Exhibit 10.8

MANAGEMENT AGREEMENT

This Management Agreement (“Agreement”) made and entered into as of the 2nd day
of July, 1993, by and among Coca-Cola Bottling Co. Consolidated, a Delaware
corporation (“Manager”); and Carolina Coca-Cola Bottling Partnership, a Delaware
general partnership (“CCCB Partnership”); CCBCC of Wilmington, Inc., a Delaware
corporation wholly owned by CCCB Partnership (“Wilmington”) (CCCB Partnership
and Wilmington are hereby sometimes jointly and severally referred to as the
“Partnership”); Carolina Coca-Cola Bottling Investments, Inc., a Delaware
corporation and wholly owned subsidiary of The Coca-Cola Company (“KO Sub”);
Coca-Cola Ventures, Inc., a Delaware corporation and wholly owned subsidiary of
Manager (“Ventures”) and Palmetto Bottling Company, a South Carolina corporation
(“Palmetto”) and wholly owned subsidiary of Manager (KO Sub, Ventures and
Palmetto are herein collectively referred to as “Partners” and sometimes
referred to individually as “Partner”).

W I T N E S S E T H:

NOW, THEREFORE, in consideration of the mutual promises, obligations and
agreements contained herein, the parties hereto, intending to be legally bound,
do hereby agree as follows:

Section 1.       Definitions.

1.01    Defined Terms. Except as otherwise provided in this Agreement, defined
terms shall have the meanings set forth in the DAA Agreement. “DAA Agreement”
shall mean the Definition and Adjustment Agreement of even date herewith among
The Coca-Cola Company (“KO”), Manager, KO Sub, Ventures, Sunbelt, Coastal,
Eastern, Carolina Holding and certain other Affiliates of KO and Manager.

1.02    Other Terms. The following terms shall have the meanings set forth in
the Section of this Agreement indicated below:

 

Defined term

 

Section

 

 

 

 

 

Agreement

 

Preamble

 

CCCB Partnership

 

Preamble

 

Claimant

 

Section 9.03(a)

 

Claim

 

Section 9.02

 

CPI

 

Section 5.01

 

Disclosing Party

 

Section 8.04

 

Due to/Due from Account

 

Section 5.03(e)

 

Environmental Manager

 

Section 3.01(c)(4)

 

Environmental Laws

 

Section 3.01(c)(4)(i)

 

Equivalent Case

 

Section 5.01

 

Expenses

 

Section 5.02

 

FICA

 

Section 3.02

 

 

--------------------------------------------------------------------------------

 

FUTA

 

Section 3.02

 

Indemnitee

 

Section 9.02

 

KO

 

Section 1.01

 

KO Sub

 

Preamble

 

Manager

 

Preamble

 

Management Fee

 

Section 5.01

 

Notified Party

 

Section 9.03(a)

 

Partner(s)

 

Preamble

 

Partnership

 

Preamble

 

Receiving Party

 

Section 8.04

 

Revolver

 

Section 5.03(d)

 

Rules

 

Section 9.02

 

Sales Branch Employee(s)

 

Section 3.01(c)(2)

 

Wilmington

 

Preamble

 

Section 2.       Appointment of Manager.

2.01    Appointment of and Acceptance by Manager. The Partnership hereby
appoints and retains Manager as the exclusive manager of the Business effective
as of the Closing Date and authorizes Manager to supervise, direct and control,
pursuant to the direction and control of the Executive Committee, the day-to-day
operation of the Business for the term of this Agreement. Manager shall have the
right to enter into contracts in the ordinary course of business and thereby
bind the Partnership; provided that such contracts (i) relate to and are
necessary for the performance by Manager of its services hereunder and (ii) do
not relate to matters set forth in Schedule 11.1(d) of the Partnership Agreement
with respect to which the Executive Committee has not otherwise expressly
granted Manager the authority to act. Manager hereby accepts such appointment
and agrees to use its best efforts in the performance of its duties in
accordance with the terms and conditions hereinafter set forth. In providing the
services described herein, Manager covenants and agrees to use its best efforts
to provide and employ a sufficient number of personnel with adequate training
and experience to perform such duties competently and in a businesslike manner
in such a way as to cause the operations of the Partnership to be carried on
efficiently and in the best interests of the Partnership. In providing such
services, Manager shall be under the direction and control of the Executive
Committee as to the policies and goals of the Partnership and as to all
significant management decisions not otherwise delegated to Manager hereunder.

2.02    Non-exclusive Service. It is understood and agreed that nothing in this
Agreement shall confer upon the Partnership an exclusive right to Manager’s
service. Manager may contract with others for the provision of expertise and
services outside the Territory similar to those to be provided to the
Partnership as contemplated herein.

-2-

--------------------------------------------------------------------------------

Section 3.       Services and Responsibilities of Manager.

3.01    Primary Services and Responsibilities. Within the scope of the authority
granted to it under this Agreement and subject to any limitations provided
herein, Manager will undertake as manager to support the Partnership in meeting
the operating requirements of its license(s), as well as all other operating
standards and the achievement of the Partnership’s financial objectives. Without
limiting the foregoing, Manager will act as a manager of the Partnership under
the Partnership Agreement. Manager acknowledges that it has received a true and
complete copy of the Partnership Agreement and understands its obligations as
Manager thereunder. Subject to any provisions to the contrary set forth in the
Partnership Agreement, Manager is hereby authorized to and shall provide the
following services or cause the following services to be performed under its
supervision:

(a)       Business/Finance.

(1)       Manager will provide accounting, tax, treasury and internal auditing
services in connection with the financial management of the Partnership’s
business including the services of Manager set forth in Section 13 of the
Partnership Agreement. As contemplated by Section 11.5 of the Partnership
Agreement, Manager will develop annual projections of volume, operating
revenues, required capital expenditures, operating expenses and cash flow and
recommend and present such projections to the Finance Committee for its
consideration as the basis for the Annual Business Plan no later than sixty (60)
days prior to the beginning of the Partnership’s fiscal year that is the subject
of such projections. The Annual Business Plan for the Partnership’s 1993 fiscal
year is attached to the Partnership Agreement as Exhibit 11.5(a). The
Partnership shall deliver a copy of each Annual Business Plan as soon as
practicable following adoption thereof by the Executive Committee.

(2)       Manager will provide necessary treasury management services for the
Partnership including the arrangement and administration of financings (subject
to Executive Committee approval) and bank transactions and cash management
services including receipt of and responsibility for all income realized by the
Partnership and disbursement of funds for satisfaction of the debts, obligations
and expenses of the Partnership.

(3)       Manager will develop and implement a comprehensive program of
accounting systems and procedures and provide the following functions or prepare
the following reports:

(i)       Accounts Receivable, Credit and Collections including credit approval,
billing, collection and cash application.

-3-

--------------------------------------------------------------------------------

(ii)      Accounts Payable functions including check writing and accounting for
paid expense and capital items.

(iii)     General accounting functions including maintenance of general ledger
and monthly financial reporting to the Executive Committee.

(iv)     Fixed asset record maintenance and accounting.

(v)      Monthly reports to the Executive Committee (i) comparing actual
operating and capital expenditures to those budgeted and set forth in the Annual
Business Plan, (ii) reflecting Expenses billed to the Partnership and (iii)
detailing significant management actions taken by Manager.

(4)       Manager shall handle the federal, state and local tax reporting and
filing as well as the implementation of tax planning and strategies designed to
minimize ongoing federal, state and local taxes and user fees. Manager will also
handle all tax audits and maintain all Department of Transportation files.
Manager will consult with KO and representatives of KO Sub in connection with
the handling of federal income tax reporting and filing, will notify KO and
provide a copy of federal income tax returns to KO prior to the filing of such
returns and will make its work papers and other tax reports available to KO and
KO Sub upon reasonable request therefor as they become available.

