<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PYRAMID BREWERIES
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LOGO OF PYRAMID BREWERIES]
PYRAMID BREWERIES INC.
91 So. Royal Brougham Way
Seattle, Washington 98134
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO OUR SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of the shareholders of
Pyramid Breweries Inc. (the "Company") will be held at the Hyatt Regency
Bellevue at Bellevue Place, 900 Bellevue Way N.E., Bellevue, Washington on
Thursday, May 13, 1999 at 10:00 a.m., for the following purposes:
1. To elect three directors.
2. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only shareholders of record at the close of business on March 15, 1999 are
entitled to notice of and to vote at the meeting.
All shareholders are requested to be present in person or by proxy. For the
convenience of those shareholders who do not expect to attend the meeting in
person and desire to have their shares voted, a form of proxy and an envelope,
for which no postage is required, are enclosed. Any shareholder who later
finds that he or she can be present at the meeting, or for any reason desires
to do so, may revoke the proxy at any time before it is voted.
Please complete, sign, date and mail promptly the accompanying proxy card in
the return envelope furnished for that purpose, whether or not you plan to
attend the meeting. Your cooperation is appreciated since one-third of the
common stock must be represented, either in person or by proxy, to constitute
a quorum for the conduct of business.
By Order of the Board of Directors
/s/ George Hancock
George Hancock
Chairman
April 13, 1999
<PAGE>
[LOGO OF PYRAMID BREWERIES INC.]
PYRAMID BREWERIES INC.
PROXY STATEMENT
For Annual Meeting of Shareholders to be held
May 13, 1999
SOLICITATION AND REVOCATION OF PROXY
The enclosed proxies are solicited by the Board of Directors of Pyramid
Breweries Inc. (the "Company" or "Pyramid") to be voted at the annual meeting
of shareholders to be held on May 13, 1999, or any adjournments thereof (the
"Annual Meeting"). The individuals named as proxies are George Hancock and
John Stoddard. The accompanying notice of meeting, this Proxy Statement and
the form of proxy are being first sent to shareholders on or about April 13,
1999.
All shares represented by proxies received will be voted in accordance with
instructions contained therein. In the absence of voting instructions, the
shares will be voted for the proposals listed herein and on the proxy. A
shareholder giving a proxy has the power to revoke it at any time before it is
voted.
At the close of business on March 15, 1999, there were 8,224,352 shares of
common stock, par value $.01 per share (the "Common Stock"), outstanding,
which represent all of the voting securities of the Company. Each share of
Common Stock is entitled to one vote. Shareholders do not have cumulative
voting rights in the election of directors. Only shareholders of record at the
close of business on March 15, 1999 (the "Record Date") will be entitled to
vote at the Annual Meeting. The holders of one-third of the Common Stock
issued and outstanding and entitled to vote at the Annual Meeting, present in
person or represented by proxy, constitute a quorum.
In addition to mailing this material to shareholders, the Company has asked
banks and brokers to forward copies to persons for whom they hold stock of the
Company and request authority for execution of the proxies. The Company will
reimburse the banks and brokers for their reasonable out-of-pocket expenses in
doing so. Officers and regular employees of the Company may, without being
additionally compensated, solicit proxies by mail, telephone, telegram,
facsimile or personal contact. All reasonable proxy soliciting expenses will
be paid by the Company in connection with the solicitation of votes for the
Annual Meeting. The Company does not currently intend to employ any other
party to assist in the solicitation process.
1
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of March 15, 1999, for (i) each person known
to the Company to own beneficially more than 5% of the Common Stock, (ii) each
of the Company's directors and named executive officers (as defined herein),
and (iii) all of the Company's executive officers and directors as a group.
Except as otherwise noted, the named beneficial owner has sole voting and
investment power. Except as otherwise noted, the address of the named
shareholder is c/o Pyramid Breweries Inc., 91 South Royal Brougham Way,
Seattle, Washington 98134.
