def14a
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment
No. )
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Filed by the Registrant x |
Filed by a Party other than the Registrant o |
Check the appropriate box:
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Preliminary
Proxy Statement
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Definitive
Proxy Statement
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o |
Soliciting
Material Pursuant to §240.14a-11(c) or §240.14a-12
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Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
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The Boston Beer Company, Inc.
(Name of Registrant as Specified In Its
Charter)
The Boston Beer Company, Inc.
(Name of Person(s) Filing Proxy
Statement)
Payment of Filing Fee (Check the appropriate
box):
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x |
No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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1) Title
of each class of securities to which transaction applies:
2) Aggregate
number of securities to which transaction applies:
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
(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.
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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
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Filed:
TABLE OF CONTENTS
THE
BOSTON BEER COMPANY, INC.
NOTICE OF THE 2011 ANNUAL MEETING OF STOCKHOLDERS
May 25,
2011
To our Stockholders:
The 2011 Annual Meeting of the Stockholders of THE BOSTON BEER
COMPANY, INC. (the Company) will be held on
Wednesday, May 25, 2011, at 9:00 a.m. at The Brewery
located at 30 Germania Street, 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. 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 conduct an advisory vote on the compensation of the
Companys named executive officers.
4. To conduct an advisory vote on the frequency of holding
future advisory votes on the compensation of the Companys
named executive officers.
5. To consider and act upon any other business which may
properly come before the meeting.
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice.
The Board of Directors has fixed the close of business on
March 28, 2011 as the record date for the meeting. Only
stockholders of record on that date are entitled to notice of
and to vote at the meeting.
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING, PLEASE SUBMIT YOUR PROXY OR VOTING
INSTRUCTIONS AS SOON AS POSSIBLE. You may submit
your proxy (1) by mail using a traditional proxy card,
(2) by calling the toll-free number, or (3) through
the Internet, as described in the enclosed materials.
This Proxy Statement and accompanying proxy are being
distributed on or about April 14, 2011.
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C. James Koch
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Kathleen H. Wade
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Chairman of the Board of Directors
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Corporate Secretary
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Important
Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to be Held on May 25,
2011
The Notice of Annual Meeting, Proxy Statement and the Annual
Report to Stockholders are available on the Internet. If your
shares are held in your name, you may access the materials at
http://bnymellon.mobular.net/bnymellon/sam.
If your shares are held in the name of a bank, broker or other
holder of record, you may access the materials at
www.proxyvote.com.
THE
BOSTON BEER COMPANY, INC.
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of The Boston
Beer Company, Inc. (the Company) for use at the 2011
Annual Meeting of Stockholders to be held on Wednesday,
May 25, 2011, at the time and place set forth in the notice
of the meeting, and at any adjournments thereof.
Proxy
Materials are Available Electronically
As permitted by the rules of the Securities and Exchange
Commission (SEC), the Company is making this proxy
statement and its annual report available to its stockholders
electronically via the Internet. On or about April 14,
2011, the Company mailed to its stockholders a Notice containing
instructions on how to access this proxy statement and the
Companys annual report online. Those stockholders who
received a Notice by mail will not receive a printed copy of the
proxy materials in the mail. Instead, the Notice provides
instructions on how to access and review all of the important
information contained in the proxy statement and annual report
and how stockholders may submit their proxy over the Internet.
Stockholders who received a Notice by mail who would like to
receive a printed copy of the Companys proxy materials
should follow the instructions for requesting such materials
contained in the Notice.
Information
about Voting
Stockholders can vote in person at the Annual Meeting or by
proxy.
If your shares are held in your name, there are three
ways to vote by proxy by Internet, by toll-free
telephone or by mail. If you access the Companys proxy
materials via the Internet, you may vote electronically or by
telephone or you may request a proxy card to mail. If you
request a printed copy of the Companys proxy materials, by
following the instructions on the proxy card, you can vote by
Internet, by toll-free telephone or by signing, dating and
mailing the proxy card.
If your shares are held in the name of a bank, broker or
other holder of record, you will receive instructions from
the holder of record. You must follow the instructions of the
holder of record in order for your shares to be voted. Telephone
and Internet voting also will be offered to stockholders owning
shares through certain banks and brokers. If your shares are not
registered in your own name and you plan to vote your shares in
person at the Annual Meeting, you must contact your broker or
agent to obtain a legal proxy or brokers proxy card and
bring it to the Annual Meeting in order to vote.
Internet and telephone voting facilities for stockholders of
record will be available 24 hours a day and will close at
11:59 p.m. (EDT) on May 24, 2011.
If you vote by proxy, the individuals named on the proxy card
(your proxies) will vote your shares in the manner
you indicate. You may specify whether your shares should be
voted for or against all, some or none of the nominees for
director. If you sign and return the proxy card without
indicating your instructions, your shares will be voted FOR each
of the agenda items for which you are entitled to vote and have
not clearly indicated votes, except for Item 4 which will
be voted for a frequency of every ONE YEAR for the shareholder
advisory vote on executive compensation. In addition, if other
matters come before the meeting, the persons named in the
accompanying proxy and acting thereunder will have discretion to
vote on these matters in accordance with their best judgment.
You may revoke or change your proxy at any time before it is
exercised by (1) delivering to the Company a signed proxy
card with a date later than your previously delivered proxy,
(2) voting in person at the Annual Meeting,
(3) granting a subsequent proxy through the Internet or
telephone, or (4) sending a written revocation to the
Companys Corporate Secretary, Kathleen H. Wade. Your most
current proxy card or telephone or Internet proxy is the one
that will be counted.
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 Annual Meeting in
order to constitute a quorum for the election of the
Class A Directors, the advisory vote regarding the
compensation of the Companys named executive
officers, and the advisory vote on the frequency of holding
future advisory votes regarding the compensation of the
Companys named executive officers.
The matters being brought before the meeting will be decided, as
follows:
Item 1, the election of each of the nominees for
Class A Director as set forth below in this Proxy Statement
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 Annual Meeting.
Item 2, the election of each of the nominees for
Class B Director, also as set forth below in this Proxy
Statement in greater detail will be decided by 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.
Item 3, the non-binding, advisory vote regarding the
compensation of the Companys named executive officers,
will be decided by the affirmative vote of the holders of a
majority of the shares of the Class A Common Stock
represented in person or by proxy and entitled to vote.
Item 4, the non-binding, advisory vote regarding the
frequency of voting on the compensation of the Companys
named executive officers, the frequency (every one, two or three
years) for which the highest number of shares of Class A
Common Stock are voted will be deemed to be the choice of the
stockholders.
With respect to any other matter, if any, that properly comes
before the Annual Meeting, the affirmative vote of the sole
holder of the shares of Class B Common Stock represented in
person or by proxy will be required for approval.
Abstentions and withheld votes will be counted as
present in determining whether the quorum requirement is
satisfied. Votes withheld with respect to the election of
Class A Directors will have the same effect as a negative
votes. Similarly, abstentions will have the same effect as a
negative vote on the advisory vote regarding the compensation of
the Companys named executive officers.
All reasonable proxy soliciting expenses incurred in connection
with the solicitation of proxies for the Annual Meeting will be
borne by the Company. Officers and regular employees of the
Company, without being additionally compensated, may solicit
proxies by mail, telephone, telegram, facsimile or personal
contact.
The Companys principal executive offices are located at
One Design Center Place, Suite 850, Boston, Massachusetts
02210, telephone number
(617) 368-5000.
RECORD
DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on
March 28, 2011, are entitled to notice of and to vote at
the meeting. On that date, the Company had outstanding and
entitled to vote 9,322,118 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 Companys Class A and
Class B Common Stock entitles the record holder to one
(1) vote on each matter properly brought before the Class.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
beneficial ownership of the Companys Class A Common
Stock and Class B Common Stock as of March 28, 2011 by:
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each person (or group of affiliated persons) known by the
Company to be the beneficial owner(s) of more than 5% of the
outstanding Class A Common Stock;
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the current directors of the Company, all of whom are nominees
for reelection as directors, and the executive officers of the
Company named in the Summary Compensation Table on page 25
(named executive officers); and
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all current directors and executive officers of the Company as a
group.
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2
The address of all Directors and named executive officers is
c/o The
Boston Beer Company, Inc., One Design Center Place,
Suite 850, Boston, Massachusetts 02210. The information
provided in the table is based on the Companys records,
information filed with the SEC and information provided to the
Company, except where otherwise noted.
Beneficial ownership is determined under the rules of the SEC
and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under those rules, beneficial
ownership includes any shares as to which the individual has the
sole or shared voting power or investment power and also any
shares that the individual has the right to acquire under
certain circumstances. Unless otherwise indicated, each person
named below held sole voting and investment power over the
shares listed. All shares are Class A Common Stock, except
for shares of Class B Common Stock held by C. James Koch.
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Shares Beneficially Owned
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Name of Beneficial Owner
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Number
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Percent
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Directors and Executive Officers:
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C. James Koch(1)
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4,492,174
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33.4
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%
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Martin F. Roper(2)
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194,030
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*
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David A. Burwick(3)
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36,200
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*
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Pearson C. Cummin, III(4)
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53,923
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*
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Charles J. Koch(5)
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71,800
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*
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Jay Margolis(6)
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26,000
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*
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Gregg A. Tanner(7)
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23,000
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*
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Jean-Michel Valette(8)
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56,500
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*
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William F. Urich(9)
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164,225
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*
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Thomas W. Lance(10)
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60,731
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*
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John C. Geist(11)
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1,894
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*
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All Directors, Nominees for Director and Executive Officers
as a group (13 people)
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5,195,278
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38.7
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%
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Owners of 5% or More of Our Outstanding Shares:
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Black Rock, Inc.(12)
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678,921
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7.3
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%
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40 E. 52nd Street New York, NY 10022
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Neuberger Berman Group LLC(13)
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1,284,400
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13.8
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%
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Neuberger Berman LLC
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Neuberger Berman Management LLC
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Neuberger Berman Equity Funds
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605 Third Avenue, New York, NY 10158
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The Vanguard Group, Inc.(14)
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593,552
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6.4
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%
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100 Vanguard Blvd., Malvern, PA 19355
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Represents holdings of less than one percent (1%). |
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(1) |
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Includes 4,107,355 shares of Class B Common Stock,
constituting all of the outstanding shares of Class B
Common Stock, options to acquire 26,500 shares of
Class A Common Stock exercisable currently or within sixty
(60) days, 23,486 shares of Class A Common Stock
held by Mr. Koch for the benefit of his minor children and
5,266 shares of Class A Common Stock held by
Mr. Kochs spouse as custodian for the benefit of his
children for which she has sole voting and investment power. |
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Includes options to acquire 193,000 shares of Class A
Common Stock exercisable currently or probable to become
exercisable within sixty (60) days. |
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(3) |
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Includes options to acquire 36,000 shares of Class A
Common Stock exercisable currently or within sixty
(60) days. |
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Includes options to acquire 30,000 shares of Class A
Common Stock exercisable currently or within sixty
(60) days. |
3
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(5) |
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Includes options to acquire 50,000 shares of Class A
Common Stock exercisable currently or within sixty
(60) days and 1,000 shares held in trust in which
Mr. Koch has a beneficial interest. |
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(6) |
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Consists of options to acquire 26,000 shares of
Class A Common Stock exercisable currently or within sixty
(60) days. |
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(7) |
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Consists of options to acquire 23,000 shares of
Class A Common Stock exercisable currently or within sixty
(60) days. |
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(8) |
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Includes options to acquire 40,000 shares of Class A
Common Stock exercisable currently or within sixty
(60) days. |
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(9) |
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Includes options to acquire 160,800 shares of Class A
Common Stock exercisable currently or within sixty
(60) days and 1,871 shares of Class A Common
Stock purchased under the Companys Investment Share
program which are not yet vested. |
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Includes options to acquire 50,000 shares of Class A
Common Stock exercisable currently or within sixty
(60) days, 2,000 shares of Class A Common Stock
issued pursuant to a restricted stock award which are not yet
vested and 638 shares of Class A Common Stock
purchased under the Companys Investment Share program
which are not yet vested. |
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Consists of 1,894 shares of Class A Commons Stock
purchased under the Companys Investment Share program
which are not yet vested. |
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(12) |
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Information is based on a Schedule 13G filed with the SEC
on February 3, 2011 by BlackRock, Inc., which reported sole
voting power and sole dispositive power as follows: sole voting
power 678,921 shares and sole dispositive
power 678,921 shares. |
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(13) |
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Information is based on a Schedule 13G filed with the SEC
on February 14, 2011 by Neuberger Berman Group LLC,
Neuberger Berman LLC, Neuberger Berman Management LLC and
Neuberger Berman Equity Funds, which reported that these
entities may be deemed to beneficially own all of the shares
reported in the table. Neuberger Berman Group LLC and Neuberger
Berman LLC each reported shared voting power with respect to
1,115,191 shares and shared dispositive power with respect
to 1,284,400 shares. Neuberger Berman Management LLC
reported shared voting power and shared dispositive power with
respect to 1,024,419 shares. Neuberger Berman Equity Funds
reported shared voting power and shared dispositive power with
respect to 1,018,419 shares. These entities also reported
that the holdings of Neuberger Berman Trust Co N.A.,
Neuberger Berman Trust Co of Delaware N.A., NB Alternative
Fund Management LLC, NB Alternatives Advisers LLC and
Neuberger Berman Fixed Income LLC, affiliates of Neuberger
Berman LLC, are also aggregated to comprise the shares reported. |
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(14) |
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Information is based on a Schedule 13G filed with the SEC
on February 11, 2011 by The Vanguard Group, Inc., which
reported sole voting power and sole and shared dispositive power
as follows: sole voting power 14,017 shares,
shared dispositive power 14,017 shares, and
sole dispositive power 579,535 shares. |
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Items 1
and
2.
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ELECTION
OF CLASS A AND CLASS B DIRECTORS
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Upon the recommendation of the Nominating/Governance Committee,
the Board of Directors proposes that the initial number of
Directors for the ensuing year be fixed at eight (8), 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 five (5) Class B Directors to be
elected by the sole holder of the Class B Common Stock,
also for a term of one (1) year, reserving the right of the
sole holder of the Class B Common Stock to increase the
number of Class B Directors to up to seven (7) at such
time as he deems appropriate and to elect up to two
(2) additional Class B Directors accordingly.
It is proposed that the holders of the Class A Common Stock
elect each of the three (3) nominees for Class A
Director to serve for a term of one (1) year and until his
successor is duly elected and qualified or until he sooner dies,
resigns or is removed.
