BEN & JERRY'S HOMEMADE, INC.
30 Technology Drive
Suite #1
South Burlington, Vermont 05403
May 22, 1996
Dear Stockholders:
Enclosed is a proxy statement for the 1996 Annual Meeting of Stockholders,
which will be held on Saturday, June 22, 1996 at Sugarbush North Resort in
Warren, Vermont, 05674 at 10:00 in the morning. Also enclosed are two proxy
cards, one for voting Class A common shares and one for voting Class B common
shares, and a copy of the 1995 Annual Report to Stockholders.
On the following pages you will find a Notice of 1996 Annual Meeting and
Proxy Statement. The Notice of Annual Meeting lists two items of formal business
to address at the Annual Meeting.
We ask your support in the election of directors and in approving Item 2.
We will follow the formal business with time for discussion, and we invite
your comments, questions and ideas.
After the meeting, there will be a one day party. This year we are again
calling it the One World One Heart Festival, and it will be a wonderful one day
celebration. The festival will be held on Saturday, June 22nd and will be filled
with music, fun, social activism and surprises. We hope you make plans to join
us.
Sincerely,
/s/Ben Cohen
Ben Cohen
Chairperson
/s/Robert Holland, Jr.
Robert Holland, Jr.
President and CEO
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
30 Technology Drive
Suite #1
South Burlington, Vermont 05403
BEN & JERRY'S HOMEMADE, INC.
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders of Ben
& Jerry's Homemade, Inc. will be held at the Sugarbush North Resort in Warren,
Vermont, 05674, on Saturday the 22nd of June at 10:00 a.m., Vermont time, for
the following purposes:
1. To fix the number of directors at ten and to elect ten directors to serve
for the next year.
2. To consider and act upon a proposal to ratify the selection of Ernst &
Young LLP as independent auditors for the 1996 fiscal year.
3. To transact any other business that may properly be brought before the
meeting or any adjourned session thereof.
Stockholders of record at the close of business on May 1, 1996 are entitled
to notice of, and to vote at, the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Frances Rathke, Secretary
South Burlington, Vermont
May 22, 1996
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXIES (ONE FOR CLASS A COMMON
STOCK AND ONE FOR CLASS B COMMON STOCK) AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
2
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Corporate Offices Mailing Address:
30 Technology Drive, Suite #1, South Burlington, VT 05403
1996 ANNUAL MEETING OF STOCKHOLDERS
June 22, 1996
PROXY STATEMENT
The enclosed form of proxy (one for Class A Common Stock and one for Class
B Common Stock) is solicited on behalf of the Board of Directors of Ben &
Jerry's Homemade, Inc. ("Ben & Jerry's" or the "Company") for use at the 1996
Annual Meeting of Stockholders to be held at the Sugarbush North Resort in
Warren, Vermont on Saturday, June 22nd, 1996 at 10:00 a.m., Vermont time, and at
any adjourned session thereof (the "Meeting").
The expense of soliciting proxies will be borne by the Company. Directors,
officers and regular employees of the Company (who will receive no compensation
therefor in addition to their regular salaries) may communicate directly or by
mail, telephone or other communication methods with shareholders to solicit
proxies. The Company will also reimburse brokers and other persons for their
reasonable charges and expenses in forwarding soliciting materials to their
principals or other beneficial owners of capital stock of Ben & Jerry's.
Any proxy may be revoked prior to its exercise (i) by written notice
received by the Secretary of the Company at its mailing address set forth above,
(ii) by execution of a later-dated proxy, or (iii) by attending the Meeting and
voting the shares covered by the proxy in person.
Stockholders of record at the close of business on May 1, 1996 are entitled
to receive notice of and to vote at the Meeting. Each share of the Company's
Class A Common Stock and Class A Preferred Stock (the "Preferred Stock")
outstanding on the record date is entitled to one vote, and each share of the
Company's Class B Common Stock is entitled to ten votes. Each share of Class A
Preferred Stock is entitled to one vote. As of the close of business on May 1,
1996 there were outstanding and entitled to vote 6,274.666 shares of Class A
Common Stock, 910,589 shares of Class B Common Stock and 900 shares of Class A
Preferred Stock.
The Company's Annual Report for 1995 is being mailed to stockholders with
this Proxy Statement. It is expected that this Proxy Statement will be mailed to
stockholders on or about May 22, 1996.
3
<PAGE>
ITEM #1 ELECTION OF DIRECTORS
Unless authority to do so has been withheld or limited in the proxy, it is
the intention of the persons named as proxies to vote the shares to which the
proxy relates to fix the number of directors at ten and to elect the nominees
named below. Management knows of no reason why any nominee should refuse or be
unable to serve. However, should any of the nominees refuse or be unable to
serve, it is the intention of the persons named as proxies to act in respect to
the filling of that office by voting the shares to which the proxy relates,
unless authority to do so has been withheld or limited in the proxy, for the
election of such other person or persons as may be designated by the Board of
Directors or, in the absence of such designation, in such other manner as they
may, in their discretion, determine. In no event will the proxy be voted for any
number of directors greater than ten. All nominees for election, other than Jon
R. Katzenbach and Jennifer Henderson, were previously elected Directors of the
Company at the 1995 Annual Meeting.
