SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
BOSTON BEER, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
BOSTON BEER, INC.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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THE BOSTON BEER COMPANY, INC.
NOTICE OF THE 1997 ANNUAL MEETING OF STOCKHOLDERS
JUNE 3, 1997
To The Stockholders:
The 1997 Annual Meeting of the Stockholders of THE BOSTON BEER COMPANY, INC.
will be held on Tuesday, June 3, 1997, at 10:00 a.m. at The Brewery located at
30 Germania Street, Jamaica Plain, Boston, Massachusetts, for the following
purposes:
1. For the election by the holders of the Class A Common Stock of two (2)
Class A Directors, each to serve for a term of one (1) year.
2. For the election by the sole holder of the Class B Common Stock of five
(5) Class B Directors, each to serve for a term of one (1) year.
3. To consider and act upon any other business which may properly come
before the meeting.
The Board of Directors has fixed the close of business on April 4, 1997 as
the record date for the meeting. All stockholders of record on that date are
entitled to notice of and to vote at the meeting.
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED WHETHER
OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN PERSON.
By order of the Board of Directors
C. James Koch, Clerk
Boston, Massachusetts
April 30, 1997
THE BOSTON BEER COMPANY, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Boston Beer Company, Inc. (the
"Corporation", which is sometimes referred to in this Proxy Statement together
with its affiliate, Boston Beer Company Limited Partnership (the
"Partnership") as the "Company") for use at the 1997 Annual Meeting of
Stockholders to be held on Tuesday, June 3, 1997, at the time and place set
forth in the notice of the meeting, and at any adjournments thereof. The
approximate date on which this Proxy Statement and form of proxy are first
being sent to stockholders is April 30, 1997.
If the enclosed proxy is properly executed and returned, it will be voted in
the manner directed by the stockholder. If no instructions are specified with
respect to any particular matter to be acted upon, proxies will be voted in
favor thereof. Any person giving the enclosed form of proxy has the power to
revoke it by voting in person at the meeting, or by giving written notice of
revocation to the Clerk of the Corporation at any time before the proxy is
exercised.
The holders of a majority in interest of the issued and outstanding Class A
Common Stock are required to be present in person or be represented by proxy
at the Meeting in order to constitute a quorum for the election of the two (2)
Class A Directors. The election of each of the nominees for Class A Director
will be decided by plurality vote of the holders of Class A Common Stock
present in person or represented by proxy at the Meeting. The affirmative vote
of the sole holder of the outstanding shares of Class B Common Stock voting in
person or by proxy at the meeting is required to elect the five (5) Class B
Directors and to approve all other matters listed in the notice of meeting.
The Corporation will bear the cost of the solicitation. It is expected that
the solicitation will be made primarily by mail, but regular employees or
representatives of the Corporation may also solicit proxies by telephone,
telegraph and in person and arrange for brokerage houses and other custodians,
nominees and fiduciaries to send proxies and proxy materials to their
principals at the expense of the Corporation.
The Corporation's principal executive offices are located at 75 Arlington
Street, Boston, Massachusetts 02116, telephone number (617) 368-5000.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on April 4, 1997 are
entitled to notice of and to vote at the meeting. On that date, the
Corporation had outstanding and entitled to vote 16,066,218 shares of Class A
Common Stock, $01 par value per share, and 4,107,355 shares of Class B Common
Stock, $.0l par value per share. Each outstanding share of the Corporation's
Class A and Class B Common Stock entitles the record holder to one (1) vote on
each matter properly brought before the Class.
ELECTION OF DIRECTORS
Pursuant to the Articles of Organization and By-Laws of the Corporation, the
Board of Directors is divided into two (2) classes, Class A Directors,
consisting of two (2) Directors elected each year by the holders of Class A
Common Stock for a term of one (1) year, and Class B Directors, consisting of
five (5) Directors elected each year by the holders of Class B Common Stock,
also for a term of one (1) year.
It is proposed that each of the two nominees listed below, each of whose
term expires at this meeting, be elected as a Class A Director, to serve a
term of one (1) year and until his successor is duly elected and qualified or
until he sooner dies, resigns or is removed.
2
The person named in the accompanying proxy will vote, unless authority is
withheld, for the election of the nominees named below. In the event that any
of the nominees should become unavailable for election, which is not
anticipated, the person named in the accompanying proxy will vote for such
substitute nominees as the incumbent Class A Directors, acting pursuant to
Section 4.8 of the Corporation's By-Laws as a Nominating Committee, may
nominate. As indicated below, except for Messrs. Cummin and Wing, all
Directors and nominees are either Executive Officers of the Corporation or its
subsidiaries or related to such Executive Officers.
Nominees. Set forth below are the nominees for election as Class A and Class
B Directors, respectively, for terms ending in 1998 and certain information
about each of them.
Class A Directors:
YEAR FIRST POSITION WITH THE CORPORATION
ELECTED A OR PRINCIPAL OCCUPATION
NAME OF NOMINEE AGE DIRECTOR DURING THE PAST FIVE YEARS
--------------- --- ---------- -----------------------------
Pearson C. Cummin III.. 54 1995 Mr. Cummin has served as a general
partner of Consumer Venture Partners, a
Greenwich, Connecticut based venture
capital firm, since January 1986.
James C. Kautz......... 66 1995 Mr. Kautz is currently a limited partner
of The Goldman Sachs Group, L.P. and the
second cousin of the Company's founder
and chief executive officer, C. James
Koch.
Class B Directors:
YEAR FIRST POSITION WITH THE CORPORATION
ELECTED A OR PRINCIPAL OCCUPATION
NAME OF NOMINEE AGE DIRECTOR DURING THE PAST FIVE YEARS
--------------- --- ---------- -----------------------------
C. James Koch.......... 47 1995 Mr. Koch founded the Company in 1984 and
has been the Chief Executive Officer
throughout the Company's history. Mr.
Koch also serves as the Corporation's
President and Clerk and is the Company's
principal executive officer.