<TABLE>
<CAPTION>
Shares Beneficially
Owned
-----------------------
Name and Address(1) Number Percent
------------------- ------------ ----------
<S> <C> <C>
George Hancock...................................... 1,090,000 13.3%
John Stoddard(1).................................... 1,041,750 12.7
John T. Bryce(2).................................... 836,500 10.2
Richard Denmark(3).................................. 79,778 1.0
Edward Black(4)..................................... 17,233 0.2
George C. Textor, Jr.(2)............................ 16,500 0.2
George Arnold(5).................................... 6,166 *
Thomas Schwalm(6)................................... 5,500 *
Robert Toledo....................................... 500 *
All executive officers and directors as a group (10
persons)(7)........................................ 3,094,437 37.6
Brookhaven Capital Management, LLC(8)............... 908,225 11.1
3000 Sandhill Road
Building 3, Suite 105
Menlo Park, California 94025
Spear, Leeds & Kellogg(9)........................... 450,000 5.4
10 Exchange Place
Jersey City, New Jersey 07302
</TABLE>
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* Less than 0.1%.
(1) Includes 2,500 vested options from the Non-Employee Directors Stock Option
Plan.
(2) Includes 7,500 vested options from the Non-Employee Directors Stock Option
Plan.
(3) Includes 77,778 vested options.
(4) Includes 10,833 vested options.
(5) Includes 5,333 vested options.
(6) Includes 5,000 vested options from the Non-Employee Directors Stock Option
Plan.
(7) Includes 116,444 vested options.
(8) The information provided with respect to Brookhaven Capital Management,
LLC is based solely on statements filed with the Securities and Exchange
Commission. The shares set forth in the table are owned by a group
consisting of the following:
Brookhaven Capital Management, LLC, a California limited liability company
("LLC"); Vincent A. Carrino ("Carrino"); and Daniel R. Coleman
("Coleman"). The business address of LLC and Carrino is 3000 Sandhill
Road, Building 3, Suite 105, Menlo Park, California 94025. The business
address of Coleman is 1370 116th Avenue NE, Suite 210, Bellevue,
Washington 98004. The LLC is an investment adviser to various accounts,
including investment limited partnerships of which it is also a general
partner. Carrino is the sole Manager and the majority member of LLC.
Coleman is the Executive Vice President and a minority member of LLC.
(9) The information provided with respect to Spear, Leeds & Kellogg is based
solely on statements filed with the Securities and Exchange Commission.
Spear, Leeds & Kellogg is a Limited Partnership organized under the laws
of the State of New York.
2
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors currently has seven members. The Board is divided
into three classes. Initially, Class I directors were elected for one year,
Class II directors for two years and Class III directors for three years.
Successors to the class of directors whose term expires at any annual meeting
shall be elected for three-year terms. Each of George Hancock, Robert Toledo
and Scott Barnum is nominated as a member of Class I to serve for a three-year
term until the annual meeting of the shareholders in 2002 and until his
successor is elected and qualified. Unless otherwise directed, the persons
named in the proxy intend to cast all proxies in favor of the nominees,
Messrs. Hancock, Toledo and Barnum.
Each of the nominees has indicated that he is willing and able to serve as a
director. If any nominee becomes unable or unwilling to serve, the
accompanying proxy may be voted for the election of such other person as shall
be designated by the Board of Directors. The Proxies being solicited hereby
will be voted for no more than three nominees at the 1999 Annual Meeting.
Vote Required
The three nominees receiving the largest number of votes cast, in person or
by proxy, at the Annual Meeting, assuming a quorum is present, will be elected
as Class I directors. Shareholders do not have cumulative voting rights in the
election of directors.
THE BOARD RECOMMENDS A VOTE IN FAVOR OF ELECTION TO THE BOARD OF EACH OF THE
NOMINEES.
Directors
The following table sets forth information regarding each nominee for
election as a director and each director whose term of office will continue
after the Annual Meeting.
<TABLE>
<CAPTION>
Expiration
Name Current Position with Company(1) Age of Term
---- -------------------------------- --- ----------
<S> <C> <C> <C>
George Hancock............... Chairman of the Board and
Chief Executive Officer 54 1999
John Stoddard................ Director 39 2000
John T. Bryce................ Director 48 2001
Thomas Schwalm............... Director 54 2000
George C. Textor............. Director 54 2001
Robert A. Toledo............. Director 56 1999
Scott S. Barnum.............. Director 43 1999
</TABLE>
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(1) For a description of certain committees of the Board of Directors and the
members of such committees, see "Committees of the Board" below.
