SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
sec. 14a-11(c) or sec. 14a-12
Mendocino Brewing Company, Inc.
-------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
MENDOCINO BREWING COMPANY, INC.
Post Office Box 400
13351 South Highway 101
Hopland, California 95449
(707) 744-1015
---------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on April 30, 1999
---------------------------------
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of the Shareholders
of Mendocino Brewing Company, Inc., a California corporation (the "Company"),
will be held on Friday, April 30, 1999, at 2:00 p.m., local time, at the Ukiah
Valley Conference Center located at 200 South School Street, Ukiah, CA 95482,
for the following purposes:
1. To elect directors of the Company, each to serve until the
next Annual Meeting of Shareholders and until his successor
has been elected and qualified or until his earlier
resignation or removal. The Board of Directors intends to
nominate the following individuals for election: Vijay Mallya,
H. Michael Laybourn, R.H.B. (Bobby) Neame, Kent Price, Sury
Rao Palamand, Jerome G. Merchant, and Yashpal Singh;
2. To ratify the appointment of Moss Adams L.L.P. as independent
auditors of the Company for the current fiscal year; and
3. To transact such other business as may properly come before
the Annual Meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this notice.
Shareholders of record at the close of business on March 15, 1999 are
entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement thereof.
The majority of the Company's outstanding shares must be represented at
the Annual Meeting (in person or by proxy) to transact business. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, AND DATE THE ACCOMPANYING
PROXY AND RETURN IT BEFORE THE MEETING IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
Your proxy will not be used if you revoke it either before or at the Annual
Meeting.
To help us in planning for the Annual Meeting, please mark the
appropriate box on the accompanying proxy if you plan to attend.
By Order of the Board of Directors
/s/ P.A. Murali
----------------------------------
Hopland, California P.A. Murali
March 30, 1999 Corporate Secretary
MENDOCINO BREWING COMPANY, INC.
Post Office Box 400
13351 South Highway 101
Hopland, California 95449
(707) 744-1015
---------------------------------
<PAGE>
PROXY STATEMENT FOR
1999 ANNUAL MEETING OF SHAREHOLDERS
---------------------------------
March 30, 1999
INTRODUCTORY STATEMENT
Time And Place Of Meeting
This Proxy Statement is furnished in connection with the solicitation
by and on behalf of the Board of Directors of Mendocino Brewing Company, Inc., a
California corporation (the "Company") of proxies to be used at the Annual
Meeting of the Shareholders of the Company to be held on Friday, April 30, 1999,
at 2:00 p.m., local time, at the Ukiah Valley Conference Center located at 200
South School Street, Ukiah, CA 95482, and at any adjournment or adjournments
thereof (the "Meeting"). The approximate date on which this Proxy Statement and
the accompanying Proxy are to be mailed to stockholders is March 30, 1999.
At the Annual Meeting, Shareholders will be asked to elect seven
directors to serve for a one-year term. In addition, Shareholders will be asked
to ratify the appointment of Moss Adams L.L.P. as the Company's independent
accountants for the year ending December 31, 1999, and to transact such other
business as may properly come before the meeting and all adjournments thereof.
Only holders of record of the Company's Common Stock at the close of
business on March 15, 1999 will be entitled to vote at the Meeting. At the close
of business on March 15, 1999, the Company had 4,497,059 shares of Common Stock
outstanding and entitled to vote. A majority of the shares outstanding on the
record date will constitute a quorum for the transaction of business.
Revocability of Proxies
Any person signing a proxy in the form accompanying this Proxy
Statement has the power to revoke it before the Meeting or at the Meeting before
the vote pursuant to the proxy. A proxy may be revoked by (a) a writing
delivered to the Company stating that the proxy is revoked, (b) a subsequent
proxy executed by the person executing the prior proxy and presented at the
Meeting, or (c) attendance at the Meeting and voting in person. Please note,
however, that if a shareholder's shares are held of record by a broker, bank, or
other nominee and that shareholder wishes to vote at the Meeting, the
shareholder must bring to the Meeting a letter from the broker, bank, or other
nominee confirming that shareholder's beneficial ownership of the shares.