It is anticipated that the sole holder of the Class B
Common Stock will elect each of the five (5) nominees for
Class B Director, also to serve for a term of one
(1) year and until his successor is duly elected and
qualified or until he sooner dies, resigns or is removed. Three
(3) of the five (5) nominees for Class B
Directors are either executive officers of the Company or
immediate family members of such executive officers.
4
Shares represented by proxies submitted through the Internet or
by telephone, and those represented by paper proxy cards that
are properly signed, dated and returned, will be voted at the
Annual Meeting in accordance with the instructions set forth
therein. If a proxy is properly submitted, whether through the
Internet, by telephone, or by mail using a paper proxy card, but
contains no instructions, the persons named in the accompanying
proxy will vote, unless authority is formally withheld, FOR
the election as Class A Directors of the three
(3) nominees named below. In the event that any of the
nominees should become unavailable for election, which is not
anticipated, the persons 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
Companys By-Laws as a nominating committee, may nominate.
As indicated below, none of the nominees for Class A
Directors are executive officers of the Company or its
subsidiaries nor immediate family members of such executive
officers.
NOMINEES
FOR BOARD OF DIRECTORS
Nominees Proposed in Accordance with the Terms of the
Articles of Organization, By-Laws of the Company and the
Corporate Governance Guidelines. Set forth below
are the nominees for election as Class A and Class B
Directors, respectively, for terms ending in 2012 and certain
information about each of them. Each nominee is currently a
director of the Company and the information below includes the
experiences, qualifications, attributes or skills that caused
the Board of Directors to determine that the individual should
continue to serve as a director of the Company. All nominees
have extensive business and senior management experience and
together represent a diverse group of individuals with
particular skills and experience in those areas the Company
considers to be the most critical to its business and prospects,
including knowledge of and experience in the alcohol beverage
industry, marketing and brand development, operations and supply
chain management, finance, sales, and general enterprise
management.
Class A
Directors:
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Year First
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Position With the Company
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Elected
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or Principal Occupation
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Name of Nominee
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Age
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a Director
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During the Past Five Years
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David A. Burwick
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49
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2005
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In April, 2010, Mr. Burwick became President,
North America, of Weight Watchers International, Inc., a
publicly-held company based in New York City and a leading
provider of weight management services. Mr. Burwick had been
Senior Vice President and Chief Marketing Officer of
PepsiCo North American Beverages, headquartered
in Purchase, New York until September 2009. Before assuming that
position in April 2008, he had been Executive Vice President,
Commercial, of PepsiCo International and President of Pepsi-QTG
Canada, headquartered in Toronto, a position he held from
November 2005 to March 2008. Mr. Burwick held several positions
with Pepsi-Cola North America, including serving as Senior Vice
President and Chief Marketing Officer from June 2002 until
immediately prior to his move to Pepsi-QTG Canada. Mr. Burwick
has extensive experience in marketing consumer product goods and
brand development.
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Year First
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Position With the Company
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Elected
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or Principal Occupation
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Name of Nominee
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Age
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a Director
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During the Past Five Years
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Pearson C. Cummin, III
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68
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1995
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Mr. Cummin has been active as a private investor for over five
years and is currently the Managing Member of Grey Fox
Associates I, LLC, a private investment company
headquartered in Greenwich, Connecticut. He served as a Director
of Pacific Sunwear of California, Inc., a California-based
specialty apparel retailer, from 1988 through March 2010, where
he also had served as chair of its compensation committee and a
member of its audit and nominating/governance committees. Mr.
Cummin currently serves as the Secretary/Treasurer elect of the
American Diabetes Association. From 1986 through 2002, Mr.
Cummin served as a general partner of Consumer Venture Partners,
a Greenwich, Connecticut-based venture capital firm. He is an
experienced investor and a venture capitalist, with extensive
experience in finance, public company corporate governance and
executive compensation matters.
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Jean-Michel Valette
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50
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2003
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Mr. Valette currently serves as an independent advisor to select
branded consumer companies. He is Chairman of the Board and a
member of the audit and nominating/governance committees of
Peets Coffee and Tea Inc., a California-based specialty
coffee company. He is also Chairman of the Board and a member of
the audit committee of Select Comfort Corporation, a
Minneapolis-based bedding company. Until October 2006, he was
also Chairman of Robert Mondavi Winery, a California wine
company. Prior to assuming that position, he had served as
President and Managing Director of Robert Mondavi Winery from
October 2004 to January 2005. From May 2003 through May 2006,
Mr. Valette served as a Class B Director of the Company. Mr.
Valette has extensive experience in management, public company
corporate governance, strategic planning and finance, as well as
in the alcohol beverage industry.
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The Board recommends that holders of Class A Common
Stock vote FOR each nominee listed.
6
Class B
Directors:
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Year First
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Position With the Company
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Elected
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or Principal Occupation
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Name of Nominee
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Age
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a Director
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During the Past Five Years
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C. James Koch
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61
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1995
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Mr. Koch founded the Company in 1984 and currently serves as its
Chairman. Until January 2001, Mr. Koch also served as the
Companys Chief Executive Officer and he served as the
Companys Secretary/Clerk until May 2010. He is a member of
the Board of Directors of the Brewers Association, which
represents craft brewers in the U.S. Prior to starting the
Company, he had worked as a consultant for an international
consulting firm, with a focus on manufacturing. His
25 years at the helm of the Company, during which it grew
from a small start-up company to its current position, is a
testament to his skill in brewing, strategy, brand development
and industry leadership.
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|
|
|
|
|
|
|
|
|
|
|
Charles J. Koch
|
|
|
88
|
|
|
|
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, a business that he had established and managed for over
30 years. Prior to that, Mr. Koch had been a brewmaster
for several years. He also holds a degree in brewing from the
Siebel Institute of Technology.
|
|
|
|
|
|
|
|
|
|
|
|
Jay Margolis
|
|
|
62
|
|
|
|
2006
|
|
|
Mr. Margolis is currently an independent investor. He serves as
a Director of Burlington Coat Factory Warehouse Corporation, a
privately held company headquartered in Burlington, New Jersey,
Godiva Chocolatier Inc., a privately held, high-end specialty
chocolate manufacturer and retailer, with its North American
headquarters located in New York, New York, and Built NY,
Inc., a privately held designer and manufacturer of fashionable
and functional totes, bags, cases and similar consumer products,
also headquartered in New York, New York. From October 2005
through July 2007, Mr. Margolis served as the President and CEO
of the Apparel Group of Limited Brands located in Ohio. Before
assuming that position, he had been President and Chief
Operating Officer of Massachusetts-based Reebok, Inc. since
2001, where he also served as a Director. Prior to that he
served on the boards and as an executive officer of other
well-known clothing brands. Mr. Margolis has significant
knowledge of retailing of consumer product goods, merchandising,
consumer insights, strategic planning and public company
corporate governance.
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year First
|
|
Position With the Company
|
|
|
|
|
Elected
|
|
or Principal Occupation
|
Name of Nominee
|
|
Age
|
|
a Director
|
|
During the Past Five Years
|
|
Martin F. Roper
|
|
|
48
|
|
|
|
1999
|
|
|
Mr. Roper is the President and Chief Executive Officer of the
Company, a position he had held since January 2001. Mr. Roper
joined the Company as Vice President of Manufacturing and
Business Development in September 1994, became the Chief
Operating Officer in April 1997 and became President and Chief
Operating Officer in December 1999. In November 2007,
Mr. Roper joined the board of directors of Lumber
Liquidators, Inc., a Virginia-based hardwood flooring retailer
and is chair of its compensation committee and a member of its
audit committee. Mr. Roper holds a masters degree in
manufacturing, as well as an advanced degree in business
management. Prior to joining the Company, he worked as a
strategy consultant and led small manufacturing companies in
turn-around situations. His experience, both prior to and since
joining the Company, provides strength in operations, strategy,
finance, public company corporate governance and general
management.
|
|
|
|
|
|
|
|
|
|
|
|
Gregg A. Tanner
|
|
|
54
|
|
|
|
2007
|
|
|
Mr. Tanner is currently Executive Vice President and Chief
Supply Chain Officer of Dean Foods Company of Dallas, Texas, a
position he has held since November 2007. From July 2006
through October 2007, Mr. Tanner was Senior Vice President of
Global Operations for The Hershey Company of Hershey,
Pennsylvania. He was with ConAgra Foods of Omaha, NE from
September 2001 through July 2005, holding the position of Senior
Vice President, Retail Supply Chain from June 2002 through July
2005. Prior to that, Mr. Tanner held positions of increasing
responsibility at the Quaker Oats Company and Ralston Purina
Company. Mr. Tanner has over 30 years of operations and
supply chain management experience in the food and beverage
industry, with significant experience in risk management.
|
CORPORATE
GOVERNANCE PRINCIPLES AND BOARD MATTERS
The Company is committed to having sound corporate governance
principles. The Companys Code of Business Conduct and
Ethics, which applies to the Companys directors, officers
and employees, the Companys Corporate Governance
Guidelines and the charters of the Audit, Compensation and
Nominating/Governance Committees are available on the
Companys website,
www.bostonbeer.com/CorporateGovernance, and are also
available in print to any stockholder who requests them. Such
requests should be directed to the Investor Relations
Department, The Boston Beer Company, Inc., One Design Center
Place, Suite 850, Boston, MA 02210.
Board
Independence
The Board has determined that all of the persons standing for
reelection as Class A directors, namely,
Messrs. Burwick, Cummin and Valette, and two (2) of
the persons standing for reelection as Class B directors,
namely, Messrs. Margolis and Tanner, together constituting
a majority of the Board of Directors, have no material
relationship with the Company (either directly or as a partner,
stockholder or officer of an organization that has a
relationship with the Company) and are independent, as
determined in accordance with the director independence
standards of the New York Stock Exchange (NYSE) and
the SEC. In addition, the Board has determined that each member
of the Audit, Compensation and Nominating/Governance Committees
has no material relationship with
8
the Company (either directly or as a partner, stockholder or
officer of an organization that has a relationship with the
Company) and is independent as determined under the NYSE and SEC
director independence standards.
Board
Leadership Structure
Since 2001, the Company has separated the roles of Chief
Executive Officer and Chairman. The Company believes that this
strengthens the Company by allowing the Chief Executive Officer
to focus on
day-to-day
management of the business and the Chairman to focus on
leadership of the Board of Directors, issues of beer quality and
innovation, and overall brand strategy and awareness. The
Chairman continues to be active in the Companys business,
but with more focus in critical areas of the business and
outreach, including participation in industry trade associations
and promotion of the business. Both participate fully in
deliberations of the Board of Directors.
The independent directors regularly meet in scheduled executive
sessions without management, with a portion of the session with
the Chairman of the Board and another portion without the
Chairman. The Chair of the Boards Nominating/Governance
Committee leads these sessions and at the conclusion of each
executive sessions reports back to the Chairman and the Chief
Executive Officer on the executive session discussions. The
independent directors met formally in executive session four
times during the Companys 2010 fiscal year.
Board
Meetings and Structure; Committee Composition
During the Companys 2010 fiscal year, there were five
meetings of the Board of Directors of the Company. All of the
Directors attended, either in person or by telephone, all or a
portion of all board meetings and all meetings of the committees
of the Board of Directors on which they served, with the
exception of one Director who did not attend one meeting of the
Board of Directors and one meeting of the Compensation Committee.
The Company strongly encourages all Directors to attend annual
meetings of stockholders. All Directors except one attended the
last annual meeting of stockholders.
As of the date of this Proxy Statement, the Board has eight
Directors and three standing committees, namely, the Audit
Committee, the Compensation Committee and the
Nominating/Governance Committee. Committee membership during the
2010 fiscal year and the function of each committee are
described below. Each of the committees operates under a written
charter adopted by the Board.
The Board oversees the Companys risk assessment and risk
management programs and processes, primarily through the Audit
Committee. The Compensation Committee is also charged with
evaluating risks that may be inherent in the Companys
compensation policies and practices.
Audit
Committee
The Audit Committee of the Board of Directors assists the Board
in fulfilling its responsibility to oversee managements
conduct of the Companys financial reporting process,
including overseeing the financial reports and other financial
information provided by the Companys systems of internal
accounting and financial controls and the annual independent
audit of the Companys financial statements. The Audit
Committee prepares the Audit Committee report for inclusion in
the annual proxy statement; annually reviews the Audit Committee
charter and the Audit Committees performance; appoints,
evaluates and determines the compensation of the Companys
independent auditors; reviews and approves the scope of the
annual audit of the Companys financial statements and the
fees for such audit; pre-approves all other audit and non-audit
services provided to the Company by the Companys
independent auditors; reviews the Companys disclosure
controls and procedures, internal controls and corporate
policies relating to financial information and earnings
guidance; and reviews other risks that may have a significant
impact on the Companys financial statements. The Audit
Committee amended its charter in 2008, 2010 and 2011 to expand
its responsibilities to include more specifically oversight of
operational, governance and other risks that could adversely
affect the Companys business.
To fulfill these oversight responsibilities, at each regular
meeting of the Audit Committee the Companys internal audit
and risk management and review manager, and representatives of
the Companys independent public accounting firm, give
reports on, and the Audit Committee reviews and discusses,
potential material risks to the
9
Company, and the Audit Committee asks for and receives regular
updates on steps taken by management to address those risks.
Areas of focus in 2010 included regulatory compliance, quality
and safety issues and crisis management. The Audit Committee
reports any risks that it believes could have a material adverse
impact on the Company to the full Board of Directors.
The present members of the Audit Committee are Pearson C.
Cummin, III (Chair), Gregg A. Tanner, and Jean-Michel
Valette. The Board has determined that each member of the Audit
Committee is an audit committee financial expert as
defined under SEC rules. The Audit Committee had four meetings
in 2010. The report of the Audit Committee is included in this
Proxy Statement on page 32.
Compensation
Committee
The Compensation Committee discharges the Boards
responsibilities relating to compensation of the Companys
officers and directors. The Compensation Committee exercises
overall responsibility for evaluating and approving compensation
programs and policies of the Company relating to officers and
directors; provides general oversight of the Companys
compensation structure, including the Companys equity
compensation plans; reviews and makes recommendations to the
Board concerning policies or guidelines with respect to
employment arrangements involving senior executive officers and
directors of the Company; reviews and approves corporate goals
and objectives relevant to the compensation of the Chairman and
CEO and other senior executives; evaluates the performance of
the Chairman and the CEO and other senior executives in light of
those goals and objectives; and sets the compensation level for
the Chairman and the CEO and reviews and approves the
compensation parameters of other senior executives of the
Company. The Compensation Committee makes reports to the Board
of Directors on a regular basis; reviews its own performance;
reviews and reassesses the adequacy of its charter and
recommends any proposed changes to the Board of Directors for
its approval; and issues an annual report, including a
discussion and analysis of executive compensation, for inclusion
in the Companys proxy statement. The Compensation
Committee also considers areas of risk that may arise from the
Companys compensation practices, not only relating to
executives, but with respect to the Company as a whole. The
Company has a balanced compensation structure for salaried
employees, composed of base pay, bonus opportunities and, in
some cases, eligibility to participate in the Companys
Employee Equity Incentive Plan. Employee bonus opportunities
reflect a mix of performance measures that include both
individual and Company goals and a mix of goals and objectives
that have both short- and longer-term implications. As a result
of this blended approach, the Compensation Committee does not
believe that the Companys compensation programs create
risks that are reasonably likely to pose a material adverse
impact on the Company.
