<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as
permitted by
/X/ Definitive Proxy Statement Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
- --------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- ---------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- ---------------------------------------------------------------------------
(3) Filing Party:
- ---------------------------------------------------------------------------
(4) Date Filed:
- ---------------------------------------------------------------------------
<PAGE> 2
[ LOGO ] ANHEUSER-BUSCH COMPANIES
NOTICE OF 1998
ANNUAL MEETING OF
SHAREHOLDERS AND
PROXY STATEMENT
---------------------------------------------------------------------
YOUR VOTE IS IMPORTANT!
PLEASE PROMPTLY MARK, DATE, SIGN, AND RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE.
---------------------------------------------------------------------
<PAGE> 3
[ LOGO ] ANHEUSER-BUSCH COMPANIES
March 10, 1998
Dear Shareholder:
On behalf of the Board of Directors, it is my pleasure to invite
you to attend the Annual Meeting of Shareholders of Anheuser-Busch
Companies, Inc. on Wednesday, April 22, 1998, in Williamsburg,
Virginia. Information about the meeting is presented on the following
pages.
In addition to the formal items of business to be brought before
the meeting, members of management will report on the company's
operations and answer shareholder questions.
Your vote is very important. Please ensure that your shares will be
represented at the meeting by completing, signing, and returning your
proxy card in the envelope provided, even if you plan to attend the
meeting. Sending us your proxy will not prevent you from voting in
person at the meeting should you wish to do so.
Thank you for your continued support of Anheuser-Busch. We look
forward to seeing you on April 22nd.
Sincerely,
/s/ August A. Busch III
AUGUST A. BUSCH III
Chairman of the Board and President
<PAGE> 4
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1998
The Annual Meeting of the Shareholders of Anheuser-Busch Companies,
Inc. (the "Company") will be held at The Kingsmill Resort and Conference
Center, 1010 Kingsmill Road, Williamsburg, Virginia, on Wednesday, April
22, 1998, at 10:00 A.M. local time, for the following purposes:
1. To elect five directors, each to serve for a term of three years;
2. To consider and vote upon a proposal to approve the adoption of the
Anheuser-Busch Companies, Inc. 1998 Incentive Stock Plan;
3. To approve the employment of Price Waterhouse LLP, as independent
accountants, to audit the books and accounts of the Company for
1998; and
4. To act upon such other matters, including the shareholder proposal
(pages 12-14), as may properly come before the meeting.
The Board of Directors has fixed the close of business on February 27,
1998, as the record date for the determination of shareholders entitled to
notice of and to vote at the meeting. A list of such shareholders will be
available during regular business hours at the Company's office, 1010
Kingsmill Road, Williamsburg, Virginia for the ten days before the meeting,
for inspection by any shareholder for any purpose germane to the meeting.
By Order of the Board of Directors,
/s/ JoBeth G. Brown
JoBeth G. Brown
Vice President and Secretary
March 10, 1998
IMPORTANT
PLEASE NOTE THAT A TICKET IS REQUIRED FOR ADMISSION TO THE MEETING. IF
YOU PLAN TO ATTEND AND YOU ARE A STOCKHOLDER AS OF THE RECORD DATE, PLEASE
CHECK THE APPROPRIATE BOX ON YOUR PROXY CARD AND BRING THE ADMISSION TICKET
YOU RECEIVED IN YOUR PROXY MAILING WITH YOU TO THE MEETING. IF, HOWEVER,
YOUR SHARES ARE HELD IN THE NAME OF A BROKER OR OTHER NOMINEE, PLEASE
BRING WITH YOU A PROXY OR LETTER FROM THAT FIRM CONFIRMING YOUR OWNERSHIP
OF SHARES.
<PAGE> 5
ANHEUSER-BUSCH COMPANIES, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Anheuser-Busch Companies, Inc. (the
"Company") for use at the Annual Meeting of Shareholders of the Company to
be held at the time and place and for the purposes set forth in the
foregoing Notice of Annual Meeting of Shareholders. The address of the
Company's principal executive offices is One Busch Place, St. Louis,
Missouri 63118. This Proxy Statement and the form of proxy are being mailed
to shareholders on or about March 10, 1998.
REVOCABILITY OF PROXY AND VOTING OF PROXY
A proxy given by a shareholder of record may be revoked at any time
before it is exercised by giving another proxy bearing a later date, by
notifying the Secretary of the Company in writing of such revocation at any
time before the proxy is exercised, or by attending the meeting in person
and casting a ballot. Any proxy properly signed and returned to the Company
will be voted in accordance with the instructions indicated thereon. If no
instructions are indicated on the proxy, the shares will be voted as
recommended by the Board of Directors. The Company knows of no reason why
any of the nominees named herein would be unable to serve. In the event,
however, that any nominee named should, prior to the election, become
unable to serve as a director, the proxy will be voted in accordance with
the best judgment of the Proxy Committee named therein.
In the event that any matter not described herein may properly come
before the meeting, or any adjournment thereof, the Proxy Committee will
vote the shares represented by it in accordance with its best judgment. At
the time this proxy statement went to press, the Company knew of no other
matters which might be presented for shareholder action at the meeting.
POLICY OF CONFIDENTIAL VOTING
It is the policy of the Company that all proxies, ballots, and vote
tabulations that identify the vote of a shareholder will be kept
confidential from the Company, its directors, officers, and employees until
after the final vote is tabulated and announced, except in limited
circumstances including any contested solicitation of proxies, when
required to meet a legal requirement, to defend a claim against the Company
or to assert a claim by the Company, and when written comments by a
shareholder appear on a proxy card or other voting material. The Company
continues its long-standing practice of retaining an independent tabulator
to receive and tabulate the proxies and independent inspectors of election
to certify the results.
2
<PAGE> 6
RECORD DATE AND VOTING RIGHTS
Only shareholders of record at the close of business on February 27,
1998, are entitled to vote at the meeting. On such record date the Company
had outstanding and entitled to vote 486,836,255 shares of common stock.
Each shareholder entitled to vote shall have one vote for each share of
common stock registered in such shareholder's name on the books of the
Company as of the record date.
A majority of the outstanding shares entitled to vote must be
represented in person or by proxy at the meeting in order to conduct the
election of directors and other matters mentioned in this Proxy Statement.
If such a majority is represented at the meeting, then the five nominees
for director who receive the highest number of the votes cast will be
elected. The other matters require the approving vote of at least a
majority of the votes cast. Proxies for shares marked "abstain" on a matter
will be considered to be represented at the meeting, but not voted, for
these purposes. Shares registered in the names of brokers or other "street
name" nominees for which proxies are voted on some but not all matters will
be considered to be represented at the meeting, but will be considered to
be voted only as to those matters actually voted.
The only person known by the Company to be the beneficial owner of more
than 5% of the outstanding voting securities of the Company is:
<TABLE>
<CAPTION>
NUMBER OF
COMMON SHARES PERCENT OF
AS OF CLASS
NAME AND ADDRESS 12/31/97 ON 12/31/97
- ---------------- ------------- -----------
<S> <C> <C>
NationsBank Corporation and its subsidiaries 25,121,850<Fa> 5.13%
100 N. Broadway
St. Louis, MO 63102
<FN>
- -------
<Fa> NationsBank Corporation and its subsidiaries have sole voting power as
to 12,446,440 shares, shared voting power as to 12,289,779 shares, sole
investment power as to 5,472,287 shares, and shared investment power as to
13,333,715 shares.
</TABLE>
ELECTION OF DIRECTORS
(ITEM A ON PROXY CARD)
The Board of Directors of the Company is divided into three Groups,
with the term of office of each Group ending in successive years. The term
of directors of Group I expires with this Annual Meeting. The terms of
directors of Group II and Group III expire with the Annual Meetings in 1999
and 2000, respectively. Mr. Peter M. Flanigan, whose term will expire
with this Annual Meeting, is not standing for re-election. He has been a
director for 20 years, and his valued advice and counsel will continue to
be available to the Company as he serves as an advisory member of the
Board.
The following information is submitted respecting the nominees for
election and the other directors of the Company:
3
<PAGE> 7
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION AT THIS MEETING TO A TERM EXPIRING IN 2001 (GROUP
I DIRECTORS):
<C> <S>
AUGUST A. BUSCH III
Mr. Busch, 60, has been a director since 1963. He is
Chairman of the Board and President of the Company.
[PHOTO OF BUSCH] He has been President since 1974, Chief Executive
Officer since 1975, and Chairman since 1977. He is
also a director of Emerson Electric Co., General
American Life Insurance Co., and SBC Communications,
Inc. Mr. Busch is Chairman of the Executive Committee
and is a member of the Nominating Committee.
CARLOS FERNANDEZ G.
Mr. Fernandez, 31, has been a director since 1996. He
is Vice Chairman of the Board of Directors and Chief
Executive Officer of Grupo Modelo, S.A. de C.V., a
[PHOTO OF FERNANDEZ] Mexican company engaged in brewing and related
operations, which positions he has held since 1994
and May 1997, respectively. During the last five
years he has also served and continues to serve in
key positions of the major production subsidiaries of
Grupo Modelo, including Executive Vice President
since 1994 and Chief Operating Officer since 1992.
Mr. Fernandez is a member of the Conflict of Interest
and Finance Committees.
JAMES R. JONES
Ambassador Jones, 58, is a nominee for director. He
has been President - International Division of
Warnaco Group, Inc., an apparel company, since 1997.
[PHOTO OF JONES] He was the U.S. Ambassador to Mexico from 1993 to
1997 and Chairman and Chief Executive Officer of the
American Stock Exchange from 1989 to 1993. He is also
a director of Kansas City Southern Industries, Inc.
ANDREW C. TAYLOR
Mr. Taylor, 50, has been a director since 1995. He is
President and Chief Executive Officer of Enterprise
Rent-A-Car Company, which position he has held since
[PHOTO OF TAYLOR] 1991. He is also a director of Commerce Bancshares,
Inc. and General American Life Insurance Co. He is a
member of the Audit and Finance Committees.
