Exhibit 10.3

 

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   COCA-COLA PLAZA       ATLANTA, GEORGIA    STEPHEN J. JONES       P. O. BOX
1734 SENIOR VICE PRESIDENT       ATLANTA, GA 30301 SYSTEM EVOLUTION            
404 676-2805       FAX 404-598-2805

May 23, 2014

Henry W. Flint

President and Chief Operating Officer

Coca-Cola Bottling Co. Consolidated

4100 Coca-Cola Plaza

Charlotte, NC 28211

Re: CCBCC’s Request for Certain Advance Waivers for Ancillary Businesses under
the Comprehensive Beverage Agreement

Dear Hank:

In light of the specific facts and circumstances related to its corporate
structure, Coca-Cola Bottling Co Consolidated (“CCBCC”) has asked that The
Coca-Cola Company (“TCCC”) provide certain advance waivers under the
Comprehensive Beverage Agreement, as may be amended from time to time (“CBA”)
with respect to CCBCC’s acquisition or development of certain lines of business
involving beverage activity that would otherwise be prohibited under the CBA.
Defined terms used in this Letter Agreement have the meaning specified in the
CBA, unless otherwise noted.

We have agreed that the provision or sale of Beverages, Beverage Components and
other beverage products not authorized or permitted by the CBA will be permitted
if provided or sold solely for internal consumption by employees and guests of
CCBCC and its Affiliates. Generally, CCBCC and its Affiliates would intend and
anticipate that Covered Beverages would be offered in every beverage category in
which TCCC participates.

In connection with the territory expansion contemplated for CCBCC by that
certain Letter of Intent dated April 15, 2013 between CCBCC and TCCC (the
“LOI”), and as a condition to the prior consent of TCCC to the potential
acquisition or development of certain lines of business identified in Section 2
of this Letter Agreement, CCBCC hereby agrees to a “Focus Period.” The Focus
Period will begin upon execution of the CBA for Johnson City, TN and Morristown
TN territories, and will continue until January 1, 2017. If, however, TCCC or
CCBCC provides written notice to the other (a) that it is terminating
discussions regarding the

 

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territory and asset transactions identified on Attachment A (as amended from
time to time by agreement of the parties) to this Letter Agreement (the
“Contemplated Transactions”), or (b) if all of the Contemplated Transactions are
consummated, that it does not intend to pursue any other transactions that would
result in additional territory expansion by CCBCC, the Focus Period will expire
on the date of such notice, and this Letter Agreement will apply only to the
CBA(s) governing territory granted to CCBCC in connection with any of the
Contemplated Transactions that were consummated prior to such date.

1. During the Focus Period, CCBCC and its Affiliates will not acquire or develop
any line of business without TCCC prior written consent, which consent will not
be unreasonably withheld. However, during the Focus Period, CCBCC or any of its
Affiliates may continue to:

 

  A. develop the lines of business listed on Attachment B to this Letter
Agreement (the “Existing Lines of Business”) and, upon advance written notice to
TCCC, may acquire a “bolt on” (i.e., acquisition of a business in the same line
of business) to any Existing Line of Business, so long as, (i) in the case of
any business other than Red Classic Services LLC, any such development or
acquisition refrains from using any delivery vehicles, cases, cartons, coolers,
vending machines or other equipment bearing TCCC’s Trademarks and assigning
personnel or management whose primary duties relate to delivery or sales of
Covered Beverages or Related Products in the Territory (other than executive
officers of CCBCC), and (ii) in the case of Red Classic Services LLC, CCBCC and
its Affiliates comply with the conditions set forth in Attachment B; and

 

  B. to the extent not prohibited under CCBCC’s Master Bottle Contract and other
preexisting contracts with TCCC and its Affiliates, provide, outside of the
Territory (as defined in the CBA), contract manufacturing services for
Beverages, Beverage Products and other beverage products that may be
distributed, sold, marketed, dealt in or otherwise used or handled by third
parties.

2. After the expiration of the Focus Period,

 

  A. Consent of TCCC (which consent will not be unreasonably withheld) will only
be required for acquisition or development by CCBCC or its Affiliates in the
Territory of:

 

  i. any grocery, quick service restaurant, or convenience and petroleum store
business engaged in the sale of Beverages, Beverage Components and other
beverage products not otherwise authorized or permitted by the CBA (“Prohibited
Beverages”); or

 

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  ii. any other line of business engaged in the preparation, distribution, sale,
dealing in or otherwise using or handling (collectively, “Beverage Activities”)
of Prohibited Beverages in which all Beverage Activities constitute in the
aggregate more than ten percent (10%) of the net sales of such ancillary
business provided such consent will not be required for any bolt on acquisition
or development by Red Classic Services LLC provided the conditions set forth in
Attachment B to this Letter Agreement will continue to apply to any such
acquisition or development.

