Ben & Jerry's Homemade, Inc.
30 Community Drive
South Burlington, VT 05403-6828
Date: May 7, 1999
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of Shareholders,
which will be held on Saturday, June 26, 1999 at Sugarbush Resort's Lincoln
Peak, in Warren, Vermont at 10:00 A.M. Enclosed is a Proxy Statement and Proxy
Card for voting Class A Common Stock and Class B Common Stock, a parking pass
for the 1999 Shareholder Meeting, and a copy of the 1998 Annual Report to
Shareholders.
On the following pages, you will find a Notice of the 1999 Annual Meeting and
Proxy Statement. The Notice of Annual Meeting lists three items of formal
business to address at the Annual Meeting.
After carefully considering the Proxy Statement, we hope that you will support
the election of the Directors and in approving Item 2 and Item 3.
We will follow the formal business with time for discussion, and we welcome 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 Resort's Mt. Ellen, in
Warren, Vermont. The Festival will run from 11:00 A.M. until 7:00 P.M. and will
be filled with lots of good music, good food, good fun, good intentions and good
friends. Please join us in this community celebration.
Best regards,
Jerry Greenfield,
Chairperson
Perry D. Odak
Chief Executive Officer
<PAGE>
Ben & Jerry's Homemade, Inc.
30 Community Drive
South Burlington, VT 05403-6828
TABLE OF CONTENTS
Page
Notice of Annual Meeting of Shareholders................................1
Proxy Statement.........................................................2
Introduction.......................................................2
Shares Outstanding, Voting Rights and Record Date..................2
Item 1 - Nominees for Director
Directors Standing for Election....................................2
Committees of the Board............................................5
Item 2 - Proposed Amendment to the 1995 Equity Incentive Plan,
Increasing the Number of Shares Available for Delivery.............6
Item 3 - Ratification of Selection of Auditors.........................12
Security Ownership of Certain Beneficial Owners and Management.........13
Executive Compensation
Summary Compensation Table........................................14
Options/SAR Grants................................................15
Aggregate Options.................................................15
Compensation Committee Report.....................................15
Certain Relationships & Related Transactions......................18
Stock Performance Graph................................................21
Voting, Miscellaneous, General, etc....................................22
<PAGE>
Ben & Jerry's Homemade, Inc.
30 Community Drive
South Burlington, VT 05403-6828
NOTICE OF THE 1999 ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Shareholders of Ben &
Jerry's Homemade, Inc. will be held at Sugarbush Resort's Lincoln Peak in
Warren, Vermont, on June 26, 1999, 10:00 A.M. (EST), for the following purposes:
1. To fix the number of directors at eight and to elect a class of two
directors to succeed the class whose term expires with this Annual Meeting,
such class to serve until the year 2002 Annual Meeting and until their
successors are duly elected and qualified.
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 delivery in connection with awards under such Plan from
900,000 shares of Class A Common Stock to 1,300,000 shares of Class A
Common Stock.
3. To consider and act upon a proposal to ratify the selection of Ernst &
Young LLP as independent auditors for the 1999 fiscal year.
4. To transact any other business that may properly be brought before the
Meeting or any adjourned session thereof.
Shareholders of record at the close of business on April 19, 1999 are entitled
to notice of, and to vote at, the Meeting and any adjourned session thereof.
By order of the Board of Directors,
Frances G. Rathke
Secretary
South Burlington, Vermont
May 7, 1999
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 POSTAGE PAID
ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING
<PAGE>
Ben & Jerry's Homemade, Inc.
30 Community Drive
South Burlington, VT 05403-6828
1999 ANNUAL MEETING OF SHAREHOLDERS
June 26, 1999
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 1999 Annual
Meeting of Shareholders to be held at Sugarbush Resort's Lincoln Peak, Warren,
Vermont on Saturday, June 26th 1999, at 10:00 A.M., (EST), and at any adjourned
session thereof (the "Meeting").
Any proxy may be revoked prior to its exercise (i) by written notice received by
the Secretary of the Company at its mailing address set forth above, (ii) by
execution of a later-dated proxy or (iii) by attending the Meeting and voting
the shares covered by the proxy in person.
Shareholders of record at the close of business on April 19, 1999 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 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 19, 1999 there were
outstanding and entitled to vote 6,621,396 shares of Class A Common Stock,
819,045 shares of Class B Common Stock and 900 shares of Class A Preferred
Stock.
The Company's Annual Report for 1998 is being mailed to shareholders with this
Proxy Statement. It is expected that this Proxy Statement will be mailed to
shareholders on or about May 14, 1999.
ITEM 1 - NOMINEES FOR DIRECTOR
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 eight 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 filling
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 were previously elected
directors of the Company at the 1998 Annual Meeting.