GEORGE HANCOCK has served as Chief Executive Officer since May 1992, as
President from July 1995 until December 1996 and as Chairman of the Board of
the Company since January 1997. Mr. Hancock previously served as Chairman of
the Board of the company from July 1989 until July 1995 and has been a
director since 1989. He was President of Penknife Computing, Inc., a computer
software company, from 1988 to May 1992. Mr. Hancock was previously employed
by the international accounting firm of Coopers & Lybrand, where he was
primarily responsible for management consulting projects. Mr. Hancock was also
the founder of two startup software companies in England and the United
States. He was awarded a Masters Degree in Business Administration by
Cranfield Institute of Technology, England in 1981. He qualified as an
accountant in England in 1967.
3
<PAGE>
JOHN STODDARD has been a director of the Company since 1989. He served as
Chairman of the Board from July 1995 to January 1997 and President and Chief
Operating Officer from January 1997 to January 1999. Mr. Stoddard owned and
operated a winery, Paul Thomas Wines, Ltd. from July 1989 until the sale of
the business to Associated Vintners in 1994. Mr. Stoddard has substantial
experience in real estate development and construction. He was employed by
Northwest Building Corporation, a company primarily engaged in real estate
investment, development, and management, as its Director of Construction from
1982 to 1989.
JOHN T. BRYCE has been a director of the Company since 1989 and served as
President of the Company from July 1989 until July 1995. He has been active as
a consultant to the Board advising and assisting on the Company's development.
Mr. Bryce received an undergraduate degree in Business Studies in Marketing
and Management and a Master of Science from the University of Wisconsin.
THOMAS SCHWALM has been a director of the Company since February 1997. Mr.
Schwalm founded Greenwich Beverage Group, a firm that provides consulting
services to the beverage industry, in 1993. He also is a founder of South
Beach Beverage Co., which manufactures and distributes a line of non-alcoholic
teas and juices. During 1992 until it was sold in 1993, Mr. Schwalm served as
President of Barton Beers, Inc., the U.S. importer for, among others, Corona
and Tsing Tao. Barton Beers, Inc. also owned Steven's Point Brewing Company, a
craft brewer located in Wisconsin. From 1984 to 1992, Mr. Schwalm was Vice
President of Sales and Marketing for Dribeck Importers, Inc., the U.S.
importer of Beck's Beer. Before that, he spent two years as Group Marketing
Director with the Stroh Brewing Co. and fourteen years in various sales and
marketing positions with Jos. Schlitz Brewing Co., including four years as Old
Milwaukee Brand Director. Mr. Schwalm earned a Bachelors Degree from the
University of Wisconsin in 1968.
GEORGE C. TEXTOR, JR. has been a director of the Company since December
1995. Mr. Textor is a founding General Partner of Capstan Partners, a private
equity investment fund. From 1981 to 1988 Mr. Textor was a founding General
Partner and Senior Vice President in the Corporate Finance Department of Cable
Howse and Ragen (now Ragen MacKenzie Inc.), a regional investment banking and
brokerage firm. Prior to that he worked for Seattle Trust and Savings Bank
(now Key Bank) from 1971 to 1981 as a Commercial Lending Officer and Vice
President and Manager of the Bank's main branch. He is a graduate of Lehigh
University and received his MBA from the University of Washington.
ROBERT A. TOLEDO has been a director of the Company since September 1998.
Mr. Toledo was most recently Owner/President of Miller Brands, Inc., a
beverage distribution company servicing King County, Washington. From 1972
through 1989 he held various marketing and planning positions with the Miller
Brewing Co. including Brand Manager, Director--Corporate Planning, Group
Product Director, Vice President of Brand Management and Vice President of
Brand and Promotion. From 1965 to 1972 Mr. Toledo held various sales positions
with Philip Morris International including Sales Manager of Philip Morris de
Puerto Rico. He is a US Small Business/SCORE volunteer counselor advising
small businesses. He is a graduate of St. John's University and completed the
Stanford University--Senior Management seminar.
SCOTT S. BARNUM has been a director of the Company since February 1999. Mr.
Barnum is Vice President--International for eBay Inc., the leading Internet
based person-to-person trading community. Prior to joining eBay, Mr. Barnum
was President and Chief Operating Officer of Pete's Brewing Company, the
nation's second largest brewer of craft beers. His background includes four
years with Miller Brewing company where he held several senior level
appointments in the marketing department and where he ultimately became
General Manger of the American Specialty and Craft Beer Co., a wholly owned
subsidiary formed to establish a national presence in the craft beer segment.
