<PAGE> 1
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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Anheuser-Busch Companies, Inc.
----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
JoBeth G. Brown
----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*1*
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4) Proposed maximum aggregate value of transaction:
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*1* Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
<PAGE> 2
ANHEUSER-BUSCH COMPANIES, INC.
NOTICE OF 1994
ANNUAL MEETING OF
SHAREHOLDERS AND
PROXY STATEMENT
YOUR VOTE IS IMPORTANT!
PLEASE PROMPTLY MARK, DATE, SIGN, AND RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE.
<PAGE>
<PAGE> 3
ANHEUSER-BUSCH COMPANIES, INC.
March 10, 1994
Dear Shareholder:
On behalf of the Board of Directors, it is my pleasure to invite you
to attend the Annual Meeting of Shareholders of Anheuser-Busch
Companies, Inc. on Wednesday, April 27, 1994, in Los Angeles,
California. Information about the meeting is presented on the following
pages.
In addition to the formal items of business to be brought before the
meeting, members of management will report on the company's operations
and answer shareholder questions.
Your vote is very important. Please ensure that your shares will be
represented at the meeting by completing, signing, and returning your
proxy card in the envelope provided, even if you plan to attend the
meeting. Sending us your proxy will not prevent you from voting in
person at the meeting should you wish to do so.
Thank you for your continued support of Anheuser-Busch. We look
forward to seeing you on April 27th.
Sincerely,
AUGUST A. BUSCH III
Chairman of the Board and President
<PAGE>
<PAGE> 4
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 1994
The Annual Meeting of the Shareholders of Anheuser-Busch Companies,
Inc. (the "Company") will be held at the Academy Plaza Theatre, 5230
Lankershim Boulevard, Los Angeles, California, on Wednesday, April 27,
1994, at 10:00 A.M. local time, for the following purposes:
1. To elect five directors, each to serve for a term of three years;
2. To approve amendments to the 1989 Incentive Stock Plan as
described on pages 8-12 in the proxy statement;
3. To approve the employment of Price Waterhouse, as independent
accountants, to audit the books and accounts of the Company for
1994;
4. To consider, if presented at the meeting, proposals submitted by
certain shareholders as described on pages 12-15 in the proxy
statement; and
5. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on February
28, 1994, as the record date for the determination of shareholders
entitled to notice of and to vote at the meeting. A list of such
shareholders will be available during regular business hours at the
Company's office, 15800 Roscoe Boulevard, Van Nuys, California for the
ten days before the meeting, for inspection by any shareholder for any
purpose germane to the meeting.
By Order of the Board of Directors,
JoBeth G. Brown
Vice President and Secretary
March 10, 1994
IMPORTANT
PLEASE NOTE THAT A TICKET IS REQUIRED FOR ADMISSION TO THE MEETING.
IF YOU PLAN TO ATTEND AND YOU ARE A STOCKHOLDER AS OF THE RECORD DATE,
PLEASE CHECK THE APPROPRIATE BOX ON YOUR PROXY CARD AND WE WILL SEND A
TICKET TO YOU. IF, HOWEVER, YOUR SHARES ARE HELD IN THE NAME OF A
BROKER OR OTHER NOMINEE, PLEASE BRING WITH YOU A PROXY OR LETTER FROM
THAT FIRM CONFIRMING YOUR OWNERSHIP OF SHARES.
<PAGE> 5
ANHEUSER-BUSCH COMPANIES, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Anheuser-Busch Companies, Inc.
(the "Company") for use at the Annual Meeting of Shareholders of the
Company to be held at the time and place and for the purposes set forth
in the foregoing Notice of Annual Meeting of Shareholders. The address
of the Company's principal executive office is One Busch Place, St.
Louis, Missouri 63118. This Proxy Statement and the form of proxy are
being mailed to shareholders on or about March 11, 1994.
REVOCABILITY OF PROXY AND VOTING OF PROXY
A proxy given by a shareholder may be revoked at any time before it
is exercised by giving another proxy bearing a later date, by notifying
the Secretary of the Company in writing of such revocation at any time
before the proxy is exercised, or by attending the meeting in person
and casting a ballot. Any proxy returned to the Company will be voted
in accordance with the instructions indicated thereon. If no
instructions are indicated on the proxy, the proxy will be voted for
the election of the five nominees for directors named herein and in
favor of Items 2 and 3, and against the shareholder proposals included
in Item 4 described in the Notice of Annual Meeting. The Company knows
of no reason why any of the nominees named herein would be unable to
serve. In the event, however, that any nominee named should, prior to
the election, become unable to serve as a director, the proxy will be
voted in accordance with the best judgment of the Proxy Committee named
therein. The Board of Directors knows of no matters, other than as
described herein, that are to be presented at the meeting, but if
matters other than those herein mentioned properly come before the
meeting, the proxy will be voted by that Committee in a manner that the
members of the Committee (in their judgment) consider to be in the best
interests of the Company.
POLICY OF CONFIDENTIAL VOTING
It is the policy of the Company that all proxies, ballots, and vote
tabulations that identify the vote of a shareholder will be kept
confidential from the Company, its directors, officers, and employees
until after the final vote is tabulated and announced, except in
limited circumstances including any contested solicitation of proxies,
when required to meet a legal requirement, to defend a claim against
the Company or to assert a claim by the Company, and when written
comments by a shareholder appear on a proxy card or other voting
material. The Company continues its long-standing practice of retaining
an independent tabulator to receive and tabulate the proxies and
independent inspectors of election to certify the results.
RECORD DATE AND VOTING RIGHTS
Only shareholders of record at the close of business on February 28,
1994, are entitled to vote at the meeting. On such record date the
Company had outstanding and entitled to vote 265,896,290 shares of
common stock. Each shareholder entitled to vote shall have one vote for
each share of common stock registered in such shareholder's name on the
books of the Company as of the record date.
A majority of the outstanding shares entitled to vote must be
represented in person or by proxy at the meeting in order to conduct
the election of directors and other matters mentioned in this Proxy
Statement. If such a majority is represented at the meeting, then the
five nominees for director who receive the highest number of the votes
cast will be elected. The other matters require the approving vote of
at least a majority of the votes cast. Except for the vote on Item 2,
proxies for shares marked "abstain" on a matter will be considered to
be represented at the meeting, but not voted, for these purposes. (See
page 12 for an explanation of the treatment of abstentions with respect
to Item 2.) Shares registered in the names of brokers or other "street
name" nominees for which proxies are voted on some but not all matters
will be considered to be represented at the meeting, but will be
considered to be voted only as to those matters actually voted.
The only person known by the Company to be the beneficial owner of
more than 5% of the outstanding voting securities of the Company is:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
COMMON SHARES CLASS
NAME AND ADDRESS AS OF 12/31/93 ON 12/31/93
---------------- -------------- -----------
<S> <C> <C>
Boatmen's Bancshares, Inc. and its subsidiaries 18,773,451(a) 7.0%
100 N. Broadway
St. Louis, MO 63102
<FN>
- - - -----
(a) Boatmen's Bancshares, Inc. and its subsidiaries have sole voting
power as to 10,128,944 shares, shared voting power as to 8,405,426
shares, sole investment power as to 6,560,208 shares, and shared
investment power as to 9,455,980 shares.
</TABLE>
2
<PAGE>
<PAGE> 6
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
The Board of Directors of the Company is divided into three Groups,
with the term of office of each Group ending in successive years. The
term of directors of Group III expires with this Annual Meeting. The
terms of directors of Group I and Group II expire with the Annual
Meetings in 1995 and 1996, respectively.
The following information is submitted respecting the nominees for
election and the other directors of the Company:
NOMINEES FOR ELECTION AT THIS MEETING TO A TERM EXPIRING IN 1997 (GROUP
III DIRECTORS):
ANDREW B. CRAIG III
Mr. Craig, 62, has been a director since 1990. He is
Chairman of the Board, President, and Chief Executive
Officer of Boatmen's Bancshares, Inc. He has been
Chairman since 1989, Chief Executive Officer since
1988, and President since 1985. He was Chairman of the
Board of Boatmen's National Bank of St. Louis from 1985
until January 1992. He is also a director of Laclede
Gas Company and Petrolite Corporation. Mr. Craig is a
member of the Conflict of Interest, Executive,
Executive Salaries, and Incentive Stock Plan
Committees.
BERNARD A. EDISON
Mr. Edison, 65, has been a director since 1985. He was
President of Edison Brothers Stores, Inc., a group of
retail specialty stores, from 1968 until his retirement
in 1987, Chairman of its Finance Committee from 1987
until 1989, and has served as Director Emeritus since
1989. He is also a director of General American Life
Insurance Co., Mercantile Bancorporation, Inc., and
Reinsurance Group of America, Inc. Mr. Edison is
Chairman of the Executive Salaries and Incentive Stock
Plan Committees and is a member of the Audit,
Executive, and Shareholder Meetings Committees.
VERNON R. LOUCKS, JR.
Mr. Loucks, 59, has been a director since 1988. He is
Chairman of the Board and Chief Executive Officer of
Baxter International Inc., a manufacturer of health
care products, specialty chemicals, and instruments. He
has been Chairman since 1987 and Chief Executive
Officer since 1980. He is also a director of Dun &
Bradstreet Corporation, Emerson Electric Co., and The
Quaker Oats Company. Mr. Loucks is a member of the
Audit, Conflict of Interest, Executive Salaries,
Nominating, and Incentive Stock Plan Committees.
VILMA S. MARTINEZ
Ms. Martinez, 50, has been a director since 1983. She
has been a partner in the law firm of Munger, Tolles &
Olson since 1982. She is also a director of Fluor
Corporation and Sanwa Bank California. Ms. Martinez is
a member of the Executive Salaries, Finance, Pension,
and Incentive Stock Plan Committees.
EDWARD E. WHITACRE, JR.
Mr. Whitacre, 52, has been a director since 1988. He
has been Chairman of the Board and Chief Executive
Officer of Southwestern Bell Corporation since 1990. He
served as President and Chief Operating Officer from
October 1988 to September 1989. He is also a director
of Burlington Northern, Inc., Emerson Electric Co., and
The May Department Stores Company. Mr. Whitacre is
Chairman of the Pension Committee and is a member of
the Audit, Executive, Finance, and Nominating
Committees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THESE NOMINEES.
3
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<PAGE> 7
DIRECTORS WHOSE TERM CONTINUES UNTIL 1995 (GROUP I DIRECTORS):
PABLO ARAMBURUZABALA O.
Mr. Aramburuzabala, 62, has been a director since July
1993. He is Vice President of the Board of Directors of
Grupo Modelo, S.A. de C.V., a Mexican company engaged
in brewing and related operations, which position he
has held since November 1991. During the last five
years he has also served and continues to serve as Vice
President of the Board of the major production
subsidiaries of Grupo Modelo.
RICHARD T. BAKER
Mr. Baker, 76, has been a director since 1978. He was
Chairman of Ernst & Ernst (now Ernst & Young),
Certified Public Accountants, from 1964 until his
retirement in 1977. He has served as a consultant to
that firm since 1977. Mr. Baker is Chairman of the
Audit and Nominating Committees and is a member of the
Executive, Executive Salaries, Finance, and Incentive
Stock Plan Committees.
AUGUST A. BUSCH III
Mr. Busch, 56, has been a director since 1963. He is
Chairman of the Board and President of the Company. He
has been President since 1974, Chief Executive Officer
since 1975, and Chairman since 1977. He is also a
director of Emerson Electric Co., General American Life
Insurance Co., and Southwestern Bell Corporation. Mr.
Busch is Chairman of the Executive Committee and is a
member of the Nominating Committee.
PETER M. FLANIGAN
Mr. Flanigan, 70, has been a director since 1978. He is
a Director of the investment banking firm of Dillon,
Read & Co. Inc., where he was a Managing Director from
1975-1992. Mr. Flanigan is a member of the Executive,
Finance, Nominating, and Pension Committees.
DOUGLAS A. WARNER III
Mr. Warner, 47, has been a director since 1992. He has
been President and a director of J. P. Morgan & Co.
Incorporated ("Morgan") and Morgan Guaranty Trust
Company of New York (the "Bank") since January 1990 and
is a member of the Executive Committees of Morgan and
the Bank. He was a Managing Director of Morgan and the
Bank from February 1989 to January 1990, an Executive
Vice President of the Bank from May 1987 to February
1989 and of Morgan from January 1989 to February 1989.
He is also a director of General Electric Company. Mr.
Warner is a member of the Finance and Pension
Committees.
4
<PAGE>
<PAGE> 8
DIRECTORS WHOSE TERM CONTINUES UNTIL 1996 (GROUP II DIRECTORS):
JOHN E. JACOB
Mr. Jacob, 59, has been a director since 1990. He has
been President and Chief Executive Officer of the
National Urban League, Inc., a community-based social
service and advocacy agency, since 1982. He is also a
director of Coca-Cola Enterprises, Inc., Continental
Corporation, LTV Corporation, National Westminster
Bancorp Inc., and NYNEX-New York. Mr. Jacob is a member
of the Finance and Shareholder Meetings Committees.
CHARLES F. KNIGHT
Mr. Knight, 58, has been a director since 1987. He has
been Chairman of the Board and Chief Executive Officer
of Emerson Electric Co., a manufacturer of electrical
and electronic equipment, since 1974. He is also a
director of The British Petroleum Company p.l.c.,
Caterpillar, Inc., IBM Corporation, and Southwestern
Bell Corporation. Mr. Knight is Chairman of the
Conflict of Interest and Finance Committees and is a
member of the Executive and Nominating Committees.
