SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 1998
Commission file number 1-7823
ANHEUSER-BUSCH COMPANIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 43-1162835
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Busch Place, St. Louis, Missouri 63118
(Address of principal executive offices) (Zip Code)
314-577-2000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
$1 Par Value Common Stock - 485,927,336 shares as of March 31, 1998
<PAGE>2
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
Anheuser-Busch Companies, Inc., and Subsidiaries (Unaudited)
Three months ended March 31,
----------------------------
(In millions, except per share data) 1998 1997
- -----------------------------------------------------------------------
Sales........................................... $2,951.2 $2,863.8
Less excise taxes............................. (443.7) (400.9)
---------------------
Net sales....................................... 2,507.5 2,462.9
Cost of products and services................. (1,638.8) (1,597.0)
---------------------
Gross profit.................................... 868.7 865.9
Marketing, distribution and administrative
expenses...................................... (400.4) (397.6)
---------------------
Operating income................................ 468.3 468.3
Other income and expenses:
Interest expense.............................. (75.5) (57.2)
Interest capitalized.......................... 8.7 8.8
Interest income............................... 1.5 1.9
Other expense, net............................ (6.1) (3.5)
---------------------
Income before income taxes...................... 396.9 418.3
Provision for income taxes...................... (151.0) (160.6)
Equity income, net of tax....................... 19.3 --
---------------------
Net income...................................... 265.2 257.7
Retained earnings, beginning of period.......... 7,604.9 6,924.5
Common stock dividends (per share: 1998--$.26;
1997--$.24)..................................... (126.6) (119.5)
---------------------
Retained earnings, end of period................ $7,743.5 $7,062.7
=====================
Basic earnings per share........................ $ .54 $ .52
=====================
Diluted earnings per share...................... $ .54 $ .51
=====================
See accompanying Notes to Consolidated Financial Statements on Page 3.
2
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Notes to Consolidated Financial Statements
1. UNAUDITED FINANCIAL STATEMENTS: The accompanying unaudited
financial statements have been prepared in accordance with generally
accepted accounting principles and applicable SEC guidelines
pertaining to interim financial information, and include all
adjustments necessary for a fair presentation. These statements
should be read in conjunction with the Consolidated Financial
Statements and Notes thereto included in the company's Annual Report
to Shareholders for the year ended December 31, 1997.
2. COMPREHENSIVE INCOME: Effective with the first quarter 1998, the
company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" (FAS 130). FAS 130 requires that
noncash changes in shareholders equity be combined with net income
and reported in a new financial statement category entitled
"comprehensive income." Adoption of FAS 130 had no impact on the
results of the company's operations.
The following table sets forth the components of comprehensive
income for the three month period ended March 31 (in millions):
------------------------------------------------------------------
1998 1997
---------- --------
Net income $265.2 $257.7
Foreign currency translation adjustment 3.0 (9.3)
--------------------------
Comprehensive income $268.2 $248.4
==========================
------------------------------------------------------------------
3
<PAGE>4
CONSOLIDATED BALANCE SHEET
Anheuser-Busch Companies, Inc., and Subsidiaries (Unaudited)
MARCH 31,
-------------------
(In millions) 1998 1997
- -----------------------------------------------------------------
ASSETS
CURRENT ASSETS:
Cash and marketable securities........... $ 106.4 $ 266.0
Receivables, less allowance for
doubtful accounts...................... 768.2 746.6
Inventories:
Raw materials and supplies............. 370.9 335.2
Work in progress....................... 98.7 97.7
Finished goods......................... 208.1 173.6
Total inventories.................... 677.7 606.5
Other current assets..................... 156.4 194.9
------------------------
Total current assets................... 1,708.7 1,814.0
------------------------
INVESTMENTS IN AFFILIATED COMPANIES...... 1,282.4 721.8
OTHER ASSETS............................. 1,127.2 1,059.4
PLANT AND EQUIPMENT, NET................. 7,821.2 7,314.5
------------------------
TOTAL ASSETS........................... $11,939.5 $10,909.7
========================
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Accounts payable....................... $ 709.4 $ 702.2
Accrued salaries, wages and benefits... 214.4 211.7
Accrued taxes.......................... 325.7 373.3
Other current liabilities.............. 331.5 263.5
------------------------
Total current liabilities............ 1,581.0 1,550.7
------------------------
POSTRETIREMENT BENEFITS.................. 526.4 525.8
------------------------
LONG-TERM DEBT........................... 4,383.6 3,498.6
------------------------
DEFERRED INCOME TAXES.................... 1,312.4 1,228.9
------------------------
SHAREHOLDERS EQUITY:
Common stock........................... 710.5 707.0
Capital in excess of par value......... 1,043.0 953.1
Retained earnings...................... 7,743.5 7,062.7
Foreign currency translation adjustment (211.0) (18.1)
------------------------
9,286.0 8,704.7
Treasury stock, at cost................ (4,902.7) (4,316.9)
ESOP debt guarantee.................... (247.2) (282.1)
------------------------
4,136.1 4,105.7
------------------------
COMMITMENTS AND CONTINGENCIES............ -- --
------------------------
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $11,935.5 $10,909.7
========================
4
<PAGE>5
CONSOLIDATED STATEMENT OF CASH FLOWS
Anheuser-Busch Companies, Inc., and Subsidiaries (Unaudited)
Three months ended March 31,
-----------------------------
(In millions) 1998 1997
- ---------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income......................................... $ 265.2 $ 257.7
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.................. 177.5 160.8
Deferred income taxes.......................... 18.8 20.8
Undistributed earnings of affiliated companies. (19.3) --
Increase in noncash working capital............ (85.5) (56.0)
Other, net..................................... (4.2) (1.2)
-------------------
Net cash provided by operating activities.......... 352.5 382.1
-------------------
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures............................... (237.4) (265.6)
-------------------
Cash used for investing activities................. (237.4) (265.6)
-------------------
CASH FLOW FROM FINANCING ACTIVITIES:
Increase in long-term debt......................... 112.9 322.9
Decrease in long-term debt......................... (60.1) (61.9)
Dividends paid to stockholders..................... (126.6) (119.5)
Acquisition of treasury stock...................... (109.4) (110.7)
Shares issued under stock plans.................... 27.2 25.1
-------------------
Cash provided by/(used for) financing activities... (156.0) 55.9
-------------------
Net increase/(decrease) in cash and marketable
securities during the period..................... (40.9) 172.4
Cash and marketable securities, beginning of
period........................................... 147.3 93.6
-------------------
Cash and marketable securities, end of period......$ 106.4 $ 266.0
===================
A more complete understanding of the company's financial position
and business can be gained by reference to the Anheuser-Busch Companies,
Inc. Annual Report on Form 10-K for the fiscal year ended December 31,
1997.
5
<PAGE>6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
INTRODUCTION
- ------------
This discussion summarizes the significant factors affecting the
consolidated operating results, financial condition and liquidity/cash
flows of Anheuser-Busch Companies, Inc. for the first quarter ended March
31, 1998 compared to the first quarter ended March 31, 1997 and the year
ended December 31, 1997. This discussion should be read in conjunction
with the Consolidated Financial Statements and Notes thereto included in
the company's Annual Report to Shareholders for the year ended December 31,
1997. Additional information concerning the company's consolidated
financial and operating results for the first quarter 1998 is
contained in the Letter to Shareholders section of the first quarter 1998
Financial Report contained in the quarterly Anheuser-Busch publication
Horizons.
This discussion contains statements regarding the company's
expectations concerning its future operations, earnings and prospects.
These statements are forward-looking statements that involve
significant risks and uncertainties, and accordingly, no assurances can be
given that such expectations will be correct. These expectations are based
upon many assumptions that the company believes to be reasonable, but
such assumptions may ultimately prove to be inaccurate or incomplete, in
whole or in part. Important factors that could cause actual results to
differ from the expectations stated in this discussion include, among
others, changes in the pricing environment for the company's products;
factors that may affect domestic demand for malt beverage products; changes
in customer preference for the company's malt beverage products;
changes in raw materials prices; changes in interest rates; changes in
6
<PAGE>7
foreign currency exchange rates; changes in attendance and consumer
spending patterns for the company's theme park operations; changes
in demand for aluminum beverage containers; changes in the company's
international beer business or in the beer business of the company's
international equity partners; and the effect of stock market conditions on
the company's share repurchase program.
FIRST QUARTER 1998 FINANCIAL RESULTS
- ------------------------------------
Key operating results for the first quarter 1998 versus 1997 are summarized
below:
- -------------------------------------------------------------------------
First Quarter
(in millions, except per share)
------------------------------------------
| 1998 vs. 1997
------------------------------------------
1998 | 1997 | $ | %
-------|-----------|-----------|----------
| | |
Gross Sales $2,951 | $2,864 | Up $87 | Up 3.1%
| | |
Net Sales $2,508 | $2,463 | Up $45 | Up 1.8%
| | |
Operating Income $468 | $468 | ---- | ----
| | |
Equity Income, Net of Tax $19 | ---- | Up $19 | N/M
| | |
Net Income $265 | $258 | Up $7 | Up 2.9%
| | |
Diluted Earnings per Share $.54 | $.51 | Up $.03 | Up 5.9%
- -------------------------------------------------------------------------
N/M - Not Meaningful
RESULTS OF OPERATIONS
- ---------------------
Anheuser-Busch Companies, Inc. achieved gross sales of $3.0 billion
during the first quarter 1998, an increase of $87.4 million, or 3.1%, over
first quarter 1997 gross sales. The company had net sales of $2.5
billion, an increase of $44.6 million, or 1.8%, compared to the first
quarter 1997. The difference between gross sales and net sales reflects
beer excise taxes paid by the company on its products. The increases
7
<PAGE>8
in both gross and net sales were primarily due to higher domestic beer
sales volume, partially offset by lower revenue per barrel and lower
international beer sales volume.
First quarter 1998 domestic revenue per barrel declined 1.3% versus
first quarter 1997 due to the carryover impact of increasingly competitive
discounting throughout 1997. However, net revenue per barrel was up versus
the fourth quarter of last year, reversing the downward quarterly trend
experienced in 1997. Gross sales and excise taxes in 1998 include the
impact of consolidating the Stag Brewery operations in the United
Kingdom. Beer volume information is summarized in the following table:
- -------------------------------------------------------------------------
Beer Volume (millions of barrels)
- -------------------------------------------------------------------------
First Quarter | 1998 versus 1997
---------------- | -------------------
1998 1997 | Barrels %
------ ------ ------- --------
Domestic 21.5 20.4 | Up 1.1 Up 5.3%
|
International 1.3 1.4 | Dn 0.1 Dn 8.0%
------ ------ | -------- --------
Worldwide -- A-B Brands 22.8 21.8 | Up 1.0 Up 4.4%
|
Equity Partner Brands 2.3 0.7 | Up 1.6 N/M
------ ------- | ------- --------
Total Brands 25.1 22.5 | Up 2.6 Up 11.5%
====== ====== | ======= ========
- -------------------------------------------------------------------------
N/M - Not Meaningful
Worldwide Anheuser-Busch beer volume in the first quarter 1998 was 22.8
million barrels, up 4.4% versus the first quarter 1997. Worldwide beer
volume is comprised of Anheuser-Busch brands sold domestically
and internationally. Domestic volume represents Anheuser-Busch beer
produced and shipped within the United States. International volume
represents exports from the company's U.S. breweries to markets around the
world, plus Anheuser-Busch brands produced overseas by company-owned
breweries and under license and contract brewing agreements.