Solicitation of Proxies
The expenses of soliciting proxies in the form accompanying this Proxy
Statement will be paid by the Company. Following the original mailing of the
proxies and other soliciting materials, the Company and/or its agents may also
solicit proxies by mail, telephone, facsimile, or in person. The Company will
request that brokers, custodians, nominees, and other record holders of the
Company's Common Stock forward copies of the proxy and other soliciting
materials to persons for whom they hold shares of Common Stock and request
authority for the exercise of proxies. In such cases, the Company, upon the
request of the record holders, will reimburse such holders for their reasonable
expenses. The Company has no present plans to specially engage any employee or
paid solicitor to solicit proxies.
Voting Rights
Holders of the Company's Common Stock are entitled to one vote for each
share held as of the above record date, except that in the election of directors
each shareholder has cumulative voting rights and is entitled to a number of
votes equal to the number of shares held by such shareholder multiplied by the
number of
1
<PAGE>
directors to be elected. The shareholder may cast these votes all for a single
candidate or distribute the votes among any or all of the candidates. No
shareholder will be entitled to cumulate votes for a candidate, however, unless
that candidate's name has been placed in nomination before the voting and the
shareholder has given notice at the Meeting before the voting of an intention to
cumulate votes. In such an event, the proxy holder may allocate among the
nominees the votes represented by proxies in the proxy holder's sole discretion.
If a broker indicates on a proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares will
not be considered present and entitled to vote with respect to that matter.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
At the Meeting, shareholders will elect directors to hold office until
the next Annual Meeting of Shareholders and until their respective successors
have been elected and qualified or until such directors' earlier resignation or
removal. The size of the Company's Board of Directors (the "Board") is currently
set at seven members. Accordingly, seven nominees will be elected at the Meeting
to be the seven directors of the Company. Shares represented by the accompanying
proxy will be voted for the election of the seven nominees recommended by the
Board unless the proxy is marked in such a manner as to withhold authority so to
vote. If any nominee for any reason is unable to serve or for good cause will
not serve, the proxies may be voted for such substitute nominee as the proxy
holder may determine. The Company is not aware of any nominee who will be unable
to or for good cause will not serve as a director.
Nominees for Directors
<TABLE>
The following sets forth the names, ages as of March 15, 1999, and
certain information regarding the director nominees:
<CAPTION>
Name of Nominee Age Position Director Since:
- --------------- --- -------- --------------
<S> <C> <C> <C>
Vijay Mallya, Ph.D.++ 43 Chairman and Chief Executive Officer 1997
H. Michael Laybourn++ 61 President and Director 1993
R.H.B. (Bobby) Neame 65 Director 1998
Kent D. Price* 55 Director 1998
Sury Rao Palamand, Ph.D.*++ 68 Director 1998
Jerome G. Merchant* 37 Director 1997
Yashpal Singh 53 Chief Operating Officer and Director 1997
<FN>
- --------------
* Member of the Audit Committee
++ Member of the Compensation Committee
</FN>
</TABLE>
Vijay Mallya, Ph.D., became Chairman of the Board and Chief Executive
Officer of the Company in October 1997. Dr. Mallya has been the Chairman of
several companies since 1983. Dr. Mallya is Chairman of UBICS, Inc., United
Breweries Limited, UB Engineering Limited, Mangalore Chemicals and Fertilisers
Ltd., Herbertsons Limited, McDowell & Co. Ltd., and other affiliated companies
(collectively the "UB Group"). United Breweries Limited and McDowell & Co., Ltd.
are two of Asia's leading beer and spirits companies. The UB Group has annual
sales in excess of (US) $1 Billion. He also sits on boards of several foreign
companies and organizations including companies comprising the UB Group, The
Institute of Economic Studies (India), and the Federation of the Indian Chamber
of Commerce and Industries. Dr. Mallya holds a Bachelor of Commerce degree from
the University of Calcutta in India and an honorary Doctorate in Business
Administration from the University of California, Irvine.
