exv10w6






Exhibit 10.6




CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR SUCH PORTIONS. ASTERISKS DENOTE OMISSIONS.



March 16, 2009



James E. Harris

Senior Vice-President and Chief Financial Officer

Coca-Cola Bottling Co. Consolidated

4100 Coca-Cola Plaza

Charlotte, NC 28211



Re: Incidence Pricing Agreement Dear Jamie:


This letter confirms our plans to enter into an incidence pricing program with Coca-Cola Bottling
Co. Consolidated (“Bottler”) starting in 2009 (the “Program”) for the Term defined below. The
Program described below will apply only to concentrate that the Bottler purchases from CCNA for the
“Brands” listed in Attachment A for ultimate resale as finished goods to your customers who resell
the finished goods directly or indirectly to retailers and consumers who are located in the
respective authorized territories for the Brands, as permitted in the respective agreements between
CCNA and the Bottler for the Brands (“Covered Sales”). The Program described below will not apply
to concentrate that the Bottler purchases from CCNA that is used to manufacture finished goods for
resale to CCNA or to authorized Coca-Cola bottlers that are not owned and controlled by the Bottler
(“Excluded Sales”).




	1.	 	The Brands will include the following CCNA beverages:







	 	•	 	All Sparkling beverages (e.g., Coca-Cola classic, diet Coke, Sprite, etc.)

	 
	 	•	 	Nestea (Coldfill only) and Minute Maid Adult Refreshment (Coldfill only)







	2.	 	The Program shall be for a minimum of two years beginning on January 1, 2009, and shall end
on December 31, 2010, unless terminated earlier by either party as permitted herein (the
“Term”). Either party may terminate the Program effective at the end of any calendar year
(i.e., on December 31) by giving not less than fifteen (15) days written notice to the other
party prior to the end of such calendar year. In addition, Bottler may terminate this
Agreement pursuant to paragraph 5.e below.

	 
	3.	 	During the Term, both parties temporarily waive the pricing provisions, including “most
favored nations” provisions relating to pricing, if any, for each of the Brands listed in
Attachment A that are contained in the agreements between them for those Brands (the “Existing
Contracts”), and both parties agree that the pricing for the Brands shall be governed by this
Agreement during the Term. In agreeing to this waiver, the parties acknowledge that Bottler
is relying on the fact that CCNA has offered this Program to all
Coca-Cola bottlers in the United States in substantially the same form and using substantially
the same methodology as stated in this Agreement.






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	 	 	If CCNA offers a materially different incidence pricing program to any bottler, CCNA will either
make such program available to Bottler or allow Bottler the option to terminate this Program
effective at the end of the next calendar quarter by giving not less than thirty days written
notice to CCNA. However, the parties acknowledge that Other Participating Bottlers (as defined
below) will have different Incidence Rates and that such differences shall not be deemed a
material difference in incidence pricing programs. CCNA will continue to publish prices for the
Brands in accordance with the terms of the Existing Contracts, but such published prices shall
be informational only and shall not apply during the Term, unless this Agreement is terminated
early as permitted herein.

	 
	4.	 	During the Term, CCNA will bill Bottler for concentrate at the standard billing prices
(“SBPs”) by Brand category that are communicated by CCNA to Bottler. The SBPs for 2009 are
set forth in Attachment A. SBP pricing will change once a year: at the end of each Program
year, CCNA shall be free to change the SBPs for the next year by giving 30 days notice to
Bottler. This is a billing price and does not reflect the incidence price (see Paragraph 5
below), CCNA shall charge the same SBPs to every bottler that elects to participate in an
incidence pricing program substantially similar to this Program during the Term (“Other
Participating Bottlers”), before taking account of any funding that Bottler or Other
Participating Bottlers may elect to net pursuant to paragraph 5.h below.