SYBIL C. MOBLEY
Dr. Mobley, 68, has been a director since 1981. She has
been Dean of the School of Business and Industry at
Florida A & M University since 1974. She is also a
director of Champion International Corporation, Dean
Witter, Discover & Co., Hershey Foods Corporation,
Sears, Roebuck & Co., Southwestern Bell Corporation,
SBI Capital Management and Research Corporation, and
The SBI Fund, Inc. Dr. Mobley is a member of the Audit,
Conflict of Interest, and Pension Committees.
JAMES B. ORTHWEIN
Mr. Orthwein, 69, has been a director since 1963. He
served as Chairman of the Board and Chief Executive
Officer of the advertising agency D'Arcy MacManus
Masius Worldwide, Inc. (now D'Arcy Masius Benton &
Bowles) from 1976 until his retirement in 1982. In 1983
he helped form Huntleigh Asset Partners, L.P., a
private investment partnership of which he is presently
a partner. Mr. Orthwein is Chairman of the Shareholder
Meetings Committee and is a member of the Nominating
Committee.
WILLIAM H. WEBSTER
Judge Webster, 70, has been a director since 1991. He
has been a partner in the law firm of Milbank, Tweed,
Hadley & McCloy since September 1991. He was Director
of Central Intelligence from 1987 until September 1991.
He is also a director of Maritz, Inc. and Pinkerton's,
Inc. Judge Webster is a member of the Audit and
Conflict of Interest Committees.
5
<PAGE>
<PAGE> 9
<TABLE>
SECURITIES OWNED BY MANAGEMENT
The following table shows the number of shares of the Company's
common stock beneficially owned by the directors, each of the
executives named in the summary compensation table, and by all
directors and executive officers as a group as of the most recent
practicable date. The number of shares shown for each individual
represents less than 1% of the common stock outstanding. The number of
shares shown for all directors and executive officers as a group
represents 2.0% of the common stock outstanding. Individuals have sole
voting and investment power over the stock unless otherwise indicated
in the footnotes.
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK
NAME BENEFICIALLY OWNED
---- ------------------
<S> <C>
Pablo Aramburuzabala O........................... 1,100
Richard T. Baker................................. 33,900
Barry H. Beracha................................. 200,657(1)
August A. Busch III.............................. 1,587,506(2)
Andrew B. Craig III.............................. 2,000
Bernard A. Edison................................ 0(3)
Peter M. Flanigan................................ 647,046(4)
John E. Jacob.................................... 125
Charles F. Knight................................ 8,000
Vernon R. Loucks, Jr............................. 1,000
Vilma S. Martinez................................ 120
Sybil C. Mobley.................................. 702
James B. Orthwein................................ 1,301,703(5)
Jerry E. Ritter.................................. 286,879(6)
Michael J. Roarty................................ 42,947(7)
Patrick T. Stokes................................ 329,511(8)
Douglas A. Warner III............................ 1,000
William H. Webster............................... 1,000(9)
Edward E. Whitacre, Jr........................... 1,000
All directors and executive officers as
a group (29 persons)........................... 5,377,787(10)
<FN>
- - - -----
(1) The number of shares includes 138,491 shares that are subject to
currently exercisable stock options.
(2) The number of shares includes 349,618 shares that are subject to
currently exercisable stock options. Of the shares shown, Mr.
Busch has shared voting and shared investment power as to 244,959
shares and 512,016 shares are held in trusts of which Mr. Busch is
income beneficiary and as to which he has certain rights, but as
to which he has no voting or investment power. 53,660 shares
beneficially owned by Mr. Busch's wife are not included.
(3) Following the acquisition in 1989 by Edison Brothers Stores, Inc.
of an indirect interest in a retail liquor license, Mr. Edison
sold all shares of Company common stock owned by him to avoid any
possible conflicts with state alcoholic beverage control laws.
(4) Of the shares shown, Mr. Flanigan has shared voting and shared
investment power as to 492,900 shares. 12,000 shares owned by Mr.
Flanigan's wife are not included.
(5) Of the shares shown, Mr. Orthwein has shared voting and shared
investment power as to 165,668 shares. 10,300 shares owned by Mr.
Orthwein's wife are not included.
(6) The number of shares includes 227,871 shares that are subject to
currently exercisable stock options. 10,000 shares owned by Mr.
Ritter's wife are not included.
(7) The number of shares includes 12,468 shares that are subject to
currently exercisable stock options. Of the shares shown, Mr.
Roarty has shared voting and shared investment power as to 2,016
shares.
(8) The number of shares includes 231,751 shares that are subject to
currently exercisable stock options.
(9) Judge Webster has shared voting and shared investment power with
respect to the shares shown.
(10) The number of shares stated includes 1,570,128 shares that are
subject to currently exercisable stock options and 512,016 shares
that are referred to in Note 2. The directors and executive
officers as a group have sole voting and sole investment power as
to 2,389,100 shares and shared voting and shared investment power
as to 906,543 shares. 126,397 shares held by immediate family
members or family trusts are not included and beneficial ownership
of such shares is disclaimed.
</TABLE>
6
<PAGE>
<PAGE> 10
ADDITIONAL INFORMATION CONCERNING THE BOARD
OF DIRECTORS OF THE COMPANY
Regular meetings of the Board of Directors of the Company are
normally held each month, although one or two of such meetings may be
dispensed with during a calendar year. During 1993 the Board of
Directors held 10 meetings. No director attended fewer than 75% of the
aggregate of the total number of meetings of the Board of Directors and
of committees of the Board on which he or she served. In addition to
regularly scheduled meetings, a number of directors were involved in
numerous informal meetings with management, offering valuable advice
and suggestions on a broad range of corporate matters.
Each director who is not an employee of the Company is paid an annual
fee of $35,000 and a fee of $1,200 for each Board of Directors meeting
attended or dispensed with. In addition, each such director is paid a
fee of $1,000 for attendance at a meeting of a committee of the Board
and for any other meeting of directors at which less than a quorum of
the Board is present. Annual fees of $10,000 each are paid to the
Chairmen of the Audit, Conflict of Interest, Executive Salaries,
Finance, and Pension Committees. The Chairmen of the Nominating and
Shareholder Meetings Committees are each paid an annual fee of $3,000.
The Company also provides each non-employee director group term life
insurance coverage of $50,000.
Under a deferred compensation plan, non-employee directors may elect
to defer payment of part or all of their directors' fees. At the
election of the director, deferred amounts are credited to a fixed
income account or a share equivalent account. The amounts deferred
under the plan are paid in cash commencing on the date specified by the
director. At the director's election, such payments may be made either
in a lump sum or over a period not to exceed ten years.
A retirement plan for non-employee directors provides a monthly
retirement benefit for life for (a) non-employee directors who have
served for at least five years and who retire in accordance with the
Board's retirement policy and (b) non-employee directors who, without
regard to length of service, retire because of disability. The amount
of such monthly benefit is one-twelfth of the annual fee for directors
in effect on the director's retirement date. Any non-employee director
receiving benefits under this plan will continue to receive life
insurance coverage in an amount equal to that in effect as of the time
of his or her retirement. No individual who has been an employee of the
Company, and who is entitled to any benefit under any pension plan for
employees sponsored by the Company or any of its subsidiaries, is
eligible for benefits under this plan, regardless of the individual's
subsequent service as a non-employee director. A non-employee director
who serves as an advisory member of the Board following retirement is
not eligible for benefits under this program until he or she ceases to
be an advisory member.
Information concerning certain standing committees of the Board of
Directors is set out below:
AUDIT COMMITTEE
The functions of the Audit Committee are to recommend to the Board of
Directors the selection, retention or termination of the Company's
independent accountants; determine through consultation with management
the appropriateness of the scope of the various professional services
provided by the independent accountants, and consider the possible
effect of the performance of such services on the independence of the
accountants; review the arrangements and the proposed overall scope of
the annual audit with management and the independent accountants;
discuss matters of concern to the Audit Committee with the independent
accountants and management relating to the annual financial statements
and results of the audit; obtain from management, the independent
accountants and the Director of Internal Auditing their separate
opinions as to the adequacy of the Company's system of internal
accounting control; review with management and the independent
accountants the recommendations made by the accountants with respect to
changes in accounting procedures and internal accounting control;
receive reports from the Business Practices Committee regarding
implementation of and compliance with the Company's business ethics
policy and discuss with management any concerns the Audit Committee may
have with regard to the Company's business
7
<PAGE>
<PAGE> 11
practices; receive reports from the Environmental Policy Committee
regarding implementation of and compliance with the Company's
environmental policy and discuss with management any concerns the Audit
Committee may have with regard to the Company's environmental
practices; hold regularly scheduled meetings, separately and jointly,
with representatives of management, the independent accountants, and
the Director of Internal Auditing to make inquiries into and discuss
their activities; and review the overall activities of the Company's
internal auditors. During 1993 the Committee held four meetings.
NOMINATING COMMITTEE
The function of the Nominating Committee is to recommend to the Board
of Directors a slate of nominees for directors to be presented on
behalf of the Board for election by shareholders at each Annual Meeting
of the Company and to recommend to the Board persons to fill vacancies
on the Board of Directors. The Committee will consider nominees
recommended by shareholders upon submission in writing to the Secretary
of the Company the names of such nominees, together with their
qualifications for service as a director of the Company. During 1993
the Committee held three meetings.
EXECUTIVE SALARIES COMMITTEE
The function of the Executive Salaries Committee is to consider and
make recommendations to the Board of Directors as to salaries and other
compensation to be paid to the executive officers of the Company and to
other officers and upper-management employees of the Company and its
subsidiaries. During 1993 the Committee held three meetings. The
Committee's report on 1993 executive compensation is on pages 15-17.
August A. Busch III and James B. Orthwein are first cousins. See
"Other Transactions Involving Directors, Officers, or Their
Associates," pages 21-23, for additional information concerning certain
of the directors.
APPROVAL OF AMENDMENTS TO 1989 INCENTIVE STOCK PLAN
(ITEM 2 ON PROXY CARD)
The second item to be acted upon at the meeting is a proposal to
approve an increase in the number of shares issuable under the
Anheuser-Busch Companies, Inc. 1989 Incentive Stock Plan (the "Plan"),
along with certain other amendments. The Plan was originally approved
by the Company's shareholders at the 1990 Annual Meeting of
Shareholders. The Plan and the amendments are described briefly below.
DESCRIPTION OF THE PLAN
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 the Company's shareholders. The Board believes that the Plan has
been instrumental in fulfilling these goals.
Prior to being amended, the Plan authorized the grant of various
types of stock-based awards to eligible employees. These awards
included: incentive stock options ("ISOs"), non-qualified stock options
("NQSOs"), stock appreciation rights ("SARs"), limited stock
appreciation rights ("Limited Rights"), shares of "Restricted Stock,"
and certain other compensatory arrangements involving stock ("Other
Stock Interests"). No Restricted Stock or Other Stock Interests have
ever been granted under the Plan. Recipients of Options, SARs, or
Limited Rights under the Plan are called "Optionees."
ISOs are "incentive stock options" as defined by federal tax law
(described below). An NQSO is any option to purchase Company stock
which is not an ISO. ISOs and NQSOs are called "Options." An SAR is the
right to receive Company stock, cash, or other property equal in value
to the difference between the base price of the SAR and the market
price of the Company's stock on the exercise date. A Limited Right is
exercisable only during the 60-day period following an Acceleration
Event, as described below. Upon exercise, the holder of a Limited Right
is entitled to receive cash equal to the spread between the base price
of the Limited Right and a stock price (defined in the Plan) which
varies according to the type
8
<PAGE>
<PAGE> 12
of Acceleration Event involved, but which in any case is not less than
the highest fair market value of the Company's stock during the 60-day
period ending on the exercise date. Limited Rights can be granted only
as alternatives to Options or SARs. An "Acceleration Event" is any of
the following change in control events: (i) ownership by certain
persons of more than half of the Company's voting securities, (ii)
shareholder approval of certain plans of merger, consolidation, or
liquidation, or of the sale of substantially all of the Company's
assets, and (iii) certain substantial changes in the composition of the
Company's Board of Directors.
Under the Plan, the various types of awards can be granted separately
or as alternatives to each other, subject to certain limitations. The
exercise of one award causes a corresponding termination of any
alternative awards. No Option or other award is transferable during the
recipient's lifetime. No awards may be granted under the Plan after
September 26, 1999.
The Plan is administered by a Committee of non-employee directors
(the Incentive Stock Plan Committee). Officers and management employees
of the Company, its subsidiaries, and certain of its affiliates are
eligible to receive awards. Approximately 50 officers and 700
management employees received awards under the Plan in 1993. Non-
employee directors, including all Committee members, are ineligible.
The Committee has the authority to determine, within the limits of the
Plan, who will be granted awards, the timing of grants, the type,
amount, and terms of each award, and other matters relating to awards.
The option price of Options and the base price of SARs may not be
less than the fair market value of the Company's stock on the grant
date, except that SARs granted as alternatives to an outstanding Option
may have a base price equal to the option price. An Optionee may pay
the option price in cash, Company stock (including stock covered by the
Option), or other property, as permitted or required by the Committee.
The Committee may allow a deferral of payment. The Committee may
determine how withholding taxes related to exercises are paid.
The Committee determines at the time of grant when Options and SARs
become exercisable. Exercisability may be accelerated by the Committee
at any time after grant, and is accelerated automatically upon the
death or disability of the Optionee or upon the happening of an
Acceleration Event, subject to certain limitations. Forfeiture may
occur if the Optionee terminates employment with the Company within two
years of grant or is dismissed for any reason, or if the Optionee acts
in a manner inimical to the best interests of the Company. In addition,
the Committee may grant an Optionee the right to receive additional
cash or other property upon exercise, subject to certain limitations;
for example, the Committee could grant an optionee the right to receive
cash on exercise equal to the tax resulting from exercise.