DOUGLAS A. WARNER III
Mr. Warner, 51, has been a director since 1992. He
has been Chairman of the Board of J. P. Morgan & Co.
Incorporated ("Morgan") and Morgan Guaranty Trust
[PHOTO OF WARNER] Company of New York (the "Bank") since January 1995
and President of Morgan and the Bank since 1990. He
is also a director of General Electric Company. Mr.
Warner is a member of the Audit, Finance, and Pension
Committees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THESE NOMINEES.
4
<PAGE> 8
<CAPTION>
DIRECTORS WHOSE TERM CONTINUES UNTIL 1999 (GROUP II DIRECTORS):
<C> <S>
JOHN E. JACOB
Mr. Jacob, 63, has been a director since 1990. He has
been Executive Vice President and Chief
Communications Officer of the Company since 1994.
[PHOTO OF JACOB] He was President and Chief Executive Officer of the
National Urban League, Inc., a community-based social
service and advocacy agency, from 1982-1994. He is
also a director of Coca-Cola Enterprises, Inc. and
LTV Corporation. Mr. Jacob is a member of the
Finance, Shareholder Meetings, and Executive
Committees.
CHARLES F. KNIGHT
Mr. Knight, 62, has been a director since 1987. He is
Chairman of the Board and Chief Executive Officer of
Emerson Electric Co., a manufacturer of electrical
[PHOTO OF KNIGHT] and electronic equipment. He has been Chairman of
the Board and Chief Executive Officer since 1974. He
also served as President from 1995-March 1997. He is
also a director of The British Petroleum Company
p.l.c., IBM Corporation, and SBC Communications, Inc.
Mr. Knight is Chairman of the Conflict of Interest
and Finance Committees and is a member of the
Executive and Nominating Committees.
SYBIL C. MOBLEY
Dr. Mobley, 72, has been a director since 1981. She
has been Dean of the School of Business and Industry
at Florida A & M University since 1974. She is also
[PHOTO OF MOBLEY] a director of Champion International Corporation.
Dr. Mobley is a member of the Audit, Conflict of
Interest, and Pension Committees.
JAMES B. ORTHWEIN
Mr. Orthwein, 73, has been a director since 1963. He
served as Chairman of the Board and Chief Executive
Officer of the advertising agency D'Arcy MacManus
[PHOTO OF ORTHWEIN] Masius Worldwide, Inc. (now D'Arcy Masius Benton &
Bowles) from 1976 until his retirement in 1982. In
1983 he helped form Huntleigh Asset Partners, L.P., a
private investment partnership which recently changed
its name to Precise Capital, L.P., of which he is
presently a partner. Mr. Orthwein is Chairman of the
Shareholder Meetings Committee and is a member of the
Executive and Nominating Committees.
WILLIAM H. WEBSTER
Judge Webster, 74, has been a director since 1991. He
has been a partner in the law firm of Milbank, Tweed,
Hadley & McCloy since September 1991. He was
[PHOTO OF WEBSTER] Director of Central Intelligence from 1987 until
September 1991 and Director of the Federal Bureau of
Investigation from 1978 until 1987. He is also a
director of Maritz, Inc., Pinkerton's, Inc., TLC
Beatrice International Holdings, Inc. and Next Wave
Telecom Inc. Judge Webster is a member of the Audit
and Conflict of Interest Committees.
5
<PAGE> 9
<CAPTION>
DIRECTORS WHOSE TERM CONTINUES UNTIL 2000 (GROUP III DIRECTORS):
<C> <S>
BERNARD A. EDISON
Mr. Edison, 69, has been a director since 1985. He
was President of Edison Brothers Stores, Inc., a
group of retail specialty stores, from 1968 until
[PHOTO OF EDISON] his retirement in 1987, Chairman of its Finance
Committee from 1987 until 1989, and served as
Director Emeritus from 1989 until 1996. He is also
a director of General American Life Insurance Co. and
Reinsurance Group of America, Inc. Mr. Edison is
Chairman of the Audit, Executive Salaries, and Stock
Option Plans Committees and is a member of the
Executive and Shareholder Meetings Committees.
VERNON R. LOUCKS, JR.
Mr. Loucks, 63, has been a director since 1988. He is
Chairman of the Board and Chief Executive Officer of
Baxter International Inc., a manufacturer of health
[PHOTO OF LOUCKS] care products, specialty chemicals, and instruments.
He has been Chairman since 1987 and Chief Executive
Officer since 1980. He is also a director of
Affymetrix, Inc., Coastcast Corporation, Dun &
Bradstreet Corporation, Emerson Electric Co., and The
Quaker Oats Company. Mr. Loucks is a member of the
Audit, Conflict of Interest, Executive Salaries,
Stock Option Plans, and Nominating Committees.
VILMA S. MARTINEZ
Ms. Martinez, 54, has been a director since 1983. She
has been a partner in the law firm of Munger, Tolles
& Olson since 1982. She is also a director of
[PHOTO OF MARTINEZ] Fluor Corporation, Sanwa Bank California, and Shell
Oil Company. Ms. Martinez is a member of the Audit,
Executive Salaries, Pension, and Stock Option Plans
Committees.
WILLIAM PORTER PAYNE
Mr. Payne, 50, has been a director since 1997. He is
Vice Chairman of NationsBank Corporation, which
position he has held since 1997. He was President and
[PHOTO OF PAYNE] Chief Executive Officer of the Atlanta Committee for
the Olympic Games from 1991 to 1997. Mr. Payne is
also a director of Cousins Properties, Inc.,
Jefferson-Pilot Corporation, and ACSYS, Inc.
Mr. Payne is a member of the Executive Salaries and
Stock Option Plans Committees.
EDWARD E. WHITACRE, JR.
Mr. Whitacre, 56, has been a director since 1988. He
has been Chairman of the Board and Chief Executive
Officer of SBC Communications, Inc. since 1990. He
[PHOTO OF WHITACRE] is also a director of Burlington Northern Sante Fe
Corporation, Emerson Electric Co., and The May
Department Stores Company. Mr. Whitacre is Chairman
of the Pension and Nominating Committees and is a
member of the Audit, Executive, and Finance
Committees.
</TABLE>
6
<PAGE> 10
SECURITIES OWNED BY DIRECTORS, NOMINEES, AND EXECUTIVE OFFICERS
The following table shows the number of shares of the Company's common
stock and the Deferred Units with a value tied to the common stock that are
beneficially owned by the directors and nominees, by each of the executives
named in the summary compensation table, and by all directors, nominees,
and executive officers as a group as of the most recent practicable date.
The number of shares shown for each individual represents less than 1% of
the common stock outstanding. The number of shares shown for all directors,
nominees, and executive officers as a group represents 1.8% of the common
stock outstanding. Individuals have sole voting and investment power over
the stock unless otherwise indicated in the footnotes.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK DEFERRED
NAME BENEFICIALLY OWNED UNITS<F1>
---- ------------------ ---------
<S> <C> <C>
August A. Busch III....................................... 3,474,799<F2> --
Bernard A. Edison......................................... 0<F3> 44,930
Carlos Fernandez G........................................ 2,200 --
John E. Jacob............................................. 284,978<F4> 5,305
James R. Jones............................................ 300
Charles F. Knight......................................... 16,000 28,036
Stephen K. Lambright...................................... 385,449<F5> --
Vernon R. Loucks, Jr...................................... 2,000 1,922
Vilma S. Martinez......................................... 261 7,033
Sybil C. Mobley........................................... 1,561 439
James B. Orthwein......................................... 1,603,408<F6> --
William Porter Payne...................................... 700 1,099
John H. Purnell........................................... 400,871<F7> --
Patrick T. Stokes......................................... 817,178<F8> --
Andrew C. Taylor.......................................... 12,094 756
Douglas A. Warner III..................................... 2,000 1,177
William H. Webster........................................ 2,000<F9> 4,137
Edward E. Whitacre, Jr.................................... 2,000 1,884
All directors, nominees, and executive officers as a group
(26 persons).............................................. 8,781,956<F10>
<FN>
- -------
<F1> Deferred Units represent director fees deferred to the individual's
share equivalent account under the Company's deferred compensation
plan for non-employee directors. The value of the Units at the time
of distribution will be equal to the market value of the equivalent
number of shares of the Company's common stock and will be paid in
cash. No voting rights are associated with Deferred Units.
<F2> The number of shares includes 1,048,576 shares that are subject to
currently exercisable stock options, of which 165,080 are held in
trusts for the benefit of children of Mr. Busch. Of the shares shown,
Mr. Busch has shared voting and shared investment power as to 536,080
shares and 1,024,032 shares are held in trusts of which Mr. Busch is
income beneficiary and as to which he has certain rights, but as to
which he has no voting or investment power. 98,010 shares
beneficially owned by Mr. Busch's wife are not included.
<F3> Following the acquisition in 1989 by Edison Brothers Stores, Inc. of
an indirect interest in a retail liquor license, Mr. Edison sold all
shares of Company common stock owned by him to avoid any possible
conflicts with state alcoholic beverage control laws.
<F4> The number of shares includes 283,942 shares that are subject to
currently exercisable stock options, of which 20,000 are held in a
trust for the benefit of the child of Mr. Jacob.
<F5> The number of shares includes 301,940 shares that are subject to
currently exercisable stock options. 2,200 shares owned by members of
Mr. Lambright's immediate family are not included.
<F6> Of the shares shown, Mr. Orthwein has shared voting and shared
investment power as to 331,336 shares.
<F7> The number of shares includes 336,956 shares that are subject to
currently exercisable stock options. 30,000 shares owned by Mr.
Purnell's wife are not included.
<F8> The number of shares includes 595,112 shares that are subject to
currently exercisable stock options.
<F9> Judge Webster has shared voting and shared investment power with
respect to the shares shown.
