SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [X]
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-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or (S) 240.14a-12
THE BOSTON BEER COMPANY, INC.
.............................................................................
(Name of Registrant as Specified in its Charter)
.............................................................................
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
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of Schedule 14A.
[_] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
........................................................................
4) Proposed maximum aggregate value of transaction:
........................................................................
5) Total fee paid:
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[_] Fee paid previously 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: .............................................................
THE BOSTON BEER COMPANY, INC.
NOTICE OF THE 1999 ANNUAL MEETING OF STOCKHOLDERS
June 1, 1999
To The Stockholders:
The 1999 Annual Meeting of the Stockholders of THE BOSTON BEER COMPANY, INC.
(the "Corporation") will be held on Tuesday, June 1, 1999, at 10:00 a.m. at
The Brewery located at 30 Germania Street, Jamaica Plain, Boston,
Massachusetts, for the following purposes:
1. The election by the holders of the Class A Common Stock of three (3)
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 six
(6) 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 2, 1999 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 14, 1999
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 1999 Annual Meeting of
Stockholders to be held on Tuesday, June 1, 1999, 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 mailed to stockholders is April 14, 1999.
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 to be represented by
proxy at the Meeting in order to constitute a quorum for the election of the
Class A Directors. The election of each of the nominees for Class A Director,
as hereinafter set forth in greater detail, 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 Class B Directors, as hereinafter set forth
in greater detail, and to approve all other matters listed in the notice of
meeting.
The Corporation will bear the cost of the solicitation. In addition to
mailing this material to shareholders, the Corporation has asked banks and
brokers to forward copies to persons for whom they hold stock of the
Corporation and request authority for execution of the proxies. The
Corporation will reimburse the banks and brokers for their reasonable out-of-
pocket expenses in doing so. Officers and regular employees of the Company,
without being additionally compensated, may solicit proxies by mail,
telephone, telegram, facsimile or personal contact. All reasonable proxy
soliciting expenses will be paid by the Corporation in connection with the
solicitation of votes for the Annual Meeting.
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 2, 1999 are
entitled to notice of and to vote at the meeting. On that date, the
Corporation had outstanding and entitled to vote 16,415,010 shares of Class A
Common Stock, $.01 par value per share, and 4,107,355 shares of Class B Common
Stock, $.01 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.
Items 1 and 2. ELECTION OF CLASS A AND CLASS B DIRECTORS
The Board of Directors proposes that the total number of Directors be fixed
for the ensuing year at nine (9), consisting of three (3) Class A Directors to
be elected by the holders of the Class A Common Stock for a term of one (1)
year, and six (6) Class B Directors to be elected by the sole holder of the
Class B Common Stock, also for a term of one (1) year.
It is proposed that each of the three (3) nominees for Class A Director and
five (5) nominees for Class B Director listed below whose term expires at this
meeting, be re-elected as Class A and Class B Directors,
1
respectively, together with the additional nominee for Class B Director so
designated below in the section entitled, "Additional Nominee", each to serve
for a term of one year and until his successor is duly elected and qualified
or until he sooner dies, resigns or is removed.
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, Wing and Hiatt, all
Directors are either Executive Officers of the Corporation or its subsidiaries
or related to such Executive Officers.
Nominees Proposed in Accordance with the Terms of the Articles of
Organization and By-Laws of the Corporation. Set forth below are the nominees
for election as Class A and Class B Directors, respectively, for terms ending
in 2000 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.. 56 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......... 68 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.
Robert N. Hiatt........ 62 1998 Mr. Hiatt was Chairman of Maybelline, Inc. from 1996
until he retired in 1997. From 1990 until 1996, Mr.
Hiatt was President and CEO of Maybelline, Inc. In
addition, Mr. Hiatt served as a Director of Genovese
Drug Stores, Inc. from 1997 until early 1999.
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.......... 49 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... 66 1995 Mr. Rossow joined the Company in late 1989 as Chief
Operating Officer and Chief Financial Officer. In
April 1997, he became Executive Vice President and
Chief Financial Officer of the Company.
