SHAREHOLDER'S AGREEMENT
THIS AGREEMENT, made and entered into this 17th day of December, 1988 (the
"Agreement"), by and among The Coca-Cola Company, a Delaware corporation (the
"Company") and J. Xxxxx Xxxxxxxx, J. Xxxxx Xxxxxxxx, III and any other person
related to or affiliated with J. Xxxxx Xxxxxxxx who has executed this Agreement
or otherwise agreed to be bound hereby (the latter persons being hereinafter
referred to individually as a "Xxxxxxxx" or "Shareholder" and collectively as
the "Harrisons" or the "Shareholders");
WHEREAS, the Company and the Harrisons are substantial holders of the
Common Stock and Class B Common Stock of Coca-Cola Bottling Co. Consolidated
("Consolidated");
WHEREAS, the Harrisons have provided management and leadership of
Consolidated for many years and the Company desires to encourage them to
continue in their ownership of the Common Stock and the Class B Common Stock of
Consolidated and to continue to provide that leadership Consolidated;
WHEREAS, the Company desires to receive and the Harrisons wish to give
assurances against the transfer of their controlling shares to an unknown
purchaser; and
WHEREAS, the Harrisons are willing to commit to restrictions on their
ability to transfer their Common Stock and Class B Common Stock of Consolidated
in exchange for the commitment of the Company to assure them that if they
continue to hold their stock for at least an additional five years that they
will have an assured value of their stock at that time in the form of an
obligation of the Company to purchase all of the Harrisons' Common Stock and
Class B Common Stock at the option of the Harrisons at that time;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the Harrisons and the Company hereby agree as
follows:
Section 1. Harrisons Continued Involvement. Subject to the right and
obligation of the Board of Directors of Consolidated to elect and supervise
management and subject to maintaining satisfactory employment and other
contractual arrangements, J. Xxxxx Xxxxxxxx and J. Xxxxx Xxxxxxxx, III hereby
express their commitment to remain actively involved and interested On the
management and operations of Consolidated during the term of this Agreement.
Section 2. Certain Terms. For purposes of this Agreement, certain
terms are defined as follows:
(a) "Shares" shall mean any shares of the $1.00 par value per share Common
Stock of Consolidated and the $1.00 par value per share Class B Common Stock of
Consolidated or any other class of stock of Consolidated hereafter authorized
and issued, whether now owned or hereafter acquired by the Harrisons or any of
them, in any manner whatsoever, all of which shall be duly and timely legended
in accordance with Section 9 herein.
(b) "Initial Shares" shall mean the Shares specified on Schedule A hereto
which are owned by the Harrisons on the date of this Agreement and made subject
hereto, namely 712,796 shares of Common Stock and 1,048,524 shares of Class B
Common Stock.
(c) "Adjusted Initial Shares" shall mean the Initial Shares and the
Additional Shares, in each case as incremented, adjusted or converted pursuant
to any stock split, stock dividend, recapitalization, reorganization or the
like.
(d) "Additional Shares" shall mean the shares of Consolidated's Common
Stock or Class B Common Stock, if any, issued to either J. Xxxxx Xxxxxxxx or J.
Xxxxx Xxxxxxxx, III by Consolidated after the date hereof; provided that the
total number of Additional Shares shall in no event exceed ten percent (10%) of
the number of Initial Shares as of the date hereof (as such number of shares may
be appropriately adjusted in the manner contemplated in the preceding paragraph
(c)).
(e) "Offered Shares" shall mean any Shares offered pursuant to Section 4(a)
hereof.
(f) "Put Shares" shall mean all of the Adjusted Initial Shares owned by the
Harrisons and their Permitted Transferees which the Harrisons have elected to
put to the Company pursuant to a Put Notice delivered to KO as provided in
Section 7 hereof.