8
<PAGE>9
Total volume, which combines equity volume (representing the company's
share of its foreign equity partners' volume) with worldwide volume, was
25.1 million barrels in the first quarter 1998, up 2.6 million barrels, or
11.5% over first quarter 1997. Total volume includes Anheuser-Busch's 37%
ownership in Grupo Modelo in the first quarter 1998 compared to a 17.7%
ownership in the first quarter 1997. Assuming a constant Anheuser-Busch
ownership level of 37% of Modelo, total beer volume would have increased
4.4%.
Domestic Beer Volume
- --------------------
Anheuser-Busch reported domestic beer shipments of 21.5 million barrels,
an increase of 1.1 million barrels, or 5.3% for the first quarter 1998
compared to the first quarter 1997. The increase in beer shipments
reflects strong underlying sales-to-retailer growth of nearly 2%, led by
Bud Family sales, and the planned increase in beer wholesaler inventories
associated with the expiration of the collective bargaining agreement with
the International Brotherhood of Teamsters in February. Wholesaler
inventories will be reduced once a labor agreement is ratified. The company
has also been successful in the first quarter in reducing discounts in most
markets compared with the levels that existed in the fourth quarter of last
year.
The company's domestic market share (excluding exports) for the first
quarter 1998 was 46.9%, an increase of 1.4 percentage points over 1997
market share of 45.5%. Including exports, the company's share of U. S.
shipments was 46.7% versus 45.2% for the first quarter 1997. Domestic
market share and share of U. S. shipments are determined based on
industry sales estimates provided by the Beer Institute and are
influenced by the company's inventory build. Excluding the impact of the
9
<PAGE>10
planned increase in beer wholesaler inventories, the company's domestic
market share and share of U.S. shipments were 46.1% and 45.9%,
respectively.
Cost of products and services for the first quarter 1998 was $1.6
billion, a $41.8 million, or 2.6%,increase compared to the first quarter
1997. The increase in cost of products and services is principally due to
higher domestic beer volume and higher depreciation. Gross profit as a
percentage of net sales was 34.6% for the first quarter 1998, down 0.6 of a
percentage point from 35.2% for the first quarter 1997 reflecting the
impact of lower revenue per barrel in the quarter.
Marketing, distribution and administrative expenses for the first
quarter 1998 were $400.4 million compared with $397.6 million for the first
quarter 1997, an increase of 0.7%. The increase is primarily due to higher
domestic marketing expense for the Bud Family, largely offset by reduced
general and administrative costs.
Operating income for the first quarter 1998 was $468.3 million, level
with operating income for the first quarter 1997, reflecting higher
domestic beer sales volume offset by lower revenue per barrel and lower
operating results from the company's theme park and international beer
operations.
Theme park operations reported lower attendance and earnings in the
first quarter 1998 compared to 1997, largely due to the impact of the
Easter holiday occurring in April in 1998 versus March in 1997.
Operating results from international beer operations (excluding Grupo
Modelo) were lower in the first quarter 1998 due to a decline in volume
compared with the particularly strong first quarter 1997, which included
rollouts in new markets in China, Argentina and the Philippines. Adjusted
for the comparison with the strong 1997 first quarter, 1998 international
volume would have grown by only a small amount, reflecting weak economic
10
<PAGE>11
conditions in Asia and related conditions in South America. The decline in
international beer operations was more than offset by the increase in Grupo
Modelo-related earnings.
On April 8, 1998, the company and its Brazilian equity partner,
Antarctica, announced the successful conclusion of an agreement with the
Brazilian antitrust agency, CADE, that approved the two brewers'
partnership in Brazil and permits the long-term continuation of the
relationship.
Net interest cost (interest expense less interest income) was $74.0
million for the first quarter 1998, an increase of $18.7 million, or 33.8%,
compared to the first quarter 1997. This increase reflects higher average
debt balances primarily due to the additional investment in Grupo Modelo in
May 1997. The net change in debt is summarized in the Liquidity and
Financial Condition section of this discussion.
Interest capitalized decreased $0.1 million, or 0.9%, for the first
quarter 1998 compared to the corresponding period in 1997.
Other income/expense, net includes numerous items of a nonoperating
nature which do not have a material impact on the company's consolidated
results of operations, either individually or in the aggregate.
Net income for the first quarter 1998 was $265.2 million, an increase
of $7.5 million, or 2.9%, versus the comparable period last year. Net
income includes $19.3 million for the company's pro rata share of the
net earnings of Grupo Modelo, accounted for on the equity basis. The
company's investment in Grupo Modelo was accounted for on the cost basis in
the first quarter 1997. The company adopted the equity method of
11
<PAGE>12
accounting for Modelo in the second quarter 1997 concurrent with increasing
its ownership to 37%. The difference between income recognized on the cost
basis for the first quarter 1997 and what would have been recognized based
on the equity method is not material.
The company currently expects the Mexican economy to cease being
hyperinflationary for accounting purposes (three-year cumulative inflation
in excess of 100%) sometime in 1998. The change to non-hyperinflation
accounting is expected to be favorable to Anheuser-Busch compared to
hyperinflation accounting.
The effective income tax rate was 38.0% of pretax earnings for the first
quarter 1998, a decline of 0.4 of a percentage point compared to first
quarter 1997. The decrease in the effective tax rate is primarily due to
lower state taxes.
Diluted earnings per share for the first quarter 1998 were $.54, an
increase of $.03, or 5.9%, compared to the first quarter 1997. Diluted
earnings per share are based on the weighted average shares of the
company's outstanding common stock and common stock equivalents. Earnings
per share continue to benefit from fewer shares outstanding due to the
company's ongoing share repurchase program. The company anticipates
repurchasing approximately 3% of shares outstanding in 1998.
LIQUIDITY AND FINANCIAL CONDITION
- ---------------------------------
Cash and marketable securities at March 31, 1998 were $106.4 million, a
decrease of $159.6 million from the March 31, 1997 level and a decrease of
$40.9 million from the December 31, 1997 level. The principal source of
the company's cash flow is cash generated by operations. Financing
activities provided additional sources of cash during the twelve month
period ended March 31, 1998. Significant uses of cash during the
12
<PAGE>13
12-month period were capital expenditures, share repurchases, dividends and
the additional investment in Grupo Modelo. See the Consolidated Statement
of Cash Flows for additional information.
Total long-term debt increased $885.0 million during the twelve month
period ended March 31, 1998. The following outlines the change in debt
during this period:
Debt Issuances ... $1,029.5 million, comprised of the following:
--------------
- $500.0 million of long-term notes ($250.0 million of 7.1%,
$250.0 million of 7.125%)
- $200.0 million of debentures ($100.0 million of 6.5%,
$100.0 million of 6.75%)
- $162.8 million of dual-currency notes (floating interest rate)
- $107.0 million of commercial paper (weighted average interest
of 5.6%)
- $28.9 million, net of industrial development revenue bonds
(various fixed interest rates)
- $30.8 million of other miscellaneous borrowings
Debt Reduction ... $144.5 million, comprised of the following:
--------------
- $40.0 million of medium notes (various fixed interest rates)
- $45.0 million of sinking fund debentures ($22.5 million of
8.625%, $22.5 million of 8.5%)
- $34.9 million of ESOP debt (interest rate, 8.3%)
- $24.6 million of other miscellaneous reductions
13
<PAGE>14
At March 31, 1998, $561.9 million of commercial paper borrowings were
outstanding, an increase of $107.0 million compared to the balance at March
31, 1997 and a decrease of $30.0 million over the December 31, 1997
balance. Commercial paper is classified as long-term debt since it is
intended to be maintained on a long-term basis with on-going credit support
provided by the company's $1 billion revolving credit agreement.
Capital expenditures during the first quarter 1998 were $237.4 million
compared to $265.6 million for the first quarter 1997, a decrease of
10.6%.
RISK MANAGEMENT
- ---------------
The company's derivatives holdings will fluctuate during the year based
on normal and recurring changes in purchasing and production activity.
Since December 31, 1997, there have been no significant changes in
the company's interest rate, commodity price and foreign currency
exposures, changes in the types of derivative instruments used to hedge
those exposures, or changes in underlying market conditions.
PART II - OTHER INFORMATION
Item 2. Changes in Securities
On January 2, 1998, the company issued out of treasury shares a total of
916 shares of the company's common stock ($1 par value) to one member of
the Board of Directors of the company in lieu of cash for that member's
1998 annual retainer fee pursuant to the company's Non-Employee Director
Elective Stock Acquisition Plan. The transaction was exempt from
registration and propectus delivery requirements of the Securities Act of
1933 pursuant to Section 4(2) of the Act.
14
<PAGE>15
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders of the company held April 22,
1998, the following matters were voted upon:
1. Election of August A. Busch III, Carlos Fernandez G.,
James R. Jones, Andrew C. Taylor and Douglas A. Warner III to serve
as Directors of the company for a term of three years.
For Withheld Non-Votes
--- --------- ---------
August A. Busch III 401,666,291 12,164,196 0
Carlos Fernandez G. 403,216,259 10,614,228 0
James R. Jones 403,601,639 10,228,848 0
Andrew C. Taylor 403,870,271 9,960,216 0
Douglas A. Warner III 403,723,193 10,107,294 0
2. Approve the Anheuser-Busch Companies, Inc. 1998 Incentive Stock
Plan.
For 352,893,220
Against 51,107,386
Abstain 9,829,881
Non-Votes 0
3. Approve the employment of Price Waterhouse LLP, as independent
accountants, to audit the books and accounts of the company for
1998.
For 405,354,522
Against 6,703,993
Abstain 1,771,972
Non-Votes 0
4. Shareholder proposal to require preparation of a report on beer
consumption.
For 22,148,646
Against 349,294,439
Abstain 8,649,683
Non-Votes 33,737,719
15
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Item 5. Other Information
Labor Negotiations
- ------------------
The company's labor contract with the International Brotherhood of
Teamsters, representing approximately 8,000 Anheuser-Busch employees,
expired at midnight on March 29, 1998 after a 30 day extension from
the original expiration date of February 28, 1998. The company presented
its final proposal to the Teamsters bargaining committee on March 27, 1998,
which was rejected by the employees of the company represented by the
Teamsters in early May. The company has agreed to meet with representatives
of the Teamsters in order to clarify proposals in the company's final
offer. The company anticipates reaching an agreement but remains fully
prepared to operate in the event of a work stoppage.