Prior to amendment, the Plan authorized the issuance of up to 12
million shares of the Company's stock. Shares are charged against the
limit only to the extent shares are issued under the Plan; shares
covered by forfeited awards may be re-granted. Appropriate adjustments
to the limit are required for stock splits and similar events.
The Plan may be amended by the Board of Directors at any time.
Amendments which increase the number of authorized shares or change the
class of persons eligible to receive awards must be approved by the
Company's shareholders.
The closing price of the Company's stock on February 28, 1994 as
reported on the New York Stock Exchange Composite Tape was $49.75 per
share.
PLAN AMENDMENTS TO BE APPROVED BY SHAREHOLDERS
The Board of Directors amended the Plan in a number of respects in
December, 1993. The following amendments are subject to shareholder
approval at the meeting:
. The number of shares authorized under the Plan has been increased
by 10 million shares.
. The maximum number of shares authorized to be optioned to any
eligible employee during any calendar year is 500,000. In
addition, the 500,000 share limit can be changed by the Board
only
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with shareholder approval. Prior to the amendment, the Plan
imposed no annual limit per employee.
OTHER SIGNIFICANT PLAN AMENDMENTS
The following are some of the more significant amendments made by the
Board last December which are not subject to shareholder approval:
. The authority to grant Restricted Stock and Other Stock Interests
has been terminated.
. The Committee may not reprice a so-called "underwater" Option or
SAR (an award having an option or base price in excess of the
then fair market value of the Company's stock). Specifically, the
Committee may not exchange an underwater award for a new one or
reduce the option or base price of an underwater award.
. The Committee may not grant any Option or SAR with a so-called
"reload" feature under which new Options or SARs are
automatically granted to Optionees upon exercise of an
outstanding award.
OPTIONS GRANTED UNDER THE PLAN IN 1993
In 1993, the Company granted Options under the Plan as follows: to
Mr. Busch III, 100,000 shares; to Mr. Ritter, 50,000 shares; to Mr.
Stokes, 50,000 shares; to Mr. Beracha, 40,000 shares; to all current
executive officers as a group, 445,000 shares; and, to all employees,
including current officers who are not executive officers, 1,578,400
shares. Since Mr. Roarty is retiring in 1994, he did not receive a
grant in 1993. The 1993 grants were made contingent upon approval by
the shareholders of the 500,000 share per person per year limit,
mentioned above, in order to preserve tax benefits for the Company, as
discussed below. No SARs or Limited Rights were granted in 1993.
REASONS FOR THE AMENDMENTS
AMENDMENTS SUBJECT TO SHAREHOLDER APPROVAL
Of the 12 million shares originally authorized for issuance under the
Plan, only 511,161 currently remain available for new grants. The Board
has determined that the Plan is a valuable tool in motivating executive
and management employees to maximize shareholder value. The Plan
creates that motivation because of two simple facts: if the Company's
stock price does not rise, the Optionee gets nothing; on the other
hand, to the extent shareholder values do grow during the Option term,
the Optionee shares proportionately in that growth. The Company is
requesting 10 million new shares to maintain the Plan's usefulness.
In the past, exercises of NQSOs, SARs, Limited Rights, and, under
certain circumstances, ISOs have resulted in taxable compensation to
the Optionee and a corresponding tax deduction to the Company, as
discussed in more detail below. In order to fully preserve that tax
deduction for the Company under changes in the federal tax code enacted
last year, the Company has added the new 500,000 share limit for Option
grants to any one employee in any year, and is submitting that addition
to its shareholders for approval.
OTHER AMENDMENTS
The original authorization of Restricted Stock and Other Stock
Interests was intended to give the Committee a large degree of
flexibility in tailoring incentive awards. However, neither Restricted
Stock nor Other Stock Interests have ever been granted under the Plan,
and the Board of Directors determined to discontinue the authorization.
Similarly, the Board determined that repricing underwater awards and
granting reload features would not be consistent with the Company's
incentive compensation policies; although the Plan never expressly
authorized such actions, the Board determined to clearly prohibit them.
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FEDERAL INCOME TAX CONSEQUENCES
ISOS
An Optionee does not realize taxable income and the Company is not
entitled to a deduction on the grant of an ISO or on its exercise.
If the Optionee does not sell or otherwise dispose of the shares
acquired ("ISO Shares") within one year from the exercise date nor
within 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, and the Company will not be entitled to a deduction. The
amount of such gain or loss will be the difference between the amount
realized on the sale and the Optionee's basis in the ISO Shares.
If an Optionee disposes of the ISO Shares without satisfying the
Required Holding Periods, such disposition will constitute a
disqualifying disposition, which gives rise to ordinary income on the
date of such disposition. The amount of such ordinary income is the
excess of the fair market value of the ISO Shares on the exercise date
over the option price, except that, if the disqualifying disposition is
a sale and the sale price is lower than the value of the ISO Shares on
the exercise date, the lower sale price generally governs the amount of
ordinary income. The Company will ordinarily be entitled to a deduction
equal to the amount of the ordinary income resulting from a
disqualifying disposition. If the sale price is higher than the value
of the ISO Shares on the exercise date, the excess will be capital
gain.
An Optionee does realize income on the exercise of an ISO for
alternative minimum tax ("AMT") purposes. On the other hand, income
from a disqualifying disposition is normally not income for AMT
purposes.
NQSOS, SARS, AND LIMITED RIGHTS
An Optionee does not realize taxable income on the grant of an NQSO
or 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.
The Company 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 also applies to Limited
Rights.
OTHER TAX PROVISIONS
Options, SARs, and Limited Rights provide for accelerated
exercisability upon a change in ownership or control of the Company,
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 the Company will be denied a deduction for,
any "excess parachute payment."
The Company is not allowed a deduction for compensation paid to
certain executive officers in excess of $1,000,000 each in any taxable
year, except to the extent such excess constitutes performance-based
compensation. Compensation from the Company's Options granted prior to
1993 will not be subject to that limit unless the Options are
materially modified. Compensation from the Company's Options granted in
December 1993 and thereafter will constitute performance-based
compensation if certain requirements are met. The Plan currently meets
all of those requirements except for the requirement that the Plan
include a shareholder-approved limit on grants to any one employee in a
specified period. The proposal to limit Option grants to 500,000 shares
per employee per year would satisfy this requirement.
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VOTE REQUIRED FOR THIS PROPOSAL
The affirmative vote of a majority of the shares of common stock that
are actually voted (and have the power to vote) at the annual meeting
is required for approval of the amendments to the Plan which
(i) increase the authority by 10 million shares and (ii) limit Option
grants to 500,000 shares per employee per year, as described in this
proxy statement. For this proposal only, the Company is required by
federal regulations to treat an abstention as being equivalent to a
vote against the proposal. The Board of Directors recommends that you
vote FOR approval of these amendments to the 1989 Incentive Stock Plan.
APPROVAL OF INDEPENDENT ACCOUNTANTS
(ITEM 3 ON PROXY CARD)
Action will be taken with respect to the approval of independent
accountants for the Company for the year 1994. The Board of Directors
has, subject to such approval, selected Price Waterhouse.
A representative of Price Waterhouse will be present at the meeting.
Such representative will have an opportunity to make a statement, if he
or she so desires, and will be available to respond to appropriate
questions by shareholders.
The Board of Directors recommends a vote FOR the proposal to approve
the employment of Price Waterhouse.
SHAREHOLDER PROPOSALS
(ITEM 4 ON PROXY CARD)
SHAREHOLDER PROPOSAL NO. 1
PROPOSAL RELATING TO THE RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
Howard H. Witsma, 665 S. Skinker Blvd. 11G, St. Louis, MO 63105-2350,
who is the owner of 276 shares of common stock of the Company, has
advised the Company that he plans to introduce the following resolution
at the Annual Meeting.
To be adopted, this proposal, WHICH IS OPPOSED BY THE BOARD OF
DIRECTORS, would require the affirmative vote of the majority of the
votes cast.
-----------------
RESOLVED: (1) The shareholders do hereby request that the Board of
Directors take all necessary steps to abolish the pension system
established for "outside" directors, and (2) request that no further
pensions for outside directors be granted in the future nor increased,
if granted, without the direct and specific approval of the
shareholders assembled in Annual Meeting.
REASONS: The ladies and gentlemen of our Board have voted themselves
pensions without reference to we, the owners of the company. The
pensions are fully vested after five (5) years of service on the Board.
These ladies and gentlemen are otherwise employed, or retired with
pensions, and are being paid for their services at their place of
primary employment. Despite what management may say, these benefits are
not required in order to attract first class people to serve us as
directors. Your vote to eliminate this practice is requested.
-----------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS RESOLUTION.
The best interests of the Company and its shareholders are served by
having high caliber, talented, and experienced individuals serving as
outside directors. To attract and retain these highly sought-after
individuals, the Company must provide a competitive total compensation
package for its outside directors. Retirement benefits are a common
element of director compensation packages at large corporations. A 1992
survey by Hewitt Associates found that 70% of the top Fortune 150
industrial companies offer retirement plans to their outside directors.
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The Company has determined that paying a portion of the total
compensation in retirement benefits is appropriate. The retirement
plan, which is described on page 7, provides an incentive to join the
Board, to remain long enough to gain experience and knowledge of the
Company's business, and to remain available to provide advice after
retirement. Payment of retirement benefits also recognizes the ever
increasing time commitment, diligence, and risks associated with Board
service. FOR THESE REASONS, WE RECOMMEND A VOTE AGAINST THIS PROPOSAL.
SHAREHOLDER PROPOSAL NO. 2
PROPOSAL RELATING TO A REPORT ON BEER MARKETING
Roco and Co., 912 Market St., LaCrosse, WI 54601, which is the owner
of 20,400 shares of common stock of the Company, has advised the
Company that it plans to introduce the following resolution at the
Annual Meeting.
To be adopted, this proposal, WHICH IS OPPOSED BY THE BOARD OF
DIRECTORS, would require the affirmative vote of the majority of the
votes cast.
-----------------
Whereas:
Our Company has adopted The Brewing Industry Advertising Code
(revised in 1992), which prohibits advertising that encourages
drinking by underaged minors. Company spokespeople have repeatedly
stated that our Company does not market to underaged minors and
opposes sales to and consumption by underaged minors.
The Inspector General of the United States found that the Brewing
Industry Advertising Code is ineffective in preventing advertisements
that appeal to youth because the standards are vague, too narrow, and
unenforceable, criticisms that remain valid despite the Code's
revisions.
The Inspector General estimates that junior high and high school
students consume 1.1 billion cans of beer each year. Based on our
Company's market share, these students purchase more than 70 million
six-packs of our Company's beer, producing revenues of more than $200
million.
Our Company uses advertising techniques which research has shown are
especially attractive to youth, including the use of lifestyle and
sexual appeals, sports figures, and portrayals of risky activities.
Our Company has marketed its products by using toy cars, stuffed
animals, cartoons, candy, toy bottles and other paraphernalia
attractive to young children.
Former Surgeon General Novello found that beer advertising "misleads
and unabashedly targets American youth" and called upon the industry
to voluntarily eliminate alcohol advertising that appeals to youth.
Recent, federally-funded research found that 10 and 11 year old
children are readily able to identify our Company's advertising
slogans. Those most familiar with the slogans were more likely to
express an intention to drink when they became teenagers.
A 1991 alcohol industry-funded poll found that 73% of the population
believes that alcohol advertising is a major contributor to underage
drinking, and a majority believe the alcohol industry is "on the
wrong track" in part because its advertisements "target the young."
Resolved:
The Shareholders request that Management prepare a report,
withholding competitive information and at reasonable cost, for the
Board and requesting shareholders by January 31, 1995, which includes
a complete statement regarding methodologies used, investigations,
and recommendations regarding the following:
. The degree to which, even if unintentional, the Company's
marketing practices reaches and is noticed by underaged minors;
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. An estimate of the amount and percentage of the Company's beer
sales that are consumed by underaged minors per year;
. Our Company's plan for monitoring its compliance with the Brewing
Industry Advertising Code;
. Our Company's proposal for amending the Brewing Industry
Advertising Code or for adopting more stringent standards for
itself in light of the findings and recommendations of the
Inspector General and Surgeon General Novello.
Supporting Statement
Beer is the alcoholic beverage of choice among underaged minors, and
alcohol-related motor vehicle crashes are the leading cause of death
and serious injury among this age group. Beer drinking among teenagers
is associated with suicide, sexual assaults, alcoholism, school
problems, trauma, and other problems, including increasing the risk of
other drug use. According to government-sponsored surveys, over 30% of
high school seniors are binge drinkers. If you believe our Company's
beer marketing should not appeal to underaged minors vote YES for this
resolution.
-----------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS RESOLUTION.
Alcohol abuse and unlawful consumption among minors is of serious
concern to the men and women of Anheuser-Busch. For that reason, and
because no company benefits when its products are misused, the Company
has been the alcohol beverage industry leader in efforts to promote
personal responsibility among adults who drink, to address drunk
driving, and to fight illegal underage drinking.
Through its "Know When To Say When" campaign, underway since 1982,
the Company has over a dozen programs to address these issues, as well
as national advertising which highlights its efforts. The Company works
with its approximately 900 independently owned distributors across the
country to implement these programs, and with parents, college groups,
sports teams and people who sell and serve beer, to fight alcohol
abuse. The Company has also formed partnerships with the California
Highway Patrol, the Maryland Department of Transportation, the
Washington State Patrol, as well as the states of Texas and Georgia, to
deliver these messages. In addition, it has worked with former U.S.
