<PAGE>
<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
/X/ Definitive Proxy Statement Commission Only (as permitted
/ / Definitive Additional Materials by Rule 14a-6(e)(2))
/ / Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
THE EARTHGRAINS COMPANY
(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)(1) and
0-11.
(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:
--------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
<PAGE>
Earthgrains [Logo]
THE EARTHGRAINS COMPANY
8400 Maryland Avenue
Saint Louis, Missouri 63105
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 14, 2000
To the Shareholders of
The Earthgrains Company:
We are pleased to notify you that the Annual Meeting of the
Shareholders of The Earthgrains Company will be held at 10:00 a.m.
Friday, July 14, 2000, in Edison Theatre at Washington University's
Mallinckrodt Center, off Forsyth Boulevard, in Saint Louis,
Missouri, for the following purposes:
1. To elect three directors for three-year terms expiring in 2003.
2. To approve an amendment to the 1996 Stock Incentive Plan.
3. To act upon such other matters as may properly come before
the meeting.
You may vote on these matters if you were a shareholder on the
record date, May 26, 2000. It is important that your shares be
represented and voted at the Annual Meeting. Whether you plan to
attend the annual meeting or not, we encourage you to vote in one of
these ways:
* USE THE INTERNET WEBSITE shown on the proxy form;
* USE THE TOLL-FREE TELEPHONE NUMBER shown on the proxy form; OR
* MARK, SIGN, DATE AND PROMPTLY RETURN the enclosed proxy form
in the enclosed business reply envelope.
A copy of Earthgrains' Annual Report for fiscal year 2000
accompanies this notice and proxy statement.
By order of the Board of Directors
/s/ Joseph M. Noelker
Joseph M. Noelker
Vice President, General Counsel
and Corporate Secretary
June 15, 2000
<PAGE>
<PAGE>
TABLE OF CONTENTS
Voting Information and Procedures..................... 2
Election of Directors (Item 1)........................ 3
Information About Your Board of Directors............. 4
Stock Ownership Information........................... 7
Approval of an Amendment to the 1996 Stock
Incentive Plan Increasing the Number of
Shares Available Under the Plan (Item 2)............ 9
Executive Compensation................................ 12
Summary Compensation Table............................ 15
Option Grants in Last Fiscal Year..................... 17
Aggregated Option Exercises in Last Fiscal
Year and Fiscal Year End Option Values.............. 18
Long-Term Incentive Plans............................. 18
Long-Term Incentive Plans--Awards in Last
Fiscal Year......................................... 18
Pension Plan Table.................................... 19
Stock Price Performance Graph......................... 20
Independent Public Accountants........................ 22
Section 16(a) Beneficial Ownership Reporting
Compliance.......................................... 22
Other Matters......................................... 22
<PAGE>
Earthgrains [Logo]
THE EARTHGRAINS COMPANY
PROXY STATEMENT
The Board of Directors of The Earthgrains Company ("Earthgrains" or
"Company") is soliciting proxies to be used at the 2000 Annual
Meeting. This proxy statement and the proxy form are being mailed to
shareholders on or about June 15, 2000. A copy of Earthgrains' 2000
Annual Report containing financial statements for the fiscal year
ended March 28, 2000, has been mailed with this proxy statement.
YOUR VOTE IS VERY IMPORTANT AND YOU ARE ENCOURAGED TO VOTE WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING.
VOTING INFORMATION AND PROCEDURES
WHO CAN VOTE
Record holders of Earthgrains' Common Stock on May 26, 2000, may
vote at the meeting. On May 26, 2000, there were 42,297,077 shares
of Common Stock outstanding.
HOW YOU CAN VOTE
* Vote by Internet. Go to WWW.PROXYVOTE.COM and follow the
-----------------
instructions provided.
* Vote by Telephone. Using a touch-tone telephone, call
1-800-690-6903 toll-free and follow the instructions provided.
* Vote by Mail. Mark your proxy form, sign and date it, and return
it in the postage-paid envelope provided.
* To vote by Internet or telephone, you will need the 12-digit
control number located on your proxy form. Internet and telephone
voting are available 24 hours a day. IF YOU VOTE BY INTERNET OR
TELEPHONE, YOU DO NOT HAVE TO RETURN YOUR PROXY FORM.
* If your shares are held in the name of a bank or broker, follow
the voting instructions on the form you receive from your bank or
broker.
HOW YOU CAN REVOKE OR CHANGE YOUR VOTE
* Send written notice to the Corporate Secretary;
* Submit another proper proxy form by Internet, telephone or mail
ballot; or
* Attend the Annual Meeting and vote in person. If you are not the
holder of record of your shares, you must obtain a proxy from the
holder of record, such as a bank or broker, in order to vote at
the Meeting.
GENERAL VOTING INFORMATION
You are entitled to cast one vote for each share of Earthgrains'
Common Stock you own on the record date. A majority of the
outstanding shares entitled to vote must be represented in person or
by proxy in order to conduct the election of directors and other
matters described in this proxy statement.
Shares represented by a proxy form marked "abstain" on a matter will
be considered to be represented at the Annual Meeting, but not
voted, for these purposes. Shares registered in the name of a bank,
broker or other "street name" agent, for which proxies are voted on
some but not all matters, will be considered to be represented at
the Annual Meeting and voted only as to those matters actually
marked on the proxy form.
All shares that are properly voted--whether by Internet, telephone
or mail--will be voted at the Annual Meeting in accordance with your
instructions. If you sign the proxy form but do not give voting
instructions, the shares represented by your proxy will be voted as
recommended by the Board of Directors.
If any other matters are properly presented at the Annual Meeting,
the people named on the proxy form will use their discretion to vote
for you. As of the date this proxy statement went to press,
Earthgrains did not know of any other matters to be raised at the
Annual Meeting.
2
<PAGE>
<PAGE>
VOTES REQUIRED
* ITEM 1--The three nominees for director receiving the highest
number of votes cast will be elected.
* ITEM 2--At least a majority of the votes cast are necessary for
approval.
BOARD RECOMMENDATIONS
* FOR the three nominees for director; and
* FOR an amendment to the 1996 Stock Incentive Plan ("SIP").
PROXY SOLICITATION
Earthgrains has paid for preparing and printing this proxy statement
and the proxy form. Earthgrains will also pay for soliciting
proxies. Costs related to soliciting proxies include postage and
handling, including the expenses of brokerage houses, custodians,
nominees and fiduciaries for forwarding documents to beneficial
owners of Earthgrains' Common Stock. Votes on proxy forms will be
solicited by mail. Proxies may also be solicited by officers and
employees of Earthgrains in person, by telephone or by mail. In
addition, to assist in the solicitation of votes on proxy forms from
banks, brokers, other institutional holders and from other
shareholders, Earthgrains has engaged Georgeson Shareholder
Communications Inc. for a fee of $6,000, plus reimbursement for
out-of-pocket expenses.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY FORM)
Presently seven members serve on the Board of Directors. The Board
is divided into three Groups, each Group as nearly equal in number
as possible, serving staggered three-year terms. At its meeting on
March 17, 2000, the Board of Directors adopted a resolution that
increased the number of Earthgrains' directors from seven to eight.
The Board has nominated E. Byron Glore, Jr., to fill the newly
created vacancy. At this Meeting, three directors in Group I will be
elected for three-year terms expiring in 2003.
Each nominee has agreed to serve and the Board does not contemplate
that any of the nominees will be unable to stand for election.
However, if any nominee becomes unable to serve before the Annual
Meeting, your proxy form will be voted for a person the Board
nominates in his or her place, unless you withhold authority to vote
for all nominees.
Vacancies that may occur during the year may be filled by a majority
of the directors then in office, even if they are too few to make a
legal quorum. So long as the directors are divided into Groups, any
director chosen to fill a vacancy shall be of the same Group as the
director he or she succeeded, and shall hold office until the next
election of that Group of directors and until his or her successor
is duly elected and qualified.
3
<PAGE>
<PAGE>
INFORMATION ABOUT YOUR BOARD OF DIRECTORS
The Board of Directors has nominated three people, one of whom is a
first-time nominee and two of whom are currently directors, for
election to three-year terms expiring in 2003. These director
nominees are E. Byron Glore, Jr., Jaime Iglesias and William E.
Stevens. Background and other information regarding the three
nominees and the Company's other directors is set out below.
TO BE ELECTED FOR THREE-YEAR TERMS EXPIRING IN 2003 (GROUP I DIRECTORS)
[PHOTO] E. BYRON GLORE, JR. NOMINEE FOR DIRECTOR
CEO of The Glore Group, a firm founded in 1995 and
specializing in new-product development for the television
and consumer market industries. Mr. Glore also serves as a
consultant to Anheuser-Busch Companies, Inc. ("Anheuser-Busch"),
and is an Emmy award winning television producer. Mr. Glore
was President of Consumer Analyst, a new-product development
firm, from 1976-1995. From 1966-1976, Mr. Glore held a variety
of sales planning and marketing positions for Anheuser-Busch,
including Director of New Product Development, Director of
Marketing Development and Brand Manager for Budweiser. Mr. Glore
is a member of the Board of Directors of FutureNet, Inc. Age: 58
[PHOTO] JAIME IGLESIAS DIRECTOR SINCE 1996
Retired since March 1996. From January 1993 to March 1996,
Mr. Iglesias was Chairman of the Board of Anheuser-Busch
Europe, Inc. ("ABEI"), which is a subsidiary of
Anheuser-Busch Companies, Inc. ("Anheuser-Busch"). He was
Chief Executive Officer of ABEI from 1989 until March 1996
and President of ABEI from 1988 until March 1996. Mr.