Alfred W. Rossow, Jr... 64 1995 Mr. Rossow joined the Company in late
1989 as Chief Operating Officer and Chief
Financial Officer.
Rhonda L. Kallman...... 36 1995 Ms. Kallman co-founded the Company. She
has been Vice President--Sales since
1985.
Charles Joseph Koch.... 74 1995 Mr. Koch is the father of founder C.
James Koch. In 1989, Mr. Koch retired as
founder and co-owner of Chemicals, Inc.,
a distributor of brewing and industrial
chemicals in southwestern Ohio.
John B. Wing........... 50 1995 Mr. Wing has been Chairman and CEO of The
Wing Group Limited, Co., a developer of
energy projects in Turkey, Kuwait and
China, since 1991.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During the Corporation's 1996 fiscal year, there were eleven (11) meetings
of the Board of Directors of the Corporation. All of the Directors attended at
least 75% of the aggregate of (i) the total number of meetings of the Board of
Directors and (ii) the total number of meetings held by committees of the
Board of Directors on which they served. The Class A Directors in office from
time to time serve as a nominating committee for the purpose of nominating
persons for election as Class A Directors. The Corporation does not otherwise
have a nominating committee.
3
The Audit Committee of the Board of Directors reviews with the Corporation's
independent auditors the scope of the audit for the year, the results of the
audit when completed and the independent auditors' fees for services
performed. The Audit Committee also recommends independent auditors to the
Board of Directors and reviews with management various matters related to its
internal accounting controls. The present members of the Audit Committee are
Pearson C. Cummin III, James C. Kautz and John B. Wing. The Audit Committee
met on three (3) occasions in 1996.
The Corporation also has a Compensation Committee, whose purpose is to
administer the Corporation's Employee Equity Incentive Plan and otherwise act
with respect to matters of executive compensation. The members of such
Committee are Pearson C. Cummin III, James C. Kautz and John B. Wing. The
Compensation Committee met on five (5) occasions in 1996.
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS OF
VOTING SECURITIES, DIRECTORS AND OFFICERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Class A Common Stock as of April 4, 1997 (i) by
each person (or group of affiliated persons) known by the Company to be the
beneficial owner(s) of more than five percent (5%) of the outstanding Class A
Common Stock, (ii) by each Director of the Company, (iii) by each person
nominated as a Director of the Company, (iv) by the Company's Chief Executive
Officer and the other officers named below in the Summary Compensation Table
and (v) all of the Company's executive officers and Directors as a group.
Unless otherwise indicated, the individuals named below held sole voting and
investment power over the shares listed below.
SHARES BENEFICIALLY OWNED(1)
NAMED EXECUTIVE OWNERS, ----------------------------
DIRECTORS AND 5% STOCKHOLDERS NUMBER PERCENT
----------------------------- ---------------- --------------
C. James Koch(2)(3)........................ 6,254,747 31.0
Rhonda L. Kallman(3)(4).................... 510,920 3.2
Alfred W. Rossow, Jr.(3)(5)................ 172,272 1.1
Martin Roper(3)(6)......................... 74,772 *
John Chappell(3)........................... -- --
Pearson C. Cummin III(7)(12)............... 2,500 *
James C. Kautz(8).......................... 525,031 3.3
Charles Joseph Koch(9)..................... 4,500 *
John B. Wing(10)........................... 434,392 2.7
Hambrecht & Quist LLC(11).................. 1,457,565 9.1
Consumer Venture Partners I, L.P.(12)...... 1,058,820 6.6
All Directors and Executive Officers as a
group (10 people)......................... 7,979,551 38.8
- --------
* Less than 1% of the outstanding shares of Class A Common Stock.
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission and includes general voting and/or
investment power with respect to securities. Shares of Class A Common
Stock subject to options and warrants currently exercisable or exercisable
within 120 days after the record date are deemed outstanding for computing
the percentage of a person holding such options but are not deemed
outstanding for computing the percentage of any other person. No shares of
Class B Common Stock are subject to options or warrants. All shares are
Class A Common Stock except for shares of Class B Common Stock held by C.
James Koch. See Note 2 below.
(2) Includes 4,107,355 shares of Class B Common Stock, constituting all of the
outstanding shares of Class B Common Stock. Includes 614,553 shares of
Class A Common Stock held in several trusts for the benefit of C. James
Koch and certain of his family members.
(3) Executive officer and/or Director of the Company. Mailing address is c/o
The Boston Beer Company, Inc., 75 Arlington Street, Boston, MA 02116.
4
(4) Includes options to acquire 149,546 shares of Class A Common Stock
exercisable currently or within 120 days.
(5) Consists of options to acquire 143,140 shares of Class A Common Stock
exercisable currently or within 120 days.
(6) Consists of options to acquire 74,772 shares of Class A Common Stock
exercisable currently or within 120 days.
(7) Director of the Company. Consists of options to acquire 2,500 shares of
Class A Common Stock exercisable currently or within 120 days.
(8) Director of the Company. Shares are owned of record by Kautz Family
Partners, L.P. of which Mr. Kautz is general partner. Mailing address is
c/o Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004.
Includes options to acquire 2,500 shares of Class A Common Stock
exercisable currently or within 120 days.
(9) Director of the Company and father of C. James Koch. Includes options to
acquire 2,500 shares of Class A Common Stock exercisable currently or
within 120 days and 2,000 shares owned by the spouse of Mr. Koch.
(10) Director of the Company. Mailing address is c/o The Wing Group, 1610
Woodstead Court, Suite 200, The Woodlands, Texas 77380. Includes options
to acquire 2,500 shares of Class A Common Stock exercisable currently or
within 120 days.
(11) Includes shares owned by various entities affiliated with Hambrecht &
Quist LLC, including H&Q London Ventures, H&Q Ventures International
C.V., H&Q Ventures IV, Hamquist, Hamco Capital Corporation, Wescot
Capital, Hambrecht & Quist Group and H&Q Investors. Mailing address for
each of these entities is do Hambrecht & Quist Venture Partners, One Bush
Street, 15th Floor, San Francisco, California 94104.
