<PAGE>
<PAGE>
Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
AMERICAN CRAFT BREWING INTERNATIONAL LIMITED
.................................................................
(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:
.......................................................
(4) Date Filed:
.......................................................
<PAGE>
<PAGE>
AMERICAN CRAFT BREWING INTERNATIONAL LIMITED
ONE GALLERIA BOULEVARD, SUITE 1714
METAIRIE, LOUISIANA 70001
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 22, 1997
--------------------
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of
American Craft Brewing International Limited (the "Company") will be held at the
Omni Royal Orleans Hotel at 621 St. Louis Street, New Orleans, Louisiana on
Tuesday, April 22, 1997, at 11:30 a.m., local time, for the following purposes:
1. To elect ten (10) directors to the Board of Directors;
2. To approve certain amendments to the Company's 1996 Stock
Option Plan: (a) to increase the number of shares of Common Stock
reserved for issuance thereunder by an additional 300,000 shares to a
total of 600,000 shares and (b) to ensure that options granted under the
1996 Stock Option Plan constitute performance-based compensation within
the meaning of Section 162(m) of the Internal Revenue Code;
3. To vote on a proposal to ratify the selection of independent
auditors; and
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on
February 28, 1997 as the record date for the determination of stockholders
entitled to received notice of, and to vote at, the meeting and any adjournment
thereof. From February 28, 1997 through April 22, 1997, during ordinary business
hours, a list of such stockholders shall be available for examination by any
stockholder for any purpose germane to the annual meeting at the offices of the
Company.
Your attention is directed to the Proxy Statement submitted with
this Notice.
By order of the Board of Directors,
JAMES L. AKE
Executive Vice President, Chief Operating
Officer and Secretary
Metairie, Louisiana
March 20, 1997
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE
ANNUAL MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
<PAGE>
<PAGE>
AMERICAN CRAFT BREWING INTERNATIONAL LIMITED
ONE GALLERIA BOULEVARD, SUITE 1714
METAIRIE, LOUISIANA 70001
--------------------
PROXY STATEMENT
--------------------
The enclosed form of proxy is solicited by the Board of Directors
of American Craft Brewing International Limited (the "Company") for use at the
annual meeting of stockholders to be held at the Omni Royal Orleans Hotel, 621
St. Louis Street, New Orleans, Louisiana on April 22, 1997 and any adjournment
thereof. When such proxy is properly executed and returned, the shares it
represents will be voted as directed at the meeting and any adjournment thereof
or, if no direction is indicated, such shares will be voted in favor of the
proposals set forth in the notice attached hereto. Any stockholder giving a
proxy has the power to revoke it at any time before it is voted. Revocation of a
proxy is effective upon receipt by the Secretary of the Company of either (i) an
instrument revoking such proxy or (ii) a duly executed proxy bearing a later
date. Furthermore, if a stockholder attends the meeting and elects to vote in
person, any previously executed proxy is thereby revoked.
Only stockholders of record as of the close of business on
February 28, 1997 (the "Record Date") will be entitled to vote at the annual
meeting. As of that date, the Company had outstanding 3,696,876 shares of common
stock, $.01 par value ("Common Stock"). Each share of Common Stock is entitled
to one vote. No cumulative voting rights are authorized, and appraisal rights
for dissenting stockholders are not applicable to the matters being proposed. It
is anticipated that the Proxy Statement and the accompanying proxy will first be
mailed to stockholders of record on or about March 20, 1997.
Votes cast by proxy or in person at the annual meeting will be
tabulated by the inspector of elections appointed for the meeting who will also
determine whether a quorum is present for the transaction of business. The
Company's Bye-laws provide that a quorum is present if the holders of a majority
of the issued and outstanding capital stock of the Company are present in person
or represented by proxy at the meeting. Abstentions and broker "nonvotes" will
be counted as present in determining whether a quorum requirement is satisfied.
A broker "nonvote" occurs when a broker holding shares for a beneficial owner
votes on one proposal pursuant to discretionary authority or instructions from
the beneficial owner, but does not vote on another proposal because the broker
has not received instructions from the beneficial owner and does not have
discretionary power. Proposals must receive the affirmative vote of a majority
of the votes cast for approval. An abstention from voting by a stockholder and
broker "nonvotes" are not counted for purposes of determining whether a proposal
has been approved.
<PAGE>
<PAGE>
PROPOSAL 1--ELECTION OF DIRECTORS
Management of the Company and the Board of Directors of the
Company (the "Board of Directors") recommend the election of the nominees listed
below for the office of director to hold office until the next annual meeting
and until their successors are elected and qualified or until their earlier
resignation or removal.
The Board of Directors has no reason to believe that any of the
nominees for the office of director will not be available for election as a
director. However, if at the time of the annual meeting any of the nominees
should be unable or decline to serve, the persons named in the proxy will vote
for such substitute nominees, vote to allow the vacancy created thereby to
remain open until filled by the Board of Directors or vote to reduce the number
of directors for the ensuing year, as the Board of Directors recommends. In no
event, however, can the proxy be voted to elect more than ten (10) directors.
The election of the nominees to the Board of Directors requires the affirmative
vote of a majority of the votes cast at the meeting.
Set forth below are the nominees for election to the Board of
Directors. Also set forth below as to each nominee is his or her age, the year
in which such nominee was first elected a director, a brief description of such
nominee's principal occupation and business experience during the past five
years, directorships of certain companies presently held by such nominee, and
certain other information, which information has been furnished by the
respective individuals.