<F10> The number of shares stated includes 3,890,769 shares that are
subject to currently exercisable stock options or stock options that
become exercisable within 60 days and 1,024,032 shares that are
referred to in Note 2. The directors, nominees, and executive
officers as a group have sole voting and sole investment power as to
2,997,739 shares and shared voting and shared investment power as to
869,416 shares. 162,366 shares held by immediate family members or
family trusts are not included and beneficial ownership of such
shares is disclaimed.
</TABLE>
7
<PAGE> 11
ADDITIONAL INFORMATION CONCERNING THE BOARD
OF DIRECTORS OF THE COMPANY
Regular meetings of the Board of Directors of the Company are normally
held each month, although one or two of such meetings may be dispensed with
during a calendar year. During 1997 the Board of Directors held 11
meetings. No current director who served during 1997 attended fewer than
75% of the aggregate of the total number of meetings of the Board of
Directors and of committees of the Board on which he or she served. In
addition to regularly scheduled meetings, a number of directors were
involved in numerous informal meetings with management, offering valuable
advice and suggestions on a broad range of corporate matters.
Each director who is not an employee of the Company is paid an annual
retainer of $40,000, which each director may elect to receive in stock,
cash, or a combination of stock and cash. Each non-employee director also
receives a fee of $1,400 for each Board of Directors meeting attended or
dispensed with and a fee of $1,200 for attendance at a meeting of a
committee of the Board and for any other meeting of directors at which less
than a quorum of the Board is present. Annual fees of $10,000 each are paid
to the Chairmen of the Audit, Conflict of Interest, Executive Salaries,
Finance, and Pension Committees. The Chairmen of the Nominating and
Shareholder Meetings Committees are each paid an annual fee of $3,000. The
Company also provides each non-employee director group term life insurance
coverage of $50,000.
Under a deferred compensation plan, non-employee directors may elect to
defer payment of part or all of their directors' fees. At the election of
the director, deferred amounts are credited to a fixed income account or a
share equivalent account. The amounts deferred under the plan are paid in
cash commencing on the date specified by the director. At the director's
election, such payments may be made either in a lump sum or over a period
not to exceed ten years.
August A. Busch III and James B. Orthwein are first cousins. See "Other
Transactions Involving Directors, Officers, or Their Associates," pages
21-23, for additional information concerning certain of the directors.
Information concerning certain standing committees of the Board of
Directors is set out below:
AUDIT COMMITTEE
The functions of the Audit Committee are to recommend to the Board of
Directors the selection, retention or termination of the Company's
independent accountants; determine through consultation with management the
appropriateness of the scope of the various professional services provided
by the independent accountants, and consider the possible effect of the
performance of such services on the independence of the accountants;
review the arrangements and the proposed overall scope of the annual audit
with management and the independent accountants; discuss matters of concern
to the Audit Committee with the independent accountants and management
relating to the annual financial statements and results of the audit;
obtain from management, the independent accountants and the General
Auditor their separate opinions as to the adequacy of the Company's system
of internal accounting control; review with management and the independent
accountants the recommendations made by the accountants with respect to
changes in accounting procedures and internal accounting control; receive
reports from the Business Practices Committee regarding implementation of
and compliance with the Company's business ethics policy and discuss with
management any concerns the Audit Committee may have with regard to the
Company's business practices; receive reports from the Environmental
Policy Committee regarding implementation of and compliance with the
Company's environmental policy and discuss with management any concerns the
Audit Committee may have with regard to the Company's environmental
practices; hold regularly scheduled meetings, separately and jointly, with
representatives of management, the independent accountants, and the General
Auditor to make inquiries into and discuss their activities; and review the
overall activities of the Company's internal auditors. During 1997 the
Committee held four meetings.
NOMINATING COMMITTEE
The function of the Nominating Committee is to recommend to the Board
of Directors a slate of nominees for directors to be presented on behalf of
the Board for election by shareholders at each Annual Meeting of the
Company and to recommend to the Board persons to fill vacancies on the
Board of Directors. The Committee
8
<PAGE> 12
will consider nominees recommended by shareholders upon submission in
writing to the Secretary of the Company the names of such nominees,
together with their qualifications for service as a director of the
Company. During 1997 the committee held one meeting.
EXECUTIVE SALARIES COMMITTEE
The function of the Executive Salaries Committee is to consider and
make recommendations to the Board of Directors as to salaries and other
compensation to be paid to the executive officers of the Company and to
other officers and upper-management employees of the Company and its
subsidiaries. During 1997 the Committee held two meetings. The Committee's
report on 1997 executive compensation is on pages 14-16.
APPROVAL OF 1998 INCENTIVE STOCK PLAN
(ITEM B ON PROXY CARD)
The second item to be acted upon at the Annual Meeting is a proposal to
approve the Anheuser-Busch Companies, Inc. 1998 Incentive Stock Plan (the
"Plan"), a copy of which is included as Exhibit A to this Proxy Statement.
SUMMARY DESCRIPTION OF THE PLAN
The Plan authorizes the grant of incentive stock options ("ISOs"),
non-qualified stock options ("NQSOs"), stock appreciation rights ("SARs"),
and limited stock appreciation rights ("Limited Rights"). ISOs and NQSOs
are both stock options, allowing the recipient to purchase a fixed number
of shares of stock for a fixed price; ISOs enable the recipient to enjoy a
special tax treatment upon exercise which is not available to holders of
NQSOs. An SAR is the right to receive stock, cash, or other property
equal in value to the difference between the base price of the SAR and the
market price of the Company's stock on the exercise date. Limited Rights
are a special kind of cash-only SARs which are exercisable only for a
limited time after the occurrence of certain takeover events relating to
the Company.
Approximately 800 officers and management employees of the Company and
its subsidiaries and affiliates are eligible to receive awards under the
Plan. Non-employee directors are ineligible for awards.
The Plan is administered by the Board's Stock Option Plans Committee
(the "Committee"), which consists entirely of directors who are not
employees of the Company. Within the limits of the Plan, the Committee
determines when and to whom awards are granted, the types of award
granted, the number of shares subject to each award, the award's exercise
or base price (as applicable) and duration, when awards become exercisable,
non-forfeitable, or otherwise vested, and other terms and conditions which
the Committee deems appropriate.
The Plan authorizes the issuance of 21,000,000 shares of the Company's
common stock pursuant to awards. No more than 750,000 shares per calendar
year may underlie awards granted to any one person. Appropriate adjustments
in these share limits and in the terms of outstanding awards are required
for stock splits and similar events. The authority to make new award grants
under the Plan will expire on April 21, 2008.
The terms of awards cannot exceed ten years. The option price of
options and the base price of SARs and Limited Rights cannot be less than
100% of the market value of the Company's stock on the grant date, except
in certain limited instances such as an adjustment for a stock split or the
Company's assumption of options granted by another corporation which
is acquired by the Company. The Committee is not permitted to grant options
or SARs in exchange for so-called "underwater" options or SARs (which have
an option or base price higher than the then-current market value of the
Company's stock), nor is it permitted to grant any options or SARs with a
so-called "reload" feature (under which new awards are granted
automatically upon exercise of outstanding ones). Optionees may pay the
option price in cash or Company stock, including (if permitted by the
Committee) shares otherwise issuable in connection with the exercise. The
Committee has authority to permit withholding taxes related to exercises or
vesting to be paid with stock; the Committee currently permits withholding
taxes related to NQSO exercises to be paid with stock otherwise
issuable in connection with the exercise. The Committee may accelerate
vesting of awards at any time in its discretion. The Plan provides for
automatic vesting of awards upon the occurrence of certain takeover events
relating to the Company. In the
9
<PAGE> 13
Committee's discretion, award agreements may provide that awards are
forfeited if the recipient takes any action prohibited by the award
agreement, or if certain events occur or fail to occur.
The Committee has developed certain policies for options under the 1989
Plan which it intends to continue under the new 1998 Plan. These policies,
which the Committee may alter over the life of the Plan, implement and
supplement the Plan's provisions. Options are granted with ten-year terms,
which can be shortened if the optionee's employment terminates or certain
other events occur. Options normally vest in equal installments on the
first three anniversaries of the grant date. Options may vest sooner if the
optionee dies, retires, or becomes disabled. Although options generally are
not transferable, the Committee has permitted a limited number of options
granted to executive officers to be transferred to certain family members
or family trusts (primarily for estate planning purposes); when desirable
for tax reasons, the Committee has permitted a limited portion of such
options to vest upon transfer. Options are forfeited if the optionee
voluntarily terminates his or her employment during the first two years
after grant, is dismissed from employment at any time, or engages in
certain conduct which is in competition with the Company or otherwise is
detrimental to the Company.
The Plan may be amended by the Board of Directors at any time. Certain
amendments which increase the number of authorized shares, increase the
maximum number of shares which may be awarded to any person in any calendar
year, or change the class of eligible employees, must be approved by the
Company's shareholders.
The closing price of Company stock on February 27, 1998, as reported on
the New York Stock Exchange (composite transactions), was $46.875 per
share.
PURPOSES OF THE PLAN
The Board of Directors believes that the Company's long-term success is
dependent upon its ability to attract and retain outstanding individuals
and to motivate them to exert their best efforts on behalf of the Company's
interests, and that stock awards are an important part of the Company's
incentive compensation of its officers and other management employees.
Stock based awards align management's interests directly with those of the
shareholders, since the awards have value only to the extent the market
price of the Company's stock increases.
The Anheuser-Busch Companies, Inc. 1989 Incentive Stock Plan (the "1989
Plan"), by its terms, expires on September 26, 1999, and no options can be
granted under that Plan after that date. As of February, 1998, 1,326,895
shares were available for new grants under the 1989 Plan, which is less
than the Company normally grants to eligible employees in a year. Rather
than request the shareholders to approve additional shares for the 1989
Plan, the Board of Directors approved for submission to the shareholders
the new 1998 Plan.
AWARDS GRANTED UNDER THE PLAN
No awards have been granted under the Plan to date. Information
regarding options granted in 1997 to certain executive officers of the
Company under the 1989 Plan is set forth in the table captioned "Option
Grants in 1997" on page 19, and information regarding older options is set
forth in the table captioned "Aggregated Option Exercises in 1997 and 1997
Year-End Option Values" on page 20. The Committee has not recently granted
SARs or Limited Rights, which are authorized under the 1989 Plan.
