Co. Consolidated, a Delaware
corporation ("Consolidated"); Sumter Merger Corporation, Inc., a Delaware
corporation and a wholly-owned subsidiary of Consolidated ("Newco")
(Consolidated and Newco being sometimes collectively referred to herein as
"Indemnitees"), W. S. Heath, A. T. Heath, III and R. Bland Roper as the
"Shareholders' Representatives", and SunTrust Bank, Atlanta, a Georgia Banking
Corporation, as escrow agent (the "Escrow Agent") hereby enter into this
indemnification escrow agreement as of the ______ day of __________, 1999
(hereafter this "Indemnification Escrow Agreement"). Unless otherwise defined,
all capitalized terms used herein shall have the meanings assigned to them in
that certain Agreement and Plan of Merger entered into as of March 26, 1999 by
and among Consolidated, Newco, and Carolina Coca-Cola Bottling Company
("Coke-Carolina") (the "APM").
ARTICLE I
Background Statement
Pursuant to the terms of the APM, a portion of the Closing Date Merger
Consideration will be placed in the Indemnification Escrow Fund (as defined
herein) by the Shareholders' Representatives for purposes of providing
protection to the Indemnitees for the Coke-Carolina Shareholders'
indemnification obligations set forth in Article VI of the APM. Due to the
nature of the transaction, Indemnitees are unwilling to enter into the APM
unless an indemnification escrow is appropriately funded. It is the intent of
the parties that (i) all dividends on such pledged stock will be for the benefit
of the registered holders and distributed to as provided for herein, and (ii)
all voting rights of such stock will be exercisable by the registered holders.
There are no restrictions on the shares other than as expressly provided herein
or in the APM. Notwithstanding anything contained herein or in the APM to the
contrary, under no circumstances shall the shares of Consolidated
1
Common Stock be held in the Indemnification Escrow Fund for a period longer than
five (5) years from the date hereof. Consolidated, Newco, and the Shareholders'
Representatives acknowledge and agree that the shares of Consolidated Common
Stock held in the Indemnification Escrow Fund shall under no circumstances
exceed forty-nine percent (49%) of the number of shares issued as part of the
Base Merger Consideration. Release of shares of Consolidated common stock held
in the Indemnification Escrow Fund will be governed by terms and conditions of
the APM and this Indemnification Escrow Agreement. It is the express intent of
the parties that the escrow of the shares of Consolidated Common Stock comply
with the provisions of Rev. Proc. 84-42 promulgated by the Internal Revenue
Service.
ARTICLE II
Items Deposited with Escrow Agent
2.0 Escrow Agent Acceptance. The Escrow Agent hereby accepts its appointment as
Escrow Agent and agrees to hold the Indemnification Escrow Fund in accordance
with this Indemnification Escrow Agreement and agrees to invest such Fund
pursuant thereto and no additional duties or obligations shall be implied
hereunder. The following items are (or will be) deposited with the Escrow Agent
by the indicated parties to be held and administered by the Escrow Agent
pursuant to the terms of this Indemnification Escrow Agreement:
2.1 By Indemnitees: A deposit consisting of cash, certificates for shares of
Consolidated Common Stock, and Installment Notes in the aggregate amount of
Three Million Six Hundred Sixty Thousand Dollars ($3,660,000) as listed on
Exhibit A of this Indemnification Escrow Agreement. The Escrow Agent shall
acknowledge receipt of the cash, certificates for shares of Consolidated Common
Stock and Installment Notes.
2.2 By Indemnitees, Coke-Carolina and Shareholders' Representatives: an executed
copy of the APM with the amount of the Base Merger Consideration redacted.
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ARTICLE III
Deposit, Investment and Disbursement of Funds
3.1 General. The items in Section 2.1 above shall be held by the Escrow Agent in
escrow under the following instructions, to wit:
(a) Cash: The Escrow Agent shall invest all cash received in investments
permitted by this Indemnification Escrow Agreement ("Permitted Investments") in
accordance with written instructions received from time to time from the
Shareholders' Representatives. For purposes hereof, Permitted Investments shall
be limited to the following:
(i) direct general obligations of the United States of America or any
agency thereof, or obligations which have the payment of principal and
interest unconditionally guaranteed by the United States of America or
any agency thereof;
(ii) Federated Treasury Obligations Money Market Fund which is rated
triple A;
(iii) prime commercial paper (including variable demand notes) of
companies whose commercial paper is rated A-1 or P-1 or better by
Standard & Poor's or Moody's; and
(iv) repurchase agreements with banks meeting the qualifications set
forth in clause (ii) above and involving securities of the type
enumerated in clauses (i) through (iii) above.
(b) Consolidated Common Stock and Installment Notes. The share
certificates and the Installment Notes held by the Escrow Agent shall be
retained and held in the Escrow Agent's vault, or at such other secure location
as the Escrow Agent determines.
(c) Responsibility. The Escrow Agent shall not be responsible or liable
for the performance of, loss on, or a penalty resulting from any Permitted
Investment made by the Escrow Agent pursuant to this Indemnification Escrow
Agreement. Such investments by the
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Escrow Agent of said cash consideration and the income from such investments
shall be paid only as hereinafter directed in writing. The cash, stock, and
Installment Notes, together with the proceeds from the investments thereof shall
hereinafter be referred to as the "Indemnification Escrow Fund".
3.2 Distribution of Indemnification Escrow Fund.
(a) Distribution of Income. All income earned on cash held in the
Indemnification Escrow Fund shall be paid to the Shareholders' Representatives
to be distributed to the shareholders in accordance with their respective
interests in the cash in the Indemnity Escrow Fund.
(b) Release of Corpus. Release of the Indemnification Escrow Fund held
by the Escrow Agent shall be as follows:
(i) Partial Release. At the conclusion of the eighteenth (18th) complete
calendar month following the Closing Date, funds will be released from
the Indemnification Escrow Fund as provided in and limited by Article VI
of the APM.
