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 Commission
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-12
ANHEUSER-BUSCH COMPANIES, INC.
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(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[Anheuser-Busch Companies LOGO]
March 11, 2003
Dear Stockholder:
On behalf of the Board of Directors, it is my pleasure to
invite you to attend the Annual Meeting of Stockholders of
Anheuser-Busch Companies, Inc. on Wednesday, April 23, 2003, in
Orlando, Florida. Information about the meeting is presented on the
following pages.
In addition to the formal items of business to be brought
before the meeting, members of management will report on the
company's operations and respond to shareholder questions.
Your vote is very important. We encourage you to read this
proxy statement and vote your shares as soon as possible. A return
envelope for your proxy card is enclosed for convenience.
Stockholders of record also have the option of voting by using a
toll-free telephone number or via the Internet. Instructions for
using these services are included on the proxy card.
Thank you for your continued support of Anheuser-Busch. We look
forward to seeing you on April 23.
Sincerely,
/s/ August A. Busch III /s/ Patrick T. Stokes
AUGUST A. BUSCH III PATRICK T. STOKES
Chairman of the Board President and Chief Executive Officer
TABLE OF CONTENTS
Notice of Annual Meeting.................................... 1
Questions and Answers About the Annual Meeting and Voting... 2
ITEM 1: ELECTION OF DIRECTORS............................... 6
Stock Ownership............................................. 10
Additional Information Concerning the Board of Directors.... 11
ITEM 2: APPROVAL OF AN AMENDMENT TO THE 1998 INCENTIVE STOCK
PLAN...................................................... 12
ITEM 3: APPROVAL OF THE STOCK PLAN FOR NON-EMPLOYEE
DIRECTORS................................................. 15
ITEM 4: APPROVAL OF INDEPENDENT ACCOUNTANTS................. 17
ITEM 5: STOCKHOLDER PROPOSAL................................ 17
Information Concerning Stockholder Proposals for 2004....... 18
Report of the Audit Committee............................... 19
Report of the Executive Salaries and Stock Option Plans
Committee................................................. 20
Compensation Committee Interlocks and Insider
Participation............................................. 23
Summary Compensation Table.................................. 23
Comparison of Five Year Cumulative Total Return............. 24
Option Grants Table......................................... 25
Option Exercises and Year-End Option Values Table........... 26
Pension Plans Table......................................... 26
Change In Control Arrangements.............................. 27
Information Concerning New Plan Benefits.................... 27
Information Concerning Equity Compensation Plans............ 28
Other Relationships Involving Directors, Officers, or Their
Associates................................................ 29
Section 16(a) Beneficial Ownership Reporting Compliance..... 30
Other Matters............................................... 30
Appendix A - Corporate Governance Guidelines................ A-1
Appendix B - Stock Plan for Non-Employee Directors.......... B-1
Appendix C - Audit Committee Charter........................ C-1
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 2003
The Annual Meeting of the Stockholders of Anheuser-Busch Companies,
Inc. (the "Company") will be held at Ports of Call at SeaWorld of Florida,
7007 SeaWorld Drive, Orlando, Florida, on Wednesday, April 23, 2003, at
10:00 A.M. local time, for the following purposes:
1. To elect five directors for a term of three years;
2. To approve an amendment to the 1998 Incentive Stock Plan;
3. To approve the Stock Plan for Non-Employee Directors;
4. To approve the employment of PricewaterhouseCoopers LLP, as
independent accountants, to audit the books and accounts of the
Company for 2003; and
5. To act upon such other matters, including a stockholder proposal
(pages 17-18), as may properly come before the meeting.
The Board of Directors has fixed the close of business on February 28,
2003, as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting. A list of such stockholders will be
available during regular business hours at the Company's office,
7007 SeaWorld Drive, Orlando, Florida, for the ten days before the meeting
for inspection by any stockholder for any purpose germane to the meeting.
By Order of the Board of Directors,
/s/ JoBeth G. Brown
JoBeth G. Brown
Vice President and Secretary
Anheuser-Busch Companies, Inc.
March 11, 2003
IMPORTANT
PLEASE NOTE THAT A TICKET IS REQUIRED FOR ADMISSION TO THE MEETING. IF
YOU ARE A STOCKHOLDER OF RECORD AND PLAN TO ATTEND THE MEETING IN PERSON,
PLEASE BRING THE ADMISSION TICKET YOU RECEIVED IN YOUR PROXY MAILING WITH
YOU TO THE MEETING. IF, HOWEVER, YOUR SHARES ARE HELD IN THE NAME OF A
BROKER OR OTHER NOMINEE, PLEASE BRING WITH YOU A PROXY OR LETTER FROM THAT
FIRM CONFIRMING YOUR OWNERSHIP OF SHARES.
1
ANHEUSER-BUSCH COMPANIES, INC.
PROXY STATEMENT
FOR 2003 ANNUAL MEETING OF STOCKHOLDERS
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
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Q: WHY DID I RECEIVE THIS PROXY STATEMENT?
A: Because you are a stockholder of Anheuser-Busch Companies,
Inc. (the "Company") as of the record date and are entitled
to vote at the 2003 Annual Meeting of Stockholders (the
"Annual Meeting" or the "Meeting"), the Board of Directors
is soliciting your proxy to vote at the Meeting.
This Proxy Statement summarizes the information you need to
know to vote at the Annual Meeting. This Proxy Statement and
form of proxy were first mailed to stockholders on or about
March 11, 2003.
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Q: WHAT AM I VOTING ON?
A: You are voting on five items:
1. Election of five Group III directors for a term of
three years:
James J. Forese
Vernon R. Loucks, Jr.
Vilma S. Martinez
William Porter Payne
Edward E. Whitacre, Jr.
2. Approval of an amendment to the 1998 Incentive Stock
Plan.
3. Approval of the Stock Plan for Non-Employee Directors.
4. Approval of the appointment of PricewaterhouseCoopers
LLP as independent accountants for 2003.
5. Stockholder proposal concerning the Chairman of the
Board.
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Q: WHAT ARE THE VOTING RECOMMENDATIONS OF THE BOARD OF DIRECTORS?
A: The Board recommends the following votes:
1. FOR each of the directors.
2. FOR approval of an amendment to the 1998 Incentive
Stock Plan.
3. FOR approval of the Stock Plan for Non-Employee
Directors.
4. FOR approval of the appointment of PricewaterhouseCoopers LLP
as independent accountants for 2003.
5. AGAINST the stockholder proposal concerning the Chairman
of the Board.
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Q: WILL ANY OTHER MATTERS BE VOTED ON?
A: We do not know of any other matters that will be brought
before the stockholders for a vote at the Annual Meeting. If
any other matter is properly brought before the Meeting,
your signed proxy card gives authority to August A. Busch
III, Patrick T. Stokes, and JoBeth G. Brown, as the Proxy
Committee, to vote on such matters in their discretion.
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2
Q: WHO IS ENTITLED TO VOTE?
A: Stockholders of record as of the close of business on
February 28, 2003 (the Record Date) are entitled to vote at
the Annual Meeting. Each share of common stock is entitled
to one vote.
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Q: WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A
STOCKHOLDER OF RECORD AND AS A BENEFICIAL OWNER?
A: Many stockholders hold their shares through a stockbroker,
bank, or other nominee rather than directly in their own
name. As summarized below, there are some distinctions
between shares held of record and those owned beneficially.
