SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(X ) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
(X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Coca-Cola Bottling Co. Consolidated
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
(X ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
COCA-COLA BOTTLING CO. CONSOLIDATED
1900 REXFORD ROAD
CHARLOTTE, NORTH CAROLINA 28211
(704) 551-4400
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on
May 15, 1996
TO THE SHAREHOLDERS OF
COCA-COLA BOTTLING CO. CONSOLIDATED:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Coca-Cola
Bottling Co. Consolidated, a Delaware corporation (the "Company"), will be held
at the Snyder Production Center, 4901 Chesapeake Drive, Charlotte, North
Carolina 28216 on Wednesday, May 15, 1996, at 10:00 a.m., Eastern Daylight Time,
for the purpose of considering and acting upon the following:
1. Fixing the number of directors at ten;
2. Electing three directors, each for a term of three years or until his
successor shall be elected and shall qualify; and
3. Such other business as may properly come before the Annual Meeting of
Shareholders, or any adjournment or adjournments thereof.
Only shareholders of record of the Company's common stock (including both
Common Stock and Class B Common Stock) at the close of business on March 29,
1996, are entitled to notice of, and to vote at, the meeting or any adjournment
thereof. A list of shareholders will be available for inspection at least ten
days prior to the meeting at the principal executive offices of the Company,
1900 Rexford Road, Charlotte, North Carolina 28211.
By Order of the Board of Directors.
John F. Henry, Jr.
SECRETARY
Date: April 23, 1996
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF
COCA-COLA BOTTLING CO. CONSOLIDATED
TO BE HELD ON MAY 15, 1996
INTRODUCTION
This Proxy Statement is being furnished by the Board of Directors of
Coca-Cola Bottling Co. Consolidated, a Delaware corporation (the "Company"), in
connection with the solicitation of proxies by the Company for use at the Annual
Meeting of Shareholders to be held at the Snyder Production Center, 4901
Chesapeake Drive, Charlotte, North Carolina 28216 on Wednesday, May 15, 1996, at
10:00 a.m., Eastern Daylight Time, and at any adjournment or adjournments
thereof (the "Annual Meeting"). It is contemplated that the Proxy Statement and
accompanying form of proxy will be mailed to shareholders of the Company on or
about April 23, 1996. The principal executive offices of the Company are located
at 1900 Rexford Road, Charlotte, North Carolina 28211, telephone (704) 551-4400.
At the Annual Meeting, holders of the Company's Common Stock, par value
$1.00 per share ("Common Stock"), and of the Company's Class B Common Stock, par
value $1.00 per share ("Class B Common Stock"), will be asked to fix the number
of directors at ten and to elect three directors, each for a term of three
years.
The Board of Directors recommends that the Company's shareholders vote FOR
fixing the number of directors at ten and FOR electing the three nominees for
director.
RECORD DATE, VOTE REQUIRED, AND RELATED MATTERS
The Board of Directors has fixed the close of business on March 29, 1996,
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting. As of the close of business on March 14,
1996, the Company had issued and outstanding 7,958,059 shares of Common Stock
(which number excludes 2,132,800 shares held in the Company's treasury) entitled
to one vote per share on all matters brought before the Annual Meeting and
1,336,362 shares of Class B Common Stock (which number excludes 628,114 shares
held in the Company's treasury) entitled to twenty votes per share on all
matters brought before the Annual Meeting (7,958,059 votes for the Common Stock
and 26,727,240 votes for the Class B Common Stock, for an aggregate of
34,685,299 votes). Each shareholder may exercise his right to vote either in
person or by properly executed proxy. Cumulative voting is not permitted. The
Common Stock and Class B Common Stock will vote as a single class on each of the
specific matters to be presented at the Annual Meeting which are discussed
herein.
Shares represented at the Annual Meeting by properly executed proxies will
be voted in accordance with the instructions indicated in the proxies unless
such proxies have previously been revoked.
1
If no instructions are indicated, such shares will be voted: (i) FOR fixing
the number of directors at ten and (ii) FOR electing the Board of Directors'
three nominees for director as set forth in this Proxy Statement.
Any proxy given pursuant to this solicitation may be revoked at any time by
the shareholder giving it, insofar as it has not been exercised, by delivering
to the Secretary of the Company a written notice of revocation bearing a later
date than the proxy or by submission of a later-dated, properly executed proxy.
Attendance at the Annual Meeting will not, in and of itself, constitute a
revocation of a proxy. Any written notice revoking a proxy should be sent to
Coca-Cola Bottling Co. Consolidated, Post Office Box 31487, Charlotte, North
Carolina 28231, Attention: John F. Henry, Jr., Secretary.
The persons designated as proxies in the accompanying form of proxy have
been selected by the Board of Directors and are J. Frank Harrison, Jr., Ned R.
McWherter, James L. Moore, Jr. and J. Frank Harrison, III, directors of the
Company. The cost of solicitation of proxies will be borne by the Company.
The presence, in person or by proxy, of the holders of a majority of the
votes eligible to be cast by the holders of the outstanding shares of Common
Stock and Class B Common Stock entitled to vote (17,342,650 votes) is necessary
to constitute a quorum at the Annual Meeting. The affirmative vote of a majority
of the total votes represented at the Annual Meeting, in person or by proxy, by
holders of outstanding shares of Common Stock and Class B Common Stock is
required to fix the number of directors at ten and a plurality of the vote is
necessary to elect the Board of Directors' nominees. Abstentions and broker
non-votes shall not be considered affirmative votes, and will have no effect
upon the election of directors by a plurality vote. With respect to fixing the
number of directors at ten, an abstention will have the same effect as a "NO"
vote and broker non-votes will have no effect.
The Board of Directors has been informed that J. Frank Harrison, Jr., J.
Frank Harrison, III and Reid M. Henson intend to vote an aggregate of 3,283,993
shares of the Company's Common Stock and 1,317,942 shares of the Company's Class
B Common Stock (representing an aggregate of 29,642,833 votes) FOR fixing the
number of directors at ten and FOR electing the Board of Directors' nominees for
director. Such number of shares includes the 2,488,497 shares of Common Stock
and the 269,158 shares of Class B Common Stock owned by The Coca-Cola Company,
which are voted by J. Frank Harrison, III pursuant to the terms of a Voting
Agreement between The Coca-Cola Company and Messrs. Harrison, Jr., Harrison, III
and Henson (in Mr. Henson's capacity as co-trustee of certain trusts holding
shares of Class B Common Stock). See "Principal Shareholders" and "Certain
Transactions." Accordingly, it is anticipated that the number of directors will
be fixed at ten and the Board of Directors' nominees for director will be
elected.
The Board of Directors of the Company is not aware of any other matter to
be brought before the Annual Meeting. If, however, other matters are properly
presented, proxies received in response to this solicitation representing shares
of Common Stock and Class B Common Stock will be cast in accordance with the
best judgment of the proxyholders on such other matters.
A copy of the Company's Annual Report for the fiscal year ended December
31, 1995, is enclosed herewith.
2
PRINCIPAL SHAREHOLDERS
The following table sets forth information as to the shares of Common Stock
and Class B Common Stock, the only classes of voting securities of the Company
with shares outstanding, beneficially owned as of March 14, 1996 (except as
otherwise noted), by each person known to the Company to be the beneficial owner
of more than 5% of the outstanding Common Stock or Class B Common Stock. As of
such date, the Company had issued and outstanding 7,958,059 shares of Common
Stock and 1,336,362 shares of Class B Common Stock.
AMOUNT AND
NATURE OF PERCENT PERCENT
TITLE BENEFICIAL OF AGGREGATE OF TOTAL
NAME OF CLASS OWNERSHIP (1) CLASS (2) VOTE VOTE (2)
J. Frank Harrison, Jr., Common Stock 5,065,221(3)(4) 53.3
J. Frank Harrison, III Class B Common Stock 1,317,942(3)(4)(5) 98.6 29,878,619 86.1
and Reid M. Henson,
as a Group
2 Union Square
Chattanooga, TN 37402
The Coca-Cola Company Common Stock 2,488,497(6) 31.3
One Coca-Cola Plaza Class B Common Stock 269,158(6) 20.1 7,871,657 22.7
Atlanta, GA 30313
Tweedy, Browne Common Stock 525,258(7) 6.6 525,258 1.5
Company, L.P.
TBK Partners, L.P.
Vanderbilt Partners, L.P.
