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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to [sec] 240.14a-11(c) or [sec] 240.14a-12
Ben & Jerry's Homemade Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Registrant
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(4) and 0-11.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
4) Proposed maximum aggregate value of transaction:
* Set forth the amount on which the filing is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[BEN & JERRY'S HOMEMADE, INC. letterhead]
May 16, 1997
Dear Stockholders:
You are cordially invited to attend the 1997 Annual Meeting of
Stockholders, which will be held on Saturday, June 28, 1997 on the Golf Course
at the Sugarbush Resort in Warren, Vermont 05674 at 10:00 in the morning.
Enclosed is a Proxy Statement and a Proxy Card for voting Class A Common Stock
and Class B Common Stock, along with a copy of the 1996 Annual Report to
Stockholders.
On the following pages you will find a Notice of the 1997 Annual Meeting
and Proxy Statement. The Notice of Annual Meeting lists four items of formal
business to address at the Annual Meeting.
We suggest you read the Proxy Statement carefully. We ask your support in
the election of directors and in approving Items 2, 3 & 4.
We will follow the formal business with time for discussion, and we invite
your comments, questions and ideas.
After the meeting, we invite you to join in the One World One Heart
Festival, a wonderful one day celebration, located at Sugarbush North. The
Festival, which runs from 11:00 a.m. until 7:00 p.m., will be filled with music,
fun, social activism and surprises. Please join us.
Best regards,
/s/ Ben Cohen
Ben Cohen,
Chairperson
/s/ Perry D. Odak
Perry D. Odak,
Chief Executive Officer
<PAGE>
[BEN & JERRY'S HOMEMADE, INC. letterhead]
BEN & JERRY'S HOMEMADE, INC.
NOTICE OF THE 1997 ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders of Ben
& Jerry's Homemade, Inc. will be held on the Golf Course at the Sugarbush Resort
in Warren, Vermont, 05674 on Saturday the 28th 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, or to serve for staggered terms in the event
that the amendment in Item 3 is approved.
2. To consider and act upon a proposal to amend the Company's 1995 Equity
Incentive Plan, to increase the aggregate number of shares of stock
authorized for issuance and delivery in connection with awards under
such Plan from 500,000 shares of Class A Common Stock to 900,000 shares
of Class A Common Stock.
3. To consider and act upon a proposal to amend the Articles of
Incorporation to (a) classify the Board into three classes; (b) provide
that directors may be removed only for cause and with the approval of
the holders of at least two-thirds of the votes cast on the matter by
all of the outstanding shares of capital stock of the Company entitled
to vote generally in the election of directors, voting together; (c)
provide that any vacancy resulting from such a removal may be filled by
two-thirds of the directors then in office; and (d) provide that the
stockholder vote required to alter, amend, repeal or adopt any provision
inconsistent with this amendment shall be at least two-thirds of the
voting power of all of the shares of the Company entitled to vote
generally in the election of directors, voting together.
4. To consider and act upon a proposal to ratify the selection of Ernst &
Young LLP as independent auditors for the 1997 fiscal year.
5. 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 April 21, 1997 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 16, 1997
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY (FOR CLASS A COMMON STOCK AND
FOR CLASS B COMMON STOCK) AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Corporate Offices Mailing Address:
30 Community Drive
South Burlington, VT 05403-6828
1997 ANNUAL MEETING OF STOCKHOLDERS
June 28, 1997
PROXY STATEMENT
The enclosed form of proxy ( for Class A Common Stock and 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 1997 Annual
Meeting of Stockholders to be held on the Golf Course at Sugarbush Resort in
Warren, Vermont on Saturday, June 28th, 1997 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
therefore 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 he 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 April 21, 1997 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. As of the close
of business on April 21, 1997 there were outstanding and entitled to vote
6,392,646 shares of Class A Common Stock, 891,072 shares of Class B Common Stock
and 900 shares of Class A Preferred Stock.
The Company's Annual Report for 1996 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 16, 1997.
ITEM #1 NOMINEES FOR DIRECTOR
The Company has accepted the resignations of three Board members who, for
personal reasons, have recently resigned from the Company's Board of Directors
or will not stand for re-election. Mr. Robert Holland, who had served on the
Board of Directors since January of 1995, resigned from the Board effective
April 3, 1997. Mr. Jon Katzenbach, who had served on the Board of Directors
since June, 1996, resigned from the Board effective March 28, 1997. Mr. Fred
"Chico" Lager, who has served on the Board of Directors since 1982 has decided
not to stand for re-election.
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. All nominees for election, other than
Pierre Ferrari, Perry D. Odak, and Andrew S. Patti, were previously elected
Directors of the Company at the 1996 Annual Meeting.
If Item 3 is approved, Messrs. Furman, Morgan and Ms. Bankowski will be
designated Class A directors and elected for a term of one year expiring at the
1998 Annual Meeting of Stockholders and until their successors are elected and
qualified: Messrs. Ferrari, Greenfield and Miller will be designated Class B
directors and elected for a term of two years expiring at the 1999 Annual
Meeting of Stockholders and until their successors are elected and qualified;
and Messrs. Cohen, Odak, Patti and Ms. Henderson will be designated Class C
directors and elected for a term of three years expiring at the 2000 Annual
Meeting of Stockholders and until their successors are elected and qualified. If
Item 3 is not approved, then ten directors are to be elected to serve as
directors until the next Annual Meeting and until their successors are elected
and qualified.
<PAGE>
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>
<CAPTION>
Director
Name Age Principal Occupation or Employment Since
- --------------------- ------ ----------------------------------------------------------------- ----------
<S> <C> <C> <C>
Elizabeth Bankowski 49 Director of Social Mission Development of Ben & Jerry's 1990
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 45 Chairperson of the Board of Directors since February 1989. 1977
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. Mr. Cohen is a
director and President of Community Products, Inc., a supplier
to the Company, which on April 28, 1997, filed for protection
under Chapter 11 of the United States Bankruptcy Code.
Pierre Ferrari 47 Special Assistant to the President and CEO of CARE, the
world's largest private relief and development agency. Mr.
Ferrari has enjoyed a successful career with The Coca-Cola
Company spanning twenty-five years, most recently, 1988 to
1994, as Sr. Vice-President, Director of Marketing and
member of the Executive Committee. Mr. Ferrari earned his
MA from the University of Cambridge and MBA from
Harvard University.
Jeffrey Furman 53 Formerly a consultant to Ben & Jerry's Homemade, Inc. from 1982
March, 1991 to December, 1996. From 1982 to 1991, Mr.
Furman was Secretary to Ben & Jerry's Homemade, Inc., and
Vice-President from 1982 to March 1990.
Jerry Greenfield 45 Vice Chairperson of Ben & Jerry's Homemade, Inc. since 1990
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.
Jennifer Henderson 43 Ms. Henderson is President of Strategic Interventions and 1996
Director of Training for the Center for Community Change in
Washington, DC. Ms. Henderson serves on the Board of
Directors of Twenty-First Century Foundation; Nonprofit
Management Association; Southern Organizing Committee;
and Young Women's Project.
Frederick A. Miller 50 Since 1985, Mr. Miller has been President of The Kaleel 1992
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). Mr. Miller serves on the Board of Directors of
The Living School and The Institute of Development
Research.
Henry Morgan 71 Mr. Morgan is retired Dean Emeritus of Boston University 1987
School of Management. Mr. Morgan serves on the Board of
Directors of Cambridge Bancorporation; Southern
Development Bancorporation; and Cleveland Development
Bancorporation.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Director
Name Age Principal Occupation or Employment Since
- ----------------- ------ ------------------------------------------------------------------- ----------
<S> <C> <C> <C>
Perry D. Odak 51 Mr. Odak has served as Chief Executive Officer Since December 1997
31, 1996. From 1990 to 1997, Mr. Odak was a principal in a
private consulting firm, providing consulting services to many
companies including: Sudbury, Inc.; Investcorp International;
Color Tile, Graham Packaging; and U.S. Repeating Arms Co.