The Board of Directors proposes to designate a class of two Directors (Class A)
to serve until the year 2002 Annual Meeting and until their successors have been
duly elected and qualified; and to elect Messrs. Jeffrey Furman and Henry
Morgan, each of whom are currently members of the Board and were elected at the
1998 Annual Meeting to the Class A Directors.
Information is furnished below with respect to the nominees for election to the
Class A Directors, as well as the Directors continuing in office. Each Director
will serve until his or her successor is elected and qualified. None of the
nominees for director is related to any other director or executive officer of
the Company.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF MESSRS.
FURMAN AND MORGAN.
<PAGE>
Messrs. Furman and Morgan have been designated Class A Directors to serve if
elected for a term of three years expiring at the 2002 Annual Meeting of
Shareholders and until their successors are elected and qualified.
Set forth below is information relating to the nominees. 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.
CLASS A DIRECTORS, TO BE ELECTED FOR A THREE YEAR TERM, TO EXPIRE AT THE ANNUAL
MEETING OF SHAREHOLDERS 2002, AND UNTIL THEIR SUCCESSORS ARE ELECTED AND
QUALIFIED.
<TABLE>
<CAPTION>
Name Age Principal Occupation or Employment Director Since
- --------------------------- ------------------------------------------------------ -------------------
<S> <C> <C> <C>
Jeffrey Furman 55 Jeffrey Furman is Treasurer and Director of the Ben 1982
& Jerry's Foundation, Inc. Currently, Mr. Furman is
a self-employed Consultant. Mr. Furman was a
consultant to the Company from March 1991 through
December 1996.
Henry Morgan 73 Henry Morgan is retired Dean Emeritus of Boston 1987
University School of Management. Mr. Morgan serves
on the Board of Directors of Cambridge
Bancorporation, Southern Development Bancorporation
and Cleveland Development Bancorporation
<PAGE>
MEMBERS OF THE BOARD OF DIRECTORS (CLASS B) WHOSE, TERMS EXPIRE AT THE ANNUAL MEETING OF SHAREHOLDERS 2000:
Pierre Ferrari 48 Pierre Ferrari, has been President of Lang 1997
International, a marketing consulting firm since
1997. From 1994 to 1997, Mr. Ferrari was the
Special Assistant to the President and CEO of Care,
the world's largest private relief and development
agency. Prior to 1994, Mr. Ferrari held various
senior level marketing positions at The Coca-Cola
Company.
Jerry Greenfield 47 Jerry Greenfield, a Founder of the Company, has 1977
served as Director, Vice-Chairperson and currently,
Chairperson of Ben & Jerry's Homemade, Inc. Mr.
Greenfield is also President and Director of the Ben
& Jerry's Foundation, Inc.
Frederick A. Miller 52 Frederick A. Miller has been President of Kaleel 1992
Jamison Consulting Group, Inc., a strategic culture
change and management consulting firm since 1985.
MEMBERS OF THE BOARD OF DIRECTORS (CLASS C) WHOSE, TERMS EXPIRE AT THE ANNUAL MEETING OF SHAREHOLDERS 2001:
Bennett Cohen 47 Ben Cohen, a Founder of the Company, has served as 1977
Director, Chairperson and currently,
Vice-Chairperson of Ben & Jerry's Homemade, Inc.
From January 1, 1991 to January 30, 1995, he was the
Chief Executive Officer. Mr. Cohen is a director of
Blue Fish Clothing, Inc., Community Products, Inc.,
Social Venture Network and GreenPeace International.
In 1997 Community Products, Inc. filed for
protection under Chapter 11 of the United States
Bankruptcy Code.
Jennifer Henderson 45 Jennifer Henderson is Director of Training at the 1996
Center for Community Change in Washington, DC and
President of Strategic Interventions, Inc., a
leadership and management consulting firm.
<PAGE>
Perry D. Odak 53 Perry Odak has served as Chief Executive Officer of 1997
the Company since December 31, 1996, as Director of
the Company since January 1997, and as Chief
Executive Officer and President since June 1997.
From 1990 to 1996, Mr. Odak was a principal in Odak,
Pezzani & Company, a private management consulting
firm. From 1994 to 1995, Mr. Odak was Chief
Executive Officer of Graham Packaging.
</TABLE>
There were six meetings of the Board of Directors in 1998. Directors who are not
employees or full-time consultants of the Company receive an annual retainer fee
of $18,000, in addition to a $1,000 per board meeting attendance fee and
reimbursement of reasonable out-of-pocket expenses. The Company has 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 Class A Common Stock having a fair market value (as of
the date of payment) equal to the amount of such annual retainer. Four
non-employee directors, Pierre Ferrari, Frederick Miller, Henry Morgan and
Andrew Patti (who resigned from the Board in September, 1998) each elected to
receive 936 shares of Class A Common Stock in Lieu of the cash retainer for the
twelve month period ending July 1, 1999 under this Plan.