52 Vanderbilt Avenue
New York, NY 10017
(1) In general, a person is deemed to be a beneficial owner of a security
if that person has or shares voting power, which includes the power to
vote or direct the voting of such security, or investment power, which
includes the power to dispose of, or to direct the disposition of, such
security; or if a person has the right to acquire either voting power
or investment power over such security through the exercise of an
option or conversion of another security within 60 days. More than one
person may be a beneficial owner of the same securities, and a person
may be deemed to be a beneficial owner of securities as to which he has
no personal economic interest or which he may not vote.
(2) The percentages shown are based upon the number of shares outstanding
(net of shares held in treasury). In the case of J. Frank Harrison,
Jr., J. Frank Harrison, III and Reid M. Henson, in which beneficial
ownership includes (i) shares of Common Stock that would result from a
conversion of Class B Common Stock into such shares or (ii) shares of
Common Stock which Messrs. Harrison, Jr. and Harrison, III presently
have the right to acquire through exercise of options, the percentages
of class shown give effect to such conversion and to the exercise of
3
such options. In calculating the aggregate vote and percent of total
vote, however, no effect is given to conversion of Class B Common Stock
into Common Stock or to the exercise of such unexercised options. In
the case of The Coca-Cola Company, beneficial ownership shown in the
table does not include shares of Common Stock that would result from a
conversion of Class B Common Stock into such shares.
(3) The amounts shown include (a) as to Common Stock: (i) 792,796 shares
owned outright by J. Frank Harrison, Jr. as to which he has sole voting
and investment power; (ii) 235,786 shares held by a trust for the
benefit of certain relatives of Mr. Harrison, Jr. as to which he has
sole voting power and no investment power; (iii) 2,488,497 shares held
by The Coca-Cola Company subject to the terms of the Voting Agreement
and Irrevocable Proxy (described elsewhere) as to which J. Frank
Harrison, III has sole voting and no investment power; (iv) 700 shares
held by Mr. Harrison, III as custodian for certain of his children
under the North Carolina Uniform Gifts to Minors Act, as to which Mr.
Harrison, III possesses sole voting and investment power; (v) 2,000
shares owned outright by Reid M. Henson; (vi) 1,317,942 shares of Class
B Common Stock, convertible into Common Stock on a one for one basis at
the option of the holder of such shares, and which are beneficially
owned by Messrs. Harrison, Jr., Harrison, III and Henson as described
in subsection (b) of this Note (3); and (vii) 100,000 shares of Common
Stock which Mr. Harrison, Jr. presently has the right to acquire
through exercise of options and 127,500 shares of Common Stock which
Mr. Harrison, III presently has the right to acquire through exercise
of options; and (b) as to Class B Common Stock: (i) 712,796 shares
owned outright by Mr. Harrison, Jr. as to which he has sole voting and
investment power; (ii) 235,786 shares held by a trust for the benefit
of Mr. Harrison, Jr. and certain of his relatives as to which Mr.
Harrison, III and Mr. Henson share investment power as co-trustees and
as to which Mr. Harrison, Jr. possesses sole voting power; (iii) 260
shares held by Mr. Harrison, III as custodian for certain of his
children under the North Carolina Uniform Gifts to Minors Act, as to
which Mr. Harrison, III possesses sole voting and investment power;
(iv) 99,942 shares held by certain trusts as to which Mr. Harrison, III
and Mr. Henson share investment power as co-trustees and as to which
Mr. Harrison, Jr. possesses sole voting power; and (v) 269,158 shares
held by The Coca-Cola Company subject to the terms of the Voting
Agreement and Irrevocable Proxy (described elsewhere) as to which Mr.
Harrison, III has sole voting and no investment power.
(4) J. Frank Harrison, Jr., J. Frank Harrison, III and Reid M. Henson (as
trustee of certain trusts holding shares of Class B Common Stock) are
parties to a Voting Agreement and a Shareholder's Agreement entered
into with The Coca-Cola Company. Pursuant to the Voting Agreement, Mr.
Harrison, III has been granted an Irrevocable Proxy for life and,
thereafter, to Mr. Harrison, Jr., covering the shares of Common Stock
and Class B Common Stock held by The Coca-Cola Company. Accordingly,
Messrs. Harrison, Jr., Harrison, III and Henson may be deemed to be a
group as such term is defined in certain regulations of the Securities
and Exchange Commission. Information concerning the Voting Agreement,
Shareholder's Agreement and Irrevocable Proxy is disclosed hereinafter
under the heading "Certain Transactions."
4
(5) A trust of which J. Frank Harrison, Jr. is a beneficiary and J. Frank
Harrison, III and Reid M. Henson are co-trustees has the right to
acquire 292,396 shares of Class B Common Stock from the Company in
exchange for an equal number of shares of Common Stock. Mr. Harrison,
Jr. would have sole voting power, and Messrs. Harrison, III and Henson
would have shared investment power upon such acquisition. The trust
does not own any shares of Common Stock with which to make such
exchange and, accordingly, the number of shares shown does not include
such shares.
(6) The information presented is derived from a report on Schedule 13D
dated May 18, 1987, as amended through Amendment Number 14 thereto
dated August 6, 1993, filed by The Coca-Cola Company as to its
beneficial ownership of Common Stock and Class B Common Stock of the
Company. The Coca-Cola Company has granted the power to vote all
2,488,497 shares of Common Stock and 269,158 shares of Class B Common
Stock it beneficially owns to J. Frank Harrison, III for life and,
thereafter, to J. Frank Harrison, Jr., pursuant to a Voting Agreement
and Irrevocable Proxy described elsewhere herein under the heading
"Certain Transactions."
(7) The information presented is derived from a report on Schedule 13D
dated March 31, 1995, as amended through Amendment Number 2 thereto
dated March 11, 1996, filed by Tweedy, Browne Company, L.P. ("TBC"),
TBK Partners, L.P. ("TBK") and Vanderbilt Partners, L.P. ("Vanderbilt")
with respect to their aggregate beneficial ownership of shares of
Common Stock of the Company. TBC is a registered broker-dealer and
investment adviser and each of TBK and Vanderbilt is a private
investment partnership. The four general partners of TBC are also
general partners of TBK and Vanderbilt. They report beneficial
ownership as follows: (i) TBC has shared investment power with respect
to 488,363 shares of Common Stock held in discretionary accounts of
various TBC customers and has sole voting power with respect to 433,410
of such shares; (ii) TBK has sole voting and investment power with
respect to 25,300 shares of Common Stock; and (iii) Vanderbilt has sole
voting and investment power with respect to 11,595 shares of Common
Stock.
ELECTION OF DIRECTORS
GENERAL
The Certificate of Incorporation of the Company provides that the Board of
Directors shall consist of not less than nine nor more than twelve members as
fixed from time to time by the shareholders of the Company or the Board of
Directors. It also provides that the Board of Directors shall be divided into
three classes, as nearly equal in number as possible, with staggered three-year
terms. The Board of Directors is permitted to appoint individuals as directors
to fill the unexpired terms of directors who resign.
The Board of Directors has recommended to the shareholders fixing the
number of directors at ten and electing the three nominees listed below to serve
for three-year terms. The directors to be elected at this year's Annual Meeting
will hold office until the 1999 Annual Meeting of Shareholders, or until their
successors are elected and qualified.
5
It is intended that the persons named as proxies in the accompanying form
of proxy will vote for the three nominees listed below, unless the authority to
vote is withheld. Each nominee is at present a member of the Board of Directors.
Although the Company's management expects that each of the nominees will be
available for election, in the event a vacancy in the slate of nominees should
occur, it is intended that shares represented by proxies in the accompanying
form will be voted for the election of a substitute nominee selected by the
Board of Directors.
The names and terms of office of the nominees and directors of the Company,
their ages, their principal occupations or employments (which have continued for
at least the past five years unless otherwise noted), directorships held by them
in certain other publicly held corporations or investment companies, the dates
they first became directors of the Company and certain other information with
respect to such nominees and directors are as follows:
NOMINEES FOR ELECTION OF DIRECTORS IN 1996
(Terms Expiring in 1999)
JOHN M. BELK, age 76, is Chairman of the Board of Directors of Belk Stores
Services Inc., operators of retail department stores, and of Belk Brothers
Company, Charlotte, North Carolina. He serves as an officer or director, or
both, of approximately 140 retail corporations in the Belk organization. Mr.
Belk presently is a director of Lowe's Companies, Inc. and Chaparral Steel
Company. Mr. Belk has been a director of the Company since 1972 and is a member
of the Audit Committee.
DAVID L. KENNEDY, JR., age 49, is Senior Vice President and General
Manager -- Coca-Cola USA -- Fountain, in which capacity he has served since
October 1992. Mr. Kennedy also is a Vice President of The Coca-Cola Company and
previously served as its Director of Business Development. Mr. Kennedy has been
a director of the Company since 1990. He is a member of the Finance Committee
and the Compensation Committee.