Rhonda L. Kallman...... 38 1995 Ms. Kallman co-founded the Company. She currently
serves as Executive Vice President of Sales and Brand
Development. Previous to being promoted to this role
in January 1999, Ms. Kallman served as Vice President
of Sales since 1985.
Charles Joseph Koch.... 76 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........... 52 1995 From 1991 through January 1999, Mr. Wing was Chairman
and CEO of The Wing Group Limited, Co., a developer
of energy projects in Turkey, Kuwait and China, and
is currently a private investor.
2
ADDITIONAL NOMINEE
Additional Class B Director Nominee:
Name of Nominee Age Principal Occupation During the Past Five Years
--------------- --- -----------------------------------------------
Martin Roper.. 36 Mr. Roper has served as Chief Operating Officer of the Company since
April 1997. Mr. Roper joined the Company as Vice President of
Manufacturing and Business Development 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 &
Company.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During the Corporation's 1998 fiscal year, there were five (5) meetings of
the Board of Directors of the Corporation. All of the Directors, except for
John B. Wing, attended at least 75% of the aggregate of (i) the total number
of meetings of the Board of Directors which they were entitled to attend and
(ii) the total number of meetings held by Board of Directors committees on
which they served which they were entitled to attend. In 1998, Mr. Wing
attended 100% of the meetings of the Board of Directors, 100% of the meetings
of the Compensation Committee and 50% of the meetings of the Audit Committee.
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.
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 (Chairman), Robert N. Hiatt, James C. Kautz and John B.
Wing. The Audit Committee met on two (2) occasions in 1998.
The Corporation also has a Compensation Committee, whose purposes are to
make recommendations to the full Board of Directors concerning the
Corporation's Employee Equity Plan and to otherwise act with respect to
matters of executive compensation. The members of such Committee are Pearson
C. Cummin III, Robert N. Hiatt, James C. Kautz (Chairman) and John B. Wing.
The Compensation Committee met on two (2) occasions in 1998.
3
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS OF
VOTING SECURITIES, DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Class A Common Stock as of April 2, 1999 (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 Officers, -------------------------------
Directors and 5% Stockholders Number Percent
----------------------------- ---------------- --------------
C. James Koch(2)(3)............................. 5,452,674 26.6%
Rhonda L. Kallman(3)(4)......................... 326,081 1.6%
Alfred W. Rossow, Jr.(3)(5)..................... 105,807 *
Martin Roper(3)(6).............................. 283,666 1.4%
David Grinnell(3)(7)............................ 17,155 *
Pearson C. Cummin III(8)........................ 1,066,320 5.2%
James C. Kautz(9)............................... 530,031 2.6%
Charles Joseph Koch(3)(10)...................... 9,500 *
John B. Wing(11)................................ 379,392 1.8%
Consumer Venture Partners I, L.P.(12) .......... 1,058,820 5.2%
Robert N. Hiatt(3)(13).......................... 6,500 *
Roberta A. Merkel(14)........................... 15,750 *
All Directors and Executive Officers as a group
(10 people).................................... 8,177,126 39.8%
- --------
*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 60 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; does not include shares
deposited in Exchange Funds which have been treated as sales for
reporting purposes. Includes options to acquire 2,927 shares of Class A
Common Stock exercisable currently or within 60 days.
(3) Executive officer and/or Director and/or nominee for Director of the
Company. Mailing address is c/o The Boston Beer Company, Inc., 75
Arlington Street, Boston, MA 02116.
(4) Includes options to acquire 176,671 shares of Class A Common Stock
exercisable currently or within 60 days; does not include shares
deposited in Exchange Funds which have been treated as sales for
reporting purposes.
(5) Includes options to acquire 23,334 shares of Class A Common Stock
exercisable currently or within 60 days.
(6) Consists of options to acquire 283,666 shares of Class A Common Stock
exercisable currently or within 60 days.
(7) Includes options to acquire 17,055 shares of Class A Common Stock
exercisable currently or within 60 days.