(5)       Manager will develop an internal audit program establishing adequate
procedures necessary to provide accurate internal auditing services.

(b)      Marketing and Sales.

(1)       Manager will have overall responsibility to develop a marketing plan
and implement the distribution strategy included in or otherwise contemplated by
the Annual Business Plan. In particular, Manager will coordinate marketing
activities, programs and funding with the Partnership’s licensors, handle
relationships with major customers crossing territorial boundaries, and develop
overall trade relationship strategies (CMAs, etc.). Manager shall perform media
purchasing through its in-house advertising agency (Case Advertising) under
standard terms, and set advertising budgets subject to the Annual Business Plan.

(2)       Manager will provide regional sales management direction including the
establishment of policies and procedures, selection of price, product and
package, not materially inconsistent with the Annual Business Plan, and
recruiting and training of sales personnel and coordinate overall cold drink
programs.

-4-

--------------------------------------------------------------------------------

(c)       Operations. The major operational responsibilities of Manager shall be
in the areas of Purchasing and Production Management, Human Resource Services,
Fleet and Facility Administration Services, Environmental Compliance, Data
Processing, Corporate Manufacturing Management and Risk Management as follows:

(1)       Purchasing and Production Management. Manager will select and
negotiate with vendors and purchase or, if in the best interest of the
Partnership, lease all supplies and capital equipment from such vendors on a
basis similar to that which is available to Manager with respect to its sales
branches. Subject to the authorization of the Partnership’s licensors, Manager
will supply, or otherwise obtain for the Partnership soft drink product, (i)
with respect to product produced by Manager, at Manager’s fully loaded, standard
cost as determined in accordance with Exhibit A, to be adjusted at the end of
each fiscal quarter to actual fully loaded cost provided that the Partnership
has received prior written notice of any such adjustment and (ii) with respect
to product purchased by Manager, on behalf of the Partnership from a third
party, at Manager’s actual cost plus transportation cost consistent with
Manager’s transportation costs incurred with respect to other sales branches
standard practices. In each case, actual transportation costs shall be added to
product delivered to the Partnership’s warehouses.

(2)       Human Resources. Manager shall provide overall pay and benefit
administration for employees of the Partnership (if any), provide administrative
in-house training and develop and implement personnel policies (if applicable)
and comprehensive pay, benefits and incentive programs and packages for all
employees. Any necessary labor contract negotiations will be performed by
Manager, and Manager will handle the administration of any labor contract
(including grievance procedures and arbitration) and any labor relations
disputes or other labor matters. Manager will have the authority and
responsibility to appoint legal counsel and to enter into, amend or terminate
any employment agreements and consulting and agency agreements relating to the
Partnership. Manager will supplement the Partnership with all additional
personnel necessary to operate the Business at the Sales Branch level (“Sales
Branch Employees(s)”). In connection therewith, Manager shall utilize its
employees or employees of a wholly owned subsidiary of Manager which have
adequate training and experience to perform their duties competently and in a
businesslike manner. Manager shall have the right to substitute one of its
employees for a Sales Branch Employee whenever Manager deems such substitution
appropriate. Each Sales Branch Employee and Partnership employee shall be
subject to all of Manager’s applicable employment policies and practices (unless
otherwise

-5-

--------------------------------------------------------------------------------

restricted by union contracts), and the Partnership shall not have the right to
subject any Sales Branch Employees or Partnership employees to any additional
employment policies or practices or other work related rules or regulations
(except rules and regulations reasonably related to the health and safety of
such employees or required under applicable law) absent Manager’s express
consent to such action. Manager shall provide substantially the same job-related
education and training to Sales Branch Employees and Partnership employees as
Manager provides to its other Employees who perform the same or related tasks.
Manager shall compensate Sales Branch Employees in accordance with Manager’s
standard compensation policies and practices for employees who perform the same
or related tasks subject to regional pay differences. Sales Branch Employees
shall be provided with employee benefits no more favorable as a whole than those
provided to Manager’s other employees performing the same or related tasks in
addition to workers’ compensation, unemployment compensation and all other
benefits which an employer is required to provide for its employees under
applicable law. Manager will adopt and enforce at the Partnership Manager’s Code
of Business Conduct.

(3)       Fleet and Facility Administration. Manager will provide overall
administration of fleet activities including assessment of required fleet
expansion or replacement, acquisition of required equipment and direction of
preventative maintenance programs. Manager will provide ongoing consulting
services to assist in efficient route structure using computer models and
provide training and consulting services for warehouse layout and management.

(4)       Environmental Compliance. Manager shall provide environmental
management services, assigning the administration of those systems to an
environmental compliance manager on its staff (“Environmental Manager”) and
shall assume the following responsibilities:

(i)       It is the responsibility of Manager to assure that all Partnership
operations are in compliance with, or exceed, the requirements of all applicable
environmental laws, regulations, statutes, ordinances and permit conditions
(“Environmental Laws”), and that Partnership operations are conducted to
minimize the risk of liability arising under any Environmental Law. In
fulfilling that responsibility, Manager shall provide for an Environmental
Manager, who shall, in consultation with Manager, establish environmental
management systems, encompassing all of the Partnership’s operations and
employees, designed to assure such compliance and to avoid liability for
noncompliance. The official duties of the Environmental Manager shall include,
without limitation, (A) assuring proper

-6-

--------------------------------------------------------------------------------

operation of established environmental management systems; (B) design,
recommendation and implementation of new environmental management systems; (C)
detection of potential environmental compliance exceptions; and (D) briefing
Manager on environmental issues on an ongoing basis. Any known or suspected
exceptions to environmental compliance requirements discovered by the
Environmental Manager shall be reported immediately to Manager who, in turn,
shall notify the Executive Committee of his findings and ensure that all
required corrective actions and all required reports are initiated and completed
as soon as possible.

(ii)      Beginning in 1994, Manager shall request an opinion from legal counsel
to the Partnership as to the compliance of all the Partnership’s operations with
all applicable Environmental Laws and the Partnership’s potential exposure to
legal liabilities under any Environmental Law. Legal counsel shall, in turn,
retain qualified independent, third party environmental consultants to act as
counsel’s agents in conducting an environmental audit of Partnership operations
to the degree of detail which, in counsel’s opinion, is necessary to form the
basis of counsel’s legal compliance opinion. All documents of whatever kind
generated during the course of developing and providing the legal opinion,
including any materials prepared by legal counsel’s agents, shall be treated,
stored and distributed in a manner which maintains the attorney-client privilege
for such documents. Whenever counsel concludes that a condition associated with
the Partnership’s operations could constitute a violation of an Environmental
Law and/or could subject the Partnership to administrative, civil or criminal
prosecution or other potential liability, legal counsel shall bring that
conclusion to the attention of the Environmental Manager and Manager. Manager
shall report such conclusion to the Executive Committee and shall, together with
the Environmental Manager, establish and implement a corrective action plan and,
if required by law, report the violation as soon as possible. No more than three
years shall elapse between any such environmental audit during the terms of the
Partnership.

(5)       Data Processing and Information Services. Manager shall utilize its
computer systems to provide centralized computer operations, including sales
data storage and analysis systems as well as vending asset management systems.
Manager will perform all required programming (including hand held computers)
and arrange for data and voice communication services.

-7-

--------------------------------------------------------------------------------

(6)       Corporate Manufacturing Management. Manager will provide manufacturing
administration, quality assurance administration and consumer response center
administration.

(7)       Risk Management. Manager shall contract for the purchase of insurance
policies on behalf of the Partnership, at coverage levels prescribed by the
Executive Committee. A list of the initial policies and coverage levels
thereunder are set forth in Exhibit C hereof. Manager shall, on behalf of the
Partnership, cause such policies (or such other policies which are satisfactory
to or required by the Executive Committee) to be maintained during the term of
this Agreement.