Set forth below is information relating to the nominees for the Board of
Directors. Each Director elected will serve until his/her successor is elected
and qualified or until his/her earlier resignation or removal. None of the
nominees for Director is related to any other nominee or to any executive
officer of the Company by marriage, adoption or blood.
<TABLE>
Name Age Principal Occupation or Employment Director Since
- ---- --- ---------------------------------- --------------
<S> <C> <C>
Elizabeth Bankowski 48 Director of Social Mission 1990
Development of Ben & Jerry's
Homemade, Inc. since June 1991.
Private political consultant
since January 1990. Chief of Staff
for Vermont Governor Madeline M.
Kunin from 1985 to October 1989.
Ben Cohen 44 Chairperson of the Board of Directors 1977
since February 1989. Chief Executive
Officer of Ben & Jerry's Homemade, Inc.
from January 1, 1991 to January 30, 1995.
President from 1983 until February 1989.
Vice President from 1977 to 1983. One
of the Company's two founders in 1977.
Jeffrey Furman 52 Consultant to Ben & Jerry's Homemade, 1982
Inc. since March, 1991. Secretary to
Ben & Jerry's Homemade, Inc. from 1982
to 1991. Vice President of Ben & Jerry's
Homemade, Inc. from 1982 to March 1990.
Senior Consultant, Raven Management
Associates from 1976 to 1984.
Jerry Greenfield 44 Vice Chairperson of Ben & Jerry's 1990
Homemade, Inc. since 1990. Director
of Promotions from 1987 to 1990.
Consultant to the Company from 1985
to 1986. One of the Company's two
founders in 1977.
4
<PAGE>
Jennifer Henderson 48 Ms. Henderson is President of Strategic
Interventions in Washington, DC
Additionally, Ms. Henderson is Director
of Training for the Center for Community
Change also in Washington, DC Ms. Henderson
was previously Executive Director of North
Carolina Hunger Coalition in Fayetteville, NC.
Ms. Henderson sits on the boards of Twenty-
First Century Foundation; Nonprofit Management
Association; Southern Organizing Committee;
and Young Women's Project. Ms. Henderson
earned her B.A. in Politics and Journalism from
North Carolina State University.
Robert Holland Jr. 55 President and Chief Executive Officer 1995
of the Company since January 30, 1995.
In March 1995, he was elected a Director
of the Company. He had been Chairperson
and Chief Executive Officer of ROHKER-J,
a consulting firm for Fortune 500
companies since 1991. Mr. Holland was a
Director and Senior Vice President of
Gilreath Manufacturing, Inc. from
1987 to 1990 and was appointed Chairperson
and Chief Executive Officer in March 1990
until 1991. From 1984 to 1987, Mr. Holland
was Chairperson and Chief Executive Officer
of City Marketing which engaged in beverage
distribution. From 1968 through 1991,
Mr. Holland was an associate and then partner
with McKinsey & Company, Inc. where he
managed projects for global concerns involving
operational, strategic and marketing issues.
Mr. Holland is Chairperson of the Board of
Trustees at Spelman College, a trustee of
Atlanta University Center and Mutual of New
York and is a member of the Board of Directors
of Frontier Corporation, TrueMark Manufacturing
Company and the Harlem Junior Tennis Program.
Jon R. Katzenbach 63 Mr. Katzenbach is a Director of McKinsey & Company,
Inc. where he has been associated since 1959. At
McKinsey, Mr. Katzenbach's primary areas of expertise
and interest have been strategy, organization, and
leadership/change issues of large institutions,
serving top executives of leading privately and
publicly held companies. Mr. Katzenbach co-authored
the book The Wisdom of Teams:Creating the High
Performance Organization. Mr. Katzenbach attended
Brigham Young University, graduated with distinction
from Stanford University with a B.A. in Economics,
and earned his M.B.A. from Harvard University where
he was a Baker Scholar.
5
<PAGE>
Fred Lager 41 Consultant to Ben & Jerry's Homemade, Inc. 1982
since February 1991. President, Chief
Executive Officer and Treasurer from
February 1989 to 1991. General Manager and
Treasurer from 1982 until February 1989. Mr. Lager
is a director of Working Assets Funding Service and
Whole Foods Market, Inc. , the largest chain of
natural food supermarkets in the country.
Frederick A. Miller 49 Since 1985, he has been President of The 1992
Kaleel Jamison Consulting Group, Inc.,
a strategic culture change and management
consulting firm he joined in 1979. Prior to
joining the firm he was Assistant Director
of Corporate Training at Connecticut
General Life Insurance Company (now Cigna).
Henry Morgan 70 Mr. Morgan serves as Chairperson of the 1987
Compensation Committee and as a member
of the Audit Committee of the Board of Directors.
He is President and sole director of Symbolics, Inc.,
a corporation which has filed for protection under
Chapter 11 of the United States Bankruptcy Code.
Mr. Morgan is also a director of Cambridge
Bancorporation.
</TABLE>
There were eight meetings of the Board of Directors in 1995. Directors who
are not employees or full-time consultants of the Company receive $9,000 per
year plus expenses. The Company has also adopted the 1995 Non-Employee Directors
Plan for Stock in Lieu of Directors Cash Retainer under which directors may
elect to be paid annually, in lieu of the cash retainer for Board services,
shares of common stock having a fair market value (as of the date of payment)
equal to the amount of such annual retainer. This plan was not implemented with
respect to the year 1995.