STOCKHOLDER OF RECORD
If your shares are registered directly in your name with the
Company's transfer agent, Mellon Investor Services, you are
considered, with respect to those shares, the stockholder of
record, and these proxy materials are being sent directly to
you by the Company.
BENEFICIAL OWNER
If your shares are held in a stock brokerage account or by a
bank or other nominee, you are considered the beneficial
owner of shares held in street name, and these proxy
materials are being forwarded to you by your broker or
nominee which is considered, with respect to those shares,
the stockholder of record. As the beneficial owner, you have
the right to direct your broker how to vote and are also
invited to attend the Meeting. However, since you are not
the stockholder of record, you may not vote these shares in
person at the Meeting unless you bring with you a legal
proxy from the stockholder of record. Your broker or nominee
has enclosed a voting instruction card for you to use in
directing the broker or nominee how to vote your shares.
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Q: HOW DO I VOTE?
A: If you are a stockholder of record, there are four ways to
vote:
* by toll-free telephone at 1-800-435-6710;
* by Internet at http://www.eproxy.com/bud;
* by completing and mailing your proxy card; and
* by written ballot at the Meeting.
If you vote by Internet or telephone, your vote must be
received by 11:00 P.M. Eastern Time on April 22nd, the day
before the Meeting. Your shares will be voted as you
indicate. If you return your proxy card but you do not
indicate your voting preferences, the Proxy Committee will
vote your shares FOR items 1, 2, 3, and 4 and AGAINST item 5.
If your shares are held in a brokerage account in your
broker's name (this is called street name), you should
follow the voting directions provided by your broker or
nominee. You may complete and mail a voting instruction card
to your broker or nominee or, in most cases, submit voting
instructions by telephone or the Internet to your broker or
nominee. If you provide specific voting instructions by
mail, telephone, or the Internet, your shares should be
voted by your broker or nominee as you have directed.
We will pass out written ballots to anyone who wants to vote
at the Meeting. If you hold your shares in street name, you
must request a legal proxy from your stockbroker to vote at
the Meeting.
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3
Q: IS MY VOTE CONFIDENTIAL?
A: Yes. It is the policy of the Company that all proxies,
ballots, and vote tabulations that identify the vote of a
stockholder will be kept confidential from the Company, its
directors, officers, and employees until after the final
vote is tabulated and announced, except in limited
circumstances including any contested solicitation of
proxies, when required to meet a legal requirement, to
defend a claim against the Company or to assert a claim by
the Company, and when written comments by a stockholder
appear on a proxy card or other voting material.
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Q: WHO WILL COUNT THE VOTE?
A: Representatives of Mellon Investor Services, the Company's
transfer agent, will count the vote and serve as the
inspectors of election.
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Q: WHAT IS THE QUORUM REQUIREMENT OF THE MEETING?
A: A majority of the outstanding shares determined on February
28, 2003, represented in person or by proxy at the Meeting
constitutes a quorum for voting on items at the Annual
Meeting. If you vote, your shares will be part of the
quorum. Abstentions and broker non-votes will be counted in
determining the quorum, but neither will be counted as votes
cast. On February 28, 2003, there were 839,852,764 shares
outstanding.
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Q: WHAT ARE BROKER NON-VOTES?
A: Broker non-votes occur when nominees, such as banks and
brokers holding shares on behalf of beneficial owners, do
not receive voting instructions from the beneficial holders
at least ten days before the Meeting. If that happens, the
nominees may vote those shares only on matters deemed
"routine" by the New York Stock Exchange. On non-routine
matters nominees cannot vote without instructions from the
beneficial owner, resulting in a so-called "broker
non-vote." Broker non-votes have no effect on the election
of directors, appointment of PricewaterhouseCoopers, or the
stockholder proposal. A broker non-vote will have no effect
on the proposals concerning approval of the amendment to the
1998 Incentive Stock Plan or approval of the Stock Plan for
Non-Employee Directors provided that holders of over 50% of
the outstanding shares cast votes on these two proposals.
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Q: WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
A: In the election of directors, the five persons receiving the
highest number of "FOR" votes will be elected. All other
proposals require the approving vote of at least a majority
of the votes cast.
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Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?
A: It means your shares are in more than one account. You
should vote the shares on all of your proxy cards.
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Q: HOW CAN I CONSOLIDATE MULTIPLE ACCOUNTS REGISTERED IN
VARIATIONS OF THE SAME NAME?
A: If you have multiple accounts, we encourage you to
consolidate your accounts by having all your shares
registered in exactly the same name and address. You may do
this by contacting our transfer agent, Mellon Investor
Services, at 1-888-213-0964.
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4
Q: I OWN MY SHARES INDIRECTLY THROUGH MY BROKER, BANK, OR OTHER
NOMINEE, AND I RECEIVE MULTIPLE COPIES OF THE ANNUAL REPORT,
PROXY STATEMENT, AND OTHER MAILINGS BECAUSE MORE THAN ONE
PERSON IN MY HOUSEHOLD IS A BENEFICIAL OWNER. HOW CAN I
CHANGE THE NUMBER OF COPIES OF THESE MAILINGS THAT ARE SENT
TO MY HOUSEHOLD?
A: If you and other members of your household are beneficial
owners, you may eliminate this duplication of mailings by
contacting your broker, bank, or other nominee. Duplicate
mailings in most cases are wasteful for us and inconvenient
for you, and we encourage you to eliminate them whenever you
can. If you have eliminated duplicate mailings but for any
reason would like to resume them, you must contact your
nominee.
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Q: I OWN MY SHARES DIRECTLY AS A REGISTERED OWNER OF
ANHEUSER-BUSCH STOCK, AND SO DO OTHER MEMBERS OF MY FAMILY
LIVING IN MY HOUSEHOLD. HOW CAN I CHANGE THE NUMBER OF
COPIES OF THE ANNUAL REPORT AND PROXY STATEMENT BEING
DELIVERED TO MY HOUSEHOLD?
A: Family members living in the same household generally
receive only one copy of the annual report, proxy statement,
and most other mailings per household. The only item which
is separately mailed for each registered stockholder or
account is a proxy card, as discussed above. If you wish to
start receiving separate copies in your name, apart from
others in your household, you must contact our transfer
agent, Mellon Investor Services, by phone (toll-free) at
1-888-213-0964 or by mail at PO Box 3315, South Hackensack,
NJ 07606, attention: Shareholder Correspondence. Within
30 days after your request is received we will start sending
you separate mailings. If for any reason you and members of
your household are receiving multiple copies and you want to
eliminate the duplications, please contact Mellon Investor
Services and request that action. That request has to be
made by each person in the household.
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Q: MULTIPLE SHAREOWNERS LIVE IN MY HOUSEHOLD, AND TOGETHER WE
RECEIVED ONLY ONE COPY OF THIS YEAR'S ANNUAL REPORT AND
PROXY STATEMENT. HOW CAN I OBTAIN MY OWN SEPARATE COPY OF
THOSE DOCUMENTS FOR THE MEETING IN APRIL?
A: You may pick up copies in person at the meeting in April or
download them from our website, www.anheuser-busch.com
(click on "Financial Info"). If you want copies mailed to
you and are a beneficial owner, you must request them from
your broker, bank, or other nominee. If you want copies
mailed and are a stockholder of record, we will mail them
promptly if you request them from our transfer agent, Mellon
Investor Services, by phone (toll-free) at 1-888-213-0964 or
by mail at PO Box 3315, South Hackensack, NJ 07606,
attention: Shareholder Correspondence. We cannot guarantee
you will receive mailed copies before the meeting.