3.02  Manager’s Personnel. All of Manager’s personnel providing services
hereunder shall be exclusively employed by Manager or its Affiliates, and
Manager shall have the sole right to determine their conditions of employment,
working hours, employment and vacation policies, seniority, promotions and
assignments. Manager shall have the exclusive right to hire and fire any such
personnel and shall comply with all the laws applicable to the employment of
such personnel. Subject to the provisions of Section 5 below, Manager shall be
solely responsible for the compensation of the employees and for all withholding
taxes, Federal Insurance Contributions Act (“FICA”) and Federal Unemployment Tax
Act (“FUTA”) taxes, unemployment insurance, workmen’s compensation and any other
insurance and fringe benefits with respect to such employees.

3.03  Limitations on Authority. Notwithstanding anything contained herein to the
contrary, without the express consent of the Executive Committee, Manager shall
not permit the Partnership to take or approve any of the actions listed on
Exhibit 11.1(d) of the Partnership Agreement.

3.04  Books and Records. Manager shall, upon written request of a member of the
Executive Committee, make its books and records with respect to the Business
available to the Executive Committee, the Finance Committee, the Partnership or
the Partners, at the reasonable request of any of them. In particular, the
Partnership or any Partner shall have access to such books and records at
reasonable business hours for the purposes of (i) auditing the actual fully
loaded cost of product sold and transportation expenses charged to the
Partnership as contemplated by Section 3.01(c)(1) and Exhibit A, (ii) obtaining
information relating to payments made to third parties pursuant to the KO and
CCBCC Prior Purchase Agreements and determining compliance by the Partnership
with its obligation sunder the KO and CCBCC Prior Purchase Agreements, (iii)
auditing the Management Fee and Expenses charged to the Partnership and (iv)
auditing the Due to/Due from Account. The Partnership shall bear the costs of
any independent accounting firm engaged by KO Sub for the purpose of performing
the review described in this Section.

-8-

--------------------------------------------------------------------------------

Section 4.       Additional Services Provided by Manager.

In the course of performing its duties hereunder, Manager may determine that it
is in the best interests of the Partnership to obtain goods, technology or other
services from Manager or its Affiliates. The provision of such products and
services will be considered to be within the scope of this Agreement and shall
be made available to the Partnership with the approval of the Executive
Committee. The price or fees (excluding applicable taxes, and transportation
costs which shall be charged to the Partnership at cost) charged by Manager or
its Affiliates for such products and services shall be no less favorable than
those charged to other entities by Manager whose business is comparable to that
of the Partnership whether or not such entities are Affiliates; provided,
however, that under no circumstances shall Manager be required to charge the
Partnership an amount which is less than Manager’s actual cost provided that the
provision of such products or services are duly authorized in accordance with
this Agreement.

Section 5.       Partnership Payments.

5.01    Management Fee. In consideration for the services to be provided by
Manager pursuant to this Agreement, the Partnership shall pay to Manager a
management services fee equal to 20.6¢ per 8 oz. equivalent case (i.e., 192
ounces/case) of bottles, cans and pre-mix (“Equivalent Case”) sold by the
Partnership in the Territory after the Closing Date (the “Management Fee”).
Subject to the provisions of Section 7.02, the Management Fee shall be increased
for 1996 and 1997 in accordance with the increase in the Urban Wage Earners and
Clerical Workers-South-All Items consumer price index published by the U.S.
Department of Labor (“CPI”) for the most recent twelve (12) month period for
which statistics are available on January 1, 1996 and January 1, 1997,
respectively. Thereafter, unless the parties agree otherwise, the Management Fee
will be increased for each subsequent year at a rate equal to one-half (1/2) of
the increase in the CPI for the most recent twelve (12) month period for which
statistics are available as of January 1 of such year.

5.02    Expenses. The expenses incurred by the Partnership (or by the Manager on
behalf of the Partnership) as contemplated in the Annual Business Plan shall be
deemed to be expenses of the Partnership payable in addition to the Management
Fee. Such expenses will be subject to audit as provided in Section 3.04 hereof.
No expense other than those accounted for in, or allowed by, the Annual Business
Plan shall be payable by the Partnership unless such expense is (i) less than
$50,000 and is approved by the Finance Committee or (ii) otherwise approved by
the Executive Committee (all expenses payable by the Partnership pursuant to
this Section 5.02 are referred to herein as “Expenses”). The Partnership agrees
that it will cause the (i) Finance Committee to convene a meeting to consider
approval of any such expense no later than five (5) Business Days after receipt
of written request

-9-

--------------------------------------------------------------------------------

for approval from Manager or (ii) Executive Committee to convene a meeting to
consider approval of any such expense no later than fifteen (15) Business Days
after receipt of written request for approval from Manager, whichever is
relevant. By way of illustration, and subject to being included in the Annual
Business Plan or otherwise specifically authorized in this Section 5.02, the
following Expenses shall be the types of Expenses which will be addressed in the
Annual Business Plan and generally payable by or on behalf of the Partnership:

(a)       Entity and Sales Branch Expenses. The Partnership will incur direct
expenses related to its form of entity or Business in the form of fees or taxes
to third parties such as state or local governments. In addition, each Sales
Branch within the Territory will incur certain specific expenses directly
related to the routine operation of the Sales Branch. Such expenses are set
forth on Exhibit C.

(b)      Division Expenses. Manager shall charge the Partnership for certain
expenses incurred at Manager’s Division level on a per case basis. These
expenses will be Division sales management expenses, vender service expenses,
fleet expenses and post-mix management services expenses, as set forth on
Exhibit D.

(c)       Refurbishment Expense. Manager will charge the Partnership its actual
average cost at the center in which the refurbishment is performed of
refurbishing items listed on Exhibit E owned or leased by the Partnership
including the cost of delivery and pickup of cold drink equipment at Manager’s
standard rates.

(d)      Miscellaneous Expense. Other reasonable and necessary expenses directly
related to the Partnership’s business operations or administration thereof which
are set forth on Exhibit F.

5.03    Payments, Reconciliation and Reimbursement.

(a)       Estimated Monthly Payments. Subject to the provisions of Section 7.01
hereof, the estimated Management Fee and Expenses to be paid by the Partnership
as set forth in the Annual Business Plan shall be paid as follows: the
Partnership shall pay to Manager on or before the 15th of each month during each
fiscal year of the Partnership a monthly disbursement equal to the sum of (i)
the estimated Management Fee for such month, and (ii) one-twelfth (1/12th) (or,
in the case of the Partnership’s 1993 fiscal year, one-sixth (1/6)) of the
estimated fiscal year Division Expenses and Miscellaneous Expenses all as set
forth in the Annual Business Plan.

(b)      Quarterly Reconciliation of Payments. On or before the end of each
fiscal quarter, beginning with the second fiscal quarter following the Closing
Date, Manager will furnish to the Partners a statement reconciling actual
Equivalent Case sales and Expenses for the immediately preceding fiscal quarter
against the

-10-

--------------------------------------------------------------------------------

estimated amounts used in determining the amount of the monthly disbursement.
For each quarter, the Partnership (acting through the Executive or Finance
Committee) and Manager shall agree upon a true-up adjustment in such amount as
is necessary to ensure that the aggregate estimated monthly payments paid to
Manager for the reconciled fiscal quarter are not more than or less than the
amounts that would have been paid had the actual Management Fee and relevant
Expenses been known to the parties at the time the monthly advances were paid,
with the amount of such adjustment bearing interest at the Composite Rate in
each case from the date any such adjusted item is paid to the date of
reconciliation. Any refund due from Manager to the Partnership, and any
additional payment due from the Partnership to Manager, as a result of this
reconciliation shall upon determination thereof be debited/ credited, as
appropriate, to the Due to/Due from Account described hereinbelow.