The Board of Directors has an Audit Committee, on which Messrs. Chandler,
Lager (Chairperson) and Morgan, none of whom are employees of the Company,
serve. This Committee met two times in 1995. The Audit Committee reviews with
management and the Company's independent public accountants the Company's
financial statements, the accounting principles applied in their preparation,
the scope of the audit, any comments made by the accountants upon the financial
condition of the Company and its accounting controls and procedures, and such
other matters as the Committee deems appropriate.
The Board of Directors also has a Compensation Committee, which reviews
salary and related compensation matters relating to officers of the Company,
reviews the compensation of all executive officers of the Company, makes
recommendations to the Board regarding policy changes related to compensation,
and administers certain compensation plans, including: The 1985 Stock Option
Plan; The 1995 Equity Incentive Plan; and the Employee Stock Purchase Plan.
Messrs. Chandler, Miller, and Morgan (Chairperson), none of whom are employees
of the Company, serve on this Committee and it met four times in 1995.
6
<PAGE>
Recommendation of the Board of Directors
The Board of Directors recommends that the stockholders vote to fix the
number of directors at ten and for each of the ten nominees.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the cash compensation paid by the Company in
Fiscal Years 1993 - 1995 as well as certain other compensation paid, awarded or
accrued for those years to the Company's Chief Executive Officer (Ben Cohen was
CEO prior to Robert Holland's election in January 1995) and the Company's other
executive officers at the end of the 1995 fiscal year whose total salary and
bonuses for 1995 exceeded $100,000:
<TABLE>
Long-Term Compensation
Annual Compensation Awards Payouts
------------------- ------------------------------------
Other Securities All
Name and Annual Restricted Underlying Other
Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus(2) ation(4) Awards(3) SARS Payouts sation(5)
- -------- ---- ------ -------- -------- --------- ---- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Ben Cohen 1995 $132,500 -- $2,195
Chairperson 1994 $132,500 -- $2,650
and CEO(1) 1993 $133,212 -- $2,664
Jerry Greenfield 1995 $132,500 -- $2,195
Vice Chairperson 1994 $132,745 -- $2,655
1993 $132,517 -- $2,650
Robert Holland, Jr. 1995 $225,962 $100,000 $180,000 --
CEO, President and
Director
Frances Rathke 1995 $125,000 $1,281 30,000 $2,260
CFO, Treasurer 1994 $121,398 $611 $2,440
and Secretary 1993 $110,000 $1,581 $2,232
Elizabeth Bankowski 1995 $125,000 $745 $14,341 $21,360 5,000 $2,267
Director of Social 1994 $115,803 $328 $2,323
Mission Development 1993 $105,000 $694 $2,114
<FN>
(1) Ben Cohen was CEO prior to January 31, 1995.
(2) "Bonus" includes discretionary distributions under the Company's profit
sharing plan pursuant to which a cash bonus was awarded to all employees (other
than co-founders, Ben Cohen and Jerry Greenfield, CEO Robert Holland, and Senior
Director of Operations Bruce Bowman). Robert Holland was awarded a bonus in
accordance with his employment contract of $100,000 for the year 1995.
(3) "Restricted Stock Awards" includes restricted stock awards of 2000 shares
made in 1995. No other restricted stock awards were made in 1993-1995, or are
outstanding. Award was vested at date of grant.
(4) "Other Annual Compensation" consists of gross-up payments for tax
liabilities incurred on the restricted stock award granted in 1995.
(5) "All Other Compensation" includes company contributions to 401(K) plans.
</FN>
</TABLE>
7
<PAGE>
Option/SAR Grants in 1995
The following table shows all grants of options to the Named Executive
Officers of Ben & Jerry's Homemade, Inc. in 1995. Pursuant to the Securities and
Exchange Commission (the "SEC") rules, the table also shows the potential
realized value of the options assuming the Company's stock price appreciates
annually by 5% and 10% respectively from the date of grant until the end of the
option term (10 years). These rates are mandated by the SEC rules and do not
represent the Company's estimate or projection of the future Common Stock price.
The Company does not agree that the value of the option can properly be
determined by this method.
<TABLE>
Potential
Realizable
Value at
Percentage Assumed Annual
of Total Rates of
Options/ Stock Price
SARS Exercise Appreciation
Options/ Granted to or for Option Term
SARS Employees Base Price Expiration
Granted in 1995 (per share) Date 5% 10%
------- ------- ----------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Ben Cohen ......... 0 0 0 0 0 0
Jerry Greenfield 0 0 0 0 0 0
Robert Holland, Jr 180,000 75.00% $ 10.81 1/29/03 $1,223,073 $3,101,104
Frances Rathke .... 30,000 12.50% $10.63-$14.00 3/31/04 $ 253,539 $ 642,517
Elizabeth Bankowski 5,000 2.08% $ 10.63 3/31/04 $ 33,326 $ 84,707
</TABLE>
<TABLE>
Aggregated Option/SAR Exercises in 1995 and 1995 Year-End
Option/SAR Values
Shares Value of Unexercised
Acquired Number of Unexercised In-The-Money Options/
on Options/SARS at 12/30/95 SARS at 12/30/95
Exercise Value ------------------------ ----------------
(#) Realized Exercisable Unexercisable Exercisable Unexercisable
--- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ben Cohen 0 0 0 0 0 ---
Jerry Greenfield 0 0 0 0 0 ---
Robert Holland, Jr. 0 0 20,000 160,000 $78,750 $630,000
Frances Rathke 0 0 2,500 28,685 $10,300 $29,050
Elizabeth Bankowski 0 0 2,500 3,470 $10,300 $10,300
</TABLE>
8
<PAGE>
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors is composed of three
independent, non-employee directors who have no interlocking relationships as
defined by the Securities and Exchange Commission and whose names appear below.