REID M. HENSON, age 56, has served as a Vice Chairman of the Board of
Directors of the Company since 1983. Prior to that time, Mr. Henson served as a
consultant to JTL Corporation, a management company, and later as President of
JTL Corporation. He has been a director of the Company since 1979, is Chairman
of the Audit Committee and is a member of the Executive Committee, the
Retirement Benefits Committee and the Finance Committee.
DIRECTORS WHOSE TERMS DO NOT EXPIRE THIS YEAR
(Terms Expiring in 1997)
JOHN W. MURREY, III, age 53, is a member of the law firm of Witt, Gaither &
Whitaker, P.C., general counsel to the Company, in Chattanooga, Tennessee with
which he has been associated since 1970. He served as Secretary of the Company
from 1985 to 1993. He has been a director of the Company since March 17, 1993
and is a member of the Audit Committee and the Retirement Benefits Committee.
H. W. MCKAY BELK, age 39, is Senior Vice President of Belk Stores Services
Inc., operators of retail department stores, a position which he has held since
February 1991. Prior to February 1991,
6
Mr. Belk had served as Vice President, General Merchandise Manager of Belk
Brothers Company, Charlotte, North Carolina, since 1988. He has been a director
of the Company since May 18, 1994 and is a member of the Compensation Committee.
H. REID JONES, age 61, is retired. Prior to his retirement in 1982, he was
a Commercial Account Representative of Bagwell & Bagwell, Inc., an independent
insurance agency in Raleigh, North Carolina. He has been a director of the
Company since 1970 and is a member of the Audit Committee.
(Terms Expiring in 1998)
J. FRANK HARRISON, JR., age 65, is Chairman of the Board of Directors of
the Company and has served the Company in that capacity since 1977. Mr.
Harrison, Jr. served as Chief Executive Officer of the Company from August 1980
until April 1983. He has previously served the Company as Vice Chairman of the
Board of Directors. He has been a director of the Company since 1973. Mr.
Harrison, Jr. presently is a director of Dixie Yarns, Inc. Mr. Harrison, Jr. is
Chairman of the Executive Committee and the Finance Committee and is a member of
the Compensation Committee.
J. FRANK HARRISON, III, age 41, is a Vice Chairman of the Board of
Directors and Chief Executive Officer of the Company. Mr. Harrison has served in
the capacity of Vice Chairman since his election in November 1987 and was
appointed as the Company's Chief Executive Officer in May 1994. He was first
employed by the Company in 1977, and has served as a Division Sales Manager and
as a Vice President of the Company. Mr. Harrison, III is a director of Wachovia
Bank & Trust Co., N.A., Southern Region Board. He is Chairman of the
Compensation Committee and is a member of the Executive Committee, the Audit
Committee and the Finance Committee.
JAMES L. MOORE, JR., age 53, is President and Chief Operating Officer of
the Company. Prior to his election as President in March 1987, he served as
President and Chief Executive Officer of Atlantic Soft Drink Co., a soft drink
bottling subsidiary of Grand Metropolitan USA. Mr. Moore has been a director of
the Company since March 1987. He is a member of the Executive Committee and is
Chairman of the Retirement Benefits Committee.
NED R. MCWHERTER, age 65, is Chairman of the Board of Directors of
Volunteer Distributing Company, Inc. and Eagle Distributors, Inc. of Dresden,
Tennessee. Mr. McWherter served as Governor of the State of Tennessee from
January 1987 to January 1995. He has been a director of the Company since 1995
and is a member of the Finance Committee.
No director, nominee or executive officer of the Company has any family
relationship, not more remote than first cousin, to any other director, nominee
or executive officer, except that J. Frank Harrison, III is J. Frank Harrison,
Jr.'s son and H. W. McKay Belk is John M. Belk's nephew.
7
BENEFICIAL OWNERSHIP OF MANAGEMENT
The following table presents certain information regarding the amount and
nature of beneficial ownership of the Company's equity securities by its
directors and nominees, by the Company's executive officers named in the Summary
Compensation Table (see "Executive Compensation") and by all directors and
executive officers, as a group, as of March 14, 1996. Information concerning
beneficial ownership of the Company's equity securities by Messrs. Harrison,
Jr., Harrison, III and Henson is presented above under the caption "Principal
Shareholders" and is not set forth below.
PERCENT
BENEFICIAL OF
NAME CLASS OWNERSHIP (1) CLASS (2)
John M. Belk Common Stock 10,475(3) *
H. W. McKay Belk Common Stock 520(4) *
H. Reid Jones Common Stock 80,000 1.0
David L. Kennedy, Jr. Common Stock 1,000 *
Ned R. McWherter Common Stock 1,000 *
James L. Moore, Jr. Common Stock 2,500(5) *
John W. Murrey, III Common Stock 1,000 *
David V. Singer Common Stock 10,000(6) *
James B. Stuart Common Stock 1,000 *
Directors and executive officers Common Stock 113,155(7)(8) 1.4
as a group (excluding Messrs.
Harrison, Jr., Harrison, III
and Henson) (18 persons)
* Indicates the number of shares owned is less than 1% of the total shares
of that class outstanding.
(1) See note 1 to table of Principal Shareholders.
(2) The percentages shown are based upon the number of shares outstanding
and do not include shares held in treasury.
(3) The amount shown includes (i) 8,975 shares held by a trust as to which
John M. Belk and his spouse serve as co-trustees and with respect to
which he shares voting and investment power and (ii) 1,500 shares held
by a trust for the benefit of John M. Belk's daughter, as to which his
spouse serves as trustee with sole voting and investment power.
(4) The amount shown includes 300 shares held by H. W. McKay Belk as
custodian for certain of his children under the North Carolina Uniform
Transfers to Minors Act.
(5) The amount shown includes 1,000 shares held by Mr. Moore's spouse.
(6) The amount shown includes 2,750 shares held by Mr. Singer's spouse.
8
(7) The number of shares shown does not include shares held in the
Coca-Cola Bottling Co. Consolidated Savings Plan for any executive
officers who have shares held in such plan.
(8) Of the number of shares indicated: (i) 91,030 shares of Common Stock
are owned with sole voting and sole investment power; (ii) 6,800 shares
of Common Stock are owned by executive officers as joint tenants with
such officers' spouses; (iii) 8,975 shares are owned by a director and
his spouse in a joint fiduciary capacity and (iv) 6,350 shares of
Common Stock are owned by directors' spouses, either directly or in a
fiduciary capacity.
Section 16(a) of the Securities Exchange Act of 1934, and regulations of
the Securities and Exchange Commission ("SEC") thereunder, require the Company's
executive officers and directors and persons who beneficially own more than 10%
of the Company's Common Stock, as well as certain affiliates of such persons, to
file initial reports of ownership and monthly transactions reports covering any
changes in ownership with the SEC and the National Association of Securities
Dealers. Executive officers, directors and persons owning more than 10% of the
Company's Common Stock are required by SEC regulations to furnish the Company
with all such reports they file. Based solely on its review of the copies of
such reports received by it and written representations that no other reports
were required for such persons, the Company believes that, during fiscal year
1995, all filing requirements applicable to its executive officers, directors
and owners of more than 10% of the Company's Common Stock were complied with,
except as follows: H. W. McKay Belk and Ned R. McWherter each filed a late Form
3, Initial Statement of Beneficial Ownership, and Steven D. Caldwell and David
V. Singer each filed one late Form 4, Statement of Changes in Beneficial
Ownership.
DIRECTORS' FEES AND ATTENDANCE
Directors who are not employees of the Company are paid a retainer of
$17,600 per year, $1,100 for each Board meeting attended and $880 for each
committee meeting attended. During 1995, the Board of Directors held four
meetings. No director attended fewer than 75% of the total number of meetings of
the Board of Directors and any committees of the Board of Directors on which he
served.
The Board of Directors has an Executive Committee whose current members are
Messrs. Harrison, Jr., Harrison, III, Henson and Moore. Except as otherwise
limited by law or by resolution of the Board of Directors, the Committee has and
may exercise all of the powers and authority of the Board of Directors for the
management of the business and affairs of the Company, which power the Committee
exercises between the meetings of the full Board of Directors. The Executive
Committee did not meet in 1995.
The Board of Directors has a standing Audit Committee whose current members
are Messrs. Harrison, III, John M. Belk, Jones, Henson and Murrey. The Audit
Committee evaluates audit performance, handles relations with the Company's
independent accountants and evaluates policies and procedures relating to
internal accounting functions and controls. The Committee recommends to the
Board of Directors the appointment of the independent accountants for the
Company. The Audit Committee met four times in 1995.
