Exhibit 10.2

EXECUTION VERSION

Expanding Participating Bottler Revenue Incidence Agreement

 

1. The Coca-Cola Company, a Delaware corporation (“Company”), and Coca-Cola
Bottling Co. Consolidated, a Delaware corporation (“Bottler”), hereby agree to
allocate, effective January 1, 2017, as set forth in this Expanding
Participating Bottler Revenue Incidence Agreement (“EPB Incidence Agreement” or
“Agreement”), the revenue generated by the marketing, promotion, distribution
and sale of Covered Beverages and Related Products in Bottler’s aggregate
business in (a) all territories under any Comprehensive Beverage Agreement and
(b) subject to Section 2 hereof, the Legacy Territory and Exchange Territory
(each as defined in that certain Territory Conversion Agreement, dated as of
September 23, 2015 (the “Conversion Agreement”), by and between Company,
Coca-Cola Refreshments USA, Inc. and Bottler).

 

  1.1. For purposes hereof,

 

  1.1.1. “Bottler Gross Revenue” means Net Sales Revenue (i.e. the wholesale
price delivered to the customer plus full service vending income and agency
delivery fee minus sales tax) from sales of Company’s Covered Beverages and
Related Products in the Shared Business Segments (as defined herein).

 

  1.1.2. “Bottler Net Revenue” means, for volume sold through for trade sales
and full service vending sales in any given year, Bottler Gross Revenue minus
customer trade marketing (“CTM”), cooperative marketing agreement (“CMA”)
expense, and customer specific coupon expense paid by Bottler.

 

  1.1.3. “Company Revenue Incidence Rate” means, for each applicable Shared
Business Segment, the numeric rate that Company from time to time determines in
its sole discretion in accordance with this Agreement will be multiplied by
Bottler Net Revenue for each such Shared Business Segment to calculate
“Company’s Incidence Revenue” for each such Shared Business Segment.

 

  1.1.4. “Company’s Standard Pricing Revenue” means Company’s revenue from
concentrate and finished goods pricing billed by Company to Bottler at the
standard billing prices (“SBPs”) for Covered Beverages and Related Products set
in accordance with the CBA (as defined in the Conversion Agreement) and
communicated annually to Bottler. Company will not change SBPs more than once
per year. At the end of each year, Company may at its sole discretion change the
SBPs for the next year by giving 30 days’ Notice to Bottler. Company will charge
the same SBPs to every Expanding Participating Bottler under this Agreement and
to every other U.S. Coca-Cola Bottler that elects to participate in a revenue
incidence pricing program with Company.

 

  1.1.5. “Shared Business Segments” means the category and/or product segments
(e.g., Sparkling, PowerAde, etc.) as determined by Company in its sole
discretion from time to time in accordance with this Agreement.

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  1.1.6. Other capitalized terms used and not otherwise defined in this
Agreement shall have the meanings ascribed to them in the CBA or any applicable
Initial CBA (as each is defined in the Conversion Agreement).

 

2. The term of this Agreement (the “Term”) will be effective as of January 1,
2017, or at such earlier date as the parties may mutually agree, and will
terminate upon termination of the Comprehensive Beverage Agreements; provided,
however, that if the CBA Conversion (as defined in the Conversion Agreement) has
not occurred on or prior to January 1, 2020 as contemplated under Section 2.1 of
the Conversion Agreement, then unless otherwise agreed by the parties, this
Agreement will cease to apply to the Legacy Territory and Exchange Territory
from and after such date, and the Legacy Territory and Exchange Territory will
be governed by the terms contained in the incidence pricing agreement between
Bottler and Company that is in effect on the date on which this Agreement is
executed.

 

3. On or before October 1, 2016, Company will provide Bottler with written
notice of the initial Shared Business Segments, and initial Company Revenue
Incidence Rate for each such segment, that will apply effective January 1, 2017.
Thereafter, Company may, at any time in Company’s sole discretion, upon 180
days’ written notice to Bottler with a copy of such Notice to the Coca-Coca
System Leadership Governance Board:

 

  3.1. revise any of the Company Revenue Incidence Rates under this Agreement;
provided that any such revision shall be proportionately applied on a percentage
basis to all Expanding Participating Bottlers and any Participating Bottlers
operating under a Comprehensive Beverage Agreement; and

 

  3.2. modify the Shared Business Segments, including by changing the
composition of any Shared Business Segment, adding Shared Business Segments,
deleting Shared Business Segments, and determining whether and how any Shared
Business Segment applies to any new Covered Beverage or new Related Product, and
to establish the Company Revenue Incidence Rate for each such modified or new
Shared Business Segment; provided that any such revisions shall be applied to
all Expanding Participating Bottlers and any Participating Bottlers.

 

4. Except as provided in Section 2 and Section 3 hereof, this Agreement may be
revised only by mutual agreement of Company and Bottler in accordance with this
Agreement.

 

5. Bottler will provide to Company, within 15 days after the end of each
calendar month and quarter, such information in the form and manner required by
Company to perform the calculations described herein for such calendar month and
quarter for each of the Shared Business Segments. The information specified in
this Section 5 is referred to as “Bottler’s Net Revenue Information”. Company
will treat Bottler’s Net Revenue Information in accordance with the
confidentiality provisions of the Comprehensive Beverage Agreements. The
calculation will be settled quarterly based on Bottler’s calendar quarter.
Company will determine Bottler Net Revenue based on Bottler’s Net Revenue
Information for the applicable calendar quarter for each such segment.

