EXHIBIT 10.1
July 13, 2004
Xx. Xxxx X. Xxx Chief Executive Officer Coca-Cola Enterprises Inc. 0000 Xxxxx
Xxxxx Xxxxxxx Xxxxxxx, Xxxxxxx 00000
Re: TERMINATION OF GROWTH INITIATIVE PROGRAM AGREEMENT, ELIMINATION OF SMF
FUNDING, AND NEW CONCENTRATE PRICING SCHEDULE
Dear Xxxx,
Pursuant to our mutual desire to simplify the business relationship between The
Coca-Cola Company ("TCCC") and Coca-Cola Enterprises Inc. ("CCE"), this letter
confirms that our companies have agreed to: (1) terminate the Growth Initiative
Program Agreement dated April 15, 2002, as amended March 11, 2003 (the "SGI
Agreement"); (2) eliminate the SMF Funding program for CCE; (3) implement a new
concentrate pricing schedule for certain products of TCCC distributed by CCE in
the United States; and (4) implement a new concentrate pricing schedule for
certain products of TCCC distributed by CCE in Canada. All these changes were
effective on May 1, 2004 with the exception of Canada which was effective on
June 1, 2004. The details are as follows:
TERMINATION OF GROWTH INITIATIVE PROGRAM AGREEMENT
The SGI Agreement is hereby terminated by the mutual consent of the parties,
effective May 1, 2004. Except as specifically set forth below, the parties shall
have no further rights or obligations pursuant to the SGI Agreement.
YEAR-TO-DATE SGI VOLUME GROWTH AND FUNDING OBLIGATIONS
TCCC has paid CCE $41,250,000 year to date in Incentive Funding pursuant to the
SGI Agreement, and TCCC will pay to CCE $6,750,000 on or before July 15, 2004.
The parties acknowledge and agree that CCE's volume performance year to date and
TCCC's payment of Incentive Funding as described above are in full and complete
satisfaction of the parties' contractual obligations regarding volume
performance and payment of Incentive Funding, respectively, pursuant to the SGI
Agreement, and the parties release each other from any claims that one may have
against the other relating to prior years under the SGI Agreement or any other
matters under the SGI Agreement.
RESTATED CONTRACTUAL RIGHTS AND OBLIGATIONS FOLLOWING TERMINATION OF THE SGI
AGREEMENT
There are certain statements of intent and contractual rights and obligations
reflected in the SGI Agreement that the parties wish to restate and reaffirm
following termination of the SGI Agreement, as follows:
o TCCC and CCE will work in a collaborative, coordinated way so that both
companies can succeed in accelerating sustainable value share growth of
TCCC brands in CCE territories. We will work together to try to find ways
to meet our objectives and to strengthen our long-term relationship in a
balanced fashion. Each company's management group will be outward
proponents of the finest, best and most collaborative relationship in the
non-alcoholic beverages industry.
o CCE agrees that as it regards its territories outside of the European
Economic Area, TCCC will be the principal brand company for CCE. TCCC
likewise agrees that CCE will be the principal operating and distribution
company in its geographies outside of the European Economic Area for TCCC.
o CCE and TCCC will jointly develop the annual marketing plans for all
applicable geographies and major customers.
o In the United States, CCE will retain responsibility for 100% of CTM
expense, except for such expense incurred in connection with the customers
identified on SCHEDULE 1 hereto, for which a mutually agreed sharing
relationship will be maintained. TCCC will retain 100% of expense (and
associated commission revenue) for local media in CCE's United States
territory.
The parties agree that the foregoing statements of intent and contractual rights
and obligations will remain in effect until terminated in a writing signed by
both parties.
ELIMINATION OF SMF FUNDING PROGRAM
The "Special Marketing Fund" or "SMF" funding program for CCE's United States
territories is eliminated effective May 1, 2004.
NEW CSD CONCENTRATE PRICING SCHEDULE
Effective May 1, 2004, TCCC has implemented lower concentrate prices for
certain products of TCCC sold by CCE in the United States, to reflect the
financial impact of the SGI and SMF changes described in this letter. This
revised concentrate pricing schedule was confirmed in a letter from Xxxx
Xxxxxxxx to Xxx Xxxxxxxx dated April 30, 2004.
ONGOING DISCUSSIONS
The parties acknowledge that the changes described in this letter are part of
ongoing discussions between them regarding the simplification of their
respective business models and a new economic relationship, which discussions
the parties intend to pursue diligently and in good faith.