FEDERAL INCOME TAX CONSIDERATIONS
ISOS
An optionee does not recognize taxable income and the Company is not
entitled to a deduction on the grant or exercise of an ISO.
If an optionee holds the shares acquired ("ISO Shares") for at least
one year from the exercise date and two years from the grant date (the
"Required Holding Periods"), the optionee's gain or loss upon a sale will
be long-term capital gain or loss equal to the difference between the
amount realized on the sale and the optionee's basis in the ISO Shares.
Long-term gain is subject to tax at a rate of 28% if the shares were held
for more than a year but not more than eighteen months; the 20% rate
applies to long-term gain on shares held more than eighteen months. The
Company will not be entitled to a deduction.
10
<PAGE> 14
If an optionee disposes of the ISO Shares without satisfying the
Required Holding Periods, the "disqualifying disposition" will give rise to
ordinary income equal to the excess of the fair market value of the ISO
Shares on the exercise date (or generally, the sale price, if less) over
the optionee's basis in the ISO shares. The Company will ordinarily be
entitled to a deduction equal to the amount of the ordinary income
resulting from a disqualifying disposition.
An optionee does recognize income for alternative minimum tax ("AMT")
purposes upon exercise of an ISO; that amount is also included in the
optionee's AMT basis in the ISO shares. AMT gain or loss is equal to the
excess of the amount realized less the optionee's AMT basis. Income from a
disqualifying disposition generally is not income for AMT purposes.
NQSOS, SARs, AND LIMITED RIGHTS
An optionee does not recognize taxable income on the grant of an NQSO
or SAR, but does recognize ordinary income on the exercise date. The amount
of income in the case of an NQSO exercise is the amount by which the fair
market value of the shares received exceeds the option price. The amount of
income in the case of an SAR exercise is the amount of cash received plus
the fair market value of any shares received.
The Company will ordinarily be entitled to a deduction on the exercise
date equal to the ordinary income recognized by the optionee from the
exercise of NQSOs or SARs.
NQSOs which are transferred by gift continue to be taxed to the
optionee in the manner described above.
The discussion with respect to SARs above also applies to Limited
Rights.
PARACHUTE PAYMENTS
The Plan provides for accelerated vesting of all unvested awards upon a
change in ownership or control of the Company, which may cause certain
amounts to be characterized as "parachute payments." An employee generally
is deemed to have received a parachute payment in the amount of
compensation that is contingent upon an ownership change if such
compensation exceeds, in the aggregate, three times the employee's base
amount, which is generally the employee's average annual compensation for
the five preceding years. An employee's "excess parachute payment" is the
excess of the employee's total parachute payments over such base amount. An
employee will be subject to a 20% excise tax on, and the Company will be
denied a deduction for, any "excess parachute payment."
$1,000,000 DEDUCTION LIMIT
The Company is not allowed a deduction for compensation paid to certain
executive officers in excess of $1,000,000 each in any taxable year, except
to the extent such excess constitutes performance-based compensation.
Compensation from awards under the Plan will constitute performance-based
compensation if the Plan is approved by the Company's shareholders.
The Board of Directors recommends that you vote FOR approval of the
1998 Incentive Stock Plan.
APPROVAL OF INDEPENDENT ACCOUNTANTS
(ITEM C ON PROXY CARD)
Action will be taken with respect to the approval of independent
accountants for the Company for the year 1998. The Board of Directors has,
subject to such approval, selected Price Waterhouse LLP.
A representative of Price Waterhouse LLP will be present at the
meeting. Such representative will have an opportunity to make a statement,
if he or she so desires, and will be available to respond to appropriate
questions by shareholders.
The Board of Directors recommends a vote FOR the proposal to approve
the employment of Price Waterhouse LLP.
11
<PAGE> 15
SHAREHOLDER PROPOSAL
(ITEM 1 ON PROXY CARD)
The Company receives many suggestions from shareholders, some as formal
shareholder proposals. All are given careful consideration. After
discussion with Company representatives and clarification of the Company's
position, many proposals are withdrawn.
The proponent of a shareholder proposal has stated that they intend to
present the following proposal at the annual meeting. The proposal and
supporting statement are quoted below. THE BOARD HAS CONCLUDED IT CANNOT
SUPPORT THIS PROPOSAL FOR THE REASONS GIVEN.
------------------------
The Marin Institute, 24 Belvedere Street, San Rafael, California 94901,
owner of 30 shares of common stock of the Company, has submitted the
following proposal:
"Whereas:
The federal government adopted a revised U.S. Dietary Guidelines for
Americans in 1995 that defines moderation as no more than one drink of
alcohol per day for women and no more than two drinks per day for men,
with a serving of alcohol defined as twelve ounces of regular beer;
The U.S. Dietary Guidelines state that consumption in excess of these
moderate limits is associated with serious health and safety problems;
Our Company has stated in its educational materials that it seeks to
promote responsible consumption of its products but has not included
the U.S. Dietary Guidelines' definition of moderation;
Our Company, as well as many other members of the alcohol industry, has
promoted the U.S. Dietary guidelines as establishing a link between
alcohol consumption and health;
There is widespread public misunderstanding and confusion regarding the
term "moderate consumption" and its connection to health and safety;
Recent research has found that approximately 80% of alcohol consumption
occurs in drinking settings in which more than two drinks per day are
being consumed, in excess of the moderation definition found in the
Dietary Guidelines;
Recent research shows that approximately 60% of all alcohol consumption
is being consumed by only 10% of the drinking population, who average
more than two drinks per day, in excess of the U.S. Dietary guidelines'
definition of moderate consumption;
THEREFORE BE IT RESOLVED:
That Management prepare a report, withholding competitive information
and at reasonable cost, for the Board and requesting shareholders by
January 31, 1999, which includes a complete statement regarding
methodologies used, investigations, and recommendations to determine
what percentage of our Company's product is consumed in moderate
amounts, as defined by the U.S. Dietary Guidelines.
And that Management revise existing Company alcohol awareness materials
and develop all future educational materials to include in a prominent
fashion the definition of moderate drinking found in the Dietary
Guidelines and mail to all shareholders a clear statement of the U.S.
Dietary Guidelines' definition of moderation.
SUPPORTING STATEMENT
The U.S. Dietary Guidelines provide important new health information
for consumers regarding alcohol consumption. Their content however is often
omitted or distorted, creating real health risks for consumers in the use
of our Company's products. As stated in the Guidelines, alcohol consumption
in excess of the moderate limits is associated with a wide array of health
and safety problems. Our Company has demonstrated a commitment to alcohol
education. In keeping with that commitment, we respectfully request that
our Company become the voluntary leader in making the definition of
"moderation" found in the U.S. Dietary Guidelines widely available to the
public by including it in its educational materials. This enhanced
commitment to alcohol
12
<PAGE> 16
education honors the consumer's right to know and improves our Company's
image as concerned, responsible corporate citizens."
------------------------
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ABOVE PROPOSAL.
This proposal was put before the shareholders last year, and was
overwhelmingly defeated by more than 96 percent of the shares voted.
Anheuser-Busch has long been a leader in the fight against alcohol
abuse. For many years, the Company has supported organizations such as the
American Council on Alcoholism, the Alcoholic Beverage Medical Research
Foundation and the Betty Ford Foundation, which are dedicated to reducing
the problem of alcohol abuse through counseling, treatment and research.
In addition to this support, the Company also conducts its own alcohol
awareness initiatives under the banners of "Know When To Say When" and
"Let's Stop Underage Drinking Before It Starts," which are designed to
encourage adults to be responsible when they drink, and to fight underage
drinking. These programs, which have been underway for over a decade, are
annually reviewed and updated to reflect the environment in which we live
and transact our business.
With an investment of over $165 million in these efforts since 1990
alone, the Company believes it is solidly on the right track in both
demonstrating its concern for these issues, as well as its commitment to
being part of the solution. The Company notes that over the last decade,
there have been significant declines in drunk driving fatalities among both
adults and teenagers, as well as progress in the fight against underage
drinking.
As to the issues raised by the proponents, the Company disagrees that
Anheuser-Busch should provide specific guidance to adults about how much
they should drink. In fact, the Company's "Know When To Say When" campaign
is specifically designed to encourage adults who drink to exercise personal
judgment and make that decision for themselves. Because there are so many
variables involved in how alcohol is absorbed, including weight, gender,
mood, and amount of food consumed, what is an appropriate amount to drink
not only varies from individual to individual, but also may differ for any
one individual depending upon the specific occasion.
Further, the Company notes that even among public health officials,
researchers, government authorities, epidemiologists and cultural
anthropologists there has been no consensus reached as to a standard
definition of what constitutes moderate drinking. According to the federal
government's National Institute on Alcohol Abuse and Alcoholism (NIAAA),
"There are numerous cultural and social definitions of `moderate' alcohol
consumption currently in use. Epidemiological studies refer to a wide range
of drinking patterns as moderate."
This is borne out by the fact that while numerous countries have
adopted guidelines for adults who drink, there is no consensus among them
as to what constitutes "moderate" drinking. For instance, France, Japan,
Australia and Ireland each have government guidelines on drinking; however,
all four of these countries have different guidelines, some of which are
higher and some of which are lower than the amount recommended by the
United States Department of Health and Human Services in its Dietary
Guidelines for Americans. Therefore, as an international company doing
business around the world, the Company believes that it is best served by
simply encouraging adults to be responsible in their consumption, wherever
they live.
With respect to the other issues raised by the proposal, the Company
believes that information about the number of Americans who drink heavily
or abuse alcohol is widely available. According to the NIAAA, more than 92
percent of the U.S. adult population do not meet alcohol abuse or
dependence criteria. And, according to the U.S. Substance Abuse and Mental
Health Services Administration, the number of frequent heavy drinkers has
declined nine percent since 1985. The fact that per capita alcohol
consumption has been declining when both the proportion of people drinking
and alcohol sales have increased, suggests a move by Americans to more
moderate consumption.