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Q: CAN I CHANGE MY VOTE?
A: Yes. If you are a stockholder of record, you can change your
vote or revoke your proxy any time before the Annual Meeting
by:
* entering a new vote by Internet or telephone;
* returning a later-dated proxy card;
* sending written notice of revocation to the Vice President
and Secretary; or
* completing a written ballot at the Meeting.
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Q: HOW WILL MY DIVIDEND REINVESTMENT SHARES BE VOTED?
A: Shares of common stock held by participants in the Company's
dividend reinvestment plan have been added to the
participants' other holdings on their proxy cards.
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5
Q: WHO CAN ATTEND THE ANNUAL MEETING?
A: All Anheuser-Busch stockholders as of the close of business
on February 28, 2003 may attend.
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Q: WHAT DO I NEED TO DO TO ATTEND THE ANNUAL MEETING?
A: If you are a stockholder of record or a participant in one
of the Anheuser-Busch Deferred Income Stock Purchase and
Savings Plans, your admission ticket is attached to your
proxy card or voting instruction form. You will need to
bring the admission ticket with you to the Meeting.
If you own shares in street name, you will need to ask your
broker or bank for an admission ticket in the form of a
legal proxy. You will need to bring the legal proxy with you
to the Meeting. If you do not receive the legal proxy in
time, bring your most recent brokerage statement with you to
the Meeting. We can use that to verify your ownership of our
Common Stock and admit you to the Meeting; however, you will
not be able to vote your shares at the Meeting without a
legal proxy.
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Q: WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?
A: We plan to announce preliminary voting results at the
Meeting and publish final results in our quarterly report on
SEC Form 10-Q for the first quarter of 2003.
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INFORMATION CONCERNING THE ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
The Board of Directors of the Company is divided into three Groups,
with the term of office of each Group ending in successive years. The term
of directors of Group III expires with this Annual Meeting. The terms of
directors of Group I and Group II expire with the Annual Meetings in 2004
and 2005, respectively.
Mr. Bernard A. Edison, whose term will expire with this Annual Meeting,
is not standing for reelection. His valued advice and counsel will continue
to be available to the Company as he serves as an advisory member of the
Board following his retirement.
6
The following information is submitted respecting the nominees for
election and the other directors of the Company:
NOMINEES FOR ELECTION AT THIS MEETING TO A TERM EXPIRING IN 2006
(GROUP III DIRECTORS):
[PHOTO] JAMES J. FORESE
Mr. Forese, 67, is a nominee for director. He was Chairman
of the Board of IKON Office Solutions, Inc. ("IKON") from
2000 until his retirement in February 2003. He was
President and Chief Executive Officer of IKON from 1998 to
2002, Executive Vice President and President of
International Operations of IKON from 1997 to 1998, and
Executive Vice President and Chief Operating Officer of
IKON from 1996 to 1997. Prior to joining IKON, he spent
36 years with IBM Corporation ("IBM") in numerous executive
positions, including two years as Chairman and Chief
Executive Officer of IBM Credit Corporation, three years
as Vice President--Finance of IBM, and six years as Vice
President and Controller of IBM. He is also a director of
American Management Systems, Inc., NUI Corporation, and
Spherion Corporation.
[PHOTO] VERNON R. LOUCKS, JR.
Mr. Loucks, 68, has been a director since 1988. He has
been Chairman of the Board of The Aethena Group, LLC, a
healthcare merchant banking firm, since 2000. He has also
been Chief Executive Officer of Segway L.L.C., a company
providing solutions to short distance travel, since
January 2003. He was Chairman of the Board of Baxter
International Inc., a manufacturer of health care
products, specialty chemicals, and instruments from
1980-1999 and was Chief Executive Officer of Baxter
International from 1980-1998. He is also a director of
Affymetrix, Inc., Edwards Lifesciences Corp., Emerson
Electric Co., and GeneSoft, Inc.
[PHOTO] VILMA S. MARTINEZ
Ms. Martinez, 59, has been a director since 1983. She has
been a partner in the law firm of Munger, Tolles & Olson
since 1982. She is also a director of Burlington Northern
Santa Fe Corporation and Fluor Corporation.
[PHOTO] WILLIAM PORTER PAYNE
Mr. Payne, 55, has been a director since 1997. He has been
a partner of Gleacher Partners LLC, an investment banking
and asset management firm, since 2000. He was Vice
Chairman of Premiere Technologies, Inc., an enhanced
communications provider, from 1998-2000. He was Vice
Chairman of NationsBank Corporation from 1997-1998. He was
President and Chief Executive Officer of the Atlanta
Committee for the Olympic Games from 1991 to 1997. Mr.
Payne is also a director of Cousins Properties, Inc.,
Crown Craft, Inc., and Jefferson-Pilot Corporation.
[PHOTO] EDWARD E. WHITACRE, JR.
Mr. Whitacre, 61, has been a director since 1988. He has
been Chairman of the Board and Chief Executive Officer of
SBC Communications Inc., a communications holding company,
since 1990. He is also a director of Burlington Northern
Santa Fe Corporation, Emerson Electric Co., and The May
Department Stores Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THESE FIVE NOMINEES.
7
DIRECTORS WHOSE TERM CONTINUES UNTIL 2004 (GROUP I DIRECTORS):
[PHOTO] AUGUST A. BUSCH III
Mr. Busch, 65, has been a director since 1963. He has been
Chairman of the Board of the Company since 1977. He also
served as President of the Company from 1974 to June 2002
and as Chief Executive Officer from 1975 to June 2002. He
is also a director of Emerson Electric Co. and SBC
Communications Inc.
[PHOTO] CARLOS FERNANDEZ G.
Mr. Fernandez, 36, has been a director since 1996. He is
Vice Chairman of the Board of Directors and Chief
Executive Officer of Grupo Modelo, S.A. de C.V., a Mexican
company engaged in brewing and related operations, which
positions he has held since 1994 and 1997, respectively.
During the last five years he has also served and
continues to serve in key positions of the major
production subsidiaries of Grupo Modelo, including
Executive Vice President since 1994 and Chief Operating
Officer since 1992. He is also a director of Emerson
Electric Co., Grupo Elektra, S.A. de C.V., and Grupo
Televisa, S.A. de C.V.
[PHOTO] JAMES R. JONES
Ambassador Jones, 63, has been a director since 1998. He
has been Co-Chairman and Chief Executive Officer of Manatt
Jones Global Strategies, LLC, a global marketing firm,
since 2001. He has been Senior Counsel in the law firm of
Manatt, Phelps & Phillips LLP since 1998. He was President
of Warnaco International, an apparel company, from
1997-1998. He was the U.S. Ambassador to Mexico from
1993-1997. He is also a director of Kansas City Industries,
Inc., Keyspan Energy, and TV Azteca S.A. de C.V.
[PHOTO] ANDREW C. TAYLOR
Mr. Taylor, 55, has been a director since 1995. He is
Chairman and Chief Executive Officer of Enterprise
Rent-A-Car Company ("Enterprise"), a national car rental
company. He has been Chairman of Enterprise since November
2001 and Chief Executive Officer of Enterprise since 1991.