(8) Director of the Company. Consists of options to acquire 7,500 shares of
Class A Common Stock exercisable currently or within 60 days, and
1,058,820 shares owned by Consumer Venture Partners I, L.P.
4
of which Mr. Cummin is a general partner. Mailing address is Three
Pickwick Plaza, Greenwich, Connecticut 06830.
(9) 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 7,500 shares of Class A Common Stock
exercisable currently or within 60 days.
(10) Director of the Company and father of C. James Koch. Consists of options
to acquire 7,500 shares of Class A Common Stock exercisable currently or
within 60 days and 2,000 shares owned by the spouse of Mr. Koch.
(11) Director of the Company. Mailing address is c/o The Wing Group, 2203
Timberloch Place, Suite 217, The Woodlands, Texas 77380. Includes options
to acquire 7,500 shares of Class A Common Stock exercisable currently or
within 60 days.
(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.
(13) Director of the Company. Includes options to acquire 2,500 shares of
Class A Common Stock exercisable currently or within 60 days, and 1,000
shares of Class A Common Stock owned by the spouse of Robert N. Hiatt.
(14) Key employee ("Key Employee") of the Company. Mailing address is c/o The
Boston Beer Company, Inc., 75 Arlington Street, Boston, MA 02116.
Includes options to acquire 14,750 shares of Class A Common Stock
exercisable currently or within 60 days.
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 Director Stock Option
Plan pursuant to which each non-employee director of the Company receives the
grant of 2,500 shares of the Company's Class A Common Stock 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 at a per share price of $18.5625 per
share; on June 3, 1997, each non-employee director was granted an option to
purchase up to 2,500 shares of the Company's stock at $9.50 per share; and on
June 2, 1998, each non-employee director was granted an option to purchase up
to 2,500 shares at a per share price of $11.1875. The grant of stock options
under this Non-Employee Director 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. On December 19, 1997, the Board amended the terms of such Non-
Employee Director Stock Option Plan (and of each stock option grant made
pursuant to the terms of such Plan) to increase from ninety (90) days to three
(3) years the period within which each option would remain exercisable
following the date on which the optionee ceased to be a Director of the
Company, subject in any case to the ten (10) year term of each option.
5
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
Compensation Philosophy. The Company's executive compensation system
continues to be comprised of base salaries, annual bonuses and stock option
awards. Executive compensation is subject to the oversight and approval of the
Compensation Committee of the Board of Directors (the "Committee"), which
reviews executive officer compensation annually. Executive compensation is
designed to be competitive within the alcoholic beverages industry and other
companies of comparable size and complexity, so as to enable the Company to
continue to attract and retain talented and motivated individuals in key
positions.
Compensation paid to the Company'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 Company. 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.
Equity-Based Compensation. During 1998, the Compensation Committee again
devoted significant attention to the grant of so-called Discretionary Options
under the Company's Employee Equity Plan. The Discretionary Options feature of
the Employee Equity Plan has been used by the Compensation Committee as an
integral part of the overall compensation approach for the officers of the
Company. Such stock option awards are designed to provide incentive to the
Company's key management employees to increase the market value of the
Company's stock, thus linking corporate performance and stockholder value to
executive compensation.
As amended and restated in 1997, the Employee Equity Plan calls for the
Committee to make recommendations to the full Board with respect to the grant
of Discretionary Options. In recommending the grant of options, the
Compensation Committee 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 deems relevant. In carrying out these responsibilities
in 1998, the Committee met with the Company's Chief Executive Officer in
October to review Management's preliminary thinking with respect to
Discretionary Options to be granted effective January 1, 1999. The Committee
met again with the Chief Executive Officer in December to review final
recommendations in the context of the overall compensation plan for
executives. Based on this review, the Committee recommended that options
covering an aggregate of 275,000 shares of Class A stock be granted by the
Board, effective as of January 1, 1999. The Committee also recommended, and
the Board approved, that a portion of the options granted to the Company's
four most senior executives carry exercise prices representing a premium over
the current market price for the Company's stock.