The Company also believes there is already widespread awareness among
the public about the harmful effects of over-consumption. A poll conducted
by the NIAAA showed that awareness levels about the dangers of
13
<PAGE> 17
over-consumption were extremely high, with over 96 percent indicating that
they understood there were negative consequences to this behavior.
As a result of the existence of the foregoing available data addressing
the information requested by the proponents, as well as Anheuser-Busch's
alcohol awareness and education initiatives, the Company believes that no
additional research is needed, and that its resources are best invested in
continuing its own efforts.
FOR THESE REASONS, THE BOARD OF DIRECTORS AGAIN RECOMMENDS A VOTE AGAINST
THIS PROPOSAL.
------------------------
SHAREHOLDER PROPOSALS FOR 1999
For inclusion in the Company's Proxy Statement and form of proxy, any
shareholder proposals intended to be presented at the 1999 Annual Meeting
must be received by the Company at its principal executive offices no later
than November 10, 1998.
Shareholders of record who do not submit proposals for inclusion in the
Proxy Statement but who intend to submit a proposal at the 1999 Annual
Meeting, and shareholders of record who intend to submit nominations for
directors at the meeting, must provide written notice. Such notice should
be addressed to the Secretary and received at the Company's principal
executive offices not earlier than January 22, 1999 and not later than
February 21, 1999. The written notice must satisfy certain requirements
specified in the Company's By-Laws. A copy of the By-Laws will be sent to
any shareholder upon written request to the Secretary.
EXECUTIVE COMPENSATION
REPORT OF THE EXECUTIVE SALARIES COMMITTEE
AND THE STOCK OPTION PLANS COMMITTEE
The Executive Salaries Committee has the responsibility of recommending
to the Board of Directors appropriate salaries and other compensation for
executive officers and administering the Officer Bonus Plan. The Stock
Option Plans Committee administers the Company's stock option program. Both
committees (hereafter referred to as the "Committee") have identical
membership consisting entirely of outside directors.
COMPENSATION PHILOSOPHY
The Committee adheres to several guiding principles in carrying out its
responsibilities:
* Total compensation should reward individual and corporate performance
and provide incentive for enhancement of shareholder value.
* Anheuser-Busch provides a base salary that will maintain its
competitive market position. The Company offers an annual bonus
opportunity that aligns corporate growth objectives and performance
with individual achievements. Anheuser-Busch utilizes stock options
to foster a long-term perspective aligned with that of the
shareholders.
* Compensation plans should be simple and easily understood. Executives
must clearly understand variable compensation opportunities and how
to earn variable rewards.
* The Anheuser-Busch program should reflect competitive levels of fixed
and variable compensation. A compensation consultant annually reports
to the Committee on the competitive mix of base, bonus, and long-term
incentives for a comparator group of national and local companies.
14
<PAGE> 18
1997 COMPENSATION
The Committee considers several factors when determining compensation
for executive officers, including August A. Busch III:
* OVERALL COMPANY PERFORMANCE. In addition to their current knowledge
of Company operations through participation at regular Board
meetings, the Committee specifically looked at annual and long term
sales, earnings, and cash flow per share growth; market share gains;
return to shareholders (see chart on page 18); progress toward long
term objectives; individual divisional results as appropriate; and
various qualitative factors relating to Company performance. There is
no set weighting of these variables as applied to individual
executive positions.
* INDIVIDUAL PERFORMANCE. The Committee considers, in addition to an
executive's business results, the achievement of various other
managerial objectives and personal development goals.
* COMPETITIVE COMPENSATION. The Committee is provided a report from a
compensation consulting firm which details Anheuser-Busch
compensation practices relative to a comparable group of 22
companies. This group is comprised of large national consumer goods
companies as well as several large St. Louis-based corporations. The
companies in the sample were chosen in consultation with the
consulting firm as being representative of the types of companies
with which Anheuser-Busch competes for executive talent. The report
reviews base salary, annual bonus, and long term incentive awards for
the CEO and other officer positions with responsibilities that are
comparable across the group. The consulting firm believes, and the
Committee concurs, that this sample of benchmarks not only provides
guidance for specific positions, but also is indicative of overall
Company pay practices when viewed in the aggregate.
* TARGETED COMPENSATION. Total compensation for executive officers
including Mr. Busch is targeted at a market level which approximates
the median of the sample group of comparable companies after
adjusting for the different magnitude of sales for each company,
using a method called regression analysis. "Market level" is
considered to be that calculated at the 50th percentile, with a
margin of (PM)20%. Mr. Busch's total compensation for 1997 was at the
market level for total compensation among the comparison group.
SALARY:
The Company does not have an employment agreement with Mr. Busch or any
of its other executive officers. In setting base salaries the Committee
generally considers the overall financial performance of the Company during
the prior year, particularly beer sales volume and market share
performance, operating and net income margin trends, earnings and cash flow
per share growth, returns on capital and equity, and total returns to
shareholders. Actual salary determination is subjective in that there are
no specific weightings for the variables considered. Mr. Busch's 1997 base
salary of $1,107,750 was at the market level of salaries for CEOs in the
comparable group of companies.
Salaries for other executive officers were targeted at the market level
where appropriate benchmarks were available. Actual 1997 salaries varied
considerably among the executive officers depending on responsibilities,
past departmental or divisional performance, and to a lesser degree, length
of service. There were no specific departmental or divisional performance
measures defined and considered. The individual's performance and potential
future contributions were subjectively evaluated.
BONUS:
1997 bonuses for Mr. Busch, 12 other executive officers and 44 other
officers were paid under the Officer Bonus Plan (the "Plan"), which was
approved by shareholders at the 1995 Annual Meeting. The Plan authorizes
the Committee to establish programs that allow payment of cash bonuses to
participants based on pre-established minimum performance goals for
designated performance periods. Pursuant to the Plan, in February 1997 the
Committee adopted the 1997 Officer Bonus Program ("1997 Program"), which
established a minimum performance goal and a formula for determining a
maximum bonus pool, both of which were based on pretax earnings of the
Company for 1997 after adjustments for certain non-recurring items. The
Committee
15
<PAGE> 19
also determined a bonus formula for allocating the pool among the
participants in which amounts for participants were expressed as a
percentage of the total pool.
In February 1998 the Committee certified that the 1997 performance goal
was met and approved individual bonuses. Although the Company achieved
higher sales and earnings from continuing operations for 1997, the level
was significantly below the Company's growth objectives. In view of this,
the Committee, through the exercise of discretion and after taking into
consideration individual performance and targeted compensation levels,
approved substantially reduced bonus payments totalling substantially less
than the maximum available in the bonus pool. Due to regulations of the
Internal Revenue Service and provisions of the Plan and 1997 Program, any
adjustments to the bonuses for the participating executives named in the
summary compensation table on page 17 could only be reductions from the
amounts determined by formula. Bonuses for other participants were
determined after subjectively taking into consideration individual
performance toward corporate or divisional objectives. Mr. Busch's
1997 bonus of $691,000 was 50% lower than his 1996 bonus. The aggregate of
1997 officer bonuses was 49% lower than 1996 bonuses.
LONG TERM INCENTIVES:
As indicated previously, stock options are the Company's only long term
incentive. Stock option awards are made to approximately 800 middle and
upper level managers, including Mr. Busch and other executive officers. The
size of awards is subjectively determined by the Committee based on
position, responsibilities, and individual performance, subject to plan
limits. The amount and terms of prior option grants are reviewed but are
not explicitly considered in determining the size of individual awards. In
1997, the Committee granted Mr. Busch options for 300,000 shares under the
1989 Incentive Stock Plan.
POLICY ON DEDUCTIBILITY OF COMPENSATION EXPENSES
The Company is not allowed a deduction for certain compensation paid to
certain executive officers in excess of $1 million, except to the extent
such excess constitutes performance-based compensation. The Committee
considers its primary goal is to design compensation strategies that
further the best interests of the Company and its shareholders. To the
extent they are not inconsistent with that goal, the Committee will attempt
where practical to use compensation policies and programs that preserve the
deductibility of compensation expenses.
Stock options granted under the 1989 Incentive Stock Plan and bonuses
paid pursuant to the Officer Bonus Plan are designed to qualify as
performance-based compensation.
Bernard A. Edison--Chairman
Vilma S. Martinez Vernon R. Loucks, Jr. William Porter Payne
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Busch is a member of the Human Resources Committee of SBC
Communications Inc. Mr. Whitacre, an Executive Officer of SBC
Communications Inc., is a Director of the Company.
16
<PAGE> 20
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION<F1> COMPENSATION
----------------------- -------------
AWARDS OF ALL
STOCK OTHER
OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS($) (#)<F2> ($)<F3>
--------------------------- ---- ---------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
A. A. Busch III 1997 1,107,750 691,000 300,000 82,970
Chairman of the Board and President 1996 1,055,000 1,382,000 200,000 75,676
1995 995,000 616,000 396,418 80,237
P. T. Stokes 1997 650,000 300,000 150,000 43,434
Vice President and Group Executive 1996 604,550 600,000 100,000 35,967
1995 565,000 250,000 193,086 37,148
J. E. Jacob 1997 457,000 125,000 90,000 31,965
Executive Vice President and 1996 423,200 250,000 60,000 27,057
Chief Communications Officer 1995 368,000 75,000 152,418 18,307
J. H. Purnell 1997 440,000 147,000 112,500 33,941
Vice President and Group Executive 1996 420,000 294,000 75,000 31,470
1995 400,000 132,500 111,752 33,146
S. K. Lambright 1997 390,000 125,000 90,000 31,759
Group Vice President and 1996 368,500 250,000 60,000 27,323
General Counsel 1995 335,000 119,000 111,752 27,519
<FN>
- -------
<F1> Salary and bonus amounts include any amounts deferred under the
Executive Deferred Compensation Plan. If an excise tax were imposed on
a participant as to such deferred benefits on account of a change in
control, the participant's benefits would be increased to the extent
required to put the participant in the same position after payment of
taxes as if no excise tax had been imposed.