He served as President of Enterprise from 1991 to October
2001. He is also a director of Commerce Bancshares, Inc.
[PHOTO] DOUGLAS A. WARNER III
Mr. Warner, 56, has been a director since 1992. He was
Chairman of the Board and Co-Chairman of the Executive
Committee of J.P. Morgan Chase & Co., an international
commercial and investment banking firm, from December 2000
until he retired in November 2001. From 1995 until 2000,
he was Chairman of the Board, President and Chief
Executive Officer of J.P. Morgan & Co. Incorporated. He is
also a director of General Electric Company and Motorola, Inc.
8
DIRECTORS WHOSE TERM CONTINUES UNTIL 2005 (GROUP II DIRECTORS):
[PHOTO] JOHN E. JACOB
Mr. Jacob, 68, has been a director since 1990. He has been
Executive Vice President--Global Communications of the
Company since July 2002. He was Executive Vice President
and Chief Communications Officer of the Company from
1994-June 2002. He is also a director of Coca-Cola
Enterprises, Inc. and Morgan Stanley Dean Witter & Co.
[PHOTO] CHARLES F. KNIGHT
Mr. Knight, 67, has been a director since 1987. He has
been Chairman of the Board of Emerson Electric Co., a
manufacturer of electrical and electronic equipment, since
1974. He also served as Chief Executive Officer of Emerson
Electric from 1973-October 2000. He is also a director of
BP p.l.c., International Business Machines Corporation,
Morgan Stanley Dean Witter & Co., and SBC Communications
Inc.
[PHOTO] JOYCE M. ROCHE
Ms. Roche, 55, has been a director since 1998. She has
been President and Chief Executive Officer of Girls
Incorporated, a national nonprofit research, education,
and advocacy organization, since September 2000. She was
an independent management consultant from 1999 to August
2000 and President and Chief Operating Officer of Carson,
Inc., a personal care products company, from 1996-1998.
She is also a director of SBC Communications Inc.,
Tupperware Corporation, and The May Department Stores
Company.
[PHOTO] HENRY HUGH SHELTON
General Shelton, 61, has been a director since November
2001. He has been President, International Operations of
M.I.C. Industries, an international manufacturing company,
since January 2002. He served as Chairman of the Joint
Chiefs of Staff from October 1997 to September 2001. Prior
to that, he served in the U.S. Army for 34 years as a
specialist in airborne strategies and special operation
tactics, including service as Commander in Chief of the
U.S. Special Operations Command from 1996-1997.
[PHOTO] PATRICK T. STOKES
Mr. Stokes, 60, has been a director since 2000. He has
been President and Chief Executive Officer of the Company
since July 2002. He was Senior Executive Vice President of
the Company from July 2000-June 2002. He is also Chairman
of the Board and Chief Executive Officer of Anheuser-Busch,
Incorporated and Chairman of the Board of Anheuser-Busch
International, Inc. and has served in such capacities since
July 2000 and 1999, respectively. He served as Vice President
and Group Executive of the Company from 1984-July 2000. He
is also a director of U.S. Bancorp.
9
STOCK OWNERSHIP
The Company knows of no single person or group that is the beneficial
owner of more than 5% of the Company's common stock.
The following table shows the number of shares of the Company's common
stock and the share units and share equivalents with a value tied to the
common stock that are beneficially owned by the directors and nominees, by
each of the executives named in the summary compensation table, and by all
directors and executive officers as a group as of January 31, 2003. As of
January 31, 2003, there were 843,327,592 shares of common stock issued and
outstanding. The number of shares shown for each individual represents less
than 1% of the common stock outstanding. The number of shares shown for all
directors and executive officers as a group represents 2.1% of the common
stock outstanding. Individuals have sole voting and investment power over
the stock unless otherwise indicated in the footnotes.
NUMBER OF
SHARES OF SHARE UNITS
COMMON STOCK AND SHARE
NAME BENEFICIALLY OWNED EQUIVALENTS(1)
---- ------------------ --------------
W. Randolph Baker......................................... 1,490,408(2) 4,426
August A. Busch III....................................... 7,675,331(3) 19,799
August A. Busch IV........................................ 682,838(4) 3,893
Bernard A. Edison......................................... 0(5) 46,319
Carlos Fernandez G. ...................................... 18,250(6) --
James J. Forese........................................... 5,000(7) --
John E. Jacob............................................. 648,770(8) 16,406
James R. Jones............................................ 9,790(9)(10) --
Charles F. Knight......................................... 40,335(9) 72,467
Stephen K. Lambright...................................... 959,973(11) 5,115
Vernon R. Loucks, Jr. .................................... 12,335(9) 4,178
Vilma S. Martinez......................................... 8,893(9) 19,421
William Porter Payne...................................... 11,318(9) 3,535
Joyce M. Roche............................................ 9,591(9) 2,192
Henry Hugh Shelton........................................ 4,006(12) 64
Patrick T. Stokes......................................... 2,794,797(13) 12,242
Andrew C. Taylor.......................................... 45,162(9) 1,644
Douglas A. Warner III..................................... 12,335(9) 2,558
Edward E. Whitacre, Jr. .................................. 5,332(14) 16,806
All directors and executive officers as a group
(26 persons)............................................ 17,787,588(15)
--------
(1) Includes share unit balances in the Company's deferred compensation plan for non-employee directors and
share equivalent balances held by executives in the Company's 401(k) Restoration Plan. Although
ultimately paid in cash, the value of share units and share equivalents mirrors the value of the
Company's common stock. The share units and share equivalents do not have voting rights.
(2) The number of shares includes 1,209,795 shares that are subject to currently exercisable stock options,
of which 172,160 are held in a family partnership.
(3) The number of shares includes 2,809,597 shares that are subject to currently exercisable stock options,
of which 400,000 are held in trusts for the benefit of children of Mr. Busch. Of the shares shown, Mr.
Busch has shared voting and shared investment power as to 1,059,836 shares and 2,048,064 shares are held
in trusts of which Mr. Busch is income beneficiary and as to which he has certain rights, but as to
which he has no voting or investment power. 82,688 shares beneficially owned by members of Mr. Busch's
immediate family are not included.
(4) The number of shares includes 642,234 shares that are subject to currently exercisable stock options. Of
those, 200,000 were granted to Mr. Busch's father and presently are held in trusts for the benefit of
Mr. Busch or his sister, of which Mr. Busch is a co-trustee.
(5) Following the acquisition in 1989 by Edison Brothers Stores, Inc. of an indirect interest in a retail
liquor license, Mr. Edison sold all shares of Company stock owned by him to avoid any possible conflict
with state alcoholic beverage control laws. Because he is unable to own the Company's common stock, he
receives stock appreciation rights ("SARs") payable in cash in lieu of director stock options. He has
8,335 currently exercisable SARs.
(6) The number of shares includes 7,001 shares that are subject to currently exercisable stock options.
(7) Mr. Forese has reported to the Company that he purchased these shares in February 2003 following his
nomination.
(8) The number of shares includes 548,507 shares that are subject to currently exercisable stock options, of
which 80,000 are held in a trust for the benefit of the child of Mr. Jacob.
(9) The number of shares includes 8,335 shares that are subject to currently exercisable stock options.
(10) Mr. Jones has shared voting and shared investment power with respect to 1,035 of these shares.
10
(11) The number of shares includes 785,568 shares that are subject to currently exercisable stock options.
25,264 shares owned by members of Mr. Lambright's immediate family are not included.
(12) The number of shares includes 1,667 shares that are subject to currently exercisable stock options.