The Board of Directors has an Audit Committee on which Directors Ferrari,
Furman, and Morgan (Chairperson) serve. This Committee met two times in 1998.
The Audit Committee reviews with management and the Company's independent public
accountants the following: 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 procedures and internal controls, and such other matters as the
Committee deems appropriate.
The Board of Directors has a Compensation Committee, which reviews salary and
related compensation matters regarding the officers of the Company, and in
particular, the compensation of all executive officers of the Company. The
Compensation Committee makes recommendations to the Board regarding policy
changes related to compensation and administers certain compensation plans,
including: the 1995 Equity Incentive Plan, the 1999 Equity Incentive Plan (under
which officers and directors are ineligible), the Employee Stock Purchase Plan,
and the 1985 Stock Option Plan (under which no further options may be granted).
Directors Miller, Morgan and Henderson, (Chairperson) serve on this Committee.
The Committee met three times in 1998.
The Board of Directors has a Governance and Nominating Committee on which
Directors Ferrari, Greenfield, Henderson, Odak and until April 15, 1999, Cohen
(Chairperson) serve. The Committee met two times in 1998.
<PAGE>
The Board of Directors has an Executive Committee on which Directors Cohen,
Miller, Morgan, Odak and Ferrari serve. The Committee did not meet in 1998.
The Board of Directors has a Social Mission/WorkCulture Committee on which
Directors Bankowski, Furman, Henderson and Miller (Chairperson) serve. The
Committee oversaw the preparation of the 1998 Social Performance Assessment. The
Committee met five times in 1998.
Effective March 31, 1998, the Board established a Finance Committee on which
Messrs. Morgan (Chair), Greenfield and Patti (who resigned in September, 1998)
serve. The Committee did not meet in 1998.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE TO FIX THE NUMBER
OF DIRECTORS AT EIGHT AND TO VOTE FOR EACH OF THE TWO NOMINEES.
ITEM 2 - PROPOSED AMENDMENT TO THE 1995 EQUITY INCENTIVE PLAN INCREASING THE
NUMBER OF SHARES AUTHORIZED TO BE DELIVERED THEREUNDER
General. Subject to approval by the stockholders at the 1999 Shareholder
Meeting, the Board of Directors approved on April 15, 1999 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 Class A Common 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 19, 1999 there were 107,147 shares available for the granting of
options or other stock-based future awards under the Plan, and the Company had
outstanding options under the Plan, the 1985 Stock Option Plan and the 1999
Equity Incentive Plan referred to below and related contractual arrangements for
an aggregate of 1,088,055 shares of Class A Common Stock. The Board of Directors
believes that the number of shares remaining available for issuance under the
Plan is clearly 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 900,000
shares to 1,300,000 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.
On January 21, 1999 the Compensation Committee granted non-incentive stock
options to purchase 316 shares to each full-time employee (excluding officers
and directors who did not receive any option grant) who has been an employee
since January 1, 1999 and regular part-time employees who have been with the
Company since January 1, 1996 with more than an average of 25 hours per week.
These options, aggregating approximately 200,000, were granted under the 1999
Equity Incentive Plan, since there were not sufficient shares available for
grant under the 1995 Equity Incentive Plan.
<PAGE>
From 1997 until March 31, 1999, the Company, pursuant to Board programs,
repurchased an aggregate of 312,000 shares of its Class A Common Stock. These
shares are available for delivery under the Plan, thereby substantially
compensating for the dilution incident to the issue of shares under the Plan,
following adoption of the proposed amendment to the Plan. The Board of Directors
presently intends to repurchase up to $2.8 million of additional shares of the
Class A Common Stock, provided that the stock can be so repurchased at market
prices deemed favorable by the Board. However, given the increase in late March
- - early April 1999 in the market price for Ben & Jerry's stock, there is no
assurance that the Company will succeed in implementing this additional stock
repurchase program.
Set forth below is a summary of the Plan now in effect:
ELIGIBLE PARTICIPANTS: MAXIMUM NUMBER OF SHARES. The Plan's eligibility
criterion 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 amendment), 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 900,000 shares. If any award
under the Plan that 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 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 exercise price of
a Non-statutory Option may be not less than the fair market value of the Class A
Common Stock on the effective date of grant. In accordance with a proposed
change in generally accepted accounting principles, the Plan was recently
amended by the Board to prohibit any repricing of options, i.e. the granting of
options at a lower price in exchange for cancellation of higher priced options
and to prohibit the grant of options with an exercise price below the fair
market value on the effective date of the grant. The Committee has never
repriced any options or granted any options below market.