His previous experience included nine years with PepsiCo Inc. in its soft
drink and snack divisions, both domestically and internationally, in marketing
management. Mr. Barnum earned a Masters Degree in Business Administration from
Columbia University.
4
<PAGE>
Committees of the Board of Directors
The Board has an Audit Committee and a Compensation Committee. The Audit
Committee, currently comprised of Messrs. Textor, Schwalm, Bryce, Toledo and
Barnum, recommends the selections of the Company's independent auditors and
consults with the independent auditors on the Company's internal accounting
controls. The Audit Committee met three times during 1998. The Compensation
Committee, currently comprised of Messrs. Schwalm, Textor, Toledo and Barnum,
recommends to the Board salaries and bonuses for the Company's executive
officers and administers the Company's Amended and Restated 1995 Employee
Stock Option Plan. The Compensation Committee did not meet formally during
1998. The Board of Directors met five times during 1998. Each member of the
Board of Directors attended at least 75% of the Board meetings. Each member of
the Board who also served on one of the committees of the Board attended at
least 75% of the meetings of all committees on which he served, except for Mr.
Schwalm who was only able to attend one audit committee meeting.
Executive Compensation
Compensation Summary. The following table summarizes the annual compensation
for services rendered during 1998 and 1997 for the Company's chief executive
officer and its other executive officers whose salary and bonus exceeded
$100,000 in 1998 ("Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
------------------- All Other
Name and Principal Position Salary ($)(1) Bonus ($) Compensation(2)
--------------------------- ------------- --------- ---------------
<S> <C> <C> <C> <C>
George Hancock................ 1998 153,600 0 3,181
Chief Executive Officer and
Chairman of the Board 1997 153,600 0 1,146
John Stoddard(3).............. 1998 128,400 0 0
1997 128,400 0 0
Richard Denmark............... 1998 138,600 15,000 0
Chief Financial Officer, Vice 1997 42,646 15,000 0
President-Finance
and Secretary
Edward Black.................. 1998 120,700 8,000 0
Vice President--Sales and
Marketing 1997 9,285 0 0
George Arnold................. 1998 102,085 8,000 2,660
Vice President--Brewery
Operations 1997 93,430 8,933 2,131
</TABLE>
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(1) Includes a car allowance.
(2) Consists of the Company's matching to the 401(k) plan.
(3) Mr. Stoddard was Chief Operating Officer and President and resigned in
January 1999.
Grants of Stock Options
The following table sets forth certain information concerning Options
granted during 1998 to the named executives:
<TABLE>
<CAPTION>
Potential
Realizable Value
Individual Grants at Assumed
--------------------------------------------- Annual Rates of
% of Total Stock Price
Options Exercise Appreciation for
Granted to or Base Option Term(1)
Option Employees in Price Expiration ----------------
Name Granted (#) Fiscal Year ($/Share) Date 5% ($) 10% ($)
---- ----------- ------------ --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
George Arnold 50,000 20.3% $2.56 06/30/08 $80,512 $204,032
</TABLE>
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(1) Potential realizable values are based on assumed compound annual
appreciation rates specified by the SEC. These increases in value are
based on speculative assumptions and are not intended to forecast
possible future appreciation, if any, of the Company's stock price.
5
<PAGE>
Year End Options
The following table sets forth information concerning the number and value
of options held by the named executive officers on December 31, 1998. No stock
options were exercised by the named executive officers during the year ended
December 31, 1998.
Year End Option Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Year End at Year End(5)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
George Hancock........... 0 0 0 0
John Stoddard(1)......... 2,500 2,500 0 0
Richard Denmark(2)....... 77,778 97,222 0 0
Edward Black(3).......... 10,833 39,167 0 0
George Arnold(4)......... 5,333 50,667 0 0
</TABLE>
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(1) The exercise price of these options is $12.25 per share of common stock.
(2) The exercise price of these options is $2.88 per share of common stock.
(3) The exercise price of these options is $2.50 per share of common stock.
(4) The weighted-average exercise price of these options is $3.44 per share of
common stock.