Iglesias was appointed President--International Operations
of Earthgrains and prior to that served as Earthgrains' Vice
President--International from 1983 to 1996. He was also
Chairman and President of Bimbo and President and Senior
Vice President--Europe of Anheuser-Busch's subsidiary,
Anheuser-Busch International, Inc. ("ABII"), and has served
in such capacities since 1978 and March 1996, respectively.
He also served as President and Managing Director--Europe of
ABII from 1988 until March 1996. Age: 69
[PHOTO] WILLIAM E. STEVENS DIRECTOR SINCE 1996
Chairman and CEO of The Wesmark Group. From 1996-1999,
Mr. Stevens was Executive Vice President of Mills & Partners.
Mr. Stevens was President, Chief Executive Officer and a
member of the Board of Directors of United Industries
Corporation from 1989-1996. Prior to 1989, Mr. Stevens was
Executive Vice President and a member of the Board of
Directors of Black & Decker Corporation. He currently serves
on the Board of Directors of McCormick & Company, Inc.
Mr. Stevens also serves on the Board of Directors of the
Repertory Theatre Company of St. Louis. Age: 57
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION
OF THESE NOMINEES.
4
<PAGE>
<PAGE>
DIRECTORS WHOSE TERMS EXPIRE IN 2001 (GROUP II DIRECTORS)
[PHOTO] J. JOE ADORJAN DIRECTOR SINCE 1996
Partner with Stonington Partners, Inc. and Chairman, Adven
Capital Partners, LLC. From January 1996 to October 1999,
Mr. Adorjan was Chairman of Borg-Warner Security Corporation
("Borg-Warner"), a Chicago-based provider of security
services. Mr. Adorjan was Chief Executive Officer of
Borg-Warner from October 1995 to March 1999, President from
April 1995 to March 1999, and was a Director of Borg-Warner
from 1993-1999. Mr. Adorjan was Chairman and Chief Executive
Officer of ESCO Electronics Corporation ("ESCO") from 1990
to 1992. He served as President of Emerson Electric Company
from 1993 until April 1995. Mr. Adorjan is a member of the
Board of Directors of Dynegy, Inc., Goss Graphic Systems,
Inc., and Hussmann International, Inc. He also serves as the
Chairman of the Board of Trustees of Saint Louis University
and on the Board of Directors of Ranken Technical College.
Age: 61
[PHOTO] JERRY E. RITTER DIRECTOR SINCE 1995
Consultant to Anheuser-Busch Companies, Inc. ("Anheuser-Busch").
Mr. Ritter was Chairman of the Board of Clark Enterprises--
parent company of the St. Louis Blues Hockey Club and Kiel
Center (the Club's home venue)--from July 1996 until October
1999. He was Executive Vice President--Chief Financial and
Administrative Officer of Anheuser-Busch from 1991 to 1996,
and served in several executive capacities at Anheuser-Busch,
including Vice President and Group Executive from 1984 to 1990,
Vice President--Finance from 1981 to 1983, and Vice President--
Finance and Treasurer from 1975 to 1981. Mr. Ritter is a
member of the Board of Directors of Brown Group, Inc.,
and The Kroll-O'Gara Company. He is President of the
Board of Governors of SSM Cardinal Glennon Children's
Hospital and also serves on the Board of Commissioners of
the Saint Louis Science Center. Age: 65
DIRECTORS WHOSE TERMS EXPIRE IN 2002 (GROUP III DIRECTORS)
[PHOTO] BARRY H. BERACHA DIRECTOR SINCE 1993
Chief Executive Officer and Chairman of the Board of
Directors of Earthgrains since March 1996. From 1976 through
March 1996, he was a Vice President and Group Executive of
Anheuser-Busch Companies, Inc. ("Anheuser-Busch"), and
during that time served in various positions for various
Anheuser-Busch subsidiaries. Mr. Beracha is a member of the
Board of Directors of Pepsi Bottling Group, Inc., and
McCormick & Company, Inc. He also serves as a member of the
Board of Trustees of Saint Louis University. Age: 58
[PHOTO] PETER F. BENOIST DIRECTOR SINCE 1996
Executive Director, Regional Housing and Community
Development Alliance. Mr. Benoist was Senior Executive Vice
President and Chief Operating Officer of Mercantile Bank of
St. Louis from February 1998 to November 1999. He served as
Executive Vice President of Mark Twain Bancshares, Inc.,
from 1984 to 1998; Director of Mark Twain Bancshares, Inc.,
from 1991 to 1997; Chairman of the Board of Mark Twain Bank
from 1986 until June 1996; President of Mark Twain Bank from
1986 until 1989; and Chairman of Mark Twain Kansas City Bank
from 1992 until June 1996. Mr. Benoist is a Director of
Ecumenical Housing Production Corp.; Director and Vice
Chairman of St. Louis Priory; Trustee of Maryville
University; Director of the St. Louis Equity Fund; and
Second Vice President of the Board of Governors of SSM
Cardinal Glennon Children's Hospital. Age: 52
5
<PAGE>
<PAGE>
[PHOTO] MAXINE K. CLARK DIRECTOR SINCE 1996
President and Chief Executive Officer of The Build-A-Bear
Workshop, a children's entertainment retail company. Since
1996, Ms. Clark has been President and Chief Executive
Officer of Smart Stuff, Inc., a Saint Louis retail and
business consulting firm, and the developer of The
Build-A-Bear Workshop. She was President and Chief
Merchandising Officer of Payless ShoeSource, Inc., from 1992
until 1996, and Executive Vice President for Venture Stores,
Inc., from 1988 until 1992. Ms. Clark is a member of the
Board of Directors of Tandy Brands Accessories, Inc. She
also serves as a member of the Board of Trustees of the
University of Georgia Foundation; as a member of the
Advisory Board for The Hatchery, Washington University; and
as a member of the Advisory Board for the Greater Saint
Louis Council of Girl Scouts. Age: 51
BOARD SERVICE SUMMARY
The directors presently serve on the Board committees shown in the
following table. Meeting attendance information for fiscal year 2000
also is given in the table.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
COMMITTEES
-------------------------------------
COMPENSATION ATTENDED 75% OR MORE
AUDIT & & HUMAN OF BOARD AND APPLICABLE
DIRECTOR BOARD FINANCE RESOURCES NOMINATING COMMITTEE MEETINGS
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Barry H. Beracha X<F*> X
----------------------------------------------------------------------------------------------------------------------------
J. Joe Adorjan X X<F*> X X
----------------------------------------------------------------------------------------------------------------------------
Peter F. Benoist X X<F*> X X
----------------------------------------------------------------------------------------------------------------------------
Maxine K. Clark X X X
----------------------------------------------------------------------------------------------------------------------------
Jaime Iglesias X X X
----------------------------------------------------------------------------------------------------------------------------
Jerry E. Ritter X X X
----------------------------------------------------------------------------------------------------------------------------
William E. Stevens X X X<F*> X
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Meetings Held in FY 2000 6 7 5 2
----------------------------------------------------------------------------------------------------------------------------
<FN>
<F*>Chair
</TABLE>
STANDING BOARD COMMITTEES
Audit and Finance--recommends to the Board the selection of
independent accountants, reviews the scope and results of the
independent audit and internal audit function, and reviews the
Company's financial plans and policies related to borrowings,
dividends and capital structure.
Compensation and Human Resources--considers and makes
recommendations to the Board as to the salaries and other
compensation to be paid to the Company's executive officers, other
officers and upper management employees of Earthgrains and its
subsidiaries.
Nominating--identifies and considers potential candidates for Board
membership, and conducts ongoing review of Board composition and
duties, as well as corporate governance issues. The Board authorized
this committee on December 3, 1999. Prior to its formation, the
entire Board had been overseeing these matters. The Committee would
consider nominees recommended by shareholders for Board vacancies
provided that shareholders follow the procedures discussed under the
heading "Other Matters" on page 22.
6
<PAGE>
<PAGE>
COMPENSATION
An employee director receives no additional compensation for service
on the Board.
Non-employee directors receive the following for their services on
the Board:
Annual Fee:....................... $23,000
Fee for Each Board Meeting
Attended:....................... $ 1,500
Fee for Each Committee Meeting
Attended:....................... $ 750
Annual Fee for Chairing a
Committee:...................... $ 3,500
Each non-employee director is required to defer 25% of his or her
director's fees and maintain an account in Earthgrains' Non-Employee
Directors Deferred Fee Plan. Directors may elect to defer up to 100%
of their fees. Each director may choose whether his or her elective
deferred fees, if any, are credited to a cash account or a share
equivalent account that tracks the value of Earthgrains' Common
Stock. At the director's option, amounts deferred under the plan are
paid in cash in a lump sum on a date the director specifies or over
a period of time, not to exceed 10 years. In fiscal year 2000, each
non-employee director received a credit to his or her account of 400
share equivalents. That credit replaced an annual stock grant given
in prior years.