Up to an aggregate of 2,687,500 shares of Class A Common Stock may be issued
under the Employee Equity Plan. As of April 2, 1999, there were 987,592 shares
of Class A Common Stock available for grant under the Employee Equity Plan.
A detailed description of the Employee Equity Plan is included elsewhere in
this Proxy Statement. The Employee Equity Plan may be amended or terminated by
the Board of Directors, subject to the approval of the holder of a majority in
interest of the Class B Common Stock of the Company.
Chief Executive Officer Compensation. The Compensation Committee reviewed
and approved the compensation paid to the Company's Chief Executive Officer,
C. James Koch, during 1998. In reviewing such compensation, the Committee
evaluated the Company's success in executing against the Company's strategic
plan for maintaining its leading position in the highly competitive better
beer industry. The Compensation Committee believes that the compensation paid
to Mr. Koch in 1998 was reasonable in light of the Company's overall
performance, especially in the area of profitability. The Committee also now
believes that, even though Mr. Koch already has a significant equity position
in the Company, his compensation should also be aligned
6
with the interests of all stockholders. Accordingly, the Compensation
Committee recommended, and the Board approved, the grant to Mr. Koch of a
Discretionary Option covering 15,000 shares, effective January 1, 1999, of
which 3,000 shares carry an exercise price of $8.4375; 3,750 shares carry an
exercise price of $11.2219; 3,750 shares carry an exercise price of $14.0906;
and 4,500 shares carry an exercise price of $16.8750.
The Compensation Committee:
James C. Kautz, Chairman
Pearson C. Cummin, III
Robert N. Hiatt
John B. Wing
7
EXECUTIVE OFFICERS OF THE COMPANY
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, 49, co-founded the Company in 1984 and has been the Chief
Executive Officer throughout the Company's history.
Rhonda L. Kallman, 38, co-founded the Company. She currently serves as
Executive Vice President of Sales and Brand Development. Previous to being
promoted to this role in January 1999, Ms. Kallman served as Vice President of
Sales since 1985.
Alfred W. Rossow, Jr., 66, joined the Company in late 1989 as Chief
Operating Officer and Chief Financial Officer. Since April 1997, Mr. Rossow
has served as Executive Vice President and Chief Financial Officer of the
Company.
Martin Roper, 36, has served as Chief Operating Officer since April, 1997.
He joined the Company as Vice President of Manufacturing and Business
Development 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 & Company.
David Grinnell, 40, is Manager of Brewing Operations of the Company. Mr.
Ginnnell joined the Company in 1988 as a Brewer and has served in his current
position since 1990.
OTHER SIGNIFICANT EMPLOYEES OF THE COMPANY
Roberta A. Merkel, 46, serves as Vice President of Brand Development. Ms.
Merkel joined the Company in 1996 as the Director of Brand Development. Prior
to joining the Company, Ms. Merkel served as the CEO of the Marketing
Continuum in Dallas, Texas which she founded in 1984. Ms. Merkel worked at the
Miller Brewing Company, where she helped introduce Miller Lite.
Jeffrey White, 41, is Vice President of Operations. Mr. White has served in
his current position since April 1997. Previously, he served as Director of
Operations from 1994 to 1997, Operations Manager from 1991 to 1994, and as
Distribution Manager from 1989 to 1991. Mr. White worked for Anheuser-Busch
from 1988 to 1989 as a Packaging Supervisor and prior to that, for New
Amsterdam Brewing Company as Operations Manager.
Richard P. Lindsay, 37, serves as Vice President of Finance. Mr. Lindsay
joined the Company in early 1997 to assist in the acquisition and integration
of the Company's Cincinnati brewery. Immediately following the acquisition,
Mr. Lindsay served as Corporate Controller until he was appointed to his
current position in November 1998. Prior to joining the Company, Mr. Lindsay
held various finance and consulting positions at Agility, Inc., KPMG Peat
Marwick LLP and Shawmut Bank.