(5) The closing price on the NASDAQ National Market on December 31, 1998 was
$1.50.
Employment Agreements
Mr. Hancock has an employment agreement with the Company of indefinite
duration that provides for an annual base salary of $150,000. Mr. Hancock also
may receive a personal performance bonus of up to $20,000 and a corporate
performance bonus of up to $30,000 annually. The agreement has a covenant not
to compete during his employment and for a period one year following the
termination of employment. If Mr. Hancock's employment is terminated without
cause, he will receive his annual base salary for a period of two years
following the date of such termination.
Mr. Denmark has an employment agreement with the Company of indefinite
duration that provides for an annual base salary of $140,660. Mr. Denmark also
may receive a personal performance bonus of up to $15,000 and a corporate
performance bonus of up to $10,000 annually. The agreement has a covenant not
to compete during his employment and for a period six months following the
termination of employment. If Mr. Denmark's employment is terminated without
cause, he will receive his annual base salary for a period of six months
following the date of such termination.
Mr. Black has an employment agreement with the Company of indefinite
duration that provides for an annual base salary of $121,940. Mr. Black also
may receive a personal performance bonus of up to $20,000 annually.
Mr. Arnold has an employment agreement with the Company of indefinite
duration that provides for an annual base salary of $106,080. Mr. Arnold also
may receive a personal performance bonus of up to $10,000 and a corporate
performance bonus of up to $10,000 annually. The agreement has a covenant not
to compete during his employment and for a period one year following the
termination of employment. If Mr. Arnold's employment is terminated without
cause, he will receive his annual base salary for a period of up to three
months following the date of such termination.
6
<PAGE>
Compensation of Directors
Each non-employee director receives a fee of $385 for each Board meeting
attended. All directors are reimbursed for out of pocket expenses for each
Board meeting attended, and non-employee directors also participate in the
Non-Employee Directors Stock Option Plan ("Director Plan").
The Director Plan provides for grants of stock options covering 2,500 shares
of Common Stock to be made automatically on the date of each annual meeting of
shareholders commencing with the 1996 annual shareholders meeting, to each
non-employee director of the Company, so long as shares of Common Stock remain
available under the Directors Plan. The exercise price under each option is
the fair market value of the Common Stock on the date of grant. Each option
expires in ten years after grant or one year after the death of the recipient
director. A total of 125,000 shares of Common Stock are reserved for future
grants of options under the Directors Plan. During 1998, 7,500 options were
granted under the Directors Plan: 2,500 shares to each Messrs. Bryce, Schwalm
and Textor.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee during calendar 1998 were Messrs.
Schwalm, Textor and Toledo.
Report of Compensation Committee
The Compensation Committee of the Board of Directors of the Company (the
"Committee") determined and administered the compensation of the Company's
executive officers during 1998.
Compensation Philosophy. The Committee endeavors to ensure that the
compensation programs for executive officers of the Company are effective in
attracting and retaining key executives responsible for the success of the
Company and in promoting its long-term interests and those of its
shareholders. The Committee seeks to align total compensation for management
with corporate performance. The Committee places emphasis on variable,
performance-based components, such as stock option awards and cash bonuses,
the value of which could increase or decrease to reflect changes in corporate
and individual performances. These short- and long-term incentive compensation
programs are intended to reinforce management's commitment to enhancement of
profitability and shareholder value.
The Committee took into account various qualitative and quantitative
indicators of corporate and individual performance in determining the level
and composition of compensation for the Company's executive officers during
1998. While the Committee considered such corporate performance measures as
net income, margins and rate of revenue increase, the Committee did not apply
a specific quantitative formula in making compensation decisions. The
Committee also recognized qualitative factors, such as demonstrated leadership
ability.
Base salaries for the executive officers were established at levels
considered appropriate in light of the duties and scope of responsibilities of
each officer's position and the salaries paid to comparable officers by
companies which are competitors of the Company. Salaries are reviewed
periodically and adjusted as warranted to reflect individual performance. The
Committee focused primarily on total annual compensation, including incentive
awards, rather than base salary alone, as the appropriate measure of executive
officer performance and contribution.
From time to time, executive officers have been eligible to receive
incentive compensation awards under the Company's annual bonus plan and stock
option plan, based upon corporate and individual performance. In approving
grants and awards under the bonus plan and the option plan, the Committee
considered the quantitative and qualitative factors and industry comparisons
related to sales and earnings growth.