Secretary of Education Dr. Terrel Bell, the National School Boards
Association and the American School Counselor Association on
educational programs. In addition to its own efforts, the Company works
on these issues with the Beer Institute, which is an organization made
up of the nation's brewers.
Further, your Board points out that marketing to minors is prohibited
by the Brewing Industry's Advertising Code ("BIA Code"), the Company's
College Marketing Guidelines, federal and state laws and network
advertising standards and practices, to all of which the Company
subscribes.
The Company strongly disagrees with the assertions made by the
Proponent. With respect to the specific issues the Proponents seek to
have addressed in a management report, the Company knows of no feasible
way to determine the "degree" to which its advertising is noticed by
underage minors; however, the Company primarily airs its advertising on
adult programming. The Company also notes that there is wide-spread
agreement in the scientific literature that advertising does not cause
underage drinking, and that this conclusion is also echoed in public
opinion research polls of youths themselves.
As to the amount of the Company's beer that is consumed by underage
individuals per year, your Board knows of no way to accurately track
the amount of beer illegally purchased and consumed by minors; however,
the Company does vigorously attempt to discourage the illegal
consumption of its products.
The proposal requests a plan for monitoring the Company's compliance
with the BIA Code. The Company notes that a copy of the BIA Code is
given to every brewery employee, wholesale distributor and outside
agency whose responsibilities include advertising and marketing beer.
The Company opposes underage drinking and is working diligently to
discourage it through programs for retailers who sell beer, materials
for parents to encourage them to address this subject with their
children, and educational materials and programs for middle and high
school students.
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Finally, with respect to the request that the Company amend the BIA
Code or adopt more stringent standards in light of the findings of
former Surgeon General Antonia Novello and the former Inspector
General, your Board points out that the comments made by these
individuals refer to a previous advertising code which has since been
revised. Moreover, the Former Surgeon General has positively commented
on the revised BIA Code the Company follows.
The Company believes that the internal policies and industry
guidelines to which it subscribes emphasize the importance of
responsible advertising of its products, and the importance of
directing its advertising to those of legal age.
THEREFORE, YOUR BOARD RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
EXECUTIVE COMPENSATION
REPORT OF THE EXECUTIVE SALARIES COMMITTEE
AND THE INCENTIVE STOCK PLAN COMMITTEE
The Executive Salaries Committee has the responsibility of
recommending to the Board of Directors appropriate salaries and bonuses
for all executive officers of Anheuser-Busch Companies. The Incentive
Stock Plan Committee administers the Company's stock option program.
For purposes of continuity, both committees (hereafter referred to as
the "Committee") have identical membership consisting entirely of
outside directors.
COMPENSATION PHILOSOPHY
The Committee adheres to several guiding principles in carrying out
its responsibilities:
. Effective compensation programs must provide adequate security,
incentive, and long term perspective in line with corporate
strategic objectives. Anheuser-Busch's compensation objective is
to provide adequate security through a competitive salary so that
on a day-to-day basis executives can devote full energy to their
business responsibilities. Anheuser-Busch offers a significant
bonus opportunity to motivate executives to achieve annual
corporate goals. Finally, the Company utilizes stock options to
foster a long term perspective aligned with that of the
shareholders.
. Compensation programs should be simple and easily understood.
Managers must be clear on what the rewards are and what they must
do to earn them for any program to be effective.
. Executives' total compensation should be competitive with an
appropriate comparison group in order to nurture their trust and
loyalty. As detailed below, an outside compensation consultant
annually reports to the Committee on how the Company's
compensation package compares to the compensation practices of a
sample of local and national corporations.
1993 COMPENSATION
The Committee considers several factors when determining compensation
for executive officers, including August A. Busch III:
. OVERALL COMPANY PERFORMANCE. In addition to their current
knowledge of Company operations through participation at regular
Board meetings, the Committee specifically looked at annual and
long term sales and earnings growth, market share gains, return
to shareholders (see charts on page 19), progress toward long
term objectives, individual divisional results as appropriate,
and the Company's record on key social and community issues such
as the environment, diversity in the workforce, and alcohol abuse
prevention. There is no set weighting of these variables as
applied to individual executive positions.
. INDIVIDUAL PERFORMANCE. The Committee considers, in addition to
an executive's business results, the achievement of various other
managerial objectives and personal development goals.
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. COMPETITIVE COMPENSATION. The Committee is provided a report from
Hewitt Associates ("Hewitt"), a nationally known compensation
consulting firm, which details Anheuser-Busch compensation
practices relative to a comparable group of 22 companies. This
group is comprised of large national consumer goods companies as
well as several large St. Louis-based corporations. The companies
in the sample were chosen in consultation with Hewitt from their
database as being representative of the types of companies with
which Anheuser-Busch competes for executive talent. The report
reviews base salary, annual bonus, and long term incentive awards
for the CEO and other officer positions with responsibilities
that are comparable across the group. Hewitt believes, and the
Committee concurs, that this sample of benchmarks not only
provides guidance for specific positions, but also is indicative
of overall Company pay practices when viewed in the aggregate.
. TARGETED COMPENSATION. Total compensation for executive officers
including Mr. Busch is targeted at a market level which
approximates the median of the sample group of comparable
companies after adjusting for the different magnitude of sales
for each company, using a method called regression analysis.
"Market level" is considered to be that calculated at the 50th
percentile, with a margin of +-20%.
SALARY:
The Company does not have an employment agreement with Mr. Busch III
or any of its other executive officers. In setting Mr. Busch's 1993
base salary the Committee considered the overall financial performance
of the Company during 1992, particularly beer sales volume and market
share performance, operating and net income margin trends, growth in
earnings per share, returns on capital and equity, and total returns to
shareholders. Actual salary determination is subjective in that there
are no specific weightings for the variables considered. Mr. Busch's
1992 base salary of $894,000 was slightly below the market level of
salaries for CEOs in the comparable group of companies. In light of the
positive financial results the Company achieved in 1992 and the
continuing confidence in Mr. Busch's guidance in setting long term
direction for the Company, the Committee recommended to the Board that
Mr. Busch's salary be increased by 5% for 1993 to $940,000. Survey data
subsequently confirmed this to be within 4% of the 50th percentile
market level. Consistent with the Company's announced policy of no
merit-based salary increases for 1994, Mr. Busch III did not receive a
salary increase in 1994.
1993 salaries for other executive officers were also targeted at the
market level where appropriate benchmarks were available. Actual 1993
salaries varied considerably among the executive officers depending on
responsibilities, past departmental or divisional performance, and to a
lesser degree, length of service. There were no specific departmental
or divisional performance measures defined and considered. The
individual's judgment, maturity, and potential were subjectively
evaluated. Other than increases resulting from significant increases in
responsibilities, executive officers received no salary increases in
1994.
BONUS:
Bonuses for the CEO, 14 other executive officers, and 40 other
officers, are distributed from a pool not to exceed .425% of pretax
profits of the Company. Individual bonus awards are determined by
subjectively evaluating each executive's performance toward divisional
or departmental objectives, including budgeted earnings and cash flow
return on gross investment targets; no specific performance measures
are defined. In the case of Mr. Busch, his bonus is dependent on
overall Company performance and the achievement of various corporate
objectives as outlined in annual presentations to the Board of
Directors. Specific short and long term objectives are established each
year for the overall Company as well as for each operating division.
Particular emphasis is placed on operating profit contribution, cash
flow return on gross investment, and earnings per share increase. Other
executive officers' bonuses are dependent on their particular
divisions' achievement toward established objectives or, in the case of
staff functions, their contribution towards overall corporate results.
There is no established weighting of various objectives and an
individual's particular contribution is subjectively evaluated.
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In keeping with the Committee's philosophy that a large portion of an
executive's compensation should be "at risk," the Company provides a
larger bonus component of total compensation than does the typical
company in Hewitt's report. Aggregate 1992 bonuses for all Company
executives in Hewitt's benchmark survey were 25% above the comparative
group. Reflecting the Company's level of achievement toward meeting
1993 goals, the Committee recommended a general 20% decrease in bonus
payments for 1993 as compared with 1992. Mr. Busch's bonus payment was
reduced from $1,120,000 to $896,000; bonus payments for all other
executive officers as a group averaged 19% below 1992 awards.
LONG TERM INCENTIVES:
Long term incentives are generally well below the levels found at the
comparable companies. As indicated previously, stock options are the
Company's only long term incentive. Stock option awards are made to
approximately 750 middle and upper level managers, including the CEO
and all executive officers. The size of awards is subjectively
determined based on position, responsibilities, and individual
performance. The amount and terms of prior option grants are not
explicitly considered in determining the size of awards. In 1993, the
Committee granted Mr. Busch options for 100,000 shares, the same number
he was granted in 1992. The Committee is aware that Hewitt's report
indicates that this size grant is well below that typically awarded the
CEO of comparable companies, particularly when no other long term
incentives are offered. However the Committee believes that the overall
mix of Mr. Busch's compensation components is appropriate and the
Committee supports his total compensation program, which is comparable
to the market level for CEO total compensation among the comparison
group.
DEDUCTIBILITY OF COMPENSATION EXPENSES
The Company is not allowed a deduction for compensation paid to
certain executive officers in excess of $1 million, except to the
extent such excess constitutes performance-based compensation.
In September 1993 the Committee recommended and the Board approved a
deferred compensation plan for its highly paid executives, whereby
executives may elect to defer a portion of their compensation.
Mr. Busch III, who is the only executive who earned more than $1
million in 1993, has elected to defer until after he retires virtually
all of the portion of his salary and bonus for 1994 that may exceed the
Company's deductibility limitation.
In order to qualify stock options as performance-based compensation,
in December 1993 the Committee recommended and the Board approved,
subject to shareholder approval at this meeting, an amendment to the
1989 Incentive Stock Plan adding an annual limit on grants to an
individual. (See pages 8-12.)
Bernard A. Edison-Chairman
Richard T. Baker Andrew B. Craig III
Vernon R. Loucks, Jr. Vilma S. Martinez
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Busch is a member of the Human Resources Committee of
Southwestern Bell Corporation. Mr. Whitacre, an Executive Officer of
Southwestern Bell, is a Director of the Company.
Mr. Ritter, an Executive Officer of the Company, is a member of the
Board of Directors of Boatmen's Bancshares, Inc. Mr. Craig, an
Executive Officer of Boatmen's Bancshares, is a member of the Company's
Executive Salaries and Incentive Stock Plan Committees.
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<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------- ALL
AWARDS OF OTHER
STOCK COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) ($)*
- - - --------------------------- ---- --------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
A. A. Busch III 1993 940,000 896,000 100,000 39,919
Chairman of the Board and 1992 894,000 1,120,000 100,000 37,641
President 1991 851,016 1,022,000 1,785 32,916
J. E. Ritter 1993 523,000 433,000 50,000 23,002
Executive Vice President- 1992 498,000 541,000 50,000 22,422
Chief Financial and 1991 474,000 500,000 1,785 20,754
Administrative Officer
P. T. Stokes 1993 523,000 355,000 50,000 17,532
Vice President and Group 1992 475,000 444,000 50,000 15,621
Executive 1991 432,000 410,000 1,785 14,345
B. H. Beracha 1993 389,000 228,000 40,000 16,078
Vice President and Group 1992 364,000 285,000 35,000 14,628
Executive 1991 347,000 250,000 1,785 13,014
M. J. Roarty 1993 350,000 216,000 0 368,428
Executive Vice President- 1992 331,000 270,000 25,000 17,420
Corporate Marketing and 1991 315,000 250,000 1,785 16,107
Communications
<FN>
- - - -----
* The 1993 amounts disclosed in this column include:
(a) Company matching contributions to the Deferred Income Stock
Purchase and Savings Plan of $9,565 for Mr. Busch, $9,559 for Mr.
Ritter, $9,581 for Mr. Stokes, $9,523 for Mr. Beracha, and $9,563
for Mr. Roarty.
(b) Payments for insurance coverage of $24,154 for Mr. Busch, $13,443
for Mr. Ritter, $7,951 for Mr. Stokes, $6,555 for Mr. Beracha,
and $8,865 for Mr. Roarty.
(c) Payment of director fees from subsidiary companies of $6,200 for
Mr. Busch.
(d) A cash separation payment of $350,000 for Mr. Roarty. This
payment was accrued in 1993 due to Mr. Roarty's participation in
the Enhanced Retirement Program ("ERP") that was offered to all
eligible salaried employees of the Company. Mr. Roarty will
receive the payment upon his retirement in September 1994. As an
ERP participant, Mr. Roarty will also receive a pension benefit
that is 15% greater than it would otherwise have been. Mr. Roarty
will be required to execute a three year Confidentiality and Non-
Competition Agreement as a precondition to participation in the
ERP. As additional consideration for executing the Agreement, the
period for exercising certain options previously granted to
Mr. Roarty will be extended for a period of four years following
retirement. None of the other named executive officers
participated in the ERP.