PETER W. H. BORDEAUX
Age 48
Director since 1996
Mr. Bordeaux has been Chairman of the Board of Directors of
AmBrew International since June 5, 1996 and has been associated with its
subsidiaries since August 9, 1994. Mr. Bordeaux has been President and Chief
Executive Officer of AmBrew International since February 12, 1997. Prior to his
employment in these positions and since 1982, Mr. Bordeaux was President and
Chief Executive Officer of New Orleans-based Sazerac Company, Inc. ("Sazerac"),
the tenth largest United States producer, importer and exporter of spirits as
well as a large U.S. distributor of wine, beer and non-alcohol beverages. Mr.
Bordeaux had been with Sazerac since 1980. In addition, Mr. Bordeaux has served
as Chairman of Concorde Holdings Limited (Beijing), a distributor of alcohol and
non-alcohol beverages ("Concorde"), since November 1994, and as President, since
1992, of Leestown Company, Inc., which owns the world's largest bourbon
distillery. Mr. Bordeaux was Vice Chairman of the Board of the National
Association of Beverage Importers, is a Board Member, Vice President and member
of the Executive Committee of the Board of the World Trade Center, New Orleans,
Chairman of the International Advisory Council of Hibernia National Bank (New
Orleans) and a Board Member and Treasurer of Episcopal Housing for Seniors, Inc.
-2-
<PAGE>
<PAGE>
JOHN F. BEAUDETTE
Age 40
Director since 1996
Mr. Beaudette has been a director of AmBrew International since
June 5, 1996 and has been associated with its subsidiaries since April 27, 1995.
Mr. Beaudette has been President of BPW Holding LLC ("BPW"), a beverage
investment and consulting company, and its predecessor, since February 1995. Mr.
Beaudette has been the President of MHW, Ltd., a beverage alcohol importer
distributor and service company located in Manhasset, New York ("MHW"), since
September 1996, and was Executive Vice President and General Manager of MHW from
1994 to 1996. From 1992 to 1994, Mr. Beaudette was Vice President and Chief
Financial Officer of Monsieur Henri Wines, Ltd. and from 1988 to 1992, he was
Director of Planning at PepsiCo Wines and Spirits International. Both companies
were involved in the United States and Canadian marketing and distribution of
imported wines and spirits from around the world.
FEDERICO G. CABO ALVAREZ
Age 52
Director since 1996
Mr. Cabo has been Deputy Chairman of the Board of Directors since
June 3, 1996 and has been associated with the Company's subsidiaries since
August 9, 1994. Since 1970, Mr. Cabo has been Chief Executive Officer and
President of Cabo Distributing Company, Inc., formerly the largest distributor
of Mexican beers in the United States and currently a distributor of beer and
producer spirit products.
WYNDHAM H. CARVER
Age 53
Director since 1996
Mr. Carver has been a director of AmBrew International since June
5, 1996. Since 1995, Mr. Carver has been on a two-year secondment from Grand
Metropolitan PLC ("Grand Met"), an international producer, distributor,
wholesaler and retailer of spirits, wines and foods, to the British Department
of Trade and Industry where Mr. Carver is a Latin American export promoter. Mr.
Carver has served in a variety of capacities on behalf of International
Distillers & Vintners, Ltd., an international producer and distributor of
spirits and wine and a subsidiary of Grand Met ("IDV"), since 1965, including
Managing Director of Wyvern International, the marketing division of IDV, and
Regional Director for IDV in the Caribbean and Central America. Mr. Carver is a
director of Test Valley Water Company, a private company in Hampshire, England.
-3-
<PAGE>
<PAGE>
DAVID K. HAINES
Age 31
Director since 1996
Mr. Haines was the Managing Director of Hong Kong Operations of
AmBrew International from June 5, 1996 until December 31, 1996. Since January 1,
1997, Mr. Haines has been employed as a Consultant to the Company and the South
China Brewery. Since 1994, Mr. Haines has devoted his efforts to establishing
and developing the South China Brewery. Before his involvement with the Company,
Mr. Haines practiced clinical psychology for one year in Vail, Colorado and was
in private practice as a psychologist for two years in Hong Kong.
JOSEPH E. HEID
Age 50
Director since 1996
Mr. Heid has been a director of AmBrew International since June
5, 1996. Mr. Heid has been Senior Vice President of Sara Lee Corporation ("Sara
Lee"), an international food and consumer products company, Chief Executive
Officer of Sara Lee Personal Products North and South America, a line of
business responsible for Sara Lee's brands in apparel and accessories in North
and South America, since 1996, President and Chief Executive Officer of Sara Lee
Personal Products - Pacific Rim, a line of business responsible for Sara Lee's
brands in apparel and accessories in the Pacific Rim, since 1994 and Vice
President of Sara Lee since 1992. From 1988 to 1992, Mr. Heid served as
President of Guinness America ("Guinness"), a holding company of Guinness PLC's
United States ventures, and Executive Vice President and Chief Operating Officer
of United Distillers - North America, a subsidiary of Guinness that imports,
produces, markets and sells beverage alcohols.