<PAGE>
Options under the Plan have typically been granted with vesting provisions such
that they generally vest over a four year period. Options granted to the CEO
have been granted with longer vesting provisions, but with acceleration of
vesting under specified conditions.
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 may be 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, 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, 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, provided that the par value of any new
issue of shares of Class A Common Stock must be paid in cash or by check or
other instrument acceptable to the Company or by any combination of the
foregoing.
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
extent 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 shall
terminate and all options and stock appreciation rights then exercisable shall
<PAGE>
continue to be 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).
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 irrevocable 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
<PAGE>
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' 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 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).
CHANGE OF CONTROL. Immediately prior to a change in control of the Company (as
defined), all options and stock appreciation rights are accelerated and become
vested, provided that the Committee may also arrange for substituted options to
be granted by a company that is acquiring control in the transaction.
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.
<PAGE>
In the event the Company is acquired under prescribed circumstances, all
outstanding awards, which will have vested immediately prior to a change in
control, 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 may be 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 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 satisfied certain withholding and
reporting requirements.
<PAGE>
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 at the end of such year. 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 a "performance based"
exception from the 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 no
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 authorize 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 - 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 1999.
The Board of Directors has recommended that shareholders ratify this selection.
The Board of Directors will review its selection if this proposal is not
approved by the shareholders 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 and will have
the opportunity to make a statement if they desire to do so and will be
available to reply to shareholder 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 1999.
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 1999.
The following table sets forth certain information as of April 19, 1999 with
respect to the beneficial ownership of the outstanding shares of Class A Common
Stock, Class B Common Stock and Class A 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 any class, (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 Ben &
Jerry's Homemade, Inc., 30 Community Drive, South Burlington, Vermont
05403-6828, except as otherwise indicated.
<PAGE>
<TABLE>
<CAPTION>
Amount of Beneficial Ownership
Class A Common Stock Class B Common Stock Preferred Stock
% Outstanding % Outstanding % Outstanding
Name # Shares shares (1) # Shares Shares (2) # Shares Shares
- ---- -------- ---------- -------- ---------- -------- ------
<S> <C> <C> <C> <C>
Ben Cohen (3) 447,673 7.1% 488,486 59.7% - -
Jeffrey Furman (4)(5) 17,000 * 30,300 3.7% - -
Jerry Greenfield (4) 130,000 2.1% 90,000 11.0% - -
Perry Odak (6) 265,125 4.1% - - - -
Elizabeth Bankowski (4) 25,704 * - - - -
Pierre Ferrari 6,377 * - - - -
Jennifer Henderson 524 * - - - -
Frederick A. Miller 3,101 * - - - -
Henry Morgan 5,101 * - - - -
Lawrence E. Benders 21,667 * - - - -
Bruce Bowman 33,619 * - - - -
Charles Green 24,063 * - - - -
Angelo Pezzani 30,917 * - - - -
Frances Rathke 39,966 * - - - -
The Capital Group 587,500 9.4% - - - -
Companies, Inc. (7)
333 South Hope St
Los Angeles, CA 90071
Warburg Pincus Asset 745,800 11.9%
Management
466 Lexington Ave
New York, NY 10017
All Officers and Directors 1,077,085 16.0% 608,786 74.4% - -
as a group of 15
persons
The Ben & Jerry's - - - - 900 100%
Foundation, Inc. (4)
</TABLE>
* Less than 1%
(1) Based on the number of shares of Class A Common Stock outstanding as of
April 19, 1999. Each share of Class A Common Stock entitles the holder to
one vote per share.
(2) Based on the number of shares of Class B Common Stock outstanding as of
April 19, 1999. Each share of Class B Common Stock entitles the holder to
ten votes.
(3) Under the regulations and interpretations of the Securities and Exchange
Commission, Mr. Cohen may be deemed to be a parent of the Company.
(4) By virtue of their positions as directors of The Foundation, which has the
power to vote or dispose of the Class A Preferred Stock, each of Messrs.
Greenfield, a co-founder, Director and Chairperson of the Company, and
Furman, a Director of and formerly a consultant to the Company, and Ms.
Bankowski, an Officer and Director of the Company, may be deemed under the
regulations and interpretations of the Securities and Exchange Commission,
to own beneficially the Class A Preferred Stock.
(5) 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 under the securities laws. Includes 7,000 shares held
by Mr. Furman as trustee for others, which are deemed beneficially owned by
Mr. Furman under rules and regulations of the Securities and Exchange
Commission.
(6) Does not include 15,080 shares of Class A Common Stock beneficially owned
by Mr. Odak's wife under the rules and regulations of the Securities and
Exchange Commission, as to which he disclaims beneficial ownership.