Grupo Modelo Investment
- -----------------------
In June 1997, the company exercised its remaining option to increase its
direct and indirect ownership in Grupo Modelo's operating subsidiary,
Diblo, to 50.2% for approximately $550 million. The company and the
controlling shareholders of Grupo Modelo are currently pursuing arbitration
in accordance with the investment agreement to resolve a dispute concerning
the purchase price for the option shares. It is anticipated that
Anheuser-Busch will complete the transaction in the fourth quarter 1998.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
--------
3.2 - By-Laws of the Company (as amended and restated April 22, 1998)
4.2 - Indenture dated as of August 1, 1995 between the Company and
The Chase Manhattan Bank, as Trustee (Incorporated by Reference
to Exhibit 4.1 in the Form S-3 of the Company, Registration
16
<PAGE>17
Statement No. 33-60885.) (Other indentures are not filed, but
the Company agrees to furnish copies of such instruments to the
Securities and Exchange Commission upon request.)
10 - Anheuser-Busch Companies, Inc. 1998 Incentive Stock Plan
12 - Ratio of Earnings to Fixed Charges
27 - Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the three month period
ending March 31, 1998.
17
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ANHEUSER-BUSCH COMPANIES, INC.
(Registrant)
/s/ W. Randolph Baker
------------------------------------------
W. Randolph Baker
Vice President and Chief Financial Officer
(Chief Financial Officer)
May 13, 1998
/s/ John F. Kelly
------------------------------------------
John F. Kelly
Vice President and Controller
(Chief Accounting Officer)
May 13, 1998
18
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INDEX TO EXHIBITS
Exhibit
No. Exhibit
- ------- -------
3.2 By-Laws of the Company (as amended and restated April 22, 1998)
10 Anheuser-Busch Companies, Inc. 1998 Incentive Stock Plan
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
EXHIBIT 3.2
BY-LAWS
OF
ANHEUSER-BUSCH COMPANIES, INC.
(As Amended and Restated April 22, 1998)
INCORPORATED UNDER THE LAWS OF DELAWARE
<PAGE>
TABLE OF CONTENTS
BY-LAWS
OF
ANHEUSER-BUSCH COMPANIES, INC.
Page Page
ARTICLE I: Section 4:3 Executive Committee -
LOCATION AND OFFICES Notice of Meetings...... 8
Section 4:4 Executive Committee -
Section 1:1 Principal Office........ 1 Quorum and Powers
Section 1:2 Other Offices........... 1 of Majority............ 9
Section 4:5 Executive Committee -
ARTICLE II: Reporting............... 9
STOCKHOLDERS Section 4:6 Other Committees........ 9
Section 2:1 Annual Meeting.......... 1 ARTICLE V:
Section 2:2 Business to be Conducted OFFICERS
at Annual Meeting.... 1
Section 2:3 Special Meetings........ 2 Section 5:1 Appointment............. 9
Section 2:4 Place of Meetings....... 2 Section 5:2 Tenure.................. 9
Section 2:5 Notice of Meetings...... 2 Section 5:3 Salaries................10
Section 2:6 Quorum and Voting....... 2 Section 5:4 Chief Executive
Officer................10
Section 2:7 Voting; Proxy........... 3 Section 5:5 Chairman of the
Board..................10
Section 2:8 Voting by Fiduciaries, Section 5:6 President...............10
Pledgee and Pledgors... 3 Section 5:7 Other Officers..........10
Section 2:9 Nomination of Directors. 4
Section 2:10 List of Stockholders.... 5 ARTICLE VI:
Section 2:11 Appointment of Inspectors CAPITAL STOCK AND DIVIDENDS
of Election and
Reslution of Questions Section 6:1 Certificates for Shares.10
Concerning Right to Section 6:2 Stock Records...........11
Vote................... 5 Section 6:3 Transfers...............11
ARTICLE III: Section 6:4 Regulations Governing
DIRECTORS Issuance and Transfers
of Shares..............11
Section 6:5 Transfer Agents and
Section 3:1 General Powers.......... 5 Registrars.............11
Section 3:2 Number and Section 6:6 Lost or Destroyed
Qualifications......... 5 Certificates...........11
Section 3:3 Election................ 5 Section 6:7 Fractions of Shares.....11
Section 3:4 Place of Meetings....... 5 Section 6:8 Determination of
Section 3:5 Annual Organization Stockholders...........12
Meetings............... 6 Section 6:9 Record Date.............12
Section 3:6 Regular Meetings........ 6
Section 3:7 Special Meetings........ 6
Section 3:8 Quorum.................. 7
Section 3:9 Waiver of Notice........ 7 ARTICLE VII:
Section 3:10 Consent................. 7 MISCELLANEOUS
Section 3:11 Notice to Members of the
Board of Directors... 7 Section 7:1 Voting Shares in Other
Section 3:12 Presiding Officer....... 8 Corporations..........12
Section 7:2 Execution of Other Papers
ARTICLE IV: and Documents.........12
COMMITTEES Section 7:3 Corporate Seal.........12
Section 7:4 Amendments.............13
Section 4:1 Executive Committee - Section 7:5 Books and Records......13
Appointment and Tenure 8
Section 4:2 Executive Committee -
Powers............... 8
<PAGE>1
BY-LAWS
OF
ANHEUSER-BUSCH COMPANIES, INC.
(AS AMENDED AND RESTATED APRIL 22, 1998)
ARTICLE I: LOCATION AND OFFICES
PRINCIPAL OFFICE.
SECTION 1:1. The principal office of the corporation shall be at such
place as the Board of Directors may from time to time determine, but until
a change is effected such principal office shall be at One Busch Place, in
the City of St. Louis, Missouri.
OTHER OFFICES.
SECTION 1:2. The corporation may also have other offices, in such
places (within or without the State of Delaware) as the Board of Directors
may from time to time determine.
ARTICLE II: STOCKHOLDERS
ANNUAL MEETING.
SECTION 2:1. An annual meeting of the stockholders of the corporation
shall be held at 10:00 o'clock a.m. on the fourth Wednesday in April of
each year if not a legal holiday, and if a legal holiday then on the next
succeeding day not a legal holiday. The purpose of the meeting shall be to
elect directors and to transact such other business as properly may be
brought before the meeting. If the corporation shall fail to hold said
meeting for the election of directors on the date aforesaid, the Board of
Directors shall cause the election to be held by the stockholders as soon
thereafter as convenient.
BUSINESS TO BE CONDUCTED AT ANNUAL MEETING.
SECTION 2:2.1 At an annual meeting of stockholders, only such business
shall be conducted as shall have been brought before the meeting (i)
pursuant to the corporation's notice of the meeting, (ii) by or at the
direction of the Board of Directors (or any duly organized committee
thereof), or (iii) by any stockholder of the corporation who is a
stockholder of record on the date of giving of the notice provided for in
this By-Law and on the record date for the determination of stockholders
entitled to vote at such meeting and who has complied with the notice
procedures set forth in this By-Law.
SECTION 2:2.2 In addition to any other applicable requirements, for
business to be properly brought before an annual meeting by a stockholder,
such stockholder must have given timely notice in proper written form to
the Secretary which notice is not withdrawn by such stockholder at or prior
to such annual meeting.
SECTION 2:2.3 To be timely, a stockholder's notice to the Secretary
must be delivered or mailed to and received by the Secretary at the
principal executive offices of the corporation, not less than sixty days
nor more than ninety days prior to the first anniversary of the preceding
<PAGE>2
year's annual meeting; provided, however, that in the event that the date
of the meeting is changed by more than thirty days from such anniversary
date, notice by the stockholder must be received not later than the close
of business on the tenth day following the earlier of the day on which
notice of the date of the annual meeting was mailed or public disclosure
was made.
SECTION 2:2.4 To be in proper written form, such stockholder's notice
must set forth as to each matter the stockholder proposes to bring before
the annual meeting (i) a brief description of the business to be brought
before the annual meeting and the reasons for conducting such business at
such meeting; (ii) the name and address, as they appear on the
corporation's books, of the stockholder proposing such business, and the
name and address of the beneficial owner, if any, on whose behalf the
proposal is made; (iii) the class and the number of shares of the
corporation's stock which are beneficially owned by the stockholder, and
the beneficial owner, if any, on whose behalf the proposal is made; (iv)
any material interest of the stockholder, and of the beneficial owner, if
any, on whose behalf the proposal is made, in such business; and (v) a
representation that such stockholder intends to appear in person or by
proxy at the annual meeting to bring such business before the meeting.
SECTION 2:2.5 Notwithstanding anything in these By-Laws to the
contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this By-Law. The chairman of
the meeting may, if the facts warrant, determine that the business was not
properly brought before the meeting in accordance with the provisions of
this By-Law; and if the chairman should so determine, the chairman shall so
declare to the meeting, and any such business not properly brought before
the meeting shall not be transacted. Notwithstanding the foregoing
provisions of this By-Law, a stockholder shall also comply with all
applicable requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations thereunder with respect
to the matters set forth in this By-Law.
SPECIAL MEETINGS.
SECTION 2:3. At any time the Chief Executive Officer may, and either
the Chief Executive Officer or the Secretary at the written request of any
five members of the Board of Directors shall, issue a call for a special
meeting of the stockholders. Such request shall state the purpose or
purposes of the proposed meeting, and at such special meeting only such
matters as may be specified in the call therefor shall be considered.
PLACE OF MEETINGS.
SECTION 2:4. All meetings of the stockholders shall be held at the
principal office of the corporation, or at such other place, within or
without the State of Delaware, as may be determined by the Board of
Directors and stated in the notice of the meeting.
NOTICE OF MEETINGS.
SECTION 2:5. Written notice of each meeting of the stockholders
stating the place, date, and hour of the meeting, and, in case of a special
meeting or where otherwise required by statute, the purpose or purposes for
<PAGE>3
which the meeting is called, shall be delivered by mail not less than ten
nor more than sixty days before the date of the meeting, by or at the
direction of the person calling the meeting, to each stockholder entitled
to vote at such meeting. The notice of a stockholders' meeting shall be
deemed to be delivered when deposited in the United States mail with
postage prepaid, addressed to each stockholder at such stockholder's
address as it appears on the records of the corporation.
QUORUM AND VOTING.
SECTION 2:6.1 The holders of a majority of the outstanding shares
(exclusive of treasury stock) entitled to vote at any meeting of the
stockholders, when present in person or by proxy, shall constitute a quorum
for the transaction of business, except as otherwise provided by statute,
the Certificate of Incorporation, or these By-Laws; but in the absence of
such a quorum the holders of a majority of the shares represented at the
meeting shall have the right successively to adjourn the meeting to a
specified date. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At
the adjourned meeting the corporation may transact any business which might
have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
SECTION 2:6.2 The absence from any meeting of the number of shares
required by statute, the Certificate of Incorporation or these By-Laws for
action upon one matter shall not prevent action at such meeting upon any
other matter or matters which may properly come before the meeting, if the
number of shares required in respect of such other matters shall be
present.