The Committee is responsible for reviewing salary and related compensation
matters relating to the Chief Executive Officer and the other officers of the
Company and making recommendations to the Board regarding compensation policy
changes for the Company. The Committee also administers the Company's stock
option plans: The 1985 Option Plan (under which stock options were granted for
the first time in 1994); The 1995 Equity Incentive Plan (under which stock
options were granted for the first time in 1995); The 1991 Restricted Stock Plan
(under which a restricted stock award was made in 1995); The 1995 Non-Employee
Directors' Plan for Stock in Lieu of Directors' Cash Retainer (under which no
shares were awarded in 1995); and the 1986 Employee Stock Purchase Plan.
General Compensation Philosophy
The Company recently hired, Katherine Greenleaf, formerly a consultant to
the Company, with responsibility for human resources and retail operations. The
Company is presently engaged in a review and reformulation of its entire
compensation programs, for presentation to the Compensation Committee and the
Board of Directors. The 1995 Equity Incentive Plan, adopted at the 1995 Annual
Meeting, is a key element in the program.
The Company operates in the competitive environment of the super premiums
ice cream and frozen dessert industry. While applying a principle of salary
compression and "linked prosperity", the Company strives to maintain
compensation programs that allow the Company to respond to the competitive
pressures within this industry. The Company's compensation philosophy is to
offer compensation opportunities linked to the Company's three-part mission,
individual performance and overall contribution to the Company's success and the
enhancement of shareholder value. These compensation opportunities are intended
to enable the Company to attract, retain and motivate the people necessary to
ensure the Company's long-term growth, both financial and non-financial (i.e.
social performance). At the officer level, the Company has, since January 1995,
hired a Chief Executive Officer and hired senior management in the areas of
operations (1995), marketing and sales (1996) and human resources and retail
operations (1996), supplementing senior management in the financial and social
mission areas. Options were granted to all individuals who were senior
management officers in 1995.
Compensation Components
It is the Committee's objective to have a substantial portion of the Chief
Executive Officer's compensation contingent ("at risk") upon the Company's
successful performance, as well as his or her contribution to the Company's
success in meeting its three-part mission, balancing both short and long-term
goals. The compensation program for the Company's Chief Executive Officer,
effective January 30, 1995, consists of three main components: 1a base salary; 2
an annual bonus; and, 3 long-term incentives. The second and third elements
constitute the "at risk" portion of the Chief Executive Officer's overall
compensation program. These three components are in addition to the Company's
employee benefits, which include hospital and health insurance, life insurance,
401(k) Retirement Plan and Employee Stock Purchase Plan.
9
<PAGE>
Base Salary. The Committee annually reviews the base salary of the Chief
Executive Officer and other officers. In determining salary adjustments, the
Committee considers the Company's success in achieving the three-part mission
objectives, the Officer's individual performance, and the Officer's base salary
in relation to the lower-to-mid end of the competitive range of pay for the
position.
Annual Incentive Bonus. The annual incentive bonus is the first "at risk"
element in the Company's Chief Executive Officer compensation program. At the
beginning of each year, the Board of Directors is to establish the three-part
mission objectives for that year, including business plan revenue and
profitability targets and non-financial objectives. The Committee then
establishes an annual incentive bonus award target for the CEO. In 1995 an
annual incentive bonus was also established for the Senior Director of
Operations.
Long-Term Incentive Program. The long-term incentive program is the second
"at risk" element of the Company's compensation program in which it is intended
that the Chief Executive Officer, all other executive officers and all key
employees will be eligible to participate. The Committee may also grant, from
time to time, options across the board to all levels of employees. The Committee
views the granting of stock options as a significant method of aligning
management's long-term interests with those of the shareholders. This approach
brings into balance short and long-term compensation with the Company's goals,
fosters the retention of key executive and management personnel, and incents the
achievement of superior performance at the different employee levels within the
Company. Long-term incentive awards to executives will be based upon criteria
which include an individual's current position with the Company, total
compensation, the executive's performance in the recent period, expected
contributions to the achievement of the Company's long-term performance goals,
and competitive practice. Following the March 1994 grant of stock options for an
aggregate of 177,9127 shares of common stock to employees across the board, the
Committee in 1995 made a restricted stock award of 2,000 shares and made stock
option grants for an aggregate of 240,000 shares to Company officers.
1995 Compensation of the Chief Executive Officer
For the year 1995, Mr. Holland, the President and Chief Executive Officer,
received base salary at the rate of $250,000 and received an annual incentive
award of $100,000. On the date of his hiring, Mr. Holland received non-incentive
stock options to purchase 180,000 shares of common stock at an exercise price of
$10 13/16 per share, equal to the fair market value at the date of grant and
becoming exercisable over a term of eight years (subject to acceleration by the
Committee).