(ii) Final Release. At the conclusion of the forty-second (42nd)
complete calendar month following the Closing Date, any remaining
balance in the Indemnification Escrow Fund will be released as provided
in and limited by Article VI of the APM.
3.3 Claims. Pursuant to Article VI of the APM, Indemnitees are entitled, under
certain circumstances and subject to certain limitations, to receive
indemnification as more particularly set forth in the APM. From time-to-time,
Indemnitees may provide the Escrow Agent with a claim for indemnification in the
form attached hereto as Exhibit C (an "Indemnitee Claim Notice"), which must be
accompanied by (i) U.S. Postal Service signed return receipt cards indicating
delivery to the Shareholders' Representatives, and (ii) a certificate from a
corporate officer of Consolidated certifying that the indemnification claim was
sent to the Shareholders'
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Representatives, and that the return receipt cards are for that claim. At the
expiration of thirty (30) days subsequent to the latest date on which the
Shareholders' Representatives were delivered notice of the claim for
indemnification (as evidenced by the return receipt cards), the Escrow Agent
shall make the distribution to Indemnitees as specified in the Indemnitee Claim
Notice (including returning the certificate of the Consolidated Common Stock and
the Installment Note to Indemnitees for cancellation and re-issuance as provided
in Article VI of the APM), unless, prior to the expiration of such thirty-day
period, the Escrow Agent receives written notice from the Shareholders'
Representatives along with confirmation that the objection letter was sent to
the Indemnitees of an objection to the Indemnitees' claim. In the event of such
objection, the Escrow Agent shall not make the distribution to the Indemnitees
specified in the Indemnitee Claim Notice absent the joint written consent of the
Indemnitees and the Shareholders' Representatives, or a certified copy of a
final order of a court of competent jurisdiction, no longer subject to appeal.
3.4 Reliance on Directions or Agreements. Where directions or instructions or
agreements from more than one of the parties to this Indemnification Escrow
Agreement are required, such directions or instructions or agreements may be
given by counterpart instruments.
3.5 Actions of Escrow Agent. It is further agreed by the Undersigned that:
(a) The Escrow Agent acts hereunder as a depository only, and is not
responsible or liable in any manner whatsoever for the genuineness or validity
of this Indemnification Escrow Agreement, or any part thereof, does not warrant
title or validity of the Indemnification Escrow Fund, or the identity or
authority of any person acting on behalf of any other party hereunder.
(b) The Escrow Agent shall be protected in acting upon written notice,
request, waiver, consent, certificate, receipt, authorization, power of attorney
or other paper or document which the Escrow Agent in good faith believes to be
genuine and what it purports to be.
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(c) The Escrow Agent shall not be liable for anything which it may do or
refrain from doing in connection herewith, other than gross negligence or
willful misconduct on part of the Escrow Agent.
(d) The Escrow Agent may consult with legal counsel in the event of any
dispute or question as to the construction of any of the provisions hereof or
its duties hereunder, and it shall incur no liability and shall be fully
protected in acting in accordance with the opinion and instructions of such
counsel. In such event, the legal fees and expenses of counsel shall be paid
one-half by Newco and one-half by Shareholders.
(e) In the event of any disagreement between any of the parties to this
Indemnification Escrow Agreement or between them or any of them and any other
person, resulting in adverse claims or demands being made in connection with the
subject matter of this escrow or in the event that the Escrow Agent, in good
faith, shall be in doubt as to what action it should take hereunder, the Escrow
Agent may, at its option, file a suit in interpleader in a court of competent
jurisdiction, or refuse to comply with any claims or demands on it, or refuse to
take any other action hereunder, so long as such disagreement continues or such
doubt exists, and in any such event, the Escrow Agent shall not be or become
liable in any way or to any person for its failure or refusal to act, and the
Escrow Agent shall be entitled to continue so to refrain from acting until (i)
the rights of all parties shall have been fully and finally adjudicated by a
court of competent jurisdiction, or (ii) all differences shall have been
adjusted and all doubt resolved by agreement among all of the interested
persons, and the Escrow Agent shall have been notified thereof in writing signed
by all such persons. The rights of the Escrow Agent under this paragraph are
cumulative of all other rights which it may have by law or otherwise. The filing
of such legal action shall not deprive the Escrow Agent of its compensation
earned prior to such filing.
(f) The Escrow Agent shall not have any liabilities or responsibilities
arising under any other agreement to which the Escrow Agent is not a party,
except to recognize the definition of terms contained in the APM and the
specific references to the APM contained herein (as
6
redacted), even though reference thereto may be made herein or a copy thereof
provided in connection with this Indemnification Escrow Agreement.
(g) Newco and the Shareholders hereby agree to jointly and severally
indemnify and hold harmless the Escrow Agent against any and all costs, losses,
claims, damages, liabilities, expenses of every kind and nature, including
reasonable costs of investigation, court costs, and reasonable attorneys' fees,
expenses and disbursements which may be incurred by the Escrow Agent without
gross negligence or willful misconduct on the part of the Escrow Agent, arising
out of or in connection with its entering into this Indemnification Escrow
Agreement or carrying out its duties hereunder in connection with its acceptance
of appointment as the Escrow Agent hereunder, including any litigation arising
from this Indemnification Escrow Agreement or involving the subject matter
hereof. One-half of such indemnification amounts shall be paid by the
Shareholders' Representatives and one-half of such indemnification amounts shall
be paid by Newco. The Escrow Agent shall not be liable for any action taken or
admitted by it in good faith and believed by it to be authorized hereby, nor for
action taken or omitted by it in accordance with the advice of its counsel. The
parties to this Indemnification Escrow Agreement agree that the indemnification
afforded to the Escrow Agent pursuant to this paragraph (g) shall survive the
termination of this Indemnification Escrow Agreement.
3.6 Interaction with Shareholders' Equity Escrow Agreement. Pursuant to Section
2.2 of the APM, if the Post-Closing Adjustment exceeds the amount of funds held
in the Shareholders' Equity Escrow Fund in favor of Indemnitees, the Escrow
Agent is expressly authorized and directed to make payments to Indemnitees as
set forth in Section 3.3 above without consideration for the liability
deductible specified in Section 6.7 of the APM.