 

6. Company’s share of revenue (“Company’s Incidence Revenue”) for each Shared
Business Segment will be calculated by multiplying Bottler Net Revenue for such
Shared Business Segment by the “Company Revenue Incidence Rate” for the
applicable Shared Business Segment. Each Expanding Participating Bottler will
have its own specific Company Revenue Incidence Rate for each Shared Business
Segment, and these rates may vary across Expanding Participating Bottlers.

 

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7. For each Shared Business Segment, Company will reconcile Company’s Incidence
Revenue against Company’s Standard Pricing Revenue, and will provide Bottler
with a reconciliation calculation within 5 calendar days of the applicable
calendar quarter. If Company’s Incidence Revenue is more than Company’s Standard
Pricing Revenue, Bottler shall pay the difference to Company no later than 15
calendar days after the end of the applicable calendar quarter. If Company’s
Incidence Revenue is less than Company Standard Pricing Revenue, Company shall
pay the difference to Bottler no later than 15 calendar days after the end of
the applicable calendar quarter.

 

8. Final Retroactive Adjustment:

 

  8.1. At the end of Quarter 1 of the following calendar year, Bottler and
Company will make a final incidence settlement adjustment for the prior year
final actuals. However, this final settlement adjustment will not incorporate
the final, reconciled expenses for prior year CTM and CMA.

 

  8.2. Once CTM and CMA actuals are finalized for the prior year, Bottler and
Company shall adjust the incidence settlement related to the final prior year
CTM and CMA adjustment referenced in Section 8.1 hereof. Any variance between
this final adjusted incidence settlement and the settlement amount from quarter
1 (prior year) will be paid or invoiced within 30 days of Bottler and Company
alignment and no later than the end of the current calendar year. Thereafter, no
further adjustment to the incidence settlement shall be made in the current
calendar year related to prior year actuals.

 

9. Company Revenue Incidence Rates for new territories acquired by Bottler will
be blended with existing territories by Company in a manner that does not result
in value transfer between Company and Bottler (i.e., there will not be separate
rates by territory for an individual Bottler).

 

10. Company may assign any of its rights and delegate all or any of its duties
or obligations under this Agreement to one or more of its Affiliates; provided,
however, that any such delegation will not relieve Company from any of its
contractual obligations under this Agreement.

 

11. Failure of Company or Bottler (including any of their respective Affiliates)
to exercise promptly any right herein granted, or to require strict performance
of any obligation undertaken herein by the other party, will not be deemed to be
a waiver of such right or of the right to demand subsequent performance of any
and all obligations herein undertaken by Bottler or by Company.

 

15. Bottler is an independent contractor and is not an agent of, or a partner or
joint venturer with, Company.

 

  15.1. Each of Company and Bottler agree that it will neither represent, nor
allow itself to be held out as an agent of, or partner or joint venturer with
the other (including any of its Affiliates).

 

  15.2.

Bottler and Company do not intend to create, and this Agreement will not be
construed to create, a partnership, joint venture, agency, or any form of
fiduciary relationship. Each party covenants and agrees never to assert that a
partnership, joint venture or fiduciary relationship exists or has been created
under or in connection with this Agreement and the Related Agreements. There is
no partnership, joint venture, agency, or any form of fiduciary

 

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  relationship existing between Bottler and Company, but if it there is
determined or found to be a partnership, joint venture, or agency, then Bottler
and Company expressly disclaim all fiduciary duties that might otherwise exist
under applicable law.

 

  15.3. Nothing in this Agreement, express or implied, is intended or will be
construed to give any person or entity, other than the parties to this Agreement
and their successors and permitted assigns, any legal or equitable right, remedy
or claim under or in respect of any agreement or any provision contained in this
Agreement. This Agreement does not, and is not intended to, confer any rights or
remedies upon any Person other than Bottler and Company.

 

16. The parties may execute this Agreement in counterparts, each of which is
deemed an original and all of which only constitute one original.

 

17. This Agreement shall be interpreted, construed and governed by and in
accordance with the laws of the State of Georgia, United States of America,
without giving effect to any applicable principles of choice or conflict of
laws, as to contract formation, construction and interpretation issues. The
parties agree that any lawsuit commenced in connection with, or in relation to,
this Agreement must be brought in a United States District Court, if there is
any basis for federal court jurisdiction. If the party bringing such action
reasonably concludes that federal court jurisdiction does not exist, then the
party may commence such action in any court of competent jurisdiction.

 

18. The parties acknowledge and agree that the terms and conditions of this
Agreement have been the subject of active and complete negotiations, and that
such terms and conditions must not be construed in favor of or against any party
by reason of the extent to which a party or its professional advisors may have
participated in the preparation of this Agreement.

[Signatures on following page]

 

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IN WITNESS WHEREOF, Company and Bottler each have caused this Expanding
Participating Bottler Revenue Incidence Agreement to be executed by a duly
authorized person in their behalf on the dates indicated below.

 

THE COCA-COLA COMPANY By:  

/s/ J. Alexander M. Douglas, Jr.

  Authorized Representative Date:   September 23, 2015 COCA-COLA BOTTLING CO.
CONSOLIDATED By:  

/s/ Umesh Kasbekar

  Authorized Representative Date:   September 23, 2015

 

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