2
<PAGE>
H. Michael Laybourn, co-founder of the Company, has served as the
Company's President since its inception in 1982 and as its Chief Executive
Officer from inception through October 1997. Mr. Laybourn was elected a director
in November 1993 when the Company began the process of converting from a limited
partnership to a corporation and served as Chairman of the Board from June 1994
through October 1997. Mr. Laybourn is a Vice President of the California Small
Brewers Association and a former Chairman of the Board of Directors of the
Brewers Association of America. Mr. Laybourn holds a Bachelor of Fine Arts
degree from Arizona State University.
R.H.B. (Bobby) Neame became a director in January 1998. Mr. Neame has
served as the Chairman and Chief Executive Officer of Shepherd Neame Ltd. for
more than five years. Shepherd Neame Ltd. has operated as a brewery in England
for 300 years, making it England's oldest continuously operating brewery.
Kent Price became a director in January 1998. He is currently the
President and CEO of Robert Kent and Company, an investment and consulting
company. From August 1994 until July 1998, he was employed by IBM Banking,
Finance and Securities Industries as General Manager of Securities and Capital
Markets. From 1993 through August 1994, he served as Chairman and Chief
Executive Officer of the Bank of San Francisco. He currently serves as a
director of The San Francisco Company, which is the holding company for the Bank
of San Francisco. He also sits on the board of the American Bridge Company. Mr.
Price received a Bachelor of Arts in history and politics and a Master of Arts
in Slavic studies from the University of Montana and attended Oxford University
as a Rhodes Scholar.
Sury Rao Palamand, Ph.D., became a director in January 1998. Dr.
Palamand is the President of Summit Products, Inc., a beverage development firm
serving the beverage industry; President of the Old 66 Brewery & Restaurant, a
brewery-restaurant in St. Louis, Missouri; owner of Southend Brewery &
Smokehouse, a chain of brewpubs in the states of North and South Carolina, and
Managing Director of Atlantic Beverages Ltd., a product development firm serving
the United Kingdom. From 1966 to 1989, Dr. Palamand served as Director, Beer and
New Product Development for Anheuser-Busch Companies, Inc. Dr. Palamand holds a
Master of Science in Chemistry from the University of Bombay, India, and a
Master of Science and Doctorate in Food and Flavor Technology from Ohio State
University.
Jerome G. Merchant became a director in October 1997 and was Chief
Financial Officer of the Company from November 1997 to October, 1998. Mr.
Merchant currently serves as the Strategic Planning Consultant to the Chairman's
Office of the Company and has served in such capacity since July 1996. Since
April 1993, Mr. Merchant has served in various capacities for Cal Fed
Investments, a wholly owned subsidiary of Cal Fed Bank. He is currently
responsible for the due diligence and monitoring of all investment products for
Cal Fed Investments. Mr. Merchant received his Bachelor of Science degree in
Managerial Economics-Finance from the University of California, Davis.
Yashpal Singh became a director in October 1997 and Chief Operating
Officer in November 1997. Since 1997, Mr. Singh has served as Executive Vice
President - Operations for United Breweries of America ("UBA"). In this
capacity, he is responsible for the U.S. brewing operations of UBA. Between 1992
and 1997, Mr. Singh served as Senior Vice President of Operations for United
Brewers Ltd., where he was responsible for the operations of 12 breweries. Mr.
Singh holds degrees in Chemistry, Botany, and Zoology from Punjab University in
India. Mr. Singh also holds the designation of AMI of Brewing, London.
The board of directors recommends that shareholders vote FOR the
election of the above nominees.
Board of Directors' Meetings and Committees
During the fiscal year ended December 31, 1998, the Board of Directors
held four meetings. No director attended fewer than 75% of the aggregate of the
total number of meetings of the Board (held during the period for which he was a
director) and the total number of meetings held by all committees of the Board
on which he served (during the period that he served).
3
<PAGE>
Listed below are the committees of the Board of Directors, along with
directors who are serving as members of each committee in 1998.