Merritt C. Chandler
Frederick A. Miller
Henry Morgan
10
<PAGE>
Certain Relationships and Related Transactions
Mr. Cohen, Chairperson and director, has an employment agreement which has
been extended for a term ending April 30, 1997. The agreement provided for a
base salary, which may be increased by the Board (the Board has currently fixed
such base salary at $150,000), and an incentive bonus at the discretion of the
Board. The agreement also provides for certain medical benefits and a covenant
not to compete during the term of the agreement and for a two year period
thereafter, in consideration of payment by the Company (except as otherwise
provided in the agreement) of the then-current base salary during the two-year
period.
During the year ended December 30, 1995, the Company purchased Rainforest
Crunch cashew-brazilnut buttercrunch candy to be included in Ben & Jerry's
Rainforest Crunch flavor ice cream for an aggregate purchase price of
approximately $1,500,000 from Community Products, Inc., a company of which
Messrs. Cohen and Furman are the principal stockholders and of which Mr. Cohen
is also president. Mr. Lager was a director until January 1994. The candy was
purchased from Community Products, Inc. at competitive prices and on standard
terms and conditions. Although the Company expects to purchase additional
quantities of candy from Community Products, Inc., termination of Ben & Jerry's
relationship with this supplier would not have a material effect on the
Company's business.
Mr. Greenfield, Vice Chairperson, a director and also a director and
President of Ben & Jerry's Foundation, has an employment agreement which has
been extended for a term ending April 30, 1997. The agreement provides for a
base salary, which may be increased by the Board (the Board has currently fixed
such base salary at $150,000), and an incentive bonus at the discretion of the
Board. The agreement also provides for certain medical benefits and a covenant
not to compete during the term of the agreement and for a two-year period
thereafter, in consideration of payment by the Company (except as otherwise
provided in the agreement) of the then-current base salary during the two-year
period.
Mr. Holland was hired January 30, 1995 as President, Chief Executive
Officer and as a Director in March 1995. Under Mr. Holland's Employment
Agreement which has a term of four years, Mr. Holland is entitled to a base
salary of $250,000 per year, subject to increase from time to time by the Board
of Directors, and an annual incentive award payable in cash or vested shares of
Class A Common Stock as determined by the Compensation Committee of the Board of
Directors in an amount up to but not exceeding $125,000, with all or such
portion thereof to be earned on a sliding scale based upon the extent to which
the Committee determines that Mr. Holland has met in each fiscal year the
objectives previously established for that year by the Compensation Committee.
For 1995, the Incentive Award Objectives were financial objectives and for years
1996 and beyond the Objectives will be financial and non-financial in nature
(i.e. Internal Culture and External Social Responsibility, etc.). Under the
Company's 1985 Stock Option Plan, Mr. Holland received non- incentive stock
options to purchase 180,000 shares of Class A Common Stock of the Company at an
exercise price of $10 13/16 per share equal to the fair market value at the date
of grant. The options have a term of eight years and become exercisable at the
rate of 20,000 shares a year for the first four years, and thereafter at the
rate of 25,000 a year so long as Mr. Holland is an employee of the Company under
this Agreement, provided that, in lieu of said "regular" annual vesting of
options during the fifth through eighth years, options for 25,000 shares which
are at the time the latest options to become "regularly" exercisable by the
passage of time become exercisable, by acceleration, upon the Committee's
determination by March 15th of each year, commencing March 15, 1996, that Mr.
Holland has met the Non-Financial Option Objectives previously established for
the prior fiscal year by the Committee. No options have been accelerated. The
11
<PAGE>
agreement provides for termination of employment by the Company for cause (as
defined) and also provides for termination by the Company other than for cause
or by Mr. Holland for good reason (as defined), in each of which events Mr.
Holland is entitled to receive for the remaining period of the four year term
his base salary and an amount equal to the average Incentive Award that was
earned prior to termination under the Agreement times the period remaining and
all options which could have become exercisable upon "regular" annual vesting
prior to the end of the four year term shall be accelerated and become vested
upon such termination. The Agreement also provides that during the term and for
two years thereafter Mr. Holland will not compete with the Company.
Subsequent to year-end 1990, Messrs. Lager and Furman retired as employees
of the Company and as President (and Chief Executive Officer) and Secretary,
respectively. Messrs. Lager and Furman first provided services to the Company in
1982 and 1978, respectively, and have been instrumental, along with the co-
founders of the Company, in its emergence as a leading super premium ice cream
business and a socially responsible Vermont company. The Board has approved the
following employment termination arrangements for Messrs. Lager and Furman, each
of whom remains a director of the Company and a consultant to the Company.
Under the terms of the Employment Agreement dated January 1, 1984 between
the Company and Mr. Lager, Mr. Lager is entitled, in consideration of his
covenant not to compete for the period of two years after termination of
employment, to severance compensation during that two year period at his annual
base salary level in effect on the date of termination of employment ($100,000
per year). The Employment Agreement was amended (i) to extend the termination
date from December 31, 1989 to February 2, 1991, (ii) to provide that the
Company pay for family health insurance coverage under the Company's regular
employee health insurance plan for a twelve year period after termination, (iii)
to transfer to Mr. Lager a $1 million life insurance policy presently held by
the Company on Mr. Lager's life and to provide for continued payment by the
Company of the premiums due on the life insurance policy (currently $11,745 per
year) until the date when the policy becomes "self-funding", which is estimated
to be December 31, 2002, and (iv) to extend the non-compete provisions for an
additional three years (without any additional payment) beyond the two-year
post-employment non-competition period provided for in the original Employment
Agreement.