(c)       Payment of Invoiced Items. Manager shall be entitled to payment from
the Partnership for all Entity and Sales Branch Expenses, Refurbishment Expenses
and Miscellaneous Expenses not otherwise subject to estimated payments as
provided in Section 5.03(a), within ten (10) days following delivery of invoice
and make appropriate credit entries in respect thereof in the Due to/ Due from
Account.

(d)      Due to/Due From Account. Following the Closing Date, Manager shall
collect Partnership receipts in various bank accounts and debit such amounts to
a due to/due from account (the “Due to/Due from Account”). All disbursements
made by Manager on behalf of the Partnership shall be credited to the Due to/Due
from Account. Interest shall accrue at the Composite Rate on a monthly basis on
the average of (i) the net balance of such Account on the last day of the prior
fiscal month and (ii) the net balance of such Account on the last day of the
subject fiscal month. So long as the Due to/Due from Account has a net deficit
or net surplus balance less than Five Million Dollars ($5,000,000), Manager’s
Treasurer, at her/his discretion, may (i) in the event of a deficit balance,
draw on the Partnership revolving line of credit described in Section 6.01(e)
hereof (“Revolver”) or (ii) in the event of a surplus balance, cause a payment
to be made and applied to a reduction of the outstanding Partnership
indebtedness, in each case in an amount up to the amount of such account
balance. In the event that the Partnership has a deficit balance of Five Million
Dollars ($5,000,000) or more, Manager’s Treasurer may draw on the Revolver to
eliminate the deficit balance. In the event that the Partnership has a surplus
balance of Five Million Dollars ($5,000,000) or more, Manager’s Treasurer shall
cause a payment in the amount of such surplus balance to be applied to a
reduction of outstanding Partnership indebtedness. Manager shall immediately
notify the Partners any time a draw is made on the Revolver. Nothing herein
shall require that a segregated bank account be maintained for the Partnership,
provided that Manager’s system of accounting for receipts and disbursements is
reasonably satisfactory to the Executive Committee. Manager will generate

-11-

--------------------------------------------------------------------------------

and maintain monthly reports detailing all debits and credits to the Due to/Due
from Account, including a calculation of any interest charges. Such reports and
other detail regarding the debits and credits to the Due to/Due from Account
will be made available upon the reasonable request of any member of the
Executive Committee or the Finance Committee.

5.04    Management Fee Distinguished from Distributions. All fees and other
payments paid by the Partnership to Manager under this Section 5 shall be
considered separate from, and shall not constitute, distributions paid to
Manager by the Partnership from accrued profits or cash flow.

Section 6.       Obligations of the Partnership.

6.01    Duties of the Partnership. In addition to the obligations imposed upon
the Partnership elsewhere in this Agreement and commencing on the Closing Date,
the Partnership shall:

(a)       provide or cause to be provided at no charge to Manager sufficient
secure building space, furniture facilities and office equipment to enable
Manager’s on-site personnel to carry out their obligations under this Agreement;

(b)      assist Manager in obtaining, or cause to be obtained any permits,
applications, authorizations or forms required by or from the federal, state or
local governments for the specific services areas or which are, in the opinion
of the Executive Committee, desirable;

(c)       afford Manager’s personnel unlimited and unrestricted access to all
the Partnership’s facilities subject only to such routine security precautions
as the Partnership may impose in the nature of its business requirements;

(d)      cooperate with Manager and direct all the Partnership personnel (if
any) to extend maximum cooperation to Manager; and

(e)       maintain a revolving line of credit or other financing sufficient in
the reasonable judgment of the Executive Committee to satisfy the Partnership’s
anticipated peak seasonal working capital needs.

Section 7.       Term.

7.01    Effective Date. This Agreement shall become effective as of the Closing
Date. If the Aiken, South Carolina KO bottling franchise and related assets are
transferred to the Partnership on or prior to August 30, 1993, Manager shall be
entitled to receive the Management Fee with respect to all Equivalent Cases sold
by Palmetto in such territory after the Closing Date.

-12-

--------------------------------------------------------------------------------

7.02    Duration. Unless terminated pursuant to Section 7.03 below, this
Agreement shall continue in full force and effect for a term of twenty-five (25)
years after the Closing Date; provided that following December 31, 1995 the
parties will negotiate in good faith to alter the terms and conditions of the
Agreement to reflect the then current agreements of the parties.

7.03    Early Termination. This Agreement shall terminate early as follows:

(a)       Breach. If at any time either party to this Agreement shall default in
the performance of any of its. material obligations under this Agreement and
such default or breach shall continue for a period of forty-five (45) days after
the other party has given notice to the aforementioned party specifying such
default or breach and requiring it to be remedied, then the party giving said
notice shall have the right to terminate this Agreement on forty-five (45) days
written notice if the default remains uncured for such additional forty-five
(45) days following such notice; provided, however, that (i) the failure of the
Partnership to meet the projections set forth in the Annual Business Plan shall
in and of itself not be deemed to be a breach of this Agreement by Manager and
(ii) a default under Section 5.03(d) shall not be deemed a breach of a material
obligation unless such amount in dispute equals or exceeds Ten Million Dollars
($10,000,000); provided, further, Manager shall not have the right to terminate
this Agreement if the Partnership’s breach hereof is due primarily to any action
or omission by CCBCC Sub.

(b)      Bankruptcy Decree. If a decree or order of a court having jurisdiction
has been entered adjudicating a party bankrupt, insolvent, or approving a
petition seeking reorganization of such party under any bankruptcy act or any
similar applicable law, and such decree or order has continued undischarged or
unstayed for a period of sixty (60) days; or a decree or order of a court having
jurisdiction for the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of such party or all or substantially all
of its property, or for the winding up or liquidation of its Affiliates, has
been entered, and such decree or order has remained in force undischarged or
unstayed for a period of sixty (60) days, then the other party shall have the
right to terminate this Agreement by giving the first mentioned party notice to
that effect within thirty (30) days after the expiration of such sixty-day
period.

(c)       Institution of Bankruptcy Proceedings. If a party institutes
proceedings to be adjudicated voluntarily bankrupt or consents to the filing of
bankruptcy proceedings against it, or files a petition for answer or consent
seeking reorganization under any bankruptcy act or similar law or consents to
the filing of any petition or consents to the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or insolvency of it, or all or
substantially all of its property, or makes a general assignment for the benefit
of creditors or admits in

-13-

--------------------------------------------------------------------------------

writing its inability to pay its debts generally as they become due, then the
other party shall have the right to terminate this Agreement by giving the first
mentioned party notice to that effect within thirty (30) days after the
occurrence of such event.

(d)      Change of Control. At any time after a Change of Control, KO Sub may
elect to terminate this Agreement following twelve (12) month’s prior written
notice.

7.04.    Partnership Termination. Upon the termination of the Partnership, this
Agreement shall be terminated concurrently therewith, and KO Sub or its
Affiliate and CCBCC shall enter into a management agreement providing for the
management of the portion of the Business distributed to KO Sub or its
Affiliates in the dissolution of the Partnership upon the same terms and
conditions (including any CPI adjustment provision herein) as in effect at the
time of the termination of the Partnership, except that KO Sub shall assume all
of the authority of the Executive Committee under this Agreement. The Annual
Business Plan adopted by KO Sub each year during the term of such agreement
shall be substantially similar to the Annual Business Plans adopted in prior
years. Such Agreement shall have a term of at least two years, but shall be
terminable by KO Sub on sixty (60) days prior written notice. Following the
termination of such management agreement, CCBCC shall cooperate in good faith
with KO Sub in making available for employment by KO Sub or its Affiliates all
employees of CCBCC or its Affiliates who are engaged in the operation of that
portion of the Business then owned by KO Sub or its Affiliates.