The Board has a standing Audit/Finance Committee and a
standing Compensation Committee. The Board does not have a nominating
committee or a committee performing similar functions.
Messrs. Merchant, Price, and Palamand presently serve as the
members of the Audit/Finance Committee. During 1998, the Audit/Finance
Committee met once. The Audit/Finance Committee reviews, acts on, and
reports to the Board of Directors with respect to various auditing,
accounting and finance matters, including the selection of the
Company's auditors, the scope of the annual audits, fees to be paid to
the auditors, the performance of the Company's auditors, and the
accounting practices of the Company.
Messrs. Mallya, Laybourn, and Palamand presently serve as the
members of the Compensation Committee. During 1998, the Compensation
Committee did not meet. The Compensation Committee considers all
matters of compensation with respect to the chief executive officer,
president, and any vice president and makes recommendations to the
Board regarding the compensation of such persons. The Compensation
Committee also makes determinations with respect to the granting of
stock options with respect to directors who are also employees of the
Company.
Director Compensation
The Company does not presently have in place any arrangement for
compensating its directors for their service as such. The Company currently is
reviewing the possibility of compensating outside Directors.
Significant Employees
Don Barkley, 45, joined the Company in 1983 as Master Brewer and has
served in that capacity continuously since then. In 1993 Mr. Barkley was the
President and representative to the national board of governors of the Master
Brewers Association of the Americas, Northern California District. Mr. Barkley
holds a Bachelor of Science degree in fermentation science from the University
of California, Davis.
P.A. Murali, 41, joined the Company in November 1997 as Controller and
Secretary. Mr. Murali was elected Chief Financial Officer in October, 1998. For
more than five years before joining the Company, Mr. Murali served as General
Manager of Finance and Accounts of the Brewery Division of United Breweries Ltd.
in Bangalore, India. Mr. Murali holds a Bachelor of Commerce degree from the
University of Madras in India and is a Chartered Accountant.
Security Ownership Of Certain Beneficial Owners and Management
The following table sets forth certain information known to the Company
regarding the beneficial ownership of the Company's Common Stock and Series A
Preferred Stock as of March 15, 1999, for (a) each shareholder known by the
Company to own beneficially 5% or more of the outstanding shares of its Common
Stock or Series A Preferred Stock; (b) each director and nominee; and (c) all
directors and executive officers of the Company as a group. Except as noted, the
Company believes that the beneficial owners of the Common Stock and Series A
Preferred Stock listed below, based on information furnished by such owners,
have sole investment and voting power with respect to such shares, subject to
community property laws where applicable.
4
<PAGE>
<TABLE>
<CAPTION>
Shares Approximate
Beneficially Percentage
Owned(1)
<S> <C> <C>
United Breweries of America, Inc.+................................................... 2,149,647(2) 47.8%
Vijay Mallya, Ph.D.+................................................................. 2,149,647(3) 47.8%
H. Michael Laybourn++................................................................ 285,867(4) 6.4%
John Scahill++....................................................................... 248,809 5.5%
Norman H. Franks..................................................................... 245,512(5) 5.5%
2141 Arroyo Drive
Ukiah, CA 95449
R.H.B. (Bobby) Neame................................................................. ------- -------
Shepherd-Neame
17 Court St.
Faversham, Kent ME13 3AX UK
Kent Price........................................................................... ------- -------