(g) "Permitted Transferee" of any Shareholder shall mean such Shareholder's
spouse, lineal descendants, adopted children, any spouse of any such lineal
descendant or adopted child, any trust created and existing solely for the
benefit of any such person and any organization described in Section 501(c)(3)
of the Internal Revenue Code, if such organization is exempt from tax under
Section 501(a) of such Code, any executor of such Shareholder's estate, or any
beneficiary of any trust which is a Shareholder; provided that no person or
organization shall be a Permitted Transferee unless he, she or it consents in
writing to be treated as a Xxxxxxxx and be bound by all of their obligations
hereunder.
(h) "Sell" and "Sale" shall mean the making of any sale, exchange, gift,
bequest, devise, assignment, transfer, pledge, hypothecation or other
disposition or creation of a security interest of any kind in any of the Shares.
(i) "Selling Shareholder" shall mean one of the Harrisons or a Permitted
Transferee who desires to sell Shares, as provided in Section 4 hereof.
Section 3. Restrictions on Transfer. During the term of this Agreement, no
Shareholder shall Sell any of the Shares to any person except a Permitted
Transferee without first offering to sell such Shares to the Company in
accordance with Section 4, except that this restriction shall not apply to a
pledge which complies with Section 5 hereof. Any Shares sold to a Permitted
Transferee shall remain subject to the restrictions provided in this Agreement
in the same manner and to the same extent as if such Permitted Transferee were a
Shareholder and a party to this Agreement, and such Permitted Transferee shall,
by the acceptance of such Shares, become bound hereby; provided, however, that
no Sale to a Permitted Transferee shall be consummated until a written consent
of the proposed Permitted Transferee to be so bound has been delivered to the
Company.
Section 4. First Offer to the Company.
(a) If, at any time, the Harrisons, or any of them, or any Permitted
Transferee, shall have received a bona fide written offer to purchase all or any
part of the Shares owned by such person and desires to accept such offer (the
"Bona Fide Offer") on the terms and conditions specified therein, then the
person desiring to sell Shares (the "Selling Shareholder") shall give written
notice (the "Offer Notice") to the Company of the desire to sell such Shares
under the terms and conditions of the Bona Fide Offer and shall first offer to
sell such Shares (the "Offered Shares") to the Company on the same terms and
conditions. The Offer Notice shall fully describe all of the terms and
conditions of the proposed sale, including the name and address of the
purchaser, the number of shares to be sold, the consideration to be received in
exchange therefor and any other related terms and conditions and shall include a
true copy of the Bona Fide Offer. In the event that the Bona Fide Offer
contemplates any consideration other than cash, then the Selling Shareholder
shall state in the Offer Notice his good faith belief as to the fair market
value of the consideration. The Company shall have thirty (30} days after
delivery of the Offer Notice to accept such offer and to thereby agree to
purchase all, but not
less than all, of the Offered Share upon the terms and conditions specified in
the Offer Notice; provided, however, that if the specified consideration is not
cash and the Company does not agree with the Selling Shareholder's good faith
determination of the fair market value of the consideration, then the Company
may require that the fair market value of such non-cash consideration (and the
resultant purchase price for the Offered Shares) be determined by a mutually
agreed upon investment banking firm.
(b) In the event the Selling Shareholder's offer made pursuant to Section
4(a) hereof is accepted by the Company, the purchase of the Offered Share shall
be closed as soon as practicable after the acceptance of such offer. At the
closing, the Selling Shareholder shall deliver to the Company share certificates
representing all of the Offered Shares, duly endorsed in blank for transfer, or
with duly executed blank stock powers attached and with signatures guaranteed by
a national bank in either case, and shall further deliver such other instruments
as may be necessary or desirable in the reasonable opinion of counsel for the
Company to effect the transfer of the Offered Shares to the Company. The Company
shall pay the purchase price for such shares in the manner and upon the terms
provided in the Offer Notice or, at the option of the Company, in cash.
(c) If the Company does not accept the offer of the Selling Shareholder
made pursuant to Section 4(a) hereof, the Selling Shareholder shall be free to
sell the Offered Shares; provided, however, that (i) the sale by the Selling
Shareholder pursuant to this Section 4(G} shall be made at the same price and on
other terms and conditions not materially different from the terms and
conditions specified in the Offer Notice, and (ii) such sale shall be
consummated within thirty (30) days after the expiration date of the time in
which the Company could have accepted the Selling Shareholder's offer or, if
longer, within ten (10) days after receipt of any required regulatory approvals.