<F2> Awards for 1995 have been adjusted to reflect a two-for-one stock
split and the spin-off of The Earthgrains Company, both of which
occurred in 1996.
<F3> The 1997 amounts disclosed in this column include:
<Fa> Company matching contributions to the Deferred Income Stock
Purchase and Savings Plan and the 401(k) Restoration Plan of
$47,853 for Mr. Busch, $28,075 for Mr. Stokes, $19,727 for Mr.
Jacob, $18,984 for Mr. Purnell, and $16,831 for Mr. Lambright.
Under the 401(k) Restoration Plan, if an excise tax were imposed
on a participant as to such benefits on account of a change in
control, the participant's benefits would be increased to the
extent required to put the participant in the same position
after payment of taxes as if no excise tax had been imposed.
<Fb> Payments for insurance coverage of $28,172 for Mr. Busch,
$15,359 for Mr. Stokes, $12,238 for Mr. Jacob, $11,636 for Mr.
Purnell, and $9,319 for Mr. Lambright.
<Fc> Payment of director fees from subsidiary or affiliated companies
of $6,945 for Mr. Busch, $3,321 for Mr. Purnell, and $5,609 for
Mr. Lambright.
</TABLE>
17
<PAGE> 21
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN<F*>
ANHEUSER-BUSCH COMPANIES, INC., S&P 500 INDEX, AND RUSSELL LARGE CAP
INDEX<F**>
(12/31/92-12/31/97)
[GRAPH]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Anheuser-Busch $100.0 $ 86.3 $ 92.1 $124.4 $155.2 $174.8
S&P 500 100.0 110.0 111.5 153.3 188.4 251.1
Russell Large Cap Index 100.0 107.0 111.0 157.7 199.4 271.4
<FN>
- -------
<F*> Assumes $100 invested on December 31 of first year of chart in
Anheuser-Busch Companies, Inc. Common Stock, S&P 500 Index and
Russell Large Cap Index and that all dividends were reinvested.
<F**> Because only one of the other four leading domestic brewers is an
independent publicly traded company, the Company has elected to
compare shareholder returns with the Russell Large Cap Index. This
index is comprised of the 50 largest publicly held United States
companies, based on market capitalization. The Company was included
in the index at the beginning of the period.
<F***> Compound Annual Growth Rate.
</TABLE>
18
<PAGE> 22
<TABLE>
OPTION GRANTS IN 1997
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS<F1> FOR OPTION TERM<F2>
-------------------------------------------- ----------------------
% OF
TOTAL
OPTIONS
NUMBER OF GRANTED
SECURITIES TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN PRICE EXPIRATION
NAME GRANTED (#) 1997<F3> ($/SH) DATE 0%<F4> 5% 10%
---- ----------- --------- -------- ----------- ------ -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
A. A. Busch III.......... 300,000 5.4% $43.38 11/25/07 $0 $ 8,183,491 $ 20,738,574
P. T. Stokes............. 150,000 2.7 43.38 11/25/07 0 4,091,746 10,369,287
J. E. Jacob.............. 90,000 1.6 43.38 11/25/07 0 2,455,047 6,221,572
J. H. Purnell............ 112,500 2.0 43.38 11/25/07 0 3,068,809 7,776,965
S. K. Lambright.......... 90,000 1.6 43.38 11/25/07 0 2,455,047 6,221,572
All Shareholders......... N/A N/A N/A N/A 0 13,284,532,100 33,665,628,200
All Optionees............ 5,557,073 100.0 43.37 N/A 0 151,587,504 384,152,677
Optionee Gain as %
of All Shareholders
Gain................... N/A N/A N/A N/A N/A 1.1% 1.1%
<FN>
- -------
<F1> All options granted to the named officers were granted on November 26,
1997. The options become exercisable in three equal parts on the
first, second, and third anniversaries of the grant date; however, the
stock Option Plans Committee is authorized to accelerate
exercisability at any time, and acceleration occurs automatically in
the event of the optionee's death, disability, or retirement (under
certain circumstances), or if certain events occur which would result
in a change in control of the Company. The one-third of the 1997 grant
which normally would become exercisable on November 26, 1998 was made
eligible for earlier vesting if transferred in gifts to certain family
members or trusts; Mr. Busch III made such a gift, and 99,232 of his
1997 grant vested on December 9, 1997. Mr. Jacob also made such a
gift, and 20,000 of his 1997 grant vested on December 23, 1997. In
addition, some of the options were granted with a tax payment feature.
The tax payment feature allows the use of option stock to pay the
withholding taxes related to option exercises. The number of options
granted with a tax payment feature in 1997 to the named officers were:
Mr. Busch III, 297,695; Mr. Stokes, 147,695; Mr. Jacob, 87,695; Mr.
Purnell, 110,195; and Mr. Lambright, 87,695.
<F2> The dollar amounts under these columns are the result of calculations
at 0% and at the 5% and 10% rates set by the SEC and therefore are not
intended to forecast possible future appreciation, if any, of the
Company's stock price. Potential realizable values for all
shareholders are based on 487 million shares outstanding at December
31, 1997 and a per share price of $43.38.
<F3> Based on 5,557,073 options granted to 811 employees during 1997.
<F4> No gain to the optionees is possible without an increase in stock
price, which will benefit all shareholders commensurately. A zero
percent stock price appreciation will result in zero dollars for the
optionee.
</TABLE>
19
<PAGE> 23
<TABLE>
AGGREGATED OPTION EXERCISES IN 1997 AND 1997 YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12/31/97 (#) 12/31/97($)<F1><F2>
SHARES ------------ --------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($)<F1> UNEXERCISABLE UNEXERCISABLE
---- ------------- ---------------- ------------- -------------
<S> <C> <C> <C> <C>
A. A. Busch III............... 308,252 7,183,566 1,048,576/ 14,575,094/
466,240 2,108,401
P. T. Stokes.................. 109,634 2,576,344 595,112/ 10,322,950/
281,028 1,065,293
J. E. Jacob................... 0 0 283,942/ 3,979,657/
160,806 768,846
J. H. Purnell................. 31,998 765,686 336,956/ 5,272,835/
199,750 670,417
S. K. Lambright............... 34,750 797,438 301,940/ 4,957,022/
167,250 623,230
<FN>
- -------
<F1> Value before income taxes payable as a result of exercise.
<F2> Based on the average of the high and low price of the Company's common
stock on the New York Stock Exchange--Composite Transactions for
12/31/97 ($44.00).
</TABLE>
<TABLE>
PENSION PLAN TABLE
<CAPTION>
YEARS OF SERVICE
- --------------------------------------------------------------------------------------------
ELIGIBLE REMUNERATION 5 10 15 20 25 30 OR MORE
- --------------------- - -- -- -- -- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000............... $ 41,667 $ 83,333 $125,000 $ 166,667 $ 208,333 $ 250,000
1,000,000............... 83,333 166,667 250,000 333,333 416,667 500,000
1,500,000............... 125,000 250,000 375,000 500,000 625,000 750,000
2,000,000............... 166,667 333,333 500,000 666,667 833,333 1,000,000
2,500,000............... 208,334 416,667 625,000 833,333 1,041,667 1,250,000
3,000,000............... 250,000 500,000 750,000 1,000,000 1,250,000 1,500,000
</TABLE>
The Pension Plan Table above shows a range of estimated annual normal
retirement pension benefits for employees who have the years of credited
service shown at retirement, and whose eligible remuneration is as shown.
The eligible remuneration used to compute actual pension benefits would be
the highest sum, for the calendar year of retirement or any of the four
preceding calendar years, of the employee's annual base salary as of
January 1 of such year plus the bonus earned during the prior calendar
year. Voluntary deferrals of salary or bonus for any year under the
Executive Deferred Compensation Plan are included for the year of deferral
in this determination. The benefits shown assume continued service until
retirement at age 65 and payment in the form of a life annuity with ten
years of guaranteed payments. Amounts shown do not reflect the applicable
deduction for Social Security benefits. Vesting and payment of part of the
benefits shown are accelerated if certain events occur that would result in
a change in control of the Company. For the portions of the foregoing
benefits payable under the programs that are not tax-qualified, if an
excise tax were imposed on a participant as to such benefits on account
of such a change in control, the participant's benefits would be increased
to the extent required to put the participant in the same position after
payment of taxes as if no excise tax had been imposed.
Years of credited service, to the nearest year, and compensation
covered by the pension plans for executive officers named in the Summary
Compensation Table are as follows: Mr. Busch--40 years and $2,489,750;
20
<PAGE> 24
Mr. Stokes--29 years and $1,250,000; Mr. Jacob--4 years and $707,000; Mr.
Purnell--33 years and $734,000; and Mr. Lambright--20 years and $640,000.
OTHER TRANSACTIONS INVOLVING DIRECTORS, OFFICERS, OR THEIR ASSOCIATES
In 1993, pursuant to an investment agreement the Company purchased from
Grupo Modelo, S.A. de C.V., Mexico's largest brewer ("Grupo Modelo"),
equity securities representing a 10% interest in Grupo Modelo. The Company
also purchased at that time equity securities representing a 10% interest
in Diblo, S.A. de C.V., the operating subsidiary of Grupo Modelo ("Diblo"),
76.75% of the outstanding equity securities of which are owned by Grupo
Modelo. Carlos Fernandez G. is Vice Chairman of the Board of Directors of
Grupo Modelo and Diblo and Chief Executive Officer of Grupo Modelo.
Pursuant to the investment agreement, the Company also acquired an option
to purchase, at then-prevailing market rates (subject to certain limits),
from trusts for the benefit of certain controlling shareholders of Grupo
Modelo and Diblo (the "Controlling Shareholders"), including Mr. Fernandez'
wife and other members of his family, equity securities sufficient to
increase the Company's interest in Grupo Modelo to 35.12% and sufficient to
increase the Company's interest in Diblo to 23.25%.