(12) Mailing address is Three Pickwick Plaza, Greenwich, Connecticut 06830.
Pearson C. Cummin III, a Director of the Company, is and has been a
general partner of Consumer Venture Partners since January 1986.
DIRECTOR COMPENSATION FOR THE LAST FISCAL YEAR
Except as described in the following paragraph, the Company's Directors are
not compensated for their services as such, although they are on occasion
reimbursed for out-of-pocket expenses incurred in attending meetings.
On May 21, 1996, the Company adopted a Non-Employee Stock Option Plan
pursuant to which each non- employee director of the Company receives the
grant of 2,500 shares annually as of the date of the Annual Stockholders'
Meeting of the Company. The grant price for such options is based upon the
fair market value of the Company's stock as of the date of grant. On May 21,
1996, each non-employee director was granted an option to purchase up to 2,500
shares of the Company's Class A Common Stock at a per share price of $18.5625
per share. The grant of stock options under this Non-Employee Stock Option
Plan is subject to the requirement that each director comply with his
fiduciary obligations with the Company. If any breach of such obligations
should occur, the Company shall be entitled, in addition to any other remedies
available to it, to recover all profit realized by him as a result of the
exercise of such option during the last 12 months of his term as director and
at any time after the expiration of such term.
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
Compensation Philosophy. The Corporation's executive compensation system is
comprised of base salaries, annual bonuses and stock option awards. The
Compensation Committee reviews executive officer compensation annually.
Executive officers are eligible to receive annual cash bonuses upon
achievement of predetermined performance targets. Executive compensation is
subject to the oversight and approval of the Compensation Committee of the
Board of Directors. Compensation paid to the Corporation's executive officers
is intended to reflect the responsibility associated with each executive
officer's position, the past performance of the specific executive officer,
the goals of management and the profitability of the Corporation.
5
Executive compensation is designed to be competitive within the alcoholic
beverages industry and other companies of comparable size and complexity to
attract and retain talented and motivated individuals in key positions.
Compensation in any particular case may vary from any industry average on the
basis of annual and long-term Company performance, as well as individual
performance. The Compensation Committee will exercise its discretion to set
compensation where, in its judgment, external or individual circumstances
warrant it.
Chief Executive Officer Compensation. The Compensation Committee reviewed
and approved the compensation paid to the Corporation's Chief Executive
Officer, C. James Koch, during 1996. In reviewing such compensation, the
Committee evaluated the Corporation's success in meeting three key goals:
securing access to sufficient brewing capacity for the Company's products;
development of a strategic plan for maintaining and increasing the Company's
market share in the highly competitive craft beer industry in light of the
proliferation of competitive products; and developing an appropriate
infrastructure for the Company. The Compensation Committee believes that the
Company is making positive strides towards these goals and that the
compensation paid to Mr. Koch in 1996 was reasonable in light of the
Corporation's overall performance.
Equity-Based Compensation. The Compensation Committee may award stock
options under the Corporation's Employee Equity Incentive Plan to executive
officers of the Corporation. Stock option awards under this plan are designed
to provide incentive to the Corporation's employees to increase the market
value of the Corporation's stock, thus linking corporate performance and
stockholder value to executive compensation.
The Corporation's Employee Equity Incentive Plan adopted by the Board of
Directors and approved by each of the sole Class B stockholder and a majority
in interest of the then Class A stockholders of the Corporation effective
November 20, 1995, and amended and restated effective on February 23, 1996
(the "Employee Equity Plan") enables the Compensation Committee to grant
options to members of senior management of the Company. As of April 4, 1997,
options to purchase an aggregate of 1,011,733 shares of Class A Common Stock
were outstanding under the Employee Equity Plan.
The Employee Equity Plan is administered by the Compensation Committee,
which takes into account the position and responsibilities of the optionee
being considered, the nature and value to the Company of his or her service
and accomplishments, his or her present and potential contributions to the
success of the Company and such other factors as the Compensation Committee
deem relevant in determining who will be eligible under the Employee Equity
Plan. The Employee Equity Plan provides for both so-called Management Options,
which carry an exercise price of $0.01 per share, and Discretionary Options,
the exercise price of which is set by the Compensation Committee at the time
of grant. The Employee Equity Plan also permits all employees to purchase
shares of Class A Stock at a discount based on length of service with the
Company. Up to an aggregate of 1,687,500 shares of Class A Common Stock may be
issued under the Employee Equity Plan. As of April 4, 1997, there were 258,382
shares of Class A Common Stock available for grant under the Employee Equity
Plan.
Options granted under the Employee Equity Plan expire ten (10) years from
the date of grant, subject to earlier termination if the optionee leaves the
Corporation's employ or service, whether voluntarily or by virtue of his or
her death or disability. The Employee Equity Plan may be terminated by the
Board of Directors if such termination is approved by the holders of the
majority in interest of the Class B Common Stock of the Corporation. A
detailed description of the Employee Equity Plan is included elsewhere in this
Proxy Statement.
James C. Kautz, Chairman
Pearson C. Cummin, III
John B. Wing
6
EXECUTIVE OFFICERS OF THE CORPORATION
Information required by Item 7(b) of Schedule 14A with respect to executive
officers of the Corporation is set forth below. The executive officers of the
Corporation are elected annually by the Board of Directors and hold office
until their successors are elected and qualified, or until their earlier
removal or resignation.
C. James Koch, 47, founded the Company in 1984 and has been the Chief
Executive Officer throughout the Company's history. From 1978 to 1984, he was
a manufacturing consultant with the Boston Consulting Group, Boston,
Massachusetts.
Rhonda L. Kallman, 36, co-founded the Company. She has been Vice President--
Sales since 1985. From 1982 to 1985, she worked for the Boston Consulting
Group, Boston, Massachusetts, as an administrative assistant.