ARTICLE IV
General Provisions.
4.1 Compensation of Escrow Agent. The Escrow Agent's fee for acting as escrow
agent hereunder shall be $3,500, payable as follows: annually, in advance.
7
4.2 Costs, Fees and Expenses. Fifty percent (50%) of all fees and expenses of
the Escrow Agent shall be paid by Newco. The remaining fifty percent (50%) shall
be paid out of the Shareholders' Expense Fund.
4.3 Resignation of Escrow Agent. The Escrow Agent may resign as Escrow Agent
hereunder at any time by providing thirty (30) days written notice to
Indemnitees and Shareholders' Representatives, whereupon the Escrow Agent shall
deliver the collected Indemnification Escrow Fund to a substitute escrow agent
selected by the mutual agreement of Indemnitees and Shareholders'
Representatives. Any successor escrow agent shall execute and deliver to the
predecessor Escrow Agent, Newco and the Shareholders an instrument accepting
such appointment and the transfer of the Shareholders' Equity Escrow Fund and
the agreeing to the terms of this Indemnification Escrow Agreement and thereupon
such successor escrow agent shall, without further act, become vested with all
the estates, properties, rights, powers, privileges and duties of the
predecessor Escrow Agent as if originally named herein. If an instrument of
acceptance by a successor escrow agent shall not have been delivered to the
Escrow Agent within thirty (30) days after the giving of such notice of
resignation, the resigning Escrow Agent may at the joint expense of Newco and
the Shareholders petition any court of competent jurisdiction for the
appointment of a successor escrow agent.
4.4 Performance on Non Business Day. Should the performance date pursuant to any
provision of this Indemnification Escrow Agreement fall upon a holiday or on a
day on which the Escrow Agent is not open for business, the performance by the
Escrow Agent on the succeeding business day shall be deemed to be in full
compliance with the terms hereof.
4.5 Counterparts. This Indemnification Escrow Agreement may be executed in any
number of counterparts, all of which when taken together shall constitute one
and the same instrument.
8
4.6 Binding Effect. This Indemnification Escrow Agreement shall be binding upon
and inure to the benefit of the parties hereto, their respective legal
representatives, successors and assigns.
4.7 Governing Law. The terms of this Indemnity Escrow Agreement shall be
construed in accordance with the laws of the State of Georgia.
4.8 Severability. If any provision of this Indemnity Escrow Agreement is
unenforceable, the remaining provisions shall, to the extent possible, be
carried into effect taking into account the general purpose and spirit of this
Indemnity Escrow Agreement.
4.9 Notices. Any notice, demand, request, consent, approval or other
communications required or permitted to be given hereunder shall be in writing
and shall be delivered personally or sent either by facsimile transmission or
nationally recognized overnight courier (utilizing guaranteed next business
morning delivery), addressed to the party to be notified at the following
address, or to such other address as such party shall specify by like notice:
(a) If to Indemnitees:
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, NC 28211
Facsimile: (704) 551-4449
Phone: (704) 551-4400
Tax ID #:
Attention: Mr. Robert D. Pettus, Jr.
with a required copy to:
Witt, Gaither & Whitaker, P.C.
1100 SunTrust Bank Building
Chattanooga, TN 37402
Facsimile: (423) 266-4138
Phone: (423) 265-8881
9
Attention: John F. Henry, Jr., Esq.
(b) If to the Shareholders, to:
W. S. Heath
72 Paisley Park
Sumter, SC 29150-3114
Phone:
A. T. Heath, III
21 Swan Lake Drive
Sumter, SC 29150-4740
Phone:
and
R. Bland Roper
112 1/2 West Main Street
Laurens, SC 29360
Facsimile: (864) 984-2539
Phone: (864) 984-2538
with a required copy to:
Overend & Company, Inc.
Suite 200
4401 Northside Pkwy.
Atlanta, GA 30327
Facsimile: (404) 262-2801
Phone: (404) 262-2800
Attention: Mr. George D. Overend
10
with a required copy to:
Sutherland, Asbill & Brennan LLP
999 Peachtree Street, NE
Atlanta, GA 30309-8806
Facsimile: (404) 853-8806
Attention: Mr. Thomas B. Hyman, Jr.
(c) If to the Escrow Agent
SunTrust Bank, Atlanta
Corporate Trust Department
3495 Piedmont Road
Building 10 - Suite 810
Atlanta, GA 30305
Facsimile: (404) 240-2030
Attention: Ms. Sandra Thompson
Or to such other representative or to such other address as may be
designated in a notice given pursuant hereto.
THIS SPACE INTENTIONALLY LEFT BLANK
11
In Witness Whereof, the undersigned hereby set forth their hands as of the date
and year first above written.
Shareholders' Representatives
- ------------------------------
W. S. Heath, Shareholders' Representative
- ------------------------------
A. T. Heath, III, Shareholders' Representative
- ------------------------------
R. Bland Roper, Shareholders' Representative
Coca-Cola Bottling Co. Consolidated
By: _____________________________
--------------------, -----------------
Sumter Merger Corporation, Inc.
By: ____________________________
-------------------, ----------------
SunTrust Bank, Atlanta, as Escrow Agent
By: ____________________________
-------------------, ----------------
12
Exhibit A
Deposits Into The Indemnification Escrow Fund
Cash Deposited: $______________________ [wire transfer instructions]
Shares Deposited ____________ Certificate No. _______
Aggregate Principal Amount of Installment Notes Deposited: $________________
13
Exhibit B
Form of Receipt
___________ __, 1999
To: Robert D. Pettus, Jr.