(13) The number of shares includes 2,373,748 shares that are subject to currently exercisable stock options,
of which 690,024 are held in a family partnership, 351,252 shares that are held in a family partnership
for which Mr. Stokes has shared voting and shared investment power and 15,645 shares that are held in a
trust in which Mr. Stokes and his wife have an economic interest, but as to which they have no voting or
investment power. 122 shares beneficially owned by a member of Mr. Stokes' immediate family are not
included.
(14) The number of shares includes 1,332 shares that are subject to currently exercisable stock options.
(15) The number of shares stated includes 11,399,533 shares that are subject to currently exercisable stock
options, 2,048,064 of the shares that are referred to in Note 3 and 15,645 of the shares that are
referred to in Note 13. None of the covered persons hold stock options that become exercisable within
60 days of January 31, 2003. The directors and executive officers as a group have sole voting and sole
investment power as to 2,912,223 shares and shared voting and shared investment power as to 1,412,123
shares. 108,074 shares held by immediate family members or family trusts are not included and beneficial
ownership of such shares is disclaimed.
ADDITIONAL INFORMATION CONCERNING THE BOARD
OF DIRECTORS OF THE COMPANY
During 2002 the Board of Directors held nine meetings. No current
director who served during 2002 attended fewer than 75% of the aggregate of
the total number of meetings of the Board of Directors and of committees of
the Board of which he or she was a member. In addition to regularly
scheduled meetings, a number of directors were involved in numerous
informal meetings with management, offering valuable advice and suggestions
on a broad range of corporate matters.
The Board of Directors has adopted Independence Criteria, which are
described in the Company's Corporate Governance Guidelines that are
attached as Appendix A to this Proxy Statement. Directors who satisfy the
criteria are considered to be "independent." Messrs. Edison, Jones, Loucks,
Payne, Shelton, Taylor, and Warner and Mses. Martinez and Roche meet these
standards and are, therefore, considered to be independent directors. Mr.
Forese, a nominee for director, also meets these standards and will be
considered an independent director. Mr. Forese will serve on the Audit
Committee after his election. The Board of Directors has determined that
Mr. Forese qualifies as an "audit committee financial expert" as defined by
the Securities and Exchange Commission.
Each director who is not an employee of the Company is paid an annual
retainer of $55,000, which each director may elect to receive in stock,
cash, or a combination of stock and cash. Each non-employee director also
receives a fee of $1,400 for each Board of Directors meeting attended and a
fee of $1,200 for attendance at a meeting of a committee of the Board and
for any other meeting of directors at which less than a quorum of the Board
is present. Annual fees of $10,000 each are paid to the Chairs of the
Audit, Conflict of Interest, Corporate Governance, Executive Salaries and
Stock Option Plans, Finance, and Pension Committees. The Company pays the
travel and accommodation expenses of directors and (when requested by the
Company) their spouses to attend meetings and other corporate functions,
along with any taxes related to such payments. The Company also provides
each non-employee director group term life insurance coverage of $50,000.
Non-employee directors receive an annual grant of options to purchase
5,000 shares of the Company's common stock. Directors who are unable to own
the Company's common stock due to possible conflicts with state alcoholic
beverage control laws receive 5,000 stock appreciation rights ("SARs")
payable in cash in lieu of stock options. The exercise price of these
options and SARs is equal to the fair market value of the Company's common
stock on the date of grant. The options and SARs become exercisable over
three years and expire ten years after grant. Options and SARs normally
vest in three equal installments on each of the first three anniversaries
of their grant date.
Under a deferred compensation plan, non-employee directors may elect to
defer payment of part or all of their directors' fees. At the election of
the director, deferred amounts are credited to a fixed income account or a
share equivalent account. The amounts deferred under the plan are paid in
cash commencing on the date specified by the director. At the director's
election, such payments may be made either in a lump sum or over a period
not to exceed ten years.
Information concerning certain standing committees of the Board of
Directors is set out below:
CORPORATE GOVERNANCE COMMITTEE
The Corporate Governance Committee, which was established effective
January 1, 2003, recommends to the Board of Directors a slate of nominees
for directors to be presented on behalf of the Board for election by
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stockholders at each Annual Meeting of the Company and recommends to the
Board persons to fill vacancies on the Board of Directors. The Committee
will consider nominees recommended by stockholders upon submission in
writing to the Secretary of the Company the names of such nominees,
together with their qualifications for service as a director of the
Company. Annually, the Committee will also review the Company's Corporate
Governance Guidelines (attached as Appendix A to this Proxy Statement) and
oversee an evaluation of the Board of Directors and its committees and
periodically the Committee will review the compensation paid to the
directors. During 2002, the predecessor to the Corporate Governance
Committee--the Nominating Committee--held one meeting. The members of the
Corporate Governance Committee, all of whom are independent directors, are
Ms. Martinez (Chair), Mr. Loucks, and Gen. Shelton.
EXECUTIVE SALARIES AND STOCK OPTION PLANS COMMITTEE
The functions of the Executive Salaries and Stock Option Plans
Committee are to consider and make recommendations to the Board of
Directors as to salaries and other compensation to be paid to the executive
officers of the Company and to other officers and upper-management
employees of the Company and its subsidiaries and to administer the
Company's stock option program. During 2002 the Committee held three
meetings. The Committee's report on 2002 executive compensation is on
pages 20-23. The members of the Executive Salaries and Stock Option Plans
Committee, all of whom are independent directors, are Mr. Edison (Chair),
Mr. Loucks, Ms. Martinez, and Mr. Payne.
AUDIT COMMITTEE
The functions and membership of the Audit Committee are described under
"Report of the Audit Committee" on page 19. All of the members of the Audit
Committee are independent as defined by the New York Stock Exchange's
listing standards.
------------------------
APPROVAL OF AN AMENDMENT TO THE 1998 INCENTIVE STOCK PLAN
(ITEM 2 ON PROXY CARD)
The second item to be acted upon at the Annual Meeting is a proposal to
approve an amendment to the Anheuser-Busch Companies, Inc. 1998 Incentive
Stock Plan (the "1998 Plan"). The Board of Directors has approved, and is
seeking shareholder approval of, an increase of 16,000,000 shares which may
be issued pursuant to awards under the 1998 Plan, up to 1,500,000 of which
may be issued in the form of Restricted Stock.
REASONS FOR SEEKING APPROVAL OF THE AMENDMENTS
The Board of Directors believes that the Company's long-term success is
dependent upon its ability to attract and retain outstanding individuals,
to motivate them to exert their best efforts on behalf of the Company's
interests, and to reward them when their efforts succeed. The purpose of
the 1998 Plan is to provide the Company with a critical tool to make that
happen. The Company has had a stock option program for over 20 years. The
Board of Directors believes that the 1998 Plan and its predecessors have
been and continue to be efficient and effective in fulfilling their
purpose. Stock awards make up a crucial part of the compensation package
the Company can offer both to existing personnel and persons being
recruited. Stock awards align management's interests directly with those of
the shareholders, as the value of stock awards is directly linked to the
market value of the Company's stock. As of February 28, 2003, only
13,806,908 shares remain available for new grants. Increasing the shares
for the 1998 Plan would allow the Company to continue this effective
program.
Restricted Stock has not previously been authorized under the 1998
Plan. The Company believes that Restricted Stock would better enable the
Company to achieve the Plan's goals by affording greater flexibility in an
uncertain environment. The strategies that peer companies are using to
attract and retain management talent are changing, and the Company needs to
be flexible in competing in that arena. Adding the ability to use
Restricted Stock gives the Company that flexibility.