From 1983 to 1990, Mr. Odak was a partner at Catalyst
Technologies where he started and launched ETAK, Inc., the first
vehicle navigation system. From 1982 to 1983 Mr. Odak was
President of the Consumer Group for Atari, Inc. Mr. Odak was
one of the founders of Jovan, Inc. where from 1978 to 1982 he
served as General Manager overseeing sales, marketing,
operations and distribution. From 1969 to 1978, Mr. Odak was at
Armour-Dial, Inc., most recently as Sr.Vice-President of
Worldwide Operations.
Andrew S. Patti 56 Mr. Patti is Executive Vice-President of Ameritech, a
telecommunications company. From 1995 to 1996, Mr. Patti
was President and COO of The Dial Corporation. From 1989
to 1995, he was President and COO of Dial Consumer
Products Group. From 1982 to 1986, President and CEO of
Armour Handcrafts, Inc. From 1978 to 1982, Sr. Vice-
President Operations of Dial Consumer Products Group. Mr.
Patti has a BS in Industrial Engineering from Rutgers
University and his MBA from Northern Illinois University.
</TABLE>
There were nine meetings of the Board of Directors in 1996. Directors who
are not employees or full-time consultants of the Company receive an annual
retainer fee of $9,000, in addition to a $750 per board meeting attendance fee,
and reimbursement of reasonable out-of-pocket expenses. The Company has 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.
On September 6, 1996, four non-employee directors, Henry Morgan, Jon Katzenbach,
Frederick A. Miller and Jennifer Henderson each received 524 shares of stock in
lieu of the cash retainer for the period October 1996 through June of 1997 under
the 1995 Non-Employee Directors' Plan for Stock in Lieu of Directors' Cash
Retainer Plan.
The Board of Directors has an Audit Committee, on which Messrs. Lager
(Chairperson) and Morgan, neither of whom are employees of the Company, serve.
This Committee met twice in 1996. 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 will appoint a non-employee
director to the Audit Committee to replace Mr. Lager following the Board
elections at the Annual Meeting on June 28, 1997.
The Board of Directors has a Social Mission Committee on which Messrs.
Miller (Chairperson), Furman, Cohen, and Ms. Henderson and Ms. Bankowski serve.
The Social Committee was added to the Board of Directors following the 1996
Board of Directors' Retreat. The Committee's first project has been to oversee
the preparation of the 1996 Social Performance Assessment. The Committee met
five times in 1996.
The Board of Directors also has a Workplace/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 1995
Equity Incentive Plan; the Employee Stock Purchase Plan; and The 1985 Stock
Option Plan (under which no further options may be granted). Messrs. Miller, and
Morgan (Chairperson) and Ms. Henderson, none of whom are employees of the
Company, serve on this Committee.
The Board of Directors also has a Nominating Committee on which Messrs.
Cohen (Chairperson), Furman, Greenfield, Odak and Ms. Bankowski serve.
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.
3
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the cash compensation paid by the Company in
Fiscal Years 1994-1996 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 during the 1996 fiscal year whose total salary and bonuses
exceeded $100,000. Perry Odak became the Chief Executive Officer on December 31,
1996.
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------
Annual Compensation Awards Payouts
--------------------------------- ------------------------ ------------------------
Other Securities
Annual Restricted Underlying All Other
Name and Compen- Stock Options/ LTIP Compen-
Principal Position Year Salary Bonus(2) sation(4) Awards(3) SARs(6) Payouts sation(5)
- --------------------- ------- ----------- ---------- ---------- ------------------------ ------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ben Cohen(1) 1996 $149,664 -- $ 3,017
Chairperson 1995 $132,500 -- $ 2,195
and CEO 1994 $132,500 -- $ 2,650
Jerry Greenfield 1996 $149,664 -- $ 3,017
Vice Chairperson 1995 $132,500 -- $ 2,195
1994 $132,745 -- $ 2,655
Robert Holland, Jr. 1996 $250,000 $100,000 $272,948
CEO, President and 1995 $225,962 $100,000 80,000 --
Director
Bruce Bowman 1996 $169,231 $ 20,000 10,000 $ 1,099
Senior Director of 1995 $ 55,385 $ 40,000 25,000 --
Operations and COO
Katherine Greenleaf 1996 $156,934 -- 25,000 --
Senior Director
of People
Frances Rathke 1996 $145,385 -- $ 2,928
CFO and 1995 $125,000 $ 1,281 30,000 $ 2,260
Secretary 1994 $121,398 $ 611 $ 2,440
Elizabeth Bankowski 1996 $125,000 -- 20,000 $ 2,267
Director of Social 1995 $125,000 $ 745 $14,341 $21,360 5,000 $ 2,267
Mission Development 1994 $115,803 $ 328 $ 2,323
</TABLE>
- ------------
(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, and starting in
1996 Frances Rathke, Elizabeth Bankowski and Katherine Greenleaf). Robert
Holland was awarded a bonus in accordance with his employment contract of
$100,000 for the years 1995 and 1996. Bruce Bowman was awarded a bonus in
accordance with his employment contract of $40,000 in 1995 and $20,000 in
1996.
(3) "Restricted Stock Awards" includes restricted stock awards of 2,000 shares
made in 1995. No other restricted stock awards were made in 1994-1996, 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 and
in 1996 includes severance payments payable monthly through January 1998 to
Robert Holland, Jr. under the Amended Employment Agreement dated October
31, 1996 in the amount of $270,833.
(6) "Securities Underlying Options/SAR" after giving effect to Mr. Holland's
Amended Employment Agreement dated October 31, 1996.
4
<PAGE>
Option/SAR Grants in 1996
<TABLE>
<CAPTION>
Percentage Potential Realizable
of Total Value at Assumed
Options/ Annual Rates of Stock
SARS Exercise Price Appreciation
Options/ Granted to or for Option Term
SARs Employees Base Price Expiration ---------------------
Granted in 1996 (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. 0 0 0 0 0 0
Bruce Bowman 10,000 16.0% $12.38 10/22/06 $77,857 $197,305
Katherine Greenleaf 25,000 40.0% 14.75 4/14/06 231,905 587,693
Frances Rathke 0 0 0 0 0 0
Elizabeth Bankowski 20,000 32.0% 12.38 10/22/06 156,000 394,611
</TABLE>
Aggregated Option/SAR Exercises in 1996 and 1996 Year-End Option/SAR Values
<TABLE>
<CAPTION>
Shares Value of Unexercised
Acquired Number of Unexercised In-The-Money Options/
on Options/SARs at 12/28/96 SARs at 12/28/96
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 80,000 0 $45,400 --
Bruce Bowman 0 0 0 35,000 0 --
Katherine Greenleaf 0 0 0 25,000 0 --
Frances Rathke 0 0 5,593 25,592 3,750 --
Elizabeth Bankowski 0 0 5,485 20,485 3,750 --
</TABLE>
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 executive 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 no further stock options
may be granted); The 1995 Equity Incentive Plan; The 1991 Restricted Stock Plan;
The 1995 Non-Employee Directors' Plan for Stock in Lieu of Directors' Cash
Retainer; and the 1986 Employee Stock Purchase Plan.
General Compensation Philosophy
The Company operates in the competitive environment of the super premium
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 hired a new Chief
Executive Officer on December 31, 1996.