 

7.05    Effect of Termination. Upon the termination of this Agreement, this
Agreement shall be of no further force and effect, except that the provisions
Sections 8, 9 and 10 shall continue in full force and effect indefinitely. Upon
the termination of this Agreement, the Partnership shall immediately pay Manager
the balance of the Management Fee accrued hereunder to the date of termination.
Notwithstanding anything contained herein to the contrary, in the event that
this Agreement is terminated pursuant to Section 7 hereof, the Partnership may
elect to purchase product from Manager on the same terms as set forth in Section
3.01(c)(1) for up to two (2) years following termination; provided that Manager
has received written notice of such election no later than fifteen (15) Business
days prior to termination; and further provided that following such election the
Partnership may elect to discontinue making such purchases from Manager upon
sixty (60) days prior written notice.

Section 8.       Confidentiality.

8.01    Confidential Information. The Parties acknowledge that each of them may
be required to disclose Confidential Information to governmental agencies or
authorities by law, upon the advice of counsel, and each shall endeavor to limit
disclosure to that purpose. Each Party will give the other prior written notice
of

-14-

--------------------------------------------------------------------------------

any disclosure pursuant to this paragraph, which notice shall specify the
substance of any such disclosure.

8.02    Identification. Each party hereto will take appropriate steps to enable
the other party hereto to identify the information that should be protected as
Confidential Information. Accordingly, each party shall legend or otherwise
designate as proprietary any material furnished to the other party if any
Confidential Information is included. In addition, any information involving
Confidential Information that is imparted orally shall be identified as
proprietary.

8.03    Acknowledgment of Confidential Information. Each party recognizes and
acknowledges (a) that Confidential Information of the other party may be
commercially valuable proprietary products of such party, the design and
development of which may have involved the expenditure of substantial amounts of
money and the use of skilled development experts over a long period of time and
which afford such party a commercial advantage over its competitors; (b) that
the loss of this competitive advantage due to unauthorized disclosure or use of
Confidential Information of such party may cause great injury and harm to such
party; (c) that the restrictions imposed upon the parties under this Agreement
are necessary to protect the secrecy of Confidential Information and to prevent
the occurrence of such injury and harm.

8.04    Nondisclosure. Each party who receives Confidential Information
hereunder (the “Receiving Party”) agrees that it will not, without the prior
written consent of the party from whom such Confidential Information was
obtained (the “Disclosing Party”), disclose, divulge or permit any unauthorized
person to obtain any Confidential Information disclosed by the Disclosing Party
(whether or not such Confidential Information is in written or tangible form)
for as long as the pertinent information or data remain Confidential
Information. The Receiving Party hereby agrees to indemnify and hold harmless
the Disclosing Party from and against any and all damage, loss, liability and
expense (including, without limitation, reasonable expenses of investigation and
reasonable attorneys’ fees and expenses) arising from any such unauthorized
disclosure by the Receiving Party or its personnel. The Receiving Party agrees
that it will use any Confidential Information disclosed by the Disclosing Party
hereunder (whether or not such Confidential Information is in written or
tangible form) only for purposes of the business of the Partnership as
contemplated by the Partnership Agreement, for as long as the pertinent
information or data remain Confidential Information. The Receiving Party hereby
agrees to indemnify, defend and hold harmless the Disclosing Party from and
against any Loss arising from any such unauthorized disclosure by the Receiving
Party or its personnel.

8.05    Security. To protect the Confidential Information of the parties, each
party shall adopt basic security measures of the kind commonly observed in
industries in the United States of

-15-

--------------------------------------------------------------------------------

America that rely extensively on proprietary information. Security measures, to
the extent appropriate, shall include physical security measures, restrictions
on access by unauthorized personnel, use of confidentiality agreements with
personnel, legending, systematic segregation, and appropriate record retention
systems.

8.06  Competitively Sensitive Information. Notwithstanding the foregoing, in
providing information hereunder, each party hereto will take care, and will
ensure that its respective representatives will take care, to avoid the
overbroad disclosure of competitively sensitive financial, operating or similar
data, if any, as to which disclosure would have adverse consequences under
applicable laws, including federal and state antitrust laws. Appropriate
procedures will be followed by the Partnership and the Partners to limit the
disclosure of competitively sensitive data, if any.

Section 9.       Manager’s Liability and Indemnification.

9.01    Limitation on Liability. Manager shall not be responsible for any errors
in judgment made in good faith in the performance of its duties hereunder;
provided, however, that nothing contained herein shall release Manager of any
responsibility it may have for product liability claims or claims based on the
negligent or willful misconduct of Manager.

9.02    Indemnification. The Partnership shall indemnify and hold Manager and
its Affiliates, directors, officers, employees and agents (each an “Indemnitee”)
harmless from any and all Losses arising in connection with the Business (a
“Claim”), except to the extent such Losses arise out of Manager’s breach of this
Agreement, negligence, fraud or willful misconduct in which event Manager shall
be liable to and indemnify the Partnership from and against any Losses incurred
by the Partnership as a result thereof.

9.03    Indemnity Procedure for Third Party Claims. The obligations and
liabilities of the Partnership to indemnify an Indemnitee or Manager to
indemnify the Partnership, as applicable, for third party Claims (including
those by Manager’s personnel) under this Section 9 shall be subject to the
following terms and conditions:

(a)       The person or entity (i.e., Partnership, Manager or Indemnitee) making
a claim (“Claimant”) will give the party from whom indemnity is sought
(“Notified Party”) prompt notice of such Claim. The failure to promptly notify a
party of any such Claim shall not relieve the party of its obligation hereunder,
unless the failure to so notify such party materially prejudices such party’s
ability to defend such Claim.

(b)      Following notice by the Claimant to the Notified Party of a Claim, the
Notified Party shall be entitled at its cost and

-16-

--------------------------------------------------------------------------------

expense to contest and defend such Claim by all appropriate legal proceedings;
provided, however, that notice of the intention so to contest shall be delivered
by the Notified Party to the Claimant within thirty (30) days from the date of
receipt by the Notified Party of notice from the Claimant of the assertion of
such Claim. Any such contest may be conducted in the name and on behalf of the
Notified Party or the Claimant, as may be appropriate. Such contest shall be
conducted diligently by reputable counsel employed by the Notified Party, but
the Notified Party shall keep the Claimant fully informed with respect to such
Claim and the contest thereof and the Claimant shall have the right to engage
its own counsel at its own expense. If the Claimant joins in any such contest,
the Notified Party shall have full authority, in consultation with the Claimant,
to determine all action to be taken with respect thereto; provided, however,
that in no event shall the Notified Party have authority to agree to any relief
other than the payment of money damages by the Claimant unless agreed to by the
Claimant. Each party shall bear its own expense of such representation. If any
Claim is asserted and the Notified Party fails to contest and defend such Claim
within a reasonable period of time, the Claimant may take such action in
connection therewith as the Claimant deems necessary or desirable, including
retention of counsel, and the Claimant shall be entitled to indemnification of
the costs incurred in connection with such defense.

(c)       If requested by the Notified Party, the Claimant shall cooperate with
the Notified Party and its counsel, including permitting reasonable access to
books and records, in contesting any Claim which the Notified Party elects to
contest or, if appropriate, in making any counterclaim against the person
asserting the Claim, or any cross-complaint against any person, and the Notified
Party will reimburse the Claimant for reasonable out-of-pocket costs (but not
the cost of employee time expended) incurred by the Claimant in so cooperating.

(d)      The Claimant agrees to afford the Notified Party and its counsel the
opportunity to be present at, and to participate in, conferences with all
persons, including governmental authorities, asserting any Claim against the
Claimant or conferences with representatives or counsel for such persons. Unless
the Notified Party approves in writing the settlement of a Claim, no right to
indemnification under Section 9.02 shall be established by such settlement.