In general, compensation payments in excess of $1 million to the CEO are
subject to a limitation on deductibility for the Company under Section 162(m)
of the Internal Revenue Code of 1986, as amended (the
7
<PAGE>
"Code"). However, certain performance based compensation is not subject to
such limitation. The Company's stock option plan currently qualifies for such
performance based exception. The Company does not expect that its cash
compensation payable to the CEO will exceed the $1 million limitation during
fiscal 1999.
Chief Executive Officer Compensation. In evaluating the compensation of
George Hancock, Chairman and Chief Executive Officer of the Company for 1998,
the Committee reviewed Mr. Hancock's performance in managing the business
through a difficult year.
The Committee noted that the Company's net sales decreased 6.5% to $25.7
million from $27.5 million in 1997. Net beer sales decreased 12.6% to $15.9
million from $18.2 million in the prior year. Alehouse sales decreased
slightly during the year while soda sales increased 17.2% to $3.4 million from
$2.9 million in 1997. The Company posted a loss of $1.1 million or $0.14 per
share compared to a loss of $2.1 million or $0.26 per share in the prior year.
While the financial results were disappointing, the Company successfully
repackaged and relauched its Pyramid and Thomas Kemper beer brands during the
year, and completed a successful computer conversion. The committee also noted
an increase in beer sales trends in the fourth quarter.
In accordance with the compensation philosophy described above, the
Committee kept Mr. Hancock's base salary at its prior year level of $150,000
for 1998, and did not award a cash bonus for personal or corporate
performance. Mr. Hancock was also eligible to receive, but was not awarded
stock options.
1998 Compensation Committee
Thomas Schwalm
George C. Textor, Jr.
Robert A. Toledo
8
<PAGE>
Performance Graph
The following graph compares the cumulative total shareholder return (stock
price appreciation plus dividends) on the Common Stock with the cumulative
total return of the S&P 500 Index and the following group of peer companies
(based on weighted market capitalization) selected by the Company: Boston Beer
Company, Redhook Ale Brewery Incorporated, Big Rock Brewery, Ltd., Minnesota
Brewing Company.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG PYRAMID BREWERIES INC., THE S&P 500 INDEX AND A PEER GROUP
5 YEAR CUMULATIVE TOTAL RETURN SUMMARY
STARTING
BASIS
DESCRIPTION 12/14/95 1995 1996 1997 1998
- ------------------------------------------------------------------------------
Pyramid Breweries Inc. (%) -19.74 -75.41 -28.35 -44.18
Pyramid Breweries Inc. ($) $100.00 $80.26 $19.74 $14.14 $7.89
S & P 500 (%) 1.93 22.96 33.36 28.58
S & P 500 ($) $100.00 $101.93 $125.33 $167.14 $214.91
Peer Group Only (%) -4.19 -55.61 -32.66 0.62
Peer Group Only ($) $100.00 $95.81 $45.53 $28.64 $28.82
Peers + Your Company (%) -6.47 -58.51 -32.29 -3.37
Peers + Your Company ($) $100.00 $93.53 $38.81 $26.28 $25.39
Note: Data complete through last fiscal year.
Note: Corporate Performance Graph with peer group uses peer group only
performance (excludes your company).
Note: Peer group indices use beginning of period market capitalization
weighting.
- --------
* $100 invested on 12/14/95 in stock or index--including reinvestment of
dividends. Fiscal year ending December 31.
9
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under SEC rules, the Company's directors, executive officers and beneficial
owners of more than 10% of any equity security of the Company are required to
file periodic reports of their ownership, and changes in that ownership, with
the SEC. Based solely on its review of copies of these reports and
representations of such reporting persons, the Company believes that during
fiscal 1998 such SEC filing requirements were satisfied with the following
exception: Mr. Stoddard, an officer and director of the Company, filed one
late Form 4 with respect to one transaction.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Shareholder proposals intended to be presented at the 2000 Annual Meeting of
Shareholders must be received by the Company no later than December 31, 1999.