12
SUMMARY DESCRIPTION OF THE 1998 PLAN
The 1998 Plan currently authorizes the grant of several types of
stock-based awards, including incentive stock options ("ISOs"),
non-qualified stock options ("NQSOs"), stock appreciation rights ("SARs"),
and limited stock appreciation rights ("Limited Rights"), and would also
authorize the grant of Restricted Stock if this Item 2 is approved. ISOs
and NQSOs are types of stock options, allowing the recipient to purchase a
fixed number of shares of stock for a fixed price; ISOs enable the
recipient to enjoy a special tax treatment upon exercise which is not
available to holders of NQSOs. An SAR is the right to receive stock, cash,
or other property equal in value to the difference between the base price
of the SAR and the market price of the Company's stock on the exercise
date. A Limited Right is a special kind of cash-only SAR which is
exercisable only for a limited time after the occurrence of certain events
relating to a change in control of the Company. "Restricted Stock" is
common stock which the Company grants subject to transfer restrictions and
possible forfeiture events; at the time of grant the Plan Committee
establishes vesting criteria. The restrictions and forfeiture risk end when
the vesting criteria are met.
Approximately 2,700 officers and management employees of the Company
and its subsidiaries and affiliates are eligible to receive awards under
the 1998 Plan. Non-employee directors are ineligible for awards. The 1998
Plan is administered by the Executive Salaries and Stock Option Plans
Committee (the "Plan Committee") which consists entirely of independent
directors. Within the limits of the 1998 Plan, the Plan Committee
determines when and to whom awards are granted, the types of award granted,
the number of shares subject to each award, the award's exercise or base
price (as applicable) and duration, when awards become exercisable,
non-forfeitable, or otherwise vested, and other terms and conditions which
the Plan Committee deems appropriate.
The 1998 Plan presently authorizes the issuance of 72 million shares of
the Company's common stock pursuant to awards; of that, only 13,806,908
shares presently are available for new awards. If this item 2 is approved
by the shareholders, the number of shares available for new awards will
increase to 29,806,908. The 1998 Plan (as amended) does not permit the
Company to make awards (other than Restricted Stock) relating to more than
1.5 million shares, or to make awards of more than 375,000 shares of
Restricted Stock, to any one person in any calendar year. Appropriate
adjustments in these share limits and in the terms of outstanding awards
are required for stock splits and similar events. The authority to make new
award grants under the 1998 Plan will expire on April 21, 2008.
The terms of awards cannot exceed ten years. The option price of
options and the base price of SARs and Limited Rights cannot be less than
100% of the market value of the Company's stock on the grant date, except
in certain limited instances such as an adjustment for a stock split or the
Company's assumption of options granted by another corporation which is
acquired by the Company. The Plan Committee is not permitted to grant
options or SARs in exchange for so-called "underwater" options or SARs
(which have an option or base price higher than the then-current market
value of the Company's stock), nor is it permitted to grant any options or
SARs with a so-called "reload" feature (under which new awards are granted
automatically upon exercise of outstanding ones). Optionees may pay the
option price in cash or Company stock, including (if permitted by the Plan
Committee) shares otherwise issuable in connection with the exercise, but
not including shares of unvested Restricted Stock. The Plan Committee has
authority to permit withholding taxes related to exercises or vesting to be
paid with stock; the Plan Committee currently permits required withholding
taxes related to NQSO exercises to be paid with stock otherwise issuable in
connection with the exercise. The Plan Committee may accelerate vesting of
awards at any time in its discretion. The 1998 Plan provides for automatic
vesting of awards upon the occurrence of certain change-in-control events
relating to the Company. In the Plan Committee's discretion, award
agreements may provide that awards are forfeited if the recipient takes any
action prohibited by the award agreement, or if certain events occur or
fail to occur.
The Plan Committee has developed certain policies and practices for
options under the 1998 Plan which it presently intends to continue. These
policies, which the Plan Committee may alter over the life of the 1998
Plan, implement and supplement the 1998 Plan's provisions. Options are
granted with ten-year terms, which can be shortened if the optionee's
employment terminates or certain other events occur. Options normally vest
in equal installments on the first three anniversaries of the grant date.
Options vest sooner if the optionee dies, retires, or becomes disabled.
Although options generally are not transferable, the Plan Committee has
permitted executive officers to transfer NQSOs to family members, family
trusts, and family partnerships (primarily for gift and estate planning
purposes). The Plan Committee has permitted a limited portion of such
13
NQSOs to vest upon transfer. None of these transfers have reduced or
deferred (i) the compensation income that the optionee would otherwise
recognize from an exercise of the NQSOs or (ii) the Company's tax deduction
that would otherwise result from the exercise of the NQSOs. Options are
forfeited if the optionee voluntarily terminates his or her employment
during the first two years after grant, or is dismissed from employment at
any time, among other things.
The 1998 Plan may be amended by the Board of Directors at any time.
Certain amendments which increase the number of authorized shares, increase
the maximum number of shares which may be awarded to any person in any
calendar year, or change the class of eligible employees, must be approved
by the Company's shareholders. The closing price of Company stock on
February 28, 2003, as reported on the New York Stock Exchange, was $46.50
per share.
AWARDS GRANTED UNDER THE 1998 PLAN
As of February 28, 2003, 56,607,979 stock options were outstanding
under the 1998 Plan. No other types of awards have been granted under the
1998 Plan. No awards have been made from the additional shares which are
the subject of this item. Information regarding options granted in 2002 to
certain executive officers of the Company under the 1998 Plan is set forth
in the table captioned "Option Grants in 2002" on page 25, and information
regarding outstanding options is set forth in the table captioned
"Aggregated Option Exercises in 2002 and 2002 Year-End Option Values" on
page 26. Because grants are discretionary, the Company is not able to
predict the amounts, types, or recipients of future grants. If the proposed
amendments had been approved prior to 2002, the Company is not able to
determine what, if any, effect that would have had on the grants actually
made during 2002.
FEDERAL INCOME TAX CONSIDERATIONS
ISOS
An optionee does not recognize taxable income and the Company is not
entitled to a deduction on the grant or exercise of ISOs. If an optionee
holds the shares acquired ("ISO Shares") for at least one year from the
exercise date and two years from the grant date (the "Required Holding
Periods"), the optionee's gain or loss upon a sale will be long-term
capital gain or loss equal to the difference between the amount realized on
the sale and the optionee's basis in the ISO Shares. The Company will not
be entitled to a deduction. If an optionee disposes of the ISO Shares
without satisfying the Required Holding Periods, the "disqualifying
disposition" will give rise to ordinary income equal to the excess of the
fair market value of the ISO Shares on the exercise date (or generally, the
sale price, if less) over the optionee's basis in the ISO Shares. The
Company will ordinarily be entitled to a deduction at the same time equal
to the amount of the ordinary income resulting from a disqualifying
disposition.
An optionee does recognize income for alternative minimum tax ("AMT")
purposes upon exercise of ISOs; that amount is also included in the
optionee's AMT basis in the ISO Shares. AMT gain or loss is equal to the
excess of the amount realized less the optionee's AMT basis. Income from a
disqualifying disposition generally is not income for AMT purposes.
