<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
/X/ Definitive Proxy Statement Commission Only
/ / Definitive Additional Materials (as permitted by Rule
/ / Soliciting Material Pursuant to 14a-6(e)(2))
Rule 14a-11(c) or Rule 14a-12
ANHEUSER-BUSCH COMPANIES, INC.
(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 TRANSACTIONS 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, INC.
March 12, 1999
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 28, 1999, in Orlando, Florida. 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 respond to shareholder questions.
Your vote is very important. We encourage you to read this proxy
statement and vote your shares as soon as possible. A return envelope
for your proxy card is enclosed for convenience. This year, shareholders
of record also have the option of voting by using a toll-free telephone
number or via the Internet. Instructions for using these new services
are included on the proxy card.
Thank you for your continued support of Anheuser-Busch. We look
forward to seeing you on April 28th.
Sincerely,
/s/ August A. Busch III
AUGUST A. BUSCH III
Chairman of the Board and President
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S>
<C> <C>
Notice of Annual Meeting................................................... 1
Proxy Statement............................................................ 2
Voting and Revocability of Proxy........................................... 2
Policy of Confidential Voting.............................................. 2
Record Date and Voting Rights.............................................. 3
ITEM 1: ELECTION OF DIRECTORS.............................................. 3
Stock Ownership............................................................ 7
Additional Information Concerning the Board of Directors................... 8
ITEM 2: INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK............ 9
ITEM 3: APPROVAL OF INDEPENDENT ACCOUNTANTS................................ 10
ITEMS 4-9: SHAREHOLDER PROPOSALS........................................... 10
Information Concerning Shareholder Proposals for 2000...................... 17
Report of the Executive Salaries and Stock Option Plans Committees......... 17
Compensation Committee Interlocks and Insider Participation................ 19
Summary Compensation Table................................................. 20
Comparison of Five Year Cumulative Total Return............................ 21
Option Grants Table........................................................ 22
Option Exercises and Year-End Option Values Table.......................... 23
Pension Plans Table........................................................ 23
Other Transactions Involving Directors, Officers, or Their Associates...... 24
Section 16(a) Beneficial Ownership Reporting Compliance.................... 26
Other Matters.............................................................. 26
</TABLE>
<PAGE> 4
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 1999
The Annual Meeting of the Shareholders of Anheuser-Busch Companies, Inc.
(the "Company") will be held at Ports of Call at Sea World of Florida, 7007
Sea World Drive, Orlando, Florida, on Wednesday, April 28, 1999, at 10:00 A.M.
local time, for the following purposes:
1. To elect four directors, each to serve for a term of three years;
2. To approve an amendment to the Restated Certificate of Incorporation to
increase the number of authorized shares of common stock from 800,000,000
to 1,600,000,000;
3. To approve the employment of PricewaterhouseCoopers LLP, as independent
accountants, to audit the books and accounts of the Company for 1999; and
4. To act upon such other matters, including the shareholder proposals
(pages 10-17), as may properly come before the meeting.
The Board of Directors has fixed the close of business on March 1, 1999, 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, 7007 Sea World Drive, Orlando,
Florida 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 12, 1999
IMPORTANT
PLEASE NOTE THAT A TICKET IS REQUIRED FOR ADMISSION TO THE MEETING. IF YOU
ARE A SHAREHOLDER OF RECORD AND PLAN TO ATTEND THE MEETING IN PERSON, PLEASE
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.
1
<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 12, 1999.
VOTING AND REVOCABILITY OF PROXY
This year, registered shareholders can simplify their voting and save the
Company expense by calling 1-800-840-1208 or voting via the Internet at
http://www.eproxy.com/bud/. Telephone and Internet voting information is
provided on the proxy card. A Control Number, located on the proxy card, is
designed to verify shareholders' identity and allow them to vote their shares
verify shareholders' identity and allow them to vote their shares and confirm
that their voting instructions have been properly recorded.
If your shares are held in the name of a bank or broker, follow the voting
instructions on the form you receive. The availability of telephone and Internet
voting will depend on their voting processes.
If you do not choose to vote by telephone or Internet, you may still return
your proxy card, properly signed, and the shares represented will be voted in
accordance with your directions. You can specify your choices by marking the
appropriate boxes on the proxy card. If your proxy card is signed and returned
without specifying choices, the shares will be voted as recommended by the
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.
IF YOU DO VOTE BY TELEPHONE OR INTERNET, IT IS NOT NECESSARY TO RETURN YOUR
PROXY CARD.
You may revoke your proxy at any time before it is voted at the meeting by
executing a later-voted proxy by telephone or Internet or mail, by voting by
ballot at the meeting, or by filing an instrument of revocation with the
inspectors of election in care of the Vice President and Secretary of the
Company.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE URGED TO VOTE BY TELEPHONE,
INTERNET, OR BY SIGNING AND RETURNING THE ACCOMPANYING PROXY CARD WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING. If you do attend, you may vote by ballot at the
meeting, thereby canceling any proxy previously given.
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 March 1, 1999, are
entitled to vote at the meeting. On such record date the Company had outstanding
and entitled to vote 475,886,852 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 four nominees for director who receive the
highest number of the votes cast will be elected. The other matters require the
approving vote of at least a majority of the votes cast, except for Item 2 on
the proxy card, which requires the approving vote of the holders of a majority
of the Company's outstanding common shares. 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.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
The Board of Directors of the Company is divided into three Groups, with the
term of office of each Group ending in successive years. The term of directors
of Group II expires with this Annual Meeting. The terms of directors of Group
III and Group I expire with the Annual Meetings in 2000 and 2001, respectively.
Pursuant to the Board's retirement policy, Judge William H. Webster and Dr.
Sybil C. Mobley, whose terms will expire with this Annual Meeting, are not
standing for re-election. The valued advice and counsel of these individuals
will continue to be available to the Company as each serves as an advisory
member of the Board for a two year period.
The following information is submitted respecting the nominees for election
and the other directors of the Company:
3
<PAGE> 7
<TABLE>
NOMINEES FOR ELECTION AT THIS MEETING TO A TERM EXPIRING IN 2002
(GROUP II DIRECTORS):
<S> <C>
JOHN E. JACOB
Mr. Jacob, 64, has been a director since 1990. He has
been Executive Vice President and Chief Communications
JACOB [PHOTO] Officer of the Company since 1994. 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.
<C>
CHARLES F. KNIGHT
Mr. Knight, 63, has been a director since 1987. He is
Chairman of the Board and Chief Executive Officer of
KNIGHT [PHOTO] Emerson Electric Co., a manufacturer of electrical 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 BP Amoco p.l.c., IBM Corporation, Morgan
Stanley Dean Witter & Co., 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.
<C>
JAMES B. ORTHWEIN
Mr. Orthwein, 74, has been a director since 1963. He
served as Chairman of the Board and Chief Executive
ORTHWEIN [PHOTO] Officer of the advertising agency D'Arcy MacManus
Masius Worldwide, Inc. (now D'Arcy Masius Benton
& Bowles) from 1976 until his retirement in 1982.
He has been a partner of Precise Capital, L.P., a
private investment partnership, since 1983. Mr.
Orthwein is Chairman of the Shareholder Meetings
Committee and is a member of the Executive and
Nominating Committees.
<C>
JOYCE M. ROCHE
Ms. Roche, 51, has been a director since December
1998. She was President and Chief Operating Officer of
ROCHE [PHOTO] Carson, Inc., a personal care products company, from
1996-1998 and Executive Vice President-Global
Marketing of Carson, Inc. from 1995-1996. She was
Vice President-Global Marketing of Avon, Inc. from
1993-1994. She is also a director of SBC
Communications, Inc. and Tupperware Corporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THESE NOMINEES.
4
<PAGE> 8
DIRECTORS WHOSE TERM CONTINUES UNTIL 2000 (GROUP III DIRECTORS):
<C>
BERNARD A. EDISON
Mr. Edison, 70, has been a director since 1985. He was
President of Edison Brothers Stores, Inc., a group of
EDISON [PHOTO] retail specialty stores, from 1968 until his retirement
in 1987. 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.
<C>
VERNON R. LOUCKS, JR.
Mr. Loucks, 64, has been a director since 1988. He is
Chairman of the Board of Baxter International Inc., a
LOUCKS [PHOTO] manufacturer of health care products, specialty
chemicals, and instruments. He has been Chairman
since 1987 and was Chief Executive Officer of Baxter
International from 1987-1998. 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.