In May 1997, the Company increased its interest in Grupo Modelo to
35.12% for an additional $605 million. In June 1997, the Company exercised
its remaining option to purchase an additional 13.25% interest in Diblo. As
of early March 1998, the transaction had not closed because of a dispute
concerning the purchase price for the option shares. The Company and the
Controlling Shareholders are currently pursuing arbitration to resolve the
dispute concerning the purchase price. When the purchase is completed, the
Company will hold a 50.2% direct and indirect interest in Diblo.
Pursuant to the investment agreement, the Company agreed to use its
best efforts to maintain a designee of the Controlling Shareholders on its
Board of Directors so long as the Company or one of its subsidiaries owns
ten percent or more of the outstanding capital stock of Grupo Modelo. Mr.
Fernandez is the designee of the Controlling Shareholders for this purpose.
August A. Busch, Jr., a former director of the Company, was, until his
death in September 1989, the owner of Grant's Farm, a tract of
approximately 225 acres located in St. Louis County, Missouri, most of
which has been leased and used by the Company for many years. Upon his
death the property passed to the trustees of a real estate trust created by
his will (the "Trustees") for the benefit of certain children of Mr. Busch,
Jr., not including August A. Busch III. The area includes an animal
reservation and numerous other attractions and facilities. The Company uses
Grant's Farm extensively for entertaining and conducting public tours and
for other purposes associated with its advertising and public relations
program. It is one of the most popular tourist attractions in the St. Louis
area. The leased premises include all of the tract (except for
approximately 23 acres that have been reserved for the residents' personal
use) plus an adjacent tract of approximately 7 acres upon which are
situated a parking lot and a stallion barn. Also, various paintings,
trophies, horsedrawn vehicles, and other personal property that belonged to
Mr. Busch, Jr. are displayed during public tours of the premises.
The current lease (the "Lease") became effective January 1, 1982. The
Lease may be terminated by the Company by giving notice at any time prior
to October 31 of any year, to be effective in the following year at the end
of the month during which the tour season ends. The Trustees may terminate
the Lease by giving notice at any time prior to October 31 of any year, to
be effective at the end of the month during which the tour season ends in
the second year following the year in which notice is given. If the
Trustees terminate the Lease, they must reimburse the Company for the
unamortized value of all capital leasehold improvements made by the
Company.
Under the Lease, the Trustees will receive a fixed annual rental of
$201,890 throughout the term of the Lease. They will also share in that
portion of income from the Company's concession operations which exceeds
the approximate income generated from such operations when they were
operated by Mr. Busch, Jr. The Company and the Trustees entered into an
agreement under which, effective with the year 1994, the Company will
retain an additional portion of concession income until certain capital
improvements made by the Company to Grant's Farm are fully amortized. The
Lease provides that the Trustees have the responsibility for the
maintenance and care of the leased premises and the animals and personal
property situated thereon, and the Company is obligated to reimburse them
for their expenses in carrying out that responsibility. During the term
21
<PAGE> 25
of the Lease, the Company has the right of first refusal to purchase the
leased premises and also to purchase the 23-acre tract referred to above.
The Company also has the right, under certain circumstances, to purchase
the personal property covered by the Lease and certain personal property
located in Mr. Busch, Jr.'s former residence. For the year 1997, the
Trustees received, in the aggregate, from the Company under the Lease: (1)
basic rent of $201,890, (2) $397,735 as their share of the Company's income
from concession operations, and (3) $1,398,392 as reimbursement for the
actual expenses, as audited by the Company's internal audit department, for
the maintenance and care of the leased premises, the animals, and the
personal property situated thereon.
For many years, Mr. Busch, Jr. provided board and care for the
Anheuser-Busch, Incorporated ("ABI") Clydesdale horses on property other
than Grant's Farm. The existing Clydesdale Lease Agreement between Mr.
Busch, Jr. and ABI first became effective on January 1, 1973. Certain heirs
of Mr. Busch, Jr. (not including August A. Busch III) succeeded to the
interests of Mr. Busch, Jr. under the lease, which was amended as of August
31, 1990. For the year 1997, ABI paid or will pay under this lease $29,625
as annual rental and $222,235 as reimbursement for the actual expenses, as
audited by the Company's internal audit department, incurred to care for
the Clydesdale horses and the leased property.
ABI has agreements with Double Eagle Distributing, Inc. ("Double
Eagle"), Southern Eagle Distributing, Inc. ("Southern Eagle"), and
Busch-Transou L.C. for the distribution of malt beverage products in
Deerfield Beach, Florida, and Fort Pierce and Ocala, Florida, and
Tallahassee, Florida, respectively. Double Eagle, which is owned by James
B. Orthwein, Jr. and Percy J. Orthwein II, who are sons of James B.
Orthwein, purchased $38,735,202 of products from ABI during 1997. Percy
Orthwein is Chairman of the Board and James B. Orthwein, Jr. is President
and General Manager of Double Eagle. Peter William Busch, a half
brother of Mr. Busch III, is the President and majority owner of Southern
Eagle. Southern Eagle purchased $22,248,614 of products from ABI during
1997. Busch-Transou, L.C. is owned by Tripp and Susan Busch Transou, the
son-in-law and daughter of Mr. Busch III. Busch-Transou, L.C. purchased
$19,989,450 of products from ABI during 1997. These distribution agreements
are ABI's standard distribution agreements.
In 1997, ABI sold the rights to distribute its malt beverage products
in Ocala, Florida to its Belle Glade, Florida wholesaler. In order to
enhance operating efficiencies in its distribution system, in connection
with that sale ABI required its Belle Glade, Florida wholesaler to sell a
portion of its existing distribution rights to an adjoining wholesaler for
$1,700,000. The Company believes that to be the fair market value of such
distribution rights. After first being offered to another wholesaler, who
declined the offer, the distribution rights were sold to Southern Eagle.
The transaction was reviewed and approved in advance by the Board of
Directors of Anheuser-Busch Companies, Inc.
In 1997, ABI entered into an agreement to acquire the assets of the
Kent, Washington wholesalership and then agreed to assign the right to
acquire the business to City Beverages, L.L.C., a corporation of which
Steven Knight, son of Charles F. Knight, a director of the Company, is the
majority owner. City Beverages, L.L.C. paid $5,437,000 for the
wholesalership, which the Company believes to be the fair market value of
the assets of the wholesalership, and assumed an eight year warehouse lease
obligation. The transaction was reviewed and approved in advance by the
Conflict of Interest Committee of the Board of Directors. City Beverages,
L.L.C. purchased $1,238,259 of products from ABI for the period of 1997
(December 20, 1997 through December 31, 1997) during which it owned the
business and its distribution agreement with ABI is ABI's standard
distribution agreement.
Douglas A. Warner III, a director of the Company, is an executive
officer of J. P. Morgan & Co., Incorporated ("Morgan"). Morgan and its
subsidiaries have provided investment banking and related financial
services to the Company during 1997 and are expected to provide similar
services to the Company during 1998.
William H. Webster, a director of the Company, is a partner of Milbank,
Tweed, Hadley & McCloy, a law firm that provided legal services to the
Company during 1997 and is expected to provide legal services to the
Company during 1998.
The Company occasionally uses the personal aircraft of Mr. Busch III
for Company business. During 1997, the Company reimbursed Mr. Busch
$129,533 based on the manufacturer's published hourly rate for fuel, oil,
maintenance, and other miscellaneous costs for operating the aircraft.
22
<PAGE> 26
In the opinion of the Company's management, the terms and conditions of
the foregoing transactions are at least as favorable to the Company and its
subsidiaries as those which would be available from unrelated parties for
comparable transactions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's executive officers and directors are required under the
Securities Exchange Act of 1934 to file reports of ownership and changes in
ownership of common stock of the Company with the Securities and Exchange
Commission and the New York Stock Exchange. Copies of those reports must
also be furnished to the Company.
Based solely on a review of the copies of reports furnished to the
Company and written representations that no other reports were required,
the Company believes that during the preceding year all filing requirements
applicable to executive officers and directors have been complied with.
OTHER MATTERS
The cost of soliciting proxies will be borne by the Company and will
consist primarily of printing, postage, and handling, including the
expenses of brokerage houses, custodians, nominees, and fiduciaries in
forwarding documents to beneficial owners. In addition, to assist in the
solicitation of proxies from brokers, bank nominees, and other
institutional holders and from other shareholders, the Company has engaged
D. F. King & Co., Inc. for a fee not to exceed $10,500 plus out-of-pocket
expenses. Solicitation also may be made by the Company's officers,
directors, or employees, personally or by telephone.
St. Louis, Missouri
March 10, 1998
23
<PAGE> 27
EXHIBIT A
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.
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.
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<PAGE> 28
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.
(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.
A-2
<PAGE> 29
(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.
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
A-3
<PAGE> 30
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
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:
(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
A-4
<PAGE> 31
(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;
(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.
A-5
<PAGE> 32
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
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
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).
A-6
<PAGE> 33
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
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.
A-7
<PAGE> 34
(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.
(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.
A-8
<PAGE> 35
Please mark
your votes as / X /
indicated in
this example
- --------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS A, B AND C.
- --------------------------------------------------------------------------
ITEM A - ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to to vote for all nominees
the contrary below) listed below
/ / / /
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME ON THE LIST BELOW.)
August A. Busch III Carlos Fernandez G.
James R. Jones Andrew C. Taylor
Douglas A. Warner III
ITEM B-APPROVAL OF 1998 FOR AGAINST ABSTAIN
INCENTIVE STOCK PLAN / / / / / /
ITEM C- APPROVAL OF FOR AGAINST ABSTAIN
INDEPENDENT / / / / / /
ACCOUNTANTS
- --------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 1.