CHARLES L. JARVIE
Age 60
Mr. Jarvie was nominated to stand for election to the Company's
Board of Directors by the incumbent Board in March 1997. Mr. Jarvie became an
Investor in and President of Host Communications in December 1992 and also
served as the Chairman, since 1995, of Universal Sports America, the nation's
largest collegiate and grassroots sports marketing company. From 1959 until 1980
Mr. Jarvie was employed by Procter and Gamble, most recently as Corporate Vice
President for food product and General Manager of Procter and Gamble's 2.5
billion edible products sector. After leaving Procter and Gamble, Mr. Jarvie was
successively President and Chief Operating Officer of the Dr. Pepper/Canada Dry
Company, Marketing General Manager of Fidelity Investments, Chairman and Chief
Executive Officer of the Schenley Spirits Company and Chief Executive Officer of
the New Era Beverage Company. Mr. Jarvie currently serves as a Director of the
Dallas Chamber of Commerce and Texas Commerce Bank. Mr. Jarvie also serves on
the Cornell University Council and as Chairman of the D/FW International Trade
Center, which played a central role in the NAFTA negotiations.
-4-
<PAGE>
<PAGE>
EDWARD F. MCDONNELL
Age 61
Mr. McDonnell was nominated to stand for election to the
Company's Board of Directors by the incumbent Board in March 1997. Mr. McDonnell
has been the President of The Premier Group, an investment group investing in
beverage alcohol companies and related activities, since June 1995. Before
joining The Premier Group, Mr. McDonnell served as President and Chief Executive
Officer of Seagram Spirits and Wine Group and Executive Vice President of
Seagram Company Ltd since 1981. Mr. McDonnell also served as a Director of the
Seagram Company Ltd. from 1992 until June 1996.
SUSANNA E. TOWNSEND
Age 47
Miss Townsend was nominated to stand for election to the
Company's Board of Directors by the incumbent Board in March 1997. Since 1995,
Miss Townsend has served as advisor to His Royal Highness The Prince of Wales on
commercial operations and has assisted in raising funds for The Prince of Wales
Charities Trust. From 1990 to 1994 Miss Townsend served as Managing Director of
Lord Rothschild's Private Companies, including Clifton Nurseries Holdings, Ltd.,
Clifton Nurseries Ltd., Clifton Little Venice Ltd., Rothschild Waddesdon Ltd,
Waddesdon Gardens Ltd. and Robert Day Flowers Ltd. From 1980 to 1989, Miss
Townsend served as Managing Director of all United Kingdom Overseas Companies of
Crabtree & Evelyn, including Crabtree & Evelyn Ltd., Crabtree & Evelyn Shops,
Ltd., Crabtree and Evelyn Overseas Ltd. and Scarborough & Co. Ltd. Miss Townsend
is a director of Duchy Originals Ltd. and A.G. Carrick Ltd.
STEVEN A. ROTHSTEIN
Age 46
Director Since 1997
Mr. Rothstein was appointed to fill an existing vacancy in the
Company's Board of Directors by the incumbent Board in March 1997. Mr. Rothstein
has been the Chairman of the Board of National Securities Corporation, a
securities broker-dealer, since 1995. Mr. Rothstein also is Chairman and
President of Olympic Cascade Financial Corporation, the parent holding company
of National Securities Corporation. From 1994 to 1995, Mr. Rothstein served as a
Managing Director of H.J. Meyers & Co., a securities broker-dealer. From 1992 to
1994, he served as a Managing Director of Rodman and Renshaw, a securities
broker-dealer. From 1989 to 1992, he served as a Managing Director of
Oppenheimer & Co., a securities broker-dealer. Prior to that, he was a limited
partner of Bear Stearns & Co., a securities broker-dealer. Mr. Rothstein
received an A.B. degree from Brown University. He is currently a director of
SigmaTron International, Inc., New World Coffee, Inc., and Vita Food Products,
Inc. and Gateway Data Sciences Corporation.
-5-
<PAGE>
<PAGE>
OPERATION OF THE BOARD OF DIRECTORS
The Company has a Compensation Committee of the Board of
Directors that is currently composed of Messrs. Beaudette and Carver and will
include Mr. Jarvie following his election to the Board at the annual meeting.
The Compensation Committee is responsible for establishing and administering the
overall compensation policies and determining compensation matters applicable to
the Company's senior management and other key officers. The Compensation
Committee was formed just prior to the Company's Initial Public Offering in
September 1996 (the "Offering") and did not meet for the remainder of fiscal
1996. The Compensation Committee may exercise such additional authority as may
be prescribed from time to time by the Board of Directors.
The Audit Committee of the Board of Directors is currently
composed of Messrs. Beaudette and Heid. The Audit Committee was formed just
prior to the Offering and did not meet for the remainder of fiscal 1996. The
Audit Committee is responsible for meeting with the Company's auditors at least
annually to review the Company's financial statements and internal accounting
controls. The Audit Committee will also be responsible for submitting
recommendations to the Board of Directors regarding the Company's internal
accounting controls and may exercise such additional authority as may be
prescribed from time to time by the Board of Directors.
The Stock Option Committee of the Board of Directors is composed
of Messrs. Carver and Heid will include Mr. Jarvie following his election to the
Board at the annual meeting. The Stock Option Committee was formed just prior to
the Offering and did not meet for the remainder of fiscal 1996. No options were
granted by the Committee under the Company's Stock Option Plan in fiscal 1996.
The Company does not have a nominating committee.
In fiscal 1996, two meetings of the Board of Directors were held.
The Board of Directors also took action during 1996 pursuant to six unanimous
written consents without meetings.
DIRECTORS' COMPENSATION AND EXPENSES
The Company pays each of the non-employee directors, other than
Mr. Cabo, an annual fee of $10,000. Mr. Cabo receives an annual fee of $20,000.
VOTE REQUIRED
The affirmative vote of a majority of the votes cast at the
annual meeting is required to elect the Company's Nominees to the Board.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 1.