9
The Board of Directors has a Compensation Committee whose current members
are Messrs. H. W. McKay Belk, Harrison, Jr., Harrison, III and Kennedy. The
Compensation Committee administers the Company's compensation plans, reviews and
may establish the compensation of the Company's officers and makes
recommendations to the Board of Directors concerning such compensation and
related matters. The Compensation Committee met two times in 1995.
The Board of Directors has a Finance Committee whose current members are
Messrs. Harrison, Jr., Harrison, III, Henson, Kennedy and McWherter. The Finance
Committee reviews, formulates and recommends to the Board of Directors financial
policies of the Company. The Finance Committee met four times in 1995.
The Board of Directors has a Retirement Benefits Committee whose current
members are Messrs. Henson, Moore and Murrey. The Retirement Benefits Committee
oversees various benefits for retired employees, including those of the
Company's employee retirement plans that are intended to meet the requirements
of the Internal Revenue Code as being qualified for favorable tax treatment. The
Retirement Benefits Committee met two times in 1995.
The Board of Directors does not have a standing nominating committee or
committee performing similar functions.
EXECUTIVE COMPENSATION
Set forth below is information concerning the annual and long-term
compensation for all services rendered in all capacities to the Company for each
of the last three (3) fiscal years for those persons who were at December 31,
1995 (i) the chief executive officer and (ii) the other four most highly
compensated executive officers of the Company (the "Named Officers").
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(1)(2) COMPENSATION(3) COMPENSATION(4)
J. Frank Harrison, III 1995 $308,250 $ 352,000 $ 84,205 $ 246,116
Vice Chairman of 1994 306,682 345,000 106,453 255,022
the Board and 1993 246,328 415,000 31,886 24,053
Chief Executive Officer
Reid M. Henson 1995 349,350 399,000 19,464 54,443
Vice Chairman of 1994 337,067 391,000 12,481 70,274
the Board 1993 303,938 505,943 14,798 45,676
James L. Moore, Jr. 1995 452,100 517,000 28,934 99,633
President and 1994 435,689 506,000 16,586 108,537
Chief Operating Officer 1993 387,178 644,535 10,739 92,428
David V. Singer 1995 246,600 141,000 16,053 30,391
Vice President and 1994 237,500 138,000 75,392 39,537
Chief Financial Officer 1993 209,167 191,730 4,011 26,010
James B. Stuart 1995 258,499 148,000 9,690 59,582
Vice President, 1994 251,069 144,659 4,177 61,672
Marketing 1993 244,900 203,719 6,712 49,387
10
(1) The amounts shown for Salary and Bonus include any amounts elected by
any Named Officer to be deferred under either the Company's
Supplemental Savings Incentive Plan (as discussed herein) or, pursuant
to Section 401(k) of the Internal Revenue Code, under the terms of the
Coca-Cola Bottling Co. Consolidated Savings Plan. Company contributions
on behalf of the Named Officers under each of these plans are included
in the "All Other Compensation" column of this table.
(2) The Company's Bonus Plan is administered by the Compensation Committee
of the Board. Any officer of the Company or any of its subsidiaries
holding a key position with the Company (or a subsidiary) is eligible
to participate, and participants are selected annually based on
management recommendations approved by the Compensation Committee.
Bonus Plan awards are determined by the Compensation Committee based on
corporate or divisional goals for selected performance indicators which
it establishes annually. Awards are generally made on the basis of a
graduated scale ranging from a "goal achievement" exceeding 89% of the
target to a maximum achievement of 110% of the target. See "Report of
the Compensation Committee on Annual Compensation of Executive
Officers."
(3) In the case of Mr. Harrison, III, includes an amount ($54,990)
representing the value of Mr. Harrison, III's personal use of Company
aircraft in 1995.
(4) Detail of amounts reported in the "All Other Compensation" column for
1995 is provided in the table below. Split-dollar insurance represents
the premiums paid by the Company for the benefit of each Named Officer.
ITEM MR. HARRISON, III MR. HENSON MR. MOORE MR. SINGER MR. STUART
(Bullet) Company contributions to the
Company Savings (401(k)) Plan $ 3,645 $ 3,645 $ 3,645 $ 3,645 $ 3,645
(Bullet) Company contributions to the
Supplemental Savings Incentive
Plan 10,127 13,998 13,934 7,907 12,579
(Bullet) Split-Dollar Insurance Premium
Value 232,344 36,800 82,054 18,839 43,358
Total All Other Compensation $ 246,116 $ 54,443 $ 99,633 $ 30,391 $ 59,582
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Following is information with respect to unexercised options to purchase
the Company's Common Stock held by Named Officers as of December 31, 1995. None
of the Named Officers exercised any stock options during fiscal year 1995. Based
on the closing price of $35.00 for shares of the Company's Common Stock on
NASDAQ/NMS on December 29, 1995, the last trading day prior to the end
11
of the Company's 1995 fiscal year, the value of the unexercised options as of
the end of the Company's fiscal year was as disclosed in the table below. The
Company has no outstanding SARs.
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS/ IN-THE-MONEY OPTIONS/
SARS HELD AT SARS HELD AT
DECEMBER 31, 1995 DECEMBER 31, 1995
(#) ($)
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
J. Frank Harrison, III (1) 127,500 22,500 $ 669,375 $ 118,125
(1) All options set forth above were granted to Mr. Harrison, III pursuant
to a Stock Option Agreement effective August 9, 1989 and are
exercisable at the price of $29.75 per share. The unexercisable options
will become exercisable in 7,500 share increments following December 31
of each year commencing in 1996 through 1998. Subject to the foregoing,
the option may be exercised in whole or in part at any time during a 15
year period commencing on the date of grant.
RETIREMENT PLAN
The Company has in effect a unit benefit retirement plan for the majority
of its non-union employees (the "Retirement Plan"), with payments thereunder
computed on an actuarial basis. The following table shows the estimated annual
benefits payable upon retirement at age 65 to persons born in 1946 for various
classifications of compensation and years of service.
ANNUAL BENEFIT UNDER RETIREMENT PLAN
For Plan Participants Born in 1946
FIVE-YEAR
AVERAGE YEARS OF SERVICE
COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
$ 125,000 $25,371 $33,828 $42,285 $50,742 $50,742
150,000(1) 31,371 41,828 52,285 62,742 62,742 (2)
(1) Prior to January 1, 1989, the formula for determining benefits did not
limit the amount of compensation (generally compensation as reported on
Form W-2 for income tax withholding purposes) which could be
considered. Benefits which accrue after December 31, 1988 are limited
as to the amount of compensation which may be considered. Beginning in
1989, this amount was limited to $200,000 to be adjusted for cost of
living increases beginning in 1990. In 1994 the amount was further
reduced to $150,000, which amount will be adjusted for cost of living
increases beginning in 1995, but only to the extent that such increases
exceed increments of $10,000. The limit did not increase for 1995 or
1996. No retroactive adjustments are permitted. Since the allowable
annual benefit amount is the same for all compensation levels in excess
of the current limit of $150,000, the table does not separately list
the annual benefit for such additional levels of compensation.
12
(2) The annual benefit from the Retirement Plan may not exceed $90,000 as
adjusted for cost of living increases beginning in 1988; in 1995 the
amount, as adjusted, is $120,000. This benefit is reduced by 1/15 for
each of the first three years that actual retirement precedes a
participant's Social Security Retirement Age. For someone born in 1946,
the Social Security Retirement Age is 66. In 1995 the maximum benefit
was $112,000 for a person who retires at age 65, the earliest Normal
Retirement Age specified by the Retirement Plan; the maximum benefit
amount is $112,000 for 1996, as well.
The benefits listed in the table, which are based on straight life annuity
amounts, are not subject to any deduction for Social Security or other offset
amounts, except to the extent that the benefits formula includes average
compensation in excess of Covered Compensation (as defined below). As of
December 31, 1995, the Named Officers have the following full years of service
as defined in the Retirement Plan: Mr. Harrison III, 18 years; Mr. Henson, 13
years; Mr. Moore, 9 years; Mr. Singer, 10 years; and Mr. Stuart, 5 years.
Generally, compensation is remuneration paid to Retirement Plan
participants by the Company for services rendered as reported or reportable for
federal income tax withholding purposes. During a period of disability, a
participant is deemed to have earned compensation at the same rate he was paid
during the last full year prior to the disability. In general, Covered
Compensation is the average of the Social Security taxable wage base during the
35 year period immediately prior to the participant reaching Social Security
Retirement Age. At any point in time, this taxable wage base is assumed to
continue without increasing for all years after the year in which it is
calculated. Pursuant to these assumptions, Covered Compensation for 1995 for the
Named Officers is as follows: Mr. Moore, $46,128; Mr. Stuart, $46,128; Mr.