Compensation Components
It is the Committee's objective to have a substantial portion of the
compensation of the Chief Executive Officer and the Company's other executive
officers' 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. This
compensation program consists of three main components: (1) a base salary; (2)
an annual bonus; and, (3) long-term incentives. The second and third elements
constitute the "at risk" portion of the 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
5
<PAGE>
Plan. When a contract for a particular officer has been previously negotiated,
annual adjustments are made in light of the specific provisions of that
contract.
Base Salary. The Committee annually reviews the base salary of the Chief
Executive Officer and other executive officers. In determining salary
adjustments, the Committee considers, in light of any contract that is in place,
the Company's success in achieving its 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 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 Chief Executive Officer and upon recommendations by
the Chief Executive Officer approves incentive bonus award targets for the other
executive officers. The Committee is considering the inclusion of non-financial
objectives in its annual incentive bonus targets for executive officers, subject
to the terms of existing employment agreements. If the long-term incentives for
a particular officer are substantial, the compensation (as in the case of Perry
Odak, the CEO, in 1997) may not include an annual incentive bonus target or the
annual incentive bonus target included may be reduced.
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 at all levels of employees and, in some cases, to
consultants. 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 rewards 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, the amount of compensation other than long-term incentive, the
executive's performance in the recent period, expected contributions to the
achievement of the Company's long-term performance goals, and competitive levels
of stock grants. The Committee in 1996 made stock option grants for an aggregate
of 62,500 shares to executive officers and key employees.
1996 compensation of the Chief Executive Officer
Mr. Robert Holland, Chief Executive Officer in 1996 until his resignation
in October of 1996, received pursuant to his 1995 Employment Agreement, a base
salary of $250,000 and an incentive award of $100,000. When Mr. Holland resigned
from the Company his 1995 Employment Agreement was modified and his stock option
grants for 100,000 shares were terminated, leaving in place stock options for
80,000 shares, granted in January 1995 at an exercise price of $10.81 per share,
fair market value of the Class A Common Stock on this date. For other details of
Mr. Holland's severance under the contract see "Certain Relationships and
Related Transactions".
During the interim period November-December, 1996, Mr. Bruce Bowman, the
Company's Chief Operating Officer, had primary operating responsibility.
Mr. Perry Odak was hired as Chief Executive Officer for the Company on
December 31, 1996. Information regarding Mr. Odak's compensation under his
Employment Agreement is described in "Certain Relationships and Related
Transactions" and his compensation for 1997 will be reported on in the 1997
Compensation Committee Report.
Henry Morgan, Chairperson
Jennifer Henderson
Frederick A. Miller
6
<PAGE>
Certain Relationships and Related Transactions
Under the terms of an Amended Employment Agreement between the Company and
Mr. Lager, the Company is obligated to provide Mr. Lager with (i) family health
insurance coverage under the Company's regular employee health insurance plan
until February, 2003 (ii) to continue payments of the premiums due on Mr.
Lager's life insurance policy (currently $12,335 per year) until the date when
the policy becomes "self-funding", which is estimated to be December 31, 2002,
and (iii) 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.
Pursuant to the terms of a Consulting Agreement dated January 17, 1991 (as
amended in 1994 and 1995) Mr. Lager agreed to furnish management consulting
services to the Company, upon the Company's request. Commencing in September
1995, Mr. Lager provided part-time consulting services to the Company at the
rate of $8,333 per month, plus reasonable out-of-pocket expenses. In 1995 and
1996, Mr. Lager was paid $235,902 and $57,917. Mr. Lager's obligation to provide
part-time consulting services to the Company under the terms of the Original
Consulting Agreement, as extended by the 1994-1995 amendment, terminated on July
31, 1996. In accordance with the Agreement, Mr. Lager has agreed not to compete
with the Company for a period of two years following the expiration of the
Consulting Agreement on July 31, 1996.
Under the terms of a Severance and Non-Competition Agreement between the
Company and Mr. Furman, dated December 31, 1990, the Company continues to
provide, at no cost to Mr. Furman, family health insurance coverage under the
Company's regular employee health insurance plan. This obligation will continue
until March 2, 1999. In 1995 and 1996, Mr. Furman was paid $51,938 and $30,000
for consulting services in connection with his work on the Company's Russian
joint venture.
Mr. Holland was hired January 30, 1995 as President and Chief Executive
Officer. Under Mr. Holland's Employment Agreement which had a term of four
years, Mr. Holland was entitled to a base salary of $250,000 per year, subject
to increases 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 were 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 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 that fiscal year by the Committee. No
options have been accelerated. The 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.
Mr. Holland resigned as President and Chief Executive Officer of the
Company on October 31, 1996 and as a director of the Company on April 3, 1997.
On October 21, 1996, Mr. Holland and the Company entered into an Agreement
regarding the termination of Mr. Holland's employment which modified the terms
of his original Employment Agreement. Under the terms of this 1996 Agreement,
Mr. Holland will receive an amount equal to his monthly salary, at the annual
rate of $250,000 through January 30, 1998; receive a bonus in 1996 of $100,000;
Options for an aggregate of 80,000 shares, which were granted in January 1995,
vested and exercisable up through April 30, 1997 (all these options were
exercised by Mr. Holland in April 1997); all other options terminated on October
31, 1996. Participation in the Company's life insurance and health insurance
plans shall continue on the
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current basis for the shorter of one year from October 31, 1996 or the
commencement of new employment for Mr. Holland which provides him with
eligibility to participate in comparable plans. All other provisions in the
Employment Agreement dated January 30, 1995, including the covenant not to
compete, remain in effect.
Mr. Cohen, Chairperson and a 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 he is entitled to an incentive bonus at the
discretion of the Board (no bonus was paid in 1996). 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. Greenfield, Vice Chairperson, and director and also a director and
President of The 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 he is entitled to an incentive bonus at the
discretion of the Board (no bonus was paid in 1996). 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. Bowman, Senior Director of Operations and Chief Operating Officer, 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 $200,000), and he is entitled to an incentive bonus, not exceeding 35%
of his base salary (payable in cash and shares of Class A Common Stock), as
determined by the Chief Executive Officer, subject to approval of the
Compensation Committee. The amount of the award for 1996 was $20,000. 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.
Mr. Odak, Chief Executive Officer, has a three year Employment Agreement
with the Company dated December 31, 1996. Under the terms of the Agreement, Mr.
Odak is entitled to a base salary of $300,000 per annum, subject to increases
from time to time by the Board of Directors, in its sole discretion. Mr. Odak
received options, which are non-statutory, non-incentive stock options, to
purchase an aggregate of 360,000 shares of Class A Common Stock of the Company
exercisable at $10.88 per share, the fair market value on the date of grant by
the Compensation Committee of the Board of Directors under the 1995 Equity
Incentive Plan.
The Employment Agreement may be terminated at any time by the Company for
cause, as defined, upon written notice to Mr. Odak. If terminated for cause, the
Company shall have no further obligation or liability to Mr. Odak, other than
for base salary earned and unpaid at the date of termination, any options that
are vested which shall continue to be exercisable for thirty days (unless such
options are terminated by the vote of the Compensation Committee of the Board of
Directors), and payments or reimbursement of business expenses accrued prior to
the date of termination. All other options shall terminate.
The Company may also terminate the Employment Agreement other than for
cause in which event, the Company shall have a continuing obligation to pay Mr.
Odak his base amount at the rate in effect on the date of termination for the
monthly periods specified in the Agreement, which are dependent upon the date of
such termination. Additionally, the Company will continue to contribute, for the
period during which the base amount is continued, the cost of Mr. Odak's
participation (including his family) in the Company's group medical and
hospitalization insurance plans and group life insurance plan, provided that Mr.
Odak is entitled to continue such participation under applicable law and plan
terms. Upon such termination, unvested options shall become exercisable to the
extent so provided by the terms of the Employment Agreement.