<C>
VILMA S. MARTINEZ
Ms. Martinez, 55, has been a director since 1983. She
has been a partner in the law firm of Munger, Tolles &
MARTINEZ [PHOTO] Olson since 1982. She is also a director of Burlington
Northern Santa Fe Corporation, 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.
<C>
WILLIAM PORTER PAYNE
Mr. Payne, 51, has been a director since 1997. He has
been Chairman of Orchestrate.com, a web-based
PAYNE [PHOTO] intelligent communications manager that is a
subsidiary of Premiere Technologies, Inc., since July
1998. He was Vice Chairman of NationsBank Corporation,
from 1997- June 1998. He was President and 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, ACSYS, Inc., and Premiere Technologies,
Inc. Mr. Payne is a member of the Executive Salaries
and Stock Option Plans Committees.
<C>
EDWARD E. WHITACRE, JR.
Mr. Whitacre, 57, has been a director since 1988. He
has been Chairman of the Board and Chief Executive
WHITACRE [PHOTO] Officer of SBC Communications, Inc., a diversified
communications holding company, since 1990. He is also
a director of Burlington Northern Santa 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.
5
<PAGE> 9
DIRECTORS WHOSE TERM CONTINUES UNTIL 2001 (GROUP I DIRECTORS):
<C>
AUGUST A. BUSCH III
Mr. Busch, 61, has been a director since 1963. He is
Chairman of the Board and President of the Company.
BUSCH [PHOTO] 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.
<C>
CARLOS FERNANDEZ G.
Mr. Fernandez, 32, has been a director since 1996. He
is Vice Chairman of the Board of Directors and Chief
FERNANDEZ [PHOTO] Executive Officer of Grupo Modelo, S.A. de C.V., a
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.
<C>
JAMES R. JONES
Ambassador Jones, 59, has been a director since April
1998. He is a practicing attorney. He was President -
JONES [PHOTO] Warnaco Inc. International, an apparel company, from
1997-1998. 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. and Keyspan Energy. Ambassador Jones
is a member of the Finance and Pension Committees.
<C>
ANDREW C. TAYLOR
Mr. Taylor, 51, has been a director since 1995. He is
President and Chief Executive Officer of Enterprise
TAYLOR [PHOTO] Rent-A-Car Company, which position he has held since
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.
<C>
DOUGLAS A. WARNER III
Mr. Warner, 52, has been a director since 1992. He has
been Chairman of the Board, President, and Chief
WARNER [PHOTO] Executive Officer of J. P. Morgan & Co. Incorporated
("Morgan") and Morgan Guaranty Trust 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.
</TABLE>
6
<PAGE> 10
STOCK OWNERSHIP
The Company knows of no single person or group that is the beneficial owner
of more than 5% of the Company's common stock.
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 2.0% of the common stock outstanding.
Individuals have sole voting and investment power over the stock unless
otherwise indicated in the footnotes.
[CAPTION] [C]
<TABLE>
NUMBER OF
SHARES OF <C>
COMMON STOCK DEFERRED
NAME BENEFICIALLY OWNED UNITS<F1>
---- ------------------ ---------
<S>
<C> <C>
August A. Busch III.........................................3,562,929<F2> --
Bernard A. Edison........................................... 0<F3> 47,807
Carlos Fernandez G.......................................... 3,100 --
John E. Jacob............................................... 313,480<F4> 5,415
James R. Jones.............................................. 300<F5> --
Charles F. Knight........................................... 16,000 30,386
Stephen K. Lambright........................................ 433,815<F6> --
Vernon R. Loucks, Jr........................................ 2,000 1,962
Vilma S. Martinez........................................... 266 7,838
James B. Orthwein...........................................1,603,408<F7> --
William Porter Payne........................................ 700 2,440
John H. Purnell............................................. 351,444<F8> --
Joyce M. Roche.............................................. 628 --
Patrick T. Stokes........................................... 839,002<F9> --
Andrew C. Taylor............................................ 14,697 772
Douglas A. Warner III....................................... 2,000 1,201
Edward E. Whitacre, Jr...................................... 2,000 3,685
All directors, nominees, and executive officers as a group
(26 persons)..............................................9,490,773<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 1,136,415 shares that are subject to
currently exercisable stock options, of which 265,080 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 529,918 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. 98,955 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 299,399 shares that are subject to
currently exercisable stock options, of which 40,000 are held in a trust
for the benefit of the child of Mr. Jacob.
<F5> Mr. Jones has shared voting and shared investment power with respect to
these shares.
<F6> The number of shares includes 347,107 shares that are subject to
currently exercisable stock options. 8,817 shares owned by members of Mr.
Lambright's immediate family are not included.
<F7> Of the shares shown, Mr. Orthwein has shared voting and shared investment
power as to 331,336 shares.
<F8> The number of shares includes 280,583 shares that are subject to
currently exercisable stock options. 30,000 shares owned by Mr. Purnell's
wife are not included.
<F9> The number of shares includes 628,618 shares that are subject to
currently exercisable stock options.
<F10> The number of shares stated includes 4,539,468 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 3,065,719 shares and shared
voting and shared investment power as to 861,554 shares. 169,928 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
During 1998 the Board of Directors held 10 meetings. No current director
who served during 1998 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 24-26,
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 1998 the Committee held four
meetings.
NOMINATING COMMITTEE
The functions of the Nominating Committee are to recommend to the Board of
Directors a slate of nominees for directors to be presented on behalf of the
Board for election by shareholders at each Annual Meeting of the Company and to
recommend to the Board persons to fill vacancies on the Board of Directors. The
Committee will consider nominees recommended by shareholders upon submission in
writing to the Secretary of the Company the names of such nominees, together
with their qualifications for service as a director of the Company. During 1998
the committee held two meetings.
8
<PAGE> 12
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 1998
the Committee held two meetings. The Committee's report on 1998 executive
compensation is on pages 17-19.
INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
(ITEM 2 ON PROXY CARD)
The Board of Directors has directed that there be submitted to the
shareholders a proposal to approve an amendment (the "Amendment") to Article
FOURTH of the Restated Certificate of Incorporation of the Company (the
"Certificate") so as to increase the number of shares of $1 par value common
stock which the Company has authority to issue from 800,000,000 to
1,600,000,000. The number of preferred shares authorized would not be changed by
this amendment, nor would the par value of either the common or the preferred
shares be affected in any way.
As of January 31, 1999, 713,429,566 shares of common stock were issued
(including 237,293,625 shares held in the Treasury) and an aggregate of
54,014,671 shares were reserved for issuance pursuant to the Company's various
employee stock plans. Therefore, as of such date, 32,555,763 shares were
unreserved. If the proposed Amendment is approved, in the aggregate there will
be 886,570,434 common shares available for issuance. The Company does not have
any current plans, agreements, or understandings to issue stock which would
involve any of the common shares that the shareholders are being asked to
authorize.
The Board of Directors of the Company believes that it is desirable to have
the additional authorized shares of common stock available for possible future
financing and acquisition transactions, stock dividends or splits, employee
benefit plans and other general corporate purposes. Having such additional
authorized shares of common stock available for issuance in the future will give
the Company greater flexibility and may allow such shares to be issued without
the expense and delay of a special shareholders meeting. All authorized but
unissued shares of common stock, including the additional shares of common
stock authorized by the Amendment, will be available for issuance without
further authorization of the shareholders, unless such action is required by
applicable law or the rules of a stock exchange on which the Company's common
stock may be listed at that time.
Issuing additional shares or rights to acquire shares could have the effect
of diluting the stock ownership, earnings per share, and voting power of
existing shareholders, except in prorata distributions such as stock dividends
and stock splits. In addition, although the Board of Directors has no present
intention of doing so, the proposed increase in authorized common stock could
be used to make it more difficult to effect a change in control of the Company
without first negotiating with the Board. Common and preferred shares, or rights
to acquire such shares, could be issued in a manner which could make a
non-negotiated takeover more difficult or costly, or which otherwise could
encourage a person interested in acquiring control of the Company to negotiate
with the Board of Directors. However, the Company has other defenses available
against coercive or unfair takeover attempts by third parties, and at present
the Board knows of no attempt to obtain control of the Company.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of a majority of the Company's
outstanding common stock is required to approve the proposed increase in the
authorized shares. If the proposed Amendment is approved, the first sentence of
Article FOURTH of the Company's Certificate will be as follows:
FOURTH: The aggregate number of shares which the Corporation shall have
authority to issue is 1,640,000,000, of which 40,000,000 shares shall be
Preferred Stock having a par value of $1 per share, and 1,600,000,000
shares shall be Common Stock having a par value of $1 per share.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
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APPROVAL OF INDEPENDENT ACCOUNTANTS
(ITEM 3 ON PROXY CARD)
Action will be taken with respect to the approval of independent accountants
for the Company for the year 1999. The Board of Directors has, subject to such
approval, selected PricewaterhouseCoopers LLP.