Under the terms of a Consulting Agreement dated as of January 17, 1991 (the
"Original Consulting Agreement"), Mr. Lager agrees to furnish management
consulting services to the Company upon the Company's request (up to
approximately 40 hours per month, subject to holidays and vacations) for a five-
year period, commencing February 3, 1991, with compensation being paid at the
rate of $75,000 for the first year, and with $5,000 annual increases for each of
the following four years. Under the Agreement Mr. Lager has agreed not to
compete with the Company during the term of and for a period of two years
following the expiration of the Agreement.
Mr. Lager's Original Consulting Agreement was amended in 1994 and 1995 to
reflect additional consulting services during the period the Company was
searching for a new Chief Executive Officer and while Mr. Lager was Acting
Director of Manufacturing. Mr. Lager furnished full-time management consulting
services and was compensated at the rate of $3,300 per week plus reasonable
out-of-pocket expenses for the period July 1, 1994 through December 31, 1994.
For the period January 1, 1995 through August 31, 1995, Mr. Lager was
compensated at the rate of $4,615 per week in addition to payments at the rate
due under the Original Consulting Agreement, plus reasonable out-of-pocket
expenses. Commencing September 1995, Mr. Lager is providing only part-time
consulting services called for under the Original Consulting Agreement at the
rate provided therein, which is now $8,333 per month, plus reasonable
out-of-pocket expenses. In 1994 and 1995, Mr. Lager was paid $147,217 and
$235,902. The term of his Original Consulting Agreement, as extended by the
1994-1995 amendment, is July 31, 1996.
12
<PAGE>
Under the terms of a Severance and Non-Competition Agreement dated as of
December 31, 1990, Mr. Furman was entitled to two-year severance/non-competition
payments similar to those paid to Mr. Lager. Under the terms of the Agreement,
Mr. Furman was entitled, as severance and in consideration of his covenant not
to compete for a period of five years after termination of employment, to
compensation payable for the first two years after termination on March 2, 1991
at the annual rate of $60,000. The Severance and Non-Competition Agreement also
provides for the Company to pay for family health insurance coverage under the
Company's regular employee health insurance plan for an eight-year period after
termination. In 1995, Mr. Furman was paid $51,938 for consulting services in
connection with his work on behalf of the Company as the Chair of the CEO Search
Committee and consultant for certain projects including the Russian joint
venture, franchise partnershops and alternative supplier arrangements.
Mr. Bowman, Senior Director of Operations, has an employment agreement
dated August 21, 1995, which has a term of three years, expiring August 20,
1998. The agreement provides for an annual base salary, which may be increased
by the Board (the Board has currently fixed such base salary at $160,000), and
an incentive bonus, not exceeding 35% of his base salary (payable in cash and
shares of Class A Common Stock under the Company's Restricted Stock Plan), as
determined by the Chief Executive Officer, subject to approval of the
Compensation Committee. The amount of the award for the 1995 short year was
$40,000. The agreement also provides for stock options on 25,000 shares of Class
A Common Stock which were granted in August, 1995, vesting over a period of six
years, commencing January 1, 1997. The agreement also provides for medical, life
insurance, 401(k) plan and other employee benefits, a covenant not to compete
during the term of the agreement and for a two-year period thereafter, and for
one year's continuation of then-current base salary and annual incentive award
at the rates in effect on the date of termination of his employment by the
Company without cause.
13
<PAGE>
Stock Performance Graph
The following graph sets forth information comparing the cumulative total
return to holders of the Company's Common Stock (Class A and Class B) over the
last five years (the "Measuring Period") with 1 the cumulative total return of
the NASDAQ Stock Market Index (U.S.) and 2 the cumulative total return of the
Standard and Poors Food Index, assuming in each case the investment of $100 on
December 31, 1990. The yearly change in cumulative total return is measured by
dividing (i) the sum of (a) the cumulative amount of dividends for each fiscal
year, assuming dividend reinvestment, and (b) the change in share price between
the beginning and end of the Measuring Period, by (ii) the share price at the
beginning of the Measuring Period. The Company has not paid any cash dividends.
Total Return to Shareholder
- ---------------------------
<TABLE>
Ben & Jerry's S & P Foods
Homemade, Inc. Index NASDAQ
-------------- ----- ------
<S> <C> <C> <C>
12/31/90 100 100 100
3/31/91 130.51 117.57 129.92
6/30/91 130.51 116.52 128.41
9/30/91 222.03 124.13 143.30
12/31/91 250.85 145.88 160.56
3/31/92 257.63 128.23 165.60
6/30/92 366.10 130.41 154.28
9/30/92 406.78 140.89 160.62
12/31/92 386.44 145.54 186.87
3/31/93 427.12 140.39 190.37
6/30/93 345.76 130.07 194.03
9/30/93 264.41 127.31 210.38
12/31/93 218.64 133.56 214.51
3/31/94 227.12 129.34 205.49
6/30/94 228.81 130.23 195.89
9/30/94 189.83 141.07 212.10
12/31/94 128.81 149.29 209.69
3/31/95 161.02 154.36 228.49
6/30/95 186.44 168.29 261.36
9/30/95 254.24 175.19 292.82
12/31/95 200.00 190.44 296.30
</TABLE>
The above stock performance graph is required by regulations adopted by the
Securities and Exchange Commission.