However, if the disqualifying disposition occurs in the same calendar year
as the exercise date, the optionee will recognize income for AMT purposes,
but the amount of such income cannot exceed the amount of income recognized
for regular income tax purposes.
NQSOS, SARS, AND LIMITED RIGHTS
An optionee does not recognize taxable income on the grant of NQSOs or
SARs, but does recognize ordinary income on the exercise date. The amount
of income in the case of an NQSO exercise is the amount by which the fair
market value of the shares underlying the option exercised exceeds the
option price. The amount of income in the case of an SAR exercise is the
amount of cash received plus the fair market value of any shares received.
The Company will ordinarily be entitled to a deduction on the exercise date
equal to the ordinary income recognized by the optionee from the exercise
of NQSOs or SARs. NQSOs which are transferred by gift continue to be taxed
to the optionee on the exercise date in the manner described above. The
discussion with respect to SARs above also applies to Limited Rights.
14
RESTRICTED STOCK
A recipient of Restricted Stock generally does not recognize income and
the Company generally is not entitled to a deduction at the time of grant.
Instead, the recipient recognizes compensation income and the Company is
entitled to a deduction on the date on which vesting occurs ("Vesting
Date"). The amount of income recognized and the amount of the Company's
deduction will equal the fair market value of the vested stock on the
Vesting Date. However, the recipient may elect to include in income the
fair market value of the Restricted Stock at the time of grant. If such
election is made, the Company's deduction will equal the fair market value
of the Restricted Stock at the time of grant.
Any dividends on the Restricted Stock paid to the recipient prior to
the Vesting Date will be includible in the recipient's income as
compensation and deductible as such by the Company.
PARACHUTE PAYMENTS
The 1998 Plan provides for accelerated vesting of all unvested awards
upon a change in ownership or control of the Company, which may cause
certain amounts to be characterized as "parachute payments." An employee
generally is deemed to have received a parachute payment in the amount of
compensation that is contingent upon an ownership change if such
compensation exceeds, in the aggregate, three times the employee's Base
Amount. The "Base Amount" is generally the employee's average annual
compensation for the five preceding years. An employee's "excess parachute
payment" is the excess of the employee's total parachute payments over the
Base Amount. An employee will be subject to a 20% excise tax on, and the
Company will be denied a deduction for, any "excess parachute payment."
$1,000,000 DEDUCTION LIMIT
The Company is not allowed a deduction for compensation paid to certain
top executive officers in excess of $1,000,000 each in any taxable year,
except to the extent such excess constitutes performance-based
compensation. Compensation from past awards under the 1998 Plan constitutes
performance-based compensation, and compensation from new awards will also
if the proposed amendment is approved, except that compensation from
Restricted Stock generally will come within the exception only if the
vesting conditions established by the Plan Committee include performance
based conditions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEM 2.
------------------------
APPROVAL OF THE STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
(ITEM 3 ON PROXY CARD)
The third item to be acted upon at the Annual Meeting is a proposal to
approve the Anheuser-Busch Companies, Inc. Stock Plan for Non-Employee
Directors (the "Director Plan"), a copy of which is included as Appendix B
to this Proxy Statement.
REASONS FOR SEEKING APPROVAL OF THE DIRECTOR PLAN
The purpose of the Director Plan is to attract and retain highly
qualified individuals to serve on the Company's Board of Directors, and to
help align the financial interests of directors with the performance of the
Company's common stock. The Plan accomplishes that purpose through regular
annual grants of stock options and stock appreciation rights ("SARs").
The Director Plan was implemented in 1999. At that time, the rules and
regulations applicable to the Company did not require the Plan to be
submitted to the Company's shareholders for approval. Since the number of
shares involved was relatively modest and the Plan was structured to
provide automatic non-discretionary awards, the Plan was implemented
without shareholder approval.
In 2002, the New York Stock Exchange proposed a rule change which, if
adopted, would require the Company to seek shareholder approval of the
Director Plan the next time that the Plan is substantially amended. That
proposed rule change is part of a series of corporate governance changes
being put in place by the Exchange as well as the U.S. Securities and
Exchange Commission. In view of those proposed changes, the
15
Board has reconsidered its earlier determination and now believes that it
would be appropriate to submit the Plan to shareholders for their
consideration at this time.
If the shareholders do not approve the Director Plan, the Board intends
to re-examine the Company's stock-based compensation practices for
non-employee directors in the context of their overall compensation.
SUMMARY DESCRIPTION OF THE DIRECTOR PLAN
The Director Plan provides for the automatic, annual grant of 5,000
options to each non-employee director and each advisory director in office
on the first business day each May. Currently, the Board of Directors has
12 non-employee directors and one advisory director. Also, the Executive
Salaries and Stock Option Plans Committee of the Board, or the full Board,
may make a discretionary special grant (not to exceed 5,000 options) to any
non-employee director appointed to the Board during a normal term. Options
are granted to all non-employee directors except for those who, due to
various legal restrictions, are unable to own Company stock. For those
persons, 5,000 SARs are granted in lieu of options on each grant date. All
SARs under the Director Plan are payable in cash. If a director receives
SARs and later is permitted to own Company stock, his or her SARs
automatically will convert to options.
The Director Plan is administered by the Executive Salaries and Stock
Option Plans Committee of the Board, whose members are selected by the
Board. Those members have no formal term of office, and the Board may
remove any members and fill all vacancies.
The Director Plan authorizes the issuance of up to 600,000 shares of
the Company's common stock pursuant to awards. At present, 591,663 shares
of Company common stock are reserved and set aside in the Company's
treasury for issuance upon exercise of options under the Director Plan.
That overall limit, as well as the 5,000 options/SARs annual grant rate,
are subject to adjustment to reflect stock splits, stock dividends, or
similar events. The Director Plan has no expiration date.
Stock options allow the recipient to purchase a fixed number of shares
of stock for a fixed price once the option has vested. An SAR under the
Director Plan is the right to receive cash equal to the difference between
the base price of the SAR and the market price of the Company's stock on
the exercise date once the SAR has vested. The terms of options and SARs
under the Director Plan are ten years. The option price of options and the
base price of SARs are 100% of the market value of the Company's stock on
the grant date, subject to adjustment for stock splits and similar events.
Optionees may pay the option price in cash or Company stock previously
owned. Options and SARs normally vest in three equal installments on each
of the first three anniversaries of their grant date. The Executive
Salaries and Stock Option Plans Committee may accelerate vesting of awards
at any time in its discretion. The Director Plan provides for automatic
vesting of awards upon the occurrence of certain change-in-control events
relating to the Company. The Director Plan also provides that awards are
forfeited if the recipient is removed "for cause" as defined by Delaware
law. A director's awards will vest sooner if the director dies, retires, or
becomes disabled, and the term of outstanding awards may be shortened in
those instances.
The Board has reserved the right to amend or terminate the Director
Plan at any time; certain amendments, however, would require shareholder
approval if currently proposed rules of the New York Stock Exchange are
adopted. The closing price of Company stock on February 28, 2003, as
reported on the New York Stock Exchange, was $46.50 per share.