A representative of PricewaterhouseCoopers 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 PRICEWATERHOUSECOOPERS LLP.
SHAREHOLDER PROPOSALS
Proponents of six shareholder proposals have stated that they intend to
present the following proposals at the annual meeting. The proposals and
supporting statements are quoted below. THE BOARD HAS CONCLUDED IT DOES NOT
SUPPORT THESE PROPOSALS FOR THE REASONS GIVEN AND RECOMMENDS THAT SHAREHOLDERS
VOTE AGAINST ALL SIX PROPOSALS.
------------------------
SHAREHOLDER PROPOSAL CONCERNING OPTION EXERCISE PERIOD
(ITEM 4 ON PROXY CARD)
Joseph Zuffante, 22 Perkins Street, Arlington, MA 02174,
beneficial owner of 256 shares of common stock of the Company, has submitted
the following proposal:
"RESOLVED: That ANHEUSER-BUSH [sic] stockholders urge the Board of Directors
take the necessary steps to adopt a policy that no executives may cash in on
stock options within six months of the announcement of a significant
workforce (more than 1% of total workforce) reduction."
The shareholder's statement in support of the proposal is as follows:
"SUPPORTING STATEMENT: Stock options were created to reward good
performance. This proposal would help to ensure that options reward real
improvements in performance, rather than short-term stock boosts which are
sometimes associated with the announcement of major layoffs.
"While Wall Street may give a temporary boost to stock prices at layoff
announcements, there is growing concern that downsizings do not translate
into long-term benefits for shareholders. **updat** [sic] Author Timothy
Carpenter likens such layoffs to 'converting your favorite horse to the
commodity status of refined glue. Yes, it can be more efficient and
profitable, but who or what will replace the horse?'
"A recent 7-year study of 25 large corporations noted that a 10% reduction
in employment caused an average of only a 1.5% reduction in operating costs.
After three years, the average downsized company's stock was up only 4.7%,
compared with a typical increase of 34.4% for similar companies in the same
field that didn't reduce staff to the same extent.
"As investors with a long-term horizon interested in building our
investments into the next century, we believe long-term growth of
Anheuser-Busch is served by linking options to long-term company growth,
rather than stock market blips that have more to do with the zeitgeist on
Wall Street than with the real value of the Company.
"For the above reasons we urge you to vote FOR this proposal."
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<PAGE> 14
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ABOVE PROPOSAL.
The Company continually reviews its businesses for means by which it can
enhance the long-term interests of its shareholders. The Company does not
routinely implement significant workforce reductions nor has it ever implemented
a workforce reduction in order to temporarily inflate the price of our stock. In
fact, the only significant workforce reduction (as defined by the shareholder
proponent as more than 1% of the total workforce) reflected in the Company's
records was in 1993 through a voluntary enhanced retirement program in which
1,271 employees or 2.9% of our total workforce at that time participated. The
decision to implement the 1993 enhanced retirement program was made only after
extensive review of the consequences and with the objective to enable the
Company to compete more effectively, benefiting the Company's shareholders,
including its continuing employees, over the long-term. This action was not
undertaken to achieve a temporary one-time "boost" in the Company's stock price.
Stock options are the Company's only long-term incentive for executives of
the Company and are a significant portion of their total compensation package.
Our stock option program was established to foster a long-term perspective by
our executives aligned with that of our shareholders. We believe our current
stock program accomplishes that objective because it links executive incentives
to stock appreciation by putting that portion of our executives' total
compensation at risk, depending on stock price appreciation. The issuance of
stock options also facilitates stock ownership by Company executives, further
aligning their interests with those of our shareholders. The terms of our stock
option grants provide further long-term incentive. Our stock option grants
generally vest and become exercisable over a period of three years, not
immediately, and thereafter remain exercisable for seven years. We believe this
encourages our executives to focus on long-term shareholder returns because
executives will maximize their returns if the Company's stock price increases
over the long-term, regardless of short-term fluctuations.
In sum, decisions by the Company concerning workforce reductions are in no
way motivated by possible short term stock price "boosts" as suggested by the
shareholder proponent. Moreover, the Company believes that its stock option
program already fully aligns executive incentives with long-term Company growth.
We do not agree with the shareholder proponent that it is necessary to further
restrict the ability of Company executives to exercise their options.
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL.
------------------------
SHAREHOLDER PROPOSAL CONCERNING OPTION EXERCISE PRICE
(ITEM 5 ON PROXY CARD)
Stephen C. Spillane, 90 Vesey Street, Brockton, MA 02301, beneficial owner
of 703 shares of common stock of the Company, has submitted the following
proposal:
"PROPOSAL: That shareholders urge that, for the twenty highest paid
employees of Anheuser-Busch Companies, Inc. no future option plans be
adopted, or existing option plans be amended, to allow options to be issued
for exercise prices below those of any options that were outstanding at any
time during the year immediately preceding the grants of the new options."
The shareholder's statement in support of the proposal is as follows:
"SUPPORTING STATEMENT: Stock options are granted to tie executive
compensation with company performance and align shareholder interests with
those of senior management. However, if there are no consequences for poor
performance, the options do not serve this purpose.
"Popular outcry against repricing has become more frequent. Consider the
following:
'Many companies are willing to move the threshold at which stock options
can be exercised, but typically they engage in the heads-I-win,
tails-I-still-win strategy of repricing stock options downward, not
upward, thereby making it easier to reach a point where the options
become valuable.' -The New York Times
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<PAGE> 15
'At the very least, every proposal to reprice existing options should be
put to a shareholder vote. No less important, repricings for top exacs
[sic] make no sense under any conditions. Stock options are long-term
incentives that should not be used to reward a management that fails to
produce results.' -John Byrne, Business Week
"This proposal is, however, limited to the top rank of management. We
understand that options can play an important role in retaining qualified
employees, and there may be occasions where repricing options for mid-level
employees is a defensible decision. However, for top management--who can be
assumed to have more direct responsibility for the direction of the company
and for its success or failure--we believe repricing should never be
allowed. Executives need to be held accountable for poor performance, and
certainly not rewarded for it.
"For the above reasons we urge you to vote FOR this proposal."
------------------------
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ABOVE PROPOSAL.
The Company agrees with the shareholder proponent that option repricing,
which occurs when companies adjust outstanding stock options to lower the
exercise price, is inappropriate. Indeed, the Company's stock option plans,
which were overwhelmingly approved by the shareholders, specifically prohibit
repricing.
The Company's option plans require that options be granted with an exercise
price no less than the market price on the date of grant. This means that the
employees who receive options are able, after vesting requirements (usually over
a period of three years) have been met, to purchase the Company's stock during
the term of the option, at the price for which the stock could be purchased by
the public on the date of grant. Since the Company's plans do not allow the
purchase price to be lowered after grant, the option will have value to the
employee recipient only if the price of the stock goes up.
Although option repricing is the central theme of the proponent's supporting
statement, the proposal itself relates to the ability of the Company to grant
options at the current market price. The proponent seeks an arbitrary
restriction on option grants to senior executives by providing that the exercise
price for such grants be no lower than the highest market price of the Company's
stock on the date any option was granted during a prior period of up to ten
years (since the Company's options are granted with a ten-year term.) This
restriction would be complicated to administer, provide no increased benefit to
shareholders, and make the option plan less effective in providing long-term
incentive compensation for senior executives.
The Board believes the interests of the Company and its shareholders are
best served by continuation of the stock option program as approved by the
Company's shareholders.
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL.
------------------------
SHAREHOLDER PROPOSAL CONCERNING SHAREHOLDER RIGHTS PLAN
(ITEM 6 ON PROXY CARD)
James M. O'Brien, 40 Magnolia Avenue, Brockton, MA 02301, beneficial owner
of 980 shares of common stock of the Company, has submitted the following
proposal:
"RESOLVED: That the Shareholders of Anheuser-Busch Compnaies, [sic] Inc.
urge the board of directors to redeem any shareholder rights plan unless the
plan is approved by the affirmative vote of a majority of the outstanding
shares at a meeting of the shareholders held as soon as possible; and that
this policy apply to rights plans which currently exist, and to those that
may be considered in the future."