-6-
<PAGE>
<PAGE>
COMMON STOCK OWNERSHIP
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of January 25, 1997 (i) of each
person (or group of affiliated persons) who is known by the Company to own
beneficially more than 5% of the Common Stock, (ii) of the Company's directors
and named executive officers and (iii) of all directors and executive officers
as a group.
<TABLE>
<CAPTION>
Number of Shares Percent of
Beneficial Owner Beneficially Owned(1) Total
- ---------------- --------------------- -----
<S> <C> <C>
John F. Beaudette(2) 152,000 4.1%
MHW, Ltd.
1165 Northern Boulevard
Manhasset, New York 11030
Peter W. H. Bordeaux(3) 272,067 7.2
One Galleria Boulevard, Suite 1714
Metairie, Louisiana 70001
Federico G. Cabo Alvarez(4) 914,400 24.7
Cabo Distributing Co.
9657 East Rush Street
South Elmonte, California 91733
David K. Haines 380,000 10.3
J.P. Walsh & Co. Ltd.
Block F (8th Floor) 3-3G Robinson Road
Hong Kong
Steven A. Rothstein 3,160(6) (7)
National Securities Corporation
875 North Michigan Avenue, Suite 1560
Chicago, Illinois 60611
All executive officers and directors as a group 1,721,627 46.2%
(eleven persons)(2)(3)(5)(6)
</TABLE>
- ------------------------------
(1) Applicable percentage ownership, except as described in note 3 to this
table, is based on 3,696,876 shares of Common Stock outstanding as of the
date hereof. Beneficial ownership is determined in accordance with the rules
of the Commission and generally includes voting or investment power with
respect to securities, subject to community property laws, where applicable.
(2) Represents shares of Common Stock held of record by BPW. Messrs. Beaudette
(a director of the Company), Edmund Piccolino (former Vice President of
Human Resources for PepsiCo. International, a division of PepsiCo Inc.) and
Peter Warren (former President of PepsiCo. International and a former
director of PepsiCo. Inc.) each own one third of the membership interest of
BPW.
(3) Includes Mr. Bordeaux's vested options to purchase 66,667 shares of Common
Stock. Mr. Bordeaux's percentage of outstanding shares was calculated by
adding to the number of outstanding shares 66,667 shares deemed to be issued
pursuant to Securities Exchange Act Rule 13d-3(d)(1).
(4) Excludes warrants to purchase 5,700 shares of Common Stock held by Diane
Elizabeth Cabo. Ms. Cabo is Mr. Cabo's daughter. Mr. Cabo disclaims
beneficial ownership of the shares underlying Ms. Cabo's warrants.
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<PAGE>
<PAGE>
(5) None of Messrs. Carver, Heid, Jarvie, McDonnell and Miss Townsend, directors
of AmBrew International, and Mr. Ake, the Executive Vice President and Chief
Operating Officer of AmBrew International, beneficially own any shares of
Common Stock.
(6) Represents warrants to purchase 3,160 shares of Common Stock owned by Mr.
Rothstein, which warrants are exercisable within 60 days of the date hereof.
(7) Less than 1%. Mr. Rothstein's percentage of outstanding shares was
calculated by adding to the number of outstanding shares 3,160 shares deemed
to be issued pursuant to Securities Exchange Act Rule 13d-3(d)(1).
CERTAIN INFORMATION REGARDING EXECUTIVE OFFICERS
The Summary Compensation Table below sets forth the cash compensation
earned by or paid to the Company's Chief Operating Officer for the fiscal year
ended October 31, 1996. None of the Company's employees had individual salary
and bonus in excess of $100,000 during the fiscal year ended October 31, 1996,
and the Company did not have a Chief Executive Officer during the fiscal year
then ended.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation(1)
------------------- --------------------------
Name Option Long
and & Term
Principal Warrant Incentive All Other
Year Salary(2) Bonus(3) Other(4) Position Awards Payouts Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James L. Ake 1996 $22,916.67(5) __ __ __ __ __ __
Executive Vice __ __ __ __ __ __
President and __ __ __ __ __ __
Chief Operating
Officer
</TABLE>
- ----------
(1) The Company has no long-term incentive compensation plans other than the
Stock Option Plan. No options were granted under the plan in 1996.
(2) Amounts shown include compensation deferred pursuant to Section 401(k) of
the Internal Revenue Code of 1986, as amended.
(3) The Company has no formal bonus plan and does not provide for deferred
awards. The Company may pay bonuses based on individual and Company
performance.
(4) The aggregate amount of Other Annual Compensation for Mr. Ake did not equal
or exceed the lesser of $50,000 or 10% of his base salary and bonus for the
year ended October 31, 1996.
(5) Includes $14,250 received as compensation by Mr. Ake prior to the effective
date of his Employment Agreement with the Company, and $8,667.67 received
after the effective date of the Employment Agreement. Mr. Ake's annual
salary is currently $72,000.
Set forth below as to Mr. Ake and certain significant employees
of the Company who are not members of the Board of Directors is his or her age,
a brief description of the principal occupation and business experience during
the past five years, directorships of certain companies presently held by such
persons, and certain other information, which information has been furnished by
the respective individuals.