SECTION 2:6.3 When a quorum is present at any meeting of the
stockholders, the vote of the holders (present in person or represented by
proxy) of a majority of the shares of stock which are actually voted (and
have the power to vote) on any proposition or question properly brought to
a vote at such meeting shall decide any such proposition or question,
unless the proposition or question is one upon which by express provision
of statute or of the Certificate of Incorporation, or of these By-Laws, a
different vote is required, in which case such express provision shall
govern and establish the number of votes required to determine such
proposition or question.
VOTING; PROXY.
SECTION 2:7.1 Whenever the law requires or the chairman orders that a
vote be taken by ballot, each stockholder entitled to vote on a particular
question at a meeting of stockholders, pursuant to law or the Certificate
of Incorporation, shall be entitled to one vote for each share of voting
stock held by such stockholder. The date for determining the stockholders
entitled to vote at a meeting of the stockholders shall be determined
pursuant to Section 6:9.
<PAGE>4
SECTION 2:7.2 Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent in writing without a meeting
may authorize another person or persons to act for such stockholder by
proxy; but no such proxy shall be voted or acted upon after three years
from its date,unless the proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is irrevocable and
if, and only as long as, it is coupled with an interest sufficient in law
to support an irrevocable power. A proxy may be made irrevocable regardless
of whether the interest with which it is coupled is an interest in the
stock itself or an interest in the corporation generally.
VOTING BY FIDUCIARIES, PLEDGEE AND PLEDGORS.
SECTION 2:8. Persons holding stock in a fiduciary capacity shall be
entitled to vote the shares so held. Persons whose stock is pledged shall
be entitled to vote, unless in the transfer by the pledgor on the books of
the corporation the pledgor has expressly empowered the pledgee to vote
thereon, in which case only the pledgee or the pledgee's proxy may
represent such stock and vote thereon.
If shares or other securities having voting power stand of record in
the names of two or more persons, whether fiduciaries, members of a
partnership, joint tenants, tenants in common, tenants by the entirety or
otherwise, or if two or more persons have the same fiduciary relationship
respecting the same shares, unless the Secretary is given written notice to
the contrary and is furnished with a copy of the instrument or order
appointing them or creating the relationship wherein it is so provided,
their acts with respect to voting shall have the following effect:
(a) If only one votes, that person's act binds all;
(b) If more than one vote, the act of the majority so
voting binds all;
(c) If more than one vote, but the vote is evenly split
on any particular matter, each faction may vote the securities in question
proportionally, or any person voting the shares, or a beneficiary, if any,
may apply to the Court of Chancery or such other court as may have
jurisdiction to appoint an additional person to act with the persons so
voting the shares, which shall then be voted as determined by a majority of
such persons and the person appointed by the Court. If the instrument so
filed shows that any such tenancy is held in unequal interest, a majority
or even-split for the purpose of this subsection shall be a majority
or even-split in interest.
NOMINATION OF DIRECTORS.
SECTION 2:9.1 Only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors of the
corporation, except as may be otherwise provided in the Certificate of
Incorporation of the corporation with respect to the right of holders of
preferred stock of the corporation to nominate and elect a specified number
of directors in certain circumstances. Nominations of persons for election
to the Board of Directors may be made at any annual meeting of
stockholders, or at any special meeting of stockholders called for the
purpose of electing directors, (i) by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (ii) by any
stockholder of the corporation who is a stockholder of record on the date
<PAGE>5
of the giving of the notice provided for in this By-Law and on the record
date for the determination of stockholders entitled to vote at such meeting
and who complies with the notice procedures set forth in this By-Law.
SECTION 2:9.2 In addition to any other applicable
requirements, for a nomination to be made by a stockholder, such
stockholder must have given timely notice thereof in proper written form to
the Secretary of the corporation.
SECTION 2:9.3 To be timely, a stockholder's notice to the Secretary
must be delivered or mailed to and received by the Secretary at the
principal executive offices of the corporation (i) in the case of an annual
meeting, not less than sixty days nor more than ninety days prior to the
anniversary date of the immediately preceding annual meeting of
stockholders; provided, however, that in the event that the annual meeting
is called for a date that is not within thirty days before or after such
anniversary date, notice by the stockholder in order to be timely must be
so received not later than the close of business on the tenth day following
the day on which such notice of the date of the annual meeting was mailed
or such public disclosure of the date of the annual meeting was made,
whichever occurs first, and (ii) in the case of a special meeting of
stockholders called for the purpose of electing directors, not later than
the close of business on the tenth day following the day on which notice of
the date of the special meeting was mailed or public disclosure of the date
of the special meeting was made, whichever occurs first.
SECTION 2:9.4 To be in proper written form, a stockholder's notice to
the Secretary must set forth (i) as to each person whom the stockholder
proposes to nominate for election as a director (A) the name, age, business
address and residence address of the person, (B) the principal occupation
or employment of the person, (C) the class or series and the number of
shares of capital stock of the corporation which are owned beneficially or
of record by the person and (D) any other information relating to the
person that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the Exchange Act, and the
rules and regulations promulgated thereunder; and (ii) as to the
stockholder giving the notice or the beneficial owner on whose behalf the
nomination is made, (A) the name and address of such stockholder as they
appear on the corporation's books, (B) the class or series and the number
of shares of capital stock of the corporation beneficially owned by such
stockholder or beneficial owner, (C) a description of all arrangements or
understandings between such stockholder or beneficial owner and each
proposed nominee and any other person or persons (including their names)
pursuant to which the nomination(s) are to be made by such stockholder or
beneficial owner, (D) a representation that such stockholder or beneficial
owner intends to appear in person or by proxy at the meeting to nominate
the persons named in its notice and (E) any other information relating to
such stockholder or beneficial owner that would be required to be disclosed
in a proxy statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant to Section
14 of the Exchange Act and the rules and regulations promulgated
thereunder. Such notice must be accompanied by a written consent of each
proposed nominee to being named as a nominee and to serve as a director if
elected.
<PAGE>6
SECTION 2:9.5 No person shall be eligible for election as a director
of the corporation, at any annual meeting of stockholders or at any special
meeting of stockholders called for the purpose of electing directors,
unless nominated in accordance with the procedures set forth in this
By-Law. If the chairman of the meeting determines that a nomination was not
made inaccordance with the foregoing procedures, the chairman shall declare
to the meeting that the nomination was defective and such
defective nomination shall be disregarded.
LIST OF STOCKHOLDERS.
SECTION 2:10. The Secretary shall prepare and make, or cause to be
made, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at said meeting, arranged in
alphabetical order, showing the address of and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior
to the election, either at a place within the city where the election is to
be held and which place shall be specified in the notice of the meeting,
or, if not so specified, at the place where said meeting is to be held, and
the list shall be produced and kept at the time and place of election
during the whole time thereof and subject to the inspection of any
stockholder who may be present. The stock ledger shall be the only evidence
as to who are the stockholders entitled to examine the stock ledger, the
list required by this By-Law or the books of the corporation, or to vote in
person or by proxy at any meeting of the stockholders.
APPOINTMENT OF INSPECTORS OF ELECTION AND RESOLUTION OF QUESTIONS
CONCERNING RIGHT TO VOTE.
SECTION 2:11. The Board of Directors, in advance of the meeting of
stockholders or, if it does not act, the chairman of the meeting, shall
appoint not less than two persons who are not directors to serve as
inspectors of election. It shall be their duty to receive and canvass the
votes for election of directors and on any proposal voted on by ballot and
to certify the results to the chairman. In all cases where the right to
vote upon any share of the corporation shall be questioned, it shall be the
duty of the inspectors to examine the stock ledger of the corporation as
evidence of the shares held, and all shares that appear standing thereon in
the name of any person or persons may be voted upon by such person or
persons. Each inspector of election before entering upon the duties of such
office shall take and subscribe the following oath before an officer
authorized by law to administer oaths: "I do solemnly swear that I will
execute the duties of an inspector of the election now to be held with
strict impartiality and according to the best of my ability."
ARTICLE III: DIRECTORS
GENERAL POWERS.
SECTION 3:1. The Board of Directors shall control and manage the
business and property of the corporation. The Board may exercise all such
powers of the corporation and do all lawful acts and things as are not by
law, the Certificate of Incorporation, or these By-Laws directed or
required to be exercised or done by the stockholders or some particular
officer of the corporation.
<PAGE>7
NUMBER AND QUALIFICATIONS.
SECTION 3:2. The number of directors shall be determined from time to
time by resolution of the Board of Directors in accordance with the terms
of Article FIFTH of the Certificate of Incorporation. From and after the
first public distribution of the Common Stock of the corporation, each
director shall be a stockholder of the corporation, except in such specific
case or cases as shall be otherwise authorized by the Board of Directors
upon a showing of reasonable cause therefor.
ELECTION.
SECTION 3:3. The directors who are to be elected at the annual meeting
of the stockholders shall be elected by ballot by the holders of shares
entitled to vote.
PLACE OF MEETINGS.
SECTION 3:4. The place where meetings of the Board of Directors are
held shall be as follows:
(a) The annual meeting shall be held in the city of the principal
office of the corporation in Missouri, provided that in the event the
annual meeting of shareholders is held in a metropolitan area other than
St. Louis, Missouri, the annual meeting of the Board of Directors shall be
held in the metropolitan area where the annual meeting of stockholders is
held.
(b) Regular meetings shall be held at such place within the City or
County of St. Louis, Missouri as may be prescribed in the call, provided
that any regular meeting may be held elsewhere, either within or without
the State of Delaware, pursuant to resolution of the Board of Directors or
pursuant to the call of the Chief Executive Officer acting with the consent
of a majority of the directors.
(c) Special meetings shall be held at such place as may be prescribed
in the notice, provided that if a special meeting is held on less than
three days' notice, it shall be held at the
principal office of the corporation unless all directors agree upon a
different location.
(d) Members of the Board of Directors may participate in a meeting of
the Board by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other, and participating in the meeting in this manner shall
constitute presence in person at such meeting.
ANNUAL ORGANIZATION MEETINGS.
SECTION 3:5. Organization meetings of the Board of Directors shall be
held immediately after each annual meeting of the shareholders for the
purpose of organizing the Board, appointing officers and members of
committees and transacting other business. No notice other than this By-Law
shall be required for any such meeting.
<PAGE>8
REGULAR MEETINGS.
SECTION 3:6. Regular meetings shall be held at least once each month on
such day as the Board of Directors may by resolution prescribe, and at such
hour as may be stated in the notice of the meeting, provided that the Chief
Executive Officer shall have the discretion to dispense with one or two
monthly meetings during the course of a calendar year. Three days' notice
of the time and place of each such meeting shall be personally served upon
or mailed to each member of the Board. Neither the business to be
transacted at, nor the purpose of any regular meeting need be specified in
the notice or waiver of notice of such meeting.
SPECIAL MEETINGS.