- --------------------------------------------------------------------------
ITEM 1- SHAREHOLDER FOR AGAINST ABSTAIN
PROPOSAL-REPORT ON / / / / / /
BEER CONSUMPTION
- ---------------------------------------------------------------------------
I plan to
attend the / /
meeting
Dated: -----------------------------------, 1998
------------------------------------------------
------------------------------------------------
SIGNATURE OF SHAREHOLDER(S)
(Sign exactly as your name or names appear at
the left; in the case of shares held by joint
owners, all joint owners should sign;
fiduciaries should indicate title and
authority.)
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
FOLD AND DETACH HERE
ADMISSION TICKET
[ LOGO ] ANHEUSER-BUSCH COMPANIES
ANNUAL MEETING OF SHAREHOLDERS
Wednesday, April 22, 1998, 10:00 A.M. (local time)
at the Kingsmill Resort and Conference Center
1010 Kingsmill Rd.
Williamsburg, Virginia 23185
PLEASE ADMIT: NON-TRANSFERABLE
PROXY
ANHEUSER-BUSCH COMPANIES, INC.
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
The person(s) signing this proxy form hereby appoints August A. Busch
III, John E. Jacob, and JoBeth G. Brown as proxies, each with the power of
substitution and hereby authorizes them to represent and to vote, as
designated on the reverse side of this form, all of the shares of stock
that the undersigned would be entitled to vote at the Annual Meeting of
Shareholders of Anheuser-Busch Companies, Inc. to be held at the Kingsmill
Resort and Conference Center, 1010 Kingsmill Rd., Williamsburg, Virginia,
on April 22, 1998,at 10:00 A.M. local time and at any adjournments
thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER
INDICATED BY THE SHAREHOLDER. IN THE ABSENCE OF SUCH INDICATION, SUCH
SHARES WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR ITEMS B AND C
AND AGAINST ITEM 1. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
THE DISCRETION OF SAID PROXIES WITH RESPECT TO SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS THEREOF.
(Be sure to sign and date the reverse side of this form)
FOLD AND DETACH HERE
From Norfolk or Newport News
Airport
Take I-64 West towards Williamsburg
and get off at Exit 242-A (Busch Gardens
and Route 199 West). At the first traffic
light, turn left onto Kingsmill Road.
[MAP]
From Richmond Airport
Take I-64 East towards Williamsburg
and get off at Exit 242-A (Busch Gardens
and Route 199 West). At the first traffic
light, turn left onto Kingsmill Road.
<PAGE> 36
Please mark
your votes as / X /
indicated in
this example
- --------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS A, B AND C.
- --------------------------------------------------------------------------
ITEM A - ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to to vote for all nominees
the contrary below) listed below
/ / / /
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME ON THE LIST BELOW.)
August A. Busch III Carlos Fernandez G.
James R. Jones Andrew C. Taylor
Douglas A. Warner III
ITEM B-APPROVAL OF 1998 FOR AGAINST ABSTAIN
INCENTIVE STOCK PLAN / / / / / /
ITEM C- APPROVAL OF FOR AGAINST ABSTAIN
INDEPENDENT / / / / / /
ACCOUNTANTS
- --------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 1.
- --------------------------------------------------------------------------
ITEM 1- SHAREHOLDER FOR AGAINST ABSTAIN
PROPOSAL-REPORT ON / / / / / /
BEER CONSUMPTION
- ---------------------------------------------------------------------------
I plan to
attend the / /
meeting
Dated: -----------------------------------, 1998
------------------------------------------------
------------------------------------------------
SIGNATURE OF PLAN PARTICIPANT
(Sign exactly as your name appears at the left.)
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
FOLD AND DETACH HERE
ADMISSION TICKET
[ LOGO ] ANHEUSER-BUSCH COMPANIES
ANNUAL MEETING OF SHAREHOLDERS
Wednesday, April 22, 1998, 10:00 A.M. (local time)
at the Kingsmill Resort and Conference Center
1010 Kingsmill Rd.
Williamsburg, Virginia 23185
- --------------------------------------------------------------------------
TO PARTICIPANTS IN THE ANHEUSER-BUSCH DEFERRED INCOME STOCK PURCHASE AND
SAVINGS PLANS
Enclosed with this proxy form are the notice and proxy statement
for the Annual Meeting of Shareholders of Anheuser-Busch Companies, Inc.
which will be held on April 22, 1998. The number of shares shown on the
proxy form represents the number of shares with respect to which you are
entitled to direct the voting because of your account under one or more of
these plans. In order for these shares to be voted by the trustee of the
plan(s) in accordance with your confidential instructions, ChaseMellon
Shareholder Services, L.L.C. must receive your executed proxy form not
later than April 16, 1998. If your executed proxy is not received by April
16, 1998, shares as to which you are entitled to direct voting will be
voted by the plan trustee as described in the following paragraph.
Your interest in a plan which is invested in the Company stock
fund is measured in terms of share equivalents. Your share equivalents
closely approximate the number of shares as to which you are entitled to
direct the voting. If you do not return your proxy form, the plan trustee
will vote shares you are entitled to vote in the same proportion as the
plan trustee votes shares for which the trustee receives voting
instructions from other participants in that plan.
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK THE
APPROPRIATE BOX ON THIS PROXY FORM. Present this ticket to the
Anheuser-Busch representative at the entrance to the meeting. Keep in mind
that you will not be able to vote any plan shares at the meeting; only the
plan trustee can vote these shares as described above.
- --------------------------------------------------------------------------
PLEASE ADMIT: NON-TRANSFERABLE
PROXY
ANHEUSER-BUSCH COMPANIES, INC.
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby directs the Trustee of the Deferred Income
Stock Purchase and Savings Plans to authorize the proxies (a) to vote as
indicated on the reverse side of this form and (B) TO VOTE, IN THEIR
DISCRETION, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING HEREAFTER DESCRIBED, in each case with respect to all of the shares
of stock for which the undersigned is entitled to direct the voting under
these plans. Such votes are to be cast at the Annual Meeting of
Shareholders of Anheuser-Busch Companies, Inc. to be held at the Kingsmill
Resort and Conference Center, 1010 Kingsmill Rd., Williamsburg, Virginia
23185, on April 22, 1998 at 10:00 a.m., local time, and at any adjournments
thereof.
WHEN PROPERLY EXECUTED AND RETURNED, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED IN THE MANNER INDICATED BY THE PLAN
PARTICIPANT AND IN THE ABSENCE OF SUCH INDICATION, SUCH SHARES WILL BE
VOTED FOR THE ELECTION OF DIRECTORS AND FOR ITEMS B AND C AND AGAINST ITEM 1.
FOLD AND DETACH HERE
From Norfolk or Newport News
Airport
Take I-64 West towards Williamsburg
and get off at Exit 242-A (Busch Gardens
and Route 199 West). At the first traffic
light, turn left onto Kingsmill Road.
[MAP]
From Richmond Airport
Take I-64 East towards Williamsburg
and get off at Exit 242-A (Busch Gardens
and Route 199 West). At the first traffic
light, turn left onto Kingsmill Road.
<PAGE> 37
ANHEUSER-BUSCH COMPANIES, INC.
Please mark
your votes as / X /
indicated in
this example
- --------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS A, B AND C.
- --------------------------------------------------------------------------
ITEM A - ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to to vote for all nominees
the contrary below) listed below
/ / / /
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME ON THE LIST BELOW.)
August A. Busch III Carlos Fernandez G.
James R. Jones Andrew C. Taylor
Douglas A. Warner III
ITEM B-APPROVAL OF 1998 FOR AGAINST ABSTAIN
INCENTIVE STOCK PLAN / / / / / /
ITEM C- APPROVAL OF FOR AGAINST ABSTAIN
INDEPENDENT / / / / / /
ACCOUNTANTS
- --------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 1.
- --------------------------------------------------------------------------
ITEM 1- SHAREHOLDER FOR AGAINST ABSTAIN
PROPOSAL-REPORT ON / / / / / /
BEER CONSUMPTION
- ---------------------------------------------------------------------------
I plan to
attend the / /
meeting
Dated: -----------------------------------, 1998
------------------------------------------------
------------------------------------------------
SIGNATURE OF SHAREHOLDER(S)
(Sign exactly as your name or names appear at
the left; in the case of shares held by joint
owners, all joint owners should sign;
fiduciaries should indicate title and
authority.)
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
FOLD AND DETACH HERE
[ LOGO ] ANHEUSER-BUSCH COMPANIES
April 7, 1998
Dear Shareholder(s):
The time is approaching for the Annual Meeting of the Shareholders of
Anheuser-Busch Companies, Inc. on April 22, 1998, and our vote tabulator
has not yet received your Proxy.
It is important that your shares be represented at the meeting. PLEASE
SIGN, DATE, AND MAIL THE ATTACHED DUPLICATE PROXY AS SOON AS POSSIBLE.
If you plan to attend the Annual Meeting, please mark the appropriate
box on the proxy form above.
Sincerely,
/s/ August A. Busch III
PROXY
ANHEUSER-BUSCH COMPANIES, INC.
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
The person(s) signing this proxy form hereby appoints August A. Busch
III, John E. Jacob, and JoBeth G. Brown as proxies, each with the power of
substitution and hereby authorizes them to represent and to vote, as
designated on the reverse side of this form, all of the shares of stock
that the undersigned would be entitled to vote at the Annual Meeting of
Shareholders of Anheuser-Busch Companies, Inc. to be held at the Kingsmill
Resort and Conference Center, 1010 Kingsmill Rd., Williamsburg, Virginia,
on April 22, 1998, at 10:00 A.M. local time and at any adjournments
thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER
INDICATED BY THE SHAREHOLDER. IN THE ABSENCE OF SUCH INDICATION, SUCH
SHARES WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR ITEMS B AND C
AND AGAINST ITEM 1. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
THE DISCRETION OF SAID PROXIES WITH RESPECT TO SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS THEREOF.
(Be sure to sign and date the reverse side of this form)
<PAGE> 38
APPENDIX
Page 18 of the printed proxy contains a performance graph. The information
contained in the graph is depicted in the table that immediately follow the
graph.