The present members of the Compensation Committee are David A.
Burwick (Chair), Pearson C. Cummin III, and Jay Margolis. The
Compensation Committee met five times in 2010. All members of
the Compensation Committee attended and participated in each of
the meetings, with the exception of one member who did not
attend one meeting. Other independent Directors frequently
attended meetings of the Compensation Committee, but had no
vote. The Chairman and CEO attended each of the meetings, but
recused themselves when the matters of their performance
evaluation and compensation were discussed.
The Compensation Discussion and Analysis and the Report of the
Compensation Committee are included in this Proxy Statement
beginning on page 14.
Nominating/Governance
Committee
The Nominating/Governance Committee assists the Board by
identifying individuals qualified to become Board members,
recommending to the Board nominees for election as Class A
Directors, and nominees for each Board committee, evaluating the
Boards leadership structure, developing and recommending
to the Board a set of corporate governance principles applicable
to the Company, and overseeing an annual evaluation of the Board
and senior management. The Nominating/Governance Committee
periodically assesses the size and composition of the Board,
including the existing experience, qualifications, attributes
and skills represented by the current Board members and those
that could enhance the overall breadth and strength of the
Board; reviews the adequacy of the Companys corporate
governance guidelines and recommends any necessary changes to
the full Board for approval; reviews director independence of
Compensation Committee members; and reviews director
independence and the
10
financial literacy and expertise of Audit Committee members. The
Chairman of the Nominating/Governance Committee receives
communications directed to non-management directors.
The present members of the Nominating/Corporate Governance
Committee are Jean-Michel Valette (Chair), David A. Burwick and
Jay Margolis. The Nominating/Corporate Governance Committee met
two times in 2010.
Consideration
of Nominees for Director
Identifying
and Evaluating Nominees for the Board of Directors
The Nominating/Governance Committee employs a variety of methods
for identifying and evaluating nominees for director. The
Nominating/Governance Committee assesses and reviews with the
full Board at least annually the skills and characteristics that
should be reflected among the members of the Board as a whole.
This review includes an examination of the extent to which the
requisite skills and characteristics are reflected in the then
current Board members and seeks to identify any particular
qualifications that should be sought for the purpose of ensuring
that the attributes, qualifications, skills and experience
represented on the Board correspond to those identified as
important by the Nominating/Governance Committee. The
Nominating/Governance Committee also takes into consideration
the results of the annual self-assessments performed by the
Board and each of the standing committees to identify any
perceived weakness or imbalance.
While the Board does not have a formal diversity policy, the
Nominating/Governance Committees assessment takes into
account issues of experience, judgment, age and diversity in
aspects of business relevant to the Companys affairs, all
in the context of the perceived needs of the Board at that time.
For example, in
2005-2006,
the Nominating/Governance Committee determined that the Board
would be strengthened by adding individuals with strength and
experience in marketing, retail execution and consumer insight,
and, with the assistance of a professional search firm,
identified two individuals who were subsequently elected to the
Board, one as a Class A Director and the other as a
Class B Director, both of whom are standing for
re-election. In 2007, as the Company considered expanding its
direct ownership and operation of breweries, the
Nominating/Governance Committee, working with the Companys
sole holder of the Companys Class B Common Stock who
has the sole power to appoint Class B Directors, and with
the assistance of a professional search firm, identified an
individual with extensive experience in operations and supply
chain management. This individual is now standing for
re-election as a Class B Director.
Candidates may come to the attention of the
Nominating/Governance Committee through a number of sources,
including current Board members, professional search firms,
stockholders or other persons. Candidates are evaluated at
regular or special meetings of the Nominating/Governance
Committee and may be considered at any point during the year. In
making their evaluation, members of the Nominating/Governance
Committee include a review of a candidates directorships
in other public companies, as well as any involvement in any
regulatory or legal proceedings, or any sanctions or orders
imposed by any self-regulatory organization.
Stockholder
Nominees
The policy of the Nominating/Governance Committee is to consider
properly submitted stockholder nominations for candidates for
membership on the Board as described above under
Identifying and Evaluating Nominees for the Board
Directors. The same process is used for evaluating a
director candidate submitted by a stockholder as is used in the
case of any other potential nominee. Any stockholder nominations
proposed for consideration by the Nominating/Governance
Committee should include the nominees name and
qualifications for Board membership and should be addressed to:
Chair, Nominating/Governance Committee
The Boston Beer Company, Inc.
One Design Center Place, Suite 850
Boston, MA 02210
If the Company receives a communication from a stockholder
nominating a candidate that is not submitted as described above,
it will forward such communication to the Chair of the
Nominating/Governance Committee.
11
Communications
with the Board
Stockholders and other interested parties may communicate with
the Board of Directors or any individual director by submitting
an email to the Companys Board at
bod@bostonbeer.com. All Directors have access
to this email address. Communications that are intended
specifically for non-management Directors should be sent to the
email address above to the attention of the Chairman of the
Nominating/Governance Committee.
COMPENSATION
OF DIRECTORS
After a review of the compensation paid to non-management
Directors, in 2010 the Board of Directors, acting on the
recommendation of the Compensation Committee, adopted a new
compensation schedule for non-management Directors, effective as
of June 1, 2010. This change was approved by the sole
holder of the Companys outstanding Class B Common
Stock, who acts with sole authority on such matters. The Board
of Directors anticipates reviewing the compensation paid to
non-management Directors bi-annually, with the next review to be
done and changes, if any, adopted in advance of the
Companys 2012 Annual Meeting. A summary of the elements
and changes in compensation of the non-management Directors is
set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In effect
|
|
|
Applies to
|
|
Payment For
|
|
Prior to 6/1/2010
|
|
6/1/2010
|
|
Payable(1)
|
|
All Non-Management
|
|
One-time Award
|
|
Option for 5,000
|
|
No change
|
|
Upon first-time election
|
Directors
|
|
|
|
shares of Class A
|
|
|
|
to the Board
|
|
|
|
|
Common Stock(2)
|
|
|
|
|
All Non-Management
|
|
Annual Award
|
|
Option for 5,000
|
|
No change
|
|
Upon each subsequent
|
Directors
|
|
|
|
shares of Class A
|
|
|
|
election to the Board
|
|
|
|
|
Common Stock(2)
|
|
|
|
|
All Non-Management
|
|
Annual Retainer
|
|
$7,500
|
|
$12,500
|
|
Upon election to the
|
Directors
|
|
|
|
|
|
|
|
Board
|
Chair, Audit
|
|
Annual Retainer
|
|
$11,000
|
|
$13,000
|
|
Upon appointment
|
Committee
|
|
|
|
|
|
|
|
|
Chair, Compensation
|
|
Annual Retainer
|
|
$2,500
|
|
$6,000
|
|
Upon appointment
|
Committee
|
|
|
|
|
|
|
|
|
Chair, Nominating/
|
|
Annual Retainer
|
|
$2,500
|
|
$4,500
|
|
Upon appointment
|
Governance Committee
|
|
|
|
|
|
|
|
|
Members of Audit
|
|
Annual Retainer
|
|
$9,000
|
|
$10,000
|
|
Upon appointment to the
|
Committee (other than
|
|
|
|
|
|
|
|
Audit Committee
|
Chair)
|
|
|
|
|
|
|
|
|
Members of Other
|
|
Annual Retainer
|
|
$500
|
|
$2,000
|
|
Upon appointment to a
|
Standing Committees
|
|
|
|
|
|
|
|
standing committee other
|
(other than Chair)
|
|
|
|
|
|
|
|
than the Audit
Committee
|
All Non-Management
|
|
Attendance at
|
|
$3,000
|
|
$4,000
|
|
After attendance at the
|
Directors
|
|
Regular Board
|
|
|
|
|
|
meeting
|
|
|
Meeting in person
|
|
|
|
|
|
|
All Non-Management
|
|
Attendance at
|
|
$1,000
|
|
$2,000
|
|
After attendance at the
|
Directors
|
|
Regular Board
|
|
|
|
|
|
meeting
|
|
|
Meeting by
|
|
|
|
|
|
|
|
|
telephone
|
|
|
|
|
|
|
All Non-Employee
|
|
Attendance at
|
|
|
|
$1,000
|
|
After attendance at the
|
Directors
|
|
Special Board
|
|
|
|
|
|
meeting
|
|
|
Meetings by
|
|
|
|
|
|
|
|
|
telephone
|
|
|
|
|
|
|
All Committee
|
|
Attendance at
|
|
$750
|
|
$1,000
|
|
After attendance at the
|
Members
|
|
Committee Meeting
|
|
|
|
|
|
meeting
|
|
|
in person
|
|
|
|
|
|
|
All Committee
|
|
Attendance at
|
|
$200
|
|
$750
|
|
After attendance at the
|
Members
|
|
Committee Meeting
|
|
|
|
|
|
meeting
|
|
|
by telephone
|
|
|
|
|
|
|
12
|
|
|
(1) |
|
All retainers and the annual option grant are pro-rated if the
non-management Director is appointed after the annual meeting of
stockholders. |
|
(2) |
|
All options to non-management directors are granted under the
Companys Non-Employee Director Stock Option Plan, as
amended and restated (the Director Option Plan). As
provided in the Director Option Plan, options carry an exercise
price equal to the fair market value of the underlying shares on
the date of grant, are immediately fully vested and expire ten
(10) years after the date of grant or three (3) years
after the grantee ceases to be a director of the Company,
whichever occurs sooner. The number of shares of Class A
Common Stock registered under the Plan is 550,000 shares,
with 172,500 remaining shares available for issuance. |
FISCAL
YEAR 2010 DIRECTOR COMPENSATION
The following table sets forth certain information concerning
the compensation of all Directors who are not named executive
officers of the Company for the Companys fiscal year ended
December 25, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or
|
|
|
Option
|
|
|
All Other
|
|
|
|
|
Name
|
|
Paid in Cash($)
|
|
|
Awards($)(1)(2)
|
|
|
Compensation($)
|
|
|
Total($)
|
|
|
David A. Burwick
|
|
$
|
30,750
|
|
|
$
|
130,855
|
|
|
$
|
0
|
|
|
$
|
161,605
|
|
Pearson C. Cummin, III
|
|
$
|
40,200
|
|
|
$
|
130,855
|
|
|
$
|
0
|
|
|
$
|
171,055
|
|
Charles J. Koch
|
|
$
|
14,500
|
|
|
$
|
130,855
|
|
|
$
|
4,030
|
(3)
|
|
$
|
149,385
|
|
Jay Margolis
|
|
$
|
23,750
|
|
|
$
|
130,855
|
|
|
$
|
0
|
|
|
$
|
154,605
|
|
Gregg A. Tanner
|
|
$
|
34,200
|
|
|
$
|
130,855
|
|
|
$
|
0
|
|
|
$
|
165,055
|
|
Jean-Michel Valette
|
|
$
|
38,450
|
|
|
$
|
130,855
|
|
|
$
|
0
|
|
|
$
|
169,305
|
|
|
|
|
(1) |
|
Reflects the dollar amount of the aggregate grant date fair
value of awards granted during the fiscal year ended
December 25, 2010 as computed in accordance with Accounting
Standards Codification 718, Compensation-Stock Compensation
(ASC 718). The methods and assumptions used in
valuing the stock option awards in accordance with ASC 718
are described in Notes B and M to the Companys
audited financial statements for the fiscal year ended
December 25, 2010 included in the Companys Annual
Report on
Form 10-K
filed with the SEC on March 8, 2011. |
|
(2) |
|
On May 26, 2010, each Director was granted an option under
the Director Option Plan to purchase 5,000 shares of the
Companys Class A Common Stock at an exercise price of
$61.855, the average of the high and low price of such stock on
the date of grant. All options are fully vested as of the date
of grant. As of December 25, 2010, the aggregate number of
stock options held by directors who are not named executive
officers is shown below: |
|
|
|
|
|
Name
|
|
Number of Options
|
|
David A. Burwick
|
|
|
36,000
|
|
Pearson C. Cummin, III
|
|
|
30,000
|
|
Charles J. Koch
|
|
|
50,000
|
|
Jay Margolis
|
|
|
26,000
|
|
Gregg A. Tanner
|
|
|
23,000
|
|
Jean-Michel Valette
|
|
|
45,000
|
|
|
|
|
(3) |
|
Represents reimbursement of certain administrative fees incurred
as a result of a tax-related reporting error by the Company. |
13
EXECUTIVE
OFFICERS
Information with respect to executive officers of the Company is
set forth below. The executive officers of the Company 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, 61, currently serves as Chairman of the
Company. Mr. Koch founded the Company in 1984 and was the
Chief Executive Officer from that time until January 2001.
Martin F. Roper, 48, was appointed Chief Executive Officer of
the Company in January 2001, and has been President of the
Company since December 1999, after having served as its Chief
Operating Officer since April 1997. He joined the Company as
Vice President of Manufacturing and Business Development in
September 1994.
William F. Urich, 54, was appointed Chief Financial Officer and
Treasurer of the Company in September 2003. Prior to joining the
Company, Mr. Urich had been the Chief Financial Officer of
Acirca, Inc., a producer of organic foods and beverages, from
2001 to 2003. From 1998 to 2000, Mr. Urich served as Vice
President Finance and Business Development for United
Distillers & Vintners, a subsidiary of Diageo, PLC,
and from 1995 to 1998 as its Vice President Finance and
Treasurer.
John C. Geist, 49, was appointed Vice President of Sales of the
Company in February 2007, after serving as National Sales
Manager of the Company since December 1998. Mr. Geist came
to the Company in 1997 from a large alcohol beverage distributor
where he had been a sales manager.
David A. Grinnell, 52, was appointed Vice President of Brewing
of the Company effective January 2008, after serving as Director
of Quality and Brewing of the Company since 2001.
Mr. Grinnell came to the Company in 1988 from New Amsterdam
Brewing Company, where he was a founding member.