(7) 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., is deemed to "beneficially own" such securities by virtue
of Rule 13d-3 under the Securities and Exchange Act of 1934.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the cash compensation paid by the Company in
Fiscal Years 1996 - 1998 as well as certain other compensation paid, awarded or
accrued for those years to the Company's Chief Executive Officer and the other
four highest-paid executive officers during the 1998 fiscal year. Perry Odak
became the Chief Executive Officer on December 31, 1996.
<TABLE>
<CAPTION>
Annual Compensation Awards Long-Term Compensation Pay-outs
------------------- ------ -------------------------------
Other Securities
Annual Restricted Underlying All Other
Name and Bonus Compen- Stock Options/ LTIP Compensation
Principal Position Year Salary (1) sation Awards SARS Pay-outs (2)
- ----------------------------------- ---- -------- --------- -------- ------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Perry D. Odak 1998 $305,769 $ 150,000 $ 7,750
CEO, President and 1997 $300,000 $ 100,000 360,000 $ 25,000
Director 1996 $ -- $ -- $ --
Bruce Bowman 1998 $211,692 $ 75,000 $ 6,964
Senior Director of 1997 $200,000 $ 50,000 27,000 $ 4,131
Operations 1996 $169,231 $ 20,000 10,000 $ 1,099
Lawrence E. Benders 1998 $229,327 $ 40,000 $ 52
Chief Marketing Officer 1997 $ 38,942 $ 5,000 52,000 $ --
1996 $ -- $ -- $ --
Charles Green 1998 $182,885 $ 75,000 $ 5,755
Senior Director of 1997 $162,596 $ 40,000 45,000 $ --
Sales & Distribution 1996 $ 24,231 $ -- 5,000 $ --
Angelo Pezzani 1998 $254,808 $ 75,000 30,000 $ 4,327
Senior Director of 1997 $208,332 $ -- 52,000 $ --
Business Development 1996 $ -- $ -- $ --
(1) "Bonus" includes 1998 discretionary distributions under the Company's Management Incentive Program.
(2) "All Other Compensation" includes Company contributions to 401(k) plans and relocation fees.
</TABLE>
<PAGE>
OPTION/SAR GRANTS IN FISCAL 1998
<TABLE>
<CAPTION>
Percentage Potential Realizable Value
of Total at Assumed Annual Rates
Options/SARS Exercise or of Stock Price Appreciation
Options/SARS Granted to Base Price Expiration for Option Term
------------ ---------- ---------- ---------- ---------------------------
Name Granted Employees in 1998 (per share) Date 5% 10%
- ---- ---------- ----------------- ----------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Angelo Pezzani 30,000 70.6% $19.25 7/28/08 $363,187 $920,386
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN 1998 AND 1998 YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Shares Number of Unexercised In-the-money Options/SARS
Acquired on Options/SARS at 12/26/98 at 12/26/98
Name Exercise (#) Value Realized Exercisable Unexercisable Exercisable Unexercisable
- ---------------- ------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Perry D. Odak 0 0 140,000 220,000 $1,626,800 $2,556,400
Bruce Bowman 0 0 24,125 37,875 $ 162,656 $ 258,514
Charles Green 0 0 19,375 30,625 $ 170,594 $ 267,456
Lawrence Benders 0 0 16,250 35,750 $ 160,388 $ 352,853
Angelo Pezzani 0 0 19,250 62,750 $ 132,243 $ 412,978
</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 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 a 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 necessary people to ensure the Company's long-term growth, both financial
and non-financial (i.e. social performance).
<PAGE>
COMPENSATION COMPONENTS. It is the Committee's objective to have a substantial
portion 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/her contribution to the success in meeting its
three-part mission and balancing both short and long-term goals. The
compensation program for the Company's Chief Executive Officer and other
executive officers consists of three main components: (1) a base salary (2) an
annual bonus; and (3) long-term incentives. The second and third constitute the
"at risk" portion of the Chief Executive Officer and other executive officers'
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 the Employee Stock Purchase Plan.
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
Officers' 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. For 1998 the Chief Executive
Officer recommended bonus awards for the executive officers and certain other
key employees, given the Company's significant improvement in its results for
the year, and these awards were approved by the Compensation Committee, which
also voted a bonus award for the Chief Executive Officer. For 1999, the Board
approved a business plan presented by management, which establishes three-part
corporate mission objectives for the year 1999, including business plan revenue
and profitability targets. The Compensation Committee, with input from the
Social Mission/WorkCulture Committee, is establishing an annual bonus target
award for the Chief Executive Officer and the Chief Executive Officer is
establishing bonus award targets for the other executive officers and certain
other key employees.