</TABLE>
18
<PAGE>
<PAGE> 22
<TABLE>
COMPARISON OF TEN YEAR CUMULATIVE TOTAL RETURN*
ANHEUSER-BUSCH COMPANIES, INC., S&P 500 INDEX & RUSSELL LARGE CAP INDEX**
<CAPTION>
Measurement Period Anheuser-Busch S&P 500 Russell Large Cap Index
- - - ------------------ -------------- ------- -----------------------
(Fiscal Year Covered)
- - - ---------------------
<S> <C> <C> <C>
Measurement Pt-12/31/83 $100.0 $100.0 $100.0
FYE 12/31/84 119.4 106.2 109.6
FYE 12/31/85 213.2 139.8 142.0
FYE 12/31/86 268.3 165.9 168.0
FYE 12/31/87 348.2 174.5 179.6
FYE 12/31/88 335.4 203.2 207.0
FYE 12/31/89 418.3 267.4 277.1
FYE 12/31/90 478.2 259.1 283.0
FYE 12/31/91 697.5 337.7 364.6
FYE 12/31/92 677.7 363.4 378.8
FYE 12/31/93 585.1 399.9 405.2
</TABLE>
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
ANHEUSER-BUSCH COMPANIES, INC., S&P 500 INDEX, AND RUSSELL LARGE CAP INDEX**
<CAPTION>
Measurement Period Anheuser-Busch S&P 500 Russell Large Cap Index
- - - ------------------ -------------- ------- -----------------------
(Fiscal Year Covered)
- - - ---------------------
<S> <C> <C> <C>
Measurement Pt-12/31/88 $100.0 $100.0 $100.0
FYE 12/31/89 124.7 131.6 133.8
FYE 12/31/90 142.6 127.5 136.7
FYE 12/31/91 208.0 166.2 176.1
FYE 12/31/92 202.1 178.8 183.0
FYE 12/31/93 174.5 196.8 195.8
<FN>
- - - -----
*Assumes $100 invested on December 31 of first year of chart in
Anheuser-Busch Companies, Inc. Common Stock, S&P 500 Index and
Russell Large Cap Index and that all dividends were reinvested.
**Because only one of the other six leading domestic brewers is an
independent publicly traded company, the Company has elected to
compare shareholder returns with the Russell Large Cap Index. This
index is comprised of the 50 largest publicly held United States
companies, based on market capitalization. The Company is included
in the index.
***Compound Annual Growth Rate.
</TABLE>
19
<PAGE>
<PAGE> 23
<TABLE>
OPTION GRANTS IN 1993
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS(1) FOR OPTION TERM(2)
---------------------------------------------- ----------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES PRICE EXPIRATION
NAME GRANTED(#) IN 1993(3) ($/SH) DATE 0% 5% 10%
---- ---------- ---------- ------- --------- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
A. A. Busch III.... 100,000 4.9% $48.88 12/14/03 $000 $3,073,722 $7,789,416
J. E. Ritter....... 50,000 2.5 48.88 12/14/03 000 1,536,861 3,894,708
P. T. Stokes....... 50,000 2.5 48.88 12/14/03 000 1,536,861 3,894,708
B. H. Beracha...... 40,000 2.0 48.88 12/14/03 000 1,229,489 3,115,766
M. J. Roarty....... 0 0 -- -- -- -- --
All Shareholders... N/A N/A N/A N/A 000 8,208,267,059 20,801,387,112
All Optionees...... 2,023,400 100 48.88 12/14/03 000(4) 62,193,650(4) 157,611,124(4)
Optionee Gain
as % of All
Shareholders less than less than
Gain............... N/A N/A N/A N/A N/A 1% 1%
<FN>
- - - -----
(1) All options granted to the named officers were granted on
December 15, 1993. The options become exercisable in three equal
parts on the first, second, and third anniversaries of the grant
date; however, the Incentive Stock Plan Committee is authorized to
accelerate exercisability at any time, and acceleration occurs
automatically in the event of the optionee's death or disability,
or if certain events occur which would result in a change in
control of the Company. In addition, a portion of the options were
granted with a tax payment feature. The tax payment feature allows
the use of option stock to pay the withholding taxes related to
option exercises. The number of options granted with a tax payment
feature in 1993 to the named officers were: Mr. Busch III, 98,000;
Mr. Ritter, 48,000; Mr. Stokes, 48,000; and Mr. Beracha, 38,000.
(2) The dollar amounts under these columns are the result of
calculations at 0% and at the 5% and 10% rates set by the SEC and
therefore are not intended to forecast possible future
appreciation, if any, of the Company's stock price. The Company did
not use an alternative formula for a grant date valuation, as the
Company is not aware of any formula which will determine with
reasonable accuracy a present value based on future unknown or
volatile factors. Potential realizable values for all shareholders
are based on 267.0 million shares outstanding at December 31, 1993
and a per share price of $48.88.
(3) Based on 2,023,400 options granted to 751 employees during 1993.
(4) No gain to the optionees is possible without an increase in stock
price, which will benefit all shareholders commensurately. A zero
percent stock price appreciation will result in zero dollars for
the optionee.
</TABLE>
<TABLE>
AGGREGATED OPTION EXERCISES IN 1993 AND 1993 YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12/31/93 (#) 12/31/93($)(1)(2)
------------ -----------------
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
---- ------------ -------------- ------------- -------------
<S> <C> <C> <C> <C>
A. A. Busch III..... 0 0 349,618/ 3,911,644/
166,666 62,500
J. E. Ritter........ 0 0 227,871/ 2,649,641/
83,333 31,250
P. T. Stokes......... 608 22,800 231,751/ 2,900,525/
83,333 31,250
B. H. Beracha........ 0 0 138,491/ 1,534,584/
63,333 25,000
M. J. Roarty......... 0 0 12,468/ 16,296/
16,666 0
<FN>
- - - -----
(1) Value before income taxes payable as a result of exercise.
(2) Based on the average of the high and low price of the Company's
common stock on the New York Stock Exchange-Composite Transactions
for 12/31/93 ($49.50).
</TABLE>
20
<PAGE> 24
<TABLE>
PENSION PLAN TABLE
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------
ELIGIBLE
REMUNERATION 10 15 20 25 30 OR MORE
- - - ------------ -- -- -- -- ----------
<S> <C> <C> <C> <C> <C>
$ 500,000......... $ 83,333 $125,000 $166,667 $208,333 $ 250,000
750,000......... 125,000 187,500 250,000 312,500 375,000
1,000,000......... 166,667 250,000 333,333 416,667 500,000
1,250,000......... 208,333 312,500 416,667 520,833 625,000
1,500,000......... 250,000 375,000 500,000 625,000 750,000
1,750,000......... 291,667 437,500 583,333 729,167 875,000
2,000,000......... 333,333 500,000 666,667 833,333 1,000,000
2,250,000......... 375,000 562,500 750,000 937,500 1,125,000
2,500,000......... 416,667 625,000 833,333 1,041,667 1,250,000
</TABLE>
The Pension Plan Table above shows a range of estimated annual normal
retirement pension benefits for employees who have the years of
credited service shown at retirement, and whose eligible remuneration
is as shown. The eligible remuneration used to compute actual pension
benefits would be the highest salary and bonus for the calendar year of
retirement or any of the four preceding years; the Summary Compensation
Table at page 18 shows the salary and bonus of the executive officers
named therein for the past three years. The benefits shown assume
continued service until retirement at age 65 and payment in the form of
a life annuity with ten years of guaranteed payments. Amounts shown do
not reflect the applicable deduction for Social Security benefits.
Vesting and payment of part of the benefits shown are accelerated if
certain events occur that would result in a change in control of the
Company. Also, if an excise tax were imposed on a participant as to
such benefits on account of such 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 excise
tax had been imposed.
Years of credited service, to the nearest year, and compensation
covered by the pension plans for executive officers named in the
Summary Compensation Table are as follows: Mr. Busch-36 years and
$2,060,000; Mr. Ritter-26 years and $1,064,000; Mr. Stokes-25 years and
$967,000; Mr. Beracha-26 years and $674,000; and Mr. Roarty-41 years
and $620,000. Due to his participation in the Enhanced Retirement
Program (as described on page 18), the pension benefit of Mr. Roarty
will be 115% of the normal benefit.
OTHER TRANSACTIONS INVOLVING DIRECTORS, OFFICERS, OR THEIR ASSOCIATES
In June of 1993, pursuant to an investment agreement the Company
purchased, for $207.2 million, from Grupo Modelo, S.A. de C.V.,
Mexico's largest brewer ("Grupo Modelo"), equity securities
representing a 10% interest in Grupo Modelo. Pablo Aramburuzabala O. is
the Vice President of the Board of Directors of Grupo Modelo.
Representatives of Grupo Modelo have informed the Company that prior to
this transaction Mr. Aramburuzabala, certain of his family members and
a trust of which he and certain of his family members were principal
beneficiaries owned equity securities aggregating approximately 28.87%
of the outstanding equity securities of Grupo Modelo. The Company also
purchased at that time, for $270 million, equity securities
representing a 10% interest in DIBLO, S.A. de C.V., the operating
subsidiary of Grupo Modelo ("Diblo"), 76.75% of the outstanding equity
securities of which are owned by Grupo Modelo. Mr. Aramburuzabala is
the Vice President of the Board of Directors of Diblo. Representatives
of Diblo have informed the Company that of the securities of Diblo
acquired by the Company, Mr. Aramburuzabala, his family members and a
trust of which he and certain of his family members were principal
beneficiaries owned approximately 28.87%. Pursuant to the investment
agreement, the Company also acquired an option to purchase, at
prevailing market rates (subject to certain limits), from certain
shareholders of Grupo Modelo and Diblo, including Mr. Aramburuzabala,
certain of his family members and trusts of which he and certain of his
family members are beneficiaries (the "Controlling Shareholders"),
equity securities sufficient to increase the Company's interest in
Grupo Modelo to 35.12% and sufficient to increase the Company's
interest in
21
<PAGE>
<PAGE> 25
Diblo to 23.25%. Under certain circumstances involving the non-exercise
of such options by the Company, at either party's election the equity
securities acquired by the Company may be repurchased by Grupo Modelo,
Diblo or the Controlling Shareholders, half at cost and the remainder
at prevailing market rates (subject to certain limits).
Pursuant to the investment agreement, the Company agreed to use its
best efforts to maintain a representative of Grupo Modelo on its Board
of Directors so long as the Company or one of its subsidiaries owns ten
percent or more of the outstanding capital stock of Grupo Modelo.
Mr. Aramburuzabala is the representative of Grupo Modelo for this
purpose. The investment agreement contains other agreements between the
Company and Grupo Modelo, Diblo and the Controlling Shareholders, as
to, among other matters, the corporate governance of Grupo Modelo and
Diblo and restrictions on the sale of the securities of Grupo Modelo
and Diblo held by the Company and by the Controlling Shareholders.
August A. Busch, Jr., a former director of the Company, was, until
his death in September 1989, the owner of Grant's Farm, a tract of
approximately 225 acres located in St. Louis County, Missouri, most of
which has been leased and used by the Company for many years. Upon his
death the property passed to the trustees of a real estate trust
created by his will (the "Trustees") for the benefit of certain
children of Mr. Busch, Jr., not including August A. Busch III. The area
includes an animal reservation and numerous other attractions and
facilities. The Company uses Grant's Farm extensively for entertaining
and conducting public tours and for other purposes associated with its
advertising and public relations program. It is one of the most popular
tourist attractions in the St. Louis area. The leased premises include
all of the tract (except for approximately 23 acres that have been
reserved for the residents' personal use) plus an adjacent tract of
approximately 7 acres upon which are situated a parking lot and a
stallion barn. Also, various paintings, trophies, horsedrawn vehicles,
and other personal property that belonged to Mr. Busch, Jr. are
displayed during public tours of the premises.
The current lease (the "Lease") became effective January 1, 1982. The
Lease may be terminated by the Company by giving notice at any time
prior to October 31 of any year, to be effective in the following year
at the end of the month during which the tour season ends. The Trustees
may terminate the Lease by giving notice at any time prior to October
31 of any year, to be effective at the end of the month during which
the tour season ends in the second year following the year in which
notice is given. If the Trustees terminate the Lease, they must
reimburse the Company for the unamortized value of all capital
leasehold improvements made by the Company.
Under the Lease, the Trustees will receive a fixed annual rental of
$201,890 throughout the term of the Lease. They will also share in that
portion of income from the Company's concession operations which
exceeds the approximate income generated from such operations when they
were operated by Mr. Busch, Jr. The Lease provides that the Trustees
have the responsibility for the maintenance and care of the leased
premises and the animals and personal property situated thereon, and
the Company is obligated to reimburse them for their expenses in
carrying out that responsibility. During the term of the Lease, the
Company has the right of first refusal to purchase the leased premises
and also to purchase the 23-acre tract referred to above. The Company
also has the right, under certain circumstances, to purchase the
personal property covered by the Lease and certain personal property
located in Mr. Busch, Jr.'s former residence. For the year 1993, the
Trustees received, in the aggregate, from the Company under the Lease:
(1) basic rent of $201,890, (2) $260,815 as their share of the
Company's income from concession operations, and (3) $1,240,110 as
reimbursement for the actual expenses, as audited by the Company's
internal audit department, for the maintenance and care of the leased
premises, the animals, and the personal property situated thereon.
For many years, Mr. Busch, Jr. provided board and care for the
Anheuser-Busch, Incorporated ("ABI") Clydesdale horses on property
other than Grant's Farm. The existing Clydesdale Lease Agreement
between Mr. Busch, Jr. and ABI first became effective on January 1,
1973. Certain heirs of Mr. Busch, Jr. (not including August A. Busch
III) succeeded to the interests of Mr. Busch, Jr. under the lease,
which was amended as of August 31, 1990. For the year 1993, ABI paid or
will pay under this lease $26,515 as annual rental and $179,788 as
reimbursement for the actual expenses, as audited by the
22
<PAGE>
<PAGE> 26
Company's internal audit department, incurred to care for the
Clydesdale horses and the leased property.