James L. Ake, age 52, has been the Executive Vice President and
Chief Operating Officer of AmBrew International since June 5, 1996 and has been
associated with its subsidiaries since
-8-
<PAGE>
<PAGE>
August 9, 1994. Mr. Ake has been President of AmBrew USA, AmBrew International's
U.S. subsidiary, since December 1996. Before joining the Company, Mr. Ake had
been the Director of Financial Analysis and Planning for Sazerac since 1993
where he was responsible for expansion of operations overseas with emphasis on
ventures in the Pacific Rim countries. In addition, since November 1994, Mr. Ake
has served as Managing Director of Concorde. Prior to joining Sazerac, Mr. Ake
was a director in Zapata-Haynie Corporation in Hammond, Louisiana, the largest
fishing company in the United States, where Mr. Ake was responsible for
corporate planning and oversaw profitability and development of various
departments. Mr. Ake is a registered engineer and is a member of the Board of
Directors of the Japan-Louisiana Friendship Foundation.
Nancy R. Hernandez, age 28, joined the Company in December 1996
as the Company's Controller. Before joining the Company, Ms. Hernandez was the
Accounting Manager for Tropical Export Co., a global exporter of industrial and
automotive parts and equipment, from 1993 to 1996. Ms. Hernandez had been with
Tropical Export since 1986. During 1995 and 1996 Ms. Hernandez also served as
Treasurer for Tropical Sales Ltd., a truck parts and equipment retail store.
Stephen B. Armstrong, age 34, joined the Company in connection
with the Company's acquisition of AmBrew USA (formerly Atlantis Import Company
("Atlantis")). Mr. Armstrong is the Executive Vice President and General Manager
of AmBrew USA. Before joining the Company, Mr. Armstrong was the founder and
President of Atlantis, a national beer importer, from 1994 through 1996. From
1992 to 1996, Mr. Armstrong served as Vice President and Director of Sales and
Marketing for Dixie Brewing Company, a regional brewery located in New Orleans,
Louisiana.
Scott Ashen, age 28, has been General Manager of the South China
Brewery since January 1997, and has been an employee of the South China Brewery
since 1995. Before joining the Company and since April, 1994, Mr. Ashen opened
and operated, as Managing Partner, The Pour House, a pub on the upper East side
of Manhattan, New York. Mr. Ashen was a manager of Nichimen America Inc., a
Japanese trading company, from June 1990 until December, 1993.
Edward Cruise Miller, age 27, has been the Head Brewer at the
South China Brewery since May 15, 1995. From June 1994 through May 1995, Mr.
Miller was one of the five brewers at the Thomas Kemper Brewery, a subsidiary of
Hart Brewing Company, in Poulsbo, Washington. From November 1990 through May
1994, Mr. Miller was employed at Broad Ripple Brew Company, a brew pub in
Indianapolis, Indiana. He was an Assistant Brewer at Broad Ripple from November
1990 through December 1992 and was Head Brewer from January 1993 through May
1994.
Dean McGuiness, age 24, is the General Manager of Celtic Brew,
LLC, the Company's majority-owned brewery in Enfield, Ireland. Mr. McGuiness has
completed the intensive brewing program at the Siebel Brewing Institute. Before
joining the Company in August 1996, Mr. McGuiness acted as consultant and
Marketing Manager for TourIT Ltd, a market research firm, where he developed and
implemented numerous marketing strategies using the Internet for promotional
efforts, travel reservations, market research and integrated information
management. During 1994 and 1995 Mr. McGuiness acted as consultant to various
service management companies, including Market Research Consultancy and the
Centre for Quality
-9-
<PAGE>
<PAGE>
Service Management. Mr. McGuiness earned his Bachelor of Commerce and Masters of
Business Studies during 1989-1994. McGuiness is the son of Mr. Adian McGuiness,
the Company's joint venture partner.
STOCK OPTION GRANTS
The Company has no long-term incentive compensation plan other
than the Stock Option Plan. No options were granted under that plan in 1996.
EMPLOYMENT AGREEMENTS
On June 14, 1996, the Company entered into an Employment
Agreement with Mr. Ake. The Agreement is for a term of two years and provides
that Mr. Ake shall receive an annual salary of $72,000 along with health and
life insurance and the use of a Company car. Mr. Ake is entitled, under the
terms of the Agreement, to participate in the Company's Stock Option Plan. No
options were granted under the plan in 1996.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change
in the cumulative return to the shareholders of the Company's Common Stock with
the cumulative return of the Nasdaq Composite and of a Peer Group for the period
commencing September 11, 1996 (the date of the Company's initial public
offering) and ending on October 31, 1996. Returns for the indicies are weighted
based on market capitalization.
[GRAPH]
-10-
<PAGE>
<PAGE>
TOTAL RETURN ANALYSIS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
9/11/96 9/18/96 10/1/96 10/8/96 10/22/96 10/31/96
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
American Craft Brewing Int'l $ 100 $ 99 $ 101 $ 101 $ 94 $ 67
- -----------------------------------------------------------------------------------------------
Peer Group $ 100 $ 97 $ 99 $ 88 $ 79 $ 75
- -----------------------------------------------------------------------------------------------
Nasdaq Composite (US) $ 100 $ 105 $ 106 $ 107 $ 106 $ 106
- -----------------------------------------------------------------------------------------------
Source: Carl Thompson Associates www.ctaonline.com (303) 494-5472. Data from Bloomberg Financial Markets
</TABLE>
The Company's peer group, selected by the Company in good faith,
is comprised of six other publicly traded craft brewing companies: Nor'Wester
Brewing Company, Inc.; Pyramid Breweries, Inc.; Frederick Brewing Co.; Michigan
Brewery, Inc.; Lion Brewery, Inc.; and Redhook Ale Brewery Incorporated.