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, NC 28211
W. S. Heath, Shareholders' Representative
===============================
A. T. Heath, Shareholders' Representative
===============================
R. Bland Roper, Shareholders' Representative
112 1/2 West Main Street
Laurens, SC 29360
I __________________________________ as the Escrow Agent pursuant to the terms
and conditions of that certain Indemnification Escrow Agreement dated as of
_______ __, 1999 by and among Coca-Cola Bottling Co. Consolidated, a Delaware
corporation ("Consolidated"); Sumter Merger Corporation, Inc., a Delaware
corporation and a wholly-owned subsidiary of Consolidated ("Newco"), Carolina
Coca-Cola Bottling Company, Inc., a South Carolina corporation
("Coke-Carolina"), W. S. Heath, A. T. Heath, III and R. Bland Roper as the
"Shareholders' Representatives", and the Escrow Agent, hereby acknowledge
receipt of the following to be held and administered pursuant to the terms and
conditions of the Indemnification Escrow Agreement:
1. ________________ dollars ($_____________) in cash
2. Certificate No. ________ representing ______________ (_____) shares of
Consolidated Common Stock issued to the Shareholders' Representatives in
their representative capacities
3. Installment Notes in the face amount of _____________ dollars ($_______)
issued to the Shareholders' Representatives in their representative
capacities.
Signature
14
cc: Thomas B. Hyman Jr.
John F. Henry, Jr., Esq.
15
Exhibit C
Indemnitee Claim Notice
Date of Claim: ______________
Principal Amount of Claim: $__________________
Accrued Interest As Of : $__________________
Total Claim: $__________________
................................................................................
Cash to be Remitted to Indemnitees: $__________________
Offset Against Notes: $_________________
Shares of Consolidated Common
Stock to be surrendered (@ $59.60/share): __________________
Certification:
I, _______________________, __________________ of Coca-Cola Bottling Co.
Consolidated, and _____________ of Sumter Merger Corporation, Inc. hereby
certify that the foregoing is a duly authorized claim for Indemnification (net
of the Liability Deductible, if applicable) pursuant to the terms of the APM,
that this Indemnittee Claim Notice was set to the Shareholders' Representatives,
and that attached hereto are the signed return receipt cards from the U. S.
Postal Service, verifying tender of delivery to the Shareholders'
Representatives on a date not later than _____________.
Dated this ______ day of __________, ________.
- -----------------------------
name:____________________
title: ___________________
16
ANNEX E
FORM OF A.T. HEATH, III NON-COMPETITION AND CONSULTING AGREEMENT
NON-COMPETITION AND CONSULTING AGREEMENT
THIS AGREEMENT made this _____ day of _________, 1999 (the "Effective
Date") by and among Carolina Coca-Cola Bottling Company, Inc. (formerly Sumter
Merger Corporation, Inc.), a Delaware corporation and a wholly-owned subsidiary
of Coca-Cola Bottling Co. Consolidated ("New Coke Carolina"), and A. T. Heath,
III, a South Carolina resident ("Consultant").
W I T N E S S E T H :
WHEREAS, Consultant has, prior to the date hereof, been employed by
Carolina Coca-Cola Bottling Company, Inc., a South Carolina corporation, which
as of this date has been merged into New Coke Carolina; and
WHEREAS, Consultant has resigned his employment as of the effective date
of the merger; and
WHEREAS, due to Consultant's knowledge and experience in the business of
the packaging, distribution and sale of soft drink products (particularly those
products of The Coca-Cola Company), New Coke Carolina desires to retain the
services of Consultant as a consultant and adviser to New Coke Carolina after
the merger; and
WHEREAS, due to Consultant's extensive business contacts in the
geographic region of New Coke Carolina's business and his knowledge of the soft
drink business in general, New Coke Carolina would be injured if Consultant
became employed, rendered services to, or otherwise assisted any other business
in the packaging, distribution and sale of soft drink products in the geographic
region served by New Coke Carolina; and
WHEREAS, New Coke Carolina and Consultant have entered into this
Agreement for their mutual interest and benefit;
NOW THEREFORE, for and in consideration of the premises and the
covenants and agreements hereinafter set forth, the legal sufficiency of which
being hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Duties. During the period beginning on the Effective Date and ending
nine (9) years thereafter (the "Consultation Period"), the Consultant agrees to
provide such advice,
counsel, assistance and services relating to New Coke Carolina as are set forth
below, but only of such nature and at such times as the Consultant and New Coke
Carolina mutually agree (it being acknowledged by New Coke Carolina that during
the Consultation Period the Consultant expects to have business and personal
activities that may result in his not being available on a regular basis or at
any specific time or for any specific number of hours). The duties required
hereunder shall be performed in the city of Sumter, South Carolina, from the
Consultant's homes or own principal office or by telephone (New Coke Carolina
acknowledging that the primary reason for wanting to obtain the Consultant's
services during the Consultation Period is to have access to the Consultant's
knowledge of New Coke Carolina's business and the industry in which it operates
and not to obtain services normally provided by employees) or such other
locations as the parties may mutually agree upon, and shall be limited to:
a. providing advice and assistance regarding the former
operations of New Coke Carolina and the continuance of such operations;
b. familiarizing officers with marketing methods formerly
employed by New Coke Carolina and its subsidiaries and assisting in on-going
marketing programs as to major customers;
c. advising on and assisting with major customer, supplier and
creditor relations, including, without limitation, telephone calls, letters or
personal visits in the territory in South Carolina in which New Coke Carolina
operates on the Effective Date and environs;
d. involvement in legislative activities by maintaining contacts
with legislators; and
e. such additional duties, including specific projects, as may be
mutually agreed to by Consultant and New Coke Carolina.
2. Reimbursement for Certain Expenses. New Coke Carolina shall pay
Consultant such additional amounts for reasonable expenses incurred by
Consultant while performing tasks required hereunder which Consultant has been
specifically asked to perform by New Coke Carolina. Consultant agrees not to
incur any such expenses without the prior written approval of New Coke Carolina.
Consultant shall be reimbursed by New Coke Carolina upon the presentation of
invoices, receipts or other evidence acceptable to New Coke Carolina in
accordance with its standard policies.