9.04    Excused Performance. Delay in performance or non-performance by Manager
shall be excused to the extent Manager’s ability to perform fully is prevented
by an act of God or similar event beyond the reasonable contemplation or control
of Manager.

-17-

--------------------------------------------------------------------------------

Section 10.     Dispute Resolution.

10.01   Attempts to Resolve. All disputes and differences raised by any party to
this Agreement or any Partner which may arise out of or in connection with or
with respect to this Agreement (including but not limited to any rights of
indemnification under Section 9 hereof) will be settled as far as possible by
means of negotiations between the members of the Executive Committee. Any such
dispute which cannot be resolved by the Executive Committee after two meetings
of the Executive Committee may be referred by any member of the Executive
Committee to KO’s North American Executive Officer and Manager’s Chief Executive
Officer for resolution. If said senior executive officers of the Partners are
unable to resolve such matter within sixty (60) days of such referral, then
either party may submit the dispute to arbitration in accordance with Section
10.02 of this Agreement for a binding resolution thereof.

10.02  Arbitration. Except as provided in Section 10.05 hereof, any dispute,
controversy or claim arising out of or relating to this Agreement or the breach,
termination or validity thereof which cannot be resolved by the parties pursuant
to Section 10.01 hereof shall be settled by arbitration in accordance with the
Arbitration Rules of the American Arbitration Association in effect on the date
of this Agreement (the “Rules”) as modified in this Article. The arbitration
shall be held in Atlanta, Georgia.

There shall be three arbitrators of whom each party shall select one within 15
days following respondent’s receipt of claimant’s notice of arbitration and
statement of claim. The two party-appointed arbitrators shall select a third
arbitrator to serve as presiding arbitrator within 15 days of the appointment of
the second arbitrator; provided, however, that in no event shall such
arbitrators be residents of or maintain a place of business in the Atlanta,
Georgia, Charlotte, North Carolina or Chattanooga, Tennessee Standard
Metropolitan Statistical Areas. The appointing authority shall be the Atlanta
Office of the American Arbitration Association.

10.03  Claims and Judgments. Within twenty (20) days of the respondent’s receipt
of the claimant’s notice of arbitration and statement of claim, the respondent
shall serve the claimant with its statement of defense and any counterclaims.
Within twenty (20) days of claimant’s receipt of the respondent’s statement of
defense and counterclaims, the claimant shall serve its statement of defense to
any counterclaims or set-offs asserted by the respondent. The tribunal shall
permit and facilitate such prehearing discovery and exchange of documents and
information to which the parties in writing agree or which it determines is
relevant to the dispute between the parties as is appropriate taking into
account the needs of the parties and the desirability of making discovery
expeditious and cost-effective. All discovery shall be completed within
forty-five (45) days from the date on

-18-

--------------------------------------------------------------------------------

which the respondent communicates its statement of defense and counterclaims, if
any, to the claimant. The hearing shall be held no later than ninety (90) days
following the selection of the presiding arbitrator. Any arbitration award shall
be rendered in U.S. dollars, with appropriate interest as determined by the
tribunal. Judgment on any award shall be entered in any court having
jurisdiction thereof.

10.04  Submission to Jurisdiction. For purposes of disputes arising under this
Agreement, the parties hereto submit themselves to the jurisdiction of the state
and federal courts located in Atlanta, Georgia or Charlotte, North Carolina with
respect to the enforcement of any arbitration award, provided however, that
nothing contained herein shall be deemed a waiver by either party of any right
it may have to (i) remove a cause of action brought in state court to a federal
court or (ii) petition a court for a change of venue to or from Atlanta, Georgia
or Charlotte, North Carolina. Each of the parties hereby consents to the service
of process by registered mail at its address set forth below and agrees that its
submission to jurisdiction and its consent to service of process by mail is made
for the express benefit of the other party. The arbitration shall be governed by
the Federal Arbitration Act, 9. U.S.C. §§ 1-16, 201-208.

10.05  Right to Additional Remedies. Notwithstanding anything to the contrary in
this Article, in the event any intellectual property (including Confidential
Information) is used in violation of the terms of this Agreement, each party
shall be entitled, in addition to the remedy of arbitration set forth herein, to
apply immediately to any court of competent jurisdiction for immediate
injunctive relief. Each party hereby submits itself to the jurisdiction of the
state and federal courts located in Atlanta, Georgia or Charlotte, North
Carolina for any such relief or for the enforcement of any arbitration award
against such party; provided, however, that nothing contained herein shall be
deemed a waiver by either party of any right it may have (i) remove a cause of
action brought in a state court to a federal court or (ii) petition a court for
a change of venue to or from Atlanta, Georgia or Charlotte, North Carolina.

Section 11.     Press Release.

The parties hereto shall consult with each other before issuing any press
release or otherwise making any public statements with respect to this Agreement
and the transactions contemplated hereby and shall not issue any such press
release or make any public statement prior to such consultation, except as may
be required by law.

Section 12.     Independent Status of Parties.

Except as specifically provided herein, nothing contained in this Agreement
shall be construed to constitute a party as agent for the other party. Except as
specifically provided herein,

-19-

--------------------------------------------------------------------------------

neither party shall have the right to bind the other party, transact any
business in the other party’s name or on its behalf in any manner or form, or to
make any promises or representations on behalf of the other party.

Section 13.     Assignment.

Neither the Partnership nor Manager shall assign or transfer any right or
obligation hereunder whether by operation of law or otherwise without the prior
written consent of the other. Any such attempted assignment or transfer in
violation of this Section 13 shall be void and without legal effect.
Notwithstanding the foregoing, Manager may assign all or any of its rights and
obligations hereunder to any wholly owned subsidiary (direct or indirect) of
Manager, provided, however, that (a) (i) Manager shall give the Partnership
written notice of such assignment, (ii) any such assignee shall execute an
agreement assuming such duties and obligations and deliver the same to the
Partnership, and (iii) Manager shall deliver to the Partnership a written
unconditional guaranty of the performance of the duties and obligations so
assigned and assumed and (b) such rights and obligations shall revert back to
Manager at such time as the assignee ceases to be a wholly owned subsidiary of
Manager. Subject to the foregoing, this Agreement shall inure to the benefit of,
and be binding upon, the successors and assigns of the parties hereto.

Section 14.     Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of
the State of North Carolina, regardless of any conflicts of laws or rules which
would require the application of the laws of another jurisdiction.

Section 15.     Miscellaneous.

15.01  Notices. Any notice, request, instruction or other document to be given
hereunder by any party hereto to any other Person shall be in writing and
delivered personally or by mail or any express mail service to the addresses set
forth below.

(a)       If to Partnership:

Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, NC 28211
Attention: Chief Financial Officer
Telecopy Number: 704-551-4451

With a copy to addresses listed in (b) below

-20-

--------------------------------------------------------------------------------

(b)      If to KO Sub:

The Coca-Cola Company
One Coca-Cola Plaza
Atlanta, GA 30313
Attention: Chief Financial Officer
Telecopy Number: (404) 676-6275

and

The Coca-Cola Company
One Coca-Cola Plaza
Atlanta, GA 30313
Attention: General Counsel
Telecopy Number: (404) 676-6209

(c)       If to Manager, Palmetto or Ventures:

Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, NC 28211
Attention: Chief Financial Officer
Telecopy Number: (704) 551-4451

With a copy to:

Witt, Gaither & Whitaker
1100 American National Bank Building
Chattanooga, TN 37402
Attention: Ralph M. Killebrew, Jr.
Telecopy Number: (615) 266-4138

or to such other address or number for a party as shall be specified by like
notice. Any notice to the Partnership shall be delivered to all the addressees
provided above. All notices so given shall also be sent by telecopy transmission
to the telecopy numbers set forth above or such other numbers as shall be given
by notice to the other parties hereto. Any notice which is delivered personally
or by telecopy transmission in the manner provided herein shall be deemed to
have been duly given to the party to whom it is directed upon actual receipt by
such party or its agent. Any notice which is addressed and mailed in the manner
herein provided shall be conclusively presumed to have been duly given to the
party to which it is addressed at the close business, local time of the
recipient, on the fourth Business Day after the day it is so placed in the mail
or, if earlier, the time of actual receipt.