CERTAIN TRANSACTIONS
On March 31, 1995, the South China Brewery borrowed $565,000 from
Hibernia National Bank. The loan was evidenced by a promissory note with
principal payments due on September 30, 1996 and March 31, 1997 bearing a
Citibank prime plus 0.5% interest rate. Sazerac provided a $250,000 guarantee
for the Hibernia Loan. Norman H. Brown, Jr., a director at the time of the
Company, and Federico G. Cabo Alvarez, a director then and now of AmBrew
International, provided standby letters of credit in the total amount of
$315,000. Peter W. H. Bordeaux is President and Chief Executive Officer of
Sazerac and Chairman of the Board of Directors of the Company as well as
Chairman of the International Advisory Council of Hibernia National Bank (New
Orleans). The amount due had been reduced to $452,000 through principal
repayments by AmBrew International. The loan was repaid with proceeds from the
Offering.
The South China Brewery borrowed $65,000 from BPW evidenced by a
Limited Recourse Promissory Note dated as of March 5, 1996 and due ten days
after the date of the Prospectus bearing an interest rate of 5.5%. John F.
Beaudette, a director of AmBrew International, is President of BPW. The note was
repaid with proceeds from the Offering.
In May 1996, Craft issued $370,000 principal amount of
convertible Bridge Notes to certain investors in Singapore and Hong Kong bearing
an interest rate of 12%. Holders of $250,000 principal amount of the Bridge
Notes converted such Bridge Notes, upon the consummation of the Offering, into
94,255 Shares of Common Stock. The holder of the remaining $120,000 principal
amount of Bridge Notes received 22,621 Shares of Common Stock at no cost. Each
holder of a Bridge Note received a Bridge Warrant entitling such holder to
purchase that number of shares of Common Stock as such holder received. Micro
Brew Systems held $20,000 principal amount of the Bridge Notes.
In January, 1997, the Company entered into a lease at a current
monthly rent of $6,625 with Corporation Calfik, a company wholly-owned by
Federico G. Cabo Alvarez, one of AmBrew International's directors and principal
shareholders, to lease a 21,443 square foot facility near the Mexico-United
States border at which the Company intends to operate the Tecate expansion
brewery and warehouse facility. The lease term is five years with yearly
incremental rent
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increases ending on September 12, 2001 for a total operating lease commitment
over the five-year period ending September 11, 2001 of $417,323.
Pursuant to the employment agreement between Mr. Bordeaux and the
Company dated February 12, 1997, the Company agreed to loan to Mr. Bordeaux an
amount equal to $200,000 with interest payable quarterly in arrears at a rate
per annum equal to the prime rate of interest as reported in The Wall Street
Journal changing as and when such prime rate shall change. Mr. Bordeaux will be
required to repay this amount, including accrued interest, on the fifth
anniversary of the date of his Employment Agreement or upon termination of his
employment by the Company for Cause (as defined in the Employment Agreement) or
if terminated by Mr. Bordeaux, unless his employment has been constructively
terminated.
Mr. Rothstein is Chairman of the Board of National Securities
Corporation, a securities broker-dealer which performed investment banking
services in connection with the Offering. In connection with such services,
National Securities Corporation received underwriting fees and discounts.
The Company has adopted a policy whereby transactions between the
Company and its officers, directors, principal stockholders and any affiliates
of the foregoing persons are made on terms no less favorable to the Company than
could reasonably be obtained in an arms length transaction with independent
third parties, and that any such transactions also be approved by a majority of
the Company's disinterested outside directors.
PROPOSAL 2--APPROVAL OF AMENDMENTS TO
THE COMPANY'S 1996 STOCK OPTION PLAN
The shareholders of the Corporation are asked to approve certain
amendments to the Company's 1996 Stock Option Plan ("the Plan") to increase the
number of shares of Common Stock reserved for issuance thereunder and to ensure
that stock options granted under the Plan continue to qualify as
performance-based compensation within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). The Board of Directors
approved these amendments to the Plan on March 14, 1997, subject to shareholder
approval at the annual meeting.
PROPOSED AMENDMENTS TO THE PLAN
The first amendment would increase the number of shares of Common
Stock reserved for issuance under the Plan by an additional 300,000 shares to a
total of 600,000 shares. The Company believes that such options are necessary to
attract and retain the services of directors, officers and employees and to
provide added incentive to such persons through their ownership of the Company's
Common Stock.
The second amendment responds to the final Treasury Department
regulations under Section 162(m) of the Code, which were issued on December 20,
1995. Section 162(m) generally provides that certain compensation payments in
excess of $1 million made by a
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corporation to its chief executive officer and its four other most highly
compensated officers are not deductible by the corporation. The $1 million limit
does not apply to certain performance-based compensation, such as options, and
the proposed amendments seek to maintain such deductibility of options granted
under the Plan. The proposed amendment to the Plan would provide, as required by
the regulations, that (i) the Plan will be administered by a committee comprised
solely of two or more outside directors, and (ii) the maximum number of options
that may be granted to a single person in a calendar year is 300,000. These
provisions ensure that options granted under the Plan will constitute
performance-based compensation within the meaning of Section 162(m) of the Code.
NEW PLAN BENEFITS
The Company is unable to determine the dollar value and number of
options or shares of Common Stock that will be issued under the Amendments to
the 1996 Stock Option Plan if the amendment described herein is approved to (i)
any of the executive officers, (ii) the current executive officers as a group,
(iii) the current directors who are not executive officers as a group, (iv) each
nominee for election as a director and (v) the employees who are not executive
officers as a group, because, except for non-discretionary option grants to
non-employee directors described above, options are granted on a discretionary
basis. The Company is unable to determine the benefits or amounts which would
have been received by or allocated to any such persons or groups for fiscal 1996
if the amendment to the 1996 Stock Option Plan had been in effect throughout
such year.