	 
	5.	 	Within 15 days after the end of each calendar quarter, i.e., March 31, June 30, September 30,
and December 31, CCNA will calculate an effective “Incidence Pricing Revenue” (“IPR”) for each
category, as follows.







	 	a.	 	The Bottler will calculate its Dead Net Net Selling Income (“DNNSI”) during the
preceding quarter for Covered Sales of each Brand and multiply the DNNSI by the
“Incidence Rate” for that Brand to yield an IPR for each Brand. The sum of these IPRs
is the Total IPR for that quarter.

	 
	 	b.	 	“DNNSI” is defined in as “Revenue less CMA/CTM/Rebates”. During the Program,
the Bottler will use the same process to calculate DNNSI for all of the quarters of the
program. Bottler will not alter the process or definition of DNNSI during the Program.
For auditing purposes, Bottler will provide copies (hard or electronic) of the results
of their sales systems (e.g., Margin Minder) to CCNA.

	 
	 	c.	 	The starting Incidence Rate for the Brands shall be defined and calculated as
set forth on Attachment B. Each bottler will have its own Incidence Rate, and this
rate may vary across bottlers.

	 
	 	d.	 	At the end of each year of the Program, CCNA will review and potentially adjust
Bottler’s Incidence Rate for the next year of the Program with the Bottler. CCNA will
give not less than forty-five (45) days written notice of any changes to the Incidence
Rate. For Bottlers that are governed by the Bottler’s Bottle Contract, the potential
adjustment in the Sparkling Incidence Rate will have a yearly cap, starting with the
Incidence Rate for 2010, that is based upon CPI. Attachment D illustrates
how Bottler and CCNA have agreed that the yearly cap on the maximum possible change
in the Incidence Rate will be calculated.






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Page 3





	 	e.	 	In addition to the annual review of the Incidence Rate described in the
preceding paragraph 5.d, CCNA may change the Incidence Rate at any time by giving not
less than 90 days prior written notice to Bottler, subject to the yearly cap described
in paragraph 5.d, if applicable. Should CCNA give notice of its intent to change the
Incidence Rate pursuant to this paragraph 5.e, Bottler shall have the right to
terminate this Program by giving written notice to CCNA not less than 15 days prior to
the date the change in Incidence Rate is scheduled to take effect.

	 
	 	f.	 	In order to help inform the calculations and decisions for paragraphs 5.d and
5.e above, the Bottler and CCNA may mutually elect and agree to share yearly category
P&L information to the Operating Income level with each other. Based upon this
information, CCNA may use a variety of economic indicators such as Bottler Revenue
Growth, GP margin, OI margin, and ROIC to inform, but not prescribe, potential
adjustments to the Incidence Rate (e.g., keep IR same, increase IR, or decrease IR) for
each of the Brands stated in section 1.

	 
	 	g.	 	If CCNA should add or change the formula or sweetener system for any Brand
during the Term, CCNA and the bottler will mutually determine whether to include the
affected Brand in the Program or whether to exclude the affected Brand and price it
pursuant to the Existing Contracts.

	 
	 	h.	 	At the Bottler’s option, base funding and contractually mandated funding as
described in Existing Contracts and in your annual agreement with CCNA, if any, may be
netted against the Incidence Rate (thus lowering the rate) and/or deducted from the
SBP, as illustrated in Attachment A. In addition, at the Bottler’s option, sales of
the Brands to customers in the full service vending channel may be excluded from
Covered Sales. If Bottler elects either of these options, Bottler’s election will be
set forth in Attachment A and may not be changed except by mutual consent.







	6.	 	Not later than two weeks before the end of each calendar quarter, the Bottler shall provide
CCNA with its volume and DNNSI calculations under paragraph 5 above for approximately the
first eleven weeks of the quarter together with such underlying details as reasonably
requested by CCNA. As soon as practicable after the end of the quarter, the Bottler will
update these numbers for the full quarter. The Bottler and CCNA shall then reconcile the
amounts actually paid to CCNA for concentrate billed at the SBP for each Brand during the
quarter (the “Total Standard Pricing Revenue” or “Total SPR”), against the Total IPR
calculated above for that quarter. If the Total SPR is less than the Total IPR, the Bottler
shall pay the difference to CCNA no later than 30 days after the end of the quarter.
Similarly, if the Total SPR is more than the Total IPR, CCNA shall pay the difference to the
Bottler no later than 30 days after the end of the quarter.