After the expiration of such fifteen or ten day period, any of the Offered
Shares not sold by the Selling Shareholder shall again become subject to all of
the provisions of this Agreement as though the offer under Section 4(a) hereof
had not been made.
Section 5. Bona Fide Pledges Permitted. Any Xxxxxxxx or Permitted
Transferee desiring to effect a bona fide pledge of any of his Shares to secure
an obligation of such Shareholder shall have the right to effect such pledge,
but only if prior to effecting such pledge such Shareholder delivers to the
Company the written agreement of the pledges (i) agreeing that such pledges
shall not sell any of such Shares upon exercise of his rights as pledges thereof
without complying with the provisions of Section 4 hereof in the same manner and
to the same extent as if such pledges were a Shareholder and a party to this
Agreement,
(ii) acknowledging that such Shares in such pledgee's hands are subject to the
options contained in Sections 4, 6 and 7 hereof and (iii) such pledgee's
agreement to comply with all other provisions hereof, together with such further
assurances with respect to the agreement of much pledges as counsel to the
Company shall reasonably request.
Section 6. Company Option Upon Unauthorized Transfer. In the event any
Shareholder, Permitted Transferee or pledgee Sells any of the Shares owned by
him or pledged to him otherwise than in strict accordance with the terms of
Section 3, 4 and 5 hereof, then, in addition to the right to any other remedies
hereunder, including an injunction against an unauthorized transfer, the Company
shall have the option to purchase such Shares from the transferee (or any
subsequent holder) to whom such Shares have been sold for an amount in cash
equal to eighty-five percent (85%) of the fair market value of the consideration
paid by such transferee for such Shares. The Company may exercise the purchase
option provided in this Section 6 by giving notice thereof to the transferee of
such Shares at any time within ninety (90) days after the Company receives
actual notice of such sale, and the purchase of such Shares from such transferee
shall be closed within fifteen (15) days after the delivery of such notice. At
such closing the Company shall pay the purchase price against delivery of
certificates representing the Shares so purchased, duly endorsed in blank for
transfer, or with duly executed blank stock powers attached, and with signature
guaranteed by a national bank in either case, and accompanied by such further
instruments as may be necessary or desirable in the opinion of counsel for the
Company to effect the transfer of such Shares. Acceptance by any purchaser,
assignee, transferee, donee, pledgee or other party of any of the Shares held by
any Shareholder, Permitted Transferee, pledgee or their unauthorized transferee
shall evidence conclusively the consent of such party to all of the terms and
provisions hereof.
Section 7. Harrisons Right to Cause the Purchase of Their Shares be the
Company.
(a) If at any time after the fifth anniversary of the date of this
Agreement and prior to the tenth anniversary thereof (the "Exercise Period"),
the Harrisons desire to cause the Company to purchase all or part of the
Adjusted Initial Shares then owned by them (including Shares held by any
Permitted Transferee or pledgee), they may give to the Company a notice in
writing (the "Put Notice") demanding that the Company purchase all of their
Adjusted Initial Shares (or the portion thereof specified in the Put Notice). If
the Harrisons elect to put less than all of their Adjusted Initial Shares
pursuant to any single Put Notice, the number of shares put to KO pursuant
thereto shall
not be less than 100,000 Shares (as such number of shares may be adjusted in the
manner contemplated in Section 2(c) hereinabove). During the Exercise Period,
the Harrisons may continue to deliver Put Notices until KO has acquired all of
the Adjusted Initial Shares owned by them; provided that no more than one (1)
Put Notice may be delivered within any twelve month period.
(b) (i) Upon exercise of the right granted in paragraph (a) above, the
purchase price for all of the 1,761,320 Initial Shares shall be Seventy-Five
Million Dollars ($75,000,000) (the "Initial Purchase Price") or $42.5817 per
Share (assuming no stock Split or other occurrence requiring an adjustment as
contemplated in Section 2(c) or distribution requiring an adjustment under
paragraph (iii) below).