LONG-TERM INCENTIVE PROGRAM. The long-term incentive program is the second "at
risk" element of the Company's compensation program in which it is intended that
the Chief Executive Officer, all other executive officers and all key employees
will be eligible to participate. The Committee may also grant, from time to
time, options across the board to all levels of employees and, in some cases, to
consultants. In January, 1999, pursuant to the Company's concept of "linked
prosperity", the Committee granted an option for 316 shares each to 632
employees, which included all employees (other than officers and directors) who
were full-time employees as of January 1, 1999 or who had been part-time
employees since January 1, 1996 at an average rate of 25 hours a week. These
options were granted at $23.63, the fair market value on the date of grant. 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, total
amount of compensation other than long-term incentive, the executives'
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 1998 made stock option grants for an aggregate of
42,500 shares to executive officers and key employees.
<PAGE>
As a result of federal tax legislation enacted in 1993, under Section 162(m) of
the Internal Revenue Code 1986, as amended, a publicly-held company such as the
Company will not be allowed a federal income tax deduction for compensation paid
to certain executive officers, to the extent that compensation exceeds one
million dollars per officer in any one year, except for, among other matters,
"performance-based compensation" approved by stockholders. At previous Annual
Meetings the shareholders approved the adoption of and amendments to the
Company's 1995 Equity Incentive Plan which are designed to assure that any
compensation deemed paid in connection with the exercise of stock options
granted under the Plan would qualify as "performance-based compensation".
1998 COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. Mr. Perry Odak, was hired as
Chief Executive Officer for the Company on December 31, 1996 and on June 30,
1997 he also became President. As Chief Executive Officer, Mr. Odak has a
three-year Employment Agreement with the Company dated December 31, 1996, as
amended. 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 ($315,000 has been set by the Board as the
1999 base salary). Under his employment agreement Mr. Odak received
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 dates of grant by the Compensation Committee of the Board of
Directors under the 1995 Equity Incentive Plan. These options become exercisable
at various dates specified in the Employment Agreement, subject to acceleration
of vesting as to specified amounts in the event that certain financial goals are
achieved and the Compensation Committee makes certain findings with respect to
Mr. Odak's performance in the applicable prior period, all as specified in
detail in the Employment Agreement. In early 1998 the Compensation Committee
made a favorable finding with respect to Mr. Odak's 1997 performance, and in
early 1999, in lieu of making a finding with respect to performance in 1998, the
Committee recommended an amendment to the Employment Agreement, which was
approved by the Board of Directors and signed by the Company and Mr. Odak
relating to the terms and conditions of further accelerated vesting of options.
In early 1999, the Committee awarded Mr. Odak a bonus of $150,000 or 50% of base
salary, for performance in 1998.
Jennifer Henderson, Chairperson
Henry Morgan
Frederick A. Miller
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Under the terms of a Severance and Non-competition Agreement between the Company
and MR. FURMAN, dated December 31, 1990, the Company provided at no cost to Mr.
Furman family health insurance coverage under the Company's regular employee
health insurance plan. This obligation terminated March 2, 1999.
MR. COHEN, a Co-founder of the Company, Vice-Chairperson and Director of the
Company, has entered into an Employment Agreement with the Company for an
employment term expiring on December 31, 1999 (renewable automatically
thereafter in successive one year periods unless either Mr. Cohen or the Company
gives notice to the other of non-renewal). The Agreement provides for a base
salary of $200,000 per annum, subject to increases and bonuses at the discretion
of the Board. The Agreement provides for a covenant not to compete during the
employment term of the Agreement and for a three-year period thereafter, in
consideration of payment by the Company (except as otherwise provided in the
Agreement) of severance equal to the then-current base salary during the
three-year period. The Agreement then provides for annual payments of $75,000
(adjusted for changes in the Consumer Price Index) for life, commencing with the
end of the three-year severance period, and for specified insurance benefits and
contains a provision for contemplated services to be provided to the Company
after the end of the term of employment and severance period.
MR. GREENFIELD, a Co-founder of the Company, Chairperson, and Director of the
Company, has entered into an Employment Agreement with the Company for an
employment term expiring on December 31, 1999 (renewable automatically
thereafter in successive one year periods unless either Mr. Greenfield or the
Company gives notice to the other of non-renewal). The Agreement provides for a
base salary of $200,000 per annum, subject to increases and bonuses at the
discretion of the Board. The Agreement also provides for a covenant not to
compete during the employment term of the Agreement and for a three-year period
thereafter, in consideration of payment by the company (except as otherwise
provided in the Agreement) of severance equal to the then-current base salary
during the three-year period. The Agreement then provides for annual payments of
$75,000 (adjusted for changes in the Consumer Price Index) for life, commencing
with the end of the three-year severance period, for specified insurance
benefits and contains a provision for certain services contemplated to be
provided to the Company after the end of the term of employment and severance
period.