SECTION 3:7. Special meetings of the Board of Directors may be held at
the call of the Chief Executive Officer or five members of the Board at
such time as may be prescribed in the call of the meeting. The purpose of
the special meeting need not be stated in the notice of the meeting. Notice
of a special meeting may be given by any one or more of the following
methods and the method used need not be the same for each director being
notified:
(a) Written notice sent by mail at least three days prior to the
meeting;
(b) Personal service at least twenty-four (24) hours prior to the date
of the meeting;
(c) Telegraphic notice at least twenty-four (24) hours prior to
the date of the meeting, said notice to be sent as a straight
full-rate telegram;
(d) Telephonic notice at least twenty-four (24) hours prior to
the date of the meeting.
(e) Facsimile transmission at least twenty-four (24) hours
prior to the date of the meeting.
QUORUM.
SECTION 3:8. A majority of the persons serving as directors of the
corporation at the time of a meeting of the Board of Directors shall
constitute a quorum for the transaction of any business by the Board at
such meeting. At any meeting of the Board, no action shall be taken (except
adjournment, in the manner provided below) until after a quorum has been
established.
The act of a majority of directors who are present at a meeting at
which a quorum previously has been established (or at any adjournment of
such meeting, provided that a quorum previously shall have been established
at such adjourned meeting) shall be the act of the Board of Directors,
regardless of whether or not a quorum is present at the time such action is
taken. In determining the number of directors who are present at the time
any such action is taken (for the purpose of establishing the number of
votes required to take action on any proposition or question submitted to
the Board), any director who is in attendance at such meeting but who, for
just cause, is disqualified to vote on such proposition or question, shall
not be considered as being present at the time of such action.
<PAGE>9
In the event a quorum cannot be established at the beginning of a
meeting, a majority of the directors present at the meeting, or the
director, if there be only one person, or the Secretary of the corporation,
if there be no director present, may adjourn the meeting from time to time
until a quorum be present. Only such notice of such adjournment need be
given as the Board may from time to time prescribe.
WAIVER OF NOTICE.
SECTION 3:9. Any notice which is required by law or by the Certificate
of Incorporation or by these By-Laws to be given to any director may be
waived in writing, signed by such director, whether before or after the
time stated therein. Attendance of a director at any meeting shall
constitute waiver of notice of such meeting, except where a director
attends a meeting for the express purpose of objecting to the transaction
of any business because the meeting is not lawfully called or convened.
CONSENT.
SECTION 3:10. Any action required or permitted to be taken at any
meeting of the Board of Directors (or of any committee thereof) may be
taken without a meeting if all members of the Board (or committee) consent
thereto in writing, and the writing or writings are filed with the minutes
of the proceedings of the Board (or committee).
NOTICE TO MEMBERS OF THE BOARD OF DIRECTORS.
SECTION 3:11. Each member of the Board of Directors shall file with
the Secretary of the corporation an address to which mail or telegraphic
notices shall be sent and a telephone number to which a telephonic or
facsimile notice may be transmitted. A notice mailed, telegraphed,
telephoned or transmitted by facsimile in accordance with the instructions
provided by the director shall be deemed sufficient notice. Such address or
telephone number may be changed at any time and from time to time
by a director by giving written notice of such change to the Secretary.
Failure on the part of any director to keep an address and telephone number
on file with the Secretary shall automatically constitute a waiver of
notice of any regular or special meeting of the Board which might be held
during the period of time that such address and telephone number are not on
file with the Secretary. A notice shall be deemed to be mailed when
deposited in the United States mail, postage prepaid. A notice shall be
deemed to be telegraphed when the notice is delivered to the transmitter of
the telegram and either payment or provision for payment is made by the
corporation. Notice shall be deemed to be given by telephone if the notice
is transmitted over the telephone to some person (whether or not such
person is the director) answering the telephone at the number which the
director has placed on file with the Secretary. Notice shall be deemed to
be given by facsimile transmission when sent to the telephone number which
the director has placed on file with the Secretary.
PRESIDING OFFICER.
SECTION 3:12. The Chairman of the Board shall preside at all meetings
of the Board of Directors at which the Chairman is present. In the
Chairman's absence, the Vice Chairman (if any) shall preside. In the
absence of the Chairman and the Vice Chairman, the Board shall select a
chairman of the meeting from among the directors present.
<PAGE>10
ARTICLE IV: COMMITTEES
EXECUTIVE COMMITTEE--APPOINTMENT AND TENURE.
SECTION 4:1. The Board of Directors, by resolution adopted by a
majority of the whole Board, may designate six directors, including the
Chief Executive Officer, to constitute an Executive Committee, provided
that a majority of said committee shall at all times be made up of members
of the Board who are neither officers nor employees of the corporation and
who shall serve at the pleasure of the Board. In the case of the death,
resignation or removal of any member of the Executive Committee or in case
any such member shall cease to be a member of the Board, the vacancy shall
be filled by the Board. The Board shall designate the chairman of the
Executive Committee.
EXECUTIVE COMMITTEE--POWERS.
SECTION 4:2. The Executive Committee, to the extent provided in the
resolution of the Board of Directors appointing suchcommittee or in any
subsequent resolution, shall have and may exercise all the powers and
authority of the Board in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to
all papers which may require it, but shall not have the power or authority
with respect to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, or recommending to the stockholders
the sale, lease or exchange of all or substantially all of the
corporation's property and assets; nor shall the Executive Committee have
the power or authority to declare a dividend or to authorize the issuance
of stock; but the designation of such Executive Committee and the
delegation of authority thereto shall not operate to relieve the Board, or
any member thereof, of any responsibility imposed upon it or them by the
provisions of the Delaware General Corporation Law, as amended.
EXECUTIVE COMMITTEE--NOTICE OF MEETINGS.
SECTION 4:3. A meeting of the Executive Committee may be held on call
by the Chief Executive Officer or on the call of any three of the other
members of the Committee. Meetings of the Executive Committee may be held,
upon notice as short as twenty-four (24) hours, at such place or places as
shall be determined by resolution of the Committee, or in the absence of a
resolution of the Executive Committee with respect thereto, at such place
or places as may be determined by the Chief Executive Officer. If notice is
given at least three days prior to the meeting of the Committee, notice may
be given in any of the ways set forth in Section 3:7, dealing with special
meetings of the Board of Directors. If less than three days' notice is
given, notice shall not be given by mail but shall be given by one of the
other methods described in Section 3:7. With respect to any such notice,
all the provisions of Section 3:11 shall be equally applicable in the case
of notice of an Executive Committee meeting as they are in the case of a
notice of a meeting of the Board of Directors. Meetings of the Executive
Committee shall be held at such place either within or without the States
of Missouri or Delaware as may be designated by a resolution of the Board;
or in the absence of such resolution, at such place within the metropolitan
St. Louis, Missouri area as may be designated in the notice. Any such
notice may be waived in the same manner provided in Section 3:9 with
respect to waiver of notice of a directors' meeting.
<PAGE>11
EXECUTIVE COMMITTEE--QUORUM AND POWERS OF MAJORITY.
SECTION 4:4. A majority of the members of the Executive Committee
shall constitute a quorum for the transaction of business at any meeting of
the Executive Committee. Unless otherwise provided by the Board of
Directors, a majority of the members of the Executive Committee shall
constitute aquorum, and the acts of a majority of the members present at a
meeting at which a quorum is present shall be the acts of the Executive
Committee.
EXECUTIVE COMMITTEE--REPORTING.
SECTION 4:5. At each regular meeting of the Board of Directors all
actions taken by the Executive Committee since the last prior meeting of
the Board shall be reported, and the Board shall take such action to
approve or rescind such action of the Executive Committee as the Board may
deem appropriate, but no rescission of such action shall affect any rights
which have attached pursuant to such Executive Committee action.
If no regular meeting of the Board is scheduled within seven days
after the date of a meeting of the Executive Committee, then no later than
five days after such meeting of the Executive Committee, the minutes
thereof (even though they may not as yet have been approved by the
Executive Committee) shall be deposited in the mail by the Secretary
addressed to each member of the Board at the address on file with the
Secretary pursuant to the provisions of Section 3:11, provided that if any
member of the Board shall have failed to place an address on file with the
Secretary, such member shall be deemed to have waived the right to receive
a copy of the minutes of the Executive Committee meeting.
OTHER COMMITTEES.
SECTION 4.6. Other Committees may be established, and their members
appointed, from time to time by the Board of Directors. Such other
committees shall have such purpose(s) and such power(s) as the Board by
resolution may confer. Unless otherwise provided by the Board, a majority
of the members of such other Committee shall constitute a quorum, and the
acts of a majority of the members present at a meeting at which a quorum is
present shall be the act of such other Committee.
ARTICLE V: OFFICERS
APPOINTMENT.
SECTION 5:1. The Board of Directors shall appoint from its membership
a Chairman of the Board and a President. The Board shall appoint such
number of Vice Presidents as the Board may from time to time determine, a
Controller, a Secretary, a Treasurer, one or more Assistant Controllers,
one or more Assistant Secretaries, one or more Assistant Treasurers and
such other officers, as the Board may from time to time deem necessary or
appropriate. The Board of Directors may appoint a Vice Chairman of the
Board, but the person holding that position shall not be considered an
officer of the corporation.
<PAGE>12
TENURE.
SECTION 5:2. Officers appointed by the Board of Directors shall hold
their respective offices for the term of one year and until their
respective successors shall have been duly appointed and qualified;
provided, however, that any officer appointed by the Board may be removed
by the Board with or without a hearing and with or without cause whenever
in its judgment the best interests of the corporation will be served
thereby.
SALARIES.
SECTION 5:3. The salaries of all officers of the corporation shall be
fixed by the Board of Directors.
CHIEF EXECUTIVE OFFICER.
SECTION 5:4. So long as the offices of Chairman of the Board and
President are held by the same person, that person shall be the Chief
Executive Officer of the corporation. Otherwise, the Chief Executive
Officer shall be the Chairman of the Board or the President, as designated
by the Board of Directors. The Chief Executive Officer shall have general
supervision and control over all the business and property of the
corporation and shall be responsible at all times to the Board of Directors
and the Executive Committee. The Chief Executive Officer shall also preside
at all meetings of the stockholders. In the event the Chief Executive
Officer shall fail or for any reason be unable to serve as such, the Board
of Directors shall promptly act to fill such vacancy.
CHAIRMAN OF THE BOARD.
SECTION 5:5. The Chairman of the Board shall preside as chairman of
all meetings of the Board of Directors at which the Chairman shall be
present and shall have such other powers, responsibilities and duties as
shall be assigned by the Board.
PRESIDENT.
SECTION 5:6. The President shall have such powers, responsibilities
and duties as shall be assigned by the Board of Directors.
OTHER OFFICERS.
SECTION 5:7. Subject to the ultimate authority of the Board of
Directors, all other officers of the corporation shall have such powers,
responsibilities and duties as shall be assigned to them from time to time
by the Chief Executive Officer.
ARTICLE VI: CAPITAL STOCK AND DIVIDENDS
CERTIFICATES FOR SHARES.