3. Terms and Compensation. The term of this Agreement shall commence on
the Effective Date and expire on the ninth (9th) anniversary of the Effective
Date. For the services to be rendered by Consultant hereunder, and for holding
himself available for consultation and advisory services to New Coke Carolina
and as consideration for the non-competition provisions of numbered paragraph 4
below, New Coke Carolina agrees to pay Consultant the sum of Fifteen Thousand
Dollars ($15,000.00) per month for the first thirty-six (36) months from the
Effective
2
Date, Ten Thousand Dollars ($10,000.00) per month for the next thirty-six (36)
months, and Five Thousand Dollars ($5,000.00) for the final thirty-six (36)
months (such compensation shall be paid to the Consultant's estate or as he
otherwise directs in the event of his disability or death). Consultant is not
entitled to any other compensation hereunder, and without limiting the
foregoing, is not entitled to participate in any employee benefit plans of New
Coke Carolina.
4. Non-Competition. As a material inducement to New Coke Carolina
entering into this Agreement, Consultant covenants to New Coke Carolina that
during the term of this Agreement, he will adhere to the following covenants of
non-competition: Consultant acknowledges that the business of New Coke Carolina
is in a material portion of the State of South Carolina, and that this covenant
of non-competition will apply throughout the State of South Carolina.
Accordingly, Consultant covenants and agrees not to directly or indirectly
compete in any manner with the business conducted by New Coke Carolina or its
subsidiaries, or to directly or indirectly enter into the employment of, or
render any service to, or provide financing for, invest in or aid, abet or
assist any person, firm or corporation which competes with New Coke Carolina in
the business of the packaging, distribution and sale of soft drink products in
the State of South Carolina; provided, however, that the foregoing shall not
prohibit Consultant from making open market purchases and hold the securities of
any publicly-traded company. Consultant will not directly or indirectly solicit
or attempt to solicit the business or patronage of any person, firm or
corporation for purposes of selling the types of products sold by New Coke
Carolina except for the benefit of New Coke Carolina. Consultant expressly
acknowledges that these covenants of non-competition do not impose economic
hardship upon him. If at any time the foregoing provisions shall be deemed to be
invalid or unenforceable or prohibited by the laws of the State of South
Carolina, by reason of being deemed or found to be vague or unreasonable as to
duration, place of performance, or for any other reason, then this paragraph
shall be considered divisible and shall become and be deemed immediately amended
to include only such time and such area as shall be determined to be reasonable
and enforceable by the court or other body having jurisdiction over this
Agreement. Consultant and New Coke Carolina expressly agree that this paragraph
as so amended shall be valid and binding as though any invalid or unenforceable
provision had not been included herein. Consultant further agrees that for the
period described above, he shall not, directly or indirectly, (i) solicit, hire,
or in any manner persuade or attempt to persuade any employee, independent
contractor, consultant or agent of New Coke Carolina to terminate his or her
relationship with New Coke Carolina, or (ii) encourage or cause any customers or
suppliers of New Coke Carolina to cease doing business with New Coke Carolina.
5. Exclusive Remedies. New Coke Carolina and the Consultant agree that,
if Consultant violates any obligation of this Agreement, New Coke Carolina shall
be entitled only to the equitable remedy of injunction, which shall be New Coke
Carolina's exclusive remedy. New Coke Carolina shall have no remedy which in any
way allows money damages or any right to stop Consulting Payments, obtain refund
or setoff of Consulting Payments, or in any way affect the obligation to pay
Consulting Payments.
3
6. Business Records. Upon termination of this Agreement, Consultant
shall return to New Coke Carolina all copies of all work papers pertaining to
the business of producing, bottling, canning, selling or distributing soft
drinks or noncarbonated beverages (including waters) conducted by New Coke
Carolina and its subsidiaries which have been received by Consultant or prepared
in the performance of Consultant's duties hereunder, including without
limitation, files, documents and customer lists.
7. Waiver. The waiver by either party of a breach of any provision of
this Agreement shall not operate as, nor be construed as, a waiver of any
subsequent or related breach thereof.
8. Independent Contractor. The parties expressly acknowledge that
Consultant is hired as an independent contractor and the parties do not intend
to establish an employer-employee relationship.
9. Entire Agreement. This Agreement represents the entire agreement
between the parties hereto pertaining to the matters herein covered, and any
other prior understandings, agreements or contracts with regard to such matters
are hereby canceled without any further liability whatsoever to either party. No
subsequent change or modification of the terms hereof shall be binding unless in
writing and signed by both of the parties hereto. The actions, courses of
dealing, or customs of the parties shall not operate to amend or modify this
Agreement unless in conformity with the preceding sentence.
10. Severability. If any provision of this Agreement is unenforceable,
the remaining provisions shall, to the extent possible, be carried into effect
taking into account the general purposes and spirit of this Agreement.
11. Benefit. The services of Consultant are being used because of his
special capabilities and qualifications and all of his rights, benefits and
duties hereunder are, therefore, not assignable or transferable in any manner;
provided, however, that the payment of obligations of New Coke Carolina shall
survive the death or incapacity of Consultant.
12. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of South Carolina excluding its conflicts or choice
of law principles.
13. Remedy. In addition to any other remedy given to New Coke Carolina
hereunder or otherwise, the parties hereto declare that it may be difficult or
impossible to measure adequately in money the damages which will accrue to New
Coke Carolina if Consultant shall breach the provisions of Paragraph 4 of this
Agreement. Therefore, if New Coke Carolina, at its election, shall institute any
action or proceeding to enforce the provisions of Paragraph 3 of this Agreement,
Consultant hereby agrees that, with respect to a violation of the provisions of
Paragraph 3 hereof, New Coke Carolina has no adequate remedy at law, and New
Coke Carolina shall be entitled to specific performance of the provisions
contained therein.
4
IN WITNESS WHEREOF, the undersigned hereby set forth their hands as of
the date first above written.