15.02  Nonwaiver of Default. Any failure by either party at any time or from
time to time to enforce and require the strict keeping and performance of any of
the terms and conditions of this Agreement shall not constitute a waiver of any
such terms and conditions at any future time and shall not permit such party
from

-21-

--------------------------------------------------------------------------------

insisting on the strict keeping and performance of such terms and conditions at
any later time.

15.03  Interpretation. Should the provisions of this Agreement require judicial
or arbitral interpretation, it is agreed that the judicial or arbitral body
interpreting or construing the same shall not apply the assumption that the
terms hereof shall be more strictly construed against one party by reason of the
rule of construction that an instrument is to be construed more strictly against
the party which itself or through its agents prepared the same, it being agreed
that the agents of both parties have participated in the preparation herein
equally.

15.04  Partial Invalidity. If any term or provision of this Agreement not
essential to the basic purpose hereof shall be held to be illegal, invalid or
unenforceable by a court of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof shall constitute their agreement with
respect to the subject matter hereof, and all such remaining terms shall remain
in full force and effect and shall be deemed to constitute the entirety of this
Agreement as though such illegal, invalid or unenforceable provision had never
been a part hereof.

15.05  Amendment or Rescission. This Agreement shall not be modified or
rescinded except by a written instrument setting forth such modification or
rescission and signed by the parties hereto.

15.06  Duplicate Originals. For the convenience of the parties hereto, this
Agreement may be executed in two counterparts, and each such counterpart shall
be deemed to be an original instrument and together constitute one and the same
Agreement.

15.07  Captions. The captions or headings of the Sections and other subdivisions
hereof are inserted only as a matter of convenience or for reference and shall
have no effect on the meaning of the provisions hereof.

15.08  Entirety of Agreement. This Agreement constitute the entire agreement
between the parties hereto with respect to the subject matter hereof, and there
are no agreements, understandings, covenants, conditions or undertaking, oral or
written, expressed or implied, concerning such subject matter that are not
merged herein. Furthermore, this Agreement shall not be deemed to amend or
affect the Partnership Agreement except as may be expressly set forth therein.
In the event of any conflict between the terms of this Agreement and the
Partnership Agreement, the terms of the Partnership Agreement shall prevail. The
Interim Management Agreement, dated June 16, 1993, between Manager and Carolina
Holding has been terminated simultaneously with the execution of this Agreement.

15.09  Plurals, Etc. As used herein or in any document which incorporates the
terms hereof:

-22-

--------------------------------------------------------------------------------

(a)       the plural form of the noun shall include the singular and the
singular shall include the plural, unless the context requires otherwise;

(b)      each of the masculine, neuter and feminine forms of any pronoun shall
include all forms unless the context otherwise requires;. and

(c)       words of inclusion shall not be construed as terms of limitation, so
that references to included matters shall be regarded as non-exclusive,
non-characterizing illustrations.

15.10  No Rights or Privileges to Employees. This Agreement shall not (and shall
not be construed to) confer any rights or privileges on any employees of any
party to this Agreement.

-23-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its duly authorized representative as of the date first written
above.

 

 

 

MANAGER:

Coca-Cola Bottling Co. Consolidated

 

By: 

/s/ DAVID V. SINGER

 

 

 

--------------------------------------------------------------------------------

 

 

 

David V. Singer
Vice President

 

 

 

CCCB PARTNERSHIP:

Carolina Coca-Cola Bottling Partnership

 

By: 

/s/ TIMOTHY J. DOYLE

 

 

 

--------------------------------------------------------------------------------

 

 

 

Carolina Coca-Cola Bottling Investments, Inc.
General Partner

 

 

 

 

 

By: 

/s/ DAVID V. SINGER

 

 

 

--------------------------------------------------------------------------------

 

 

 

Coca-Cola Ventures, Inc.
General Partner

 

 

 

 

 

By: 

/s/ DAVID V. SINGER

 

 

 

--------------------------------------------------------------------------------

 

 

 

Palmetto Bottling Company
General Partner

 

 

 

WILMINGTON:

CCBC of Wilmington, Inc.

 

By: 

/s/ DAVID V. SINGER

 

 

 

--------------------------------------------------------------------------------

 

 

 

David V. Singer
Vice President

 

-24-

--------------------------------------------------------------------------------

 

 

 

PARTNERS:

Carolina Coca-Cola Bottling Investments, Inc.

 

By: 

/s/ TIMOTHY J. DOYLE

 

 

 

--------------------------------------------------------------------------------

 

 

 

Timothy J. Doyle
Vice President

 

 

 

Coca-Cola Ventures, Inc.

 

By: 

/s/ DAVID V. SINGER

 

 

 

--------------------------------------------------------------------------------

 

 

 

David V. Singer
Vice President

 

 

 

Palmetto Bottling Company

 

By: 

/s/ DAVID V. SINGER

 

 

 

--------------------------------------------------------------------------------

 

 

 

David V. Singer
Vice President

 

-25-

--------------------------------------------------------------------------------

EXHIBIT A

Fully Loaded Standard Manufacturing Cost 1993

The definition of Coca-Cola Bottling Co. Consolidated fully loaded standard cost
includes the following components: raw materials, direct manufacturing labor,
variable manufacturing overhead and fixed manufacturing overhead each of which
is computed on a physical case basis by package.

Raw material costs include the estimated cost for concentrate, sweetener and
packaging materials such as bottles, cans, closures, glue, hi-cones, trays and
labels. Other raw materials include miscellaneous blending ingredients and CO2.

The direct labor component of costs include estimated labor costs that are
directly involved in the production of finished goods. Costs include regular
wages, associated fringe benefits and payroll taxes.

The variable manufacturing overhead component of costs include all estimated
indirect labor, variable and semivariable factory overhead costs. Costs include
indirect labor, supplies, machine maintenance, materials breakage, production
machine rental, insurance/workers’ compensation, utilities and maintenance costs

The fixed manufacturing overhead component of cost include all estimated fixed
labor, depreciation expense, facility maintenance and building repairs, general
insurance, taxes and building rent/lease expenses.

Fully loaded standard cost is reviewed on an annual basis and revised annually
for changes in the components’ cost. Fully loaded standard cost does not include
any allocation of costs not incurred at production locations.

NOTE:          Fully loaded standard manufacturing cost does not include
transportation cost from the manufacturing location to the sales branch which
shall be consistent with Manager’s transportation costs incurred with respect to
other sales branches. Transportation cost would be in addition to the fully
loaded standard manufacturing cost in determining total product cost.

-26-

--------------------------------------------------------------------------------

EXHIBIT B

Initial Levels of Insurance

Please see attached.

-27-

--------------------------------------------------------------------------------

   

Policy Number

 

Insurer

 

Type of Insurance

 

Limits

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

 

 

PPPF891497

 

Home Indemnity Company

 

Property

 

$14,651,177 Buildings;
$9,273,000 Contents

 

 

 

 

 

Commercial General Liability

 

$1,000,000

 

 

 

 

 

Accounts Receivable Business Interruption

 

$6,530,000
$8,995,000

 

 

 

 

 

 

 

 

 

22CBBRB0962

 

Hartford Accident & Indemnity

 

Comprehensive Crime

 

$50,000 Truck Drivers;
$500,000 All other
employees

 

 

 

 

 

 

 

 

 

GLA583-43-31,24(1)

 

The Coca-Cola Bottlers’ Assn.