(ii) If the Shares have been adjusted by virtue of an event
contemplated in Section 2(c), then the purchase price per share shall be
determined by dividing Seventy-Five Million Dollars by the number of
Initial Shares, as so adjusted.
(iii) The Initial Purchase Price, as otherwise adjusted, shall be
appropriately reduced if there has occurred any extraordinary cash or
property distribution other than normal quarterly dividends in light of
Consolidated's results of operations.
(iv) The total purchase price payment to the Harrisons for their
Initial Shares (as adjusted) and any Additional Shares included in the Put
Notice will be the purchase price per Share determined under paragraphs
(i), (ii), and (iii) above times the number of Put Shares.
(c) The closing of the purchase of the Put Shares pursuant to this Section
7 shall take place as promptly as practicable at a time and place specified by
the Company.
(d) At the closing, the Harrisons shall deliver the certificates evidencing
the Put Shares free and clear of any lien or encumbrance and such certificates
shall be duly endorsed in blank or accompanied by duly executed stock powers
with signatures guaranteed by a national bank in either case, and accompanied by
such further instruments as may be necessary or desirable in the reasonable
opinion of counsel for the Company to effect the transfer of such Put Shares.
Acceptance by any purchaser, assignee, transferee, donee, pledgee or other party
of any of the Shares held by any Shareholder, Permitted Transferee or pledgee
shall evidence conclusively the consent of such party to all the terms and
provisions hereof.
(e) The consideration for the Put Shares shall be immediately available
funds paid by wire transfer to a bank account or accounts designated by the
Harrisons.
(f) Each of the Harrisons and their Permitted Transferees and pledgees
hereby irrevocably appoints J. Xxxxx Xxxxxxxx, III and if J. Xxxxx Xxxxxxxx, III
is unable for any reason to act then J. Xxxxx Xxxxxxxx, as his true and lawful
agent and attorney-in-fact for the purpose of determining and with absolute
discretion to determine if a Put Notice should be given under this Section 7,
for the giving of such notice and with respect to all other matters related to
the transfer of Put Shares pursuant to such notice and the receipt of
consideration therefor; and the Company may rely absolutely on any action taken
by such attorney-in-fact in connection herewith as being the action of each of
the Harrisons and each Permitted Transferee and pledgee.
Section 8. Merger or Sale of Assets. In the event that any offer is made
which, if consummated, would result in a change in control of Consolidated, or
the sale of all or substantially all of the assets of Consolidated, and the
Harrisons or the Permitted Transferees, as shareholders, intend to vote their
Shares in favor of such transaction, then the Harrisons will immediately provide
the Company with the Offer Notice described in Section 4 and thereby offer their
Shares to the Company on the terms and conditions contemplated in Section 4. In
the event such transaction constitutes a sale of assets of Consolidated, the
price deemed offered for the Shares shall be the product of (i) the percentage
of the Harrisons' (or Permitted Transferees') ownership of the total number of
outstanding shares of Consolidated Common Stock and Class B Common Stock, and
(ii) the purchase price paid for such assets, net of any anticipated tax
liabilities and other out-of-pocket costs to be incurred by Consolidated as a
consequence of such transaction.
Section 9. Stock Legend. Simultaneously with the execution hereof, each
Shareholder shall present the certificates evidencing his Shares so that the
following legend may be placed thereon in conspicuous type:
"Any transfer (including a pledge) of the shares of stock represented
by this certificate is restricted by the terms of a Shareholder's Agreement
dated December ___, 1988 by and among The Coca-Cola Company and J. Xxxxx
Xxxxxxxx and certain of the other shareholders of Coca-Cola Bottling Co.
Consolidated, which includes terms and options binding on Transferees and
Pledgees, a copy of which is on file at the offices of Consolidated."