The shareholder's statement in support of the proposal is as follows:
"SUPPORTING STATEMENT: At any time, Anheuser-Busch's board may adopt a
shareholder rights plan commonly known as a 'poison pill.' Shareholders are
concerned that rights plans can serve to insulate boards and management from
shareholder interests.
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<PAGE> 16
"Generally, we believe 'pills' depress a company's stock price and serve to
insulate management. As a December 19, 1996 New York Times article notes
poison pills are not serving their original intention of protecting all
shareholders:
But if the Board has the power to suspend the pill for some bidders and
not for others, it can then allow a friendly bidder to make a coercive
offer while preventing a better offer from another suitor. That's not
the way pills are supposed to work.
"For these reasons, we believe the unilateral adoption of this poison pill
plan by the Board detracts from our company's broader relationship with its
shareholders and harms shareholder value. Therefore, we urge a vote FOR the
resolution."
------------------------
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ABOVE PROPOSAL.
The Board of Directors adopted the Company's Shareholder Rights Plan in 1985
and extended it in 1994 to protect the Company's shareholders in the event of
certain unsolicited attempts to acquire control of the Company, including a
partial or two-tier tender offer that fails to treat all shareholders equally, a
"creeping acquisition" of the Company by the purchase of stock on the open
market and other acquisition tactics that the Board believes are unfair to the
Company's shareholders and are not in their best interests. Plans similar to the
Company's Plan have been adopted by a majority of the corporations included in
the Standard & Poor's 500.
A major function of the Rights Plan is to give the Board a greater period of
time within which it can properly evaluate an acquisition offer. A second major
function of the Plan is to induce a bidder for the Company to negotiate with the
Board and thus strengthen the Board's bargaining position vis-a-vis such bidder.
The Plan thus enables the Board, as elected representatives of the shareholders,
to better protect and further the interests of the Company's shareholders in the
event of an acquisition proposal. The Board gains the opportunity and additional
time to determine if an offer reflects the full value of the Company and is fair
to all shareholders, and if not, to reject the offer or to seek an alternative
that meets these criteria.
The Board's fiduciary duty to the shareholders dictates that it evaluate the
merits of each and every acquisition proposal presented to the Board and seek to
insure that any proposed business combination or acquisition delivers full value
to the shareholders.
The Board believes that the adoption of a Rights Plan is appropriately
within the scope of responsibilities of the Board of Directors, acting on behalf
of the shareholders. The adoption of such a Plan is in accord with the Board's
responsibilities for the management of the Company's affairs and the issuance of
securities and does not require shareholder approval. Redeeming the rights would
remove an important tool that the Board should have for the protection of
shareholders. The Board therefore believes that any decision to redeem the
rights should be made in the context of a specific acquisition proposal.
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL.
------------------------
SHAREHOLDER PROPOSAL CONCERNING BOARD COMPOSITION
(ITEM 7 ON PROXY CARD)
John M. Shea, 64 "L" Street, South Boston, MA 02127, beneficial owner of
1,120 shares of common stock of the Company, has submitted the following
proposal:
"RESOLVED: The shareholders urge that the board of directors adopt a policy
that no board members shall serve if he or she is not an independent
director. For these purposes, the board should adopt the following
definition of independence to mean a director who:
* is not employed by the Company or an affiliate in an executive capacity;
* is not a member of a corporation or firm that is one of the Company's paid
advisers or consultants;
* is not employed by a significant customer or supplier to the Company;
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<PAGE> 17
* has no personal services contract with the Company or one of it's [sic]
affiliates;
* is not part of an interlocking directorate in which the CEO or any other
executive officer of the Company serves on the board of another
corporation that employs the director;
* and does not have any personal, financial, and/or professional
relationships with the CEO or other executive officer that would interfere
with the exercise of independent judgement by such director."
The shareholder's statement in support of the proposal is as follows:
"SUPPORTING STATEMENT: The purpose of this proposal is to incorporate a
standard of independence that will permit objective decision making on
compensation and other issues at Anheuser-Busch.
"The current board includes many individuals who do not meet this standard
of independence. The section of this proxy statement entitled 'Other
Transactions Involving Directors, Officers, and Their Associates' detail the
web of relationships.
"These include:
* Carlos Fernandez, Vice Chairman of the Board of Directors of Grupo Modelo
and Diblo, and Chief Executive Officer of Grupo and Modelo, companies in
which Anheuser-Busch holds considerable stakes, and is currently in the
midst of disputed stock transactions. Mr. Fernandez serves on the
Anheuser-Busch board as a representative of the Controlling Shareholders
of Diblo.
* James B. Orthwein, President and General Manager of Double Eagle
Distribution [sic].
* Percy J. Orthwein II, Chairman of the Board of Double Eagle Distributing.
Both men are the sons of board member James B. Orthwein. In 1997 Double
Eagle purchased $38,735,202 of products from Anheuser-Bush [sic]
Incorporated.
* Steven Knight, a majority owner of City Beverage, L.L.C., is the son of
board member Charles F. Knight. In 1997, Anheuser-Busch Incorporated
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. City Beverages L.L.C. paid $5,437,000 of [sic]
the wholesalership.
* Director William Webster is a partner at Milbank, Tweed, Hadley & McCoy
[sic], which Anheuser-Busch used for legal services in 1997."
"For the above reasons, we urge a vote FOR this resolution."
------------------------
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ABOVE PROPOSAL.
The Company recognizes the importance of having independent, non-management
directors. For this reason, only two of the current 16 directors are members of
management. Furthermore, all compensation decisions are made by the Executive
Salaries Committee and the Stock Option Plans Committee, which are made up
entirely of independent directors.
This shareholder proposal, however, asks that ALL directors be
"independent." This extreme and unreasonable requirement would not be in the
best interests of the Company's shareholders. It would, for example, render
ineligible for Board service the Company's Chief Executive Officer, who is the
person most knowledgeable about the Company. The Company is aware of no
recognized corporate governance guidelines that advocate such an extreme
position.
The Board of Directors and the Nominating Committee are committed to an
extremely high quality and diverse membership of the Board. Our Board consists
of a highly effective combination of individuals with a variety of Company
knowledge, business acumen, professional expertise, personal experience,
historical perspective, and independent judgment. Limiting director candidates
as narrowly as described in this proposal would severely limit the
shareholders, ability to elect the most qualified individuals to the Board and,
we believe, would result in a much less effective Board of Directors.
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL.
------------------------
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<PAGE> 18
SHAREHOLDER PROPOSAL CONCERNING CLASSIFIED BOARD
(ITEM 8 ON PROXY CARD)
The International Brotherhood of Teamsters, 25 Louisiana Avenue, N.W.,
Washington, D.C. 20001, owner of 90 shares of common stock of the Company, has
submitted the following proposal:
"RESOLVED: That Anheuser Busch Companies' stockholders urge the Board of
Directors take the necessary steps, in compliance with state law, to
declassify the Board for the purpose of director elections. The board
declassification shall be completed in a manner that does not affect the
unexpired terms of directors previously elected."
The shareholder's statement in support of the proposal is as
follows:
"SUPPORTING STATEMENT: Anheuser Busch Companies's board is divided into
three classes of directors serving staggered three-year terms. This means
an individual director faces election only once every three years, and
shareholders only vote on roughly a third of the board each year.
"We think continuity is insured through director re-elections. When
directors are performing well they routinely are re-elected with majorities
over 95%. Anheuser Busch does not suffer from a lack of continuity; in
addition to two Busch heirs, who have served more than thirty years [sic].
"We believe that annual elections can pave the way for improved board
sensitivity to important shareholder issues. In particular, it can help
speed the diversification of Anheuser Busch's board and introduce new
perspectives.
"In addition, a declassified board allows the company to respond quickly to
changes by giving the board the ability to appoint more qualified candidates
each year. A declassified board can help give Anheuser Busch the flexibility
it needs as it moves into the next century.
"Generally, shareholders have grown hostile to classified boards. This is
especially important for employee shareholders. In 1998, Walt Disney Company
agreed to change the by-laws after the resolution passes with 65% of the
vote. At Fleming and Eastman Kodak more than 70% of shareholders voted to
declassify the board. In 1997 a majority of shares voted for board
declassification at Bausch & Lomb, Bristol-Meyers Squibb, Eastman Kodak and
Ogden.
"By adopting annual elections, Anheuser Busch can demonstrate its commitment
to fuller accountability to shareholders, accountability that honors
shareholder prerogatives.
"We urge you to vote YES for this proposal."