STOCK OWNERSHIP INFORMATION
BENEFICIAL OWNERS OF MORE THAN FIVE PERCENT
The table below lists the persons or groups known by Earthgrains to
own more than 5% of its Common Stock:
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF % OF SHARES EXPLANATORY
OF BENEFICIAL OWNER COMMON SHARES OUTSTANDING NOTES
------------------- ------------- ----------- -----------
<S> <C> <C> <C>
FMR Corp. 4,875,484 11.467 <Fa><Fc>
82 Devonshire Street
Boston, Massachusetts 02109
Snyder Capital Management, L.P. 3,053,600 7.200 <Fb><Fc>
and its sole general partner,
Snyder Capital Management, Inc.
("Snyder Capital")
350 California Street, Suite 1460
San Francisco, California 94104
<FN>
-------
<Fa> FMR Corp. and its subsidiaries have sole voting power as to 15,600 shares
and sole investment power as to 4,875,484 shares.
<Fb> Snyder Capital has sole voting power as to 50,200 shares, shared voting
power as to 2,704,800 shares, and shared investment power as to 3,053,600
shares.
<Fc> As reported to the Securities and Exchange Commission by the beneficial
owner as of 12/31/99.
</TABLE>
7
<PAGE>
<PAGE>
COMMON STOCK BENEFICIALLY OWNED BY MANAGEMENT
The following table summarizes the beneficial ownership of
Earthgrains' Common Stock as of March 28, 2000, for each director
and nominee for director, each of the executive officers named in
the Summary Compensation Table (see page 15 below), and all
directors and executive officers as a group. Except as otherwise
noted, the individuals have sole voting and investment power with
respect to the shares reported. Included are shares that were
beneficially owned on March 28, 2000, or which could be acquired
within 60 days after that date by exercising employee stock options.
<TABLE>
<CAPTION>
NUMBER EXERCISABLE % OF SHARES
NAME OF SHARES OPTIONS TOTAL OUTSTANDING
---- --------- ----------- ----- -----------
<S> <C> <C> <C> <C>
Barry H. Beracha.......................... 717,452<F1> 643,864 1,361,316 3.17
J. Joe Adorjan............................ 11,297<F2> - 0 - 11,297 <F*>
Peter F. Benoist.......................... 12,573<F3> - 0 - 12,573 <F*>
Maxine K. Clark........................... 6,109<F4> - 0 - 6,109 <F*>
Jaime Iglesias............................ 11,574<F5> - 0 - 11,574 <F*>
Jerry E. Ritter........................... 20,199<F6> - 0 - 20,199 <F*>
William E. Stevens........................ 14,669<F7> - 0 - 10,669 <F*>
John W. Iselin, Jr........................ 153,409<F8> 100,333 253,742 <F*>
William H. Opdyke......................... 43,308<F9> 80,164 123,472 <F*>
Mark H. Krieger........................... 27,994<F10> 58,845 86,839 <F*>
Xavier Argente............................ 31,224<F11> 127,000 158,224 <F*>
All directors and executive officers as a
group (22 persons)...................... 1,275,818<F12> 1,478,314 2,754,132 6.29
<FN>
-------
<F*> Person beneficially owns less than 1% of Earthgrains'
outstanding Common Stock.
<F1> Includes 333,332 shares of restricted stock, subject to
forfeiture, 38,124 shares owned indirectly by Mr. Beracha
through his 401(k) plan accounts and 3,400 shares owned by a
child of Mr. Beracha, the beneficial ownership of which is
disclaimed.
<F2> Includes 3,200 shares of stock, subject to transfer
restrictions.
<F3> Includes 3,200 shares of stock, subject to transfer
restrictions.
<F4> Includes 3,200 shares of stock, subject to transfer
restrictions.
<F5> Includes 3,200 shares of stock, subject to transfer
restrictions.
<F6> Includes 3,200 shares of stock, subject to transfer
restrictions, and 16,918 shares held by a family limited
partnership.
<F7> Includes 3,200 shares of stock, subject to transfer
restrictions, and 4,000 shares held in an irrevocable trust,
the beneficial ownership of which is disclaimed.
<F8> Includes 71,668 shares of restricted stock, subject to
forfeiture and 2,189 shares owned indirectly by Mr. Iselin
through his 401(k) plan accounts.
<F9> Includes 38,332 shares of restricted stock, subject to
forfeiture, and 4,252 shares owned indirectly by Mr. Opdyke
through his 401(k) plan accounts.
<F10> Includes 24,168 shares of restricted stock, subject to
forfeiture and 1,718 shares owned indirectly by Mr. Krieger
through his 401(k) plan accounts.
<F11> Includes 18,332 shares of restricted stock, subject to
forfeiture. Mr. Argente is not eligible to participate in the
Company's 401(k) plan or 401(k) restoration plan.
<F12> Includes restricted stock and shares owned indirectly through
401(k) plan accounts and otherwise.
</TABLE>
8
<PAGE>
<PAGE>
APPROVAL OF AN AMENDMENT TO THE 1996 STOCK INCENTIVE PLAN INCREASING
THE NUMBER OF SHARES AVAILABLE UNDER THE PLAN
(ITEM 2 ON PROXY FORM)
The second item to be acted upon is a proposal to approve an
amendment to the 1996 Stock Incentive Plan (the "SIP").
THE PROPOSED AMENDMENT
As of May 26, 2000, only 125,386 shares of Common Stock remain
available for new awards to eligible employees under the SIP. Of
those, none may be issued as Restricted Stock. The Board of
Directors has approved, and is seeking shareholder approval of, an
increase of 2,114,850 shares in the total authorized under the SIP,
of which up to 245,320 shares would be available for Restricted
Stock awards. The overall SIP share increase is less than 5% of
Earthgrains' currently outstanding shares of Common Stock.
SUMMARY DESCRIPTION OF THE SIP
The SIP was last approved by Earthgrains' shareholders in 1997. The
SIP authorizes the grant of a wide variety of awards, including
incentive stock options ("ISOs"), non-qualified stock options
("NQSOs"), Restricted Stock, and other stock interests. ISOs and
NQSOs are both stock options, allowing the recipient to purchase a
fixed number of shares of Common Stock for a fixed price; ISOs
enable the recipient to enjoy a special tax treatment upon exercise
which is not available to holders of NQSOs. Restricted Stock is
Common Stock which is issued subject to transfer restrictions and
possible forfeiture events. The SIP also authorizes other
stock-based awards, including regular and limited stock appreciation
rights. The Company never has granted those other types of awards;
they are authorized in the SIP in case their grant becomes necessary
in the future to fulfill the SIP's purposes.
At the end of fiscal 2000, approximately 225 officers and key
employees of Earthgrains and its subsidiaries and affiliates were
eligible to receive awards under the SIP. In addition to these
participants, certain employees of acquired companies will also be
eligible for future awards under the SIP. Non-employee directors are
ineligible for awards.
The SIP is administered by the Board's Compensation and Human
Resources Committee (the "Committee"), which consists entirely of
directors who are not employees of Earthgrains. Within the limits of
the Plan, the Committee determines when and to whom awards are
granted, the types of award granted, the number of shares subject to
each award, the award's exercise or base price (as applicable) and
duration, when awards become exercisable, non-forfeitable, or
otherwise vested, and other terms and conditions which the Committee
deems appropriate.
No more than 5,720,000 shares may be issued under the SIP at
present, of which up to 666,204 may be Restricted Stock. As
mentioned above, only 125,386 shares remain for new grants, none of
which can be Restricted Stock. The proposed amendment would increase
the overall limit to 7,834,850 shares in total, which would make
2,240,236 available for new grants; of those, 245,320 could be used
for new Restricted Stock grants. In addition, no more than 1,300,000
shares per calendar year may underlie awards granted to any one
person; the per-person annual limit is not being increased.
Appropriate adjustments in these share limits and in the terms of
outstanding awards are required for stock splits and similar events.
The authority to make new grants of awards under the SIP will expire
on February 21, 2006.
The option price of options generally cannot be less than 100% of
the market value of Earthgrains' Common Stock on the grant date.
Optionees may pay the option price in cash or Earthgrains' Common
Stock, including (if permitted by the Committee) shares otherwise
issuable in connection with the exercise. Earthgrains may loan the
option price to optionees (to the extent allowed by law). The
Committee has authority to permit withholding taxes related to
option exercises and Restricted Stock vesting to be paid with stock.
The Committee may accelerate vesting of awards at any time in its
discretion. The SIP provides for automatic vesting of awards upon
death or disability of a recipient, or upon the occurrence of
certain takeover events relating to Earthgrains. Automatic vesting
also occurs upon retirement of the recipient, except for Restricted
Stock. In the Committee's discretion, award agreements may provide
that awards are forfeited if the recipient takes any action
prohibited by the award agreement, or if certain events occur or
fail to occur.
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The SIP may be amended by the Board of Directors at any time.