	 
	7.	 	Both parties shall be entitled to review the other’s calculations and all relevant underlying
records upon written request.

	 
	8.	 	Within two weeks of the end of every quarter, the Bottler will provide CCNA package level
data for volume, gross revenue, and CTM/CMA/Rebates for all of the Brands covered in the
Program.






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Page 4





	9.	 	The Bottler will make changes as needed to the views in its Route Settlement System (e.g.,
Margin Minder or other mutually agreeable system) to reflect the effective COGS under this
Program, and will use reasonable efforts to ensure that its key decision makers will have
access to the incidence pricing view in Margin Minder or other system, or make such other
changes that may be reasonably required in order to ensure that Bottler employees with
financial decision-making responsibility have access to Bottler’s effective COGS under this
Program when making decisions in the performance of their duties.

	 
	10.	 	The parties will meet on a timely basis to jointly develop a mutually agreeable reporting and
review process.

	 
	11.	 	Bottler will share with CCNA in a timely fashion its annual and quarterly forecasting
information for the average prices it expects to charge for each of the Brands by package, to
the extent that Bottler maintains such information in the ordinary course of its business.

	 
	12.	 	The purpose of this Program is to determine the feasibility and effectiveness of implementing
an alternative pricing system. Characteristics of this Program may or may not be extended
past the end of the Program specified in Section 2, and any such extensions must be by mutual
agreement.

	 
	13.	 	Attached as Attachment C is a form of Confidentiality Agreement that shall govern this
Agreement and the information shared between the parties pursuant to this Agreement.

	 
	14.	 	Rights of Reversion. If either Bottler or CCNA terminates this agreement as permitted in
paragraphs 2 and 5.e above, the parties will reconcile Total SPR against Total IPR as provided
in paragraph 6 through the end of the Term. Beginning on the first day of the quarter
following the expiration or termination of this Agreement, CCNA will resume charging prices to
Bottler for the Brands in accordance with the terms of the Existing Contracts, Nothing in this
Agreement shall be deemed to modify, change or amend the interpretation of the Existing
Contracts or the parties’ respective rights and obligations thereunder following termination
or expiration of this Agreement.





If this letter accurately sets forth our understanding and agreement, please sign below and return
one copy to me for our files.


Sincerely,


/s/ Alan Rabb


Alan Rabb


Vice President, Bottler Sales and Marketing


Coca-Cola North America



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Page 5



AGREED this 25th day of March, 2009:


Coca-Cola Bottling Co. Consolidated



					
	 	
 	 
	 	By:  	/s/ James E. Harris
 	 
	 	 	Printed Name: 	 James E. Harris 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	cc:

 	 
	 	 	 
	 	 	 
	 	 	 
	 



Classified — Confidential






 









 








ATTACHMENT A:

Incidence Pricing 2009 CCNA-Consolidated Sparkling Billing Price




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	D	 
	A	 	 	B	 	C	 	SBP	 
	Lookup	 	 	 	 	EQ	 	1/1/09	 
	Code	 	 	Brand	 	Throw	 	$/Gal	 
	 	1	 	 	COCA-COLA CLASSIC
	 	[***]	 	$	[***]	 
	 	2	 	 	CF Coca-Cola CLASSIC
	 	[***]	 	$	[***]	 
	 	3	 	 	VANILLA COKE
	 	[***]	 	$	[***]	 
	 	4	 	 	CHERRY COKE
	 	[***]	 	$	[***]	 
	 	5	 	 	DIET COKE
	 	[***]	 	$	[***]	 
	 	6	 	 	CF DIET COKE
	 	[***]	 	$	[***]	 
	 	7	 	 	COKE ZERO
	 	[***]	 	$	[***]	 
	 	8	 	 	dKO w/Splenda
	 	[***]	 	$	[***]	 
	 	9	 	 	DIET COKE with LIME
	 	[***]	 	$	[***]	 
	 	10	 	 	DIET VANILLA COKE
	 	[***]	 	$	[***]	 
	 	11	 	 	DIET CHERRY COKE
	 	[***]	 	$	[***]	 
	 	12	 	 	Cherry Zero
	 	[***]	 	$	[***]	 
	 	13	 	 	Vanilla Zero
	 	[***]	 	$	[***]	 
	 	14	 	 	Diet KO Plus
	 	[***]	 	$	[***]	 
	 	15	 	 	TAB
	 	[***]	 	$	[***]	 
	 	16	 	 	BARQS Root Beer
	 	[***]	 	$	[***]	 
	 	17	 	 	CARVERS GINGER ALE
	 	[***]	 	$	[***]	 
	 	18	 	 	Barqs DELAWARE PUNCH
	 	[***]	 	$	[***]	 
	 	19	 	 	BARQS Diet Root Beer
	 	[***]	 	$	[***]	 
	 	20	 	 	DIET SPRITE
	 	[***]	 	$	[***]	 
	 	21	 	 	FANTA Orange/Flavors
	 	[***]	 	$	[***]	 
	 	22	 	 	FANTA ZERO
	 	[***]	 	$	[***]	 
	 	23	 	 	FRESCA
	 	[***]	 	$	[***]	 
	 	24	 	 	MELLO YELLO
	 	[***]	 	$	[***]	 
	 	25	 	 	PIBB XTRA
	 	[***]	 	$	[***]	 
	 	26	 	 	NORTHERN NECK GINGER
	 	[***]	 	$	[***]	 
	 	27	 	 	Diet Northern Neck
	 	[***]	 	$	[***]	 
	 	28	 	 	RED FLASH
	 	[***]	 	$	[***]	 
	 	29	 	 	SEAGRAMS GINGER ALES
	 	[***]	 	$	[***]	 
	 	30	 	 	SEAGRAMS DT GINGER ALE/DT RASP
	 	[***]	 	$	[***]	 
	 	31	 	 	SEAGRAMS CLUB SODA
	 	[***]	 	$	[***]	 
	 	32	 	 	SEAGRAMS TONIC WATER
	 	[***]	 	$	[***]	 
	 	33	 	 	SEAGRAMS DIET TONIC WATER
	 	[***]	 	$	[***]	 
	 	34	 	 	SEAGRAMS SELTZERS
	 	[***]	 	$	[***]	 
	 	35	 	 	PIBB ZERO
	 	[***]	 	$	[***]	 
	 	36	 	 	SPRITE
	 	[***]	 	$	[***]	 
	 	37	 	 	VAULT/VAULT Red Blitz
	 	[***]	 	$	[***]	 
	 	38	 	 	VAULT ZERO
	 	[***]	 	$	[***]	 






A-1



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	 	 	 	 	 	 	 	 	D	 
	A	 	 	B	 	C	 	SBP	 
	Lookup	 	 	 	 	EQ	 	1/1/09	 
	Code	 	 	Brand	 	Throw	 	$/Gal	 
	 	39	 	 	Nestea Sweet Lemon
	 	[***]	 	$	[***]	 
	 	40	 	 	Diet Nestea
	 	[***]	 	$	[***]	 
	 	41	 	 	MMAR
	 	[***]	 	$	[***]	 
	 	42	 	 	MMAR Lights
	 	[***]	 	$	[***]	 








 




			
	***	 	This information has been omitted and filed separately with the commission. Confidential
treatment has been requested for such information.






A-2


Classified — Confidential














 








ATTACHMENT B



Incidence Rate



The Incidence Rate is [***]% which was the agreed upon rate between CCNA Sparkling Finance and
Coca-Cola Bottling Co. Consolidated which took into account multiple business factors and was
reached in December of 2008.





 




			
	***	 	This information has been omitted and filed separately with the commission. Confidential
treatment has been requested for such information.