Robert Kent and Company
Wood Island #308
60 E Sir Francis Drake Blvd.
Larkspur, CA 94939
Sury Rao Palamand, Ph.D.............................................................. ------- -------
50 Crestwood Executive Center, Suite 207
St. Louis, MO 63126
Jerome G. Merchant+.................................................................. ------- -------
Yashpal Singh++...................................................................... ------- -------
All directors and executive officers as a group (7 persons).......................... 2,435,514(6) 54.2%
SERIES A PREFERRED STOCK:
H. Michael Laybourn.................................................................. 6,100 2.7%
All directors and executive officers as a group (8 persons).......................... 6,100 2.7%
<FN>
- -----------------
+........Three Harbor Drive, Suite 115
Sausalito, CA 94965
++.......13351 Hwy. 101 South
Hopland, CA 95449
(1) Applicable percentage of ownership is based on 4,497,059
shares of Common Stock outstanding. Beneficial ownership is
determined in accordance with the rules of the Securities and
Exchange Commission, and includes voting and investment power
with respect to such shares. Shares of Common Stock subject to
a contract of purchase or options currently exercisable or
exercisable within 60 days after the date of this Proxy
Statement are deemed outstanding for computing the
5
<PAGE>
percentage ownership of the person obligated to purchase the
shares or holding the options but are not deemed outstanding
for computing the percentage of any other person.
(2) This does not include the 662,683 shares that are issuable
upon the conversion of 11 convertible notes of the Company in
favor of UBA, the 869,247 outstanding shares, and 12,500
shares subject to options which are presently exercisable or
will be exercisable within 60 days, all held by Messrs.
Laybourn, Scahill, Franks, and Barkley pursuant to a
Shareholders' Agreement which requires the parties thereto to
vote for four directors designated by UBA and two additional
independent directors who are acceptable to UBA, and which
grants UBA a right of first refusal with respect to such
shares.
(3) Dr. Mallya may be deemed to be a beneficial owner of UBA
because the shares of UBA are owned by a foreign corporation,
the shares of which are controlled by fiduciaries who may
exercise discretion in Dr. Mallya's favor amongst others. Dr.
Mallya is the Chairman and Chief Executive Officer of UBA.
(4) Includes 12,500 shares subject to options exercisable or will
be exercisable within 60 days. Does not include 2,745,527
outstanding shares held by UBA, Messrs. Scahill, Franks, and
Barkley, all of which are subject to Shareholders' Agreement
which requires the parties thereto to vote for one director
designated by Mr. Laybourn.
(5) Does not include 175 shares owned by Mr. Franks' wife. Mr.
Franks disclaims any beneficial ownership of shares held in
the name of his wife.
(6) Does not include 595,880 outstanding shares held by Messrs.
Scahill, Franks and Barkley pursuant to a Shareholders'
Agreement which requires the parties thereto to vote for four
directors designated by UBA, one director designated by Mr.
Laybourn, and two additional independent directors who are
acceptable to UBA, and which grants UBA a right of first
refusal with respect to such shares.
</FN>
</TABLE>
Change in UBA's Beneficial Ownership Interest
UBA has made available a credit facility for the working capital
requirements of the Company in the maximum amount of $2,000,000 at an interest
rate of 1.5% per annum above the prime rate offered by the Bank of America in
San Francisco, California. In November 1997, UBA owned 2,119,647 shares
representing 47.5% of the outstanding shares of Common Stock. UBA's subsequent
acquisition of an additional 30,000 shares from a shareholder in a private
transaction increased UBA's percentage of share ownership to 48.2%. UBA
presently owns 2,149,647 shares representing 47.8% of the outstanding shares of
Common Stock. An additional 662,683 shares are issuable upon the conversion of
eleven convertible notes issued by the Company in favor of UBA. As of February
28, 1999, the aggregate amount drawn on the UBA credit facility, together with
interest accrued thereon, is equal to $1,009,325. The shares of UBA are owned by
a foreign corporation, the shares of which are controlled by fiduciaries who may
exercise discretion in Dr. Mallya's favor amongst others. Dr. Mallya is the
Chairman and Chief Executive Officer of UBA.
Executive Compensation
The following table sets forth the annual compensation, including
salary, bonuses, and certain other compensation, paid by the Company to its
Chief Executive Officer during each of the fiscal years ended December 31, 1996,
1997, and 1998. None of the Company's other executive officers received total
compensation in excess of $100,000 in any of those years.