Certain amendments which increase the number of authorized shares,
increase the maximum number of shares which may be awarded to any
person in any calendar year, change the class of eligible employees,
or withdraw the authority of the Committee to administer the SIP,
must be approved by Earthgrains' shareholders.
The closing price of Earthgrains' Common Stock on June 5, 2000, as
reported on the New York Stock Exchange (composite transactions),
was $17.250 per share.
PURPOSES OF THE SIP
The Board of Directors believes that
* Earthgrains' long-term success is dependent upon its ability to
attract and retain outstanding individuals and to motivate them
to exert their best efforts on behalf of Earthgrains' interests.
* The SIP's stock-based awards are an important part of
Earthgrains' incentive compensation of its officers and other
management employees.
* Stock-based awards align management's interests directly with
those of the shareholders, since the value of the awards is
directly linked to the market price of Earthgrains' stock.
FEDERAL INCOME TAX CONSEQUENCES
ISOS
An optionee does not realize taxable income and Earthgrains is not
entitled to a deduction on the grant or exercise of ISOs.
If an optionee holds the shares acquired ("ISO Shares") for at least
one year from the exercise date and two years from the grant date
(the "Required Holding Periods"), the optionee's gain or loss upon a
sale will be long-term capital gain or loss equal to the difference
between the amount realized on the sale and the optionee's basis in
the ISO Shares. Earthgrains will not be entitled to a deduction.
If an optionee disposes of the ISO Shares without satisfying the
Required Holding Periods, the "disqualifying disposition" will give
rise to ordinary income on that date equal to the excess of the fair
market value of the ISO Shares on the exercise date (or generally,
the sale price if less) over the option price. Earthgrains will
ordinarily be entitled to a deduction at the same time equal to the
amount of the ordinary income resulting from a disqualifying
disposition.
An optionee does recognize income for alternative minimum tax
("AMT") purposes upon exercise of an ISO, unless there is a
disqualifying disposition in the year of exercise. The amount of AMT
income is the amount by which the fair market value of the shares
received exceeds the option price. Upon sale of the ISO shares, AMT
gain or loss is equal to the excess of the amount realized over the
AMT basis; AMT basis will include the AMT income on exercise.
NQSOS AND STOCK APPRECIATION RIGHTS
An optionee does not realize taxable income on the grant of an NQSO
or stock appreciation right ("SAR"), but does realize ordinary
income on the exercise date. The amount of income in the case of any
NQSO exercise is the amount by which the fair market value of the
shares received exceeds the option price. The amount of income in
the case of an SAR exercise is the amount of cash received plus the
fair market value of any shares received.
Earthgrains will ordinarily be entitled to a deduction on the
exercise date equal to the ordinary income realized by the optionee
from the exercise of NQSOs or SARs.
The discussion with respect to SARs above applies to regular and
limited stock appreciation rights.
RESTRICTED STOCK
A recipient of Restricted Stock generally does not recognize income
and Earthgrains generally is not entitled to a deduction at the time
of grant. Instead, the recipient recognizes compensation income and
Earthgrains is entitled to a deduction on the date on which vesting
occurs ("Vesting Date"). The Recipient's holding period will begin
on the Vesting Date. The amount of income recognized and the amount
of Earthgrains' deduction will equal the fair market value of the
vested Restricted Stock on the Vesting Date.
Any dividends on the Restricted Stock paid to the recipient prior to
the Vesting Date will be includible in the recipient's income as
compensation and deductible as such by Earthgrains.
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A recipient may, in some circumstances, elect to accelerate the time
of inclusion in income to the grant date rather than waiting until
the Vesting Date. If the election is made, the recipient recognizes
compensation income at the time of grant in the amount of the fair
market value of an equal number of unrestricted shares of Common
Stock; and Earthgrains is entitled to a deduction in the same amount
at the same time.
PARACHUTE PAYMENTS
Awards under the SIP provide for accelerated exercisability and
vesting upon a change in ownership or control of Earthgrains, which
may cause certain amounts to be characterized as parachute payments.
An employee generally is deemed to have received a "parachute
payment" in the amount of compensation that is contingent upon an
ownership change if such compensation exceeds, in the aggregate,
three times the employee's base amount, which is generally the
employee's average annual compensation for the five preceding years.
An employee's "excess parachute payment" is the excess of the
employee's total parachute payments over such base amount. An
employee will be subject to a 20% excise tax on, and Earthgrains
will be denied a deduction for, any excess parachute payment.
$1,000,000 DEDUCTION LIMIT
Earthgrains is not allowed a deduction for compensation paid to
certain executive officers ("Covered Employees") in excess of
$1,000,000 each in any taxable year, except to the extent such
excess constitutes performance-based compensation. Compensation from
Earthgrains' stock options constitutes performance-based
compensation. Compensation from Restricted Stock generally is not
performance-based and, therefore, will not be deductible by
Earthgrains to the extent total non-performance-based compensation
paid to a Covered Employee in any year exceeds $1,000,000.
REASONS FOR THE AMENDMENT
The Board of Directors believes that the Company's long-term success
is dependent upon its ability to attract and retain outstanding
individuals and to motivate them to exert their best efforts on
behalf of Earthgrains. Stock awards are an important part of
incentive compensation for the Company's officers and other
management employees. Stock based awards align management's
interests directly with those of the shareholders, since the value
of the awards is directly linked to the market price of Earthgrains'
Common Stock.
Only 125,386 shares remain available for new grants, and none are
available for Restricted Stock. Many of the awards initially granted
under the SIP, including all of the Restricted Stock awards, were
made during the Company's transition from a wholly owned subsidiary
of Anheuser-Busch to an independent, publicly traded company. Those
early grants allowed the Company to assemble and retain its
management team during a critical and uncertain time in the
Company's history. The uncertainties of four years ago have passed,
but new challenges have replaced them. As the Company continues its
active participation in the rapid consolidation of the baking
industry, it is vital for Earthgrains to offer competitive
compensation packages in order to retain and incentivize its
managerial team. As new companies are acquired and integrated into
Earthgrains, that team necessarily grows in size and its task,
managing the Company, grows more complex. A key component to staying
competitive today is the Company's ability to offer stock incentives
which focus its management team on the Company's overall growth and
shareholder value.
Whether granted to officers and employees of Earthgrains or to key
employees of acquired companies, the additional shares will allow
the Company to continue to attract, retain and motivate individuals
who are critical to the Company's continued success.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
PROPOSAL TO AMEND THE 1996 STOCK INCENTIVE PLAN.
11
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EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION AND HUMAN RESOURCES COMMITTEE FOR FISCAL
YEAR 2000
The Compensation and Human Resources Committee of the Board of
Directors (the "Committee") of Earthgrains is comprised entirely of
independent, non-employee directors. The Committee operates under
the authority delegated to it by the Board. The Committee's
responsibilities include review and approval of salary, annual
incentives, equity-based incentives, mid- to long-term incentives
and other compensation for executive officers, including the Chief
Executive Officer (the "CEO"). The Committee also administers
Earthgrains' employee incentive programs. The following discussion
summarizes the philosophies and methods which guide the Committee in
carrying out its responsibilities.
COMPENSATION PHILOSOPHY
Earthgrains' principal goal is to maximize shareholder value.
Accordingly, the Committee's paramount objective is to strengthen
and monitor the connection between executive compensation and the
creation of value by Earthgrains. The Committee endeavors to
accomplish this through a compensation program that attracts,
motivates and retains top executive talent, and that rewards those
executives for maximizing the key elements of Earthgrains' economic
value.
Earthgrains' executive officers are eligible for fixed, short-term
variable (based on short-term performance), and mid- to long-term
incentive (based on mid- to long-term corporate results) elements of
compensation. In determining the structure and design of these pay
elements as well as how much is awarded under each component, the
Committee considers several principles:
* To attract, motivate and retain executives, a base compensation
package that is competitive with median practices in the
commodity and branded segments of the food industry.
* Both short-term and mid- to long-term incentives that are
matched with short-term and mid- to long-term corporate
performance, respectively, to achieve Earthgrains' financial
performance objectives.
* All Earthgrains' awards should be aligned with maximizing the
economic value of Earthgrains.
* Each component of compensation available to executives should be
clearly communicated to them, as should the performance required
to earn variable components of compensation. Such communication
is essential to an effective compensation program.
The Committee reviews compensation based on these four principles,
Earthgrains' performance and competitive practices. As part of its
review, the Committee looks at compensation of a broad group of
companies in the food industry (the "survey companies"), including
but not limited to the companies included in the S&P Foods Index, as
reflected in Earthgrains' stock price performance graph on page 20.
The Committee favors qualifying compensation for tax deductibility
under the Internal Revenue Code. Section 162(m) of that Code limits
to $1 million the annual deduction a publicly held corporation may
take for compensation paid to any executive, except for certain
performance-based compensation. However, tax savings are but one
consideration among many in the executive compensation equation, and
will not be solely determinative where the Committee, in its
discretion, finds other considerations to be more important.