MR. ODAK, Chief Executive Officer, has a three-year Employment Agreement with
the Company dated December 31, 1996, as amended. 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
($315,000 has been set by the Board as the 1999 base salary). Mr. Odak received
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 dates of grant by the Compensation Committee of the Board of
Directors under the 1995 Equity Incentive Plan. These options become exercisable
at various dates specified in the Employment Agreement, subject to acceleration
of vesting as to specified amounts in the event that certain financial goals are
achieved and the Compensation Committee makes certain findings with respect to
Mr. Odak's performance in the applicable prior period, all as specified in
detail in the Employment Agreement.
<PAGE>
The Employment Agreement may be terminated at any time by the Company for cause,
as defined. If terminated for cause, the Company shall have no further
obligation to Mr. Odak, other than for base salary through the date of
termination, and any options that are vested shall continue to be exercisable
for thirty days (unless terminated by the vote of the Compensation Committee).
All other options terminate.
The Company may also terminate the Employment Agreement other than for cause, in
which event the Company has 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. Upon such
termination, unvested options shall become exercisable to the extent so provided
by the Agreement.
Mr. Odak may terminate his employment with the Company for good reason, as
defined (in the absence of cause). In the event of such termination, base
amount, benefits and options (including acceleration, period of exercisability
and termination of options) shall be paid or provided in the same manner and
extent as for a termination by the Company other than for cause.
Mr. Odak agrees not to compete with the Company during his period of employment
and, after termination, for the greater of one year or the period during which
severance payments are made.
MR. PEZZANI, Senior Director of Business Development has an Employment Agreement
dated January 1, 1998, expiring December 31, 2000 with an annual renewal
provision. The agreement provides for an annual base salary of $250,000 per
annum, subject to increases from time to time by the CEO with approval by the
Board of Directors. He is eligible for an annual bonus that is guaranteed to be
at least $75,000, as determined by the CEO and approved by the Board of
Directors. Mr. Pezzani received incentive stock options to purchase an aggregate
of 52,000 shares of Class A common stock of the Company exercisable at $13.89
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. These
options become exercisable over a four year period with one-fourth being
exercisable on March 1, 1998 and up to an additional 1/48 of the shares covered
by this Option on the last day of each month in the next three years. 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.
The Agreement may be terminated at any time for by the Company for cause, as
defined. The Company may also terminate the Agreement other than for cause, in
which event the Company has a continuing obligation to pay Mr. Pezzani his base
salary, bonuses that are earned and unpaid, for the monthly periods, but for a
period not less than twelve months, specified in the Agreement. Additionally,
the Company will continue to contribute the cost of Mr. Pezzani's participation
in the Company's group medical and life insurance plans during the same period
as his base salary is continued. Upon such termination, unvested options shall
become exercisable to the extent so provided by the Agreement. Mr. Pezzani may
terminate his employment with the Company for good reason, as defined (in the
absence of cause). In the event of such termination, base salary, bonus,
benefits and options shall be paid or provided in the same manner and extent as
for termination by the Company Other Than For Cause.
<PAGE>
MR. BENDERS, Chief Marketing Officer, has an Employment Agreement dated October
20, 1997, expiring October 20, 2000. The agreement provides for an annual base
salary of $225,000 per annum, subject to increases from time to time by the CEO
with approval by the Board of Directors. He is eligible for an annual bonus as
determined by the CEO and approved by the Board of Directors. Mr. Benders
received incentive stock options to purchase an aggregate of 52,000 shares of
Class A common stock of the Company exercisable at $12.63 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. These options become exercisable
over a four year period with one-fourth being exercisable on October 20, 1998
and up to an additional 1/48 of the shares covered by this Option on the last
day of each month in the next three years. 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.
The Agreement may be terminated at any time for by the Company for cause, as
defined. The Company may also terminate the Agreement other than for cause, in
which event the Company has a continuing obligation to pay Mr. Benders his base
salary for six months. Additionally, the Company will continue to contribute the
cost of Mr.Benders' participation in the Company's group medical and life
insurance plans during the same period as his base salary is continued.
Copies of the above described Agreements have been filed as exhibits to the Form
10-K and the above descriptions are qualified by the definitive terms of the
Agreements so filed as exhibits.
During the year ended December 27, 1997, the Company purchased RainForest Crunch
cashew-brazilnut butter crunch candy to be included in Ben & Jerry's RainForest
Crunch(R) flavor ice cream for an aggregate purchase price of approximately
$800,000 from Community Products, Inc., a company of which Messrs. Cohen and
Furman were the principal stockholders and directors. The candy was purchased
from Community Products, Inc., at competitive prices and on standard terms and
conditions. Community Products, Inc. filed for protection under Chapter 11 of
the U.S. Bankruptcy Code in early 1997, its business was sold and the matter
(and related litigation) is pending in U.S. Bankruptcy Court. Ben & Jerry's
located an alternative supplier for cashew-brazilnut butter crunch and no
purchases were made in 1998 from Community Products, Inc. The termination of Ben
& Jerry's relationship with Community Products, Inc. had no material effect on
the Company's business.