Alfred W. Rossow, Jr., 64, joined the Company in late 1989 as Chief
Operating Officer and Chief Financial Officer. Related prior positions in the
beverage industry include Vice President--Marketing and Vice President--Sales
at Pepsi-Cola Company from 1971 to 1974, Chief Executive Officer of the
predecessor company to A&W Beverages, Inc. from 1975 to 1980 and consultant to
soft drinks and bottled water companies from 1980 to 1989.
John Chappell, 39, is Vice President--Brand Development. He joined the
Company in 1994 after nine years at Labatt's USA where he was Director of
Brand Management. From 1983 to 1985 he worked for PepsiCo in brand management.
Martin Roper, 34, is Vice President--Operations. He joined the Company in
September 1994 from Steel Works Inc. where he was President of the MEG
Division. From July 1990 to October 1992, Mr. Roper was Executive Vice
President of Blocksom & Co. Prior to July 1990, Mr. Roper was an associate
consultant with the Boston Consulting Group in London.
David Grinnell, 39, has been Manager of Brewing Operations of the Company
since 1988. Prior to joining the Company, Mr. Grinnell held various positions
with New Amsterdam Brewing Co.
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by or
paid to the Corporation's Chief Executive Officer and each of the
Corporation's executive officers (other than the Chief Executive Officer)
whose total annual salary and bonus exceeded $100,000 for all services
rendered in all capacities to the Company for the Company's two most recent
fiscal years ended December 31, 1996 and 1995.
SUMMARY COMPENSATION TABLE
ANNUAL LONG TERM
COMPENSATION(1) COMPENSATION AWARDS
----------------- -------------------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEARS SALARY BONUS OPTIONS/SARS COMPENSATION
--------------------------- ----- -------- -------- ------------ ------------
C. James Koch................ 1996 $184,465 $129,940 $1,400,134 $ 797
President and Chief Execu-
tive Officer 1995 $184,465 $129,940 0 $ 4,972
Rhonda L. Kallman............ 1996 $174,353 $ 77,000 $ 579,830 $ 505
Vice President--Sales 1995 $154,334 $ 77,000 $ 1,520 $ 5,120
Alfred W. Rossow, Jr. ....... 1996 $176,940 $ 35,000 $1,497,808 $61,095(2)
Chief Operating Officer and
Chief Financial Officer 1995 $141,283 $ 35,000 $ 940 $60,738(2)
Martin Roper................. 1996 $158,592 $ 47,500 0 $ 90
Vice President--Operations 1995 $ 89,426 $ 47,000 0 $ 2,316
John Chappell................ 1996 $149,599 $ 47,231 0 $ 148
Vice President--Brand Devel-
opment 1995 $136,525 0 $ 1,137 $37,363(3)
7
- --------
(1) Included in this column are amounts earned, though not necessarily
received, during the corresponding fiscal year.
(2) Included in these amounts are deferred compensation of $59,000 and $56,000
for fiscal years 1996 and 1995. See "Deferred Compensation Agreement with
Alfred W. Rossow, Jr." below.
(3) Includes $32,800 moving allowance.
EMPLOYMENT AGREEMENTS
The Company has not entered into employment agreements with any of its
employees. However, the Stockholder Rights Agreement between the Company and
initial stockholders of the Company provides that so long as Mr. Koch remains
an employee of the Company (i) he will devote such time and effort, as a full-
time, forty (40) hours per week occupation, as may be reasonably necessary for
the proper performance of his duties and to satisfy the business needs of the
Company, (ii) the Company will provide Mr. Koch benefits no less favorable
than those formerly provided to him by the Partnership and (iii) the Company
will purchase and maintain in effect term life insurance on the life of Mr.
Koch.
DEFERRED COMPENSATION AGREEMENT FOR ALFRED W. ROSSOW, JR.
Effective December 1, 1992, the Company entered into a Deferred Compensation
Agreement (the "Agreement") with Mr. Rossow. Under this Agreement, Mr. Rossow
(i) waived any right to participate further in the Company's then existing
investment and incentive share plans and (ii) agreed to defer and have paid
over to a trust called for by the Agreement (the "Trust") the first $20,833 of
any annual cash bonus to which he might otherwise be entitled after December
1, 1992. In exchange, the Company agreed to (i) cause the Trust to be formed,
(ii) pay over to the Trust as of December 1, 1992 and on November 30 in each
of the years 1993 through 1999, the sum of $43,500 plus certain additional
insurance premium amounts, and (iii) pay Mr. Rossow $50,000 per year for 18
years after his employment with the Company terminates. The $50,000 annual
benefit is subject to reduction if Mr. Rossow's employment terminates prior to
April 1, 2000 and is subject to forfeiture in certain limited circumstances.
Funds held by the Trust are used to pay the annual premiums on a life
insurance policy (the "Policy") on Mr. Rossow's life, the owner and
beneficiary of which is the Trust. The total insurance amount of the Policy
including the basic insurance amount of $275,011 and the adjustable term
insurance is $531,752. The assets held in the Trust, including the Policy, are
intended to secure the Company's obligations to Mr. Rossow under the
Agreement.
EMPLOYEE EQUITY INCENTIVE PLAN
The Employee Equity Plan is the successor to the Partnership's 1995
Management Option Plan and also the successor to various employee investment
unit plans of the Boston Beer Company Limited Partnership. The predecessor
Incentive Share Plans entitled eligible employees to certain deferred
compensation, generally payable after termination of employment and calculated
based on appreciation in the value of equity interests in the Company from the
date of an award, and (ii) a series of plans under which a broader group of
employees of the Partnership were permitted to purchase similar deferred
compensation rights.
As of April 4, 1997, there are (i) outstanding options for 144,968 shares of
Class A Common Stock at an exercise price of $0.01 per share, of which options
to purchase 102,574 shares are immediately exercisable, (ii) outstanding
options for 866,765 shares of Class A Common Stock at an average exercise
price of $9.90 per share and (iii) rights to receive 63,625 Investment Shares,
of which rights to receive 55,720 shares have vested.
A more complete discussion of the specific terms and provisions of the
Employee Equity Plan is provided below.