CAROLINA COCA-COLA BOTTLING
COMPANY, INC., a Delaware corporation
By:___________________________________ ___________________________
Name:_________________________ A. T. Heath III
Title:________________________
* * *
Parent Guaranty
Coca-Cola Bottling Co. Consolidated, a Delaware corporation (the
"Guarantor"), which is the parent of New Coke Carolina, does hereby, as a
primary obligor, absolutely, unconditionally and irrevocably guarantee the
prompt payment and performance of all of the obligations of New Coke Carolina
under and pursuant to the foregoing Agreement without any requirement of notice
or demand of, or failure to perform by, New Coke Carolina; and this guarantee by
the Guarantor shall be an obligation for full and prompt payment and performance
rather than a secondary guarantee of collectibility. No change, amendment or
modification of the foregoing Agreement or waiver of any of its terms shall
diminish, release or discharge the liability of Guarantor under the foregoing
Agreement. The liability of Guarantor under this Guaranty is continuing and
shall only be discharged by the full performance of New Coke Carolina of all of
its obligations under the foregoing Agreement.
COCA-COLA BOTTLING CO. CONSOLIDATED
By:________________________________
Name:___________________________
Title:__________________________
5
ANNEX F
FORM OF AFFILIATE AGREEMENT
AFFILIATE AGREEMENT
__________ __, 1999
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, North Carolina 28211
Ladies and Gentlemen:
This letter is being delivered to you as contemplated by Section 8.3(f)
of that certain Agreement and Plan of Merger dated as of March __, 1999 (the
"Merger Agreement") by and among Coca-Cola Bottling Co. Consolidated
("Consolidated"), Sumter Merger Corporation, Inc. and Carolina Coca-Cola
Bottling Company, Inc. ("Coke-Carolina"). I am a shareholder of Coke-Carolina
and will acquire, among other things, shares of common stock, $1.00 par value
("Consolidated Common Stock"), and 5.75% Installment Notes due 2006 (together
with the Consolidated Common Stock, the "Consolidated Securities") of
Consolidated in the merger contemplated by the Merger Agreement (the "Merger").
I understand that as of the date of this letter I may be deemed to be an
"affiliate" of Coke-Carolina as that term is defined for purposes of Paragraphs
(c) and (d) of Rule 145 promulgated by the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act").
This Affiliate Agreement evidences certain rights and obligations between me and
Consolidated relative to the Consolidated Securities to be received by me in the
Merger.
In consideration of the Merger and of the mutual covenants contained
herein, the undersigned and Consolidated hereby agree as follows:
1. I have been advised that Consolidated Securities issued to me
pursuant to the Merger have been registered with the Commission under the Act on
a Registration Statement on Form S-4. However, I have been advised that, because
at the time the Merger is submitted to a vote of the shareholders of
Coke-Carolina, (a) I may be deemed to be an affiliate of Coke-Carolina and (b)
the distribution by me of the Consolidated Securities has not been registered
under the Act. I agree that I may not sell, transfer or otherwise dispose of the
Consolidated Securities issued to me in the Merger unless:
(i) such sale, transfer or other disposition is made in
conformity with the limitations of Rule 145 promulgated by
Commission under the Act;
(ii) such sale, transfer or other disposition has been
registered under the Act; or
(iii) in the opinion of counsel reasonably acceptable to
Consolidated, such sale, transfer or other disposition is
otherwise exempt from registration under the Act.
2. I also understand that there will be placed on the certificates for
the Consolidated Securities, or any substitution therefor, a legend stating in
substance:
[SHARES REPRESENTED BY THIS CERTIFICATE WERE/THIS
INSTALLMENT NOTE WAS] ISSUED IN A TRANSACTION TO WHICH
RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933
APPLIES. THIS SECURITY MAY ONLY BE TRANSFERRED IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED
__________________, 1999 BETWEEN THE REGISTERED HOLDER
HEREOF AND COCA-COLA BOTTLING CO. CONSOLIDATED, A COPY OF
WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF
COCA-COLA BOTTLING CO. CONSOLIDATED.
3. I also understand that unless the sale or transfer is made in
conformity with the provisions of Rule 145, or pursuant to a registration
statement under the Act, Consolidated reserves the right to put the following
legend on any certificate issued to my transferee:
THE SECURITIES REPRESENTED HEREBY WERE ACQUIRED FROM A
PERSON WHO RECEIVED SUCH SECURITIES IN A TRANSACTION TO
WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
1933 APPLIES. THE SECURITIES MAY ONLY BE TRANSFERRED IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933.
4. I have carefully read this letter and the Merger Agreement and
discussed the requirements of such documents and other applicable limitations
upon my ability to sell, transfer or otherwise dispose of the Consolidated
Securities, to the extent I felt necessary, with my counsel or counsel for
Coke-Carolina.
5. Execution of this letter should not be considered an admission on my
part that I am an "affiliate" of Coke-Carolina as described in the first
paragraph of this letter, nor as a waiver of any rights I may have to object to
any claim that I am such an affiliate on or after the date of this letter.
6. By Consolidated's acceptance of this letter, Consolidated hereby
agrees with me that upon my request, Consolidated will cause any legend set
forth in paragraphs 2 and 3 above to be removed by delivery of substitute
certificates without any such legend if (i) one (1) year shall have elapsed from
the date that I became the beneficial owner of the Consolidated Securities and
the provisions of Rule 145(d)(2) are then applicable to me, (ii) two (2) years
shall have elapsed from the date that I became the beneficial owner of the
Consolidated Securities and the provisions of Rule 145(d)(3) are then applicable
to me, or (iii) I shall have delivered to Consolidated a copy of a letter from
the staff of the Commission or an opinion of counsel, in form and substance
reasonably satisfactory to Consolidated, to the effect that any such legend is
not required for purposes of the Act.
Very truly yours,
---------------------------------
Name:
Agreed:
COCA-COLA BOTTLING CO. CONSOLIDATED
By:___________________________________
Name:
Title:
ANNEX G
PROVISIONS OF THE SOUTH CAROLINA BUSINESS CORPORATION ACT
RELATING TO DISSENTERS' RIGHTS
CHAPTER 13
ARTICLE 1. RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
SS. 33-13-101. DEFINITIONS.
In this chapter:
(1) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring corporation by merger
or share exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under Section 33-13-102 and who exercises that right when and
in the manner required by Sections 33-13-200 through 33-13-280.