SUMMARY OF THE STOCK OPTION PLAN
General. The following description of the Plan is a summary that
does not give effect to any of the proposed amendments. The summary, however,
does not purport to be a complete description of all the provisions of the Plan.
Any shareholder of the Company who wishes to obtain a copy of the actual plan
document may do so upon written request to the Corporate Secretary at the
Company's principal executive offices in Metairie, Louisiana.
The Plan was adopted by the Company's Board of Directors on July
18, 1996 and approved by its stockholders on that date, prior to the Company's
initial public offering. The Company reserved 300,000 authorized but unissued
shares of Common Stock for issuance under the Plan. The purpose of the Plan is
to provide key employees (including officers) and independent contractors of the
Company (including its subsidiaries) with additional incentives by increasing
their equity ownership in the Company.
Options granted under the Plan are intended to qualify as
incentive stock options ("ISOs") under Section 422 of the Code. The Plan is
intended to satisfy the conditions of Section 16 of the Exchange Act pursuant to
Rule 16b-3.
The Plan is administered by a committee of the Company's Board of
Directors comprised of at least two non-employee directors who are
"disinterested" within the meaning of Rule 16b-3 (the "Stock Option Committee").
Subject to the terms of the Plan, the Stock Option
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Committee has the sole authority and discretion to grant options, construe the
terms of the plan and make all other determinations and take all other action
with respect to the Plan.
Options are exercisable during the period specified by the Stock
Option Committee, except that options become immediately exercisable in the
event of a Change in Control (as defined in the Plan) of the Company and in the
event of certain mergers and reorganizations of the Company. Generally, options
vest over a five-year period. No option will be exercisable more than 10 years
from the date of grant (or five years in the case of ISOs granted to holders of
more than 10% of the Common Stock) or after the option holder ceases to be an
employee or independent contractor of the Company; provided that the Stock
Option Committee may permit an employee or independent contractor to exercise
options after such employee or independent contractor ceases to be an employee
or independent contractor, as the case may be, in the event of certain
circumstances specified in the documentation of the grant of the option, but in
no event will any option be exercisable after its expiration date. Options are
nontransferable, except by will or the laws of intestate succession. Shares
underlying options that terminate unexercised are available for reissuance under
the Plan.
The per share exercise price of options granted under the Plan
may not be less than 100% of the Fair Market Value (as defined in the Plan) of a
share of the Company's Common Stock on the date of grant (or 110% in the case of
ISOs granted to employees owning more than 10% of the Common Stock).
Certain Federal Income Tax Consequences. The following is a brief
summary of the significant aspects of current federal income tax treatment of
the stock options that may be granted under the Plan. This summary does not
discuss provisions of the Code that generally limit the tax deductibility of the
Company's compensation expense.
The grant of a stock option will not result in tax consequences
to the Company or the optionee. Upon the exercise of an option and the transfer
to the optionee of shares of Common Stock, the tax treatment depends upon
whether the option is a nonqualified stock option or an ISO.
Non-Qualified Stock Options. When a nonqualified option is
exercised, the optionee will realize compensation taxable as ordinary income in
an amount equal to the difference between the option price and the Fair Market
Value of the shares of Common Stock on the date of exercise, and the Company
will have a deductible expense in the same amount. The optionee's basis in such
shares of Common Stock will generally be the Fair Market Value of such shares of
Common Stock on the date of exercise. When the optionee disposes of such shares
of Common Stock, the difference between the amount received and the Fair Market
Value of the shares of Common Stock on the date of exercise will be treated as
long-term or short-term capital gain or loss, depending upon the optionee's
holding period for the shares of Common Stock. However, when a person subject to
Section 16(b) of the Securities Exchange Act acquires shares of Common Stock
upon the exercise of a nonqualified stock option, the ordinary income and the
Company's corresponding deduction attributable to such exercise will be
recognized six months after the date of exercise. The amount of such income and
deduction will equal the difference
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between the Fair Market Value of the shares of Common Stock at that later date
and the option exercise price, unless an election under Section 83(b) of the
Code is filed by the optionee within thirty days after exercise, in which case
the inclusion of income and corresponding deduction will occur at the time of
exercise.
Incentive Stock Options. When an ISO is exercised, the optionee
will not realize any income and the Company will not be allowed any deduction if
certain conditions regarding the optionee's period of employment with the
Company are met and if the optionee does not dispose of the shares of Common
Stock within two years after the option was granted or within one year after the
optionee acquired the shares of Common Stock. In the event of a sale of the
shares of Common Stock after compliance with these conditions, the resulting
gain or loss will ordinarily be treated as long-term capital gain or loss. The
basis to the optionee of shares of Common Stock acquired upon the exercise of an
incentive stock option for cash will be the exercise price.
The amount by which the Fair Market Value of the shares of Common
Stock at the time of exercise exceeds the price paid for such shares of Common
Stock by the optionee will be an item of tax preference for purposes of the
alternative minimum tax.
If the optionee of an ISO fails to comply with the condition
regarding his period of employment, the optionee is taxed as if he had exercised
a nonqualified option, and the Company will have a deductible expense upon
exercise equal to the compensation income recognized by the optionee. If the
optionee fails to comply with the condition regarding the holding period of
shares of Common Stock, he will be treated as having received compensation
taxable as ordinary income at the time of his disposition of the shares of
Common Stock equal to the excess of the value of his shares of Common Stock on
the date of exercise of his option over the exercise price, except that if his
disposition is in an arm's-length sale, the amount treated as compensation and
deductible by the Company cannot exceed his gain on the sale. Any gain in excess
of the amount treated as compensation will be treated as long-term or short-term
capital gain depending on the optionee's holding period for the shares of Common
Stock.