Henson, $41,676; Mr. Singer, $59,568; Mr. Harrison, III, $58,524. No benefits
are payable to a participant whose employment terminates before he has been
credited with five years of service or has both reached age 65 and begun to
participate in the Retirement Plan at least five years before his employment
terminated.
OFFICER RETENTION PLAN
Under the Company's Officer Retention Plan ("ORP"), a participant receives
a 20-year annuity payable in equal monthly installments commencing at retirement
or, in certain instances, upon termination of employment. The retirement
benefits under the ORP increase with each year of the participant's
participation in the ORP based on the product of an assumed rate of increase in
a participant's beginning salary (as determined by the Compensation Committee)
and factors prescribed by the ORP. The retirement benefits under the ORP are not
payable to the participants unless they remain in the employment of the Company
until they attain age 60, except in the event of total disability (at which time
they would be paid on a present value basis).
The ORP contains a death benefit which must be paid in a lump sum. If the
participant dies before annuity payments begin, then the death benefit equals
the retirement benefit accrued as of the date of death, except that there is a
further reduction of 50% of the amount otherwise payable for deceased
participants whose employment with the Company terminated prior to age 60. If
the participant dies
13
after annuity payments have begun, the monthly installments remaining are paid
to the participant's beneficiary in a lump sum after applying a discount rate of
8% per annum.
The ORP provides that in the event of a Change in Control in the ownership
of the common stock of the Company (as more specifically described in connection
with the Supplemental Savings Incentive Plan below), if in connection therewith
(i) the ORP is terminated by the Company or amended so as to materially reduce
the rights and benefits of an ORP participant, (ii) the participant is
terminated by the Company without cause, (iii) the participant is demoted or has
his salary and/or benefits materially reduced, or (iv) the Company takes other
action which denies the participant the position and economic entitlements which
he had under the ORP prior to the Change in Control, then the participant may
elect to have paid to him 100% of the retirement benefits to which he was
entitled at the time of the Change in Control, plus 50% of any increase in his
retirement benefits which accrued between the date of the Change in Control
through the date of his election.
The 1995 annual compensation used for determining benefits under the ORP
for the Named Officers is as follows: Mr. Harrison, III, $237,160; Mr. Henson,
$339,279; Mr. Moore, $430,173; Mr. Singer, $224,869; and Mr. Stuart, $276,528.
Each of those individuals presently is credited with five years of participation
in the ORP.
SUPPLEMENTAL SAVINGS INCENTIVE PLAN
Pursuant to the Company's Supplemental Savings Incentive Plan ("SSIP"), the
Company and the participant agree to defer a portion of salary and bonuses. The
Company matches 30% of the first 6% of salary (excluding bonuses) deferred by
the participant. The Company may also make discretionary contributions to any
one or more participants which contributions are to be both based on merit and
intended to offset the impact of the reduced compensation limit for qualified
plans (see "Retirement Plan," above). A participant is fully vested in the
salary and bonuses he defers and becomes fully vested in Company contributions
upon death, disability, retirement on or after age 55, the completion of at
least five years of service (vesting occurring at a 20% rate for each year of
service) or a Change in Control. "Change in Control" for these purposes includes
the acquisition by any person or group of more than 50% of the total vote of all
shares of common stock of the Company for the election of the Board of Directors
and is presumed to occur in the event that J. Frank Harrison, Jr. and his issue
(or persons acting on their behalf) should be entitled to vote less than 50% of
the total votes of all shares of common stock of the Company for the election of
directors. Deferrals and Company contributions may be placed in either a Fixed
Benefit Option or designated among investment funds specified by the Company.
Such investment funds are only used to measure the value of benefits, which
benefits comprise the Supplemental Account of a participant. There is no
requirement that any money held in the SSIP actually be invested in any such
fund.
The schedule of benefits for a Fixed Benefit Option provides for earnings
up to 13% (depending on the participant's age and years of service at retirement
or termination due to total disability, as applicable). Benefits which start
after age 60 are increased at the rate of 6% compounded annually, while benefits
paid on account of severance are deemed to earn 8% compounded annually.
14
Amounts held in a Supplemental Account may be transferred to a Fixed
Benefit Option. No investment in a Fixed Benefit Option may be transferred to a
Supplemental Account.
Benefits paid on account of a Change in Control are made within 30 days
following a Change in Control; all other payments are made (or begin) in the
first January after a payment has been requested and satisfactory evidence has
been furnished that the participant has become entitled to receive such benefit.
All benefits for severance, benefits arising from a Change in Control, death
benefits for participants who are not insurable, and benefits payable out of
Supplemental Accounts are made in a lump sum. Other payments made from the Fixed
Benefit Option are normally paid on a monthly basis for 180 months, although the
Compensation Committee may approve a lump sum payment or an annuity for a period
of less than 180 months. No executive officer received a distribution during
1995. The amount of Company contributions allocated to each of the Named
Officers during 1995 is reflected in the Summary Compensation Table under the
heading, "All Other Compensation."
OFFICERS' SPLIT-DOLLAR LIFE INSURANCE PLAN
The Company has established an Officers' Split-Dollar Life Insurance Plan
for all officers, including the Named Officers. Special arrangements have been
provided for J. Frank Harrison, III and Reid M. Henson, as described below.
Insurance policies purchased under the plan are whole life policies having a
face amount, in most instances, equal to approximately three times each
officer's salary (approximately six times in the case of the Named Officers).
The Company pays all premiums on each officer's policy. Policy dividends are
used to purchase paid up additions. Upon the death of any participant, the
participant's beneficiary would receive a stated death benefit, with the balance
of the proceeds from the participant's policy being paid to the Company.
The dollar amount representing the insurance premiums paid by the Company
for the benefit of each of the Named Officers under the Officers' Split-Dollar
Life Insurance Plan is included in the Summary Compensation Table under the
heading "All Other Compensation."
A separate split-dollar insurance policy has been obtained covering Mr.
Henson. In the event of his death, the Company would receive an amount equal to
all premiums paid on the policy, subject to the death benefit payable to Mr.
Henson's beneficiary being not less than $1,000,000.
The split-dollar life insurance arrangement for J. Frank Harrison, III
varies from the standard split-dollar plan. A trust established by Mr. Harrison,
III pays the PS-58 cost and the Company pays the remaining portion of the
premium. This arrangement allows Mr. Harrison, III to obtain additional
insurance coverage with no increase in the net present value of the projected
costs of this arrangement for the Company. Under this revised arrangement, at
the death of the insured the Company receives a return of the aggregate premiums
it has paid.
EMPLOYMENT AGREEMENTS
James L. Moore, Jr., is employed as President and Chief Operating Officer
pursuant to an employment agreement dated March 16, 1987, as amended on May 18,
1994, at an annual salary of not less
15
than $275,000. Mr. Moore is also entitled under the agreement to other fringe
benefits generally available from time to time to the Company's executive
officers. The agreement provides that it may be terminated by either party at
any time, with or without cause. In the event Mr. Moore's employment is
terminated by the Company for cause (as defined in the agreement), or if Mr.
Moore voluntarily terminates his employment with the Company, Mr. Moore will
receive only benefits accrued through the date his employment is terminated. If
the Company terminates Mr. Moore's employment without cause, Mr. Moore shall
receive his salary (i) at the annual rate of $275,000 for the period through May
18, 1999 or (ii) for a period of two years from the date of termination at the
specified annual rate of $440,000, whichever is greater.
REPORT OF THE COMPENSATION COMMITTEE ON ANNUAL
COMPENSATION OF EXECUTIVE OFFICERS
The Board's Compensation Committee, composed of Messrs. H. W. McKay Belk,
J. Frank Harrison, Jr., J. Frank Harrison, III, and David L. Kennedy, Jr,
administers the Company's compensation plans, reviews and may establish
executive compensation and makes recommendations to the Board concerning such
compensation and related matters. The following is a report submitted by the
Compensation Committee members addressing the Company's compensation policy as
it relates to the Company's executive officers, including the Named Officers,
for 1995.
COMPENSATION POLICY AND FISCAL 1995 COMPENSATION
The Company's executive compensation policy is designed to establish an
appropriate relationship between executive pay and the creation of long term
shareholder value, while motivating and retaining key employees. To achieve
these goals, the Company's executive compensation policy supplements annual base
compensation with an opportunity to earn bonuses based upon corporate
performance as well as subjective factors related to each individual's
performance. Accordingly, a significant portion of any executive's compensation
may consist of performance-based bonuses. Measurement of corporate performance
is primarily based on Company objectives which are set based on industry
conditions and industry-wide performance levels and approved by the Board of
Directors. The performance of individual executives is evaluated on the basis of
both objectively determined performance goals for the Company and subjective
factors related to the qualitative contributions of each individual.