(3) "Fair value", with respect to a dissenter's shares, means the value
of the shares immediately before the effectuation of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action to which the dissenter objects, excluding
any appreciation or depreciation in anticipation of the corporate action unless
exclusion would be inequitable. The value of the shares is to be determined by
techniques that are accepted generally in the financial community.
(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.
(5) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation.
(6) "Beneficial shareholder" means the person who is a beneficial owner
of shares held by a nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
SS. 33-13-102. RIGHT TO DISSENT.
(A) A shareholder is entitled to dissent from, and obtain payment of the
fair value of, his shares in the event of any of the following corporate
actions:
(1) consummation of a plan of merger to which the corporation is a party
(i) if shareholder approval is required for the merger by Section 33-11-103 or
the articles of incorporation and the shareholder is entitled to vote on the
merger or (ii) if the corporation is a subsidiary that is merged with its parent
under Section 33-11-104 or 33-11-108 or if the corporation is a parent that is
merged with its subsidiary under Section 33-11-108;
(2) consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares are to be acquired, if the shareholder
is entitled to vote on the plan;
(3) consummation of a sale or exchange of all, or substantially all, of
the property of the corporation other than in the usual and regular course of
business, if the shareholder is entitled to vote on
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the sale or exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all or
substantially all of the net proceeds of the sale must be distributed to the
shareholders within one year after the date of sale;
(4) an amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(i) alters or abolishes a preferential right of the shares;
(ii) creates, alters, or abolishes a right in respect of
redemption, including a provision respecting a sinking fund for the redemption
or repurchase, of the shares;
(iii) alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities;
(iv) excludes or limits the right of the shares to vote on any
matter, or to cumulate votes, other than a limitation by dilution through
issuance of shares or other securities with similar voting rights; or
(v) reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be acquired for
cash under Section 33-6-104; or
(5) in the case of corporations which are not public corporations, the
approval of a control share acquisition under Article 1 of Chapter 2 of Title
35;
(6) any corporate action to the extent the articles of incorporation,
bylaws, or a resolution of the board of directors provides that voting or
nonvoting shareholders are entitled to dissent and obtain payment for their
shares.
(B) Notwithstanding subsection (A), no dissenters' rights under this
section are available for shares of any class or series of shares which, at the
record date fixed to determine shareholders entitled to receive notice of a vote
at the meeting of shareholders to act upon the agreement of merger or exchange,
were either listed on a national securities exchange or designated as a national
market system security on an interdealer quotation system by the National
Association of Securities Dealers, Inc.
SS. 33-13-103. DISSENT BY NOMINEES AND BENEFICIAL OWNERS.
(a) A record shareholder may assert dissenters' rights as to fewer than
all the shares registered in his name only if he dissents with respect to all
shares beneficially owned by any one person and notifies the corporation in
writing of the name and address of each person on whose behalf he asserts
dissenters' rights. The rights of a partial dissenter under this subsection are
determined as if the shares to which he dissents and his other shares were
registered in the names of different shareholders.
(b) A beneficial shareholder may assert dissenters' rights as to shares
held on his behalf only if he dissents with respect to all shares of which he is
the beneficial shareholder or over which he has power to direct the vote. A
beneficial shareholder asserting dissenters' rights to shares held on his behalf
will notify the corporation in writing of the name and address of the record
shareholder of the shares, if known to him.
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ARTICLE 2. PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
SS. 33-13-200. NOTICE OF DISSENTERS' RIGHTS.
(a) If proposed corporate action creating dissenters' rights under
Section 33-13-102 is submitted to a vote at a shareholders' meeting, the meeting
notice must state that shareholders are or may be entitled to assert dissenters'
rights under this chapter and be accompanied by a copy of this chapter.
(b) If corporate action creating dissenters' rights under Section
33-13-102 is taken without a vote of shareholders, the corporation shall notify
in writing all shareholders entitled to assert dissenters' rights that the
action was taken and send them the dissenters' notice described in Section
33-13-220.
SS. 33-13-210. NOTICE OF INTENT TO DEMAND PAYMENT.
(a) If proposed corporate action creating dissenters' rights under
Section 33-13-102 is submitted to a vote at a shareholders' meeting, a
shareholder who wishes to assert dissenters' rights (1) must give to the
corporation before the vote is taken written notice of his intent to demand
payment for his shares if the proposed action is effectuated and (2) must not
vote his shares in favor of the proposed action. A vote in favor of the proposed
action cast by the holder of a proxy solicited by the corporation shall not
disqualify a shareholder from demanding payment for his shares under this
chapter.
(b) A shareholder who does not satisfy the requirements of subsection
(a) is not entitled to payment for his shares under this chapter.
SS. 33-13-220. DISSENTERS' NOTICE.
(a) If proposed corporate action creating dissenters' rights under
Section 33-13-102 is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders who satisfied the
requirements of Section 33-13-210(a).
(b) The dissenters' notice must be delivered no later than ten days
after the corporate action was taken and must:
(1) state where the payment demand must be sent and where
certificates for certificated shares must be deposited;
(2) inform holders of uncertificated shares to what extent
transfer of the shares is to be restricted after the payment demand is received;
(3) supply a form for demanding payment that includes the date of
the first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting dissenters'
rights certify whether or not he or, if he is a nominee asserting dissenters'
rights on behalf of a beneficial shareholder, the beneficial shareholder
acquired beneficial ownership of the shares before that date;
(4) set a date by which the corporation must receive the payment
demand, which may not be fewer than thirty nor more than sixty days after the
date the subsection (a) notice is delivered and set a date by which certificates
for certificated shares must be deposited, which may not be earlier than twenty
days after the demand date; and
(5) be accompanied by a copy of this chapter.
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SS. 33-13-230. SHAREHOLDERS' PAYMENT DEMAND.
(a) A shareholder sent a dissenters' notice described in Section
33-13-220 must demand payment, certify whether he (or the beneficial shareholder
on whose behalf he is asserting dissenters' rights) acquired beneficial
ownership of the shares before the date set forth in the dissenters' notice
pursuant to Section 33-13-220(b)(3), and deposit his certificates in accordance
with the terms of the notice.