The exercise of an option by the exchange of shares of Common
Stock already owned by the optionee will not result in any taxable gain or loss
on the unrealized appreciation of the shares of Common Stock so used, except
where the optionee, in payment of the option price of an ISO, transfers shares
of Common Stock which he originally acquired through a prior exercise of an
incentive stock option in violation of the holding period condition referred to
above.
If the Company acquires stock options from an optionee for a cash
payment (including a deemed cash payment for the optionee's surrender of all or
part of an option in exchange for the cashless exercise of the remaining or
another option), the optionee will, at the time of payment or exercise,
recognize ordinary income equal to the amount of cash paid or deemed paid and
the Company will have a deductible expense equal to the amount of such ordinary
income.
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Options Granted Through the Record Date. No options were granted during
fiscal 1996. Mr. Bordeaux was granted 200,000 non-qualified options under the
Plan in February 1997.
VOTE REQUIRED
The affirmative vote of a majority of the votes cast at the
annual meeting is required to approve the proposed amendments to the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 2.
PROPOSAL 3--SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected the firm of Arthur Andersen
LLP to serve as independent auditors of the Company for 1997. Arthur Andersen
LLP has served as independent auditors of the Company since 1995.
One or more representatives of Arthur Andersen LLP will be
present at the annual meeting, will have an opportunity to make a statement if
he or she so desires and will be available to respond to appropriate questions.
VOTE REQUIRED
The affirmative vote of a majority of the votes cast at the
annual meeting is required to approve the selection of Arthur Andersen LLP as
the Company's independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 3
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES AND EXCHANGE ACT
None of the Company's officers, directors or ten percent security
holders failed to file on a timely basis reports required by Section 16(a)
during fiscal 1996.
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 1996, which includes audited financial statements, as filed
with the Securities and Exchange Commission, accompanies this Proxy Statement.
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STOCKHOLDER PROPOSALS
Any stockholder proposals intended to be presented at the
Company's 1998 annual meeting of stockholders must be received no later than
December 31, 1997 in order to be considered for inclusion in the Proxy Statement
and form of proxy to be distributed by the Board of Directors in connection with
such meeting.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company.
In an effort to have as large a representation at the meeting as possible,
special solicitation of proxies may, in certain instances, be made personally or
by telephone, facsimile or mail by one or more employees of the Company. The
Company also may reimburse brokers, banks, nominees and other fiduciaries for
postage and reasonable clerical expenses of forwarding the proxy material to
their principals who are beneficial owners of Common Stock.
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 persons named in
this Proxy Statement will act in respect thereof in accordance with their best
judgment.
By Order of the Board of Directors,
JAMES L. AKE
Executive Vice President, Chief
Operating Officer and Secretary
March 20, 1997
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APPENDIX I -- PROXY CARD
[ ]
<TABLE>
<S> <C> <C>
1. Election of Directors FOR all nominees [X] WITHHOLD AUTHORITY to vote [X] *EXCEPTIONS [X]
listed below for all nominees listed
below
</TABLE>
Nominees: Peter W. H. Bordeaux, John F. Beaudette, Federico G. Cabo Alvarez,
Wyndham H. Carver, David K. Haines, Joseph E. Heid, Charles L. Jarvie,
Edward F. McDonnell, Suzanna E. Townsend and Steven A. Rothstein
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions ____________________________________________________________________
<TABLE>
<S> <C>
2. To approve certain amendments to the Company's 3. To ratify and approve the selection by the
1996 Stock Option Plan. Board of Directors of Arthur Andersen LLP as
independent public accountants for the
FOR [X] AGAINST [X] ABSTAIN [X] Company for the fiscal year ending October
31, 1997.
In their discretion the Proxies are authorized to FOR [X] AGAINST [X] ABSTAIN [X]
vote upon such other matters as may properly come
before the meeting or any adjournment or postpone-
ment thereof. Change of Address and
or Comments Mark Here [X]
</TABLE>
The signature on this Proxy should correspond
exactly with stockholder's name as printed to
the left. In the case of joint tenancies, co-
executors, or co-trustees, both should sign.
Persons signing as Attorney, Executor,
Administrator, Trustee or Guardian should
give their full title.
DATED: , 1997
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Signature
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Signature
PLEASE SIGN, DATE AND RETURN VOTES MUST BE INDICATED
THIS PROXY IN THE ENCLOSED (X) IN BLACK OR BLUE INK. [X]
PREPAID ENVELOPE.
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AMERICAN CRAFT BREWING INTERNATIONAL LIMITED
PROXY/VOTING INSTRUCTION CARD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AMERICAN CRAFT
BREWING INTERNATIONAL LIMITED
FOR THE ANNUAL MEETING ON APRIL 22, 1997
The undersigned appoints Peter W. H. Bordeaux and James L. Ake, and each of
them, with full power of substitution in each, the proxies of the undersigned,
to represent the undersigned and vote all shares of American Craft Brewing
International Limited Common Stock which the undersigned may be entitled to vote
at the Annual Meeting of Stockholders to be held on April 22, 1997, and at any
adjournment or postponement thereof, as indicated on the reverse side.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2 AND 3.
(Continued, and to be signed and dated on the reverse side.)
AMERICAN CRAFT BREWING INTERNATIONAL LIMITED
P.O. BOX 11338
NEW YORK, N.Y. 10203-0338