8
STOCK OPTIONS
The following table sets forth certain information concerning grants of
stock options made during the fiscal year ended December 31, 1996 to the
executive officers named below.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-----------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
NUMBER OF PERCENT OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -------------------------------
NAME GRANTED FISCAL YEAR PER SHARE DATE 0% 5% 10%
---- ---------- ---------------- ----------- ---------- ------------------ ------------
C. James Koch........... 0 0 -- -- -- -- --
Rhonda L. Kallman....... 200,000 49.2% $12.0625 (2) 0 $ 1,517,199 $ 3,844,897
Alfred W. Rossow, Jr. .. 15,000 3.7% $12.0625 (2) 0 113,789 288,367
Martin Roper............ 30,000 7.4% $12.0625 (2) 0 227,579 576,734
John Chappell........... 30,000 7.4% $12.0625 (2) 0 227,579 576,734
- --------
(1) The potential realizable value of the options reported above was
calculated by assuming 5% and 10% annual rates of appreciation above the
fair market value of the Class A Common Stock of the Company from the date
of grant (determined in accordance with the rules of the Securities and
Exchange Commission) of the options until the expiration of the options.
These assumed annual rates of appreciation were used in compliance with
the rules of the Securities and Exchange Commission and are not intended
to forecast future price appreciation of the Class A Common Stock of the
Company. The actual value realized from the options could be higher or
lower than the values reported above, depending upon the future
appreciation or depreciation of the Class A Common Stock during the option
period, the option holder's continued employment through the option period
and the timing of the exercise of the options.
(2) December 31, 2005.
The following table sets forth certain information concerning the number and
value of shares exercised, as well as unexercised stock options held by each
of the executive officers named below as of December 31, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR END AT FISCAL YEAR END(1)
SHARES ACQUIRED VALUE -------------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ---------- -------------- --------------- ----------- -------------
C. James Koch........... 83,323 $1,400,134 0 2,927 0 $29,416
Rhonda L. Kallman....... 29,016 573,068 169,902 201,672 $1,379,588 16,806
Alfred W. Rossow, Jr. .. 80,000 1,365,713 160,000 15,000 1,190,000 0
John Chappell........... 0 0 0 30,000 0 0
Martin Roper............ 0 0 74,772 180,111 55,236 0
- --------
(1) Based upon a fair market value at December 31, 1995 of $10.25 per share,
determined in accordance with the rules of the Securities and Exchange
Commission, less the option exercise price or purchase price.
OTHER RELATED TRANSACTIONS
During 1994, the Company loaned Mr. Koch $210,000 on a nonrecourse basis,
secured by 52,500 options granted to Mr. Koch during 1994. Such loan contained
interest provisions requiring the payment of interest at the minimum rate
required by the Internal Revenue Service to avoid imputed interest. This loan
was paid in full in 1996.
9
During 1995, the Company loaned Mr. Rossow $150,000 on a full recourse basis
secured by 13,500 of the options granted to Mr. Rossow during 1989. Such loan
contained interest provisions requiring the payment of interest at the minimum
rate required by the Internal Revenue Service to avoid imputed interest. This
loan was paid in full in 1996. On March 11, 1997, the Company loaned Mr. Rossow
$63,720. The loan is a demand loan which bears interest at the minimum rate
required by the Internal Revenue Service to avoid imputed interest.
Certain directors, officers, and 5% shareholders of the Company, including C.
James Koch, Rhonda L. Kallman, James C. Kautz, John B. Wing, Consumer Venture
Partners I, L.P., and certain affiliates of Hambrecht & Quist LLC are parties
to the Recapitalization documents including the Stockholder Rights Agreement.
COMPANY STOCK PERFORMANCE
The chart set forth below shows the value of an investment of $100 on
November 21, 1995 in each of the Corporation's stock ("Boston Beer"), the
Standard & Poor's 500 Index ("S&P 500") and Standard & Poor's Beverage Index
(Alcoholic) ("S&P Beverage") as of December 31, 1995 and December 31, 1996.
[GRAPH APPEARS HERE]
11/27/95 12/31/95 12/31/96
-------- -------- --------
Boston Beer (%)............. -- 18.75 -56.84
Boston Beer ($)............. $100.00 $118.75 $51.25
S & P 500 (%)............... -- 6.40 22.96
S & P 500 ($)............... $100.00 $110.02 $139.00
S & P Beverages-Alcoholic
(%)........................ -- -0.15 19.96
S & P Beverages-Alcoholic
($)........................ $100.00 $104.02 $124.28
THE EMPLOYEE EQUITY INCENTIVE PLAN
The Employee Equity Plan permits the grant of Management Options,
Discretionary Options and Investment Shares (each is described below). The
maximum number of shares of the Company's Class A Common Stock
10
which may be issued under the Employee Equity Plan is 1,687,500 shares. Shares
of Class A Common Stock which are the subject of Management Options or
Discretionary Options which lapse unexercised or Investment Shares which do
not vest and are repurchased by the Company or which are redeemed by the
Company shall again be available for issuance under the Employee Equity Plan.
The maximum number of shares available for grants is subject to adjustment for
capital changes.
In adopting the Employee Equity Plan, the Company has also approved, subject
to certain further restrictions described below, the assumption of rights to
acquire equity interests in the Company granted under certain predecessor
plans of the Partnership.
ADMINISTRATION, TERMINATION AND AMENDMENT
The Employee Equity Plan is administered by the Compensation Committee of
the Company's Board of Directors (the "Board"), The Board, subject to the
approval of the holders of a majority in interest of the Company's then issued
and outstanding Class B Common Stock may modify, amend or terminate the
Employee Equity Plan at any time. Termination or amendment of the Employee
Equity Plan shall not, without the consent of any person affected thereby,
modify or in any way affect any Management Options or Discretionary Options
granted or Investment Shares purchased prior to such termination or amendment.