(b) The shareholder who demands payment and deposits his share
certificates under subsection (a) retains all other rights of a shareholder
until these rights are canceled or modified by the taking of the proposed
corporate action.
(c) A shareholder who does not comply substantially with the
requirements that he demand payment and deposit his share certificates where
required, each by the date set in the dissenters' notice, is not entitled to
payment for his shares under this chapter.
SS. 33-13-240. SHARE RESTRICTIONS.
(a) The corporation may restrict the transfer of uncertificated shares
from the date the demand for payment for them is received until the proposed
corporate action is taken or the restrictions are released under Section
33-13-260.
(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are canceled or modified by the taking of the proposed corporate action.
SS. 33-13-250. PAYMENT.
(a) Except as provided in Section 33-13-270, as soon as the proposed
corporate action is taken, or upon receipt of a payment demand, the corporation
shall pay each dissenter who substantially complied with Section 33-13-230 the
amount the corporation estimates to be the fair value of his shares, plus
accrued interest.
(b) The payment must be accompanied by:
(1) the corporation's balance sheet as of the end of a fiscal
year ending not more than sixteen months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for that
year, and the latest available interim financial statements, if any;
(2) a statement of the corporation's estimate of the fair value
of the shares and an explanation of how the fair value was calculated;
(3) an explanation of how the interest was calculated;
(4) a statement of the dissenter's right to demand additional
payment under Section 33-13-280; and
(5) a copy of this chapter.
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SS. 33-13-260. FAILURE TO TAKE ACTION.
(a) If the corporation does not take the proposed action within sixty
days after the date set for demanding payment and depositing share certificates,
the corporation, within the same sixty-day period, shall return the deposited
certificates and release the transfer restrictions imposed on uncertificated
shares.
(b) If, after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under Section 33-13-220 and repeat the payment demand
procedure.
SS. 33-13-270. AFTER-ACQUIRED SHARES.
(a) A corporation may elect to withhold payment required by section
33-13-250 from a dissenter as to any shares of which he (or the beneficial owner
on whose behalf he is asserting dissenters' rights) was not the beneficial owner
on the date set forth in the dissenters' notice as the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action, unless the beneficial ownership of the shares devolved upon
him by operation of law from a person who was the beneficial owner on the date
of the first announcement.
(b) To the extent the corporation elects to withhold payment under
subsection (a), after taking the proposed corporate action, it shall estimate
the fair value of the shares, plus accrued interest, and shall pay this amount
to each dissenter who agrees to accept it in full satisfaction of his demand.
The corporation shall send with its offer a statement of its estimate of the
fair value of the shares, an explanation of how the fair value and interest were
calculated, and a statement of the dissenter's right to demand additional
payment under Section 33-13-280.
SS. 33-13-280. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
(a) A dissenter may notify the corporation in writing of his own
estimate of the fair value of his shares and amount of interest due and demand
payment of his estimate (less any payment under Section 33-13-250) or reject the
corporation's offer under Section 33-13-270 and demand payment of the fair value
of his shares and interest due, if the:
(1) dissenter believes that the amount paid under Section
33-13-250 or offered under Section 33-13-270 is less than the fair value of his
shares or that the interest due is calculated incorrectly;
(2) corporation fails to make payment under Section 33-13-250 or
to offer payment under Section 33-13-270 within sixty days after the date set
for demanding payment; or
(3) corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty days after the date set for
demanding payment.
(b) A dissenter waives his right to demand additional payment under this
section unless he notifies the corporation of his demand in writing under
subsection (a) within thirty days after the corporation made or offered payment
for his shares.
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ARTICLE 3. JUDICIAL APPRAISAL OF SHARES
SS. 33-13-300. COURT ACTION.
(a) If a demand for additional payment under Section 33-13-280 remains
unsettled, the corporation shall commence a proceeding within sixty days after
receiving the demand for additional payment and petition the court to determine
the fair value of the shares and accrued interest. If the corporation does not
commence the proceeding within the sixty-day period, it shall pay each dissenter
whose demand remains unsettled the amount demanded.
(b) The corporation shall commence the proceeding in the circuit court
of the county where the corporation's principal office (or, if none in this
State, its registered office) is located. If the corporation is a foreign
corporation without a registered office in this State, it shall commence the
proceeding in the county in this State where the principal office (or, if none
in this State, the registered office) of the domestic corporation merged with or
whose shares were acquired by the foreign corporation was located.
(c) The corporation shall make all dissenters (whether or not residents
of this State) whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication, as provided by law.
(d) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) is plenary and exclusive. The court may appoint persons as
appraisers to receive evidence and recommend decisions on the question of fair
value. The appraisers have the powers described in the order appointing them or
in any amendment to it. The dissenters are entitled to the same discovery rights
as parties in other civil proceedings.
(e) Each dissenter made a party to the proceeding is entitled to
judgment for the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the corporation.
SS. 33-13-310. COURT COSTS AND COUNSEL FEES.
(a) The court in an appraisal proceeding commenced under Section
33-13-300 shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The court shall
assess the costs against the corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable, to
the extent the court finds the dissenters acted arbitrarily, vexatiously, or not
in good faith in demanding payment under Section 33-13-280.
(b) The court also may assess the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds equitable:
(1) against the corporation and in favor of any or all dissenters
if the court finds the corporation did not comply substantially with the
requirements of Sections 33-13-200 through 33-13-280; or
(2) against either the corporation or a dissenter, in favor of
any other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this chapter.
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(c) If the court finds that the services of counsel for any dissenter
were of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these counsel reasonable fees to be paid out of the amounts
awarded the dissenters who were benefited.
(d) In a proceeding commenced by dissenters to enforce the liability
under Section 33-13-300(a) of a corporation that has failed to commence an
appraisal proceeding within the sixty-day period, the court shall assess the
costs of the proceeding and the fees and expenses of dissenters' counsel against
the corporation and in favor of the dissenters.
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