COMPENSATION PROGRAM COMPONENTS
During the last fiscal year, Earthgrains executives were eligible
for four compensation components: (1) base salary, (2) annual
incentives, (3) equity-based incentives, and (4) mid- to long-term
incentives. In general, base salary is set in advance but can be
adjusted periodically at the discretion of the Committee; annual and
equity-based incentives are awarded at the discretion of the
Committee; and mid- to long-term incentives are awarded by the
Committee pursuant to plans approved by the Committee. The following
discussion outlines the factors the Committee considers and applies
when awarding each of the four components.
BASE SALARY
The Committee took the following factors into account in determining
each executive's base salary for the last fiscal year, including
that of the CEO:
* The executive's experience and the responsibilities attendant to
the position; and
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* The median base salaries paid to executives in comparable
positions at the survey companies.
The Committee reviews base salaries annually. In evaluating whether
an adjustment to an executive's base salary is appropriate, the
Committee considers the pay levels at the survey companies and
Earthgrains' overall financial performance during the prior fiscal
year including such measures as:
* Earnings before interest expense and income taxes ("EBIT");
* Growth in earnings before interest expense, income taxes,
depreciation, amortization and minority interest expense
("EBITDA");
* Return on capital employed; and
* Appreciation in value of common shares.
Special consideration may be given to performance measures that bear
a close relationship to an executive's particular duties, as well as
to the complexity of an individual's responsibilities and the
executive's immediate supervisor's evaluation as to how well those
responsibilities were discharged. The Committee, however, does not
employ a precise formula in adjusting base salaries and to this
extent the determination involves some degree of subjectivity. In
accordance with the foregoing, the Committee increased the base
salaries of executive officers, including the named executive
officers, in the last fiscal year by an average of 4.4%.
ANNUAL INCENTIVE
The Committee sets an annual incentive target bonus for each
executive (other than the CEO who is covered by a separate program
discussed below) based on the median annual bonus paid to executives
performing comparable positions at the survey companies. The
Committee also establishes target performance goals for each fiscal
year. At the end of each fiscal year, the Committee determines what
percentage of the target bonus each executive earned, based on the
Committee's assessment of actual performances of both Earthgrains
and the executive individually relative to the target performance
goals.
For the last fiscal year, bonuses for executive officers were
determined on the basis of Earthgrains' actual EBIT compared with a
target EBIT goal established by the Committee. Bonuses for executive
officers assigned to Earthgrains' domestic operations were
determined in part on the basis of domestic EBIT for those
operations and bonuses for executive officers assigned to
international operations were determined in part on the basis of
international EBIT for those operations.
For the last fiscal year, executive officers became eligible for
annual bonuses based on a percentage of their target annual bonuses.
The bonuses were then adjusted for all executive officers based on
the Committee's assessment of individual performance. This
assessment was discretionary and took into account a number of
factors that varied from individual to individual.
EQUITY-BASED INCENTIVES
Earthgrains continues to use stock options, and has used restricted
stock, as a means of retaining and motivating executives over the
long term, and creating a commonality of interest between executives
and shareholders. An executive's background, position,
responsibilities, and individual performance are relevant to the
Committee's decision whether to make an award to an executive, as
well as to the amount and composition of any such award. Because
awards involve the Committee's estimation of an individual
executive's potential to contribute to Earthgrain's long-term
performance, the Committee considers certain subjective factors in
addition to certain objective factors.
OTHER MID- TO LONG-TERM INCENTIVES
At the 1997 Annual Meeting, shareholders approved Earthgrains'
Exceptional Performance Plan (the "EPP").
Also in 1997, a subcommittee of the Committee established the 1998
Cash Incentive Program (the "1998 Program"). The performance period
for the 1998 Program began on March 26, 1997 and was scheduled to
end on March 25, 2002. The performance goals were met or exceeded
earlier than the scheduled date. Accordingly, bonuses under the 1998
Program were paid in fiscal year 2000 and the 1998 Program has
terminated. The amounts of bonuses under the 1998 Program are
included in the "LTIP Payout" column of the Summary Compensation
Table on page 15.
The performance goals of the 1998 Program were tied to both a cash
flow measure and a return on capital measure, and the bonus each
participant received depended on the applicable bonus
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formula amount and to the extent which the performance goals were
achieved.
In 1999, the Committee established the 2000 Leadership Excellence
Achievement Program (the "2000 Program") which became effective
September 15, 1999. Approximately 220 employees of Earthgrains,
including the named executive officers, are designated participants
of the 2000 Program. The performance period for the 2000 Program
will terminate on the third anniversary of the effective date. The
performance goals for the 2000 Program are tied to a cash flow
measure, a return on capital measure, and an average annual revenue
growth measure.
CEO COMPENSATION
The factors used to evaluate Mr. Beracha's performance were
his continued success in transitioning Earthgrains from an
Anheuser-Busch subsidiary to a thriving independent company, the
development of sound strategic and operating plans, and improvements
in Earthgrains' operating performance. Strategic acquisitions and
successful integration of new operations were also factors. No
specific weighting was assigned to these factors.
Mr. Beracha's compensation is governed, in part, by his employment
agreement with Earthgrains. Pursuant to his employment agreement,
Mr. Beracha received a base salary of $640,080 for the last fiscal
year. Mr. Beracha's bonus for the last fiscal year was paid pursuant
to the 2000 CEO Cash Incentive Program (the "2000 CEO Program"),
established by the Committee under the EPP in April 1999. The
performance period for the 2000 CEO Program was fiscal year 2000.
Mr. Beracha's 2000 CEO Program was tied to both Earthgrains' and Mr.
Beracha's performance, using Earthgrains' actual EBIT (earnings
before interest expense and income taxes) compared with a target
EBIT goal established by the Committee, and a return on capital
measure. Mr. Beracha's bonus for fiscal year 2000 was $361,965.
EXECUTIVE STOCK OWNERSHIP
The Committee believes that it is important for every executive to
have an ownership interest in Earthgrains that is significant
relative to the executive's base salary. Accordingly, Earthgrains
adopted minimum stock ownership guidelines for executive officers.
Currently, all executives are in compliance with such guidelines.
COMPENSATION AND HUMAN RESOURCES COMMITTEE
J. Joe Adorjan, Chair
Maxine K. Clark
William E. Stevens
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SUMMARY COMPENSATION TABLE
The table below summarizes the compensation paid by Earthgrains for
services rendered by the named executive officers during the past
three fiscal years.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION<F1> LONG-TERM COMPENSATION
---------------------------------------------------------------------------------
RESTRICTED SECURITIES ALL OTHER
NAME AND FISCAL OTHER ANNUAL STOCK UNDERLYING LTIP COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS<F2> OPTIONS(#)<F3> PAYOUT<F4><F5> SATION<F6>
------------------ ------ ------ ----- ------------ ---------- -------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Barry H. Beracha 2000 $640,080 $361,965 $ 9,843<F7> $- 0 - 40,000 $549,960 $45,957
Chairman of the 1999 600,000 415,000 5,857<F7> - 0 - 40,000 44,004
Board & Chief 1998 549,960 445,000 - 0 - 30,000 31,866
Executive Officer
John W. Iselin, Jr. 2000 305,040 160,183 6,293<F7> - 0 - 19,800 257,400 16,004
President, 1999 272,820 124,178 4,566<F7> - 0 - 25,000 14,303
Worldwide Bakery 1998 257,400 155,956 - 0 - 12,500 10,437
Products
William H. Opdyke 2000 245,040 111,180 5,041<F7> - 0 - 16,200 195,900 17,154
President, 1999 215,400 117,274 3,603<F7> - 0 - 20,000 14,839
Worldwide 1998 195,900 108,553 - 0 - 10,000 10,373
Refrigerated Dough
Products, Technology
& Purchasing
Mark H. Krieger 2000 231,000 97,119 4,558<F7> - 0 - 14,400 178,800 11,908
Vice President & 1999 209,520 72,960 67,041<F7> - 0 - 15,840 10,043
Chief Financial 1998 178,800 79,516 - 0 - 5,800 7,148
Officer
Xavier Argente<F8> 2000 214,460 148,800 - 0 - 16,200 201,480 2,180
President, 1999 227,079 44,966 - 0 - 18,000 2,082
European Bakery 1998 216,247 51,285 - 0 - 10,500 2,347
Products
<FN>
---------
<F1> Salary and bonus amounts include any amounts earned in a given
fiscal year and subsequently deferred under Earthgrains'
Executive Deferred Compensation Plan. If a change in control of
Earthgrains occurred, the entire amount accrued on behalf of a
participant would be paid to the participant in a single lump
sum within 30 days of the date of the change in control. If an
excise tax were imposed on a participant's accrued benefits on
account of a change in control, the participant's benefits
would be increased to the extent required to put the
participant in the same position after payment of taxes as if
no such excise tax had been imposed.
<F2> All of the shares of Restricted Stock currently authorized
under the 1996 Stock Incentive Plan were granted to the named
executive officers and other eligible employees in fiscal year
1997. Non-preferential dividends are paid on the Restricted
Stock. The Restricted Stock also has a tax payment feature;
some of the shares can be used to pay the required withholding
taxes related to the vesting of the Restricted Stock awards.
Any taxes in excess of the required withholding taxes must be
paid by the recipient. The Restricted Stock awards will vest
over the next two years. With the exception of some of Mr.