Base salaries, including the base salary of J. Frank Harrison, III, the
Company's Chief Executive Officer, were adjusted from the prior year. The
Company periodically reviews base salary levels for its executives in comparison
with those of other companies in the soft drink bottling industry, as well as
other industries. For 1995, the Company utilized a study published by Wyatt
Executive Compensation Services which surveyed over 1200 public corporations,
including many "Fortune 500" companies. The survey provided compensation
information by separate categories of employers. Employer categorization factors
included, but were not limited to, those defined by industry, size and
geographic location. The Company strives to maintain base executive salaries at
a level that will permit it to compete
16
with other major companies for managers with comparable qualifications and
abilities. Based on information contained in the Wyatt survey, the Compensation
Committee believes that the overall compensation of the Company's executive
officers, taken in the aggregate, places them at the median range of the
compensation scale of similarly situated executives in all industries covered by
the survey. The Compensation Committee believes that Mr. Harrison, III's overall
compensation places him below the median range for similarly situated
executives.
Other factors considered by the Company in its periodic review of executive
salary levels include (i) the Company's total operating budget for each fiscal
year; (ii) the impact of annual changes in the consumer price index; and (iii) a
comparison of the Company's executive compensation program to available
information concerning those of other companies in the soft drink bottling
industry, focusing specifically on the three publicly traded soft drink bottlers
utilized by the Company in developing the "peer group index" utilized in the
stock price performance graph included elsewhere in this proxy statement. Due to
wide disparities in levels of executive compensation revealed in the published
information regarding the other companies included in the Company's peer group
index, the Compensation Committee does not believe that such information
provides a meaningful basis for evaluating the overall compensation of the
Company's executive officers for the current fiscal year, and therefore relied
principally upon the information contained in the Wyatt survey for purposes of
such evaluation.
The Company's Bonus Plan is administered by the Compensation Committee,
which annually selects participants (based on management recommendations) who
hold key positions with the Company or one of its subsidiaries. The total cash
bonus awardable to a participant is determined by multiplying such participant's
base salary by three factors: (i) the participant's approved bonus percentage
factor; (ii) the individual's indexed performance factor; and (iii) the overall
goal achievement factor. The participant's approved bonus percentage factor is
based on the relative responsibility and contribution to the Company's
performance attributed to the participant's position with the Company, while the
individual's indexed performance factor is determined by such individual's
actual performance during the fiscal year. The overall goal achievement factor
is determined by the Company's performance in relation to pre-set goals, as
discussed below.
Annual goals for selected performance indicators are set in the fourth
quarter for the succeeding year. These goals are reviewed by the Compensation
Committee and approved by the Board of Directors. The selected performance
indicators for 1995 were operating cash flow, free cash flow, net income,
equivalent case volume, market share and a value measure. The Compensation
Committee also assigns different weights to each of the performance indicators
based on the perceived need to focus more or less on any particular objective in
a given year. The corporate performance indicators and related weights are
established after evaluating the industry conditions, available information on
performance of other companies in the soft drink bottling industry, prior year
performance and the Company's specific needs for the current year. For fiscal
1995, the following weights were assigned to the performance indicators:
operating cash flow -- 30%; free cash flow -- 30%; net income -- 10%; equivalent
case volume -- 10%; market share -- 10%; and value measure -- 10%. The
performance indicators, as weighted, make up the Company's overall goal
achievement factor, which is calculated on the basis of a graduated scale
ranging from a goal achievement exceeding 89% of the target to a
17
maximum achievement of 110% of the target for each performance indicator. Target
goals were met or exceeded for each of the performance indicators.
Although the Company's Bonus Plan enables the Compensation Committee to
calculate bonuses derived from the factors described above, the Compensation
Committee has absolute discretion to decrease, eliminate or otherwise amend
awards under the Company's Bonus Plan. The Compensation Committee elected to
award bonuses to executive officers in an amount equal to 114% of 1995 base
salary multiplied by each officer's approved bonus percentage factor. The amount
of annual bonus payments for each of the Named Officers for the years 1993, 1994
and 1995 is shown in the Summary Compensation Table under the heading "Bonuses."
In addition to the annual base salary and performance-based bonus
components, the Company's total annual compensation package for its executives
includes the opportunity: (i) to participate, on the same basis as other
non-union employees, in the Coca-Cola Bottling Co. Consolidated Savings Plan
(Company contributions for each of the Named Officers are included under "All
Other Compensation" in the Summary Compensation Table); (ii) to participate in
the Officers' Split-Dollar Life Insurance Plan; (iii) to participate in the
Company's Retirement Plan which is available to all eligible employees; (iv) to
elect to defer a certain portion of each executive's compensation and receive
limited matching contributions from the Company under the Supplemental Savings
Incentive Plan (Company contributions for each of the Named Officers are
included under "All Other Compensation" in the Summary Compensation Table); and
(v) for certain key executives selected by the Compensation Committee, to
receive additional retirement and survivor benefits pursuant to the Officer
Retention Plan. (The Retirement Plan, the Officers' Split-Dollar Life Insurance
Plan, the Supplemental Savings Incentive Plan and the Officer Retention Plan are
each discussed in greater detail in the preceding section of this Proxy
Statement.) This overall package is designed to attract and retain qualified
executives and to ensure that such executives have a continuing stake in the
long-term success of the Company.
The Company has not yet established a policy with respect to qualifying
compensation paid to its executive officers for deductibility under Section
162(m) of the Internal Revenue Code. No executive officer of the Company has
been paid applicable employee remuneration (as defined by Section 162(m)) in
excess of $1,000,000 in any fiscal year.
The Company's compensation policies apply equally to all of its executive
officers, including each of those named in the compensation table.
Although Mr. Harrison, III serves as a member of the Compensation
Committee, he did not participate in any of the Committee's decisions related to
the determination of his own compensation.
Submitted by the Compensation Committee of the Board of Directors.
H. W. McKay Belk J. Frank Harrison, III
J. Frank Harrison, Jr. David L. Kennedy, Jr.
18
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Board of Directors' Compensation Committee for fiscal
year 1995 were Messrs. H. W. McKay Belk, Harrison, Jr., Harrison, III and
Kennedy. Mr. Harrison, Jr. is Chairman of the Board of Directors of the Company,
and Mr. Harrison, III is a Vice Chairman of the Board of Directors and the
Company's Chief Executive Officer.
On November 30, 1992, the Company and the owner of the property on which
the Company operates its Snyder Production Center agreed to the early
termination of the Company's lease of this property. Harrison Limited
Partnership One ("HLP One"), a North Carolina limited partnership, purchased the
property contemporaneously with the termination of the lease, and the Company
and HLP One entered into an agreement pursuant to which the Company is leasing
the property for a ten-year term which commenced December 1, 1992. JFH
Management, Inc., a North Carolina corporation of which J. Frank Harrison, Jr.
is the sole shareholder, serves as sole general partner of the limited
partnership that purchased the production center property. The sole limited
partner of this limited partnership is a trust as to which J. Frank Harrison,
III and Reid M. Henson are co-trustees, share investment powers, and as to which
they share voting power for purposes of this partnership interest. The
beneficiaries of this trust are J. Frank Harrison, Jr. and his descendants.
On June 1, 1993, Beacon Investment Corporation, a North Carolina
corporation of which J. Frank Harrison, III is sole shareholder, purchased the
office building located on Rexford Road in Charlotte, North Carolina, in which
the Company leases its executive offices. Contemporaneously, the Company entered
into a ten-year lease commencing June 1, 1993 with Beacon Investment Corporation
for office space within the building.
Under these agreements, the annual base rents which the Company is
obligated to pay for its lease of the Snyder Production Center and its executive
offices are subject to annual adjustments corresponding to the Consumer Price
Index. The base rent for the lease of the Snyder Production Center is further
subject to increases and decreases based on the London Interbank Offered Rate of
interest ("LIBOR"), and the base rent for the lease of the executive offices is
subject to increases and decreases, as the case may be, in an Adjusted
Eurodollar Rate determined by NationsBank of North Carolina, N.A. The current
annual lease payments, as so adjusted, are $2,593,000 for the Snyder Production
Center and $1,804,000 for the Company's executive offices.
The material terms of the Snyder Production Center and office building
lease agreements are substantially similar to the lease agreements between the
Company and the properties' prior owners. The Company believes that the terms of
the Snyder Production Center and office building lease agreements are generally,
in each instance, at least as favorable as the Company could have obtained from
the prior owners.