ELIGIBILITY TO PARTICIPATE
Employees eligible to participate in the Employee Equity Plan ("Eligible
Employees") are those employees of the Company who:
(i) have been employed by the Company for at least one (1) year; and
(ii) have entered into an Employment Agreement with the Company
containing certain terms and conditions as the Compensation Committee in
its discretion may from time to time require. Only full-time management-
level Eligible Employees, as determined by the Compensation Committee in
its sole discretion, shall be selected by the Compensation Committee for
the grant of a Management Option. In designating Optionees for Management
Options, the Compensation Committee shall take into account each
prospective Optionee's level of responsibility, performance, potential and
such other considerations as the Compensation Committee deems appropriate.
TERMS AND PROVISIONS
Management Options and Discretionary Options. As of January 1 in each year,
the Compensation Committee shall grant Management Options to selected
Management Optionees subject to a number of shares of Class A Common Stock
determined as follows: the Management Optionee's base salary earned during the
preceding calendar year times a percentage, as determined by the Compensation
Committee in its discretion, taking into consideration such performance
criteria as it shall deem appropriate, divided by the fair market value of
shares of Class A Common Stock as of January 1 of such year. Management
Options shall be announced on or about March 15 in each year. The exercise
price shall in all cases be $.01 per share. The Compensation Committee may
also, from time to time, grant to Eligible Employees options ("Discretionary
Options") to acquire shares of Class A Common Stock, on such terms and
conditions, including exercise price, as the Compensation Committee shall
determine. Each Management Option and Discretionary Option shall be set forth
in an Option Agreement, which shall include the following terms, conditions
and restrictions:
(i) The right to exercise a Management Option or Discretionary Option
shall vest over the period of five (5) years after the Option Date at the
rate of twenty percent (20%) of the Option Shares covered thereby per year,
so long as the Optionee continues to be employed by the Company as of each
vesting date, provided, however, that (i) the Compensation Committee may
permit accelerated vesting in its discretion, (ii) Management Options shall
become exercisable in full in the event of an Optionee's retirement at or
after reaching age 65, death or disability, and (iii) the Compensation
Committee may tie exercisability to compliance by an Optionee with any
applicable restrictive covenants; and
11
(ii) Except as determined by the Compensation Committee from time to
time, each Management Option and Discretionary Option shall terminate on
the earlier to occur of the expiration of (i) ninety (90) days after the
Optionee ceases to be an employee of the Company and (ii) ten (10) years
after the Option Date.
Investment Shares. Eligible Employees may also become Participants in the
Employee Equity Plan and invest up to ten percent (10%) of their most recent
annual W-2 earnings in shares ("Investment Shares") of Class A Common Stock.
The number of Investment Shares which can be purchased by each Participant
will be computed by dividing 10% of the Participant's W-2 earnings by the
Investment Share Value. The "Investment Share Value" shall be the mean between
the high and the low prices at which shares of Class A Common Stock traded on
the New York Stock Exchange or on any other exchange on which such shares may
be traded, on the day next preceding the date of a Participant's investment in
Investment Shares, which ordinarily shall be effective as of January 1 in each
applicable year and discounted, according to the Participant's years of
service with the Company, as follows:
YEARS OF SERVICE DISCOUNT
---------------- --------
Less than 2 years............................................... 0%
2-3 years....................................................... 20%
3-4 years....................................................... 30%
More than 4 years............................................... 40%
For each full year Investment Shares are held after issuance and the
Participant remains employed with the Company, twenty percent (20%) of such
Investment Shares will become vested. All Investment Shares which have not yet
vested shall automatically vest in the event of the termination of a
Participant's employment with the Company by reason of his or her retirement
at or after reaching age 65, death or disability. The Compensation Committee
may also accelerate vesting at any time in its discretion. All unvested
Investment Shares shall be held in escrow by an escrow agent selected by the
Compensation Committee, pursuant to a Restricted Stock Escrow Agreement.
Any Participant who is not subject to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, as amended, shall have the right at any time
to cause the Company to redeem all, but not less than all, of such
Participant's Investment Shares at a price equal to the lesser of (i) the
Discounted Investment Share Value at which the Investment Shares were issued
and (ii) the fair market value of such Investment Shares, as of the date next
preceding the date on which the Investment Shares are tendered for redemption.
In the event that a Participant's employment with the Company is terminated
other than because of retirement at or after the age of 65, death or
disability, the Company shall have the right, but not the obligation, to
redeem within ninety (90) days after such termination any or all of the
Investment Shares previously purchased by the Participant which have not
vested, at a price, payable in cash, equal to the lesser of (i) the Discounted
Investment Share Value at which the Shares were issued and (ii) the fair
market value of such Investment Shares, as of the date next preceding the date
on which the Investment Shares are called for redemption.
Except as otherwise specifically provided for above, no right or interest
under the Employee Equity Plan of any Eligible Employee shall be assignable or
transferable, in whole or in part, either directly or by operation of law or
otherwise, including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner, other than
by will or the laws of descent and distribution; and no such right or interest
of any Eligible Employee shall be subject to any obligation or liability of
such Eligible Employee. A Management Option or Discretionary Option shall be
null and void and without effect upon the bankruptcy of the Optionee or upon
the attempted assignment or transfer, except as hereinabove provided,
including without limitation any purported assignment, whether voluntary or by
operation of law, pledge, hypothecation or other disposition contrary to the
provisions hereof, or levy of execution, attachment, trustee process or
similar process, whether legal or equitable, upon the option.
12
RECENT GRANTS
The following table summarizes the total grants of Management Options and
Discretionary Options during fiscal year 1996. Dollar values below are based
upon a fair market value of Class A Common Stock at December 31, 1996 of
$10.25 per share, determined in accordance with the rules of the Securities
and Exchange Commission, less the option exercise price. None of the officers
purchased Investment Shares during the year ended December 31, 1996.