------------------------
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ABOVE PROPOSAL.
The Company's classified Board system, where one third of the directors are
elected each year, was approved by the Company's shareholders in 1985 by more
than 85% of the shares voted at the meeting. The Board of Directors continues to
believe that a classified board is in the best interests of the Company and its
shareholders.
Anheuser-Busch believes this system helps provide continuity and stability
in the management of the business and affairs of the Company. It assures that at
least two-thirds of the directors at any one time have prior experience with and
in-depth knowledge of Anheuser-Busch; this experience and knowledge not only
contribute to more effective long range strategic planning but are particularly
important given the challenges Anheuser-Busch faces in the current environment
of the domestic beer industry and as the Company implements its plans for
international growth.
Classified boards are also intended to prevent sudden change in the
composition of the Board by preventing the election of an entirely new Board in
a single year. At least two annual shareholder meetings are required to effect a
change in control of the Board. This in turn encourages any person or group
seeking to acquire control to negotiate at arm's length with the management and
the Board, who are in the best position to negotiate a transaction which is fair
to all of the shareholders of the Company.
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<PAGE> 19
The proponent's concerns about diversification of the Company's Board and
the introduction of new perspectives have been handled very effectively through
the current classified structure. The Board and the Nominating Committee are
committed to an extremely high quality, diverse membership of the Board and are
proud of the Company's achievements as measured by both criteria. The Company's
Board of Directors is diverse in race, ethnicity, gender, age, background, and
years of Board service.
This proposal requires approval by a majority of the shares voted on the
issue. It should be noted, however, that adoption of this proposal would not by
itself eliminate the classified Board. Under Delaware law, the Board of
Directors has to recommend further action by the shareholders to amend the
Restated Certificate of Incorporation to eliminate the classified Board and the
amendment then must be approved by a majority of the shares entitled to vote (as
opposed to the lower requirement of a majority of the shares actually voted that
is needed to approve this advisory resolution).
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL.
------------------------
SHAREHOLDER PROPOSAL CONCERNING CHAIRMAN OF THE BOARD
(ITEM 9 ON PROXY CARD)
Paul M. Cannon, 81 Cochato Road, Braintree, MA 02184, beneficial owner of
657 shares of common stock of the Company, has submitted the following proposal:
"RESOLVED: That the shareholders of Anheuser-Busch Companies, Inc. urge the
board to take the necessary steps to require that an independent director
who was not formerly the chief executive of the company serve as chair of
the board."
The shareholder's statement in support of the proposal is as follows:
"SUPPORTING STATEMENT: The board's responsibility in scrutinizing management
plans may be reduced when the board chair is also the chief architect of the
management plan in his or her capacity as chief executive officer. By
requiring that the chair be an independent director, the board may be able
to bring to bear more critical review of basic management plans.
"Numerous scholars have called for greater distinction between directors and
management. An idea parallel to splitting the Chair and CEO is naming a
'lead' director, an idea championed by attorney Martin Lipton and Harvard
Business School Prof. Jay Lorsch. Tyco has such a lead director, Philip
Hampton. His role allows 'the Board to operate independently of management,'
he explains. Adds Tyco CEO Dennis Kozlowski, 'It's a real good check and
balance.'
"Splitting the Chair and CEO, we believe, enhances these advantages through
more formal acknowledgement that the board will be led by a non-management
officer.
"For these reasons, we urge you to vote FOR this proposal."
------------------------
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ABOVE PROPOSAL.
The Board believes that it is not in the best interests of the Company and
its shareholders to require that the Chairman be an independent director who was
not formerly the Chief Executive Officer of the Company.
The Company's bylaws require the Board to select a Chairman from its
membership. The current Chairman is also the Chief Executive Officer. There is
no requirement, however, that the Chairman also be the Chief Executive Officer
and in the past, the positions have been held by two different individuals. The
Board is in the best position to determine who should serve as Chairman at any
given time in light of the Company's then-current and anticipated future
circumstances.
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<PAGE> 20
Since only two of the Board's current 16 directors are current or former
employees of the Company, there are ample independent directors to offer
critical review of management plans. Furthermore, all of the Board committees
other than the Executive Committee are chaired by outside directors.
The Board believes that the Company's bylaws provide appropriate flexibility
for the selection of a Chairman and that the shareholder proposal imposes an
unnecessary restriction that is not in the best interests of the Company and its
shareholders.
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL.
------------------------
SHAREHOLDER PROPOSALS FOR 2000
For inclusion in the Company's Proxy Statement and form of proxy, any
shareholder proposals intended to be presented at the 2000 Annual Meeting must
be received by the Company at its principal executive offices no later than
November 13, 1999.
Shareholders of record who do not submit proposals for inclusion in the
Proxy Statement but who intend to submit a proposal at the 2000 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 December 30, 1999 and not later than January 29, 2000. 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 Vice
President and Secretary.
EXECUTIVE COMPENSATION
REPORT OF THE EXECUTIVE SALARIES
AND THE STOCK OPTION PLANS COMMITTEES
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. An external 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.
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<PAGE> 21
1998 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 21); 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 +/-20%. Mr. Busch's total compensation for
1998 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. 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 approved the
recommendation of management that there be no merit-based salary increases for
senior executives for 1998. Mr. Busch's 1998 base salary of $1,107,750 was the
same as his 1997 base salary and was at the market level of salaries for CEOs in
the comparable group of companies.
Other than an increase to one executive officer in order to bring the
individual's salary within the targeted compensation range, other executive
officers received no salary increases in 1998. 1997 salaries for these executive
officers were targeted at the market level where appropriate benchmarks were
available. Actual 1997 and 1998 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:
1998 bonuses for Mr. Busch, 12 other executive officers and 39 other
officers were paid under the Officer Bonus Plan (the "Plan"), which was approved
by shareholders at the 1995 Annual Meeting. The Plan authorizes
18
<PAGE> 22
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 1998 the Committee
adopted the 1998 Officer Bonus Program ("1998 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 1998 after
adjustments for certain non-recurring items. The Committee 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 1999 the Committee certified that the 1998 performance goal was
met and approved individual bonuses. The Company achieved record sales and
earnings in 1998. In view of this, the Committee, through the exercise of
discretion and after taking into consideration individual performance and
targeted compensation levels, approved bonus payments that were generally at the
market levels, but less than the maximum available in the bonus pool. Due to
regulations of the Internal Revenue Service and provisions of the Plan and 1998
Program, any adjustments to the bonuses for the participating executives named
in the summary compensation table on page 20 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 1998 bonus was $1,750,000.
LONG TERM INCENTIVES:
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 1998, the Committee granted Mr. Busch options for 1,668
shares under the 1989 Incentive Stock Plan and 398,332 shares under the 1998
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 $1 million, except to the extent such
excess constitutes performance-based compensation. The Committee considers its
primary goal is to design compensation strategies that further the best
interests of the Company and its shareholders. To the extent they are not
inconsistent with that goal, the Committee will attempt where practical to use
compensation policies and programs that preserve the deductibility of
compensation expenses.
Stock options granted under the 1989 and 1998 Incentive Stock Plans and
bonuses paid pursuant to the Officer Bonus Plan are designed to qualify as
performance-based compensation.
Executive Salaries and Stock Option Plans Committees
Bernard A. Edison--Chairman
Vilma S. Martinez
Vernon R. Loucks, Jr.
William Porter Payne
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All members of the Executive Salaries and Stock Option Plans
Committees are independent, non-employee directors.
Mr. Busch is a member of the Human Resources Committee of SBC
Communications Inc. Mr. Whitacre, an Executive Officer of SBC Communications
Inc., is a Director of the Company.