Argente's shares which will vest in July 2001 and 2002, 50% of
the Restricted Stock awards will vest in October 2000 and the
remaining 50% will vest in October 2001. Certain executive
officers, including the named executive officers, may elect to
sell some of their respective shares in order to satisfy any
additional tax liability they may incur.
The Compensation and Human Resources Committee of the Board may
accelerate the vesting of a Restricted Stock award at any time,
and all shares of Restricted Stock automatically vest upon the
recipient's death or upon disability, as that term is defined
in the Plan. If certain events occur which would result in a
change in control of Earthgrains, all shares of Restricted
Stock become nonforfeitable and freely transferable (except for
restrictions
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imposed by applicable federal and state securities laws), and
all previously unsatisfied conditions to unrestricted ownership
lapse. The number of shares and value of Restricted Stock
holdings as of March 28, 2000, are as follows:
NUMBER VALUE AT
OF SHARES FISCAL YEAR END
--------- ---------------
* Mr. Beracha 333,332 $4,770,814
* Mr. Iselin 71,668 1,025,748
* Mr. Opdyke 38,332 548,627
* Mr. Krieger 24,168 345,905
* Mr. Argente 18,332 262,377
<F3> Awards for fiscal year 1998 have been adjusted to reflect two
two-for-one stock splits effected in 1997 and 1998.
<F4> Two separate payouts under the Exceptional Performance Plan's
1998 Program were made after various levels of the Program's
performance goals were achieved. The first payout date was May
15, 1999. The second payout date was October 15, 1999.
<F5> The payout amounts on each of the payout dates for the named
executive officers were:
* Mr. Beracha, $274,980
* Mr. Iselin, $128,700
* Mr. Opdyke, $97,950
* Mr. Krieger, $89,400
* Mr. Argente, $100,740
<F6> The amounts shown in this column consist of the following for
fiscal year 2000:
(i) Matching Contributions under Earthgrains' 401(k) and 401(k)
restoration plans:
* Mr. Beracha, $26,003
* Mr. Iselin, $12,202
* Mr. Opdyke, $9,802
* Mr. Krieger, $9,240
Mr. Argente is not eligible to participate in the Company's
401(k) plan or 401(k) restoration plan.
In the event of a change in control of Earthgrains, the unvested
portion of a participant's 401(k) account will immediately become
100% non-forfeitable, and the entire amount accrued in the 401(k)
restoration plan on behalf of a participant will be paid in a
single lump sum within 30 days of the date of the change in
control.
(ii) Amounts imputed as income for federal income tax purposes
under Earthgrains' life insurance plans:
* Mr. Beracha, $19,954
* Mr. Iselin, $3,802
* Mr. Opdyke, $7,352
* Mr. Krieger, $2,668
* Mr. Argente, $2,180
<F7> Amounts reported in the table are tax reimbursements, with the
exception of the amount reported for Mr. Krieger in 1999. That
amount consists primarily of a country club membership valued
at $38,053.
<F8> Mr. Argente's salary and the majority of his bonus are paid in
Spanish pesetas. The dollar values listed in the table above
represent the approximate U.S. dollar amounts Mr. Argente would
have received based on the average conversion rate of 159.47,
148.01 and 148.58 Spanish pesetas to one U.S. dollar for fiscal
years 2000, 1999 and 1998, respectively.
</TABLE>
16
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<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
% OF TOTAL
OPTIONS
NUMBER OF GRANTED TO POTENTIAL REALIZABLE VALUE AT
SHARES EMPLOYEES ASSUMED ANNUAL RATES OF STOCK PRICE
UNDERLYING IN FISCAL EXERCISE APPRECIATION FOR OPTION TERM<F3>
OPTIONS YEAR PRICE PER EXPIRATION -----------------------------------
NAME GRANTED<F1> 2000<F2> SHARE DATE 0% 5% 10%
---- ----------- ---------- --------- ---------- ----- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Barry H. Beracha...... 40,000 6.19 $15.7188 1/19/10 - 0 - $395,419 $1,002,069
John W. Iselin, Jr.... 19,800 3.07 $15.7188 1/19/10 - 0 - 195,732 496,024
William H. Opdyke..... 16,200 2.51 $15.7188 1/19/10 - 0 - 160,145 405,838
Mark H. Krieger....... 14,400 2.23 $15.7188 1/19/10 - 0 - 142,351 360,745
Xavier Argente........ 16,200 2.51 $15.7188 1/19/10 - 0 - 160,145 405,838
<FN>
--------
<F1> All options granted to the named executive officers were
granted on January 20, 2000. The options become exercisable in
three equal parts on the first, second and third anniversaries
of the grant date; however, the Compensation and Human
Resources Committee of the Board is authorized to accelerate
exercisability at any time, and acceleration occurs
automatically in the event of the optionee's death, or the
optionee's disability or retirement as those terms are defined
in the 1996 Stock Incentive Plan and its agreements, or if
certain events occur which would result in a change in control
of Earthgrains. In addition, some of the options (NQSOs) were
granted with a tax payment feature; the option stock can be
used to pay the withholding taxes related to an option
exercise.
The number of NQSOs granted in fiscal year 2000 to the named
officers were:
* Mr. Beracha, 33,700
* Mr. Iselin, 13,500
* Mr. Opdyke, 9,900
* Mr. Krieger, 8,100
* Mr. Argente, 16,200
The NQSOs granted in fiscal year 2000 to each of the named
executive officers are transferable to the respective officers'
immediate family members.
<F2> Based on option grants for 645,715 shares of Earthgrains'
Common Stock to 230 employees in fiscal year 2000.
<F3> The dollar amounts under these columns are the result of
calculations at the 5% and 10% rates set by the SEC and
therefore are not intended to forecast possible future
appreciation of Earthgrains' Common Stock. If the value of
Earthgrains' Common Stock does not appreciate, the options will
be valueless, as evidenced by the 0% column. The assumed 5%
annual rate of appreciation would result in the market price of
Earthgrains' Common Stock increasing from $15.7188 to $25.60.
The assumed 10% annual rate of appreciation would result in an
increase from $15.7188 to $40.77.
</TABLE>
17
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<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT FISCAL
SHARES ACQUIRED ON VALUE AT FISCAL YEAR END YEAR END<F2><F3>
NAME EXERCISE<F1> REALIZED<F2> EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------ ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
Barry H. Beracha.......... - 0 - - 0 - 643,864/76,668 $3,430,216/- 0 -
John W. Iselin, Jr........ 75,332 $1,198,246 100,333/40,635 373,100/- 0 -
William H. Opdyke......... - 0 - - 0 - 80,164/32,868 358,348/- 0 -
Mark H. Krieger........... - 0 - - 0 - 58,845/26,895 248,639/- 0 -
Xavier Argente............ - 0 - - 0 - 127,000/31,700 266,244/- 0 -
<FN>
--------
<F1> Shares acquired reflect two two-for-one stock splits effected
in 1997 and 1998.
<F2> Value before income taxes payable as a result of exercise.
<F3> The closing price of Earthgrains' Common Stock on March 28,
2000, was $14.3125 per share. Options granted with a higher
exercise price are ignored in this column.
</TABLE>
LONG-TERM INCENTIVE PLANS
At last year's Annual Meeting, shareholders re-approved the
Company's Exceptional Performance Plan (the "EPP"), which was
adopted by the Board in May 1997. The EPP provides a framework
through which key executives, including the named executive
officers, can receive appropriate cash bonuses for exceptional
performance over a measured performance period which may be longer
than a given fiscal year. In addition to current participants,
certain employees of acquired companies will also participate in
programs established under the EPP. On March 19, 1999, the
Compensation and Human Resources Committee of the Board (the
"Committee"), established the 2000 Leadership Excellence Achievement
Program (the "2000 Program") under the EPP, and on April 29, 1999,
the Committee established the 2000 CEO Cash Incentive Program (the
"2000 CEO Program") under the EPP.
Information regarding the 2000 Program is provided in the table
below. Since the performance period for the 2000 CEO Program was
fiscal year 2000, Mr. Beracha's cash bonus pursuant to the 2000 CEO
Program is reported in the Summary Compensation Table on page 15.
While the 2000 Program is the current program in effect under the
EPP, the Committee is authorized to, and may, establish additional
EPP programs.
<TABLE>
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE-BASED
PLANS<F3><F4>
PERFORMANCE OR OTHER PERIOD
UNTIL MATURATION OR PAYOUT THRESHOLD/TARGET MAXIMUM
NAME <F1><F2> ($) ($)
---- --------------------------- ---------------- ---------
<S> <C> <C> <C>
Barry H. Beracha.......................... September 15, 2002 640,080 1,280,160
John W. Iselin, Jr........................ September 15, 2002 305,040 610,080
William H. Opdyke......................... September 15, 2002 245,040 490,080
Mark H. Krieger........................... September 15, 2002 231,000 462,000
Xavier Argente............................ September 15, 2002 214,460 428,920
<FN>
--------
<F1> Because the applicable performance period has not elapsed and
performance goals have not been attained, it is not possible to
determine if performance goals triggering bonuses will be met.