 

  B. In all other cases, CCBCC or its Affiliates may develop or acquire any line
of business in the Territory without prior consent of TCCC, so long as CCBCC and
its Affiliates refrain from using any delivery vehicles, cases, cartons,
coolers, vending machines or other equipment bearing TCCC’s Trademarks and
assigning personnel or management whose primary duties relate to delivery or
sales of Covered Beverages or Related Products in the Territory (other than
executive officers of CCBCC) with respect to such line of business in the
Territory and provide TCCC with at least 30 days prior written notice of the
proposed line of business. If requested by TCCC within five business days of
TCCC’s receipt of such notice, the two most senior executive officers of CCBCC
will discuss the proposed line of business with representatives of TCCC.

As used herein “CBA” means the Comprehensive Beverage Agreement being entered
into on the date hereof in connection with the Johnson City, TN and Morristown,
TN territories and, except as otherwise provided in the third paragraph of this
Letter Agreement, any other Comprehensive Beverage Agreement, or similar
agreement, entered into between the parties or their affiliates for other
territories subsequent to the date of this Letter Agreement, as any of such
agreements may be amended or restated from time to time. This Letter Agreement
will apply to each CBA or amended CBA entered into by CCBCC, including those
entered into after the date of this Letter Agreement.

Except as expressly set forth in this Letter Agreement, as applied solely to
CCBCC, TCCC expressly reserves and does not waive hereunder any and all rights
under the CBA or any other agreement. TCCC and CCBCC agree that the contents of
this Letter Agreement are confidential and that none of the parties may discuss
or disclose any of the provisions herein without the express written permission
of the other parties, except (i) as required under applicable securities laws,
legal process or other laws, (ii) that each party may disclose the contents of
this Letter Agreement to those of its directors, officers, employees, lenders,
potential financing sources and representatives of its legal, accounting and
financial advisors (the persons to whom such disclosure is permissible being
collectively referred to herein as “Representatives”) who have a need to know
such information as long as such Representatives are informed of the
confidential and proprietary nature of the information. The parties agree that
the merger, integration and similar provisions in each CBA stating that such CBA
encompasses all agreements between the parties and supersedes all prior
agreements will not have any effect on the validity and continuance of the
provisions of this Letter Agreement, and TCCC and CCBCC agree never to assert
that this Letter Agreement has been superseded by a merger, integration or
similar provision of any CBA unless the parties specifically state in such CBA
that they intend to modify or supersede this Letter Agreement by making specific
reference to this Letter Agreement.

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Sincerely, /s/ Stephen Jones Stephen Jones Senior Vice President System
Evolution Coca-Cola North America

 

Accepted and Agreed to: COCA-COLA BOTTLING CO. CONSOLIDATED By:   /s/ Henry W.
Flint   Henry W. Flint   President and Chief Operating Officer   Coca-Cola
Bottling Co. Consolidated

Signature Page to Letter Agreement Regarding CCBCC’s for Certain Advance Waivers

for Ancillary Businesses under the Comprehensive Beverage Agreement

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Attachment A

Contemplated Transactions

1. Johnson City/Morristown

2. Cookeville/Pikeville/Paducah

3. Knoxville/Cleveland

4. Louisville/Lexington/Evansville

 

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Attachment B

Existing Lines of Business

 

1. BYB Brands, Inc.

 

2. Red Classic Services LLC — An over-the-road transportation and freight
brokerage business, as described and conditioned in Schedule 14A Part 2 of the
CBA for Johnson City, TN and Morristown, TN, executed at the same time as this
Letter Agreement, which description and conditions may be amended by agreement
of the parties in future CBAs.

 

3. Swift Water Logistics, Inc. — A broad array of logistical supply chain
products and services. This business includes (i) assessing supply chain
systems, (ii) advising regarding potential solutions, (iii) developing,
manufacturing, integrating and implementing processes, tools and solutions
across the supply chain, and (iv) providing supply chain and operational
services, including supply chain management, project management, network
strategy planning, territory planning and dispatch management, warehouse
management and delivery and merchandising.

 

4. Data Ventures Inc.—Develops and provides analytics product suites, analytics
services and consulting services for a wide variety of industries. These product
suites and services include data warehousing and access solutions, shopper
segmentation/clustering analytics, out of stock/shelf analytics, shopper
behavior analytics, pricing and promotion analytics and product assortment
analytics.

 

5. Equipment Reutilization Solutions LLC—Provides manufacturing and maintenance
services for heating, ventilation and air conditioning systems, including
equipment employing refrigeration systems. These services include manufacturing,
installation, periodic maintenance service, and repair of mechanical and fluid
systems employed in the beverage business, such as fountain dispenser equipment,
vending equipment, and fast lane/cold carton merchandizing equipment used in the
beverage and other businesses.

 

6. Third-party logistics services (“3PL Services”) and fourth-party logistics
services (“4PL Services”). 3PL Services include the performance of outsourced
logistics activities, such as warehousing, inventory management, pick and pack
services, and other value added services including those that have been
performed traditionally within an organization itself. 4PL Services include
acting as an integrator that assembles the resources, capabilities and
technology to design and build, execute and manage comprehensive supply chain
solutions.

 

7. Management services and shared services to third parties such as
cooperatives, joint ventures and other entities engaged in bottling, beverage
and/or other businesses that produce or distribute beverage products under
license from TCCC.

 

Classified - Confidential