MANAGEMENT OPTION GRANTS
EXERCISE PRICE OF $0.01
------------------------------
DOLLAR NUMBER OF
NAME AND POSITION VALUE SHARES
----------------- -------------- --------------
C. James Koch, CEO.............................. $ 0 0
Rhonda L. Kallman, VP Sales..................... $ 0 0
Alfred W. Rossow, Jr., COO and CFO.............. $ 0 0
Martin Roper, VP Operations..................... $ 0 0
John Chappell, VP Brand Development............. $ 0 0
Executive Officers as a Group................... $ 5,622 549
All Directors (excluding Executive Officers).... $ 0 0
Employees as a Group (excluding Executive Offi-
cers).......................................... $ 67,881 6,629
DISCRETIONARY OPTION GRANTS
------------------------------
DOLLAR NUMBER OF
NAME AND POSITION VALUE(1) SHARES
----------------- -------------- --------------
James Koch, CEO................................. 0 0
Rhonda L. Kallman, VP Sales..................... $ (362,500) 200,000
Alfred W. Rossow, Jr., COO and CFO.............. (27,188) 15,000
Martin Roper, VP Operations..................... (54,375) 30,000
John Chappell, VP Brand Development............. (54,375) 30,000
Executive Officers as a Group................... (554,504) 306,299
All Directors (excluding Executive Officers).... (83,125) 10,000
Employees as a Group (excluding Executive Offi-
cers).......................................... (563,738) 66,050
INVESTMENT SHARES
------------------------------
DOLLAR NUMBER OF
NAME AND POSITION VALUE(1) SHARES
----------------- -------------- --------------
Executive Officers as a Group................... $ 0 0
All Directors (excluding Executive Officers).... $ 0 0
Employees as a Group (excluding Executive Offi-
cers).......................................... $ (11,413) 2,255
- --------
(1) These Discretionary Option Grants have been granted at per share exercise
prices ranging from $12.0625 to $25.5625 per share.
RECAPITALIZATION, REORGANIZATIONS
The Employee Equity Plan provides that in the event that the outstanding
shares of Class A Stock are changed into or exchanged for a different number
or kind of shares or other securities of the Company or of another corporation
by reason of any reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares, or dividends payable
in capital stock, appropriate adjustment shall be made in the number and kind
of shares which may be issued under the Employee Equity Plan and as to which
outstanding Management Options or Discretionary Options or portions thereof
then unexercised shall be exercisable, to the end that the proportionate
interest of the Optionee shall be maintained as before the occurrence of such
event; such adjustment in outstanding Discretionary Options shall be made
without change in the total price applicable to the unexercised portion of
such Discretionary Options and with a corresponding adjustment in the exercise
price per share. The exercise price per share of Management Options shall
remain $0.01 per share.
13
PREVIOUSLY GRANTED OPTIONS AND INVESTMENT SHARES
All options granted by the Partnership prior to November 20, 1995, which
were assumed under the Employee Equity Plan on that date and became Management
Options or Discretionary Options, first became exercisable, to the extent that
the right to exercise had otherwise then vested, on March 1, 1996, except that
any such options held by Optionees subject to the provisions of Section 16(b)
of the 1934 Act did not become exercisable until May 20, 1996. All Investment
Shares purchased from the Partnership prior to November 20, 1995, which had
vested prior to March 1, 1996, were issued to the applicable Participants on
that date, except that vested Investment Shares otherwise then issuable to
Participants subject to the provisions of Section 16(b) of the 1934 Act did
not become issuable until May 20, 1996.
RESALE RESTRICTIONS
Notwithstanding any other provision of the Employee Equity Plan, the Company
may delay the issuance of shares covered by the exercise of a Management
Option or a Discretionary Option or any Investment Shares which have vested
(in any such case, "Shares") until one of the following conditions shall be
satisfied:
(i) Such Shares are at the time of issuance effectively registered under
applicable federal and state securities acts, as now in force or hereafter
amended; or
(ii) Counsel for the Company shall have given an opinion, which opinion
shall not be unreasonably conditioned or withheld, that the issuance of
such Shares is exempt from registration under applicable federal and state
securities acts, as now in force or hereafter amended.
Moreover, unless the Shares to be issued have been effectively registered
under the Securities Act of 1933, as amended (the "1933 Act"), the Company
shall be under no obligation to issue such Shares unless the Optionee or
Participant shall first give written representation to the Company,
satisfactory in form and scope to the Company's counsel and upon which in the
opinion of such counsel the Company may reasonably rely, that he or she is
acquiring the Shares to be issued to him or her as an investment and not with
a view to or for sale in connection with any distribution thereof in violation
of the 1933 Act. The Company shall have no obligation, contractual or
otherwise, to any Optionee or Participant to register under any federal or
state securities laws any Shares issued under the Employee Equity Plan to such
Optionee or Participant.
Notwithstanding the above, Shares acquired under the Employee Equity Plan
while a Registration Statement relating to such Shares is in effect under the
1933 Act, by persons who are not affiliates of the Company may be sold by such
persons without registration under the 1933 Act, and without the need to
comply with Rule 144 thereunder. Public resales of shares acquired (while a
Registration Statement relating to such shares is in effect under the 1933
Act) under the Employee Equity Plan by persons who are affiliates of the
Company will be subject to registration or compliance with the requirements of
Rule 144 under the 1933 Act, other than the holding period requirement of
paragraph (d) of that Rule. Employees who are Directors or officers of the
Company may be deemed to be affiliates of the Company.
TAX EFFECTS OF EMPLOYEE EQUITY PLAN PARTICIPATION
The Employee Equity Plan described herein is not a qualified plan under
Section 401 of the Internal Revenue Code and is not subject to the provisions
of the Employee Retirement Income Security Act of 1974.
Management and Discretionary Options. Upon the grant of a Management Option
or Discretionary Option, the Participant will not recognize ordinary income
nor will the Company be entitled to a deduction. Upon the exercise of a
Management Option or a Discretionary Option, the Participant will generally
recognize ordinary income in the amount by which the fair market value of
Class A Common Stock at the time of exercise exceeds the exercise price for
the Shares then purchased and the Company will generally be entitled to a
deduction for such amount of ordinary income recognized. Upon a subsequent
disposition of Class A Common Stock, the Participant will realize a short-term
or long-term capital gain or loss, depending upon the holding period of the
Class A Common Stock, with the basis for computing such gain or loss equal to
the fair market value of Class A Common Stock on the date of exercise.