Thomas W. Lance, 56, joined the Company as Vice President of
Operations in January 2007. Prior to joining the Company,
Mr. Lance had served as Executive Vice President of
Kens Foods, Inc., a food product manufacturer located in
Marlborough, MA, from January 2001 to January 2007. Prior to
joining Kens Foods, Mr. Lance held a number of
positions in operations with Bausch and Lomb, a manufacturer of
vision care products located in Rochester, NY.
Robert P. Pagano, 60, who joined the Company in February 2011,
serves the Company as Vice President of Brand Development. Prior
to his appointment, Mr. Pagano had served as Managing
Director of the brand strategy firm, Red Sky Insights, LLC,
located in Sudbury, Massachusetts since 2006, after having
served as a partner of Monitor Group, a consulting company
located in Cambridge, Massachusetts for six years. In 1986,
Mr. Pagano was co-founder of the advertising firm, Pagano
Schenck & Kay, Inc., located in Boston, Massachusetts,
which joined forces in 1997 with Mullen Advertising located in
Wenham, Massachusetts, where he served as Senior Vice President
and Group Account Director until 1999.
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation
Philosophy and Practice
The Company operates in the highly competitive alcoholic
beverages industry. The key objectives of the Companys
executive compensation programs are to attract, motivate and
retain executives who drive the Companys success. The
Company achieves these objectives through a compensation
philosophy that provides employees with a distinctive overall
compensation package under which strong performers have the
opportunity to earn competitive compensation over the long term
through a combination of base salary, cash incentives and equity
awards. These programs are designed to:
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provide executives with competitive cash and stock compensation
with a significant portion of total compensation contingent on
individual and Company performance, as well as the creation of
stockholder value;
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provide higher compensation to high-value contributors and high
performers in the most critical areas of the Companys
business; and
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14
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encourage executives to act as owners with an equity stake in
the Company, while reducing risk from its compensation practices
that would be reasonably likely to have a material adverse
effect on the Company by basing variable compensation on a range
of performance criteria that have a mix of short-term and
long-term implications.
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In keeping with these objectives, the Companys executive
compensation program is structured with three basic elements:
Base Salary. Base salaries are designed to
provide a fixed level of competitive income that reflects the
individuals level and scope of responsibility and level of
performance.
Cash Incentive Bonus. Cash incentive bonuses
are designed to motivate, focus and reward achievements based on
specific individual and Company performance goals established
annually by the Compensation Committee.
Equity Incentive Awards. Equity incentive
awards are designed to provide an incentive for delivering
long-term stockholder value, to align interests of the
Companys executive officers with the interests of the
Companys stockholders, and to retain executives. Equity
incentive awards are primarily through stock option grants that
typically vest over a
5-year
period and have a term of 10 years. In addition, some
executives receive restricted stock awards that typically vest
over a
5-year
period. Further, all employees who have been employed by the
Company for at least one year, other than the Chairman and the
Chief Executive Officer (CEO), are eligible to
participate in the Companys Investment Share program.
Role
of the Compensation Committee
The Compensation Committee has overall responsibility for
evaluating and approving compensation programs and policies of
the Company relating to officers and directors, as well as the
Companys Employee Equity Incentive Plan that applies to
all employees of the Company. This includes reviewing the
competitiveness of executive compensation programs, evaluating
the performance of the Companys executive officers and
approving their annual compensation and equity awards. The
Compensation Committee reviews and approves corporate goals and
objectives relevant to the compensation of the Chairman, if a
member of management, the CEO and other senior executive
officers of the Company; evaluates their performance in light of
those goals and objectives; and sets the compensation level of
the Chairman, the CEO and senior executive officers based on
this evaluation.
In discharging its responsibilities, the Compensation Committee
endeavors to develop compensation structures for individual
officers that reflect the responsibilities of their respective
positions and are appropriate in light of market compensation
levels for executives with comparable responsibilities, reflect
past achievements with the Company and the compensation awarded
to them in the past, and provide financial incentives for
superior performance in meeting the challenges facing the
Company.
Components
of Executive Compensation and Determination of Compensation
Mix
Total potential compensation of the Companys executives is
substantially weighted towards performance-based compensation.
Salary generally constitutes approximately 40% to 70% of the
total compensation of the Companys executive officers
(excluding the CEO and the Chairman), with the remainder being
bonuses and equity compensation, both of which are primarily
performance-based. For executives and other senior managers of
the Company, the proportion of compensation provided by equity
and the proportion of variable, performance-based compensation
increases with the level of responsibility and ability to have
an impact on the value of the Companys business.
Base
Salary
Base salaries are determined based on a variety of factors,
including the executives scope of responsibilities and
tenure and a comparison of salaries paid to peers within the
Company and to those with similar roles at other companies. Base
salaries are set at levels that allow the Company to attract and
retain superior managers and that will enable the Company to
deliver on its business goals. Base salaries are reviewed
annually and may be adjusted after considering the above factors.
15
The CEO makes recommendations to the Compensation Committee for
base salaries of each executive officer, excluding the Chairman
and the CEO, and the Chairman makes the recommendation to the
Compensation Committee for the base salary of the CEO. When
setting the base salaries of these executive officers, the
Compensation Committee, while considering the recommendations of
the CEO and the Chairman, makes the final determination based on
the factors listed above and its assessment of each executive
officers performance during the previous year.
Cash
Incentive Bonus
Executives have the opportunity to earn a cash incentive bonus
tied to a percentage of their respective base salaries. Criteria
for these cash incentive bonuses include a combination of
qualitative and quantitative performance goals established each
year for each executive. These goals vary for each executive
based on his or her responsibilities and role within the Company
and may include financial or strategic measures, including,
among others, sales, profitability, brand health, quality, cost
reductions, customer satisfaction and other strategic
initiatives. The goals are intended to require performance that,
if achieved, will result in matching or exceeding the
Companys business and financial plans for the fiscal year
in question. Individual bonus awards reflect the
individuals achievement of his or her performance goals
for the year, as well as the overall performance of the Company.
The CEO makes recommendations to the Compensation Committee for
the Company-wide performance goals, the bonus opportunities tied
to these goals and the weighting of these goals for each
executive officer, including those of the CEO and Chairman. The
CEO also provides the Compensation Committee with his assessment
of the performance of each executive against his or her bonus
goals and proposed bonus payout. When determining the bonus
structure and goals and the bonus payout for executive officers,
the Compensation Committee, while considering the
recommendations of the CEO, makes the final determination based
on the factors listed above, each executive officers
performance and that of the department that he or she led during
the year relative to the performance-based goals. The
determination of the bonus earned is generally made within the
first three months after the end of the fiscal year, allowing
sufficient time to assess the achievement of the bonus goals. On
occasion, additional bonuses in excess of those otherwise
payable under the bonus structure and goals have been given by
the Compensation Committee in recognition of exceptional
performance by certain executive officers.
Equity
Incentive Awards and Investment Share Program
Discretionary Stock Options. Under the
Companys Employee Equity Incentive Plan (the
EEIP), employees are eligible to receive stock
option grants. While generally granted on an annual basis, all
option grants are discretionary and may be granted by the Board,
upon the recommendation of the Compensation Committee, at any
time. Although infrequent, under certain circumstances, such as
the hiring of a new executive officer, as a part of a
performance review, a promotion or making a mid-year
compensation adjustment, options may be granted at other times
during the year. Such options may have vesting and performance
criteria that differ from the annual grants.
Most of the options granted by the Company vest over a
5-year
period, at the rate of 20% each year, conditioned on continued
employment with the Company, and have a term of 10 years.
In recent years, options have been granted only to executive
officers and certain senior managers of the Company and, in most
cases, vesting has also been contingent on the Company achieving
certain performance criteria in the fiscal year immediately
following the date of grant. By way of illustration, the number
of shares, if any, as to which a performance-based option may
subsequently become exercisable as a result of the tenure-based
conditions is dependent upon the Companys performance
measured against a benchmark determined by the Companys
Board of Directors. The performance-based options frequently
have two tiers of criteria and provide that, in the event the
criteria in either tier or both tiers are not met, the option
lapses as to 50% or all of the shares that would have vested had
the performance criteria been satisfied. The Compensation
Committee believes that stock options are an effective way to
reward executives and senior managers and align their interests
with the interests of the Companys stockholders, as they
provide significant equity compensation only if the value of
shares of stock in the Company increases. In addition, through
the use of performance-based vesting, the Committee endeavors to
assure that receipt of significant equity-based compensation
requires that the Companys performance exceeds appropriate
benchmarks.
16
Through the use of five-year vesting, the Committee endeavors to
create an incentive for retention of the executives and to align
their rewards with the interests of stockholders.
In October of each year, the CEO makes preliminary
recommendations to the Compensation Committee for stock option
grants to executive officers and senior managers, taking into
account his assessment of each executives expected future
contributions to the Company, as well as past performance. The
CEO also makes recommendations as to the performance criteria to
be met for such options to vest. In December, the CEO makes his
final recommendations and the Compensation Committee makes its
recommendation to the Board of Directors, which may or may not
vary from that of the CEO. The full Board of Directors then
makes the final determination with respect to all discretionary
stock option grants. When determining the number of shares to be
subject to a stock option grant and the vesting criteria for
executive officers, the Compensation Committee, while
considering the recommendations of the CEO, makes its
determination based on the various factors mentioned above.
Generally, all grants are effective January 1 of the following
year and are priced at fair market value as of January 1,
although on occasion options are granted at other times of the
year and vesting is contingent on other specific targets
relative to the executive officers or managers areas
of responsibility within the Company. Performance-based
contingent-vesting options for a total of 65,100 shares
were granted in 2010 to most of the Companys executive
officers and certain of its senior managers.
Restricted Stock Awards. As with discretionary
options, restricted stock awards are generally granted on an
annual basis on January 1. The first such awards were made
on January 1, 2006. These shares of restricted stock vest
over a
5-year
period, at the rate of 20% per year. Vesting is generally tied
only to continued employment and not to any performance
criteria. Restricted stock awards are generally granted to
senior managers and key employees of the Company. Restricted
stock has value even if the share price decreases after the date
of the award, and, therefore, is a more effective retention tool
for these employees. The Company generally does not grant
restricted stock awards to its most senior executives
(approximately six individuals, including each of the named
executive officers), as the Company currently believes that
their equity compensation should be more closely tied to the
future performance of the Company through stock options as
described above and should not have value if the share price
decreases.
As with options, initially in October and then in December, the
CEO makes recommendations to the Compensation Committee for
restricted stock awards to senior managers and key employees,
along with his assessment of each employees past
performance and expected future contributions to the Company.
When determining the number of shares to be subject to a
restricted stock award, the Compensation Committee, while taking
into consideration the recommendations of the CEO, makes its own
determination based on the various factors mentioned above. The
Compensation Committee then makes its recommendation to the
Board of Directors and the Board of Directors makes the final
determination of all restricted stock awards. As with stock
options, restricted stock awards generally are effective January
1 of the following year and are valued at fair market value as
of January 1. In 2010, awards of an aggregate of
33,617 shares of restricted stock were made to senior
managers and key employees of the Company.
Investment Shares. Also under the EEIP,
employees who have been employed by the Company for at least one
year may purchase such number of shares of the Companys
Class A Common Stock (Investment Shares) as
have a value, as determined pursuant to the EEIP, no greater
than 10% of their annual base salary and bonus received in the
immediately preceding year, up to a maximum investment of
$17,500. After two full years of service, Investment Shares may
be purchased at a discount. The amount of the discount is tied
to years of service and the maximum discount is 40% after four
full years of service. Eligible employees have the opportunity
to purchase Investment Shares in January each year, with the
purchase price based on the fair market value of the shares at
January 1. Investment Shares vest at the rate of 20% per
year over the
5-year
period commencing on the effective date of purchase, contingent
solely on continued employment with the Company. The Chairman
and the CEO of the Company have been precluded from
participation in the Investment Share program since 2006. Other
executive officers continue to be able to participate in the
program. In 2010, employees purchased a total of
20,392 shares under the Investment Share program.
17
Executive
Benefits
In 2010, the Companys executives were eligible for the
same level and offering of benefits, including the
Companys 401(k) plan and welfare benefit programs, as were
made available to other employees. The Company provides no
additional benefits to its executives.
How
Executive Pay Levels are Determined
The Compensation Committee considers a number of factors in
determining executive compensation, including, but not limited
to, individual performance, responsibility level and role within
the Company, tenure and a comparison of salaries paid to peers
within the Company and to those with similar roles at other
companies. The Compensation Committee has the authority to
select, retain and compensate executive compensation consultants
and other experts as it determines necessary to carry out its
responsibilities. As one element in its assessment of the
competitiveness of executive compensation packages established
for fiscal year 2010, the Compensation Committee applied
knowledge gained through a competitive compensation study
commissioned in 2007 from a nationally-recognized executive
compensation consulting firm.
The Compensation Committee uses tally sheets that ascribe dollar
amounts to the components of executive officer compensation,
including salary, bonus and equity compensation. It also
tabulates gains made by the executive officers through the
exercise of options, unrealized gains in vested options and
potential gains from unvested options at current market prices.
Each year, the Compensation Committee, taking into consideration
the recommendations of the CEO and the Chairman, determines the
appropriate level of equity compensation for each executive and
senior manager. The Company emphasizes differentiation in
executive compensation, with greatest emphasis on performers and
individuals who impact significantly, or who have the potential
to impact significantly, the Companys business.
Based upon an overall review of equity compensation in the prior
year and a prior survey of executive officers and senior
managers regarding their preference in type of equity
compensation, the Companys compensation and retention
strategy in 2010 included the use of stock options and
restricted stock awards, as well as the continued availability
of Investment Shares for purchase by all eligible employees
(except the CEO and Chairman). The level of usage of
discretionary options and restricted stock awards was determined
based on factors such as individual performance and contribution
to the Companys performance, the desired mix of cash and
equity pay for different individuals, and, to a limited extent,
the compensation levels at comparable companies identified in
the 2007 survey relative to the Companys target
compensation levels.
In 2010, of the total compensation paid to the Companys
current named executive officers other than the CEO and
Chairman, salary constituted 38% to 70%, bonuses (based on 2010
performance) constituted 16% to 30%, and equity compensation,
all of which was in the form of performance-based stock options,
constituted 0% to 46%.
During fiscal year 2010, the Compensation Committee re-engaged
the nationally-recognized executive compensation consulting firm
that had conducted the 2007 study, to provide it with updated
market information regarding competitive executive compensation
programs for use in its discussions regarding 2011 executive
compensation determinations. The competitive assessment prepared
by the consulting firm provided the Compensation Committee
context for its evaluation of the over-all competitiveness of
the Companys executive compensation programs and was used
as one source of market information in its determinations of
executive salary, bonus and equity incentive award opportunities
for fiscal year 2011.