<PAGE>
In 1998, the Company paid $20,000 to Ms. Jennifer Henderson for services as a
consultant in connection with service as a member of the Board of Directors.
In 1997, the Company paid a $60,000 fee to the Kaleel Jamison Consulting Group,
Inc., for its role in the Company's hiring of Mr. Richard Doran, Senior Director
of Human Resources. Mr. Frederick A. Miller, a Director of the Company is
President of Kaleel Jamison Consulting Group, Inc. Prior to joining the Company,
Mr. Doran was an employee of Kaleel Jamison Consulting Group, Inc.
In December 1997, the Company advanced $140,000 to Mr. Lawrence E. Benders,
Chief Marketing Officer, under a non-interest bearing bridge loan for the
purchase of his home in Vermont. In January 1998, Mr. Benders paid the bridge
loan in full.
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, 1993. 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.
Indexed \ Cumulative Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Period Return Return Return Return Return Return Return Return Return Return
Company \ Index Name 12/31/93 3/31/94 6/30/94 9/30/94 12/31/94 3/31/95 6/30/95 9/30/95 12/31/95 3/31/96 6/30/96
========================================================================================================================
BEN & JERRY'S HOMEMDE CL A 100 103.88 104.65 86.82 58.91 73.64 85.27 116.28 91.47 102.33 105.43
S&P FOODS INDEX 100 96.84 97.51 105.63 111.78 115.57 126.00 131.17 142.59 144.74 148.22
NASDAQ 100 109.97 104.83 113.51 112.21 122.28 139.87 156.70 158.56 166.08 179.64
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Return Return Return Return Return Return Return Return Return Return
Company \ Index Name 9/30/96 12/31/96 3/31/97 6/30/97 9/30/97 12/31/973/31/98 6/30/98 9/30/98 12/31/98
========================================================================================================================
BEN & JERRY'S HOMEMDE 78.29 67.44 79.84 85.27 79.84 96.12 112.40 120.16 92.25 138.76
S&P FOODS INDEX 161.88 168.93 181.99 207.27 215.83 242.12 258.65 260.49 229.17 262.02
NASDAQ 186.04 195.18 184.61 218.45 255.40 239.53 116.80 120.18 108.80 140.33
The above stock performance graph is required by regulations adopted by the Securities and Exchange Commission.
</TABLE>
<PAGE>
STOCK OWNERSHIP FILINGS
Under the securities laws of the United States, the Company's directors, certain
of its officers, and any persons holding more than ten percent of the Company's
Common Stock are required to report their ownership of the Company's Common
Stock and any changes in that ownership to the Securities and Exchange
Commission. Specific due dates for these reports have been established and the
Company is required to report in this proxy statement any failure to file by
these dates during 1998. All of these filing requirements were satisfied by its
directors and officers and, to the Company's knowledge and belief, ten percent
holders.
VOTING INFORMATION
------------------
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. Persons appointed
by the Company to act as Judges of Election for the Meeting will count votes
cast by proxy or in person at the Annual Meeting.
The two nominees for election as Directors at the Annual Meeting who receive the
greatest number of votes properly cast for the election of Directors shall be
elected Directors. A majority of the votes properly cast on the matter is
necessary to approve any other matter which comes before the Annual Meeting,
except where law or the Company's Articles of Incorporation 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.
<PAGE>
STOCKHOLDER PROPOSALS FOR THE YEAR 2000 ANNUAL MEETING
------------------------------------------------------
All stockholder proposals intended to be submitted at the Company's Year 2000
Annual Meeting must be received by the Secretary of the Company on or before
January 14, 2000 in order to be considered for inclusion in the Company's proxy
materials for the Year 2000 Annual Meeting.
Pursuant to the Company's By-law requiring advance notice for additional
nominations for director or for any proposals by stockholders for presentation
at the Year 2000 Annual Meeting, the persons named as proxies in the Year 2000
form of Proxy will be entitled to vote in their discretion on all such matters
that are not received by the Company by April 10, 2000.
GENERAL
-------
The proxy confers discretionary authority with respect to any other business,
which may come before the Annual Meeting of Shareholders, 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 person 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,
telecopy, telephone and personal interviews for which they will receive no
additional compensation. 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.
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.
By order of the Board of Directors,
Frances G. Rathke, Secretary
South Burlington, Vermont
May 7, 1999