19
COMMON STOCK PERFORMANCE
As part of the executive compensation information presented in this Proxy
Statement, the Securities and Exchange Commission requires a five-year
comparison of stock performance with a broad market equity index and with a peer
group of similar companies. The Company's Common Stock is traded on the
NASDAQ/NMS and the Company has selected the S&P 500 for use as a broad equity
market index for the purpose of this comparison. The Company selected three
publicly traded soft drink bottlers in developing a peer group index (the
"Custom Composite Index"). The peer group comprising the Custom Composite Index
consists of Coca-Cola Enterprises Inc., Coca-Cola Beverages Ltd. and National
Beverage Corp.
20
CUMULATIVE TOTAL RETURN (1)
BASED ON REINVESTMENT OF $100 BEGINNING DECEMBER 31, 1990
(The Performance Graph appears here. The plot points are listed in the
table below.)
Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95
Coca-Cola Bottling Co. $100 $111 $105 $218 $164 $223
Consolidated
S & P 500(R) $100 $130 $140 $155 $157 $215
Custom Composite Index $100 $ 96 $ 73 $ 93 $104 $158
(3 Stocks)
(1) Assumes that the value of the investment in Company Common Stock and in
each index was $100 on December 31, 1990, and that all dividends were
reinvested on a quarterly basis. Returns for the companies in the
Custom Composite Index have been weighted on the basis of total market
capitalization for each company.
21
CERTAIN TRANSACTIONS
The Company's business consists primarily of the production, marketing and
distribution of soft drink products of The Coca-Cola Company, which is the sole
owner of the secret formulas under which the primary components (either
concentrates or syrups) of its soft drink products are manufactured.
Accordingly, the Company purchases substantially all of its requirements of
concentrates and syrups from The Coca-Cola Company in the ordinary course of its
business. During fiscal year 1995, the Company paid The Coca-Cola Company
approximately $186 million for sweetener, syrups and concentrate purchases.
Additionally, the Company engages in a variety of marketing programs, local
media advertising and similar arrangements to promote the sale of products of
The Coca-Cola Company in territories operated by the Company. During fiscal year
1995, total direct marketing support provided to the Company by The Coca-Cola
Company was approximately $36 million. In addition, the Company paid
approximately $18 million for local media and marketing program expense pursuant
to cooperative advertising and cooperative marketing arrangements with The
Coca-Cola Company.
On July 2, 1993, Piedmont Coca-Cola Bottling Partnership, a Delaware
general partnership (the "Partnership"), was formed by wholly owned subsidiaries
of the Company and The Coca-Cola Company (together, the "Partners") to engage in
the business of distributing and marketing finished bottle/can and fountain
beverage products under trademarks of The Coca-Cola Company and other third
party licensors in portions of North Carolina, South Carolina, Virginia and
Georgia. A Company subsidiary ("CCBCC Sub") is a general partner and owns a 50%
interest in the Partnership. A subsidiary of The Coca-Cola Company ("KO Sub") is
the other general partner, and it owns the remaining 50% interest in the
Partnership. All distributions of cash flow and profits and losses of the
Partnership are allocated between KO Sub and CCBCC Sub on a 50/50 basis. The
Partnership has an initial term of 25 years subject to early termination as a
result of any Dissolving Event, as defined in the Partnership Agreement. Each
Partner's partnership Interest is subject to certain limitations on transfers,
rights of first refusal and other purchase rights upon the occurrence of certain
events. CCBCC Sub and KO Sub made equal initial capital contributions with KO
Sub's contribution being in the form of cash and CCBCC Sub's contribution being
comprised of the Wilson, North Carolina and Greenville and Beaufort, South
Carolina bottling territories and other related assets and cash. Following the
formation of the Partnership, the Company and certain of its subsidiaries caused
the sale to the Partnership of the Charleston, Greenwood, Columbia, Anderson and
Aiken, South Carolina and Plymouth, North Carolina bottling territories and
other related assets and The Coca-Cola Company caused the sale to the
Partnership of assets and capital stock of subsidiaries having bottling
territories located in and around Kinston, Greenville, Goldsboro, Wilmington,
Rocky Mount, Weldon and Kelford, North Carolina; Marion, Conway and Florence,
South Carolina; and Emporia, Virginia.
The Company is providing the manufacture, production and packaging of the
products and the management of the Partnership pursuant to a Management
Agreement. In consideration for its services, the Company receives a management
fee based on total case sales, reimbursement for its out-of-pocket expenses and
reimbursement for sales branch, division and certain other expenses. The term of
the Management Agreement is 25 years, subject to early termination in the event
of a "Change in Control" as defined therein, a termination of the Partnership or
a material default by either party. For the fiscal
22
year ending December 31, 1995, the Partnership recorded management fees in the
amount of approximately $10.7 million to the Company pursuant to the Management
Agreement.
Mr. David L. Kennedy, Jr., a director of the Company, is Senior Vice
President and General Manager -- Coca-Cola USA -- Fountain. During the period
from 1987 to 1993, The Coca-Cola Company purchased an aggregate of 2,488,497
shares of Common Stock (31.3% of the outstanding shares of such class as of
March 14, 1996) and 269,158 shares of Class B Common Stock (20.1% of the
outstanding shares of such class as of March 14, 1996) from the Company. These
transactions occurred pursuant to (i) a negotiated, direct purchase of shares
from the Company, (ii) an exchange of Common Stock for all of the outstanding
shares of The Coca-Cola Bottling Company of West Virginia, Inc., which were
owned by The Coca-Cola Company and (iii) the exercise by The Coca-Cola Company
of its preemptive right to purchase additional shares of Common Stock pursuant
to the Stock Rights and Restrictions Agreement (described below) that was
triggered by the Company's issuance of Common Stock to Mr. Harrison, Jr. in
connection with the Company's acquisition of Whirl-i-Bird, Inc. in April 1993.
See "Principal Shareholders" and the notes to the tabular information
presented therein for additional information concerning The Coca-Cola Company's
beneficial ownership of Common Stock and Class B Common Stock.
Pursuant to a Stock Rights and Restrictions Agreement dated January 27,
1989, between the Company and The Coca-Cola Company, The Coca-Cola Company
agreed not to purchase or acquire additional shares of Common Stock or Class B
Common Stock except as contemplated or provided in the agreement; and not to
sell or otherwise dispose of shares of Class B Common Stock without converting
them into Common Stock. The Coca-Cola Company granted the Company a right of
first refusal with respect to any sale, assignment, transfer or other
disposition by The Coca-Cola Company of such shares, and the Company granted The
Coca-Cola Company certain registration rights with respect to such shares. The
Stock Rights and Restrictions Agreement contains provisions under which The
Coca-Cola Company has agreed that if its equity ownership or voting interest
exceeds current levels (as adjusted by the Company's right to call described
below) then it will negotiate in good faith with the Company to sell to the
Company the number of shares of Common Stock or convert the number of shares of
Class B Common Stock necessary to reduce its equity or voting interest to
current levels, as adjusted. In the event that the Company issues new shares of
Class B Common Stock upon the conversion or exercise of any security, warrant or
option of the Company which results in The Coca-Cola Company owning less than
20% of the outstanding shares of Class B Common Stock and less than 20% of the
total votes of all outstanding shares of all classes of the Company, The
Coca-Cola Company has the right to convert shares of Common Stock to shares of
Class B Common Stock in order to maintain its ownership of 20% of the
outstanding shares of Class B Common Stock and 20% of the total votes of all
outstanding shares of all classes of the Company. Under the Stock Rights and
Restrictions Agreement, The Coca-Cola Company has a preemptive right to purchase
a percentage of any newly issued shares of any class as necessary to allow it to
maintain ownership of both 29.67% of the outstanding shares of Common Stock of
all classes and 22.59% of the total votes of all outstanding shares of all
classes. The number of shares issuable to The Coca-Cola Company as a result of
any exercise of its conversion right or its preemptive right described herein is
subject to adjustment by the
23
Company's right to call described below and by any voluntary disposition of the
shares held by The Coca-Cola Company.
Pursuant to the Stock Rights and Restrictions Agreement, The Coca-Cola
Company granted the Company the right, from and after the sixth anniversary of
the date of such agreement through the thirtieth anniversary, at the Company's
sole option and from time to time, to call for redemption that number of
Purchased Shares (as defined in such agreement) which would reduce The Coca-Cola
Company's ownership of the equity of the Company to 20% at a price and on such
terms as set forth in the agreement; provided, however, that in no event shall
the price be less than $42.50 per share (subject to appropriate adjustment to
reflect changes in the Company's capital structure and except for shares issued
to The Coca-Cola Company to maintain its proportionate ownership of Common
Stock).