 

Product Liability

 

$500,000 Each occurrence,
BI, PD
$1,000,000Aggregate

 

 

 

 

 

 

 

 

 

BAF718883
BAF7173137

 

Home Indemnity
Company

 

Comprehensive Automobile Liability and Physical Damage

 

$1,000,000 Each occurrence

 

 

 

 

 

 

 

 

 

YUB00108

 

Genesis Insurance Company Liability

 

Umbrella Excess

 

$5,000,000 Coverage H
$1,000,000 Coverage B+C

 

 

 

 

 

 

 

 

 

WC-L225090-2

 

Home Indemnity Company

 

Workers’ Compensation

 

Statutory Benefits,
$500,000 Employers
Liability

 

 

 

 

 

 

 

 

 

78349363

 

Chubb Group

 

Boiler & Machinery

 

$10,000,000

 

 

 

 

 

 

 

 

 

025FF100809872

 

Aetna

 

Fiduciary Responsibility

 

$500,000 Basic; $500,000
Recourse

 

   (1)    Policy for Wilmington is to be issued.

-28-

--------------------------------------------------------------------------------

EXHIBIT C

Entity and Sales Branch Expenses

Each Sales Branch will incur certain specific expenses directly related to the
routine operation of the sales branch. These expenses are as follows:

1.        _______ cost at Manager’s fully loaded standard cost as determined in
accordance with Exhibit A. Transportation cost will be included at an
established standard by package for each branch to be adjusted and reconciled
quarterly for any increase and decrease in cost.

2.        Payroll and benefit costs for all Sales Branch Employees and
Partnership employees, including the branch manager. Benefit costs currently are
estimated to be (and will be accounted for in the Annual Business Plan at) 18%
of payroll (which number will be adjusted from time to time to reflect actual
costs) and will be reconciled and adjusted annually to actual cost.

3.        Sales development fund expenses (CMA’s).

4.        Point-of-sale expenses.

5.        Local marketing costs such as coupon redemption, product donations,
customer promotion items (dealer loaders).

6.        Insurance - Automobile, workers compensation, general liability,
product liability, D&O, crime, property, boiler as required under Section
3.01(c)(7).

7.        Utility costs.

8.        Security.

9.        Telephone.

10.      Branch supplies

11.      Building repairs.

12.      Employee travel and entertainment.

13.      Postage.

14.      Over/short from route settlement.

15.      Garbage removal.

16.      Janitorial maintenance.

17.      Rent on facilities.

-29-

--------------------------------------------------------------------------------

18.      Federal, state and local taxes related to the Business and payable by
the Partnership.

19.      Business licenses and entity licenses and fees (i.e., annual report,
foreign qualification, franchise fee, etc.) relating to the Partnership or the
Business.

20.      Depository bank service charges.

21.      Bad debt expense.

22.      Advertising expense.

23.      Vending and Fleet Lease Payments.

24.      Other expense line items set forth in attached Profit and Loss
Statement which are not specifically stated herein.

-30-

--------------------------------------------------------------------------------

EXHIBIT D

Division Expenses

Manager will charge the Partnership on a proportionate volume basis for the
relevant Division for certain expenses which are incurred at a Division level.
These Division expenses are as follows:

Division sales management expenses
Vender service expenses
Fleet expenses
Post Mix Management

Computation of Pro-Rata Division Expense for Partnership.

It is anticipated that the Sales Branches will make up portions of different
sales divisions which will include other sales branches of Manager. Accordingly,
Manager will calculate the cost of Division sales management, vender service
expenses, fleet expenses and Division post-mix management expenses on an
Equivalent Case basis across all of the sales Divisions involved with the
Partnership Sales Branches. The per case charge for each of the costs will then
be multiplied by the Equivalent Case sales for the Sales Branches in each fiscal
month.

To the extent that Division sales management, vender service expenses, fleet
expense and Division post-mix management expenses are incurred at locations
where 100% of the activities are related to Partnership business, then those
expenses will not be based upon a pro-rata allocation using Equivalent cases.
Instead, the actual expenses for these locations for the aforementioned types of
expenses will be charged to the Partnership as incurred.

-31-

--------------------------------------------------------------------------------

EXHIBIT E

Refurbishment Expenses

The following items would be refurbished by Manager and billed to the
Partnership based on Manager’s standard rate consistent with what Manager
charges its other sales branches for the respective Manager refurb location:

Route delivery vehicles

Cold drink equipment (venders, CCM’s)

Post-mix equipment

Pre-mix equipment

Coin changers

Dollar bill validators

Refrigeration units (compressors)

NOTE:          The “standard rate” includes all labor costs associated with the
specific refurbishment, including fringe benefits, as well as other direct
expenses associated with the refurbishment process. The refurbishment cost does
not include any corporate overhead or interest charges.

-32-

--------------------------------------------------------------------------------

EXHIBIT F

Miscellaneous Expenses

1.         Field Marketing personnel, Field Human Resources personnel, Field
NORAND coordinators, Field Quality Assurance, management trainees. Manager will
determine the total cost for these employees (payroll and benefits, T&E) in the
four sales divisions which include the Sales Branches. Partnership will
determine on an Equivalent Case basis the cost across all of the sales divisions
involved. The per case charge for these costs would then be multiplied by the
Equivalent Case sales for the Partnership branches in each fiscal month.

2.         The following expenses will be charged to the Partnership on an
Equivalent Case basis across all Partnership Equivalent Cases and Manager’s
non-Partnership Equivalent Cases combined:

a.        Under-the-crown (UTC) promotion expenses

b.        Tax consulting services

c.        NORAND equipment maintenance

3.         The state soft drink association dues will be charged to the
Partnership based upon the percent of Partnership Equivalent Cases to all
Manager’s non- Partnership and Partnership Equivalent Cases combined in the
states of North Carolina, South Carolina, Georgia and Virginia. National soft
drink association dues will be charged to the Partnership on a Equivalent Case
basis across all of Manager’s non-Partnership cases and Partnership cases
combined.

4.         Legal fees and external accounting/audit and tax consulting fees
related directly to the Partnership or its respective branches.

5.         Environmental remediation and compliance expenses, environmental
compliance manager’s T&E and other environmental personnel services paid by
Manager which benefit the Business.

6.         New product introduction costs paid by Manager which benefit the
Business would be billed to the Partnership.

7.         Identifiable market research paid by Manager which benefit the
Business.

8.         Identifiable sponsorships paid by Manager which benefit the Business
and a pro rata charge based on Equivalent Case sales to the Partnership for any
sponsorship which

-33-

--------------------------------------------------------------------------------

benefits both the Partnership and Manager sales operations.

9.         Bonuses paid to Division managers would be charged to the Partnership
on a pro rata basis.

10.      Umbrella insurance paid by Manager, if any, which benefits the
Business.

11.      External training costs paid by Manager (including antitrust compliance
seminars) which benefit the Business.

12.      Recruiting expense/placement fees paid to third parties for recruitment
of personnel for the Business.

13.      All financing costs including fees, interest, documentation costs,
etc., paid by Manager which relate to the Business.

14.      The Partnership use of Manager’s aircraft; Partnership will be billed
at standard hourly charge.

15.      Cooperative advertising expenses paid by Manager, if any, which benefit
the Business.

16.      Contributions paid by Manager which benefit the Business.

17.      Relocation expenses paid by Manager, if any, which relate to moving
employees into the Partnership Territory.

18.      Any cost of winding up previous insurance programs in the Wilmington,
Goldsboro or Coastal territories which is paid by Manager.

19.      Any cost of winding up employee benefit plans for employees
(active/retired/ disabled) in the Wilmington, Goldsboro or Coastal territories
which is paid by Manager.

20.      Any other expense or cost paid by Manager which relates to the Business
and is approved by the Executive Committee.

21.      The cost of NORAND Equipment and supplies directly used by
Partnership’s Sales Branches

-34-