Section 10. Amendment of Voting Agreement and Irrevocable Proxy. The last
sentence of paragraph 7(d) of the Voting Agreement dated May 7, 1987 among the
Company and J. Xxxxx Xxxxxxxx and J. Xxxxx Xxxxxxxx, III is hereby amended to
provide that the Coca-Cola Bottling Co. Consolidated Irrevocable Proxy of even
date therewith will terminate at such time as (i) J. Xxxxx Xxxxxxxx or executors
or trustees under his will and/or J. Xxxxx Xxxxxxxx, III do not collectively own
all of the 712,796 shares of Class B Common Stock currently owned by J. Xxxxx
Xxxxxxxx, or (ii) the trust which are parties hereto collectively hold less than
50% of the shares of Class B Common Stock held by them, in the aggregate, as of
the date hereof.
Section 11. Remedies.
(a) The parties recognize and acknowledge that it is impossible to measure
in money the damages which would result to a party hereto by reason of a failure
of any of the parties to perform any of the obligations imposed upon them under
this Agreement. Therefore, if any party hereto should institute an action or
proceeding to enforce the provisions hereof, any person against whom such action
or proceeding is brought hereby waives the claim or defense that such party has
an adequate remedy at law, and such person shall not urge in any action or
proceeding the claim or defense that such a remedy at law exists.
(b) This Agreement constitutes a separate agreement independently supported
by good and adequate consideration, the receipt and sufficiency of which are
hereby acknowledged, and this Agreement shall be interpreted, construed, and
enforced separate and apart from other agreements between or among the parties
hereto. Any claim or cause of action of any party hereto against any other party
hereto arising under any other agreement between or among the parties hereto or
out of any state of facts shall not constitute a defense to the enforcement of
the covenants, options and agreements contained in this Agreement.
Section 12. Assignment by Company. The Company shall have the right at any
time and from time to time to assign to any subsidiary of the Company any or all
rights, options or other benefits to which it is entitled hereunder, but it
shall remain responsible for the performance of its obligation hereunder.
Section 13. Term of Agreement. The term of this agreement shall be ten (10)
years, unless sooner terminated upon the purchase by the Company of all of the
Shares owned by the Harrisons, their Permitted Transferees and pledgees.
Section 14. Notice and Miscellaneous.
(a) Any notice, offer, acceptance of any offer, or other communication
provided for or required by this Agreement shall be in writing and shall be
deemed to have been given when delivered by hand, or when deposited in the
United States Mail, registered mail, return receipt requested, postage prepaid,
properly addressed to the person to whom such notice or other communication is
intended to be given, at the following address:
if to J. Xxxxx Xxxxxxxx or
J. Xxxxx Xxxxxxxx, III
J. Xxxxx Xxxxxxxx
c/o Coca-Cola Bottling Co. Consolidated
0000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
J. Xxxxx Xxxxxxxx, III
c/o Coca-Cola Bottling Co. Consolidated
0000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
with a copy to:
Xxxx X. Xxxxxx, III, Esg.
Xxxx, Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxxxxxxx Xxxx Xxxx.
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
if to The Coca-Cola Company
The Coca-Cola Company
Xxx Xxxx-Xxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
with a copy to:
The Coca-Cola Company
Xxx Xxxx-Xxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
or at such other address for a party as shall have been specified by
like notice.
(b) The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall
be construed in all respects as if such invalid or unenforceable provisions were
omitted.
(c) No change or modification of this Agreement shall be valid or binding
upon the parties hereto unless such change or modification shall be in writing
and signed by all of the parties hereto.
(d) This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, personal representatives,
transferees, successors and assigns.
(e) For the convenience of the parties hereto, any maker of counterparts
hereof may be executed, and each ouch counterpart shall be deemed to be an
original instrument.
(f) This Agreement shall be interpreted, construed, and enforced in
accordance with the laws of the State of Delaware. Titles of the sections herein
have been inserted as a matter of convenience of reference only and shall not
affect the meaning or construction of any of the terms or provisions hereof.
(g) This Agreement is intended by the parties hereto to be the final
expression of their agreement and is the complete and exclusive statement of the
terms hereof notwithstanding any representations or statements to the contrary
heretofore made.
IN WITNESS WHEREOF, the parties hereto have executed and sealed this
Agreement, effective as of the date first above written.