Eagle Snacks, Inc. ("Eagle Snacks"), a wholly-owned subsidiary of the
Company, previously had an agreement with Gulf Coast Snacks, Inc.
("Gulf Coast") for the distribution of snack products in San Antonio,
Austin, and Houston, Texas. Adolphus A. Busch IV, a half brother of Mr.
Busch III, is a one-third owner and president of Gulf Coast. The terms
of this distribution agreement are comparable with those which Eagle
Snacks has with other wholesalers. Pursuant to this distribution
agreement, Gulf Coast purchased $9,268,000 of products from Eagle
Snacks during 1993. A limited partnership in which Eagle Snacks holds a
majority of the equity, but as a limited partner, will purchase the
assets of Gulf Coast used in the operation of its San Antonio and
Austin distributorships. Eagle Snacks will also purchase the assets of
Gulf Coast used in the operation of its Houston snack distributorship.
The assets to be purchased consist primarily of inventory and
equipment. Inventory will be purchased at cost for approximately
$386,700 and equipment will be purchased at book value for
approximately $288,200. At the time of closing, Gulf Coast will owe
Eagle Snacks approximately $2,147,000 for inventory purchased while
operating the distributorships, net of credits owed them. A final
accounting of amounts owed and credits due the parties will be
completed within sixty days of closing, and Eagle Snacks will be paid
in full at that time. The terms of the purchases, including the amounts
paid, were reviewed and approved by the Conflict of Interest Committee
of the Board.
Anheuser-Busch, Incorporated ("ABI") has agreements with Double Eagle
Distributing, Inc. ("Double Eagle") and Southern Eagle Distributing,
Inc. ("Southern Eagle") for the distribution of malt beverage products
in Deerfield Beach, Florida and Fort Pierce, Florida, respectively.
Double Eagle, which is owned by James B. Orthwein, Jr. and Percy J.
Orthwein II, who are sons of James B. Orthwein, purchased $41,091,623
of products from ABI during 1993. Percy Orthwein is Chairman of the
Board and James Orthwein is President and General Manager of Double
Eagle. Southern Eagle, of which Peter William Busch, a half brother of
Mr. Busch III, is the majority owner, purchased $18,847,972 of products
from ABI during 1993. Peter Busch is the President of Southern Eagle.
The terms of these distribution agreements are comparable with those
which ABI has with other wholesalers.
Peter M. Flanigan, a director of the Company, is also a director of
Dillon, Read & Co. Inc. ("Dillon Read"), an investment banking firm
which provided financial advisory, securities underwriting, and other
customary investment banking services to the Company during 1993. The
Company expects that Dillon Read will continue to provide services to
the Company during 1994.
Douglas A. Warner III, a director of the Company, is an executive
officer of J. P. Morgan & Co., Incorporated ("Morgan"). Morgan and its
subsidiaries have provided investment banking and related financial
services to the Company during 1993 and are expected to provide similar
services to the Company during 1994.
William H. Webster, a director of the Company, is a partner of
Milbank, Tweed, Hadley & McCloy, a law firm that provided legal
services to the Company in 1993 and may provide legal services to the
Company during 1994.
The Company occasionally uses the personal aircraft of Mr. Busch III
for Company business. During 1993, the Company reimbursed Mr. Busch
$73,399 based on the manufacturer's published hourly rate for fuel,
oil, maintenance, and other miscellaneous costs for operating the
aircraft.
In the opinion of the Company's management, the terms and conditions
of the foregoing transactions are at least as favorable to the Company
and its subsidiaries as those which would be available from unrelated
parties for comparable transactions.
COMPLIANCE WITH THE SECURITIES EXCHANGE ACT
The Company's executive officers and directors are required under the
Securities Exchange Act of 1934 to file reports of ownership and
changes in ownership of common stock of the Company with the Securities
and Exchange Commission and the New York Stock Exchange. Copies of
those reports must also be furnished to the Company.
23
<PAGE>
<PAGE> 27
Based solely on a review of the copies of reports furnished to the
Company and written representations that no other reports were
required, the Company believes that during the preceding year all
filing requirements applicable to executive officers and directors have
been complied with.
SHAREHOLDER PROPOSALS FOR 1995
For inclusion in the Company's Proxy Statement and form of proxy, any
shareholder proposals intended to be presented at the 1995 Annual
Meeting must be received by the Company no later than November 10,
1994.
Shareholders who do not submit proposals for inclusion in the Proxy
Statement but who intend to submit a proposal at the 1995 Annual
Meeting, and shareholders who intend to submit nominations for
directors at the meeting must provide written notice. Such notice
should be addressed to the Secretary and received at the Company's
principal executive offices not earlier than January 27, 1995 and not
later than February 26, 1995. The written notice must satisfy certain
requirements specified in the Company's By-Laws. A copy of the By-Laws
will be sent to any shareholder upon written request to the Secretary.
OTHER MATTERS
The cost of soliciting proxies will be borne by the Company and will
consist primarily of printing, postage, and handling, including the
expenses of brokerage houses, custodians, nominees, and fiduciaries in
forwarding documents to beneficial owners. In addition, to assist in
the solicitation of proxies from brokers, bank nominees, and other
institutional holders and from other shareholders, the Company has
engaged D. F. King & Co., Inc. for a fee not to exceed $10,000 plus
out-of-pocket expenses. Solicitation also may be made by the Company's
officers, directors, or employees, personally or by telephone.
St. Louis, Missouri
March 10, 1994
24
<PAGE>
<PAGE> 28
APPENDIX
A five year and ten year performance graph is found on page 19. Also,
the proxy statement, in circulated form, will include 1 1/8" x 1 1/4"
pictures of the directors next to their descriptions on pages 3-5.
<PAGE>
PAGE> 29
ANHEUSER-BUSCH COMPANIES, INC. PROXY
DIRECTORS RECOMMEND A VOTE FOR
1. / / FOR the election of Andrew B. Craig III, Bernard A. Edison,
Vernon R. Loucks, Jr., Vilma S. Martinez, and Edward E.
Whitacre, Jr. as Directors
/ / WITHHOLD authority to vote for ALL of the above nominees
/ / WITHHOLD authority to vote for the following nominees only:
-----------------------------------------------------------
-----------------------------------------------------------
2. Approval of amendments to the 1989 Incentive Stock Plan
FOR AGAINST ABSTAIN
/ / / / / /
3. Approval of the appointment of Price Waterhouse as independent
auditors for 1994
FOR AGAINST ABSTAIN
/ / / / / /
DIRECTORS RECOMMEND A VOTE AGAINST
4. A. Shareholder proposal on Retirement Plan for
Non-Employee Directors
FOR AGAINST ABSTAIN
/ / / / / /
B. Shareholder proposal on Beer Marketing Report
FOR AGAINST ABSTAIN
/ / / / / /
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD.
<PAGE>
<PAGE> 30
The undersigned hereby appoints August A. Busch III, Fred L. Kuhlmann,
and JoBeth G. Brown 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 card, all of the shares of stock that the
undersigned 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 to be held at the Academy Plaza Theatre, 5230
Lankershim Blvd., Los Angeles, California, on April 27, 1994, at 10:00
A.M. local time and at any adjournments thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. WHEN
PROPERLY EXECUTED, IT WILL BE VOTED FOR ITEMS #1, #2, AND #3 AND
AGAINST THE SHAREHOLDER PROPOSALS IN ITEM #4 UNLESS CONTRARY
INSTRUCTIONS ARE INDICATED ON THE REVERSE SIDE.
Dated---------------------, 1994
-------------------------------
-------------------------------
SIGNATURE OF SHAREHOLDER(S)
(Sign exactly as your name or
names appear at the left; in
the case of shares held by
joint owners, all joint owners
should sign; fiduciaries should
indicate title and authority.)
/ / SEND ADMISSION TICKET
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
<PAGE> 31
TO PARTICIPANTS IN THE ANHEUSER-BUSCH EMPLOYEE STOCK
PURCHASE AND SAVINGS PLAN AND THE DEFERRED INCOME
STOCK PURCHASE AND SAVINGS PLANS
Enclosed is the notice, proxy statement, and proxy card for the Annual
Meeting of Shareholders of Anheuser-Busch Companies, Inc. which will be
held on April 27, 1994. The number of shares shown on the proxy card
represents the shares in your account(s) with respect to which you are
entitled to direct the voting. In order for these shares to be voted
by the Trustees of the Plan(s) in accordance with your confidential
instructions, Boatmen's Trust Company must receive your executed proxy
card not later than April 20, 1994.
BOATMEN'S TRUST COMPANY
<PAGE>
<PAGE> 32
April 5, 1994
To the Shareholders of
Anheuser-Busch Companies, Inc.
The time is approaching for the holding of the annual meeting of the
shareholders of Anheuser-Busch Companies, Inc. on April 27, 1994, and our vote
tabulator has not yet received your Proxy.
It is important that your shares be represented at the meeting. We urge
you to sign and mail the enclosed duplicate Proxy as soon as possible.
Sincerely,
<PAGE>
<PAGE> 33
ANHEUSER-BUSCH COMPANIES, INC.
1989 INCENTIVE STOCK PLAN
(AS AMENDED DECEMBER 20, 1989, DECEMBER 19, 1990 AND DECEMBER 15, 1993)
SECTION 1. PURPOSE.
The purpose of the Plan is to attract, retain, motivate and reward
employees of the Company, its Subsidiaries and Affiliates with
compensatory arrangements that involve Options and SARs.
SECTION 2. DEFINITIONS.
(a) "Act" means the Securities Exchange Act of 1934, as amended from
time to time.
(b) "Affiliate" means any entity in which the Company has a
substantial direct or indirect equity interest (other than a Subsidiary),
as determined by the Committee.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code as in effect from time
to time.
(e) "Committee" means the Stock Option Committee described in
Section 12 hereof.
(f) "Company" means Anheuser-Busch Companies, Inc. and its
successors.
(g) "Disability" means the condition of being "disabled" within the
meaning of Section 422(c)(6) of the Code or any successor provision.
(h) "Eligible Employee" means a person who is eligible to receive
an option under Section 4 of the Plan.
(i) "Employer" means the Company, the Subsidiary, or the Affiliate
which employs the Optionee.
(j) "Fair Market Value" of Stock on a given date means (i) the
average of the highest and lowest selling prices per share of Stock
reported on the New York Stock Exchange Composite Tape or similar facility
for such date, (ii) if Stock is not listed on the New York Stock Exchange,
the average of the highest and lowest selling prices per share of Stock
as reported for such date on the principal stock exchange in the U.S. on
which Stock is listed (as determined by the Committee), or (iii) if
neither of the preceding clauses is applicable, the value per share
determined by the Committee in a manner consistent with the Treasury
Regulations under Section 2031 of the Internal Revenue Code. If no sale
of Stock occurs on such date, but there were sales reported within a
reasonable period both before and after such date, the weighted average
of the means between the highest and lowest selling prices on the nearest
date before and the nearest date after such date shall be used, with the
average to be weighted inversely by the respective numbers of trading days
between the selling dates and such date.
(k) "ISO" or "Incentive Stock Option" means an option to purchase
Stock which is designated by the Committee as an "Incentive Stock Option"
and which qualifies as an "incentive stock option" under Section 422 (or
any successor provision) of the Code.
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(l) "Limited Right" has the meaning given in Section 7.
(m) "NQSO" or "Non-Qualified Stock Option" means an option to
purchase Stock which is designated by the Committee as a "Non-Qualified
Stock Option," or which is designated by the Committee as an ISO but which
fails or ceases to qualify as an "incentive stock option" under the Code.
(n) "Option" means an ISO or an NQSO.
(o) "Option Agreement" means the written agreement referred to in
Section 5(a) between the Company and the Optionee evidencing an Option or
SAR.
(p) "Optionee" means a person to whom an Option or SAR is granted
pursuant to the Plan.
(q) "Plan" means the Anheuser-Busch Companies, Inc. 1989 Incentive
Stock Plan, as amended from time to time.
(r) "Reporting Person," as of a given date, means an Optionee who
would be required to report a purchase or sale of Stock occurring on such
date to the Securities and Exchange Commission pursuant to Section 16(a)
of the Act and the rules and regulations thereunder.
(s) "Rule 16b-3" means Rule 16b-3 (as amended from time to time)
promulgated by the Securities and Exchange Commission under the Act, and
any successor thereto, as in effect as to the Plan.
(t) "SAR" means a stock appreciation right, which is the right to
receive cash, Stock, or other property having a value on the date the SAR
is exercised equal to (i) the excess of the Fair Market Value of one share
of Stock on the exercise date over (ii) the base price of the SAR. The
term "SAR" does not include a Limited Right.
(u) "Stock" means shares of the common stock of the Company, par
value $1.00 per share, or such other class or kind of shares or other
securities as may be applicable under Section 10.
(v) "Subsidiary" means a "subsidiary corporation" of the Company as
defined in Section 424 (or any successor provision) of the Code.
(w) "Withholding Taxes" means, in connection with an Option or SAR
(including without limitation the receipt of Stock pursuant to the
exercise of an NQSO or SAR or the disposition of ISO shares), (a) the
total amount of Federal and state income taxes, social security taxes and
other taxes which the Employer of the Optionee is required to withhold
("Required Withholding Taxes") plus (b) any other such taxes which the
Employer, in its sole discretion, withholds at the request of the
Optionee.
SECTION 3. MAXIMUM SHARES.
(a) The maximum number of shares of Stock which may be issued to
Eligible Employees pursuant to Options and SARs under the Plan shall be
22,000,000 shares, subject to adjustment as provided in Section 10. For
this purpose:
(i) Only shares actually issued pursuant to the grant or
exercise of an Option or SAR shall be counted against the Plan
maximum.