Mr. Odak may terminate his employment with the Company for good reason, as
defined (in the absence of cause), upon notice to the Company. In the event of
such termination, base amount, benefits and options (including acceleration,
period of exercisablilty and termination of options) shall be paid or provided
in the same manner and extent as for a termination Other Than for Cause.
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Mr. Odak agrees not to compete with the Company during his period of
employment and, after his employment terminates, for the greater of one year or
the period during which severance payments are made.
During the year ended December 28, 1996, the Company purchased Rain Forest
Crunch cashew-brazilnut buttercrunch candy to be included in Ben & Jerry's Rain
Forest Crunch flavor ice cream for an aggregate purchase price of approximately
$1,000,000 from Community Products, Inc., a company of which Messrs. Cohen and
Furman are directors and the principal stockholders and of which Mr. Cohen is
also president. Mr. Lager was a director until January 1994. The Company
believes that 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. On April 28, 1997, Community
Products, Inc. filed for protection under Chapter 11 of the United States
Bankruptcy Code.
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 Poor's Food Index, assuming in each case the investment of $100 on
December 31, 1991. 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.
[typeset representation of graph]
Ben & Jerry's S&P Foods
Homemade Index NASDAQ
12/31/91 100 100 100
3/31/92 102.70 87.90 103.14
6/30/92 145.95 89.39 96.09
9/30/92 162.16 96.58 100.04
12/31/92 154.05 99.77 116.38
3/31/93 170.27 96.23 118.56
6/30/93 137.84 89.16 120.84
9/30/93 105.41 87.27 131.03
12/31/93 87.16 91.55 133.60
3/31/94 90.54 88.66 127.98
6/30/94 91.22 89.27 122.00
9/30/94 75.68 96.70 132.10
12/31/94 51.35 102.34 130.59
3/31/95 64.19 105.81 142.31
6/30/95 74.32 115.36 162.78
9/30/95 101.35 120.09 182.37
12/31/95 79.73 130.54 184.54
3/31/96 89.19 132.52 193.29
6/30/96 91.89 135.70 209.06
9/30/96 68.24 148.21 216.51
12/31/96 58.78 154.67 227.15
[end graph]
The above stock performance graph is required by regulations adopted by the
Securities and Exchange Commission.
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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 1996. 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 PROPOSED AMENDMENT TO THE 1995 EQUITY INCENTIVE PLAN
INCREASING THE NUMBER OF SHARES AUTHORIZED TO BE
AWARDED AND DELIVERED THEREUNDER
Subject to approval by the stockholders at the 1997 Shareholder Meeting,
the Board of Directors at its regular meeting held on March 28, 1997 approved a
proposal to amend the Company's 1995 Equity Incentive Plan (the "Plan") to
increase by 400,000 shares the aggregate number of shares of stock of the
Company which may be delivered in connection with options, restricted stock
awards, or other stock-based awards granted under the Plan. The Plan, was
originally approved by the stockholders at the June 24, 1995 Shareholder
Meeting.
As of April 21, 1997 stock options for a total of 425,000 shares of the
Company's Class A Common Stock, net of forfeitures, have been awarded under the
Plan leaving 75,000 shares available for the granting of options, or other
stock-based future awards under the Plan. The Board of Directors believes that
the number of shares remaining available for issuance under the Plan is
insufficient to continue to fulfill the purposes of the Plan, which expires
April 21, 2005 and that accordingly the number of shares authorized for delivery
thereunder should be increased by 400,000, from 500,000 shares to 900,000 shares
of Class A Common Stock.
The Directors believe that the Plan is an important means of attracting,
holding and motivating key employees of the Company and that the Plan is a
necessary and integral part of the Company's overall management compensation
program. As noted under the heading "Compensation Committee Report on Executive
Compensation" in this Proxy Statement, the Board views the granting of options
as a significant method of aligning management's long-term interests with those
of the shareholders. The Board of Directors presently intends to repurchase up
to 200,000 shares of the Class A Common Stock, for use in making awards under
the Plan as amended provided that the stock can be so repurchased at market
prices deemed favorable by the Board. However, there is no assurance that the
Company will succeed in implementing this stock repurchase program.
Set forth below is a summary of the Plan as is now in effect.
Eligible Participants: Maximum Number of Shares. The Equity Incentive
Plan's eligibility criteria encompasses officers and other key employees of the
Company and its subsidiaries and consultants and other persons who are in a
position to make a significant contribution to the Company and its subsidiaries.
Options for no more than 200,000 shares can be granted to any individual in any
one year under the Plan.
Currently, (prior to the proposed amendments), subject to any future
adjustment for stock splits and similar events, the total number of shares of
Class A Common Stock that can be issued under the Plan is 500,000 shares. If any
award under the Plan which requires exercise by the participant for the delivery
of Class A Common Stock terminates without having been exercised in full, or if
any award payable of Class A Common Stock or cash is satisfied in cash rather
than Class A common stock, the number of shares of Class A Common Stock as to
which such award was not exercised or for which cash was substituted will be
available for future grants. The Plan is not required to be qualified under
Section 401(a) of the Internal Revenue Code, nor is it subject to the provisions
of the Employees Retirement Income Security Act of 1974.
Stock Options. The Equity Incentive Plan permits the granting of options
that qualify as incentive stock options under the Internal Revenue Code
("Incentive Options" or "ISOs") and stock options that do not so qualify ("Non-
Statutory Options"). The option exercise price of each option shall be
determined by the Committee. The option price of an ISO may not be less than
100% of the fair market value of the shares on the date of grant in the case of
ISOs (110% in the case of ISOs granted to a greater than ten percent
stockholder). The option price of a Non-statutory Option may be not less than
par value. However, the Committee's present intention is not to grant options at
below the fair market value of the Class A Common Stock on the effective date of
grant. Subject to these limitations, the Committee may reduce the exercise price
of an option at any time after the time of grant with the consent of the
participant, but the option will be treated as a new option granted on the date
of such reduction.
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The term of each option will be fixed by the Committee, but may not exceed
ten years from the date of grant (five years in the case of an ISO granted to a
greater than ten-percent stockholder). The Committee will determine at what time
or times each option maybe exercised. Options may be made exercisable in
installments, and the exercisability of options may be accelerated by the
Committee. The Committee may, in its discretion, provide that upon exercise of
an option, instead of receiving shares free from restrictions under the Plan,
the participant will receive shares of Restricted Stock or Deferred Stock Awards
as defined below. Also, if the market price of the Class A Common Stock subject
to an option exceeds the price of the option at the time of exercise, the
Committee may, in its discretion, and upon request by an employee, cancel the
option and pay to the employee an amount in cash or Class A Common Stock equal
to the difference between the fair market value of the Class A Common Stock
which would have been purchased pursuant to the exercise (determined on the date
the option is canceled) and the aggregate exercise price which would have been
paid.
The exercise price of options granted under the Plan must be paid in full
in cash or by check, bank draft or money order, or if the terms of the option
permit (or for a non-statutory option, if the Committee so permits at or after
the grant of the option), by shares of Class A Common Stock which have been
owned for at least six months (unless the Committee approves in any instance a
shorter period), by a promissory note, by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or by any combination of the
foregoing, provided that the par value of shares of Class A Common Stock must be
paid in cash or by check or other instrument acceptable to the Company.
Stock Appreciation Rights. The Committee may also grant stock appreciation
rights, alone or in conjunction with options, entitling the holder upon exercise
to receive an amount in any combination of cash or shares of unrestricted Class
A Common Stock, Restricted Stock or Deferred Stock Awards (as determined by the
Committee), in general measured by the increase since the date of grant in the
value of the shares covered by such right. Stock appreciation rights granted in
tandem with options will be exercisable only at such time or times, and to the
extend that the related option is exercisable and will terminate upon the
exercise of the related stock appreciation right.