Proposals may be mailed to the Company, to the attention of the Secretary, 91
So. Royal Brougham Way, Seattle, Washington 98134. The Company's management
will have discretionary authority to vote its proxies on any proposal
introduced by a shareholder at the Company's 2000 annual meeting unless the
shareholder notifies the Company on or before February 28, 2000 that such
shareholder intends to introduce a proposal.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
matters, which will be presented for consideration at the Annual Meeting other
than the proposals set forth in this Proxy Statement. If any other matters
properly come before the meeting, it is intended that the persons named in the
proxy will act in respect thereof in accordance with their best judgment.
By Order of the Board of Directors
/s/ George Hancock
George Hancock
Chairman
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DIRECTIONS TO
PYRAMID BREWERIES INC. ANNUAL MEETING OF STOCKHOLDERS
Hyatt Regency Bellevue at Bellevue Place, Regency Ballroom
900 Bellevue Way N.E.
Bellevue, WA 98004
(425) 462-1234
[MAP APPEARS HERE]
There are three freeways that access the hotel. You may approach from I-90
(East-West), I-405 (North-South) and State Route 520 (East-West). Take I-405 if
you are coming from a location North or South of Bellevue. If you are coming
from downtown Seattle, take I-90 or State Route 520, whichever is closest.
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I-405
Take the N.E. 8th St. Exit, Westbound over the bridge, which puts you on
N.E. 8th St. Stay on N.E. 8th St. going West. At the cross street of 106th
Ave. N.E., you will see a Washington Mutual Bank on the right hand side. The
next driveway after the Bank will be the entrance to the Bellevue Place
complex. You may enter and park here. You will see signs directing you toward
the hotel elevator which brings you into the hotel lobby. From the hotel
lobby, take the stairs or elevator to the third floor and the Regency
Ballroom.
I-90 Eastbound
Take 1-405 North. Take N.E. 8th Street Westbound and proceed as directed
above.
SR 520
Take 1-405 South. Take N.E. 8th Street Westbound and proceed as directed
above.
Sea-Tac Airport
Follow "To All Freeways" sign and take the I-405 North Exit at Southcenter
and proceed as directed above.
Three hours of validated self-parking is available in the Hotel parking garage.
For validation, please bring your parking ticket to the Pyramid Breweries Inc.
sign-in desklocated just outside the Regency Ballroom.
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PROXY
PYRAMID BREWERIES INC.
91 So. Royal Brougham Way
Seattle, Washington 98134
For the Annual Meeting To Be Held Thursday, May 13, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS OF THE COMPANY
Revoking any such prior appointment, the undersigned, a shareholder of Pyramid
Breweries, Inc. hereby appoints George Hancock and John Stoddard and either of
them, attorneys and agents of the undersigned, with full power of substitution,
to vote all shares of the Common Stock of the undersigned in said Corporation at
the Annual Meeting of Shareholders of said Corporation to be held at the Hyatt
Regency Bellevue at Bellevue Place, 900 Bellevue Way N.E., Bellevue, Washington,
on May 13, 1999 at 10:00 A.M. local time and at any adjournments thereof, as
fully and effectually as the undersigned could do if personally present and
voting, hereby approving, ratifying and confirming all that said attorneys and
agents or their substitutes may lawfully do in place of the undersigned as
indicate below.
(Continued and to be signed on reverse side)
- --------------------------------------------------------------------------------
.FOLD AND DETACH HERE.
<PAGE>
Please mark
your vote as [X]
indicated in
this example.
This proxy when properly executed will be voted as directed. If no direction is
indicated, this proxy will be voted FOR the following proposals:
WITHHOLD
FOR VOTE
Proposal 1. Election of the Board of Directors: [ ] [ ]
Nominees: George Hancock, Robert Toledo,
Scott Barnum
(Instruction: to withhold authority to vote for any
individual nominee, write the nominee's name in the
space provided below.)
___________________________________________________
With respect to the transaction of such other business as may properly come
before the Meeting. Proxyholder, in his sole discretion, will vote the proxy as
he may see fit. When shares are held by joint tenants, both should sign. When
signing as attorney, as executor, administrator, trustee or guardian, please
give full title as such, if a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in full
partnership name by authorized person.
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.
Your name and address as shown as registered - please notify the Corporation of
any change in your address.
Signature ________________________________
Please sign exactly as name appears.
Signature if held jointly ______________________________
Dated ______________________, 1999
. FOLD AND DETACH HERE .