SECTION 6:1. Certificates for shares of the capital stock of the
Company shall be in such form, not inconsistent with the Certificate of
Incorporation, as shall be approved by the Board of Directors, and
<PAGE>13
shall be signed by the Chairman or Vice Chairman of the Board of Directors
or by the President or a Vice-President, and by the Secretary or an
Assistant Secretary, or the Treasurer or an Assistant Treasurer, provided
that the signatures of any such officers thereon may be facsimiles. The
seal of the corporation shall be impressed, by original or by facsimile,
printed or engraved, on all such certificates. The certificate shall also
be signed by the transfer agent and a registrar and the signature of either
the transfer agent or the registrar may also be facsimile, engraved or
printed. In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed upon any such certificate
shall have ceased to be such officer, transfer agent or registrar before
such certificate is issued, such certificate may nevertheless be issued by
the corporation with the same effect as if such officer, transfer agent, or
registrar had not ceased to be such officer, transfer agent, or registrar
at the date of its issue.
STOCK RECORDS.
SECTION 6:2. The corporation shall keep at its principal office stock
books in which shall be recorded the number of shares issued, the names of
the owners of the shares, the number owned by them respectively, and the
transfer of such shares with the date of transfer.
TRANSFERS.
SECTION 6:3. Certificates representing shares of stock of the
corporation shall be transferable only on the books of the corporation by
the person or persons named in the certificate or by the attorney lawfully
constituted in writing representing such person or persons and upon
surrender of the certificate or certificates being transferred which
certificate shall be properly endorsed for transfer or accompanied
by a duly executed stock power. Whenever a certificate is endorsed by or
accompanied by a stock power executed by someone other than the person or
persons named in the certificate, evidence of authority to transfer shall
also be submitted with the certificate. All certificates surrendered to the
corporation for transfer shall be cancelled.
REGULATIONS GOVERNING ISSUANCE AND TRANSFERS OF SHARES.
SECTION 6:4. The Board of Directors shall have the power and authority
to make all such rules and regulations as it shall deem expedient
concerning the issue, transfer and registration of certificates for shares
of stock of the corporation.
TRANSFER AGENTS AND REGISTRARS.
SECTION 6:5. Transfer agents and registrars for the corporation's
stock shall be banks, trust companies or other financial institutions
located within or without the State of Delaware as shall be appointed by
the Board of Directors. The Board shall also define the authority of such
transfer agents and registrars.
LOST OR DESTROYED CERTIFICATES.
SECTION 6:6. Where a certificate for shares of the corporation has
been lost or destroyed, the Board of Directors may authorize the issuance
of a new certificate in lieu thereof upon satisfactory proof of such loss
<PAGE>14
or destruction, and upon the giving of an open penalty bond with surety
satisfactory to the corporation's General Counsel and Treasurer, to protect
the corporation or any person injured by the issuance of the new
certificate from any liability or expense which it or they may incur by
reason of the original certificate's remaining outstanding, and upon
payment of the corporation's reasonable costs incident thereto.
FRACTIONS OF SHARES.
SECTION 6:7. The corporation shall not issue fractions of a share. It
shall, however, (1) arrange for the disposition of fractional interests by
those entitled thereto, and (2) pay in cash the fair value of fractions of
a share as of the time when those entitled to receive such fractions are
determined, or (3) issue scrip or warrants in registered or bearer form
which shall entitle the holder to receive a certificate for a full share
upon the surrender of such scrip or warrants aggregating a full share.
Scrip or warrants shall not, unless otherwise provided therein, entitle the
holder to exercise voting rights, to receive dividends thereon, or to
participate in any of the assets of the corporation in the event of
liquidation. The Board of Directors may cause scrip or warrants to be
issued subject to the conditions that the shares for which scrip or
warrants are exchangeable may be sold by the corporation and the proceeds
thereof distributed to the holders of scrip or warrants, or subject to any
other conditions which the Board may impose.
DETERMINATION OF STOCKHOLDERS.
SECTION 6:8. The corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof, and
shall not be bound to recognize any equitable or other claim to or interest
in such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, save as expressly provided by
the laws of the State of Delaware.
RECORD DATE.
SECTION 6:9. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment or any rights, or entitled to exercise any rights
in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than
ten days before the date of such meeting, nor more than sixty days prior to
any other action. If no record date is fixed:
(1) The record date for determining stockholders
entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on
the day next preceding the day on which notice is
given, or, if notice is waived, at the close of
business on the day next preceding the day on which
the meeting is held.
<PAGE>15
(2) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which
the Board adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board may fix a new record date for
the adjourned meeting.
ARTICLE VII: MISCELLANEOUS
VOTING SHARES IN OTHER CORPORATIONS.
SECTION 7:1. The corporation may vote any and all shares of stock and
other securities having voting rights which may at any time and from time
to time be held by it in any other corporation or corporations and such
vote may be cast either in person or by proxy by such officer of the
corporation as the Board of Directors may appoint or, in default of
such appointment, the Chief Executive Officer, the President or a Vice
President.
EXECUTION OF OTHER PAPERS AND DOCUMENTS.
SECTION 7:2. All checks, bills, notes, drafts, vouchers, warehouse
receipts, bonds, mortgages, contracts, registration certificates and all
other papers and documents of the corporation shall be signed or endorsed
for the corporation by such of its officers, other employees and agents as
the Board of Directors may from time to time determine, or in the absence
of such determination, by the Chief Executive Officer, the President or a
Vice President, provided that instruments requiring execution with the
formality of deeds shall be signed by the Chief Executive Officer, the
President or a Vice President and impressed with the Seal of the
corporation, duly attested by the Secretary or an Assistant Secretary.
CORPORATE SEAL.
SECTION 7:3. The Board of Directors shall provide a suitable seal,
containing the name of the corporation, which seal shall be in the custody
of the Secretary of the corporation, and may provide for one or more
duplicates thereof to be kept in the custody of such other officer of the
corporation as the Board may prescribe.
AMENDMENTS.
SECTION 7:4. These By-Laws may be amended or repealed, or new By-Laws
may be adopted (a) by the affirmative vote of a majority of the shares
issued and outstanding and entitled to vote at any annual or special
meeting of stockholders, or (b) by the affirmative vote of the majority of
the Board of Directors at any regular or special meeting; provided that the
notice of such meeting of stockholders or directors, whether regular or
special, shall specify as one of the purposes thereof the making of such
amendment or repeal, and provided further that any amendment of the By-Laws
made by the Board may be further amended or repealed by the stockholders.
<PAGE>16
BOOKS AND RECORDS.
SECTION 7:5. Except as the Board of Directors may from time to time
direct or as may be required by law, the corporation shall keep its books
and records at its principal office.
EXHIBIT 10
ANHEUSER-BUSCH COMPANIES, INC.
1998 INCENTIVE STOCK PLAN
SECTION 1. PURPOSE
The purpose of this Plan is to attract, retain, motivate and reward
employees of the Company and its Subsidiaries and Affiliates with certain
stock-related compensation arrangements.
SECTION 2. MAXIMUM NUMBER OF SHARES
(a) The maximum number of shares of Stock which may be issued pursuant
to Awards under this Plan, and the maximum number of shares for which ISOs
may be granted under this Plan, shall be 21,000,000 shares, subject to
adjustment as provided in Section 9. For this purpose:
(i) The number of shares underlying an Award shall be counted
against this Plan maximum ("used") at the time of grant.
(ii) When an Award is payable in cash only, the number of shares of
Stock on which the amount of such cash is based shall be deemed used at
the time of grant.
(iii) Shares which underlie Awards that (in whole or part) expire,
terminate, are forfeited, or otherwise become non-payable, and shares
which are recaptured by the Company in connection with a forfeiture,
may be re-used in new grants to the extent of such expiration,
termination, forfeiture, non-payability, or recapture.
(iv) For all purposes of this Section 2, shares underlying two or
more alternative Awards shall be treated as underlying only a single
Award, with no multiple counting of shares. Accordingly: shares
underlying alternative Awards shall be used only once at the time of
grant; if one such Award is exercised or paid, no re-usage of shares
shall result from the termination of the unexercised alternative
Awards.
(b) Notwithstanding any other provisions of this Plan, the maximum
number of shares underlying Awards that may be granted to any Eligible
Person during any calendar year shall be 750,000, subject to adjustment as
provided in Section 9.
(c) In its discretion, the Company may issue treasury shares or
authorized but unissued shares, but shall issue treasury shares to the
extent required by the Committee or applicable law. Shares of Stock may be
represented by certificates or may be issued in uncertificated form, as
determined by the Company from time to time.
SECTION 3. ELIGIBILITY
Officers and management employees of the Company, Subsidiaries, or
Affiliates shall be eligible to receive Awards under this Plan. A director
of the Company, a Subsidiary, or an Affiliate shall be eligible only if he
or she also is an officer or management employee of at least one such
entity. Notwithstanding the foregoing, persons employed only by Affiliates
shall not be eligible to receive ISOs.
<PAGE>2
SECTION 4. GENERAL PROVISIONS RELATING TO AWARDS
(a) Subject to the limitations in this Plan, the Committee may cause
the Company to grant Awards to such Eligible Persons, at such times, of
such types, in such amounts, for such periods, becoming exercisable or
otherwise vesting at such times, with such features, with such option
prices, purchase prices or base prices, and subject to such other terms,
conditions, and restrictions as the Committee deems appropriate. Each Award
shall be evidenced by a written Award Document, which (as determined by the
Committee) may be a formal agreement between the Company and the Recipient
or a communication by the Company to the Recipient. The Award Document may
be written and transmitted on paper, electronically, or using any other
medium selected by the Committee, and may be set forth in a single document
or in several documents. In granting an Award, the Committee may take into
account any factor it deems appropriate and consistent with the purposes of
this Plan. Awards may be granted as additional compensation, or in lieu of
other compensation. All or any portion of any payment to a Recipient,
whether in cash or shares of Stock, may be deferred to a later date if and
as provided in the Award Document. Deferrals may be for such periods and
upon such terms and conditions (including the provision of interest,
dividend equivalents, or other return) as the Committee may determine.
(b) Except as otherwise provided in this Plan, one or more Awards may
be granted separately or as alternatives to each other. If Awards are
alternatives to each other:
(i) the exercise of all or part of one automatically shall cause an
immediate equal and corresponding termination of the other; and
(ii) unless the Award Document or the Committee expressly permit
otherwise, alternative Awards which are transferable may be transferred
only as a unit, and alternative Awards which are exercisable must be
exercisable by the same person or persons.
(c) Award Documents may contain any provision approved by the Committee
relating to the period for exercise or vesting after termination of
employment, and relating to the circumstances under which a termination is
deemed to occur. Except to the extent otherwise expressly provided in the
Award Document or determined by the Committee, termination of employment
includes the separation of a Recipient, directly or through the separation
of his or her Employer, from the group of companies comprised of the
Company and its Subsidiaries and Affiliates for any reason, including: (i)
separation of the Recipient by reason of death, permanent or indefinite
disability, retirement, resignation, dismissal, permanent or indefinite
layoff, or other event having a similar effect; and (ii) separation of the
Employer by any method which results in the Employer ceasing to be a
Subsidiary or an Affiliate.