14
<PAGE>
Stock Ownership Filings
Under the securities laws of the United States, the Company's directors,
certain of its officers, and any persons holding more than ten percent of the
Company's Common Stock are required to report their ownership of the Company's
Common Stock and any changes in that ownership to the Securities and Exchange
Commission. Specific due dates for these reports have been established and the
Company is required to report in this proxy statement any failure to file by
these dates during 1995. All of these filing requirements were satisfied by its
directors and officers and, to the Company's knowledge and belief, ten percent
holders.
ITEM #2 RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the independent public accounting firm
of Ernst & Young LLP to audit the accounts of the Company for the fiscal year
1996. The Board of Directors has recommended that stockholders ratify this
selection. The Board of Directors will review its selection if this proposal is
not approved by the stockholders of the Company at the Annual Meeting.
Neither the firm of Ernst & Young LLP nor any of its partners has a direct
or materially indirect financial interest in the Company. Representatives of the
firm of Ernst & Young LLP will be present at the Annual Meeting with the
opportunity to make a statement if they desire to do so and will be available to
reply to stockholder inquiries.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR the proposal to ratify the
selection of Ernst & Young LLP as the Company's independent auditors for 1996.
Vote Required
The affirmative vote of a majority of the votes properly cast on the matter
by all shares of outstanding stock of the Company, voting together, at the
Annual Meeting is required to ratify the selection of Ernst & Young LLP as the
Company's independent auditors for 1996.
15
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of March 8, 1996 with
respect to the beneficial ownership of the outstanding shares of Class A Common
Stock, Class B Common Stock and Preferred Stock by (i) all persons owning of
record, or beneficially to the knowledge of the Company, more than five percent
of the outstanding shares of Class A Common Stock, Class B Common Stock or
Preferred Stock, (ii) each director and executive officer of the Company
individually, (iii) all directors and officers of the Company as a group and
(iv) The Ben & Jerry's Foundation, Inc. The mailing address of each of the
persons shown and of the Foundation is c/o the Company, 30 Technology Drive,
Suite #1, South Burlington, Vermont 05403.
<TABLE>
Amount of Amount of
Beneficial Beneficial Amount of
Ownership of Ownership of Beneficial
Class A Class B Ownership of
Common Stock Common Stock Preferred Stock
------------ ------------ ---------------
Percentage Percentage Percentage
Number of Number of Number of
of Outstanding of Outstanding of outstanding
Shares Shares (a) Shares Shares (b) Shares Shares
------ ---------- ------ ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Ben Cohen (c) 604,373 9.6 487,876 52.24 0 0
Robert Holland, Jr. 0 0 0 0 0 0
Fred Lager (d) 30,600 * 53,600 5.90 0 0
Jeffrey Furman (e),(f) 10,000 * 30,300 3.30 0 0
Merritt C. Chandler 1,072 * 36 * 0 0
Henry Morgan 2,700 * * * 0 0
Jerry Greenfield (e) 130,000 2.01 90,000 9.90 0 0
Frederick Miller 600 * 0 0 0 0
Elizabeth Bankowski 3,182 * 0 0 0 0
Frances Rathke 3,315 * 0 0 0 0
Bruce Bowman 0 0 0 0 0 0
------- ----- ------- ----- - -
All Officers and directors
as a group (13 persons) 785,842 12.53 661,812 72.60 0 0
======= ===== ======= ===== = =
The Ben & Jerry's
Foundation, Inc. 0 0 0 0 900 100
= = = = === ===
- ----------------------
<FN>
* Less than 1%
(a) Based on the number of shares of Class A Common Stock outstanding as of
March 8, 1996. Each share of Class A Common Stock entitles the holder to
one vote.
(b) Based on the number of shares of Class B Common Stock outstanding as of
March 8, 1996. Each share of Class B Common Stock entitles the holder to
ten votes.
(c) Under the regulations and interpretations of the Securities and Exchange
Commission, Mr. Cohen may be deemed to be a parent of the Company.
(d) Mr. Lager owns these shares jointly with his wife.
(e) By virtue of their positions as two of the three current directors of the
Foundation, which has the power to vote or dispose of the Preferred Stock,
each of Messrs. Greenfield, a co-founder, Director and Vice Chairperson of
the Company, and Furman, a Director of and consultant to the Company, may
be deemed, under the regulations and interpretations of the Securities and
Exchange Commission, to own beneficially the Preferred Stock.
(f) Does not include 210 shares of Class A Common Stock and 105 shares of Class
B Common Stock owned by Mr. Furman's wife, as to which he disclaims
beneficial ownership.
(g) While the Foundation is an entity legally separate from the Company, it may
be deemed to be an affiliate of the Company under the securities laws.
</FN>
</TABLE>
16
<PAGE>
VOTING
Consistent with state law and under the Company's by-laws, a majority of
the shares entitled to be cast on a particular matter, present in person or
represented by proxy, constitutes a quorum as to such matter. Votes cast by
proxy or in person at the Annual Meeting will be counted by persons appointed by
the Company to act as Judges of Election for the meeting.