Executive
Compensation Recovery Policy
The Compensation Committee has adopted an executive compensation
recovery policy which applies to executive officers and the
corporate controller. Under this policy, the Company may recover
incentive income that was based on achievement of quantitative
performance targets, if an executive officer engaged in
intentional misconduct that resulted in an increase in his or
her incentive income. Incentive income includes income related
to annual bonuses, discretionary options and restricted stock
awards.
18
Fiscal
Year 2010 Compensation of the Chief Executive Officer
The Compensation Committee reviews and approves the compensation
paid to the Companys CEO, Martin F. Roper. For fiscal year
2010, the Compensation Committee approved a 3% increase to
Mr. Ropers 2009 base salary, increasing his base
salary by $20,000 to $686,750.
In December 2009, the Compensation Committee established
Mr. Ropers 2010 bonus opportunity at 80% of his 2010
salary, with an incremental opportunity equal to 64% of his 2010
salary tied to achieving certain goals that would require
substantial out-performance of the Companys financial plan
for the year. Specific 2010 quantitative and qualitative
performance goals and the weightings established by the
Compensation Committee to measure and reward
Mr. Ropers performance in 2010, including stretch
goals, and the performance achieved relative to these goals,
were as follows:
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% of Base
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Bonus
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2010 Base Bonus Goals for
CEO:
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Opportunity
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Fiscal 2010 Base Bonus Performance Goal
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Weighting
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2010 Performance
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Awarded
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Weighted combined depletions and pricing
growth of at least 7% with a minimum 2010 EPS greater than $2.48
|
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10
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%
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Achieved weighted combined depletions and pricing growth of
11.5% and EPS of $3.52
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10.0
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%
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Weighted combined depletions and pricing
growth of at least 4% better than craft volume growth with a
2010 EPS greater than $2.48
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20
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%
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*
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*
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Delivered gross profit of at least
$206 million and gross profit margin of at least 48%
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10
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%
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Achieved delivered gross profit of $232.3 million and gross
profit margin of 50.1%
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10.0
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%
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Implementation of resource efficiency
programs to improve gross profit margin realization in 2010 and
beyond
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10
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%
|
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Implemented resource efficiency programs to improve gross profit
margin realization
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|
10.0
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%
|
Systematic improvement in internal
processes, procedures and capabilities
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5
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%
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|
Achieved expectations for systematic improvements in internal
processes, procedures and capabilities
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5.0
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%
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Reductions in the cost of goods and
freight of at least $10 million by the Brewing and
Operations departments and by other departments by at least
$4 million
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30
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%
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Achieved cost reductions in excess of specified target amounts
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30.0
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%
|
Improve brand management capabilities,
including significant improvements of advertising campaigns and
new metrics to measure effectiveness of the campaigns
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15
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%
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Partially achieved expectations for improvements in brand
management capabilities
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7.5
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%
|
Total
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100
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%
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72.5
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%**
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* |
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The Compensation Committee was not able to determine whether
this goal had been attained due to insufficient information.
When the information needed to measure performance with respect
to this goal becomes available for the Committees review,
the bonus award may be increased by the Committee. |
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Without taking into consideration the possible achievement of
the goal for which determination has not yet been possible. |
19
2010
Stretch Bonus Goals for
CEO:
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% of Stretch Bonus
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Fiscal 2010 Stretch Bonus Performance Goal
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Weighting
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2010 Performance
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Awarded
|
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Weighted combined depletions and pricing
growth of at least 6% better than the craft category
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25.0
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%
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Target not achieved
|
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0
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%
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Weighted combined depletions and pricing
growth of at least 9% better than the craft category
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37.5
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%
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Target not achieved
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0
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%
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Processing costs of under $2.00 per case
equivalent for owned breweries, holding energy costs at planned
levels
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37.5
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%
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Target not achieved
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0
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%
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Total
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100
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%
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0
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%
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In February 2011, the Compensation Committee reviewed
Mr. Ropers achievements against his 2010 bonus
opportunities, as detailed above. Accordingly, at that time they
determined that he satisfied 72.5% of his base bonus goals, but
did not achieve his stretch bonus goals, and approved a bonus of
$398,315 for his 2010 performance, equivalent to 58% of his 2010
base salary. As noted above, the Compensation Committee was not
able to determine whether one goal had been attained due to
insufficient information. When the information needed to measure
performance with respect to that goal becomes available for the
Committees review, the bonus award may be increased by the
Committee. Should that goal be achieved, then Mr. Roper
would have satisfied 92.5% of his base bonus goals, which would
increase his bonus to $508,195, equivalent to 74% of his 2010
base salary.
In December 2007, the Compensation Committee and the Board of
Directors approved a long-term variable price option grant to
Mr. Roper for 753,864 shares of the Companys
Class A Common Stock effective January 1, 2008. This
option, part of a long-term compensation strategy to provide the
CEO with compensation comparable to that which he could receive
elsewhere, had a value of approximately $6.34 million at
the date of grant. Since the exercise price of the option is
indexed to the broader market, subject to a cap, and will have
value only to the extent that the market price of the
Companys Class A Common Stock exceeds the index, the
Compensation Committee believes that this will provide
Mr. Roper with significant incentive to cause the Company
to out-perform other companies over the long term and provide
him with a corresponding opportunity to benefit from long-term
out-performance of the Companys stock price. The option
vests 20% on January 1 in each of the years 2014 through 2018,
contingent on Mr. Ropers continued employment with
the Company. The option provides for certain acceleration of
vesting in the event of a change of control of the
Companys Class B Common Stock and Mr. Roper has
the right to participate in a transaction giving rise to such a
change in control, to the extent that the option then becomes
exercisable.
Taking into account information from a number of sources,
including in part the competitive assessment prepared by the
compensation consultants referred to above, the Compensation
Committee believes that Mr. Ropers compensation is
appropriate based on his responsibilities, performance level and
contribution to the Company, and that it is structured in a way
that provides Mr. Roper with appropriate incentives and
rewards for superior performance and, with its long-term focus,
does not reward decisions that might entail imprudent levels of
risk.
The Summary Compensation Table included in this Proxy Statement
sets forth all compensation received by Mr. Roper during
fiscal year 2010. There is no Company-sponsored retirement
program for Mr. Roper other than the Companys 401(k)
plan, and he receives no benefits or perquisites from the
Company other than the general Company benefits described above.
Mr. Roper does not have a change of control arrangement,
other than an acceleration of the vesting of the options granted
under the EEIP nor does he have a severance arrangement with the
Company.
Compensation
of Chairman
The Compensation Committee also reviews and approves the
compensation paid to C. James Koch, the Chairman and a full-time
employee of the Company. The Compensation Committee increased
Mr. Kochs base salary for 2010 by 37%, or $102,000,
to $375,000. The increase in Mr. Kochs base salary
was based on the
20
Compensation Committees assessment of his
responsibilities, performance level and contribution to the
Company, and reflects a salary level that the Compensation
Committee considered to be more appropriate based on these
considerations.
The Compensation Committee established Mr. Kochs 2010
bonus opportunity at 100% of his 2010 salary. Specific 2010
quantitative and qualitative performance goals and the
weightings established by the Compensation Committee to measure
and reward Mr. Kochs performance in 2010, and the
performance achieved relative to these goals, were as follows:
2010
Bonus Goals for
Chairman:
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|
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|
Fiscal 2010 Bonus Performance Goal
|
|
Weighting
|
|
2010 Performance
|
|
% of Bonus Awarded
|
|
Weighted combined depletions and pricing
growth of at least 7% with a minimum 2010 EPS greater than $2.48
|
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|
10
|
%
|
|
Achieved weighted combined depletions and pricing growth of
11.5% and EPS of $3.52
|
|
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10.0
|
%
|
Weighted combined depletions and pricing
growth of at least 4% better than craft volume growth with a
2010 EPS greater than $2.48
|
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30
|
%
|
|
*
|
|
|
*
|
|
Delivered gross profit of at least
$206 million and gross profit margin of at least 48%
|
|
|
20
|
%
|
|
Achieved delivered gross profit of $232.3 million and gross
profit margin of 50.1%
|
|
|
20.0
|
%
|
Implementation of resource efficiency
programs to improve gross profit margin realization in 2010 and
beyond
|
|
|
20
|
%
|
|
Met expectations for implementing resource efficiency programs
|
|
|
20.0
|
%
|
Improve time and resources in support of
craft beer industry initiatives
|
|
|
20
|
%
|
|
Achieved expectations for improvements in support of industry
initiatives
|
|
|
20.0
|
%
|
Total
|
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|
100
|
%
|
|
|
|
|
70
|
%**
|
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|
* |
|
The Compensation Committee was not able to determine whether
this goal had been attained due to insufficient information.
When the information needed to measure performance with respect
to this goal becomes available for the Committees review,
the bonus award may be increased by the Committee. |
|
** |
|
Without taking into consideration the possible achievement of
the goal for which determination has not yet been possible. |
In February 2011, the Compensation Committee reviewed
Mr. Kochs achievements against his 2010 cash
incentive bonus opportunities, as detailed above. Accordingly,
at that time, they determined that he satisfied 70% of his
performance goals, and approved a bonus of $262,500 for his 2010
performance, equivalent to 70% of his 2010 base salary. As noted
above, the Compensation Committee was not able to determine
whether one goal had been attained due to insufficient
information. When the information needed to measure performance
with respect to that goal becomes available for the
Committees review, the bonus award may be increased by the
Committee. Should that goal be achieved, then Mr. Koch
would have satisfied 100% of his base bonus goals, which would
increase his bonus to $375,000, equivalent to 100% of this 2010
base salary.
Mr. Koch was granted an option effective January 1,
2010 for 9,500 shares of the Companys Class A
Common Stock, with vesting contingent on the Companys
depletions growth. In February 2011, the Compensation Committee
determined that the performance criteria for that option had
been met and, hence, the shares will vest in accordance with the
option agreement.
The Summary Compensation Table included in this Proxy Statement
sets forth all compensation received by Mr. Koch during
fiscal year 2010. There is no Company-sponsored retirement
program for Mr. Koch other than the Companys 401(k)
plan, and he receives no benefits or perquisites from the
Company other than the general
21
Company benefits described above. Mr. Koch does not have a
change of control arrangement other than an acceleration of the
vesting of options granted under the EEIP nor does he have a
severance arrangement with the Company.
Compensation
of Executive Officers Other than the CEO and
Chairman
The Companys named executive officers for fiscal 2010, in
addition to the CEO and Chairman, are:
|
|
|
|
|
William F. Urich, Treasurer & Chief Financial Officer
|
|
|
|
Thomas W. Lance, Vice President of Operations
|
|
|
|
John C. Geist, Vice President of Sales
|
The following table shows the 2010 base salary, and the
corresponding percentage increase above the 2009 base salary
level, of each of the named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
% Increase to
|
|
|
Fiscal 2010
|
|
Fiscal 2009
|
Named Executive Officer
|
|
Base Salary
|
|
Base Salary
|
|
William F. Urich
|
|
$
|
372,000
|
|
|
|
2.8
|
%
|
Thomas W. Lance
|
|
$
|
329,000
|
|
|
|
2.8
|
%
|
John C. Geist
|
|
$
|
315,000
|
|
|
|
5.0
|
%
|
The Compensation Committee considered recommendations made by
the CEO for 2010 salary adjustments for these named executive
officers and concluded that the recommended base salary for each
of the executive officers, as adjusted, was within the
appropriate range for his experience and job responsibilities.
For fiscal 2010, the overall cash incentive bonus potential for
the named executive officers other than the CEO and the Chairman
was 50% of their respective base salaries, with between 20% and
30% of the bonus potential based on the achievement of
Company-wide goals and between 70% and 80% based on the
achievement of goals specifically set for each officer. The
shared 2010 Company-wide goals consisted of achieving depletions
growth by at least 4%, $14 million in resource
efficiencies, including $10 million in delivered gross
margin savings and $4 million in other efficiencies, and
maintaining brand health.
In February 2011, the Compensation Committee reviewed
performance and determined that the shared Company-wide goals
had been achieved based on actual depletions growth of 11.5%,
over $15 million of savings in delivered gross margin and
other spending, and successfully maintaining brand health as
demonstrated by the depletions accomplishment. The Compensation
Committee also reviewed the 2010 performance of the named
executive officers against their individual bonus goals, and
approved bonus payments, as described below.