(d) Award Documents may, in the discretion of the Committee, contain a
provision permitting a Recipient to designate the person who may exercise
an Award after the Recipient's death, either by will or by appropriate
notice to the Company. The Committee may impose such conditions and
limitations on such designations as it deems appropriate.
(e) A Recipient shall have none of the rights of a shareholder with
respect to shares of Stock which underlie his or her Award until shares are
issued in his or her name.
<PAGE>3
(f) Except as otherwise provided in an Award Document pursuant to this
Section, Awards shall not be transferable other than by will or the laws of
descent and distribution, and shall be exercisable during the Recipient's
lifetime only by the Recipient or his or her guardian or legal
representative. However, except in the case of ISOs and Awards which are
alternatives to ISOs, the Committee may expressly provide in any Award
Document that the Award is transferable. Transferability (if permitted) may
be subject to such conditions and limitations as the Committee deems
appropriate.
(g) Notwithstanding Section 14(a), in its discretion the Committee may
provide in any Award Document for the acceleration of vesting or the
termination of any condition or forfeiture provision upon the happening of
any specified event (including, for example, an event which results in an
Acceleration Date).
(h) Subject to Section 14(a) in the case of ISOs, and subject to any
express limitations contained in the applicable Award Document: (i) the
Committee may accelerate vesting or waive or terminate any condition or
forfeiture provision of any Award at any time and for any reason; and (ii)
the Committee may amend an Award Document after grant at any time and for
any reason so long as such amendment is not inconsistent with this Plan.
(i) No Award by its terms shall be exercisable after the expiration of
ten years from the date it is granted.
SECTION 5. OPTIONS AND SARS
(a) Except as provided in Section 9, the option price per share of
Options or the base price of SARs shall not be less than Fair Market Value
per share of Stock on the Options' or the SARs' grant date, except that
SARs which are alternatives to Options but which are 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 SARs are granted.
(b) The grant of Options and their related Award Document must
identify the Options as either ISOs or as NQSOs.
(c) If Options, SARs, and/or Limited Rights are granted as alternatives
to each other, the option prices and the base prices (as applicable) shall
be equal and the expiration dates shall be the same.
(d) In the case of SARs, the Award Document may specify the form of
payment 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 form.
(e) Notwithstanding any other provision of Sections 4 or 5: (i) no
Options or SARs shall be granted in exchange for so-called "underwater"
Options or SARs (which have option or base prices in excess of the
then-current Fair Market Value per share of Stock), nor shall underwater
Options or SARs be amended to reduce their option or base price; and, (ii)
no Options or SARs shall contain a so-called "reload" feature under which
additional Options or SARs are granted automatically to Recipients upon
exercise of the original Options or SARs.
<PAGE>4
SECTION 6. LIMITED RIGHTS
(a) The Committee shall have authority to grant a special type of stock
appreciation rights ("Limited Rights") to any Recipient of any Options or
SARs granted under this Plan (the "Related Award"). Limited Rights are
stock appreciation rights which are exercisable only after the occurrence
of one or more extraordinary events specified by the Committee; such events
may include, for example, the events which result in an Acceleration Date.
Limited Rights shall not be granted separately, but shall be granted only
as alternatives to their Related Award. Limited Rights may be granted
either at the time of grant of the Related Award or at any time thereafter
during its term. Limited Rights shall be exercisable or payable at such
times, payable in such amounts, and subject to such other terms,
conditions, and restrictions as the Committee deems appropriate.
(b) The Committee shall place on any Limited Rights for which the
Related Awards are ISOs such restrictions as may be required by the Code at
the time of grant, and shall amend this Plan accordingly to the extent
required by the Code.
SECTION 7. STOCK ISSUANCE, PAYMENT, AND WITHHOLDING
(a) The Recipient of Options may pay the option price in cash, Stock
(including shares of previously-owned Stock or Stock issuable in connection
with the Award), or other property, to the extent permitted or required by
the Award Document or the Committee from time to time.
(b) Except to the extent prohibited by applicable law, the Committee or
the Company may take any necessary or appropriate steps in order to
facilitate the payment of an option price. The Committee may permit deemed
or constructive transfers of shares in lieu of actual transfer and physical
delivery of certificates. The Committee may require satisfaction of any
rules or conditions in connection with paying the option price at any
particular time or in any particular form.
(c) If shares used to pay the option price of Options are subject to
any transfer or other restrictions, an equal number of the shares of Stock
purchased shall be made subject to such prior restrictions in addition to
any further restrictions imposed on such purchased shares by the terms of
the Award Document or Plan.
(d) After the obligation arises to collect and pay Required Withholding
Taxes, the Recipient shall reimburse the Company or Employer (as required
by the Committee or Company) for the amount of such Required Withholding
Taxes in cash, unless the Award Document or the Committee permits or
requires payment in another form. In the discretion of the Committee or its
delegate and at the Recipient's request, the Committee or its delegate may
cause the Company or Employer to pay to the appropriate taxing authority
withholding taxes in excess of Required Withholding Taxes on behalf of a
Recipient, which shall be reimbursed by the Recipient in any manner
determined by the Company or the Committee from time to time. In the Award
Document or otherwise, the Committee may allow a Recipient 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.
(e) If provided in the Award Document relating to an ISO, the Committee
may (i) cause the Company to hold the shares of Stock issued in the
<PAGE>5
Recipient's name upon exercise, or (ii) prohibit the transfer by a
Recipient of such shares into the name of a nominee and require the
placement of a legend on certificates for such shares reflecting such
prohibition.
SECTION 8. FORFEITURES
In its discretion, the Committee may adopt and amend any policies, and
may include in any Award Document any provisions relating to, forfeitures.
Such forfeiture provisions may include, for example, prohibitions on
competing with the Company and its Subsidiaries and Affiliates and on
engaging in other detrimental conduct. Forfeiture provisions for one Award
type may differ from those for another type, and also may differ among
Awards of the same type granted at different times or to Recipients in
different circumstances. As used in this Plan, a "forfeiture" of an Award
includes the recapture of Stock issued or other economic benefits derived
from an Award, as well as the forfeiture of an Award itself; however, the
Committee may define the term more narrowly for specific Award Documents.
SECTION 9. ADJUSTMENTS AND ACQUISITIONS
(a) Subject to Section 9(c), in the event that the Committee shall
determine that, as a result of any dividend or other distribution (whether
in the form of cash, Stock, other securities, or other property), stock
split, reverse stock split, recapitalization, reorganization, merger,
consolidation, split-up, split-off, spin-off, combination, repurchase, or
exchange of Stock or other securities of the Company, issuance of warrants
or other rights to purchase Stock or other securities of the Company, or
any other similar corporate transaction, change, or event, an adjustment is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under outstanding Awards
or under the Plan (an "Adjustment Event"), then the Committee shall, in
such manner as it may deem equitable, adjust any or all of:
(i) the number and types of shares of Stock (or other securities or
property) subject to outstanding Awards;
(ii) the maximum number of shares of Stock with respect to which
Awards may be issued set forth in Section 2(a) of this Plan, the
maximum number of shares of Stock for which ISOs may be granted set
forth in Section 2(a) of this Plan, and the maximum number of shares of
Stock which may be granted to any Eligible Person during any calendar
year set forth in Section 2(b) of this Plan (collectively the "Share
Limitations"); and
(iii) the option price, base price, or other similar price with
respect to any Award.
Alternatively to (i) and (iii), if there is an Adjustment Event and the
Committee deems it appropriate, it may provide for cash payments to holders
of outstanding Awards.
(b) Subject to Section 9(c), in the event of an acquisition by the
Company by means of a merger, consolidation, acquisition of property or
stock, reorganization or otherwise, the Committee shall be authorized:
<PAGE>6
(i) to cause the Company to issue Awards or assume stock options or
stock appreciation rights issued by the acquired company, whether or
not in a transaction to which Section 424(a) of the Code applies, by
means of issuance of new Awards in substitution for, or an assumption
of, previously issued options or rights, but only if and to the extent
that such issuance or assumption is consistent with the other
provisions of this Plan and any applicable law, and/or
(ii) to increase the Share Limitations to reflect such issuance or
assumption.
(c) The Committee shall not make an adjustment under Section 9(a),
issue Awards or assume options or rights under Section 9(b)(i), or increase
the Share Limitations under Section 9(b)(ii),
(i) to the extent such action would affect ISOs or the Share
Limitation relating to ISOs and would require shareholder approval
under Section 422 of the Code, or
(ii) to the extent such action would affect the Share Limitation
set forth in Section 2(b) of this Plan and would require shareholder
approval in order to qualify such Awards, such assumed options or
rights, or Awards granted thereafter as performance-based compensation
under Section 162(m) of the Code, unless such action(s) by the
Committee are made subject to shareholder approval and are so approved
by the shareholders.
(d) In the event that the Board approves any merger or consolidation of
the Company with or into any other corporation or business entity as a
result of which the Company shall not be the surviving corporation, with
respect to each Award, either (i) the Committee shall, in such manner as it
may deem equitable, cause such Award to vest prior to the effective date of
such merger or consolidation or (ii) the Committee or the Board shall
approve arrangements to substitute an award issued by the surviving
corporation for such Award on terms and conditions deemed equitable by the
Committee or the Board.
SECTION 10. ACCELERATION AND VESTING
(a) An "Acceleration Date" occurs when any of the following events
occur:
(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 30% 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
of merger or consolidation with any other corporation or business
entity, other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior to the
consummation of the merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 50% of the combined voting
power of the voting securities of the surviving entity of such merger
or consolidation outstanding immediately after such merger or
consolidation;
<PAGE>7
(iii) Continuing Directors cease to constitute at least a majority
of the directors of the Company; or
(iv) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or an agreement for the sale
or disposition by the Company of all or substantially all the Company's
assets.
An Acceleration Date as described in (i) above shall not occur as a
result of the ownership of voting securities by (A) the Company or any of
its Subsidiaries, (B) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any of its Subsidiaries or (C) a
corporation owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their ownership of Stock.
Securities held by an underwriter pursuant to an offering of such
securities for a period not to exceed 40 days shall be deemed to be
outstanding but shall not be deemed to be beneficially owned by such
underwriter for purposes of clause (i) above.
For purposes of this Section 10(a), (X) "Affiliate" and "Associate"
shall have the respective meanings ascribed to such terms in Rule 12b-2
under the Act; (Y) "Continuing Directors" shall mean any directors of the
Company who either (i) were directors of the Company on the date of
adoption of the Plan, or (ii) became directors of the Company subsequent to
such date and whose election or nomination for election by the shareholders
of the Company was duly approved, either by a specific vote or by approval
of the proxy statement issued by the Company in which such individuals were
named as nominees for director of the Company, by a majority of the
Continuing Directors who were at the time of election or nomination
directors of the Company; and (Z) "Person" shall mean any individual, firm,
corporation, partnership or other entity and shall include the Affiliates
and Associates of such Person.
(b) If an Acceleration Date occurs while Awards remain outstanding
under this Plan, then all Awards shall vest. This Section shall apply to
ISOs notwithstanding Section 14(a).