<F2> In the event of a change in control of Earthgrains, the
Committee has the authority to make adjustments to the
performance goals, performance periods and bonus formulas to
prevent or limit the forfeiture of bonuses under EPP programs.
Under the existing programs, the Committee has exercised its
discretion
18
<PAGE>
<PAGE>
under the EPP to require payment of maximum bonuses upon a change
in control.
<F3> Program performance goals are tied to a cash flow measure, a
return on capital measure, and an average annual revenue growth
measure. Bonus formula amounts range from 100%-200% of fiscal
year 2000 salary for the named executive officers, depending on
the extent to which performance goals are achieved.
<F4> The Committee, in its discretion, may reduce the actual bonuses
paid to amounts less than the threshold amounts provided above.
</TABLE>
<TABLE>
PENSION PLAN TABLE
<CAPTION>
YEARS OF CREDITED SERVICE
--------------------------------------------------------
COMPENSATION 15 20 25 30 35 40 AND OVER
------------ -- -- -- -- -- -----------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 41,820 48,759 55,698 62,637 69,576 76,515
200,000 56,947 68,079 83,333 100,000 101,356 112,458
300,000 75,000 100,000 125,000 150,000 150,000 150,000
400,000 100,000 133,333 166,667 200,000 200,000 200,000
600,000 150,000 200,000 250,000 300,000 300,000 300,000
800,000 200,000 266,667 333,333 400,000 400,000 400,000
1,000,000 250,000 333,333 416,667 500,000 500,000 500,000
1,200,000 300,000 400,000 500,000 600,000 600,000 600,000
</TABLE>
The Earthgrains Company Pension Plan (the "Pension Plan") is a
defined benefit pension plan intended to comply with the
requirements of Section 401(a) of the Internal Revenue Code. Under
the Pension Plan, eligible employees receive a benefit based on
final average pay and accumulated benefit credits. The benefit is
paid in a lump sum or annuity payments for life. Final average pay
is the highest five consecutive complete calendar years of pay out
of the last ten complete calendar years of pay. "Pay" is all
compensation received by a participant excluding bonuses and other
forms of compensation that are specifically excluded under the terms
of the Pension Plan. Benefit credits are earned according to the
following schedule:
AGE ANNUAL BENEFIT CREDIT
--- ---------------------
50 or under................. 12%
51-53....................... 13%
54-56....................... 14%
57-59....................... 15%
60 and over................. 16%
The Pension Plan Table above presents the estimated annual pension
benefits payable to a covered participant at normal retirement age
(age 65) under the Pension Plan, as well as all non-qualified
supplemental pension plans, based on pay that is covered under the
plans and years of service with Earthgrains. These benefit amounts
will be offset by Social Security benefits payable at age 65 and a
prior plan benefit for service prior to March 26, 1996. However,
benefits offset by the prior plan will never be less than the
benefits calculated using service after March 26, 1996, with no
offset for the prior plan. In the event of a change in control of
Earthgrains, a participant's accrued benefits will immediately
become 100% non-forfeitable, and all benefits accrued under any
nonqualified supplemental pension plans become payable in a single
lump sum within 30 days of the date of the change in control.
The years of credited service and the "Pay" used in determining
benefits under the Company's qualified Pension Plan and
non-qualified supplemental pension plans as of the end of fiscal
year 2000 for each of the named executive officers are as follows:
* Mr. Beracha, 32.7 years and $649,680
* Mr. Iselin, 20.7 years and $314,640
* Mr. Opdyke, 20.3 years and $254,640
* Mr. Krieger, 19.2 years and $237,400
Mr. Argente is not eligible to participate in the Pension Plan or
the non-qualified supplemental pension plans.
19
<PAGE>
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following performance graph compares the changes, for the period
indicated, in the cumulative total value of $100 hypothetically
invested in each of (a) Earthgrains' Common Stock, (b) the S&P 1500
Supercomposite, and (c) the S&P Foods Index. Both of the indices are
weighted by capitalization. The S&P 1500 Supercomposite is comprised
of 500 companies with large capitalization (S&P 500), 400 companies
with medium capitalization (S&P 400) and 600 companies with small
capitalization (S&P 600) and reflects the performance of those 1500
companies. The S&P Foods Index reflects the performance of 13
companies represented in the foods sector of the S&P 500 Index.
[GRAPH]
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
27-Mar-96 25-Mar-97 31-Mar-98 30-Mar-99 28-Mar-00
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The Earthgrains Co. $100 $170 $293 $284 $193
-------------------------------------------------------------------------------------------
S&P 1500 Supercomposite $100 $123 $175 $203 $242
-------------------------------------------------------------------------------------------
S&P Foods Index $100 $128 $177 $158 $116
-------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<PAGE>
EXECUTIVE AGREEMENTS
Mr. Beracha's employment agreement ends on March 31, 2001, but may
be extended by mutual agreement. Mr. Beracha's agreement provides
for a base salary of $500,004 per year which is subject to
adjustment, except that his salary may not be adjusted downward
during the current term of the agreement. Pursuant to his employment
agreement, Mr. Beracha received a base salary of $640,080 for fiscal
year 2000. If Mr. Beracha becomes disabled, incapacitated or dies
during the term of his employment agreement, he or his revocable
living trust or estate will receive his base salary through March
31, 2001.
Mr. Beracha's employment agreement provides that he may be
terminated at any time without "cause," but if such termination
occurs prior to the end of the term of the employment agreement, he
is entitled to receive his base salary through the end of the term.
Notwithstanding these provisions, Earthgrains is entitled to
terminate Mr. Beracha's employment agreement immediately and without
notice if he engages in certain specified conduct, including the
refusal without cause to perform his assigned duties, the open
criticism of Earthgrains in the media, and the participation in any
conduct that the Board of Directors determines to be inimical or
contrary to the best interests of Earthgrains ("Termination for
Cause"). Upon Termination for Cause, Earthgrains is obligated only
to pay his base salary prorated to the date of the termination
event. The employment agreement excludes participation in any
severance pay plan established by Earthgrains in the event of
termination for any reason.
Mr. Argente is the President-Sole Administrator of Bimbo, S.A., and
holds the position of President, European Bakery Products with
Earthgrains. Mr. Argente entered into an employment agreement with
Earthgrains that was executed in Barcelona, Spain, and is governed
by Spanish law. He receives a minimum gross annual salary of
30,000,000 pesetas, paid in fifteen installments, one each month,
with additional installments in May, July and December. Mr. Argente
is also eligible to receive stock options and grants in accordance
with Earthgrains' program for making such awards, and an annual
bonus based on terms and conditions as mutually determined from time
to time. He also receives travel expense reimbursement and receives
certain other benefits and perquisites pursuant to programs
established by the Company's Compensation and Human Resources
Committee. Mr. Argente's current employment agreement ends on
December 31, 2001, and is subject to three-year renewal terms.
A violation of confidentiality, a trade secrecy provision or a
breach of trust are "fair grounds" for termination of Mr. Argente,
and Earthgrains may claim relevant compensation for damages.
Earthgrains may also terminate Mr. Argente in the event he seriously
breaches the agreement. Either party may also voluntarily terminate
the agreement at any time by giving the other party requisite
notice. If such termination is declared to have been for fair
grounds, Mr. Argente is not entitled to severance. If the
termination is deemed unfair or Earthgrains voluntarily terminates
the agreement, the amount of severance Mr. Argente receives varies
with the timing of the termination and its reason. Should
Earthgrains decide not to renew Mr. Argente's agreement, he is
entitled to receive a payment in the amount of some multiple of his
salary, depending upon the circumstances.
During fiscal year 2000, Mr. Beracha, the other executive officers
named in the Summary Compensation Table on page 15, and certain
other key executives of Earthgrains entered into Executive Severance
Agreements ("Severance Agreements") with Earthgrains. The Severance
Agreements will be effective for a three-year period with automatic
one-year extensions, unless a termination notice is given. Each
Severance Agreement provides that if the executive's employment
terminates in certain ways following a change in control of
Earthgrains, the executive would receive certain severance benefits.
The severance benefits would consist of cash payments by Earthgrains
equal to two times (three times in the case of Mr. Beracha) the
executive's average base salary and target bonus. In addition, the
executive's welfare benefits (e.g. health and life insurance) would
continue for two years (three years in the case of Mr. Beracha),
certain supplemental pension benefits would vest, and Earthgrains
would be required to pay any excise taxes imposed in connection with
the severance benefits. No severance benefits would be provided if
an executive were terminated for cause, death, or disability, or if
no change in control of Earthgrains were to occur.
21
<PAGE>
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit and Finance Committee of the Board of Directors has
selected PricewaterhouseCoopers LLP to be the Company's independent
public accountants for fiscal year 2001. A representative of
PricewaterhouseCoopers LLP is expected to attend the Meeting and
will have the opportunity to make a statement and respond to
appropriate questions from shareholders.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Executive officers and directors of Earthgrains are required under
the Securities Exchange Act of 1934 to file reports of ownership and
changes in ownership of Earthgrains' Common Stock with the
Securities and Exchange Commission and the New York Stock Exchange.
Copies of those reports must also be furnished to Earthgrains.