19
<PAGE> 23
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
| LONG-TERM |
ANNUAL COMPENSATION<F1> | COMPENSATION|
----------------------------------- | -------------|
| | ALL
| AWARDS OF | OTHER
OTHER ANNUAL | STOCK | COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)| OPTIONS (#)| ($)<F2>
- - --------------------------- ---- ---------- --------- ----------------| ----------- | ------------
<S> <C> <C> <C> <C> | <C> | <C>
A.A. Busch III 1998 1,107,750 1,750,000 26,424 | 400,000 | 88,025
Chairman of the Board 1997 1,107,750 691,000 20,658 | 300,000 | 82,970
and President 1996 1,055,000 1,382,000 -- | 200,000 | 75,676
| |
P. T. Stokes 1998 650,000 800,000 13,813 | 200,000 | 46,815
Vice President and 1997 650,000 300,000 10,837 | 150,000 | 43,434
Group Executive 1996 604,550 600,000 -- | 100,000 | 35,967
| |
J. E. Jacob 1998 457,000 350,000 16,981 | 100,000 | 33,692
Executive Vice 1997 457,000 125,000 15,555 | 90,000 | 31,965
President and Chief 1996 423,200 250,000 -- | 60,000 | 27,057
Communications Officer | |
| |
J. H. Purnell 1998 440,000 264,000 7,077 | 75,000 | 34,584
Vice President and 1997 440,000 147,000 9,703 | 112,500 | 33,941
Group Executive 1996 420,000 294,000 -- | 75,000 | 31,470
| |
S. K. Lambright 1998 390,000 350,000 5,516 | 100,000 | 35,238
Group Vice President 1997 390,000 125,000 5,664 | 90,000 | 31,759
and General Counsel 1996 368,500 250,000 -- | 60,000 | 27,323
<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> The 1998 amounts disclosed in this column include:
(a) Company matching contributions to the Deferred Income Stock Purchase
and Savings Plan and the 401(k) Restoration Plan of $50,296 for Mr.
Busch, $29,522 for Mr. Stokes, $20,751 for Mr. Jacob, $19,982 for Mr.
Purnell, and $17,688 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.
(b) Payments for insurance coverage of $29,620 for Mr. Busch, $17,293 for
Mr. Stokes, $12,941 for Mr. Jacob, $11,969 for Mr. Purnell, and
$10,436 for Mr. Lambright.
(c) Payment of director fees from subsidiary or affiliated companies of
$8,109 for Mr. Busch, $2,633 for Mr. Purnell, and $7,114 for Mr.
Lambright.
</TABLE>
20
<PAGE> 24
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN<F*>
ANHEUSER-BUSCH COMPANIES, INC., S&P 500 INDEX
AND RUSSELL LARGE CAP INDICES<F**>
(12/31/93-12/31/98)
[GRAPH]
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Anheuser-Busch $100.0 $106.7 $144.1 $179.8 $202.4 $308.2
S&P 500 100.0 101.4 139.3 171.2 228.3 293.4
Russell Large Cap Index 100.0 103.7 147.4 186.4 253.7 356.3
Russell 200 Index 100.0 101.6 141.6 175.6 236.3 316.6
<FN>
- - -------------
<F*> Assumes $100 invested on December 31 of first year of chart in
Anheuser-Busch Companies, Inc. Common Stock, S&P 500 Index, Russell
Large Cap Index and Russell 200 Index and that all dividends were
reinvested.
<F**> Because only one of the other four leading domestic brewers is an
independent publicly traded company, the Company has elected to compare
shareholder returns with companies with similar market capitalizations.
The Company was previously included in the Russell Large Cap Index,
which is comprised of the 50 largest publicly held United States
companies, based on market capitalization. The Company is no longer
included in the Russell Large Cap Index and has substituted the Russell
200 Index of the 200 largest publicly held companies, including
Anheuser-Busch, for comparison purposes.
<F***> Compound Annual Growth Rate.
</TABLE>
21
<PAGE> 25
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS<F1> FOR OPTION TERM<F2>
------------------------------------------------- -----------------------------
% OF TOTAL
OPTIONS
NUMBER OF GRANTED
SECURITIES TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN PRICE EXPIRATION
NAME GRANTED (#) 1998<F3> ($/SH) DATE 0%<F4> 5% 10%
- - ---- ----------- ---------- -------- ---- ------ -------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
A. A. Busch III...... 400,000 7.93% $59.94 11/24/08 $0 $ 15,077,748 $ 38,209,975
P. T. Stokes......... 200,000 3.96 59.94 11/24/08 0 7,538,874 19,104,988
J. E. Jacob.......... 100,000 1.98 59.94 11/24/08 0 3,769,437 9,552,494
J. H. Purnell........ 75,000 1.48 59.94 11/24/08 0 2,827,078 7,164,370
S. K. Lambright...... 100,000 1.98 59.94 11/24/08 0 3,769,437 9,552,494
All Shareholders..... N/A N/A N/A N/A 0 17,968,906,179 45,536,738,898
All Optionees........ 5,043,905 100.0 59.94 N/A 0 190,126,821 481,818,722
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 25,
1998. 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 1998 grant which normally would become
exercisable on November 25, 1999 was made eligible for earlier vesting if
transferred in gifts to certain family members or trusts; Mr. Busch III
made such a gift, and 100,000 of his 1998 grant vested on November 30,
1998. Mr. Jacob also made such a gift, and 20,000 of his 1998 grant vested
on December 1, 1998. 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 an option exercise. The
number of options granted with a tax payment feature in 1998 to the named
officers were: Mr. Busch III, 398,332; Mr. Stokes, 198,332; Mr. Jacob,
98,332; Mr. Purnell, 73,332; and Mr. Lambright, 98,332.
<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 476.7 million shares outstanding at December 31, 1998 and a
per share price of $59.94.
<F3> Based on 5,043,905 options granted to 838 employees during 1998.
<F4> No gain to the optionees is possible without an increase in stock price,
which will benefit all shareholders commensurately. A zero percent stock
price appreciation will result in zero dollars for the optionee.
</TABLE>
22
<PAGE> 26
AGGREGATED OPTION EXERCISES IN 1998 AND 1998 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12/31/98 (#) 12/31/98 ($)(1)(2)
------------ ------------------
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($)(1) UNEXERCISABLE UNEXERCISABLE
- - ---- ------------ --------------------- ------------- ---------------
<S> <C> <C> <C> <C>
A. A. Busch III....................... 211,736 7,170,775 1,136,415/ 36,697,857/
566,665 8,137,460
P. T. Stokes.......................... 114,190 4,482,415 628,618/ 22,282,148/
333,332 4,381,218
J. E. Jacob........................... 85,350 3,281,804 299,399/ 9,343,408/
159,999 2,378,727
J. H. Purnell......................... 156,124 4,007,584 280,583/ 9,274,057/
174,999 2,817,164
S. K. Lambright....................... 35,000 1,329,867 354,191/ 12,434,156/
179,999 2,503,727
<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 12/31/98
($66.1875).
</TABLE>
PENSION PLANS TABLE
<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--41 years and $2,880,000; Mr. Stokes--30 years and
$1,530,000; Mr. Jacob--5 years and $850,000; Mr. Purnell--34 years and $734,000;
and Mr. Lambright--21 years and $779,000.
23
<PAGE> 27
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 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. In
connection with the exercise by the Company of that option, the Company and the
Controlling Shareholders pursued arbitration to resolve a dispute concerning the
purchase price of the Diblo option shares, using the procedures specified in the
investment agreement. On September 4, 1998, the arbitration panel determined
that the Company would pay approximately $556 million (U.S.) for the Diblo
option shares. On September 14, 1998, the Company and the Controlling
Shareholders completed the purchase and sale of the Diblo option shares in
accordance with the decision of the arbitration panel, and the Company now holds
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
Lease provides that the Trustees have the responsibility for the maintenance and
care of the leased premises and the animals and personal property situated
thereon, and the Company is obligated to reimburse them for their expenses in
carrying out that responsibility. During the term of the Lease, the Company has
the right of first refusal to purchase the leased premises and also to purchase
the 23-acre tract referred to above. The Company also has the right, under
certain circumstances, to purchase the personal property covered by the Lease
and certain personal property located in Mr. Busch, Jr.'s former residence. For
the year 1998, the Trustees received,
24
<PAGE> 28
in the aggregate, from the Company under the Lease: (1) basic rent of $201,890,
(2) $392,007 as their share of the Company's income from concession operations,
and (3) $1,366,075 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 1998, ABI
paid or will pay under this lease $30,175 as annual rental and $231,583 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"), Tri-Eagle Sales, and City
Beverage, L.L.C. for the distribution of malt beverage products in Deerfield
Beach, Florida, and Fort Pierce and Ocala, Florida, Tallahassee, Florida, and
Kent, Washington, respectively. Double Eagle, which is owned by James B.
Orthwein, Jr. and Percy J. Orthwein II, who are sons of James B. Orthwein,
purchased $38,047,425 of products from ABI during 1998. 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
$24,443,324 of products from ABI during 1998. Tri-Eagle Sales is owned by Tripp
and Susan Busch Transou, the son-in-law and daughter of Mr. Busch III. Tri-Eagle
Sales purchased $21,080,666 of products from ABI during 1998. Steven Knight, the
son of Charles F. Knight, is the majority owner of City Beverage, L.L.C., which
purchased $14,839,439 of products from ABI during 1998. These distribution
agreements are ABI's standard distribution agreements.