EXECUTIVE COMPENSATION
The following table sets forth total compensation awarded to the Chief
Executive Officer, Executive Officers and one Key Employee of the Corporation
whose total salaries and bonuses exceeded $100,000 in the fiscal year ended
December 26, 1998. The Key Employee represents the highest paid non-executive
officer of the Corporation for the fiscal year ended December 26, 1998.
Compensation disclosed is for all services rendered in all capacities to the
Corporation for the fiscal years ended December 26, 1998, December 27, 1997
and December 28, 1996.
8
SUMMARY COMPENSATION TABLE
Other
Annual Compensation Compensation
----------------------- Other Annual from
Name and Principal Position Years Salary(1) Bonus(2) Compensation Securities
- --------------------------- ----- ---------- --------- ------------ ------------
C. James Koch............ 1998 $ 184,465 -- $ 745 --
President and Chief 1997 $ 184,465 $ 37,750 $ 185 --
Executive Officer 1996 $ 184,465 $ 129,940 $ 797 $1,400,134
Rhonda L. Kallman........ 1998 $ 226,169 $ 65,000 $ 583 $ 131,241
Executive Vice President 1997 $ 175,680 $ 90,125 $ 525 $1,042,143
of Sales
and Brand Development 1996 $ 174,353 $ 77,000 $ 505 $ 579,830
Alfred W. Rossow, Jr..... 1998 $ 193,669 $ 18,500 $74,109(3) $ 354
Executive Vice President
and 1997 $ 191,160 $ 14,450 $64,883(3) $1,106,461
Chief Financial Officer 1996 $ 176,940 $ 35,000 $61,095(3) $1,497,808
Martin F. Roper.......... 1998 $ 277,169 $ 40,000 $ 539 --
Chief Operating Officer 1997 $ 213,302 $ 500 $ 209 --
1996 $ 158,592 $ 47,500 $ 90 --
Roberta A. Merkel........ 1998 $ 192,837 -- $ 498 --
Vice President of 1997 $ 168,654 $ 500 $ 412 --
Brand Development 1996 $ 50,155(4) $ 20,500 $25,733 --
- --------
(1) Included in this column are amounts earned, though not necessarily
received, during the corresponding fiscal year.
(2) The bonus amounts for the executive officers have been restated so that
the bonus for all fiscal year periods is recorded for each officer in the
year in which such bonus is paid.
(3) Included in these amounts are deferred compensation of $70,000, $61,000
and $59,000 for fiscal years 1998, 1997 and 1996. See "Deferred
Compensation Agreement with Alfred W. Rossow, Jr." below.
(4) Roberta A. Merkel joined the Company in September 1996.
The following sets forth, as of December 26, 1998, information regarding
options exercised by the Executive Officers and Key Employee during the fiscal
year ended December 26, 1998 as well as information regarding unexercised
options held by such Executive Officers and Key Employee and the value of "in-
the-money" options.
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES AS OF DECEMBER 26, 1998
Number of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)(7)
------------------------- -------------------------
Shares Acquired Value Realized
Name on Exercise (#) ($)(8) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------------- ----------- ------------- ----------- -------------
C. James Koch........... 0 0 2,927 0 23,936 0
Rhonda L. Kallman....... 18,346 130,715 101,671 133,334 13,673 9,373
Alfred W. Rossow, Jr.... 0 0 15,000 33,333 0 9,373
Martin F. Roper......... 0 0 223,666 281,217 0 0
David Grinnell.......... 0 0 6,676 25,760 13,705 6,215
Roberta A. Merkel....... 0 0 13,500 16,500 0 1,406
- --------
(7) Based upon a fair market value at December 26, 1998 of $8.1875 per share,
determined in accordance with the rules of the Securities and Exchange
Commission, less the option exercise price or purchase price.
(8) Excludes value realized from the vesting of Investment Shares purchased in
prior year periods.
9
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. As of December 26, 1998, the cash value of
the Policy was $302,310, the basic insurance amount was $671,717 and the total
death benefit was $770,047. The assets held in the Trust, including the
Policy, are intended to secure the Company's obligations to Mr. Rossow under
the Agreement.