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(ii) Except to the extent prohibited by Rule 16b-3, Shares which
are forfeited by an Optionee after issuance shall be deemed to have
never been issued under the Plan and accordingly shall not be
counted against the Plan maximum.
(iii) The number of shares available for the grant of new Options
and SARs at any particular time shall be (A) the maximum number of
shares specified above (as adjusted), minus (B) the sum of the
number of shares issued under the Plan prior to that time and the
number of shares issuable upon exercise of Options and SARs
outstanding at that time.
In its discretion, the Company may issue treasury shares or authorized but
previously unissued shares.
(b) Notwithstanding paragraph (a) above, the maximum number of
shares for which ISOs may be granted under the Plan shall be 22,000,000
shares, subject to adjustment as provided in Section 10, regardless of the
fact that a lesser number of shares is issued pursuant to the exercise of
ISOs.
(c) Shares issued under other plans of the Company shall not be
counted against the Plan maximum.
(d) Notwithstanding any other provisions of this Plan, the maximum
number of options that may be granted to any Eligible Employee during any
calendar year shall be 500,000, subject to adjustment as provided in
Section 10.
SECTION 4. ELIGIBILITY.
Officers and management employees of the Company, Subsidiaries or
Affiliates shall be eligible to receive Options and SARs under the Plan.
A Director of the Company or a Subsidiary or an Affiliate shall be
eligible only if he or she also is an officer or employee of the Company,
a Subsidiary or an Affiliate. Notwithstanding the foregoing, persons
employed only by Affiliates shall not be eligible to receive ISOs.
SECTION 5. OPTION AND SAR GRANTS.
(a) Subject to the limitations in this Plan, the Committee may cause
the Company to grant Options and/or SARs to such Eligible Employees, at
such times, in such amounts, for such periods, becoming exercisable at
such times, with such option prices or base prices, and subject to such
other terms, conditions, and restrictions as the Committee deems
appropriate. Each Option or SAR shall be evidenced by a written Option
Agreement between the Company and the Optionee. In granting an Option or
SAR, the Committee may take into account any factor it deems appropriate
and consistent with the purpose of the Plan. Options and/or SARs may be
granted as additional compensation to the Optionee, or in lieu of other
compensation.
(b) Options and SARs may be granted separately or as alternatives
to each other, except that (i) Options and SARs shall be granted as
alternatives to each other only if the option prices and the base prices
are equal, (ii) Limited Rights shall not be granted separately, and shall
be granted only as alternatives to Options and/or SARs, (iii) SARs and/or
Limited Rights which are alternatives to ISOs may be granted only at the
same time the ISO is granted, and (iv) SARs which are alternatives to
Options, and Limited Rights which are
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alternatives to Options or SARs, shall expire or terminate at the same
time as the Option or SARs to which they are alternatives.
(c) All or any portion of any payment to an Optionee whether in cash
or shares of Stock, may be deferred to a later date if and as provided in
the Option Agreement. Deferrals may be for such periods and upon such
terms and conditions (including the provision of interest, dividend
equivalents, or other return on such amounts) as the Committee may
determine.
(d) Option Agreements may contain any provision approved by the
Committee, not inconsistent with Section 9, relating to the period for
exercise after termination of employment, death or Disability.
(e) Option Agreements may, in the discretion of the Committee,
contain a provision permitting an Optionee to designate the person who may
exercise an Option or SAR upon the Optionee's death, either by Will or by
appropriate notice to the Company.
(f) Notwithstanding any other provision of this Section 5, (i) no
Option or SAR shall contain a so-called "reload" feature under which
Options or SARs are automatically granted to Optionees upon exercise of
Options or SARs, and (ii) no Option or SAR shall be granted in exchange
for a so-called "underwater" Option or SAR which has an option price or
base price in excess of the Fair Market Value of the Stock (nor shall an
underwater Option or SAR be amended to reduce its option price or base
price).
SECTION 6. PROVISIONS GOVERNING OPTIONS AND SARS.
(a) If Options and SARS are alternatives to each other, the exercise
of all or part of one automatically shall cause an immediate equal and
corresponding termination of the other.
(b) An Optionee shall have none of the rights of a shareholder with
respect to shares of Stock subject to his or her Option or SAR until
shares are issued in his or her name.
(c) Nothing in the Plan or any Option Agreement shall confer on any
person any right or expectation to continue in the employ of his or her
Employer, or shall interfere in any manner with the absolute right of the
Employer to change or terminate such person's employment at any time for
any reason or for no reason.
(d) Options and SARs shall not be transferable other than by will
or the laws of descent and distribution, and shall be exercisable during
the Optionee's lifetime only by the Optionee or his or her guardian or
legal representative.
(e) Except as provided in Section 10(b), (A) the option price per
share of an Option or the base price of an SAR shall not be less than Fair
Market Value on the Option's or the SAR's grant date, nor less than the
par value of a share of Stock, except that an SAR which is an alternative
to an Option but which is granted at a later time may have a base price
equal to the option price even though the base price is less than Fair
Market Value on the date the SAR is granted.
(f) The grant of an Option and the Option Agreement for an Option
must clearly identify the Option as either an ISO or as an NQSO.
(g) In the case of an SAR, the Option Agreement may specify the form
of payment of SARs or may provide that the form is to be determined at a
later date, and may require the satisfaction of any rules or conditions
in connection with receiving payment in any particular
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form. If the Optionee is a Reporting Person at the time of grant or
during the SAR's term and is given an election to receive cash in full or
partial settlement of an SAR, the Committee shall have sole discretion to
approve or disapprove such election at any time after it is made.
SECTION 7. LIMITED RIGHTS.
(a) The Committee shall have authority to grant limited stock
appreciation rights ("Limited Rights") to the holder of any Option or SARs
granted under the Plan (the "Related Option or SAR") with respect to all
or some of the shares of Stock covered by such Related Option or SAR. A
Limited Right may be granted either at the time of grant of the Related
Option or SAR or (except in the case of an ISO) at any time thereafter
during its term. A Limited Right may be granted to an Optionee with
respect to Options irrespective of whether such Optionee is being granted
or has been granted an SAR. Limited Rights shall be transferable only
when the Related Option or SAR is transferable and under the same
conditions, and shall be exercisable during the Optionee's lifetime only
by the Optionee or his or her guardian or legal representative. If an ISO
is a Related Option to Limited Rights, the Limited Rights may be exercised
only if the Fair Market Value per share of Stock on the exercise date
exceeds the option price per share of the ISO. A Limited Right may be
exercised only during the sixty-day period beginning on an "Acceleration
Date" (as defined in Section 11(a) hereof); provided, however, that if the
Acceleration Date occurs within the six month period following the grant
of the Limited Right or the grant of the Related Option or SAR, whichever
is applicable as provided below, to a Reporting Person, then the Limited
Right will be exercisable by the Reporting Person for a period of thirty
days following expiration of such six-month period, or, if earlier, thirty
days following the Optionee's death or Disability. Each Limited Right
shall be exercisable only if, and to the extent that, the Related Option
or SAR is exercisable (ignoring paragraph (j) below). Notwithstanding the
provisions of the two immediately preceding sentences, no Limited Right
may be exercised by a Reporting Person until the expiration of six months
from the date of grant of the Limited Right unless otherwise permitted by
Rule 16b-3 in the case of an SAR granted prior to the grant of the Limited
Right.
(b) Upon the exercise of Limited Rights, the holder thereof shall
receive in cash whichever of the following amounts is applicable:
(i) in the case of an exercise of Limited Rights by reason of an
acquisition of Stock described in Section 11(a), an amount equal to
the Acquisition Spread (as defined in paragraph (d) below); or
(ii) in the case of an exercise of Limited Rights by reason of
shareholder approval of an agreement described in Section 11(a), an
amount equal to the Merger Spread (as defined in paragraph (f)
below);
(iii) in the case of an exercise of Limited Rights by reason of a
change in the composition of the Board of Directors as described in
Section 11(a), an amount equal to the Board Change Spread (as
defined in paragraph (g) below);
(iv) in the case of an exercise of Limited Rights by reason of
stockholder approval of a plan of liquidation described in Section
11(a), an amount equal to the Liquidation Spread (as defined in
paragraph (i) below);
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provided, however, that if an ISO is a Related Option to the Limited
Rights, the cash received for each Right shall not exceed 100% of the
spread under the ISO, i.e., the difference between the option price of the
ISO and the Fair Market Value of Stock on the date the Limited Right is
exercised.
(c) The term "Acquisition Price per Share" as used in this Section
shall mean, with respect to the exercise of any Limited Right by reason
of an acquisition of Stock described in Section 11(a), the greater of (i)
the highest price per share of Stock stated on the Schedule 13D, 14D-1 or
similar schedule (or amendment thereto) filed by the holder of 50% or more
of the Company's voting power which gives rise to the exercise of such
Limited Right, and (ii) the highest Fair Market Value per share of Stock
during the sixty-day period ending on the date the Limited Right is
exercised.
(d) The term "Acquisition Spread" as used in this Section shall mean
an amount equal to the product computed by multiplying (i) the excess of
(A) the Acquisition Price per Share over (B) the option or base price per
share of Stock at which the Related Option or SAR is exercisable, by (ii)
the number of Limited Rights being exercised.
(e) The term "Merger Price per Share" as used in this Section shall
mean, with respect to the exercise of any Limited Right by reason of
shareholder approval of an agreement described in Section 11(a), the
greater of (i) the fixed or formula price for the acquisition of shares
of Stock specified in such agreement if such fixed or formula price is
determinable on the date on which such Limited Right is exercised, and
(ii) the highest Fair Market Value per share of Stock during the sixty-day
period ending on the date on which such Limited Right is exercised. Any
securities or property which are part or all of the consideration paid for
shares of Stock pursuant to such agreement shall be valued in determining
the Merger Price per share at the higher of (A) the valuation placed on
such securities or property by the corporation, person or other entity
which is a party with the Company to such agreement or (B) the valuation
placed on such securities or property by the Committee.
(f) The term "Merger Spread" as used in this Section shall mean an
amount equal to the product computed by multiplying (i) the excess of (A)
the Merger Price per Share over (B) the option or base price per share of
Stock at which the Related Option or SAR is exercisable, by (ii) the
number of Limited Rights being exercised.
(g) The term "Board Change Spread" as used in this Section shall
mean, with respect to the exercise of any Limited Rights by reason of a
change in the composition of the Board described in Section 11(a), an
amount equal to the product computed by multiplying (i) the excess of (A)
the highest Fair Market Value per share of Stock during the sixty-day
period ending on the date the Limited Rights are exercised over (B) the
option or base price per share of Stock at which the Related Option or SAR
is exercisable, by (ii) the number of Limited Rights being exercised.
(h) The term "Liquidation Price per Share" as used in this Section
shall mean, with respect to the exercise of any Limited Right by reason
of shareholder approval of a plan of liquidation described in Section
11(a) the greater of (i) the highest amount paid or to be paid per share
of Stock pursuant to the plan of liquidation as determined by the
Committee and (ii) the highest Fair Market Value per share of Stock during
the sixty-day period ending on the date on which such Limited Right is
exercised. Any securities or property which (A) are part or all of the
consideration paid for shares of Stock pursuant to such plan of
liquidation
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or (B) are to be sold and the proceeds distributed in liquidation shall be
valued in determining the Liquidation Price per share at the higher of
(i) the valuation placed on such securities or property by the Company
upon the distribution of such securities or property in accordance with
the plan of liquidation, if known, at the time of the exercise of such
Limited Right, or (ii) the valuation placed on such securities or property
by the Committee.
(i) The term "Liquidation Spread" as used in this Section shall mean
an amount equal to the product computed by multiplying (i) the excess of
(A) the Liquidation Price per Share over (B) the option or base price per
share of Stock at which the Related Option or SAR is exercisable, by (ii)
the number of Limited Rights being exercised.
(j) Notwithstanding any other provision of the Plan, an SAR may not
be exercised at a time when any Limited Rights held by the holder of such
SAR may be exercised.
(k) Notwithstanding the provisions of Section 7(a) above, if an
Acceleration Date specified in Section 11(a)(i) occurs and if such Date
occurs in connection with a Window Period Situation, then each Optionee
who is a Restricted Reporting Person may exercise his or her Limited
Rights only during the Window Period immediately following the
Acceleration Date, subject to the following exceptions: (i) if the
Acceleration Date occurs during the six-month period following the grant
of a Limited Right or the grant of the Related Option or SAR, whichever
is applicable as provided in the last sentence of Section 7(a) above, then
such Limited Right may be exercised by such Optionee only during the
Window Period immediately following the expiration of such six-month
period or, if earlier, following the death or Disability of such Optionee;
and (ii) if such Acceleration Date or the expiration of such six-month
period (as applicable) occurs during a Window Period, such Optionee may
exercise such Limited Right either during the remainder of such Window
Period or during the next whole Window Period thereafter. For the
purposes of this paragraph, a "Window Period Situation" exists (A) if one
or more Reporting Persons are the "Person" or members of the group
constituting the "Person" specified in Section 11(a)(i) below, or (B) if,
by excluding all voting securities acquired by the "Person" directly from
the Company, no Acceleration Date would occur. Each Reporting Person
specified in clause (A) above, and all Reporting Persons in the case of
a clause (B) Window Period Situation, are "Restricted Reporting Persons"
for the purposes of this paragraph. A "Window Period" is the period
defined from time to time in paragraph (e)(3)(iii) of Rule 16b-3, or the
corresponding paragraph(s) of any successor to Rule 16b-3.