In 1998, ABI entered into an agreement with McDonald Beverage, Inc., its
wholesaler for Lawrence and Leavenworth, Kansas, giving ABI the right to select
the purchaser of this wholesaler and determine the price of such a purchase. ABI
subsequently selected as purchaser Classic Eagle Distributing, L.L.C. For this
selection, Classic Eagle Distributing, L.L.C. paid to ABI a designation fee of
$479,000. In December, 1998, Classic Eagle Distributing, L.L.C. completed the
transaction by paying to the shareholders of McDonald Beverage, Inc. a purchase
price determined by ABI. ABI determined a price for this purchase consistent
with its appraised prices for other ABI wholesalers of similar size and
operating conditions. Stephen K. Lambright, Jr., the son of Stephen K.
Lambright, an executive officer of the Company, is an executive of Classic
Eagle. He and another individual have the right to acquire in the future a
controlling interest in Classic Eagle Distributing, L.L.C. The transaction was
reviewed and approved in advance by the Conflict of Interest Committee of the
Board of Directors. Classic Eagle Distributing, L.L.C. purchased $89,710 of
products from ABI for the nine-day period in 1998 during which it owned the
wholesaler, 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
1998 and are expected to provide similar services to the Company during 1999.
In November 1998, Ginnaire Rental, Inc. ("Ginnaire"), a corporation wholly
owned by Mr. Busch III, contracted to occasionally lease aircraft to the Company
for business use. For 1998, the Company paid $48,180 to Ginnaire pursuant to the
lease agreement. The leasing fee is an hourly rate intended to reimburse
Ginnaire for the pro rata share of maintenance costs, engine reserves and
aircraft insurance, plus excise and use taxes attributed to the Company's actual
use of the aircraft, without mark-up. The lease agreement was reviewed and
approved by the Conflict of Interest Committee of the Board of Directors. Prior
to the lease agreement, the Company occasionally used the personal aircraft of
Mr. Busch III for Company business. For 1998, the Company reimbursed Mr. Busch
$129,864 based on the manufacturer's published hourly rate for fuel, oil,
maintenance and other miscellaneous costs for operating the aircraft.
In the opinion of the Company's management Business Practices Committee and
the Board's Conflict of Interest Committee, the terms and conditions of the
foregoing transactions are at least as favorable to the
25
<PAGE> 29
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 12, 1999
26
<PAGE> 30
APPENDIX
Page 21 of the printed proxy contains a performance graph. The information
contained in the graph is depicted in the table that immediately follows
the graph.
<PAGE>31
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 Ports of Call at Sea World of
Florida, 7007 Sea World Drive, Orlando, Florida 32821, on April 28, 1999, 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 IN ITEM 1, FOR ITEMS 2 AND 3, AND AGAINST
ITEMS 4 THROUGH 9. 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
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE FOLD AND DETACH HERE
ADMISSION TICKET
[LOGO] ANHEUSER-BUSCH COMPANIES
Annual Meeting of Shareholders
April 28, 1999, 10:00 A.M. (local time) at Ports of Call
at Sea World of Florida, 7007 Sea World Drive,
Orlando, Florida 32821
<PAGE>32
ANHEUSER-BUSCH COMPANIES, INC. Please mark [X]
your votes as
indicated in
this example
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" Items 1 through 3.
- - --------------------------------------------------------------------------------
1 - ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to to vote for all nominees listed
the contrary below) below
[ ] [ ]
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name on the list below.)
01 John E. Jacob 02 Charles F. Knight
03 James B. Orthwein 04 Joyce M. Roche
2 - AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3 - APPROVAL OF INDEPENDENT ACCOUNTANTS
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote "AGAINST" Items 4 through 9.
- - --------------------------------------------------------------------------------
4 - SHAREHOLDER PROPOSAL CONCERNING OPTION EXERCISE PERIOD
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5 - SHAREHOLDER PROPOSAL CONCERNING OPTION EXERCISE PRICE
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6 - SHAREHOLDER PROPOSAL CONCERNING SHAREHOLDER RIGHTS PLAN
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
7 - SHAREHOLDER PROPOSAL CONCERNING BOARD COMPOSITION
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
8 - SHAREHOLDER PROPOSAL CONCERNING CLASSIFIED BOARD
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
9 - SHAREHOLDER PROPOSAL CONCERNING CHAIRMAN OF THE BOARD
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- - --------------------------------------------------------------------------------
I plan to attend the meeting YES [ ] NO [ ]
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Signature Signature Dated: , 1999
----------------------- ----------------- -------
SIGNATURE OF SHAREHOLDER(S) (Sign exactly as your name appears above; in
the case of shares held by joint owners, all joint owners should sign;
fiduciaries should indicate title and authority.)
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
-------------------------------------
YOU CAN VOTE IN ONE OF THREE WAYS:
-------------------------------------
1. Call toll-free 1-800-840-1208 on a touch tone telephone
24 hours a day-7days a week.
There is NO CHARGE to you for this call.
or
2. Vote by Internet at our Internet Address: http://www.eproxy.com/bud/
or
3. Mark, sign and date your proxy card and return
promptly in the enclosed envelope.
- - --------------------------------------------------------------------------------
IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET, PLEASE FOLLOW THE DIRECTIONS ON
THE YELLOW INSTRUCTION SHEET ENCLOSED
- - --------------------------------------------------------------------------------
HAVE YOUR PROXY CARD IN HAND
You will be asked to enter a Control Number, which is located in the box in the
lower right hand corner of this form.
Thank you for voting
- - --------------------------------------------------------------------------------
Each shareholder may be asked to present valid picture identification, such as
driver's license or employee identification badge, in addition to this admission
ticket.
PLEASE ADMIT: ADMISSION TICKET NON-TRANSFERABLE
--------------
CONTROL NUMBER
--------------
<PAGE>33
[LOGO] ANHEUSER-BUSCH COMPANIES
Two new ways to vote
=====================
Vote by Telephone
=====================
It's fast, convenient, and your vote is immediately
confirmed and posted.
Using a touch-tone phone
call 1-800-840-1208
Just follow these 4 easy steps:
1. Read the accompanying Proxy Statement.
2. Call the toll-free number, 1-800-840-1208
3. Enter your 11 digit Control Number located in the lower right corner on
your proxy card.
4. Follow the recorded instructions.
Your vote is important!
====================
Vote by Internet
====================
It's fast, convenient, and your vote is immediately
confirmed and posted.
http://www.eproxy.com/bud/
Just follow these 4 easy steps:
1. Read the accompanying Proxy Statement.
2. Go to website http://www.eproxy.com/bud/
3. Enter your 11 digit Control Number located in the lower right corner on
your proxy card.
4. Follow the recorded instructions.
Your vote is important!
Do not return Proxy Card if you are voting by telephone or Internet
<PAGE>34
VOTING INSTRUCTION CARD
Anheuser-Busch Companies, Inc.
These Voting Instructions Are 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 Ports of Call at Sea World of Florida, 7007 Sea World Drive, Orlando, Florida
32821, on April 28, 1999 at 10:00 a.m., local time, and at any adjournments
thereof.
WHEN PROPERLY EXECUTED AND RETURNED, THE SHARES REPRESENTED BY THIS VOTING
INSTRUCTION CARD 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 IN ITEM 1, FOR ITEMS 2 AND 3, AND AGAINST ITEMS 4
THROUGH 9.
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
-------------------------------------
YOU CAN VOTE IN ONE OF THREE WAYS:
-------------------------------------
1. Call toll-free 1-800-840-1208 on a touch tone telephone
24 hours a day-7 days a week by not later than April 23, 1999.
There is NO CHARGE to you for this call.
or
2. Vote by Internet at our Internet Address: http://www.eproxy.com/bud/
by not later than April 23, 1999.
or
3. Mark, sign and date your voting instruction card and return promptly
in the enclosed envelope.
ChaseMellon Shareholder Services, L.L.C. must receive your executed voting
instruction card not later than April 23, 1999.
- - --------------------------------------------------------------------------------
IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET, PLEASE FOLLOW THE DIRECTIONS ON
THE YELLOW INSTRUCTION SHEET ENCLOSED
- - --------------------------------------------------------------------------------
HAVE YOUR VOTING INSTRUCTION CARD IN HAND
You will be asked to enter a Control Number, which is located in the box in
the lower right hand corner on the reverse side of this form.