(c) When Awards "vest," they become fully exercisable. Vesting does not
mean that an Award becomes non-forfeitable, except to the extent provided
in the Award Document or otherwise by the Committee pursuant to Sections
4(g) or 4(h) above.
SECTION 11. ADMINISTRATION
(a) This Plan shall be administered by the Stock Option Plans Committee
of the Board, or another committee appointed by the Board from time to
time, consisting of three or more persons, each of whom at all times shall
be a member of the Board and none of whom shall be an officer or employee
of the Company or any of its Subsidiaries at the time of service. Committee
members shall not be eligible for selection to receive Awards under this
Plan.
(b) During any time when one or more Committee members may not be
qualified to serve under Rule 16b-3, under Section 162(m) of the Code, or
under any other rule or law which contains special qualifications for
Committee members in order to avoid a penalty or to obtain a benefit, the
Committee may form a sub-Committee from among its qualifying members. The
sub-Committee may act, in lieu of the full Committee, with respect to all
<PAGE>8
or any category of Awards granted or to be granted to all or any group of
Recipients, and may take other actions deemed appropriate and convenient to
prevent, control, minimize, or eliminate any penalties, loss of benefits,
or other adverse effects of such potential disqualification. Any such
sub-Committee shall have the full authority of the full Committee under
this Plan, except to the extent the full Committee limits the
sub-Committee's powers.
(c) At the Committee's request or on its own motion, the Board may
ratify or approve grants, or any terms of any grants, made by the Committee
during any time that any member of the Committee may not be qualified to
approve such grants or terms under Rule 16b-3 or any other rule or law.
(d) 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 all of the
members of the Committee, shall be the acts of the Committee. The Committee
may meet in person, by telephone or television conference, or in any other
manner (unless prohibited by applicable law). From time to time the
Committee may adopt, amend, and rescind such rules and regulations for
carrying out this Plan and implementing Award Documents, and the Committee
may take such action in the administration of this Plan, as it deems
proper. The interpretation of any provisions of this Plan by the Committee
shall be final and conclusive unless otherwise determined by the Board.
(e) To the extent the Committee deems it convenient and appropriate,
the Committee may delegate such of its powers and duties, including (among
other things) its power to grant Awards, to one or more officers of the
Company. Any such delegation shall be subject to such limitations and
conditions as the Committee deems appropriate. However, notwithstanding the
foregoing: (i) the power to grant Awards may not be delegated to an officer
who is not also a director of the Company except in conformity with
applicable Delaware law; and, (ii) no officer may grant Awards to him- or
herself or to his or her superiors unless such grants are ratified by the
Committee or the Board.
SECTION 12. AMENDMENT, TERMINATION, SHAREHOLDER APPROVAL.
(a) The Board may amend or terminate this 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 this Plan, (ii) change the
class of persons eligible to receive ISOs, (iii) change the annual limit on
Awards which may be granted to an Eligible Person provided in Section 2(b),
or (iv) change the provisions of this Section 12(a).
(b) The Committee may amend this Plan from time to time to the extent
necessary to (i) comply with Rule 16b-3 and, to the extent it deems
appropriate, (ii) prevent benefits under this Plan from constituting
"applicable employee remuneration" within the meaning of Section 162(m) of
the Code.
(c) No Awards may be granted under this Plan after April 21, 2008.
(d) The approval by shareholders shall consist of the approving vote of
the holders of a majority of the outstanding shares of Stock present (in
person or by proxy) and voted (for or against) at a meeting of the
shareholders at which a quorum is present, unless a greater vote is
<PAGE>9
required by the Company's charter or by-laws, by the Board, by the
Company's principal stock exchange, or by applicable law (including
Delaware law, Rule 16b-3, or Section 162(m) of the Code).
SECTION 13. DEFINITIONS
(a) "Acceleration Date" has the meaning given in Section 10(a).
(b) "Act" means the Securities Exchange Act of 1934, as amended from
time to time.
(c) "Adjustment Event" has the meaning given in Section 9(a).
(d) "Affiliate" means any entity in which the Company has a substantial
direct or indirect equity interest (other than a Subsidiary), but only if
expressly so designated by the Committee from time to time. Without
limiting the generality of the foregoing, the term "Affiliate" shall not
include any beer wholesaler or distributor in which Anheuser-Busch
Investment Capital Corporation or other Subsidiary invests, unless the
Committee expressly determines otherwise; the Committee may also revoke or
reinstate any such designation from time-to-time.
(e) "Award" means a grant of ISOs, NQSOs, SARs, or Limited Rights.
(f) "Award Document" means the written agreement or other document
referred to in Section 4(a) evidencing an Award.
(g) "Board" means the Board of Directors of the Company.
(h) Options "cease to qualify as ISOs" when they fail or cease to
qualify for the exclusion from income provided in Section 421 (or any
successor provision) of the Code.
(i) "Code" means the U.S. Internal Revenue Code as in effect from time
to time.
(j) "Committee" means the committee of the Board described in Section
11 hereof and any sub-committee established by such committee pursuant to
Section 11(b).
(k) "Company" means Anheuser-Busch Companies, Inc. and its successors.
(l) "Eligible Person" means a person who is eligible to receive an
Award under Section 3 of this Plan.
(m) "Employer" means the Company, the Subsidiary, or the Affiliate
which employs the Recipient.
(n) "Fair Market Value" of Stock on a given valuation 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 quotation
service 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 valuation date on the principal stock exchange
or quotation system in the U.S. on which Stock is listed or quoted (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 Code. If
<PAGE>10
no sale of Stock occurs on such valuation date, but there were sales
reported within a reasonable period both before and after such valuation
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
valuation date shall be used, with the average to be weighted inversely by
the respective numbers of trading days between the selling dates and such
valuation date.
(o) "Forfeiture" has the meaning given in Section 8.
(p) "ISO" or "Incentive Stock Option" means an option to purchase one
share of Stock for a specified option price 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.
(q) "Limited Right" has the meaning given in Section 6.
(r) "NQSO" or "Non-Qualified Stock Option" means an option to purchase
one share of Stock for a specified option price which is designated by the
Committee as a "Non-Qualified Stock Option," or which is designated by the
Committee as an ISO but which ceases to qualify as an ISO.
(s) "Option" means an ISO or an NQSO.
(t) "Optionee" means a person to whom Options are granted pursuant to
this Plan.
(u) "Plan" means the Anheuser-Busch Companies, Inc. 1998 Incentive
Stock Plan, as amended from time to time.
(v) "Recipient" means an Eligible Person to whom an Award is granted
pursuant to this Plan.
(w) "Reporting Person," as of a given date, means a Recipient 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.
(x) "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.
(y) "Share Limitations" has the meaning given in Section 9(a).
(z) "SAR" means a stock appreciation right, which is a 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.
(aa) "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 9.
(bb) "Subsidiary" means a "subsidiary corporation" of the Company as
defined in Section 424(f) (or any successor provision) of the Code, other
than corporations expressly excluded by the Committee from time-to-time.
<PAGE>11
(cc) "Vest" has the meaning given in Section 10(c).
(dd) "Required Withholding Taxes" means, in connection with the
exercise of or other taxable event relating to an Award, the total amount
of Federal and state income taxes, social security taxes, and other taxes
which the Employer of the Recipient is required to withhold.
SECTION 14. MISCELLANEOUS
(a) Each provision of this Plan and the Award Documents relating to
ISOs shall be construed so that all ISOs shall be "incentive stock options"
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, subject however to Sections 4(g) and 10(b)
and provided that Award Documents are permitted to have provisions which
cause Options which qualify as ISOs at the time of grant to cease to
qualify as ISOs at a later time or upon the happening of a later event. No
discretion granted or allowed to the Committee under this Plan shall apply
to ISOs after their grant except (i) to the extent the related Award
Document shall so provide or (ii) to the extent that the application of
such discretion would not cause such ISOs to cease to qualify as ISOs.
Notwithstanding the foregoing, nothing shall prohibit an amendment to or
action regarding outstanding ISOs which would cause them to cease to
qualify as ISOs, so long as the Company and the Recipient shall
consent to such amendment or action.
(b) Without amending this Plan, Awards may be granted to Eligible
Persons who are foreign nationals or who are employed outside the United
States or both, on such terms and conditions different from those specified
in this Plan as may, in the judgment of the Committee, be necessary or
desirable to further the purposes of this Plan. Such different terms and
conditions may be reflected in Addenda to this Plan. However, no such
different terms or conditions shall be employed if such terms or conditions
constitute, or in effect result in, an increase in the aggregate number of
shares which may be issued under this Plan or a change in the definition of
Eligible Person.
(c) Notwithstanding any other provision in this Plan, the Committee
shall not act with respect to any Reporting Person in a manner which would
result in a forfeiture under Section 16(b) of the Act of some or all of the
economic benefits relating to his or her Awards, without in each case the
written consent of such Reporting Person.
(d) Nothing in this Plan or any Award Document shall confer on any
person any 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.
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of the company's earnings
to fixed charges, on a consolidated basis, for the periods
indicated:
Three Months
Ended
March 31, Year Ended December 31,
-------------- ----------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
5.7X 7.5X 7.3X 8.1X 1/ 6.6X 2/ 7.7X 5.8X 3/
For purposes of this ratio, earnings have been calculated by adding
to income before income taxes the amount of fixed charges. Fixed
charges consist of interest on all indebtedness, amortization of
debt discount and expense of that portion of rental expense deemed
to represent interest.
1/ The ratio for 1996 includes the gain from the sale of the
Cardinals, which increased income before income taxes by $54.7
million. Excluding this one-time gain, the ratio would have been 7.9X.
2/ The ratio for 1995 includes the impact of the Tampa Brewery
shutdown and the reduction of wholesaler inventories. Excluding
these non-recurring items, the ratio would have been 7.6X.
3/ Includes the impact of the one-time, pre-tax restructuring
charge of $401 million as a result of the company's Profitability
Enhancement Program. Excluding this non-recurring special charge,
the ratio would have been 7.5X.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from
the Form 10-Q for the quarter ended March 31, 1998 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 106,411
<SECURITIES> 0
<RECEIVABLES> 773,837
<ALLOWANCES> 5,639
<INVENTORY> 677,702
<CURRENT-ASSETS> 1,708,700
<PP&E> 13,387,738
<DEPRECIATION> 5,566,583
<TOTAL-ASSETS> 11,939,473
<CURRENT-LIABILITIES> 1,581,014
<BONDS> 4,383,551
0
0
<COMMON> 710,519
<OTHER-SE> 3,425,561
<TOTAL-LIABILITY-AND-EQUITY> 11,939,473
<SALES> 2,507,524
<TOTAL-REVENUES> 2,507,524
<CGS> 1,638,779
<TOTAL-COSTS> 2,039,218
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 75,486
<INCOME-PRETAX> 396,899
<INCOME-TAX> 151,016
<INCOME-CONTINUING> 265,186
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 265,186
<EPS-PRIMARY> 0.54
<EPS-DILUTED> 0.54
</TABLE>