22
Specific fiscal 2010 quantitative and qualitative performance
goals, the weightings established by the Compensation Committee
to measure and reward the performance of each named executive
officer in 2010 and the performance achieved relative to these
goals were as follows:
2010
Bonus Goals for Chief Financial Officer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Bonus
|
Fiscal 2010 Bonus Performance Goal
|
|
Weighting
|
|
2010 Performance
|
|
Awarded
|
|
Shared Company-Wide Goals
|
|
|
30
|
%
|
|
All goals achieved
|
|
|
30
|
%
|
Individual
Goals:
|
|
|
|
|
|
|
|
|
|
|
Deliver at least $4 million in
resource efficiencies outside of delivered gross margin; support
efforts to achieve delivered gross margin goal of
$10 million in savings; develop performance improvement
measurements, KPIs and financial reporting
|
|
|
35
|
%
|
|
Expectations achieved
|
|
|
35
|
%
|
Through effective use of procurement
department, deliver at least $1.5 million in reduced costs
outside of delivered gross margin and identify at least
$3.25 million in delivered gross margin savings
|
|
|
15
|
%
|
|
Achieved $2.4 million of cost savings and identified over $4.0
million in delivered gross margin savings
|
|
|
15
|
%
|
Support sales force through identifying
unplanned pricing opportunities, develop program to track
wholesaler and retailer margins; implement process to evaluate
wholesaler incentives and management of local marketing resources
|
|
|
10
|
%
|
|
Achieved expectations for pricing opportunities and margin
tracking; Tracking wholesaler incentives not achieved
|
|
|
5
|
%
|
Improve IT operational efficiency
|
|
|
10
|
%
|
|
Achieved expectations
|
|
|
10
|
%
|
Total
|
|
|
100
|
%
|
|
|
|
|
95
|
%
|
2010
Bonus Goals for Vice President of Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Bonus
|
Fiscal 2010 Bonus Performance Goal
|
|
Weighting
|
|
2010 Performance
|
|
Awarded
|
|
Shared Company-Wide Goals
|
|
|
20
|
%
|
|
All goals achieved
|
|
|
20
|
%
|
Individual
Goals:
|
|
|
|
|
|
|
|
|
|
|
Reduce total incident rate by 5%
|
|
|
10
|
%
|
|
Expectations not achieved
|
|
|
0
|
%
|
Improve total quality aggregate score by
5%
|
|
|
10
|
%
|
|
Target not fully achieved
|
|
|
9
|
%
|
Develop and implement inventory
improvements
|
|
|
10
|
%
|
|
Target achieved
|
|
|
10
|
%
|
Deliver at least $10 million in
delivered gross margin savings
|
|
|
20
|
%
|
|
Delivered $10.5 million in delivered gross margin savings
|
|
|
20
|
%
|
Develop leadership and implement
performance improvements in the breweries
|
|
|
15
|
%
|
|
Target achieved
|
|
|
15
|
%
|
Restructure Cincinnati Brewery to
improvement alignment of volume needs with cost structure
|
|
|
5
|
%
|
|
Expectations partially achieved
|
|
|
4
|
%
|
Develop and implement employee relations
strategy at the Pennsylvania Brewery
|
|
|
10
|
%
|
|
Significant progress, but goal was not fully achieved
|
|
|
8
|
%
|
Total
|
|
|
100
|
%
|
|
|
|
|
86
|
%
|
23
2010
Bonus Goals for Vice President of Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Bonus
|
Fiscal 2010 Bonus Performance Goal
|
|
Weighting
|
|
2010 Performance
|
|
Awarded
|
|
Shared Company-Wide Goals
|
|
|
30
|
%
|
|
All goals achieved
|
|
|
30
|
%
|
Individual
Goals:
|
|
|
|
|
|
|
|
|
|
|
Achieve specific depletions
targets for all Samuel Adams beers,
Samuel Adams Boston Lager and
Twisted Tea
|
|
|
20
|
%
|
|
Performance
exceeded all
targets
|
|
|
20
|
%
|
Grow Samuel Adams share of
craft category measured by IRI data
|
|
|
5
|
%
|
|
Expectations not
achieved
|
|
|
0
|
%
|
Achieve specific growth
targets for convenience stores and
on-premise national accounts
|
|
|
10
|
%
|
|
Performance
exceeded both
targets
|
|
|
10
|
%
|
Develop leadership in the
off-premise craft category with
execution in at least 10 chain
stores
|
|
|
5
|
%
|
|
Expectations not
fully achieved
|
|
|
2
|
%
|
Implement Sam to Standard
program with all core wholesalers,
tracking market improvements
|
|
|
4
|
%
|
|
Target achieved
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Implement display tracking
for key holidays with all core wholesalers,
tracking market improvements
|
|
|
4
|
%
|
|
Target achieved
|
|
|
4
|
%
|
Improve conversion rate for
seasonal beers on draft
|
|
|
4
|
%
|
|
Target achieved
|
|
|
4
|
%
|
Collect draft surveys in 90%
of core wholesalers with a list of
targeted accounts.
|
|
|
4
|
%
|
|
Expectations
partially achieved
|
|
|
2
|
%
|
Achieve net mixed price
increases by 1.5%, with an
additional $500,000 in unplanned
pricing increases
|
|
|
7
|
%
|
|
Expectations
partially achieved
|
|
|
5
|
%
|
Stay within local marketing
and expense budgets allocated to
sales
|
|
|
7
|
%
|
|
Expectations not
achieved
|
|
|
0
|
%
|
Total
|
|
|
100
|
%
|
|
|
|
|
81
|
%
|
Mr. Urich and Mr. Geist were each granted an option
effective January 1, 2010 for 19,000 shares of the
Companys Class A Common Stock, with vesting
contingent on the Companys depletions growth. In February
2011, the Compensation Committee determined that the performance
criteria for those options had been met and, hence, the shares
will vest in accordance with the respective option agreements.
Tax
Limitation
Section 162(m) of the U.S. Internal Revenue Code
limits the tax deductibility by a corporation of compensation in
excess of $1,000,000 paid to the Chief Executive Officer and any
other of its named executive officers. However, compensation
which qualifies as performance-based is excluded
from the $1,000,000 limit if, among other requirements, the
compensation is payable only upon attainment of pre-established,
objective performance goals under a plan approved by
stockholders. Mr. Ropers bonuses and stock option
grants have been approved by the sole holder of the
Companys Class B Common Stock, who acts with sole
authority on such matters, in accordance with the requirements
of Section 162(m).
24
The Compensation Committee does not presently expect that total
cash compensation to any individual executive that is not
performance-based will exceed $1,000,000. The Compensation
Committee will continue to monitor the compensation levels
potentially payable under the Companys compensation
programs, but intends to retain the flexibility necessary to
provide total compensation in line with competitive practice,
the Companys compensation philosophy and the
Companys best interests. The Company has not adopted a
policy that all executive compensation be fully deductible.
REPORT OF
THE COMPENSATION
COMMITTEE1
The Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis required by
Item 402(b) of
Regulation S-K,
promulgated under the Securities Act of 1933, as amended. Based
on such review and discussions, the Compensation Committee
recommended to the Board of Directors that the Compensation
Discussion and Analysis be included in the Companys Annual
Report on
Form 10-K
and the Companys Proxy Statement on Schedule 14A.
The Compensation
Committee:
David A. Burwick, Chair
Pearson C.
Cummin, III
Jay Margolis
|
|
|
(1) |
|
The material in this report is not soliciting
material, is not deemed filed with the SEC and is not to
be incorporated by reference in any filing of the Company under
the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, whether made before or after
the date hereof and irrespective of any general incorporation
language in any such filing. |
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The following table summarizes the compensation of the named
executive officers for the Companys fiscal years ended
December 25, 2010, December 26, 2009 and
December 27, 2008. The Companys named executive
officers are the Chief Executive Officer, the Chief Financial
Officer, and the next three most highly compensated executive
officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
|
|
|
|
|
Name and
|
|
|
|
|
Salary
|
|
|
Option
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Principal Position
|
|
Year
|
|
|
($)(1)
|
|
|
Awards ($)(2)
|
|
|
($)(1)
|
|
|
Compensation ($)(3)
|
|
|
Total ($)
|
|
|
Martin F. Roper
|
|
|
2010
|
|
|
$
|
686,750
|
|
|
|
|
|
|
$
|
398,315
|
(4)
|
|
$
|
9,173
|
|
|
$
|
1,094,238
|
(4)
|
President & Chief
|
|
|
2009
|
|
|
$
|
666,750
|
|
|
|
|
|
|
$
|
373,380
|
|
|
$
|
9,173
|
|
|
$
|
1,049,303
|
|
Executive Officer
|
|
|
2008
|
|
|
$
|
666,750
|
|
|
$
|
6,341,503
|
|
|
$
|
399,977
|
|
|
$
|
7,688
|
|
|
$
|
7,415,918
|
|
William F. Urich
|
|
|
2010
|
|
|
$
|
372,000
|
|
|
$
|
380,445
|
(5)
|
|
$
|
176,700
|
|
|
$
|
9,173
|
|
|
$
|
938,318
|
|
Treasurer & Chief
|
|
|
2009
|
|
|
$
|
362,000
|
|
|
$
|
265,275
|
(6)
|
|
$
|
130,320
|
|
|
$
|
9,173
|
|
|
$
|
766,768
|
|
Financial Officer
|
|
|
2008
|
|
|
$
|
352,000
|
|
|
$
|
330,305
|
(6)
|
|
$
|
144,320
|
|
|
$
|
7,688
|
|
|
$
|
834,313
|
|
C. James Koch
|
|
|
2010
|
|
|
$
|
375,000
|
|
|
$
|
190,222
|
(5)
|
|
$
|
262,500
|
(4)
|
|
$
|
9,173
|
|
|
$
|
836,895
|
(4)
|
Chairman
|
|
|
2009
|
|
|
$
|
273,000
|
|
|
$
|
127,332
|
(6)
|
|
$
|
136,500
|
|
|
$
|
9,173
|
|
|
$
|
546,005
|
|
|
|
|
2008
|
|
|
$
|
273,000
|
|
|
$
|
172,333
|
(6)
|
|
$
|
136,475
|
|
|
$
|
7,688
|
|
|
$
|
589,496
|
|
Thomas W. Lance
|
|
|
2010
|
|
|
$
|
329,000
|
|
|
|
|
|
|
$
|
141,684
|
|
|
$
|
9,173
|
|
|
$
|
479,857
|
|
Vice President of
|
|
|
2009
|
|
|
$
|
320,000
|
|
|
$
|
425,790
|
(5)
|
|
$
|
103,680
|
|
|
$
|
9,173
|
|
|
$
|
858,643
|
|
Operations
|
|
|
2008
|
|
|
$
|
312,000
|
|
|
|
|
|
|
$
|
129,948
|
|
|
$
|
7,688
|
|
|
$
|
449,636
|
|
John C. Geist
|
|
|
2010
|
|
|
$
|
315,000
|
|
|
$
|
380,445
|
(5)
|
|
$
|
127,575
|
|
|
$
|
9,173
|
|
|
$
|
832,193
|
|
Vice President of
|
|
|
2009
|
|
|
$
|
300,000
|
|
|
$
|
265,275
|
(6)
|
|
$
|
73,500
|
|
|
$
|
9,173
|
|
|
$
|
647,948
|
|
Sales
|
|
|
2008
|
|
|
$
|
290,000
|
|
|
$
|
330,305
|
(6)
|
|
$
|
120,350
|
|
|
$
|
7,688
|
|
|
$
|
748,343
|
|
25
|
|
|
(1) |
|
Included in this column are amounts earned, though not
necessarily received, during the corresponding fiscal year. |
|
(2) |
|
Reflects the dollar amount of the aggregate grant date fair
value of awards granted during each fiscal year as computed in
accordance with Accounting Standards Codification 718,
Compensation-Stock Compensation (ASC 718).
The methods and assumptions used in valuing the stock option
awards in accordance with ASC 718 are described in
Notes B and M to the Companys audited financial
statements for the fiscal year ended December 25, 2010
included in the Companys Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
March 8, 2011. |
|
(3) |
|
Includes annual group life insurance premium and Company
matching contributions under the Companys 401(k) plan paid
in the respective year. |
|
(4) |
|
At its February 2011 meeting, the Compensation Committee was not
able to determine whether one goal had been attained due to
insufficient information. When the information needed to measure
performance with respect to that goal becomes available for the
Committees review, the bonus award may be increased by the
Committee. The information shown above reflects the non-equity
incentive payment for 2010 as of the date of this Proxy
Statement. |
|
(5) |
|
Grant contains performance-based vesting conditions; as such,
the value reported above reflects the value of the award at the
grant date and is consistent with the estimate of aggregate
compensation cost to be recognized over the service period
determined as of the grant date under ASC 718, excluding
the effect of estimated forfeitures. In 2010, the Company
concluded that it was probable that the performance criteria
would be met and recorded the related compensation expense. In
February 2011, the Compensation Committee determined that the
maximum performance criteria had been achieved and the shares
eligible to vest under the options would vest commencing in
March 2011 as to 100% of the shares. |
|
(6) |
|
Grant contains performance-based vesting conditions; as such,
the value reported above reflects the value of the award at the
grant date and is consistent with the estimate of aggregate
compensation cost to be recognized over the service period
determined as of the grant date under ASC 718, excluding
the effect of estimated forfeitures. Such value has not been
recognized for financial statement purposes, as the performance
conditions were not met. |
The Company has not paid or provided any perquisites to any of
its officers, either individually or in the aggregate, in excess
of $10,000. Not included in the above Summary Compensation Table
are shares of the Companys Class A Common Stock
purchased by such officers at a discount under the Investment
Share feature of the EEIP (the Investment Shares).
Under the Investment Share program, all employees who have been
with the Company for at least one year have the opportunity to
purchase Investment Shares, and after two years of employment,
Investment Shares may be purchased at a discount. Eligible
employees may purchase Investment Shares in January of each year
and may pay for such stock through payroll deduction throughout
the year. The maximum aggregate annual purchase price is capped
at $17,500 and the maximum available discount is 40%. The
Investment Shares vest at the rate of 20% per year commencing on
the following January 1st. As noted in the Compensation
Discussion and Analysis, the Chairman and the CEO of the Company
have been precluded from participation in the Investment Share
program since 2006. Other executive officers remain eligible to
participate in the Investment Share program. At
December 25, 2010, Messrs. Geist, Lance and Urich held
unvested Investment Shares.