Thank you for voting
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
ADMISSION TICKET
[LOGO] ANHEUSER-BUSCH COMPANIES
Annual Meeting of Shareholders
April 28, 1999, 10:00 A.M. (local time) at Ports of Call at Sea World of
Florida, 7007 Sea World Drive, Orlando, Florida 32821
<PAGE>35
ANHEUSER-BUSCH COMPANIES, INC. Please mark [X]
your votes as
indicated in
this example
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" Items 1 through 3.
- - --------------------------------------------------------------------------------
1 - ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to to vote for all nominees listed
the contrary below) below
[ ] [ ]
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name on the list below.)
01 John E. Jacob 02 Charles F. Knight
03 James B. Orthwein 04 Joyce M. Roche
2 - AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3 - APPROVAL OF INDEPENDENT ACCOUNTANTS
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote "AGAINST" Items 4 through 9.
- - --------------------------------------------------------------------------------
4 - SHAREHOLDER PROPOSAL CONCERNING OPTION EXERCISE PERIOD
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5 - SHAREHOLDER PROPOSAL CONCERNING OPTION EXERCISE PRICE
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6 - SHAREHOLDER PROPOSAL CONCERNING SHAREHOLDER RIGHTS PLAN
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
7 - SHAREHOLDER PROPOSAL CONCERNING BOARD COMPOSITION
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
8 - SHAREHOLDER PROPOSAL CONCERNING CLASSIFIED BOARD
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
9 - SHAREHOLDER PROPOSAL CONCERNING CHAIRMAN OF THE BOARD
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- - --------------------------------------------------------------------------------
I plan to attend the meeting YES [ ] NO [ ]
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Signature Dated: , 1999
------------------------------------------------- ---------
SIGNATURE OF PLAN PARTICIPANT (Sign exactly as your name appears above.)
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
[LOGO] ANHEUSER-BUSCH COMPANIES
- - --------------------------------------------------------------------------------
To Participants in the Anheuser-Busch Deferred
Income Stock Purchase and Savings Plans
Enclosed with this voting instruction form are the notice and proxy
statement for the Annual Meeting of Shareholders of Anheuser-Busch Companies,
Inc. which will be held on April 28, 1999. The number of shares shown on this
voting instruction 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 voting instructions by not later
than April 23, 1999. If your voting instructions are not received by April 23,
1999, 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 provide voting instructions the plan trustee will vote
shares you are entitled to vote.
If you plan to attend the Annual Meeting, please mark the appropriate box
on this voting instruction form. Present the ticket below 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.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Each shareholder may be asked to present valid picture identification, such as
driver's license or employee identification badge, in addition to this admission
ticket.
PLEASE ADMIT: ADMISSION TICKET NON-TRANSFERABLE
--------------
CONTROL NUMBER
--------------
<PAGE>36
[LOGO] ANHEUSER-BUSCH COMPANIES
Two new ways to vote
=====================
Vote by Telephone
=====================
It's fast, convenient, and your vote is immediately
confirmed and posted.
Using a touch-tone phone
call 1-800-840-1208
Just follow these 4 easy steps:
1. Read the accompanying Proxy Statement.
2. Call the toll-free number, 1-800-840-1208
3. Enter your 11 digit Control Number located in the lower right corner on
your proxy card.
4. Follow the recorded instructions.
Your vote is important!
====================
Vote by Internet
====================
It's fast, convenient, and your vote is immediately
confirmed and posted.
http://www.eproxy.com/bud/
Just follow these 4 easy steps:
1. Read the accompanying Proxy Statement.
2. Go to website http://www.eproxy.com/bud/
3. Enter your 11 digit Control Number located in the lower right corner on
your proxy card.
4. Follow the recorded instructions.
Your vote is important!
Do not return Proxy Card if you are voting by telephone or Internet
<PAGE>37
[LOGO] ANHEUSER-BUSCH COMPANIES
April 9, 1999
Dear Shareholder(s):
The time is approaching for the Annual Meeting of the Shareholders of
Anheuser-Busch Companies, Inc. on April 28, 1999, and our vote tabulator has not
received your Proxy.
It is important that your shares be represented at the meeting. Please
vote in one of the three ways as described on the attached duplicate Proxy as
soon as possible.
Sincerely,
JoBeth G. Brown
Vice President and Secretary
<PAGE>38
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 Ports of Call at Sea World of
Florida, 7007 Sea World Drive, Orlando, Florida 32821, on April 28, 1999, 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 IN ITEM 1, FOR ITEMS 2 AND 3, AND AGAINST
ITEMS 4 THROUGH 9. 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
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE FOLD AND DETACH HERE
ADMISSION TICKET
[LOGO] ANHEUSER-BUSCH COMPANIES
Annual Meeting of Shareholders
April 28, 1999, 10:00 A.M. (local time) at Ports of Call
at Sea World of Florida, 7007 Sea World Drive,
Orlando, Florida 32821
<PAGE>39
ANHEUSER-BUSCH COMPANIES, INC. Please mark [X]
your votes as
indicated in
this example
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" Items 1 through 3.
- - --------------------------------------------------------------------------------
1 - ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to to vote for all nominees listed
the contrary below) below
[ ] [ ]
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name on the list below.)
01 John E. Jacob 02 Charles F. Knight
03 James B. Orthwein 04 Joyce M. Roche
2 - AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3 - APPROVAL OF INDEPENDENT ACCOUNTANTS
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote "AGAINST" Items 4 through 9.
- - --------------------------------------------------------------------------------
4 - SHAREHOLDER PROPOSAL CONCERNING OPTION EXERCISE PERIOD
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5 - SHAREHOLDER PROPOSAL CONCERNING OPTION EXERCISE PRICE
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6 - SHAREHOLDER PROPOSAL CONCERNING SHAREHOLDER RIGHTS PLAN
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
7 - SHAREHOLDER PROPOSAL CONCERNING BOARD COMPOSITION
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
8 - SHAREHOLDER PROPOSAL CONCERNING CLASSIFIED BOARD
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
9 - SHAREHOLDER PROPOSAL CONCERNING CHAIRMAN OF THE BOARD
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- - --------------------------------------------------------------------------------
I plan to attend the meeting YES [ ] NO [ ]
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Signature Signature Dated: , 1999
---------------------- ----------------- ---------
SIGNATURE OF SHAREHOLDER(S) (Sign exactly as your name appears above; in
the case of shares held by joint owners, all joint owners should sign;
fiduciaries should indicate title and authority.)
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
-------------------------------------
YOU CAN VOTE IN ONE OF THREE WAYS:
-------------------------------------
1. Call toll-free 1-800-840-1208 on a touch tone telephone
24 hours a day-7days a week.
There is NO CHARGE to you for this call.
or
2. Vote by Internet at our Internet Address: http://www.eproxy.com/bud/
or
3. Mark, sign and date your proxy card and return
promptly in the enclosed envelope.
- - --------------------------------------------------------------------------------
IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET, PLEASE FOLLOW THE DIRECTIONS ON
THE YELLOW INSTRUCTION SHEET ENCLOSED
- - --------------------------------------------------------------------------------
HAVE YOUR PROXY CARD IN HAND
You will be asked to enter a Control Number, which is located in the box in the
lower right hand corner of this form.
Thank you for voting
- - --------------------------------------------------------------------------------
Each shareholder may be asked to present valid picture identification, such as
driver's license or employee identification badge, in addition to this admission
ticket.
PLEASE ADMIT: ADMISSION TICKET NON-TRANSFERABLE
--------------
CONTROL NUMBER
--------------
<PAGE>40
[LOGO] ANHEUSER-BUSCH COMPANIES
Two new ways to vote
=====================
Vote by Telephone
=====================
It's fast, convenient, and your vote is immediately
confirmed and posted.
Using a touch-tone phone
call 1-800-840-1208
Just follow these 4 easy steps:
1. Read the accompanying Proxy Statement.
2. Call the toll-free number, 1-800-840-1208
3. Enter your 11 digit Control Number located in the lower right corner on
your proxy card.
4. Follow the recorded instructions.
Your vote is important!
====================
Vote by Internet
====================
It's fast, convenient, and your vote is immediately
confirmed and posted.
http://www.eproxy.com/bud/
Just follow these 4 easy steps:
1. Read the accompanying Proxy Statement.
2. Go to website http://www.eproxy.com/bud/
3. Enter your 11 digit Control Number located in the lower right corner on
your proxy card.
4. Follow the recorded instructions.
Your vote is important!
Do not return Proxy Card if you are voting by telephone or Internet