6
<PAGE>
<TABLE>
<CAPTION>
Annual Compensation
Fiscal All Other
Name and Principal Position Year Salary Bonus Compensation*
- --------------------------- ------ ------ ----- -------------
<S> <C> <C> <C> <C>
Vijay Mallya
Chief Executive Officer 1998 $ 120,000 $0.00 $ 0.00
1997 $ 0.00 $0.00 $ 0.00
H. Michael Laybourn
President 1998 $ 120,000 $0.00 $ 8,386
1997 $ 90,307 $0.00 $ 4,182
1996 $ 89,016 $0.00 $ 7,053
<FN>
- --------------
* Includes an allowance for health insurance, life insurance,
disability insurance, and participation in the Company's profit
sharing retirement plan (annual discretionary contributions by the
Company of up to 15% of gross compensation).
</FN>
</TABLE>
Stock Option Grants
<TABLE>
The following table sets forth certain information concerning exercises
of stock options by the named executive officers during the year ended December
31, 1998 and options held at December 31, 1998. No stock options were exercised
by the executive officers during the year ended December 31, 1998.
<CAPTION>
Number Of Percent Of Total
Securities Options/SARs
Underlying Granted To
Options/SARs Employees In Exercise Or Base Expiration
Name Granted (#) Fiscal Year Price ($/Share) Date
- ---- ------------ ----------- --------------- ----------
<S> <C> <C> <C>
H. Michael Laybourn 12,500 $8.80 09/18/01
</TABLE>
Employment Agreement
The Company's employment agreement with President Michael Laybourn
which provided for minimum salary of $120,000 expired December 24, 1998. Mr.
Laybourn remains President of the Company.
Certain Transactions
On October 11, 1996, in recognition of Mr. Laybourn's personal guaranty
of an equipment lease, the Company granted President Michael Laybourn a 5-year
option to purchase 12,500 shares of Common Stock of the Company at an exercise
price of $8.80 per share. Mr. Laybourn's guaranty has now terminated in
accordance with its terms. The option was granted in January 1997 and expires in
January 2002.
7
<PAGE>
UBA has agreed to provide the Company with a credit facility of up to
$2 million, to be funded in installments of up to $300,000 each. The advances
are to bear interest at prime plus 1.5% and are to be due and payable 18 months
after the date of the advance. The advances are convertible into unregistered
shares of the Company's common stock at a rate of $1.50 per share. The
arrangement was approved by a committee consisting of director Michael Laybourn
(the President of the Company) and independent directors Kent Price and Sury Rao
Palamand on February 19, 1998, and the terms of the credit facility was
finalized by the Board of Directors on October 6, 1998. As of February 28, 1999,
the aggregate amount drawn on the line of credit, together with interest accrued
thereon, is equal to $1,009,325.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires each of the Company's executive directors, officers or beneficial owner
of more than 10% of the Company's Common Stock to file forms with the Securities
and Exchange Commission ("SEC") and the Pacific Exchange Inc. reports of
ownership and changes in ownership of the Company's shares. These persons are
required by SEC regulation to furnish the Company with copies of all such forms
they file. Based solely upon a review of Forms 3, 4, and 5 and amendments
thereto furnished to the Company during fiscal 1998, no person who, at any time
during fiscal 1998 was a director, officer, beneficial owner of more than 10
percent of the Common Stock of the Company failed to file on a timely basis, as
disclosed in the above forms, reports required by Section 16(a) of the
Securities Exchange Act of 1934 during the most recent fiscal year or prior
fiscal years.
PROPOSAL NO. 2 -- RATIFICATION OF INDEPENDENT AUDITORS
The Company has appointed Moss Adams L.L.P. as its independent auditors
to perform the audit of the Company's financial statements, and the shareholders
are being asked to ratify such appointment. Moss Adams L.L.P. audited the
Company's financial statements for fiscal 1998. Representatives of Moss Adams
L.L.P. are expected be present at the Meeting, will have an opportunity to make
a statement at the Meeting if they desire to do so, and are expected to be
available to respond to appropriate questions. Ratification of the appointment
of Moss Adams L.L.P. requires the vote of a majority of the shares of the
Company's Common Stock present in person or represented by a proxy at the
Meeting and entitled to vote. Abstentions have no effect.