B-1 



Classified — Confidential














 








ATTACHMENT C


Confidentiality Agreement




C-1 



Classified — Confidential












 








CONFIDENTIALITY AGREEMENT




     THIS CONFIDENTIALITY AGREEMENT is made and entered into as of the 6th day of February, 2009,
by and between (BOTTLER) and THE COCA-COLA COMPANY, by and through its Coca-Cola North America
division (“KO”), under the following circumstances:



     A. KO has requested that BOTTLER allow KO access to certain of BOTTLER’S nonpublic information
concerning sales of beverages by BOTTLER. This information will include (without limitation) the
identity of individual accounts and will show all products sold under license from KO, sales
volume, invoice prices, allowances and discounts. The information described in the preceding
sentence is referred to in this Agreement as the “Confidential Information.”



     B. BOTTLER is willing to and agrees to allow certain KO employees (“KO Employees”) to have
such access to the Confidential Information, provided that KO agrees to the restrictions on the use
and disclosure of the Confidential Information as provided in this Agreement.



     NOW THEREFORE, in consideration of the foregoing and for other good and valuable legal
consideration, the parties agree as follows:



     1. Non-disclosure. KO will use the Confidential Information only for the internal
purposes of KO, and, except as permitted by this Agreement, shall make no disclosure whatsoever of
any Confidential Information.



     2. Restricted Access. KO will restrict access to the Confidential Information only to
KO Employees meeting all of the following criteria: (a) the KO Employee has a need to know this
information; (b) the KO Employee has been approved by an authorized KO official (i.e., above
Director level) to have access to the Confidential Information.



     3. No Warranty. The Confidential Information to which KO is being allowed access is
prepared in the ordinary business operations of BOTTLER and is believed to reflect correctly the
records of BOTTLER and its affiliates at the date it is entered into the data system, but any
express or implied warranty that the Confidential Information is accurate or complete is
specifically disclaimed by BOTTLER. BOTTLER shall have no liability to KO for KO’s use of or
reliance on the Confidential Information.



     4. Exclusions from Confidential Information. The following information shall not be
considered as “Confidential Information” under this Agreement:


          (a) Information which is, or subsequently may become, generally available to the public as a
matter of record through no fault of KO;


          (b) Information which KO can show was previously known to it as a matter of record at the time
of receipt;


          (c) Information which may subsequently be obtained from a third party (i) who received the
information lawfully and from a disclosing party who was under no duty to



C-2 



Classified — Confidential













 







keep such information confidential; and (ii) who obtained the information through no fault of
KO;


          (d) Information which may subsequently be developed by KO independently of any disclosure of
Confidential Information from BOTTLER hereunder;


          (e) Information which is required to be disclosed pursuant to the requirement of a government
agency or by operation of law, subsequent to prior consultation with BOTTLER’S legal counsel;


          (f) Information which is or becomes more than ten years old from the date it was first
provided to KO or the BOTTLER.



     5. Legal Process. KO agrees to notify BOTTLER immediately if either becomes subject
to legal process compelling them to disclose Confidential Information, so that BOTTLER may seek a
protective order or other appropriate remedy. If legally compelled to disclose the Confidential
Information, KO agrees that it will furnish only that portion of the Confidential Information which
is legally required to be disclosed.



     6. Termination, Either party may terminate this Agreement for any reason by giving not
less than ninety (90) days prior written notice.



     7. Effect on Other Agreements, Nothing in this Agreement shall be deemed to modify,
amend or waive any rights either party may have under any bottling or distribution agreement
between the parties,


          IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.



	 	 	 	 	 	 	 	 	 
	Bottler	 	 	 	THE COCA-COLA COMPANY 

by and
through its Coca-Cola North America division
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ James E. Harris	 	 	 	 	 	 
	 

	 	 

Authorized Signing Officer
	 	 	 	 By:	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Authorized Signing Officer






C-3



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ATTACHMENT D




Yearly Sparkling Incidence Rate Amended Cap Calculation

(where applicable)




D-1 



Classified — Confidential