The ten nominees for election as Directors at the Annual Meeting who
receive the greatest number of votes properly cast for the election of Directors
shall be elected Directors. A majority of the votes properly cast on the matter
is necessary to approve any other matter which comes before the
Annual Meeting, except where law or the Company's Articles of Association
or by-laws require otherwise.
The Judges of Election will count the total number of votes cast "for"
approval of proposals, other than the election of Directors, for purposes of
determining whether sufficient affirmative votes have been cast. The Judges of
Election will count shares represented by proxies that withhold authority to
vote for a nominee for election as a Director or that reflect abstentions and
"broker non-votes" (i.e., shares represented at the Annual Meeting held by
brokers or nominees as to which (i) instructions have not been received from the
beneficial owners or persons entitled to vote and (ii) the broker or nominee
does not have the discretionary voting power on a particular matter) only as
shares that are present and entitled to vote on the matter for purposes of
determining the presence of a quorum, but neither abstentions nor broker
non-votes will have any effect on the outcome of voting on the matter.
MISCELLANEOUS
Each of the Compensation Committee Report on Executive Compensation and the
Stock Performance Graph shall not be deemed incorporated by reference by any
general statement incorporating this proxy statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent that the Company later specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended for presentation at the 1997 Annual
Meeting must be received by the Secretary of the Company at the Company's
headquarters in South Burlington, Vermont by January 31, 1997.
GENERAL
The proxy confers discretionary authority with respect to any other
business which may come before the Annual Meeting of Stockholders, including
rules for the conduct of the meeting. The Board of Directors knows of no other
matter to be presented at the Meeting. It is the intention of the persons named
as proxies to vote the shares to which the proxies relate according to their
best judgment if any matters not included in the Proxy Statement do properly
come before the Meeting, unless the contrary is indicated.
In addition to the solicitation of proxies by mail, management and
employees of the Company may also assist in soliciting proxies in person or by
mail, telescope, telephone, telegram and personal interviews for which they will
receive no additional compensation. The costs of solicitation of proxies will be
borne by the Company.
17
<PAGE>
You are encouraged to exercise your right to vote by marking the
appropriate boxes, and dating and signing the enclosed proxy(s) card. It is not
necessary to mark any box if you wish to vote in accordance with the
recommendations of the Board of Directors. The proxy(s) card may be returned in
the enclosed envelope, which is postage-paid if mailed in the United States. A
prompt response will be helpful and your cooperation is appreciated.
May 22, 1996 Ben & Jerry's Homemade, Inc.
18
<PAGE>
CLASS A COMMON STOCK
BEN & JERRY'S HOMEMADE, INC.
This Proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints Ben Cohen, Jeffrey Furman and Fred Lager,
and each of them, as proxies, each with the power to appoint his substitute and
hereby authorizes any of them to represent and to vote, as designated below, all
the shares of Class A Common Stock of Ben & Jerry's Homemade, Inc. held of
record by the undersigned on May 1, 1996 at the Annual Meeting of Stockholders
to be held on June 22, 1996 at Sugarbush North Resort in Warren, Vermont at
10:00 a.m., Vermont time, or any adjournment thereof.
1. Election of Directors
FOR all nominees listed below or if any nominee is not available for
election, such substitute as the Directors may designate (except as marked to
the contrary below)
WITHHOLD AUTHORITY to vote for nominees listed below
Elizabeth Bankowski, Ben Cohen, Jeffrey Furman, Jerry Greenfield,
Jennifer Henderson, Robert Holland Jr., Jon R. Katzenbach, Fred Lager,
Frederick A. Miller, Henry Morgan.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
- -------------------------------------------------------------------
2. APPROVING the selection of Ernst & Young as the Company's
independent auditors for 1996.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ELECTION OF DIRECTORS AND FOR ALL PROPOSALS.
Dated____________, 1996
- -----------------------
Signature
- -----------------------
Signature if held jointly
Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
<PAGE>
CLASS B COMMON STOCK
BEN & JERRY'S HOMEMADE, INC.
This Proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints Ben Cohen, Jeffrey Furman and Fred Lager,
and each of them, as proxies, each with the power to appoint his substitute and
hereby authorizes any of them to represent and to vote, as designated below, all
the shares of Class B Common Stock of Ben & Jerry's Homemade, Inc. held of
record by the undersigned on May 1, 1996 at the Annual Meeting of Stockholders
to be held on June 22, 1996 at Sugarbush North Resort in Warren, Vermont at
10:00 a.m., Vermont time, or any adjournment thereof.
1. Election of Directors
FOR all nominees listed below or if any nominee is not available for election,
such substitute as the Directors may designate (except as marked to the contrary
below)
WITHHOLD AUTHORITY to vote for nominees listed below
Elizabeth Bankowski, Ben Cohen, JeffreyFurman, Jerry Greenfield,
Jennifer Henderson, Robert Holland Jr., Jon R. Katzenbach, Fred Lager,
Frederick A. Miller, Henry Morgan.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
- -------------------------------------------------------------------
2. APPROVING the selection of Ernst & Young as the Company's
independent auditors for 1996.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ELECTION OF DIRECTORS AND FOR ALL PROPOSALS.
Dated____________, 1996
- -----------------------
Signature
- -----------------------
Signature if held jointly
Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
<PAGE>