26
GRANTS OF
PLAN-BASED AWARDS IN FISCAL 2010
The following table describes the potential range of annual cash
incentive awards and potential payouts under equity incentive
awards for fiscal 2010 performance, the actual stock options to
purchase Class A Common Stock granted during fiscal 2010
and the grant date fair value of the option awards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Possible
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payouts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
Exercise or
|
|
|
Closing
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Estimated Future Payouts Under
|
|
|
Base Price
|
|
|
Price on
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Awards(3)
|
|
|
Equity Incentive Plan Awards(1)
|
|
|
of Option
|
|
|
Date of
|
|
|
Option
|
|
|
|
Grant
|
|
|
Approval
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Awards
|
|
|
Grant
|
|
|
Awards
|
|
Name
|
|
Date(1)
|
|
|
Date(2)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($/sh)
|
|
|
($/sh)
|
|
|
($)(4)
|
|
|
Martin F. Roper
|
|
|
|
|
|
|
|
|
|
$
|
988,902
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William F. Urich
|
|
|
1/1/10
|
|
|
|
12/15/09
|
|
|
$
|
186,000
|
|
|
|
9,500
|
|
|
|
14,250
|
|
|
|
19,000
|
|
|
$
|
46.60
|
(3)
|
|
$
|
46.60
|
|
|
$
|
380,445
|
|
C. James Koch
|
|
|
1/1/10
|
|
|
|
12/15/09
|
|
|
$
|
375,000
|
|
|
|
4,750
|
|
|
|
7,125
|
|
|
|
9,500
|
|
|
$
|
46.60
|
(3)
|
|
$
|
46.60
|
|
|
$
|
190,222
|
|
Thomas W. Lance
|
|
|
|
|
|
|
|
|
|
$
|
164,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John C. Geist
|
|
|
1/1/10
|
|
|
|
12/15/09
|
|
|
$
|
157,500
|
|
|
|
9,500
|
|
|
|
14,250
|
|
|
|
19,000
|
|
|
$
|
46.60
|
(3)
|
|
$
|
46.60
|
|
|
$
|
380,445
|
|
|
|
|
(1) |
|
Each option vests at 20% per year provided certain criteria are
met. The vesting of each option is contingent on the Company
achieving certain performance criteria. If the Companys
depletions increased by at least 2%, but less than 3%, over 2009
depletions, 50% of the number of shares would be eligible to
vest in accordance with the vesting schedule
(Threshold). If the Companys depletions
increased by at least 3%, but less than 4%, over 2009
depletions, 75% of the number of shares would be eligible to
vest in accordance with the vesting schedule
(Target). If the Companys depletions increased
by 4% or more over 2009 depletions, 100% of the number of shares
shall be eligible to vest in accordance with the vesting
schedule (Maximum). In February 2011, the
Compensation Committee determined that the Maximum had been
achieved. As a result, 20% of the Shares vested on March 1,
2011 and, so long as the Optionee continues to be employed by
the Company or an affiliate of the Company as of each indicated
date, the Option shall become incrementally exercisable as to
20% of Shares on January 1 in each of the years 2012, 2013, 2014
and 2015. |
|
(2) |
|
At the December 15, 2009 meeting of the Board of Directors,
upon the recommendation of the Compensation Committee, the Board
of Directors granted the options effective as of January 1,
2010, with an exercise price equal to the closing price of the
Companys stock on the New York Stock Exchange on the last
trading day immediately prior to the effective date of the
option grant. |
|
(3) |
|
There are no threshold levels for these awards. The amount
reflects the maximum payout for full achievement of the
performance goals. Nevertheless, the Compensation Committee has
the discretion to adjust the actual payout upon evaluation of
overall achievement. |
|
(4) |
|
Reflects the dollar amount of the aggregate grant date fair
value of awards granted during each fiscal year as computed in
accordance with ASC 718. The methods and assumptions used
in valuing the stock option awards in accordance with
ASC 718 are described in Notes B and M to the
Companys audited financial statements for the fiscal year
ended December 25, 2010 included in the Companys
Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
March 8, 2011. |
27
OUTSTANDING
EQUITY AWARDS AT 2010 FISCAL YEAR-END
The following table sets forth information regarding outstanding
equity awards granted to the named executive officers at
December 25, 2010. Those performance-based options that had
not either vested or lapsed as of December 25, 2010 are
considered unexercisable and unearned.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
No. of
|
|
No. of
|
|
No. of
|
|
|
|
|
|
|
|
Market
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
No. of
|
|
Value of
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
Shares of
|
|
Shares
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
Option
|
|
Stock That
|
|
that Have
|
|
|
Options
|
|
Options
|
|
Options
|
|
Exercise
|
|
Expiration
|
|
Have Not
|
|
Not
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
Unearned
|
|
Price ($)
|
|
Date
|
|
Vested
|
|
Vested ($)
|
|
Martin F. Roper
|
|
|
4,000
|
(1)
|
|
|
|
|
|
|
|
|
|
$
|
18.465
|
|
|
|
1/1/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
(2)
|
|
|
|
|
|
|
|
|
|
$
|
21.140
|
|
|
|
1/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
(3)
|
|
|
|
|
|
|
|
|
|
$
|
22.425
|
|
|
|
6/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
(4)
|
|
|
|
|
|
$
|
43.550
|
|
|
|
8/11/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
753,864
|
(5)
|
|
|
|
|
|
$
|
37.650
|
(5)
|
|
|
12/31/2018
|
|
|
|
|
|
|
|
|
|
William F. Urich
|
|
|
83,800
|
(6)
|
|
|
|
|
|
|
|
|
|
$
|
15.835
|
|
|
|
9/8/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(6)
|
|
|
|
|
|
|
|
|
|
$
|
18.000
|
|
|
|
9/8/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
(7)
|
|
|
|
|
|
|
|
|
|
$
|
21.140
|
|
|
|
1/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
(8)
|
|
|
2,000
|
(8)
|
|
|
|
|
|
$
|
24.950
|
|
|
|
1/1/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
5,400
|
(9)
|
|
|
3,600
|
(9)
|
|
|
|
|
|
$
|
35.980
|
|
|
|
1/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,000
|
(10)
|
|
$
|
46.600
|
|
|
|
12/31/2019
|
|
|
|
|
|
|
|
|
|
C. James Koch
|
|
|
12,000
|
(11)
|
|
|
3,000
|
(11)
|
|
|
|
|
|
$
|
26.070
|
|
|
|
1/1/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
7,200
|
(9)
|
|
|
4,800
|
(9)
|
|
|
|
|
|
$
|
35.980
|
|
|
|
1/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,500
|
(10)
|
|
$
|
46.600
|
|
|
|
12/31/2019
|
|
|
|
|
|
|
|
|
|
Thomas W. Lance
|
|
|
20,000
|
(12)
|
|
|
20,000
|
(12)
|
|
|
|
|
|
$
|
34.700
|
|
|
|
1/22/2017
|
|
|
|
4,000
|
(13)
|
|
$
|
150,600
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(14)
|
|
$
|
18.510
|
|
|
|
3/12/2019
|
|
|
|
|
|
|
|
|
|
John C. Geist
|
|
|
|
|
|
|
4,000
|
(8)
|
|
|
|
|
|
$
|
24.950
|
|
|
|
1/1/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
(9)
|
|
|
|
|
|
$
|
35.980
|
|
|
|
1/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,000
|
(10)
|
|
$
|
46.600
|
|
|
|
12/31/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Option granted 1/1/04 and shares vested at the rate of 20% per
year commencing one year after date of grant. |
|
(2) |
|
Option granted 1/1/05 and provides that 3,000 shares vested
on 5/31/07, 5/31/08 and 5/31/09 due to certain performance
criteria being met. Does not include 3,000 shares which
lapsed as of 3/1/06 and 3/1/10 as a result of performance
criteria not having been met. |
|
(3) |
|
Option granted 6/28/05 and 180,000 shares vested on 5/1/08
due to certain performance criteria being met. Does not include
120,000 shares which lapsed as of 5/1/10 as a result of
certain performance criteria not having been met. |
|
(4) |
|
Option granted 8/13/07 and provides that 180,000 shares
will vest on 8/13/2013 contingent on Mr. Ropers
continued employment with the Company. |
|
(5) |
|
Option granted 1/1/08 and provides that shares vest at the rate
of 20% on January 1 in each of the years 2014 through 2018,
contingent on Mr. Ropers continued employment with
the Company. The exercise price is determined by multiplying
$42.00 by the aggregate change in the DJ Wilshire 5000 Index
from and after January 1, 2008 through the close of
business on the trading date next preceding each date on which
the option is exercised. The exercise price will not be less
than $37.65 per share and the excess of the fair value of the
Companys Class A Common Stock cannot exceed $70 per share
over the exercise price. |
|
(6) |
|
Options granted 9/8/03 and shares vested at the rate of 20% per
year commencing one year after date of grant. |
|
(7) |
|
Option granted on 1/1/05 and 2,000 shares vested on
5/31/07, 5/31/08 and 5/31/09 due to certain performance criteria
being met. Does not include 2,000 shares which lapsed as of
3/1/06 and 3/1/10 as a result of performance criteria not having
been met. |
|
(8) |
|
Option granted 1/1/06 and shares will vest at the rate of 20%
per year due to certain performance criteria being met as of
3/1/07. |
28
|
|
|
(9) |
|
Option granted 1/1/07 and shares will vest at the rate of 20%
per year due to certain performance criteria being met as of
3/1/08. |
|
(10) |
|
Option granted 1/1/2010 and the shares will vest at the rate of
20% per year if certain performance criteria are met as of
3/1/11. On 3/1/11 it was determined the option will vest due to
performance criteria being met. |
|
(11) |
|
Option granted 2/16/06 and shares will vest at the rate of 20%
per year due to certain performance criteria being met as of
3/1/07. |
|
(12) |
|
Option granted 1/29/07 and provides that shares will vest at the
rate of 25% per year if certain performance criteria were met as
of 1/22/09, with the first vesting date being 3/1/09. Does not
include 40,000 shares which lapsed as of 3/1/09 due to
certain performance criteria not having been met. |
|
(13) |
|
Restricted stock awarded 1/29/07 and shares vest at a rate of
20% per year commencing 1/22/08. |
|
(14) |
|
Option granted 3/13/09 and provides that shares vest at the rate
of
331/3%
on March 1 in each of the years 2011, 2012 and 2013, contingent
on certain performance criteria being met. In February 2011, it
was determined the option will vest due to performance criteria
being met. |
OPTION
EXERCISES AND STOCK VESTED IN FISCAL 2010
The following table sets forth information regarding options
exercised and shares of Class A Common Stock acquired on
vesting of restricted stock awards by the named executive
officers during the fiscal year ended December 25, 2010, as
well as information regarding the value realized on such
exercise or vesting. Other than Mr. Lance, none of the
named executive officers have been granted any restricted stock
awards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
No. of Shares
|
|
|
|
No. of Shares
|
|
|
|
|
Acquired on
|
|
Value Realized on
|
|
Acquired on
|
|
Value Realized on
|
Name
|
|
Exercise (#)
|
|
Exercise ($)
|
|
Vesting (#)
|
|
Vesting(1) ($)
|
|
Martin F. Roper
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William F. Urich
|
|
|
25,500
|
|
|
$
|
1,412,341
|
|
|
|
|
|
|
|
|
|
C. James Koch
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas W. Lance
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
$
|
93,020
|
|
John C. Geist
|
|
|
21,000
|
|
|
$
|
520,274
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The aggregate dollar amount realized upon vesting equals the
number of shares vested multiplied by the market value of the
underlying shares on the vesting date. |
Employment
Contracts; Termination of Employment and
Change-in-Control
Arrangements
A Stockholder Rights Agreement between the Company and its
initial stockholders provides that, so long as C. James
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 Boston Beer Company Limited Partnership, and
(iii) the Company will purchase and maintain in effect term
life insurance on the life of Mr. Koch.
All employees of the Company, including each of the named
executive officers, are required to enter into a non-competition
agreement with the Company which prohibits the employee from
accepting employment with a competitor for a period of one year
after leaving the Company. Nevertheless, all employees of the
Company are employed at-will.
With the exception of the option granted to Martin Roper on
January 1, 2008, which is subject to acceleration pursuant
to a defined schedule in the event of a change of ownership of
the Companys Class B Stock, all options granted under
the EEIP, including those granted to the named executive
officers, become immediately exercisable in full in the event
that C. James Koch
and/or
members of his family cease to control a majority of the
Companys issued and outstanding Class B Common Stock.
29
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee was an officer or
employee of the Company or any of its subsidiaries during fiscal
year 2010. None of our executive officers serves as a member of
the board of directors or compensation committee of any entity
that has one or more of its executive officers serving as a
member of our Compensation Committee. In addition, none of our
executive officers serves as a member of the compensation
committee of any entity that has one or more of its executive
officers serving as a member of our Board of Directors.
Item 3. ADVISORY
VOTE ON EXECUTIVE COMPENSATION
The Board of Directors recognizes the interest our investors
have in the compensation of our executives. While the holders of
our Class A Common Stock have limited voting rights, in
recognition of that interest and consistent with the intent of
the Dodd-Frank Act and recently enacted SEC rules, we are
providing the holders of our Class A Common Stock with the
opportunity to cast a non-binding advisory vote on the
compensation of our named executive officers, as disclosed
pursuant to the compensation disclosure rules of the SEC (also
referred to as
say-on-pay).
The compensation of our named executive officers is disclosed in
the Compensation Discussion and Analysis, or
CD&A, the compensation tables, and the related
disclosures contained in this Proxy Statement. As described in
our CD&A, we have adopted an executive compensation
philosophy designed to deliver competitive total compensation,
upon the achievement of financial
and/or
strategic performance objectives, which will attract, motivate
and retain leaders who will drive the creation of stockholder
value. In order to implement that philosophy, the Compensation
Committee has established a disciplined process for the adoption
of executive compensation programs and individual executive
officer pay actions. We believe that our compensation policies
and decisions are focused on
pay-for-performance
principles, are strongly aligned with the long-term interests of
our stockholders, and provide an appropriate balance between
risk and incentives. Stockholders are urged to read the
CD&A section of this Proxy Statement, which discusses in
greater detail how our compensation policies and procedures
implement our executive compensation philosophy. We are asking
our stockholders to indicate their support for our named
executive officer compensation, as described in this Proxy
Statement, by approval of the following resolution:
RESOLVED, that the compensation policies and procedures
followed by the Company and the Compensation Committee of the
Companys Board of Directors and the level and mix of
compensation paid to the Companys named executive
officers, as disclosed pursuant to Item 402 of
Regulation S-K,
including the Compensation Discussion and Analysis, compensation
tables and narrative discussion, resulting from such policies
and procedures are hereby determined to be appropriate for the
Company and accordingly approved.
Your vote on this Item 3 is advisory, and therefore not
binding on the Company, the Compensation Committee, or the
Board. The vote will not be construed to create or imply any
change to the fiduciary duties of the Company or the Board, or
to create or imply any additional fiduciary duties for the
Company or the Board. However, our Board and our Compensation
Committee value input from stockholders and will consider the
outcome of the vote when making future executive compensation
decisions.
The Board recommends a vote FOR the adoption, of the
foregoing approval resolution regarding the Companys
executive compensation policies and procedures and the 2010
compensation paid to the named executive officers, as disclosed
in the Compensation Discussion and Analysis, the compensation
tables, and related narratives in this Proxy Statement.
Item 4. ADVISORY
VOTE ON FREQUENCY OF EXECUTIVE COMPENSATION ADVISORY
VOTE
The federal legislation that called for the advisory
say-on-pay
votes also requires that stockholders be allowed to advise the
Company as to the frequency with which such
say-on-pay
votes should be taken, with the choices being every year, every
two years, or every three years.
After careful consideration of the various arguments supporting
each frequency level, the Board of Directors believes that
submitting the advisory vote on executive compensation to the
holders of our Class A Common Stock every year is
appropriate for the Company and its stockholders at this time.
The proxy card provides four choices (every year, every two
years, every three years, or abstain). Stockholders are not
voting to approve or disapprove the Boards recommendation.
30
As with your vote on
say-on-pay
under Item 3 above, your vote on this Item 4 is
advisory and therefore not binding on the Company, the
Compensation Committee, or our Board. The vote will not be
construed to create or imply any change to the fiduciary duties
of the Company or the Board, or to create or imply any
additional fiduciary duties for the Company or the Board.
However, the Board values the opinions of the Companys
stockholders as expressed through their votes and other
communications. Although the vote is non-binding, the Board and
the Compensation Committee will carefully consider the outcome
of the frequency vote and other communications from stockholders
when making future decisions regarding the frequency of
say-on-pay
votes.
The Board recommends a frequency of ONE YEAR for
future advisory stockholder votes on compensation of our named
executive officers.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP (Ernst &
Young) was engaged as the Companys independent
public accountants to audit the Companys financial
statements for the Companys 2009 and 2010 fiscal years.