The Employee Equity Plan
The Employee Equity Plan is the successor to the Partnership's 1995
Management Option Plan, the various Partnership employee investment unit
plans, and various discretionary options granted by the 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 2, 1999, there are (i) outstanding Management Options for 57,845
shares of Class A Common Stock at an exercise price of $0.01 per share, of
which options to purchase 48,792 shares are immediately exercisable, (ii)
outstanding Discretionary Options for 1,141,549 shares of Class A Common Stock
at an average exercise price of $11.73 per share, of which options to purchase
519,248 shares are immediately exercisable and (iii) rights to receive 73,868
Investment Shares, of which rights to receive 37,586 shares have vested.
A more complete discussion of the specific terms and provisions of the
Employee Equity Plan is provided below.
10
Stock Options
The following table sets forth certain information concerning grants of
stock options made during the year ended December 26, 1998 to the Executive
Officers and other key employee named below.
OPTION GRANTS IN YEAR ENDED DECEMBER 26, 1998
Individual Grants
-----------------------------------------------------------------
Percent of Potential Realizable Value at
Number of Total Assumed Annual Rates of
Securities Options Exercise Stock Price Appreciation
Underlying Granted to or for Option Term(1)
Options Employees in Base Price Expiration ------------------------------
Name Granted(#) Fiscal Year Per Share Date 0% 5% 10%
---- ---------- ------------ ---------- ---------- ------------------ -----------
C. James Koch........... -- -- -- -- -- -- --
Rhonda L. Kallman....... 33,333 41% $7.9063 1/1/08 $ 0 $ 165,737 $ 420,012
Alfred W. Rossow, Jr.... 33,333 41% $7.9063 1/1/08 $ 0 $ 165,737 $ 420,012
Martin Roper............ -- -- -- -- -- -- --
David Grinnell.......... -- -- -- -- -- -- --
Roberta A. Merkel....... 5,000 6% $7.9063 1/1/08 $ 0 $ 24,861 $ 63,002
- --------
(1) The potential realizable value of the options reported above was
calculated by assuming 0%, 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.
11
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 a peer group as of December 31,
1998.
[GRAPH APPEARS HERE]
THE EMPLOYEE EQUITY INCENTIVE PLAN
On November 20, 1995, the Company adopted the Employee Equity Plan which
provided for 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 originally authorized for issuance under
the Employee Equity Plan was 1,687,500 shares. On October 20, 1997, the Board
of Directors (the "Board") and the sole holder of the Corporation's Class B
Common Stock amended the Employee Equity Plan to provide for an additional
1,000,000 authorized shares and, on December 19, 1997, the Company further
amended the Employee Equity Plan to delete the provision which had permitted
the grant of Management Options which had been granted at a per share exercise
price of $0.01 and to provide for a shift from the Compensation Committee to
the full Board of Directors authority to act under the Employee Equity Plan,
based on recommendations brought to it by the Compensation Committee. 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.
12
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 Board of Directors (the
"Board") and the sole holder of the Corporation's Class B Common Stock, taking
into account recommendations from the Compensation Committee of the Board. The
Compensation Committee consists of at least two (2) members of the Board, none
of whom shall be or at any time have been employees of the Company. The
members of the Compensation Committee are appointed by the Board and the Board
may at any time, subject to the above restrictions, appoint one or more
members of the Compensation Committee in substitution for or in addition to
the member or members then in office and may fill vacancies on the
Compensation Committee, however caused. 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 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 Board, 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 a
recommendation to the Board to be granted Discretionary Options. In
designating Optionees for Discretionary 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. While Management Options
granted prior to December 31, 1997 remain outstanding, effective as of
December 19, 1997, the Employee Equity Plan no longer provides for the grant
of Management Options. Therefore, as of the date of its meeting in October of
each year, the Compensation Committee shall make its recommendation to the
Board concerning the overall total number of shares which are eligible for
option grants and such other and further details as the Compensation Committee
may deem appropriate. Immediately prior to the Board's meeting in December of
each year, the Compensation Committee will finalize its recommendation, taking
into consideration the recommendations of management, and will thereafter
makes its final recommendation to the Board with respect to the grant of
Discretionary Options to selected Optionees. The terms of each 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 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, or upon such
other vesting schedule as the Compensation Committee recommends, and the
Board shall so approve, so long as the Optionee continues to be employed by
the Company as of each vesting date, provided, however, that (i) the Board
may permit accelerated vesting in its discretion, (ii) Discretionary
Options shall become exercisable in full in the event of an Optionee's
retirement at or after reaching age 65, death or
13
disability, and (iii) the Compensation Committee may recommend, and the
Board may so approve, tying exercisability to compliance by an Optionee
with any applicable restrictive covenants; and
(ii) Except as recommended by the Compensation Committee, and approved by
the Board, from time to time, a 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 (based upon the market value of the shares, determined as set
forth above, as of the last trading day in December immediately preceding such
January 1) 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 has 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
14
disposition contrary to the provisions hereof, or levy of execution,
attachment, trustee process or similar process, whether legal or equitable,
upon the option.