The Board recommends that Shareholders vote FOR the ratification of the
appointment of Moss Adams L.L.P.
Shareholder Proposals To Be Presented At Next Annual Meeting
Any proposal which a shareholder wishes to have presented at the next
annual meeting and included in the management proxy materials relating to such
meeting must be received at the main office of the Company no later than
November 30, 1999. If such proposal is in compliance with all of the
requirements of Rule 14a-8 promulgated under the Securities Exchange Act of
1934, it will be included in the proxy statement and set forth on the form of
proxy issued for the next annual meeting of shareholders. It is urged that any
such proposals be sent by certified mail, return receipt requested.
Availability Of Form 10-KSB
The Company will provide without charge to any shareholder, upon
written request, a copy of the Company's Annual Report on Form 10-KSB. Such
written requests should be made to the Company at Mendocino Brewing Company,
Inc., Attn: Sarah T. McDaniel, Shareholder Relations, Post Office Box 400, 13351
South Highway 101, Hopland, California 95449, Telephone: (800) 733-3871. A copy
of Form 10-KSB is included in the Company's Annual Report to Shareholders
distributed with this proxy statement.
8
<PAGE>
Other Matters
The Board of Directors does not presently intend to present matters
other than the foregoing for action by the shareholders at the Meeting, and, so
far as is known to the Board of Directors, no matters are to be brought before
the Meeting except as specified herein. As to any business that may properly
come before the Meeting, however, it is intended that proxies, in the form
accompanying this Proxy Statement, will be voted in accordance with the judgment
of the persons voting such proxies.
By Order of the Board of Directors
/s/ P.A. Murali
-------------------------------------------
Hopland, California P.A. Murali
March 30, 1999 Corporate Secretary
<PAGE>
APPENDIX A
Front of proxy card:
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
MENDOCINO BREWING COMPANY, INC.
The undersigned shareholder of MENDOCINO BREWING COMPANY, INC., a
California corporation (the "Company") hereby acknowledges receipt of the Notice
of Annual Meeting of Shareholders and Proxy Statement each dated March 30, 1999,
and appoints Vijay Mallya, Michael Laybourn, Robert Neame, Kent Price, Sury Rao
Palamand, Jerome Merchant and Yashpal Singh, and each of them, as proxy of the
undersigned with power of substitution and revocation, to represent the
undersigned at the Annual Meeting of the Shareholders of the Company, to be held
on Friday, April 30, 1999 at 2:00 p.m. at the Ukiah Valley Conference Center
located at 200 South School Street, Ukiah, CA 95482, and at any adjournment
thereof, and to vote all shares of Common Stock which the undersigned would be
entitled to vote as if the undersigned were present and voting the shares.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF THE NOMINEES NAMED AND FOR PROPOSAL 2. IN THEIR DISCRETION THE
PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
SEE REVERSE SIDE. If you wish to vote in accordance with the Board of
Directors' recommendations, just sign on the reverse side. You do not need to
mark any boxes.
SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
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<PAGE>
Back of proxy card:
/X/ Please mark votes as in this example.
The Board of Directors recommends a vote FOR Proposals 1 and 2.
1. Election of all 7 Directors (or if any nominee is not available for
election, such substitute as the Board of Directors may designate).
Nominees: Vijay Mallya, Michael Laybourn, Robert Neame, Kent Price,
Sury Rao Palamand, Jerome Merchant, Yashpal Singh
FOR ALL WITHHOLD FOR ALL
/ / / /
/ / -------------------------------
To withhold authority to vote for any individual nominee write that
nominee's name in the space provided above and mark box.
2. To ratify the selection of Moss Adams as the Company's independent auditors.
FOR AGAINST ABSTAIN
/ / / / / /
MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
CHANGE AND / / TO ATTEND / /
NOTE AT LEFT THE MEETING
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
Signature: ________________________________ Date: __________________
Signature: ________________________________ Date: __________________
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<PAGE>
SKU 3680-PS-99