Neither the report of Ernst & Young on the
Companys financial statements for 2009 nor its report on
the Companys financial statements for 2010 contained an
adverse opinion or disclaimer of opinion, nor were such reports
qualified or modified as to uncertainty, audit scope or
accounting principles.
During the Companys two most recent fiscal years, there
were no disagreements with Ernst & Young on any matter
of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which, if not
resolved to such accountants satisfaction, would have
caused such accountants to make reference to the subject matter
of the disagreement in connection with its reports; and there
were no reportable events as defined in Item 304(a)(1)(v)
of
Regulation S-K
promulgated by the Securities and Exchange Commission.
Representatives of Ernst & Young are expected to be
present at the annual meeting, will have the opportunity to make
a statement if they desire to do so and are expected to be
available to respond to appropriate questions.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires the Companys officers and Directors and persons
owning more than 10% of the outstanding Class A Common
Stock of the Company to file reports of ownership and changes in
ownership with the SEC. Officers, Directors and greater than 10%
holders of Class A Common Stock are required by SEC
regulation to furnish the Company with copies of all
Section 16(a) forms they file.
The Company believes that during the fiscal year ended
December 25, 2010 all Section 16(a) filing
requirements applicable to its officers, directors, and
beneficial owners of greater than 10% of its Common Stock were
complied with, with the exception of Messrs. Charles Koch,
C. James Koch and Jean-Michel Valette, who were each late in
filing a Form 4 due to inadvertence. In making this
statement, the Company has relied upon examination of the copies
of Forms 3, 4 and 5, and amendments thereto, provided to
the Company and the written representations of its directors,
executive officers and 10% stockholders.
TRANSACTIONS
WITH RELATED PERSONS
The Board of Directors has adopted policies and procedures for
the disclosure, review and approval of any transaction in which
the Company or one of its subsidiaries is a participant and in
which any related person (director, executive
officer or their immediate family members, or stockholders
owning 5% or more of the Companys outstanding stock) has a
direct or indirect material interest. The policy requires that
transactions involving a related person be reviewed and approved
in advance by the Audit Committee of the Board of Directors.
Under the Companys Code of Business Conduct and Ethics,
officers, directors and employees of the Company are required to
report proposed related party transactions to the Companys
Compliance Officer, who will bring applicable transactions to
the attention of the Audit Committee. The Company is not aware
of any transaction required to be reported under
Item 404(a) of
Regulation S-K
promulgated by the SEC since the beginning of its 2010 fiscal
year where the foregoing policies and procedures did not require
review, approval or ratification of such transaction or where
such policies and procedures were not followed. Since the
beginning of the last fiscal year, the Company has had no
transactions, nor does it currently have any proposed
transactions, in which it was or is to be a participant in which
any related person had or will have a direct or indirect
material interest.
31
REPORT OF
THE AUDIT COMMITTEE
(2)
The Audit Committee of the Board of Directors reviews the
Companys auditing, accounting, financial reporting and
internal control functions and selects and engages the
Companys independent registered public accounting firm. In
discharging its duties, the Audit Committee reviews and approves
the scope of the annual audit and non-audit services to be
performed by the independent registered public accounting firm
and the independent registered public accounting firms
audit and non-audit fees. The Audit Committee also reviews the
audited financial statements to be included in the Annual Report
on
Form 10-K
for filing with the Securities and Exchange Commission
(SEC); meets independently with the Companys
manager of internal audit, independent registered public
accounting firm and senior management; and reviews the general
scope of the Companys accounting, financial reporting,
annual audit and internal audit programs and matters relating to
internal control systems, as well as the results of the annual
audit and interim financial statements, auditor independence
issues, and has oversight of operational, governance and other
risks that could adversely affect the Companys business.
The Audit Committee acts pursuant to an Audit Committee Charter,
a copy of which is available on the Companys website at
www.bostonbeer.com.
The Audit Committee of the Board of Directors is composed of
three directors, each of whom qualifies as independent under the
current listing standards of the New York Stock Exchange and
applicable SEC rules and regulations. In addition, the Board of
Directors has determined that each member of the Audit Committee
qualifies as an audit committee financial expert in
accordance with applicable SEC rules based on their relevant
experience. Mr. Cummin served for many years as a partner
in a venture capital firm where he had extensive experience in
assessing the performance of companies and evaluating their
financial statements, and served for several years on an audit
committee of another publicly-held company. Mr. Tanner, who
joined the Audit Committee in December 2007, also has many
years experience in senior management positions where he
supervised primary operational financial officers of large food
and agricultural companies. Mr. Valette, who joined the
Audit Committee in August 2004, worked as a securities analyst
for several years and has served as CEO of two companies where
he supervised the primary financial officers. He currently
serves as a member of the audit committees of two other
publicly-held companies and is chairman of the finance committee
of one of those companies as well.
The Audit Committees policy is to pre-approve all audit
and permissible non-audit services provided by the
Companys independent registered public accounting firm,
currently Ernst & Young LLP (Ernst &
Young). The Audit Committee pre-approved all such audit
and non-audit services provided by Ernst & Young
during 2010. In 2009 and 2010, the services provided by
Ernst & Young included audit services, audit-related
services, tax services and other services and resulted in the
fees set forth below:
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Audit Fees. The Company paid audit fees
to Ernst & Young in the amount of $383,000 for its
audit of the Companys 2010 annual financial statements and
for quarterly reviews during the fiscal year ended
December 25, 2010. Fees for the audit of the Companys
2009 annual financial statements and quarterly reviews during
the fiscal year ended December 26, 2009 totaled $450,600.
These amounts include fees for the review and certification of
the Companys compliance with the provisions of
Section 404 of the Sarbanes-Oxley Act of 2002.
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Audit-Related Fees. The Company paid
Ernst & Young $26,000 for audit fees relating to the
Companys 401(k) plans in 2010 and $14,000 for audit fees
relating to the Companys 401(k) plans in 2009. The
increase is due to the inclusion of the 401(k) plan of a
subsidiary in the 2010 audit.
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Tax Fees. The Company paid
Ernst & Young an aggregate of $153,580 for tax-related
services in 2010, which consisted of $57,500 in federal and
state tax return compliance assistance, $87,055 for federal and
state examination review assistance and $9,025 for other tax
advisory services. The Company paid Ernst & Young an
aggregate of $540,505 for tax-related services in 2009, which
consisted of $136,600 for federal and state tax return
compliance assistance, $67,765 for federal and state examination
review assistance and $336,140 in tax-related advisory services
in connection with an internal organizational restructuring that
was effected as of the beginning of the 2010 fiscal year.
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Other Fees. The Company paid no other
fees to Ernst & Young during the 2010 and 2009 fiscal
years.
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(2) The
material in this report, including the Audit Committee Charter,
is not soliciting material, is not deemed filed with
the SEC and is not to be incorporated by reference in any filing
of the Company under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, whether made
before or after the date hereof and irrespective of any general
incorporation language in any such filing.
32
During the course of 2010, the Audit Committee reviewed and
discussed with both management and Ernst & Young the
Companys 2010 quarterly results and during the first
quarter of 2011, the Audit Committee reviewed and discussed with
both management and Ernst & Young the Companys
audited financial statements for the fiscal year ended
December 25, 2010. In addition, throughout the year, the
Audit Committee met with Ernst & Young regarding the
Companys internal controls and compliance with
Section 404 of the Sarbanes-Oxley Act of 2002. The Audit
Committee has discussed with Ernst & Young the matters
required to be discussed by Statement of Auditing Standards
(SAS) No. 61, Communication with Audit
Committees, as amended by SAS No. 90,
Audit Committee Communications, which
provides that certain matters related to the conduct of the
audit of the Companys financial statements are to be
communicated to the Audit Committee. The Audit Committee has
received the written disclosures and the letter from
Ernst & Young required by Independence Standards Board
Standard No. 1 relating to the accountants
independence from the Company, has discussed with
Ernst & Young its independence from the Company, and
has considered the compatibility of non-audit services provided
by Ernst & Young with Ernst & Youngs
required independence.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Companys Board of Directors
that the Companys audited financial statements be included
in the Companys Annual Report on
Form 10-K
for the fiscal year ended December 25, 2010.
Audit Committee:
Pearson C.
Cummin, III, Chairman
Gregg A. Tanner
Jean-Michel Valette
DEADLINES
FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholders interested in submitting a proposal for inclusion
in the proxy materials for the Annual Meeting of Stockholders to
be held in 2012 may do so by following the procedures set
forth in
Rule 14a-8
of the Securities Exchange Act of 1934, as amended. To be
eligible for inclusion, stockholder proposals must be received
at the Companys principal executive offices in Boston,
Massachusetts on or before December 12, 2011.
If a stockholder wishes to present a proposal at the 2012 Annual
Meeting of Stockholders but not have it included in the
Companys proxy materials for that meeting, the proposal
must be received by the Company no later than March 6, 2012
and must relate to subject matter which could not be excluded
from a proxy statement under any rule promulgated by the
Securities and Exchange Commission.
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.
10-K
REPORT
A COPY OF OUR ANNUAL REPORT ON
FORM 10-K,
INCLUDING AUDITED FINANCIAL STATEMENTS AND SCHEDULES THERETO,
REQUIRED TO BE FILED WITH THE SEC FOR THE COMPANYS MOST
RECENT FISCAL YEAR, MAY BE FOUND ON THE COMPANYS WEBSITE,
WWW.BOSTONBEER.COM. IN ADDITION, THE COMPANY
WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A COPY
OF THE ANNUAL REPORT WITHOUT CHARGE, UPON RECEIPT OF A WRITTEN
REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE SENT TO THE
INVESTOR RELATIONS DEPARTMENT, THE BOSTON BEER COMPANY, INC.,
ONE DESIGN CENTER PLACE, SUITE 850, BOSTON, MA 02210.
33
VOTING
PROXIES
The Board of Directors recommends an affirmative vote for all
nominees specified herein, for approval, on an advisory basis,
of the compensation of the Companys named executive
officers and a vote for a three-year frequency of voting on the
compensation of the Companys named executive officers.
Proxies will be voted as specified. If signed proxies are
returned without specifying voting instructions, the shares
represented by such proxies will be voted for each of the agenda
items for which you have not clearly indicated votes, as
recommended by our Board of Directors.
By order of the Board of Directors
Boston, Massachusetts
April 14, 2011
34
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
We encourage you to take advantage of Internet or telephone voting.
Both are available 24 hours a day, 7 days a week.
Internet and telephone voting is available through 11:59 PM Eastern Time the day prior to annual meeting day.
THE BOSTON BEER COMPANY, INC.
INTERNET
http://www.proxyvoting.com/sam
Use the Internet to vote your proxy.
Have your proxy card in hand when you
access the web site.
OR
TELEPHONE
1-866-540-5760
Use any touch-tone telephone to vote
your proxy. Have your proxy card in
hand when you call.
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
To vote by mail, mark, sign and date your proxy card
and return it in the enclosed postage-paid envelope.
Your Internet or telephone vote authorizes the
named proxies to vote your shares in the same
manner as if you marked, signed and returned your
proxy card.
WO# Fulfillment#
97221 97222
6 FOLD AND DETACH HERE 6
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THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR
THE ELECTION OF DIRECTORS, FOR ITEM 3 AND FOR EVERY 1 YEAR ON ITEM 4.
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Please mark your votes as
indicated in this example
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FOR |
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*EXCEPTIONS |
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FOR ALL |
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1. ELECTION OF DIRECTORS Nominees:
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01 David A. Burwick
02 Pearson C. Cummin, III
03 Jean-Michel Valette
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, mark the Exceptions box above and
write that nominees name in the space provided below.)
Management recommends a vote FOR the following proposal:
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FOR
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AGAINST
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3.
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To approve the non-binding advisory resolution
relating to executive compensation.
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Management recommends a vote for EVERY 1 YEAR on the following proposal: |
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1 year |
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Abstain |
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4.
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Non-binding advisory vote on frequency
of executive compensation vote |
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Such other matters as may properly come before the meeting or at any
adjournment there of. |
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Mark Here for
Address Change
or Comments
SEE REVERSE
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NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian. Please give full title as such.
THE BOSTON BEER COMPANY, INC.
2011 ANNUAL MEETING
Wednesday, May 25, 2011
9:00 A.M.
The Brewery
30 Germania Street
Boston, MA 02130
DIRECTIONS TO THE BREWERY
FROM THE SOUTH OF BOSTON
Take 93N to exit 18 (Mass Ave and Roxbury Exit). Go straight down Melnea
Cass Blvd toward Roxbury. Once on Melnea Cass Blvd you will go through seven
lights. At the eighth light take a left on Tremont St (Landmark: Northeastern
University and Ruggles T Station will be on your right when you turn onto Tremont
St. Note: Tremont St eventually becomes Columbus Ave).
Follow Tremont St through seven lights. Take a right on Amory St
(Landmark: look for a big, powder blue Muffler Mart shop on the right - directly after
Centre Street). Follow Amory St through 2 lights. After the 2nd light take a
left on Porter St (Landmark: Directly after Boyiston St). Go to the end of
Porter St and the Brewery is on the right.
FROM THE NORTH OF BOSTON
Take
93S to exit 18 (Mass Ave and Roxbury exit) and follow the above
directions.
FROM THE SUBWAY
Take the Orange Line outbound toward Forest Hills. Exit at the Stony Brook
stop. Above ground take a left onto Boylston St. Take your first right onto
Amory St. Then take your first left onto Porter St to Brewery gate (the Brewery
will be at the end of Porter St on your right).
Important notice regarding the Internet availability of proxy materials for the
Annual Meeting.
The Proxy Statement and the 2010 Annual Report to Stockholders are available at:
http://www.proxyvoting.com/sam
6 FOLD AND DETACH HERE 6
THE BOSTON BEER COMPANY
PROXY
Annual Meeting of Stockholders May 25, 2011
CLASS A COMMON STOCK
The undersigned, a stockholder of The Boston Beer Company, Inc., does hereby appoint C.
James Koch and Frederick H. Grein, Jr., or either of them, acting singly, the undersigneds proxy,
with full power of substitution, to appear and vote at the Annual Meeting of Stockholders, to be
held on Wednesday May 25, 2011 at 9:00 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
reverse side on the following matters and in accordance with his judgment on other matters which
may properly come before the Meeting.
(Continued and to be marked, dated and signed, on the other side)
Address Change/Comments
(Mark the corresponding box on the reverse side)
BNY MELLON SHAREOWNER SERVICES
P.O. BOX 3550
SOUTH HACKENSACK, NJ 07606-9250
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WO#
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Fulfillment# |
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97222
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