Treatment of Options and Stock Appreciation Rights Upon Termination of
Employment. If a participant's employment terminates by reason of death or total
or permanent disability, any option or stock appreciation right then held by the
participant that is not exercisable immediately prior to such termination of
employment will terminate on that date. Any remaining options and stock
appreciation rights will remain exercisable for one year from the date of
termination of the employment. In the event of any other termination of
employment (or, in the case of a non-employee participant, in the event such
participant ceases to be affiliated with the Company), all options and stock
appreciation rights held by the participant that are not then exercisable for a
period of three months or such longer period as may be established by the
Committee. (Termination of employment of an employee for cause will result in
immediate termination of all awards if the Committee so determines before or
after the date of such termination.) Notwithstanding the post-termination
exercise periods, described above, no option or stock appreciation right may be
exercised beyond its original term.
Restricted Stock and Unrestricted Stock. The Committee may also award
shares of Class A Common Stock subject to such conditions and restrictions as
the Committee may determine ("Restricted Stock"). The purchase price of shares
of Restricted Stock shall be not less than par value (or past services of
equivalent value). Recipients of Restricted Stock must accept an award within 60
days of the grant of such award by written instrument and tender full payment,
if any, in order to have any rights with respect to the Restricted Stock. The
Committee may at any time accelerate the dates on which the restrictions will
lapse. Generally, shares of Restricted Stock are nontransferable, and if a
participant who holds shares of Restricted Stock terminates employment or
otherwise ceases to be affiliated with the Company for any reason including
death or disability prior to the lapse or waiver of the restrictions, the
employee must resell to the Company the shares of Restricted Stock for the
amount paid for such shares, or forfeit them to the company if no cash was paid;
provided, however, that the Committee may provide that the restrictions lapse
upon any such termination of employment. Prior to the lapse of restrictions on
shares of Restricted Stock, the participant will have all rights of a
stockholder with respect to the shares, including voting and dividend rights,
subject only to the conditions and restrictions generally applicable to
Restricted Stock.
Any participant making an election under Section 83(b) of the Internal
Revenue Code with respect to Restricted Stock must provide a copy thereof to the
Company within 10 days of the filing of such election with the Internal Revenue
Service.
The Committee may also grant shares which are free from any restrictions
under the Plan ("Unrestricted Stock"). The purchase price of Unrestricted Stock
must be not less than par value (or past services of equivalent value).
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<PAGE>
Deferred Stock. The Committee may also make deferred stock awards under the
Plan ("Deferred Stock Awards"). Deferred Stock Awards entitle the recipient to
receive shares of Class A Common Stock in one or more installments at a future
date or dates, and on such conditions as determined by the Committee. Except as
otherwise specified in the grant or agreed to by the Committee, all such rights
to which the participant has not become irrevocably entitled will terminate upon
the participant's death, retirement or other termination of employment or other
affiliation with the Company. The Committee may at any time accelerate the time
at which delivery of all or part of the shares will take place.
Performance Awards (Cash or Stock). The Committee may also grant awards
based on certain performance criteria ("Performance Awards") entitling the
recipient to receive, without payment, shares of Class A Common Stock or cash in
such combinations as the Committee may determine. Payment of the award may be
conditioned on achievement of personal, corporate, departmental or any other
category of performance goals and such other conditions as the Committee shall
determine. Except as otherwise specified in the grant or agreed to by the
Committee, rights under a Performance Award to which the participant has not
become irrevocably entitled will terminate upon a participant's death,
retirement or other termination of employment or other affiliation with the
Company. Any conditions in an award may be waived or modified by the Committee
at any time.
Loans. The Company may make a loan to a participant ("Loan"), either on the
date of or after the grant of any award to the participant. A Loan may be made
either in connection with the purchase of Class A Common Stock under the award
or with the payment of any Federal, state and local income tax with respect to
income recognized as a result of the award. The Board will have full authority
to decide whether to make a Loan and to determine the amount, terms and
conditions of the Loan, including the interest rate. However, no Loan may have a
term (including extensions) exceeding ten years in duration.
Supplemental Grants. In connection with any award, the Committee may at the
time such award is made or at a later date, provide for and grant a cash award
to the participant ("Supplemental Grant") not to exceed an amount equal to the
amount of any Federal, State and Local Income tax on ordinary income for which
the participant will be liable with respect to the award, plus an additional
amount on a grossed-up basis necessary to make the participant whole after tax,
discharging all the participant's income tax liabilities arising from the
Supplemental Grant. Except as otherwise specified in the grant or agreed to by
the Committee, rights under a Supplemental Grant to which the participant has
not become irrevocably entitled will terminate upon a participant's death,
retirement or other termination of employment or other affiliation with the
Company.
No award granted under the Plan (other than an award in the form of an
outright transfer of cash or Unrestricted Stock) may be transferred other than
by will or by the laws of descent and distribution and during an employee's
lifetime an award requiring exercise may be exercised only by the participant
(or in the event of the participant's incapacity, the person legally appointed
to act on the participant's behalf).
Adjustments in Class A Common Stock; Certain Corporate Transactions. In the
event of a stock dividend, stock split and certain other changes in the
Company's capitalization, including extraordinary distributions to shareholders,
the Committee will make appropriate adjustment to the maximum number of shares
that may be delivered under the Plan, the number of shares subject to
outstanding awards, the exercise price of outstanding awards, and other
appropriate adjustments. The Committee may also make such adjustments in other
circumstances if it deems the adjustments necessary to avoid distortion in the
operation of the Plan.
In the event the Company is acquired under prescribed circumstances, all
outstanding awards will terminate. The Committee in its discretion may, however,
accelerate the exercisability of (or lift restrictions applicable to)
outstanding awards, or if the participant will be employed by the acquiring
corporation or an affiliate, may arrange for replacement awards.
Withholding Requirements. The grant or exercise of awards maybe subject to
tax withholding requirements, as described below. Where Class A Common Stock may
be delivered under an award, the Committee may require that the participant or
other appropriate person either remit to the Company an amount necessary to
satisfy withholding requirements or make other satisfactory arrangements
(including, if the Committee so permits, the holding back of shares from
payments under the award).
Where a participant purchases Class A Common Stock under an award for a
price equal to the par value of the stock, the Committee may determine that the
price has been satisfied by past services rendered by the participant.
Effect, Discontinuance, Cancellations, Amendment and Termination. The
Committee may at any time discontinue granting awards under the Plan. The Board
may at any time or times amend the Plan (and the Committee
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may amend any outstanding award) or any outstanding award for any purpose which
may at the time be permitted by law, or may at any time terminate the Plan as to
any further grants of awards, except that the following amendments may not be
made without the approval of the stockholders of the Company: increase in the
maximum number of shares available under the Plan or change in the group of
persons eligible to receive awards under the Plan. No amendment or termination
of the Plan may adversely affect the rights of any participant (without the
participant's consent) under any award previously granted.
Federal Income Tax Effects. In general, neither the grant nor the exercise
of an incentive stock option will result in taxable income to the option holder
or a deduction to the Company. However, option holders exercising incentive
stock options may become subject to the alternative minimum tax by reason of
that exercise.