THE COCA-COLA COMPANY
By: /s/ Xxxxx X. Xxxxxxx
--------------------
[SEAL]
ATTEST:
/s/ Xxxxx X. Xxxxx
---------------------
Witness as to Shareholders:
each Shareholder:
/s/ Xxxxxx Xxxxx /s/ J. Xxxxx Xxxxxxxx
--------------------- ----------------------------- (SEAL)
J. Xxxxx Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxx /s/ J. Xxxxx Xxxxxxxx, III
--------------------- ----------------------------- (SEAL)
J. Xxxxx Xxxxxxxx, III
/s/ Xxxxxx X. Xxxxxxx /s/ J. Xxxxx Xxxxxxxx, III
--------------------- ----------------------------- (SEAL)
J. Xxxxx Xxxxxxxx, III
/s/ Xxxxxx Xxxxx /s/ Xxxx X. Xxxxxx
--------------------- ----------------------------- (SEAL)
Xxxx X. Xxxxxx, Trustees U/A
Xxxx X. Xxxxxx dated 12/22/66
F/b/o J. Xxxxx Xxxxxxxx III
/s/ Xxxxxx X. Xxxxxxx /s/ J. Xxxxx Xxxxxxxx, III
--------------------- ----------------------------- (SEAL)
J. Xxxxx Xxxxxxxx, III
/s/ Xxxxxx Xxxxx /s/ Xxxx X. Xxxxxx
--------------------- ----------------------------- (SEAL)
Xxxx X. Xxxxxx, Trustees U/A
Xxxx X. Xxxxxx dated 12/22/66
F/b/o J. Xxxxx Xxxxxxxx III
/s/ Xxxxxx X. Xxxxxxx /s/ J. Xxxxx Xxxxxxxx, III
--------------------- ----------------------------- (SEAL)
J. Xxxxx Xxxxxxxx, III
/s/ Xxxxxx Xxxxx /s/ Xxxx X. Xxxxxx
--------------------- ----------------------------- (SEAL)
Xxxx X. Xxxxxx, Trustees U/A
Xxxx X. Xxxxxx dated 12/22/66
F/b/o J. Xxxxx Xxxxxxxx III
/s/ Xxxxxx X. Xxxxxxx /s/ J. Xxxxx Xxxxxxxx, III
--------------------- ----------------------------- (SEAL)
J. Xxxxx Xxxxxxxx, III
/s/ Xxxxxx Xxxxx /s/ Xxxx X. Xxxxxx
--------------------- ----------------------------- (SEAL)
Xxxx X. Xxxxxx, Trustees U/A
Xxxx X. Xxxxxx dated 12/22/66
F/b/o J. Xxxxx Xxxxxxxx III
SCHEDULE A
Number of Number of Shares
Shares of Common of Class B Common
Shareholder Stock Owned Stock Owned
----------- ---------------- -----------------
J. Xxxxx Xxxxxxxx 712,796 712,796
---------------- -----------------
J. Xxxxx Xxxxxxxx, III (none included in Initial Shares)
J. Xxxxx Xxxxxxxx, III 33,314
and Xxxx X. Xxxxxx, ---------------- -----------------
Trustees U/A Xxxx X.
Xxxxxx dated 12/29/66
f/b/o J. Xxxxx Xxxxxxxx,
III
J. Xxxxx Xxxxxxxx, III 33,314
and Xxxx X. Xxxxxx, ---------------- -----------------
Trustees U/A Xxxx X.
Xxxxxx dated 12/29/66
f/b/o Xxxxxxx Xxxxxxxx
J. Xxxxx Xxxxxxxx, III 235,786
and Xxxx X. Xxxxxx, ---------------- -----------------
Trustees U/A Xxxx X.
Xxxxxx dated 2/2/67
f/b/o J. Xxxxx Xxxxxxxx
J. Xxxxx Xxxxxxxx, III 33,314
and Xxxx X. Xxxxxx, ---------------- -----------------
Trustees U/A J. Xxxxx
Xxxxxxxx f/b/x Xxxxxxxx
Family dated 10/13/88