MISCELLANEOUS
TCCC and CCE expressly reserve and do not waive any rights under applicable
bottling or distribution agreements, or any other contract or agreement,
including without limitation, the Master Bottle Contract, the Allied Bottle
Contract, the Bottler's Agreement, the Jumpstart/CAPPRs agreements, and the
parties' various bottling contracts outside the United States. TCCC and CCE
each expressly acknowledge that this letter agreement was negotiated at arms
length, is valid and enforceable according to its terms, and is supported by
adequate consideration.
The terms and conditions of this letter agreement are acknowledged by TCCC and
CCE to be strictly confidential, and the parties agree not to share the
contents hereof with any other party without the express written consent of the
other party; provided, however, that either party may make any public
disclosure that it believes in good faith to be required by applicable law or
by any listing or trading agreement concerning its public securities, in which
case the party making the disclosure will advise the other party of the
disclosure.
If this letter accurately reflects our agreement and understanding, please sign
where indicated below and return a signed copy to me.
Sincerely,
/s/ Xxx X. Xxxxxx
---------------------
Accepted and agreed to by:
Coca-Cola Enterprises Inc.
By: /s/ XXXX X. XXX
----------------------------
Xxxx X. Xxx
Chief Executive Officer
SCHEDULE 1
Customers for which a mutually agreed sharing relationship between CCNA and
Xxxxxxx will be maintained until further notice:
---------------------------------------- -------------------------------------- --------------------------------------
Airtran Airlines DECA US Military Commissaries Omni Hotels
---------------------------------------- -------------------------------------- --------------------------------------
Alaska Airlines Delta Airlines Papa Xxxx's Pizza
---------------------------------------- -------------------------------------- --------------------------------------
Aloha Airlines Domino's Pizza Princess Services
---------------------------------------- -------------------------------------- --------------------------------------
American Airlines Xxxxxx'x Pizza Radisson Hotels
---------------------------------------- -------------------------------------- --------------------------------------
Apollo Ship Chandlers Doubletree Hotels Red Roof Inns
---------------------------------------- -------------------------------------- --------------------------------------
Aramark Services Extended Stay Ritz Carlton
---------------------------------------- -------------------------------------- --------------------------------------
Army and Air Force - Exchange Fairmont Hotels Royal Caribbean Cruise Lines
---------------------------------------- -------------------------------------- --------------------------------------
Blockbuster Entertainment Hawaiian Airlines Simon Services
---------------------------------------- -------------------------------------- --------------------------------------
Boston Market Hilton Hotels Sky West Airlines
---------------------------------------- -------------------------------------- --------------------------------------
Boys & Girls Clubs Hilton International Sodexho Marriott
---------------------------------------- -------------------------------------- --------------------------------------
Carnival/Holland America Holiday Inn/Six Continents Southwest Airlines
---------------------------------------- -------------------------------------- --------------------------------------
Cendant Headquarters Host Marriott Services Starwood Lodging Corp
---------------------------------------- -------------------------------------- --------------------------------------
Choice Hotels International Xxxxxxx Inns Subway (Pending)
---------------------------------------- -------------------------------------- --------------------------------------
Choice Management Lowe's Hotels US Air Pittsburgh
---------------------------------------- -------------------------------------- --------------------------------------
Coast Guard Exchange Marine Corps Exchange Veterans Canteen Service
---------------------------------------- -------------------------------------- --------------------------------------
Columbia Sussex Marriott International Hotels Wyndham International
---------------------------------------- -------------------------------------- --------------------------------------
Com Air Meristar/Interstate Hotels
---------------------------------------- -------------------------------------- --------------------------------------
Compass Navy Exchange - NEX Norfolk
---------------------------------------- -------------------------------------- --------------------------------------
Continental Airlines Norwegian Cruise Lines (Xxxxxxx
Cruise Limited)
---------------------------------------- -------------------------------------- --------------------------------------
Crystal Cruises Ocean Hospitalities
---------------------------------------- -------------------------------------- --------------------------------------
CHANGES:
--------
United Airlines - No deal
Meristar - Name change to Meristar/Interstate Hotels
HealthSouth - No national deal
Holiday Inn - Name change to Holiday Inn/Six Continents
Xxxxxxx Cruise Lines - Name change to new name Norweigan Cruise Lines
ADDS:
-----
Simon Services
Xxxx Xxxxxxx
Xxxxxx'x Pizza
Boston Market
Xxxx'x Hotel
Subway (Pending)