If the stock received upon the exercise of an incentive stock option is
held for at least two years from the date of grant and at least one year after
the date of exercise, any gain or loss recognized upon the disposition of the
stock will be considered long-term capital gain or loss and will be taxed
accordingly. If shares received upon exercise of an incentive stock option are
disposed of before the holding period requirements described above have been
satisfied (a "Disqualifying Disposition"), the option holder will realize
ordinary income, and the Company will be entitled to a deduction, equal in
general to the difference between the option price and the value of the stock on
the date of exercise. The amount of ordinary income realized on a Disqualifying
Disposition may be limited when the stock is sold for less than its value on the
exercise date. Incentive options granted to an optionee will be treated for
Federal income tax purposes as non-statutory options (see below) to the extent
the aggregate value (determined as of the time of grant) of the stock for which
the options first become exercisable in any calendar year exceeds $100,000. In
the case of non-statutory options, no income results upon the grant of the
option. When an option holder exercises a non-statutory option, he or she will
realize ordinary income, subject to withholding, equal in general to the excess
of the then-fair market value of the stock over the option price. The Company
will in general be entitled to a deduction equal to the amount of ordinary
income realized by the optionee, provided the Company satisfies certain
withholding and reporting requirements.
Special rules will apply in the case of officers or directors subject to
the shore-swing profit limitations of Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), who exercise options within six
months of the grant of those options.
Section 162(m) of the Internal Revenue Code limits to $1 million the
deduction a public corporation may claim with respect to the remuneration paid
in any year to any of the Corporations' top five officers. The deduction
limitation is subject to a number of important exceptions, including an
exception for so-called "performance-based" compensation. It is anticipated that
options granted under the Plan will be eligible for an exception from the $1
million deduction limitation.
The Internal Revenue Code also imposes a 20% additional tax, and denies a
deduction, where remuneration paid in connection with a change in control
exceeds specified limits. In determining whether these limits have been
exceeded, options that vest upon a change in control of the Company may be taken
into account.
The foregoing summary is limited to Federal income tax consequences and
does not purport to be a complete description of those taxes.
Vote Required
The favorable vote of a majority of the votes cast on the matter by all
outstanding shares of Class A Common Stock, Class B Common Stock and Class A
Preferred Stock entitled to vote, voting together, is required to authorized
this amendment.
Recommendation of the Board of Directors
The Board of Directors unanimously recommends a vote FOR the proposed
amendment to the 1995 Equity Incentive Plan.
ITEM #3 PROPOSED AMENDMENTS TO THE ARTICLES OF INCORPORATION
CONCERNING CLASSIFICATION OF THE BOARD OF DIRECTORS.
THE REMOVAL OF DIRECTORS AND RELATED MATTERS
General
The Vermont Business Corporation Act currently provides that the Articles
of Incorporation may provide for classification of the Board into two (or more)
classes.
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The Board of Directors has approved proposed amendments to (a) classify the
Board, effective with this 1997 Annual Meeting, into three classes, as nearly as
equal as possible, so that each director (after a transitional period) will
serve for three years, with one class of directors being elected each year; (b)
provide that directors may be removed only for cause and with the approval of at
least two-thirds of the votes cast on the matter by all of the outstanding
shares of capital stock of the Company entitled to vote generally in the
election of directors; (c) provide that any vacancy resulting from such a
removal may be filled by two-thirds of the directors then in office; and (d)
increase the stockholder vote required to alter, amend, repeal or adopt any
provision inconsistent with these amendments proposed in Item 3 to at least
two-thirds of the votes cast on the matter by all of the outstanding shares of
capital stock of the Company entitled to vote generally in the elections of
directors, voting together.
The Board of Directors of the Company has directed that the proposed
amendments be submitted to a vote of the stockholders of the Company at the
Annual Meeting and recommends to the stockholders that the amendments set forth
in Item 3 be adopted. If the proposed amendments are approved, the Articles of
Incorporation will be amended to include the Article entitled "Classification of
Directors" reading as set forth in Exhibit A attached hereto and adoption of
Item 3 will constitute approval of such amendments.
The Company believes the proposed amendments would, if adopted, effectively
reduce the possibility that a third party could effect a change, including a
tender offer or a sudden or surprise change in the composition of the Company's
Board of Directors, without the support of the incumbent Board and accordingly
that adoption of the amendments will strengthen Ben & Jerry's ability to remain
an independent, Vermont-based company, which Ben & Jerry's believes is in the
best interest of the Company, its stockholders, its employees and the Vermont
community. However, the adoption of the proposed amendments may have significant
effects on the ability of stockholders of the Company to change the composition
of the incumbent Board, to benefit from transactions which are opposed by the
incumbent Board, to assume control of the Company or to effect a fundamental
corporate transaction such as a merger and adoption may assist management in
retaining its present positions. Accordingly, before voting on the proposed
amendments, stockholders should read carefully the description contained below
in "Anti-Takeover Effects of Existing Provisions of the Articles of
Incorporation Relating to the Class B Common Stock and Class A Preferred Stock"
as well as the following description of the proposed amendments.
The Company's management is not presently aware of any pending or
threatened effort to take over control of the company or to change management,
either by a third party or by any holder or holders of any substantial block of
the Company's capital stock, whether by merger, tender offer, solicitation in
opposition to management or otherwise. Accordingly, Item 3 is not being
recommended in response to any specific effort to obtain control of the Company
of which the Company is aware. The Board of Directors has concluded, however,
that it is desirable to consider these amendments at a time when the Company is
not subject to a takeover attempt because the Board of Directors believes it is
prudent to seek stockholder approval of these measures in advance since, given
time and other constraints, such action would often be impractical once a
hostile attempt has been announced. The Board has no present intention to adopt
or propose any other proposals designed to deter an unsolicited takeover of the
Company.
Description of the Proposed Amendments.
Classification of the Board of Directors. The By-laws now provide that each
director shall hold office until such director's successor is elected and
qualified and that an annual meeting of stockholders shall be held each year for
the election of directors. The proposed Article titled "Classification of
Directors" provides that the Board shall be divided into three classes of
directors, each class to be nearly equal in number of directors as possible. If
the proposed amendments are adopted, the Company's directors will be divided
into three classes and three directors will be elected for a term expiring at
the 1998 Annual Meeting of Stockholders, Three directors will be elected for a
term expiring at the 1999 Annual Meeting of Stockholders, and four directors
will be elected for a term expiring at the 2000 Annual Meeting of Stockholders
(in each case, until their respective successors are elected and qualified).
Starting with the 1998 Annual Meeting of Stockholders, one class of directors
will be elected each year for a three-year term. For information regarding the
Board of nominees for election at this 1997 Annual Meeting and the class of
Directors in which each nominee will initially serve if the proposed amendments
are adopted, see Item 1--"Election of Directors".
The proposed classification of directors is consistent with the provisions
of Section 8.06 of the Vermont Business Corporation Act, which provides as
follows: "The articles of incorporation may provide for staggering their terms
by dividing the total number of directors into two, three, four or five groups,
with each group containing one-half, one-third, one-quarter or one-fifth of the
total, as near as may be. In that event, the terms of directors in the first
group expire at the first annual shareholders' meeting after their election, the
terms of the second group
14
<PAGE>
expire at the second annual shareholders' meeting after their election, and the
terms of the third group, fourth group and fifth group, if any, expire at the
third, fourth or fifth annual shareholders' meeting after their election. At
each annual shareholders' meeting held thereafter, directors shall be chosen for
a term not to exceed five years, as the case may be, to succeed those whose
terms expire."
The classification of directors will have the effect of making it more
difficult to change the composition of the Board. At least two stockholder
meetings, instead of one, will be required to effect a change in the control of
the Board. The Board believes that the longer time required to elect a majority
of a classified Board will help to assure the continuity and stability of the
Company's management and policies in the future, because a majority of the
directors at any given time will have prior experience as directors of the
Company. (The Company has not experienced any significant problems to date with
the continuity and stability of the Company's management and policies.) It
should be noted that the classification provisions will apply to every election
of directors, whether or not a change in the Board would be beneficial to the
Company and its stockholders and whether or not a majority of the Company's
stockholders believes that such a change would be desirable.