SECTION 8. STOCK ISSUANCE, PAYMENT, AND WITHHOLDING.
(a) An Optionee may pay the option price of an Option in cash, Stock
(including shares of previously-owned Stock, or Stock issuable in
connection with the Option), or other property, to the extent permitted
or required by the Option Agreement or the Committee from time to time.
The Committee may permit deemed or constructive transfers of shares in
lieu of actual transfer and physical delivery of certificates. Except to
the extent prohibited by applicable law, the Committee or its delegate may
take any necessary or appropriate steps in order to facilitate the payment
of any such purchase price. Without limiting the foregoing, the Committee
may allow the Optionee to defer payment of the option price, or may cause
the Company to loan the option price to the Optionee or to guaranty that
any shares to be issued will be delivered to a broker or lender in order
to allow the Optionee to borrow the purchase price. The Committee may
require satisfaction of any rules or conditions in
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connection with paying the Option price at any particular time, in any
particular form, or with the Company's assistance.
(b) When the Optionee's Employer becomes required to collect and pay
Required Withholding Taxes, the Optionee shall promptly reimburse the
Company or Employer (as required by the Committee) for the amount of such
Required Withholding Taxes in cash, unless the Option Agreement or the
Committee permits or requires payment in another form. In the discretion
of the Committee or its delegate and at the Optionee's request, the
Committee or its delegate may cause the Company or Employer to pay
Withholding Taxes in excess of Required Withholding Taxes on behalf of an
Optionee, which shall be reimbursed by the Optionee. The Committee may
allow an Optionee to reimburse the Company or Employer for payment of
Withholding Taxes with shares of Stock or other property. The Committee
may require the satisfaction of any rules or conditions in connection with
any non-cash payment of Withholding Taxes. If an Optionee is a Reporting
Person at the time of grant or during the Option's term and is given an
election to pay any Withholding Taxes with Stock, the Committee shall have
sole discretion to approve or disapprove such election at any time after
the election is made.
(c) If provided in the Option Agreement relating to an ISO, the
Committee may prohibit the transfer by an Optionee of shares of Stock
issued to him or her upon exercise of an ISO into the name of a nominee,
and the Committee may require the placement of a legend on certificates
for such shares reflecting such prohibition.
SECTION 9. FORFEITURES.
(a) If any Optionee voluntarily terminates employment within two
years of the grant of an Option or SAR, or is dismissed from employment
at any time for any reason, such Option or SAR shall immediately terminate
and be forfeited to the extent not previously exercised.
(b) Notwithstanding any other provision in this Plan except
paragraph (c) below, the receipt of any Option or SAR, and the receipt of
any share of Stock, cash, or other benefit in connection with such Option
or SAR, shall be subject to the following provisions:
(i) At all times during his or her employment with the Company
or a Subsidiary or Affiliate, the Optionee shall continuously
satisfy his or her duties of loyalty and faithful service to the
Company and his or her Employer and shall refrain from engaging in
any undisclosed conflict of interest or from otherwise acting in any
manner inimical to or contrary to the best interests of the Company
or Employer. Any violation of law or of any Company or Employer
policy or the Business Practices and Ethics Manual (or any manual,
or portion thereof, which replaces such Manual) of the Company shall
be considered conduct inimical to or contrary to the best interests
of the Company and Employer for the purposes of this Section 9(b).
The exercise of any Option or SAR, or the acceptance of any share
of stock, cash, or other benefit hereunder in connection with any
Option or SAR shall be deemed to be the certification by the
Optionee that he or she has satisfied this condition. In addition,
the Optionee shall furnish to the Committee on request any other
information concerning satisfaction of such condition which the
Committee may request.
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(ii) This Section 9(b) is intended to establish, as a condition
to the realization of economic benefits under the Plan, a standard
of conduct consistent with (A) the duties of loyalty and faithful
performance of services imposed on an employee by the common law,
and (B) the Company's and Employer's published standards and
policies which the Optionee is bound to observe. This Section 9(b)
shall in no way impair or derogate from the rights or remedies which
the Company or Employer may have at law or in equity or under any
employment contract or agreement with an Optionee to prevent or to
recover damages for the disclosure of trade secrets, or to recover
any restitution or damages properly owing the Company or Employer
because of any theft, fraud, embezzlement, or other illegal conduct
on the part of an Optionee.
(iii) If the Committee determines that an Optionee has not
observed the standard of conduct required by this Section 9(b), the
Committee may require the Optionee to forfeit any right to or in any
outstanding Option or SAR, as of the date such determination is
made, and may require repayment of any Stock or cash received in
connection with any Option or SAR by such Optionee after the act or
acts of misconduct which gave rise to the Committee's determination.
(iv) This Section 9(b) shall not be interpreted as requiring the
Committee to take action in each and every instance of suspected
misconduct, and in determining to attempt to enforce the forfeiture
and repayment provisions of this Section 9(b), the Committee may
consider, among other things, the nature of the misconduct, its
seriousness, the impact on the Company, the possible economic
effects, the circumstances surrounding the discontinuance of the
Optionee's employment with the Employer, and the amount of proof
which the Employer may have of any alleged misconduct. Any decision
by the Committee to forego enforcement of this Section 9(b) in whole
or in part in any particular instance shall in no way constitute a
waiver of the right to enforce such Section in any other instance.
(v) During the period of any investigation into whether an
Optionee has engaged in conduct prohibited by this Section 9(b), the
Optionee's rights to receive delivery of any Stock or cash, or to
have any transfer of Stock recognized on the stock books of the
Company, shall be suspended. An Optionee may exercise Options or
SARs subject to the prior sentence.
(c) The provisions of this Section 9 shall terminate upon the
occurrence of an Acceleration Date described in Section 11.
SECTION 10. ADJUSTMENTS AND ACQUISITIONS.
(a) In the event of (i) any change in the outstanding shares of
Stock by reason of any stock split, combination of shares, stock dividend,
reorganization, merger, consolidation, or other corporate change having
a similar effect, (ii) any separation of the Company including a spin-off
or other distribution of stock or property by the Company, or (iii) any
distribution to stockholders generally other than a normal dividend, the
Committee shall make such equitable adjustments to the Plan and to
outstanding Options, SARs and Limited Rights as it shall deem appropriate
in order to prevent the dilution or enlargement of (a) the Options, SARs
and Limited Rights which may be granted, the shares of Stock which may be
issued, or the shares for which ISOs may be granted under the Plan, (b)
the economic value of
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outstanding Options, SARs and Limited Rights or (c) the limitations
imposed by Section 3(d) of this Plan, provided, however, that the Committee
shall not make any adjustment which would constitute or result in an increase
in the aggregate number of Shares available under the Plan, or the annual
limit on the number of options which may be granted to an Eligible Employee
under Section 3(d) of this Plan, requiring shareholder approval under Section
422 or Section 162(m) of the Code. Any such determination by the Committee
shall be conclusive and binding on all concerned.
(b) In the event the Company or a Subsidiary enters into a
transaction described in Section 424(a) of the Code with any other
corporation, the Committee may grant Options, SARs, or Limited Rights to
employees or former employees of such corporation in substitution of stock
options, stock appreciation rights or limited stock appreciation rights
previously granted to them by such corporation upon such terms and
conditions as shall be necessary to qualify such grant as a substitution
described in Section 424(a) of the Code.
SECTION 11. ACCELERATION.
(a) If, while unexercisable Options or SARs remain outstanding under
the Plan,
(i) any Person (as defined herein) becomes the beneficial owner
directly or indirectly (within the meaning of Rule 13d-3 under the
Act) of more than 50% of the Company's then outstanding voting
securities (measured on the basis of voting power);
(ii) the shareholders of the Company approve a definitive
agreement to merge or consolidate the Company with any other
corporation, other than an agreement providing for (x) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity), in combination with
the ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, at least 50% of the
combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or (y) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction)
in which no Person acquires more than 50% of the combined voting
power of the Company's then outstanding securities;
(iii) a change occurs in the composition of the Board of Directors
during any period of twenty-four consecutive months such that
individuals who at the beginning of such period were members of the
Board of Directors cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for
election by the Company's shareholders, of each new director was
approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously
so approved; or
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets,
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then on the date as of which any of the events described in clauses (i)
thru (iv) occurs (such date being referred to as an "Acceleration Date"),
each Option and SAR automatically shall become exercisable. For purposes
of this paragraph, "Person" shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof; however, a Person shall not include (aa) the Company or any
of its subsidiaries, (bb) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries,
(cc) an underwriter temporarily holding securities pursuant to an offering
of such securities, or (dd) a corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions
as their ownership of Stock.
(b) Except to the extent prohibited by Rule 16b-3 in the case of
Reporting Persons, the Committee may accelerate the date on which any
Options and SARs become exercisable and may remove any restrictions on
such Options or SAR at any time after grant and for any reason the
Committee deems appropriate.
(c) All Options and SARs shall automatically become exercisable upon
a termination of employment caused by the death or Disability of the
Optionee.
SECTION 12. ADMINISTRATION.
(a) The Plan shall be administered by a Stock Option Committee
appointed by the Board consisting of three or more persons, each of whom
at all times shall be a member of the Board, a "disinterested person" as
defined in Rule 16b-3 and an "outside director" within the meaning of
Section 162(m)(4)(C)(i) of the Code. Committee members shall not be
eligible for selection to receive Options or SARs under the Plan. The
initial Committee shall consist of the members of the "Stock Option
Committee" administering the Anheuser-Busch 1981 Non-Qualified Stock
Option Plan at the time this Plan is adopted by the Board.
(b) A majority of the members of the Committee shall constitute a
quorum. The acts of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by a majority of
the members of the Committee, shall be the acts of the Committee. From
time to time the Committee may adopt, amend, and rescind such rules and
regulations for carrying out the Plan and implementing Option Agreements,
and the Committee may take such action in the administration of the Plan,
as it deems proper. The interpretation of any provisions of the Plan by
the Committee shall be final and conclusive unless otherwise determined
by the Board.
SECTION 13. AMENDMENT, TERMINATION, SHAREHOLDER APPROVAL.
(a) The Board may amend or terminate the Plan at any time, except
that without the approval of the Company's shareholders, no amendment
shall (i) increase the maximum number of shares issuable, or the maximum
number of shares for which ISOs may be granted, under the Plan, (ii)
change the class of persons eligible to be Optionees, (iii) change the
annual limit on options which may be granted to an Eligible Employee
provided in Section 3(d) or (iv) change the provisions of this Section
13(a).
(b) The Committee may amend the Plan from time to time to the extent
necessary to (i) comply with Rule 16b-3 and (ii) prevent benefits under
the Plan from constituting "applicable employee remuneration" within the
meaning of Section 162(m) of the Code.
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(c) No Options or SARs may be granted under the Plan after
September 26, 1999.
(d) Notwithstanding any other provision of the Plan, no Option or
SAR granted under the Plan on or after December 15, 1993 may be exercised
unless and until either (i) the amendment to the Plan adopted by the Board
on December 15, 1993 which added Section 3(d) to this Plan is approved by
the Company's shareholders within twelve months of such adoption, or (ii)
if earlier, the Company receives an opinion of counsel or other evidence
satisfactory to it that such shareholder approval is not required by the
Code in order to prevent benefits under the Plan from constituting
"applicable employee remuneration" within the meaning of Section 162(m)
of the Code.
(e) The approval by shareholders described in this Section shall
consist of the approving vote of the holders of a majority of the
outstanding shares of Stock present (in person or by proxy) at a meeting
of the shareholders at which a quorum is present, unless a greater vote
is required by the Company's charter or by-laws or by applicable law.
SECTION 14. ADDITIONAL PAYMENTS.
The Committee may grant an Optionee the right to receive additional
compensation in cash or other property (in addition to any cash or other
property payable under the terms of the Option or SAR itself) upon an
Option or SAR becoming exercisable or being exercised provided that (i)
in the case of an ISO such compensation is includible in income under
Sections 61 and 83 of the Code at the time of such exercise and (ii) no
such right may be granted in connection with any SAR or Limited Right
which is an alternative to an ISO.
SECTION 15. MISCELLANEOUS.
(a) Each provision of the Plan and each Option Agreement relating
to an ISO shall be construed so that each ISO shall be an incentive stock
option as defined in Section 422 of the Code or any statutory provision
that may replace Section 422, and any provisions thereof which cannot be
so construed shall be disregarded. Except as provided in Section 9, no
discretion granted or allowed to the Committee under the Plan shall apply
to an ISO after its grant except to the extent the Option Agreement with
respect to the ISO grant shall so provide.
(b) Without amending the Plan, Options and SARs may be granted to
Eligible Employees who are foreign nationals or who are employed outside
the United States or both, on such terms and conditions different from
those specified in the Plan as may, in the judgment of the Committee, be
necessary or desirable to further the purposes of the Plan. Such
different terms and conditions may be reflected in Addenda to the Plan.
However, in the case of an ISO, no such different terms or conditions
shall be employed if such term or condition constitutes, or in effect
results in, an increase in the aggregate number of shares which may be
issued under the Plan or a change in the definition of Eligible Employee.
(c) Notwithstanding any other provision in the Plan, the Committee
shall not act with respect to any Reporting Person in a manner which would
contravene any requirement of Rule 16b-3 as in effect at the time of such
action.
(d) Amendments to this Plan which were adopted by the Board on
December 15, 1993 shall not apply to Options granted prior to that date
except for (i) the definition of "Required Withholding Tax" now contained
in Section 2(w) and (ii) the amendment adding the express authority for
beneficiary designations which is contained in Section 5(e).
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