14
Investment Shares. Upon the purchase of an Investment Share, the Participant
will not recognize ordinary income unless the Participant makes an election
under Section 83(b) of the Internal Revenue Code (such election is referred to
herein as a "Section 83(b) election"). If the Participant makes a Section
83(b) election, then the Participant will immediately recognize ordinary
income in the amount by which the fair market value of the Investment Shares
on the date of acquisition exceeds the purchase price therefor. Otherwise,
upon vesting of the Investment Shares, the Participant will recognize ordinary
income in the amount by which the fair market value of the Investment Shares
then vesting, as of the date of vesting, exceeds the purchase price therefor.
The Company will generally be allowed a deduction in an amount equal to the
income recognized by the Participant in the tax year in which such income is
recognized. Upon the disposition of Investment Shares, the Participant will
realize a short-term or long-term capital gain or loss, depending upon the
holding period of the Investment Shares, after they have vested, with the
basis for computing such gain or loss equal to the amount of ordinary income
realized on such shares plus the purchase price therefor.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Coopers & Lybrand L.L.P. as independent
auditors to examine the consolidated financial statements of the Company for
the fiscal year ending December 31, 1996. A representative of Coopers &
Lybrand, L.L.P. is expected to be present at the meeting and will have the
opportunity to make a statement if he or she so desires and to respond to
appropriate questions. The engagement of Coopers & Lybrand, L.L.P. was
approved by the Board of Directors, at the recommendation of the Audit
Committee of the Board of Directors, and by the sole holder of the
Corporation's Class B Common Stock.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and Directors and persons owning more than 10% of the
outstanding Class A Common Stock of the Corporation to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Officers, Directors and greater than 10% holders of Class A Common
Stock are required by SEC regulation to furnish the Corporation with copies of
all Section 16(a) forms they file.
Based solely on copies of such forms furnished as provided above, the
Company believes that during fiscal 1996, all Section 16(a) filing
requirements applicable to its officers, Directors and owners of greater than
10% of its Class A Common Stock were complied with, except that one officer
was five weeks late in filing one of his Form 4 reports.
DEADLINES FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Under regulations adopted by the Securities and Exchange Commission, any
proposal submitted for inclusion in the Corporation's Proxy Statement relating
to the Annual Meeting of Stockholders to be held in 1997 must be received at
the Corporation's principal executive offices in Boston, Massachusetts on or
before December 23, 1997. Receipt by the Corporation of any such proposal from
a qualified stockholder in a timely manner will not ensure its inclusion in
the proxy material because there are other requirements in the proxy rules for
such inclusion.
OTHER MATTERS
Management knows of no matters which may properly be and are likely to be
brought before the meeting other than the matters discussed herein. However,
if any other matters properly come before the meeting, the persons named in
the enclosed proxy will vote in accordance with their best judgment.
15
The cost of this solicitation will be borne by the Corporation. It is
expected that the solicitation will be made primarily by mail, but regular
employees or representatives of the Corporation may also solicit proxies by
telephone, telegraph and in person and arrange for brokerage houses and other
custodians, nominees and fiduciaries to send proxies and proxy material to
their principals at the expense of the Corporation.
1O-K REPORT
THE CORPORATION WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A
COPY OF AN ANNUAL REPORT ON FORM l0-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE CORPORATION'S MOST RECENT FISCAL YEAR, WITHOUT CHARGE, UPON
RECEIPT OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE SENT TO
ALFRED W. ROSSOW, JR., CHIEF FINANCIAL OFFICER, THE BOSTON BEER COMPANY, INC.,
75 ARLINGTON STREET, BOSTON, MA 02116.
VOTING PROXIES
The Board of Directors recommends an affirmative vote for the election of
the two (2) nominees for Class A Director. Proxies will be voted as specified.
If signed proxies are returned without specifying an affirmative or negative
vote, the shares represented by such proxies will be voted in favor of the
nominees.
By order of the Board of Directors
C. James Koch, Clerk
16
THE BOSTON BEER COMPANY, INC
PROXY - Annual Meeting of Stockholders - June 3, 1997
CLASS A COMMON STOCK
The undersigned, a stockholder of THE BOSTON BEER COMPANY, INC does hereby
appoint C. James Koch the undersigned's proxy, with full power of substitution,
to appear and vote at the Annual Meeting of Stockholders to be held on June 3,
1997 at 10:00 A.M., local time, or at any adjournments thereof, upon such
matters as may come before the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby instructs said proxy, or his substitute, to vote as
specified on the reverse side on the following matters and in accordance with
his judgement on other matters which may properly come before the Meeting.
(Continued and to be Completed on Reverse Side)
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATION, SIGN AND DATE
THIS CARD IN THE SPACE BELOW. NO BOXES NEED TO BE CHECKED
Please mark your votes as indicated in this example [X]
1. Election of Class A Directors. PEARSON C CUMMIN III AND JAMES C. KAUTZ
FOR both nominees listed (Except as marked to the contrary to the right) [ ]
WITHOLD authority from both nominees listed [ ]
(Instructions: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- -------------------------------------------------------------------------------
I plan to attend the meeting [ ]
PLANNING TO ATTEND? Please help our planning efforts by letting us know if you
expect to attend the Annual Meeting. Call (617)368-5050, and check the box
above.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO ACTION IS
INDICATED AS TO ITEM 1, SUCH SHARES WILL BE VOTED IN FAVOR OF SUCH ITEM.
IMPORTANT: Before returning this Proxy, please sign your name or names on the
lines(s) below exactly as shown hereon. Executors, administrators, trustees,
guardians or corporate officers should indicate their full title when signing.
Where shares are registered in the name of joint tenants or trustees, each joint
tenant or trustee should sign.
Dated____________________________________________________________________, 1997
_________________________________________________________________________ (L.S.)
_________________________________________________________________________ (L.S.)
Stockholder(s) Sign Here
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.