Removal of Directors; Filling Vacancies on the Board of Directors. The
proposed amendments provide that a director, or the entire Board, may be
removed, only for cause, by the affirmative vote of the holders of at least
two-thirds of the votes cast in the matter by the outstanding shares of capital
stock entitled to vote generally in the election of directors. Currently neither
the Company's Articles of Incorporation nor its By-laws contain a provision
describing the director removal procedures.
The proposed amendments provide that a vacancy on the Board resulting from
such a removal may be filled by vote of two-thirds of the directors then in
office. The proposed amendments would also permit the remaining directors then
in office to fill such a vacancy on the Board through less than a quorum. In
addition, the proposed amendments provide that any new director elected to fill
such a vacancy on the Board will serve for the remainder of the full term of the
class in which the vacancy occurred. It also provides that no decrease in the
number of directors shall shorten the term of any incumbent. Currently the
Company's By-laws provide that a vacancy on the Board resulting from removal of
a director may be filled by a vote of a majority of the directors then in office
and permit the remaining directors then in office to fill such a vacancy, even
though less than a quorum. The By-laws also provide that any director elected to
fill such a vacancy on the Board will hold office until the election of their
successor at the Annual Meeting of Stockholders. The Vermont Business
Corporation Act provides that a vacancy occurring on the Board, including a
vacancy resulting from an increase in the number of directors, may be filled by
the shareholders or a majority of the remaining directors even though less than
a quorum, subject to any greater voting requirements contained in the Articles
of Incorporation. The Provisions of the proposed amendments relating to the
removal of directors and the filling of vacancies on the Board will preclude a
third party from removing incumbent directors without cause and simultaneously
gaining control of the Board by filling the vacancies created by removal with
its own nominees. The proposed amendments would also have the effect of allowing
directors to fill any vacancy created by removal of a director by the
stockholders. Therefore, if any director is removed by a vote of the
stockholders, the directors then in office would have the right to replace such
director with a nominee of their choosing without stockholder approval.
Increased Stockholder Vote for Alteration, Amendment or Repeal of Proposed
Amendments. Under Vermont Business Corporation Act, stockholder approval of most
amendments to the Articles of Incorporation requires, in the absence of a
greater voting requirement in the Articles of Incorporation, the favorable vote
of at least a majority of the votes cast on the matter by the class (or classes)
of stockholders entitled to vote thereon. The Vermont Business Corporation Act
also permits provisions to be contained in the Articles of Incorporation, to
require a greater vote. With respect to such greater-voting provisions, the
Vermont Business Corporation Act requires that any alterations, amendment or
repeal thereof be approved by an equally large stockholder vote as is required
by the Vermont Business Corporations Act for initial adoption of the amendments.
As permitted by these provisions of Vermont Business Corporation Act, the
proposed amendments discussed above would require approval of at least
two-thirds of the votes cast on the matter by all of the outstanding shares of
capital stock of the Company entitled to vote generally in the election of
directors, voting together, for the alteration, amendment or repeal of, or the
adoption of any provision inconsistent with, the Article entitled
"Classification of Directors".
The requirement of an increased stockholder vote is designed to prevent a
stockholder or a group of stockholders controlling a majority (but less than
two-thirds) of the voting power of all the outstanding shares of capital stock
of the Company entitled to vote from avoiding the requirements of the proposed
amendments by simply repealing them.
Anti-Takeover Effects of Existing Provisions of the Articles of
Incorporation Relating to the Class B Common Stock and Class A Preferred Stock.
The Company presently has in effect certain provisions in its Articles of
15
<PAGE>
Incorporation which, by themselves, or when added to the proposed Amendments to
the Articles of Incorporation in this Item 3, could preclude or inhibit the
takeover of the Company by a transaction not favored by the incumbent directors
and officers, including the Principal Stockholders (as defined below) and the
Ben & Jerry's Foundation, Inc.
The holders of Class A Common Stock are entitled to one vote for each share
held on all matters voted on by stockholders, including the election of
directors. The holders of Class B Common Stock are entitled to ten votes for
each share held in the election of directors and on various other matters,
except as limited by law. The Class B Common Stock is generally nontransferable,
and while there is no trading market for the Class B Common Stock, the Class B
Common Stock is freely convertible into Class A Common Stock on a
share-for-share basis and transferable thereafter. A stockholder who does not
wish to complete the prior conversion process may effect a sale by simply
delivering the certificate for such shares of Class B Common Stock to a broker,
properly endorsed. The broker may then present the certificate to the Company's
Transfer Agent which, if the transfer is otherwise in good order, will issue to
the purchaser a certificate for the number of shares of Class A Common Stock
thereby sold.
The Company has been advised that Mr. Ben Cohen (Chairperson and director
of the Company), Mr. Jerry Greenfield (Vice Chairperson and director of the
Company), Mr. Fred Lager (a director of the Company not standing for re-election
) and Mr. Jeff Furman (director of the Company) (collectively, the "Principal
Stockholders") presently intend to retain substantial numbers of shares of Class
B Common Stock. As a result of conversions by "public" stockholders of Class B
Common Stock, in order to enable their sales of such securities, the Class B
Common Stock is now held disproportionately by Company insiders, including the
above-named four directors who are Principal Stockholders. See "Security
Ownership of Certain Beneficial Owners and Management." As of March 7, 1997,
these four principal individual stockholders held shares representing 48.5% of
the aggregate voting power in elections of directors and various other matters
but only 19.94% of the aggregate common equity outstanding, permitting them, as
a practical matter, generally to decide elections of directors and thereby
effectively control the business, policies and management of the Company and
also to decide various other questions submitted to a vote of the Company's
stockholders even though they might sell substantial portions of their Class A
Common Stock.
The Board of Directors, without further stockholder approval, may authorize
the issuance of additional authorized but unissued shares of Class B Common
Stock in the future and sell shares of Class B Common Stock held in the
Company's treasury subject to compliance with listing requirements of the
NASDAQ-NMS.
In 1985, Ben Cohen, Chairperson of the Board, contributed 900 shares of
Preferred Stock to The Ben & Jerry's Foundation, Inc. While the Foundation is a
charitable entity legally separate from the Company, it may be deemed to be an
affiliate of the Company because its directors are also directors of the
Company. The Preferred Stock gives the Foundation a special class voting right
to act with respect to certain Business Combinations (as defined in the
Company's Articles of Incorporation). The issuance of the Preferred Stock to the
Foundation effectively limits the voting rights that holders of the Class A
Common Stock and Class B Common Stock, the owners of virtually all of the equity
in the Company, would otherwise have with respect to Business Combinations (as
defined). This may have the effect of limiting such common stockholders'
participation in certain transactions such as mergers, other Business
Combinations (as defined) and tender offers, whether or not such transactions
might be favored by such common stockholders.
The Class B Common Stock and the Preferred Stock may be deemed to be
"anti-takeover" devices in that the Board of Directors believes the existence of
these securities will make it difficult for a third party to acquire control of
the Company on terms opposed by the holders of the Class B Common Stock,
including primarily the Principal Stockholders, and the Foundation or for
incumbent management and the Board of Directors to be removed. The Board
believes that these existing provisions, adopted in 1987 and 1985, have
strengthened the ability of the Company to remain an independent, Vermont-based
business.
The Company's Board of Directors has approved the amendments adding the
Article entitled "Classification of Directors" to the Articles of Incorporation
and believes that such amendments are advisable and in the best interest of the
Company and its stockholders.
Vote Required
The affirmative vote of at least two-thirds of the votes cast on the matter
by all outstanding shares of Class A Common Stock, Class B Common and Class A
Preferred, voting together, is required to authorize the proposed amendments in
this Item 3.