During fiscal year 1998, a total of 14,793 Investment Shares were purchased
by Eligible Employees, including 3,366 and 2,807 Investment Shares by Rhonda
Kallman and James Koch, respectively.
Recent Grants
The following summarizes the total grants of Management Options and
Discretionary Options during fiscal year 1998. Dollar values below are based
upon a fair market value of Class A Common Stock at December 26, 1998 of
$8.1875 per share, determined in accordance with the rules of the Securities
and Exchange Commission, less the option exercise price. No Management Options
were granted to the executive officers or employees of the Company during the
year ended December 26, 1998.
The following sets forth the details of Discretionary Options granted during
the year ended December 26, 1998:
Discretionary Option Grants
------------------------------
Dollar Number of
Name and Position Value(1) Shares
----------------- -------------- --------------
James Koch, CEO.................................. -- --
Rhonda L. Kallman, Exec. VP of Sales and Brand
Development..................................... $ 9,373 33,333
Alfred W. Rossow, Jr., Exec. VP and CFO.......... $ 9,373 33,333
Martin Roper, Chief Operating Officer............ -- --
Roberta A. Merkel, VP of Brand Development....... $ 1,406 5,000
Executive Officers as a Group.................... $ 20,152 71,666
All Directors (excluding Executive Officers and
Key Employee)................................... ($37,266) 12,500
Employees as a Group (excluding Executive
Officers and Key Employee)...................... $ 2,812 10,000
- --------
(1) Calculated by multiplying the difference between the per share value of
Class A Common Stock on December 26, 1998 and the respective option
exercise price, and multiplying by the number of shares subject to
Discretionary Options granted.
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.
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.
15
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.
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
16
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. Participants
purchasing Investment Shares should consult their tax advisors regarding the
advisability of making a Section 83(b) election. A Section 83(b) election must
be made within thirty (30) days of the purchase of Investment Shares.
INDEPENDENT PUBLIC ACCOUNTANTS
Effective June 15, 1998, the Board of Directors appointed Arthur Andersen
LLP as independent auditors to examine the consolidated financial statements
of the Company for the fiscal year ending December 26, 1998 and disengaged
Coopers & Lybrand LLP as its independent auditors. Such change was not the
result of any disagreement between the Company and Coopers & Lybrand LLP
relating to any accounting, financial reporting or disclosure issues. A
representative of Arthur Andersen LLP 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 Arthur Andersen LLP 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 the fiscal year ended December 26, 1998, 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 Mr. Alfred W. Rossow, Jr., the Company's Chief Financial Officer
and a Director of the Company, amended one otherwise timely-filed report
relating to the sale of 8,360 shares of Company Class A Common Stock.
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 2000 must be received at
the Corporation's principal executive offices in Boston, Massachusetts on or
before December 18, 1999. 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.
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.
17
10-K REPORT
THE CORPORATION WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A
COPY OF AN ANNUAL REPORT ON FORM 10-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 all nominees
specified herein. 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
Boston, Massachusetts
April 14, 1999
18