The Coca-Cola Company was also given the right to have its designee
proposed by the Company for nomination to the Company's Board of Directors and
to have such person (or a successor) nominated at each subsequent election of
the Company's directors, subject to certain conditions. Mr. Kennedy's nomination
for election as a director of the Company was made in accordance with the terms
of this agreement.
The Coca-Cola Company, J. Frank Harrison, Jr., J. Frank Harrison, III and
Reid M. Henson, in his capacity as co-trustee of certain trusts holding shares
of Class B Common Stock, also entered into a Voting Agreement dated January 27,
1989 (the "Voting Agreement"). Pursuant to the Voting Agreement, Mr. Harrison,
Jr., Mr. Harrison, III and Mr. Henson (as co-trustee), agreed to vote their
shares of Common Stock and Class B Common Stock for a nominee of The Coca-Cola
Company for election, as a director, to the Company's Board of Directors, and
The Coca-Cola Company granted an irrevocable proxy (the "Irrevocable Proxy")
with respect to all shares of Class B Common Stock and Common Stock owned by The
Coca-Cola Company (and any shares of Common Stock into which shares of Class B
Common Stock are converted or exchanged) to J. Frank Harrison, III for life and
thereafter to J. Frank Harrison, Jr. The Irrevocable Proxy covers any matters on
which holders of Class B Common Stock or Common Stock are entitled to vote,
other than certain mergers, consolidations, sales of assets and other similar
corporate reorganizations or corporate transactions.
Pursuant to the terms of the Voting Agreement, J. Frank Harrison, III (or,
in the event of his death, J. Frank Harrison, Jr.) was granted the option
(assignable to the Company or to J. Frank Harrison, Jr.) to purchase the shares
of Class B Common Stock held by The Coca-Cola Company at a price per share
determined in accordance with the Voting Agreement, exercisable on certain
conditions relating to termination of the disproportionate voting rights of the
Class B Common Stock.
The Voting Agreement and Irrevocable Proxy terminate upon the written
agreement of the parties, or at such time as The Coca-Cola Company is not the
beneficial owner of any shares of the Company's common stock. The Irrevocable
Proxy terminates at such time as: (i) J. Frank Harrison, Jr. or J. Frank
Harrison, III do not collectively own all 712,796 shares of Class B Common Stock
owned by J. Frank Harrison, Jr., or (ii) certain trusts holding shares of Class
B Common Stock subject to the Voting Agreement do not collectively own at least
50% of the Class B Common Stock held by them at the date of the Voting
Agreement.
24
On December 17, 1988, J. Frank Harrison, Jr., J. Frank Harrison, III and
certain trusts holding shares of Class B Common Stock entered into a
Shareholder's Agreement with The Coca-Cola Company. Pursuant to the agreement,
which has a term of ten years, expiring in 1998: (i) the Harrisons expressed a
commitment to remain actively involved and interested in the management and
operations of the Company during the term of the agreement; (ii) the Harrisons
agreed not to dispose of their shares of Common Stock and Class B Common Stock
during the term of the agreement (other than to certain permitted transferees)
without first offering such shares to The Coca-Cola Company; (iii) the Harrisons
were granted the right (the exercise of which could result in a change in
control of the Company), exercisable for a period of five years following the
fifth anniversary of the agreement, to cause The Coca-Cola Company to purchase
all or a portion of their shares of Common Stock and Class B Common Stock
subject to the agreement at a price per share and on such terms as determined by
the agreement; and (iv) The Coca-Cola Company was granted the right to acquire
the Harrisons' shares of Common Stock and Class B Common Stock at a price per
share and on such terms as determined by the agreement upon the circumstance of
an offer having been made which, if consummated, would result in a change in
control of the Company or the sale of all or substantially all of the assets of
the Company, and provided that the Harrisons intend to vote in favor of such
transaction.
During the fiscal year ended December 31, 1995, the Company paid legal fees
of $700,541 to Witt, Gaither & Whitaker, P.C., a law firm in which John W.
Murrey, III, a director of the Company, and John F. Henry, Jr., Secretary of the
Company, are members.
25
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has appointed the firm of Price
Waterhouse LLP to serve as the Company's independent accountants for the fiscal
year ending December 29, 1996. Price Waterhouse LLP has served in that capacity
since 1968.
A representative of Price Waterhouse LLP will be present at the Annual
Meeting and will have the opportunity to make a statement if he desires to do so
and is expected to be available to respond to appropriate questions.
RECOMMENDATIONS OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the Company's shareholders vote FOR
fixing the number of directors at ten and FOR electing the Board of Directors'
nominees for directors as set forth in this Proxy Statement.
SHAREHOLDER PROPOSALS
In the event any shareholder wishes to present a proposal to the
shareholders of the Company at the 1997 Annual Meeting of Shareholders, such
proposal must be received by the Company for inclusion in the proxy statement
and form of proxy relating to such meeting on or before November 19, 1996.
26
ADDITIONAL INFORMATION
The entire cost of soliciting proxies will be borne by the Company. In
addition to this solicitation of proxies by mail, proxies may be solicited by
the Company's directors, officers and other employees by personal interview,
telephone and telegram. Such persons will receive no additional compensation for
such services. Furthermore, Georgeson & Co., Inc., Wall Street Plaza, New York,
New York 10005, has been retained to assist the Company in the solicitation of
brokers, banks and other similar entities holding shares for other persons.
Georgeson & Co., Inc. will receive a payment of $6,500 for these services. All
brokers, banks and other similar entities and other custodians, nominees and
fiduciaries will be requested to forward solicitation materials to the
beneficial owners of the shares of Common Stock and Class B Common Stock held of
record by such persons, and the Company will pay such brokers, banks and other
fiduciaries all of their reasonable out-of-pocket expenses incurred in
connection therewith.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present, and has not been informed that any other person intends to
present, any matter to be acted upon at the Annual Meeting other than those
specifically referred to in this Proxy Statement. If other matters should
properly come before the Annual Meeting, it is intended that the holders of the
proxies will act in respect thereto in accordance with their best judgment.
John F. Henry, Jr.
SECRETARY
Date: April 23, 1996
27
*******************************************************************************
APPENDIX
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
COCA-COLA BOTTLING CO. CONSOLIDATED
PROXY
ANNUAL MEETING OF SHAREHOLDERS, MAY 15, 1996
The undersigned hereby appoints J. Frank Harrison, Jr., Ned R.
McWherter, James L. Moore, Jr. and J. Frank Harrison, III, and each of them
proxies, with full power of substitution, to act and to vote the shares of
common stock which the undersigned is entitled to vote at the Annual Meeting of
Shareholders to be held at Snyder Production Center, 4901 Chesapeake Drive,
Charlotte, North Carolina 28216, at 10:00 a.m., E.D.T., on May 15, 1996, and any
adjournment or adjournments thereof, as follows:
1. FIXING THE NUMBER OF DIRECTORS AT TEN:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. ELECTION OF DIRECTORS: [] FOR all nominees listed below [] WITHHOLD AUTHORITY
(Except as marked to the contrary to vote for all nominees listed
below) below
John M. Belk; David L. Kennedy, Jr.; and Reid M. Henson
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
3. Acting upon any other business which may be properly brought before said
meeting or any adjournment or adjournments thereof;
(Continued on other side)
(Continued from other side)
according to the number of votes and as fully as
the undersigned would be entitled to vote if
personally present, hereby ratifying and
confirming all that said proxies or any of them
lawfully do or cause to be done by virtue hereof.
A majority of said proxies who shall be present
and acting as such at the meeting or any
adjournment thereof, or if only one such proxy be
present and acting, then that one, shall have and
may exercise all the powers herein conferred.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
IN FAVOR OF PROPOSALS 1 AND 2, AND WILL BE VOTED IN ACCORDANCE WITH THE BEST
JUDGMENT OF THE PROXYHOLDERS IN ACTING UPON ANY OTHER BUSINESS WHICH MAY BE
PROPERLY BROUGHT BEFORE SAID MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders, dated April 23, 1996, and the Proxy Statement furnished
therewith.
If you plan to attend the Annual Meeting of Shareholders on May 15, 1996,
please check the following box: []
Dated this ..... day of ..... ,
1996
(Seal)
Note: Signature should agree
with name on stock certificate
as printed thereon. Executors,
administrators, trustees and
other fiduciaries and persons
signing on behalf of
corporations or partnerships,
should so indicate when
signing.
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ACCOMPANYING PREPAID
SELF-ADDRESSED ENVELOPE. THANK YOU.