Recommendation of the Board of Directors
Accordingly, the Board of Directors recommends that the stockholders vote
FOR approval of the amendment.
16
<PAGE>
ITEM #4 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
1997. 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.
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 1997.
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 1997.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of April 21, 1997
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 Community Drive,
South Burlington, Vermont 05403-6828.
<TABLE>
<CAPTION>
Amount of
Beneficial
Ownership of
Class A Common Stock
------------------- -----------------
Percentage of
Outstanding
Number of Shares Shares (a)
------------------- ----------------
<S> <C> <C>
Ben Cohen (c) 604,373 9.6%
Perry Odak 24,580 *
Fred Lager (d) 30,600 *
Jeffrey Furman (e),(f) 10,000 *
Henry Morgan 3,224 *
Jerry Greenfield (e) 130,000 2.01%
Frederick A. Miller 1,124 *
Elizabeth Bankowski 3,134 *
Jennifer Henderson 524 *
Bruce Bowman 403 *
Frances Rathke 3,315 *
Putnam Investments, Inc.
One Post Office Square
Boston, MA 02109 472,250(1) 6.5%
The Capital Group
Companies, Inc.
333 South Hope St.
Los Angeles, CA 90071 755,500(2) 11.9%
All Officers and directors
as a group (13 persons) 788,817 12.53%
The Ben & Jerry's
Foundation, Inc.(g) -- --
<CAPTION>
Amount of Amount of
Beneficial Beneficial
Ownership of Ownership of
Class B Common Stock Preferred Stock
------------------------------------ ------------------------------------
Percentage of Percentage of
Outstanding Outstanding
Number of Shares Shares (b) Number of Shares Shares
------------------- ---------------- ------------------- ---------------
<S> <C> <C> <C> <C>
Ben Cohen (c) 487,876 52.24% -- --
Perry Odak -- -- -- --
Fred Lager (d) 53,600 5.9% -- --
Jeffrey Furman (e),(f) 30,300 3.3% -- --
Henry Morgan * * -- --
Jerry Greenfield (e) 90,000 9.9% -- --
Frederick A. Miller -- * -- --
Elizabeth Bankowski -- * -- --
Jennifer Henderson -- -- -- --
Bruce Bowman -- * -- --
Frances Rathke -- * -- --
Putnam Investments, Inc.
One Post Office Square
Boston, MA 02109 -- * -- --
The Capital Group
Companies, Inc.
333 South Hope St.
Los Angeles, CA 90071 -- ** -- --
All Officers and directors
as a group (13 persons) 661,776 72.6% -- --
The Ben & Jerry's
Foundation, Inc.(g) -- -- 900 100%
</TABLE>
17
<PAGE>
- ------------
(1) Putnam Investments, Inc. is a wholly-owned subsidiary of Marsh & McLennan
Companies, Inc., and wholly owns two registered investment advisers: Putnam
Investment Management Inc., which is the investment adviser to the Putnam
family of mutual funds and The Putnam Advisory Company, Inc., which is the
investment adviser to Putnam's institutional clients. Both subsidiaries
have dispository power over the shares as investment managers, but each of
the mutual fund's trustees have voting power over the shares held by each
fund, and The Putnam Advisory Company, Inc. has shared voting power over
the shares held by the institutional clients.
(2) The Capital Group Companies, Inc. is the parent company of Capital Research
and Management Company, SMALLCAP World Fund, Inc. and Capital Guardian
Trust Company. As a result of the investment power and in some cases the
voting power held by the subsidiary companies, The Capital Group Companies,
Inc., may be deemed to "beneficially own" such securities by virtue of Rule
13d-3 under the Securities Exchange Act of 1934.
* Less than 1%
(a) Based on the number of shares of Class A Common Stock outstanding as of
April 21, 1997. 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
April 21, 1997. 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 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 formerly a consultant to the
Company and Ms. Bankowski, a Director and Executive Officer of 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 Ben & Jerry's Foundation, Inc. is an entity legally separate from
the Company, it may be deemed to be an affiliate of the Company under the
securities laws.
18
<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 (as in the case of Item 3) 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 1998 Annual
Meeting must be received by the Secretary of the Company at the Company's
headquarters in South Burlington, Vermont by January 31, 1998.
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.
You are encouraged to exercise your right to vote by marking the
appropriate boxes, and dating and signing the enclosed proxy 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 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 16, 1997 Ben & Jerry's Homemade, Inc.
19
<PAGE>
EXHIBIT A
Proposed Additional Article to the Articles of Incorporation (Item 3)
Classification of Directors
(A) Commencing with the election of directors at the 1997 Annual Meeting at
which this Article entitled "Classification of Directors" is adopted by
stockholders of the Corporation, the directors of the Corporation shall be
classified and divided into three classes, as nearly equal in number as
possible, one class ("Class A") whose term expires at the first annual meeting
of stockholders to be held after their election, another class ("Class B") whose
term expires at the second annual meeting of stockholders to be held after their
election and another class ("Class C") whose term expires at the third annual
meeting of stockholders to be held after their election, with each class to hold
office until its successors are elected and qualified. At each annual meeting of
the stockholders of the Corporation thereafter, the successors of the class of
directors whose term expires at such meeting shall be elected to hold office for
a term expiring at the annual meeting of stockholders held in the third year
following the year of their election. Any director elected to fill a newly
created directorship or any vacancy on the Board of Directors resulting from any
death, resignation, removal or other reason shall hold office for the remainder
of the full term of the class of directors in which the new directorship was
created or the vacancy occurred and until such director's successor shall have
been elected and qualified.
(B) Any director or directors may be removed from office at any time, but
only for cause and only upon the affirmative vote of two-thirds of the votes
cast by of the then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors, voting together. Any
vacancy in the Board of Directors resulting from any such removal may be filled
by vote of two-thirds of the directors then in office, although less than a
quorum, or by a sole remaining director, and any director so chosen shall hold
office until the next election of the class for which such director shall have
been chosen and until such director's successor shall be elected and qualified
or until such director's earlier death, resignation or removal.
(C) In the event of any increase or decrease in the authorized number of
directors, the newly created or eliminated directorships resulting from such
increase or decrease shall be apportioned by the Board of Directors among the
three classes of directors so as to maintain such classes as nearly equal as
possible. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
(D) Notwithstanding any other provision of the Articles of Association or
the By-laws of the Corporation (and notwithstanding the fact that a lesser vote
may be specified by law), the affirmative vote of two-thirds of the votes cast
by the then-outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors, voting together, shall be required
to alter, amend or repeal, or to adopt any provision inconsistent with the
purpose or intent of the provision of this Article, entitled "Classification of
Directors", of the Articles of Association of the Corporation.
A-1
<PAGE>
CLASS A and/or 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, Jerry Greenfield and Perry Odak 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 and B Common Stock of Ben & Jerry's Homemade, Inc. held of
record by the undersigned on April 21, 1997 at the Annual Meeting of
Stockholders to be held on June 28, 1997 on the Golf Course at Sugarbush 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, Pierre Ferrari, Jeffrey Furman, Jerry
Greenfield, Jennifer Henderson, Frederick A. Miller, Henry Morgan, Perry D.
Odak, Andrew S. Patti.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
2. APPROVING an amendment to the 1995 Equity Incentive Plan increasing the
aggregate number of shares of Class A Common Stock authorized to be awarded and
delivered thereunder to 900,000 shares.
3. APPROVING amendments to the Articles of Incorporation concerning
classification of the Board of Directors, the Removal of Directors and related
matters.
4. APPROVING the selection of Ernst & Young as the Company's independent
auditors for 1997.
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.