Based solely on a review of the copies of those reports, other
documents furnished to Earthgrains and written representations that
no other reports were required, Earthgrains believes that all filing
requirements applicable to executive officers and directors have
been complied with during the preceding fiscal year except that
Larry G. Bergner and Edward J. Wizeman each filed late one report of
one transaction due to an inadvertent administrative error.
OTHER MATTERS
SHAREHOLDER PROPOSALS FOR 2001
To be included in the Company's proxy materials for its 2001
Meeting, a shareholder proposal must be received by Earthgrains in
writing no later than February 15, 2001. Such proposals must meet
the requirements set forth in the rules and regulations of the
Securities and Exchange Commission in order to be eligible for
inclusion in the Company's fiscal year 2001 proxy materials.
If you wish to make a proposal or nomination for the 2001 Annual
Meeting, you must comply with Earthgrains' By-Laws, whether or not
your proposal is also included in the Company's written proxy
materials for that Meeting. The Company's By-Laws require, among
other things, that any shareholder wishing to submit a proposal or
nomination must send written notice to the Company's Secretary
between April 15 and May 15, 2001, and must attend the Meeting (in
person or by proxy) and introduce the proposal for action. The
written notice must contain certain information required by the
By-Laws, depending on the nature of the matter proposed. You may
request a copy of the applicable By-Laws at any time; send your
written request to the attention of the Company's Secretary at its
headquarters in St. Louis.
FORM 10-K
Upon written request and at no charge, Earthgrains will provide to
each person receiving a Proxy Statement, a copy of the Company's
Annual Report on Form 10-K, including financial statements and
schedules, for its most recent fiscal year required to be filed with
that Commission. Earthgrains may impose a reasonable fee for
expenses in connection with providing copies of the separate
exhibits to such report when such exhibits are requested.
NOTICES OR REQUESTS
Any notice or request discussed above should be directed to Joseph
M. Noelker, Corporate Secretary, The Earthgrains Company, 8400
Maryland Avenue, St. Louis, Missouri 63105.
PLEASE VOTE BY INTERNET OR TELEPHONE, OR DATE, SIGN AND PROMPTLY
RETURN THE ENCLOSED PROXY FORM IN THE ACCOMPANYING ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. YOUR COOPERATION
IS APPRECIATED. THANK YOU.
St. Louis, Missouri
June 15, 2000
22
<PAGE>
<PAGE>
Earthgrains [Logo]
THE EARTHGRAINS COMPANY
ANNUAL MEETING OF SHAREHOLDERS
10:00 A.M. FRIDAY, JULY 14, 2000
IN EDISON THEATRE, WASHINGTON UNIVERSITY'S MALLINCKRODT CENTER
OFF FORSYTH BOULEVARD
SAINT LOUIS, MISSOURI 63130
DIRECTIONS TO EDISON THEATRE:
FROM I-70 EASTBOUND (FROM ST. CHARLES, MO.):
Take I-70 East to I-170 exit. Take I-170 South to I-64/U.S. 40 East.
Exit to the right at McCausland, and turn left on to McCausland,
which becomes Skinker Blvd. Turn left on Forsyth Blvd. and follow
Forsyth Blvd. to Hadley Way (which will be on your right). Turn
right on Hadley Way.
FROM I-70 WESTBOUND (FROM ILLINOIS):
Take I-70 West, get off at the I-64/U.S. 40 exit (farthest left
lane) as you cross the Poplar Street Bridge (over Mississippi River)
and continue on (from Illinois) U.S. 40 to the Clayton Rd./Skinker
Blvd. exit. Turn right on Skinker Blvd. and follow to Forsyth Blvd.
Turn left on Forsyth Blvd., and continue to Hadley Way (which will
be on your right). Turn right on Hadley Way.
FROM I-55 NORTHBOUND:
Take I-55 North to the I-44 exit (44 West). Take 44 West to Hampton
north (right on Hampton) and Hampton north to I-64/U.S. 40 West.
Take I-64/U.S. 40 West to the Clayton Rd./Skinker Blvd. exit then
follow the directions in italics (I-70 Westbound).
FROM I-44 EASTBOUND:
Take I-44 East to Hampton exit. Turn north (left) on Hampton and
follow to I-64/U.S. 40 West. Take I-64/U.S. 40 West to the Clayton
Rd./Skinker Blvd. exit and then follow the directions in italics
(I-70 Westbound).
PARKING INFORMATION:
Limited parking is available for $3.00 in a pay-to-park lot west of
Edison Theatre on Hadley Way. Additional parking is available at
two-hour meters in front of Edison Theatre and on some of the
streets surrounding Washington University. Please avoid parking in
any spaces where signs indicate a parking permit is required.
Parking in such spaces without a permit could result in your car
being ticketed.
<PAGE>
<PAGE>
EARTHGRAINS [Logo]
THE EARTHGRAINS COMPANY
PROXY SERVICES
P.O. BOX 9079
FARMINGDALE, NY 11735
VOTE BY INTERNET: WWW.PROXYVOTE.COM
1. Read the accompanying Proxy Statement and this proxy form.
2. Go to website www.proxyvote.com
-----------------
3. Enter your 12 digit Control Number, shown below.
4. Follow the simple instructions.
VOTE BY PHONE: 1-800-690-6903
1. Read the accompanying Proxy Statement and this proxy form.
2. Call toll free 1-800-690-6903.
3. Enter your 12 digit Control Number, shown below.
4. Follow the simple recorded instructions.
VOTE BY MAIL
1. Mark, sign and date your proxy form.
2. Return it in the enclosed postage paid envelope.
==============================================
IF YOU WISH TO VOTE BY INTERNET OR TELEPHONE,
PLEASE READ THE INSTRUCTIONS ABOVE.
==============================================
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X]
EARTH1 KEEP THIS PORTION FOR YOUR RECORDS
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY FORM IS VALID ONLY WHEN SIGNED AND DATED.
--------------------------------------------------------------------------------
THE EARTHGRAINS COMPANY
Check here if you plan to attend the Annual Meeting. [ ]
VOTE ON DIRECTORS
1. Proposal to elect Directors. The nominees for Directors are:
01) E. Byron Glore, Jr.
02) Jaime Iglesias
03) William E. Stevens
FOR WITHHOLD FOR ALL To withhold authority to vote, mark "For All Except"
ALL ALL EXCEPT and write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
2. Amendment to the 1996 Stock Incentive Plan. [ ] [ ] [ ]
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. WHEN PROPERLY
EXECUTED, IT WILL BE VOTED FOR ITEMS #1 AND #2.
(Sign exactly as your name or names appear above. In the case of shares
held by joint owners, all joint owners should sign; fiduciaries should indicate
vote and authority.)
---------------------------------------- --------------------------------------
---------------------------------------- --------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
<PAGE>
<PAGE>
ADMISSION TICKET
THE EARTHGRAINS COMPANY
ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, JULY 14, 2000, 10:00 A.M.
IN EDISON THEATRE AT WASHINGTON UNIVERSITY'S MALLINCKRODT CENTER
OFF FORSYTH BOULEVARD
SAINT LOUIS, MISSOURI 63130
PLEASE PRESENT THIS TICKET FOR ADMITTANCE.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING, WHETHER OR
NOT YOU ATTEND THE MEETING IN PERSON. TO MAKE SURE YOUR SHARES ARE
REPRESENTED, WE URGE YOU TO VOTE BY INTERNET OR TELEPHONE OR COMPLETE,
DETACH AND MAIL THE PROXY FORM.
=============================================================================
IF YOU PLAN TO ATTEND THE MEETING, PRESENT THIS TICKET TO THE EARTHGRAINS
COMPANY REPRESENTATIVE AT THE ENTRANCE TO THE MEETING.
=============================================================================
ChaseMellon Shareholder Services is the transfer agent for The Earthgrains
Company. Telephone inquiries regarding your shares of Earthgrains' stock
should be made to ChaseMellon Shareholder Services' Automated Toll-Free
Telephone Response Center at 1-888-213-0971.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PROXY FORM
THE EARTHGRAINS COMPANY
ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, JULY 14, 2000, 10:00 A.M.
IN EDISON THEATRE AT WASHINGTON UNIVERSITY'S MALLINCKRODT CENTER
OFF FORSYTH BOULEVARD
SAINT LOUIS, MISSOURI 63130
The person(s) signing this proxy form hereby appoints Barry H. Beracha and
Joseph M. Noelker as proxies, each with the power of substitution, and hereby
authorizes them to represent and to vote, as designated on the reverse side of
this form, all of the shares of stock that the person(s) signing this proxy
form would be entitled to vote upon the matters set forth in the Notice of
Meeting or which may properly come before the Annual Meeting of Shareholders
of The Earthgrains Company, to be held in Edison Theatre at Washington
University's Mallinckrodt Center, off Forsyth Boulevard, St. Louis, Missouri,
on July 14, 2000, at 10:00 A.M. and at any adjournments thereof.
(IF VOTING BY MAIL, BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS FORM.)
--------------------------------------------------------------------------------
<PAGE>
<PAGE>
APPENDIX
Page 20 of the printed Proxy contains a Performance Graph. The information
contained in the graph appears in the table immediately following the graph.