AWARDS GRANTED UNDER THE DIRECTOR PLAN
The Director Plan provides that 5,000 options are granted to each
director each May, except that 5,000 SARs are granted to any director
legally prohibited from owning Company stock. If the Plan is approved, if
all current nominees are elected to the Board, if the number of
non-employee directors remains twelve, and if the number of advisory
directors is two, then in May 2003 and each May thereafter until the Plan
is amended or terminated or exhausts its shares, 60,000 options will be
granted to all non-employee directors of the Company as a group, and an
additional 5,000 options and 5,000 SARs will be granted to the advisory
directors as a group. Those grants will have no immediate dollar value to
the directors, because all grants will be made at then-current market value
and all grants are non-transferable. The eventual dollar value of such
grants cannot be determined, because that value depends upon the future
growth of the Company's common stock.
16
The Director Plan has been in existence since 1999. During 2002, 55,000
options and 5,000 SARs were granted to twelve non-employee directors of the
Company, and 5,000 options were granted to one advisory director, all at an
option or base price of $53.515 per share. As of December 31, 2002, 219,663
stock options and 18,000 SARs were outstanding under the Director Plan.
Information regarding option/SAR ownership by the current directors is set
forth in the Stock Ownership table on page 10.
FEDERAL INCOME TAX CONSEQUENCES
A director does not recognize taxable income on the grant of options or
SARs under the Director Plan, but does recognize ordinary income on the
exercise date. The amount of income in the case of an option exercise is
the amount by which the fair market value of the shares underlying the
option exercised exceeds the option price. The amount of income in the case
of an SAR exercise is the amount of cash received plus the fair market
value of any shares received. The Company will ordinarily be entitled to a
deduction on the exercise date equal to the ordinary income recognized by
the optionee from the exercise of options or SARs.
The Director Plan provides for accelerated vesting of all unvested
awards upon a change in ownership or control of the Company, which may
cause certain amounts to be characterized as "parachute payments." A
director may be subject to the parachute payment rules if he or she meets
certain thresholds of compensation by the Company or ownership of Company
stock in the year of change in ownership or control. If subject to the
rules, a director is deemed to have received a parachute payment in the
amount of compensation that is contingent upon an ownership change if such
compensation exceeds, in the aggregate, three times the director's Base
Amount. The "Base Amount" is generally the director's average annual
compensation for the five preceding years. A director's "excess parachute
payment" is the excess of the director's total parachute payments over the
Base Amount. A director will be subject to a 20% excise tax on, and the
Company will be denied a deduction for, any "excess parachute payment."
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEM 3.
------------------------
APPROVAL OF INDEPENDENT ACCOUNTANTS
(ITEM 4 ON PROXY CARD)
Action will be taken with respect to the approval of independent
accountants for the Company for the year 2003. The Board of Directors has,
upon the recommendation of its Audit Committee, selected
PricewaterhouseCoopers LLP, subject to the approval of the stockholders. If
the stockholders do not approve this selection, the Board of Directors and
the Audit Committee will consider other independent accountants.
A representative of PricewaterhouseCoopers LLP is expected to be
present at the meeting. Such representative will have an opportunity to
make a statement, if he or she so desires, and will be available to respond
to appropriate questions by shareholders. For additional information
regarding the Company's relationship with PricewaterhouseCoopers, please
refer to the "Report of the Audit Committee" on page 19.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 4, WHICH APPROVES THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS FOR
2003.
------------------------
STOCKHOLDER PROPOSAL CONCERNING THE CHAIRMAN OF THE BOARD
(ITEM 5 ON PROXY CARD)
The National Automatic Sprinkler Industry Pension Plan, 8000 Corporate
Drive, Landover, MD 20785, beneficial owner of 95,871 shares of common
stock of the Company, has submitted the following proposal:
"RESOLVED: The shareholders of Anheuser-Busch ("Company") urge the
Board of Directors to amend the Company's by laws to require that an
independent director--as defined by the rules of the New York Stock
Exchange ("NYSE")--who has not served as an officer of the Company
serve as the Chairman of its Board of Directors."
17
The stockholder's statement in support of the proposal is as follows:
"The recent wave of corporate scandals at such companies as Enron,
WorldCom and Tyco has resulted in renewed emphasis on the importance of
independent directors. For example, both the NYSE and the NASDAQ have
proposed new rules that would require corporations that wish to be
traded on them to have a majority of independent directors.
"Unfortunately, having a majority of independent directors alone is
clearly not enough to prevent the type of scandals that have afflicted
Enron, WorldCom and Tyco. All of these corporations had a majority of
independent directors on their boards when the scandals occurred.
"All of these corporations also had a Chairman of the Board who was
also an insider, usually the Chief Executive Officer ("CEO"), a former
CEO or some other officer. Obviously, no matter how many independent
directors there are on a board, that board is less likely to protect
shareholder interests by providing independent oversight of the
officers if the Chairman of that board is also the CEO or some other
officer of the company.
"We respectfully urge the board of our Company to dramatically change
its corporate governance structure and the public's perception of it by
having an independent director serve as its Chairman.
"Although this change would be dramatic, it would hardly be radical. In
the United Kingdom it is common to separate the offices of Chairman and
CEO. In 1996, a blue ribbon commission on Director Professionalism of
the National Association of Corporate Directors recommended that an
independent director should be charged with 'organizing the board's
evaluation of the CEO and providing continuous ongoing feedback;
chairing executive sessions of the board; setting the agenda with the
CEO, and leading the board in anticipating and responding to crises.' "
------------------------
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ABOVE PROPOSAL.
The Board believes that it is not in the best interests of the Company
and its stockholders to require that the Chairman be an independent
director who was not formerly an officer of the Company.
The Company's by-laws require the Board to select a Chairman from its
membership. There is no requirement that the Chairman also be the Chief
Executive Officer and the positions are currently held by two different
individuals. The Board is in the best position to determine who should
serve as Chairman at any given time in light of the Company's then current
and anticipated future circumstances.
Since only three of the Board's current 15 directors are current or
former employees of the Company, and a majority of the Board is independent
as defined by the New York Stock Exchange, there are ample independent
directors to offer critical review of management plans. Furthermore, the
Board has implemented a policy of having non-management director executive
sessions led by an independent director on a rotating basis.
The Board believes that the Company's by-laws provide appropriate
flexibility for the selection of a Chairman and that the need for
independent oversight has already been appropriately addressed.
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST
THIS PROPOSAL.
------------------------
STOCKHOLDER PROPOSALS FOR 2004
For inclusion in the Company's Proxy Statement and form of proxy, any
stockholder proposals intended to be presented at the 2004 Annual Meeting
must be received by the Company at its principal executive offices no later
than November 12, 2003.
Stockholders of record who do not submit proposals for inclusion in the
Proxy Statement but who intend to submit a proposal at the 2004 Annual
Meeting, and stockholders of record who intend to submit nominations for
directors at the meeting, must provide written notice. Such notice should
be addressed to the Vice President and Secretary and received at the
Company's principal executive offices not earlier than December 25, 2003
and not later than January 24, 2004. The written notice must satisfy
certain requirements specified in the
18
Company's by-laws. A copy of the by-laws will be sent to any stockholder
upon written request to the Vice President and Secretary.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee's responsibilities are set forth in the Audit
Committee Charter, attached as Appendix C to this Proxy Statement. The
Audit Committee assists the full Board of Directors in fulfilling its
oversight responsibilities. Management of the Company prepares financial
statements and establishes the system of internal controls.
In fulfilling its oversight responsibilities, the Audit Committee
reviewed the audited financial statements with management and the Company's
independent accountants, including a discussion of the acceptability as
well as the appropriateness of significant accounting principles. The Audit
Committee also reviewed with management and the independent accountants the
reasonableness of significant estimates and judgments made in preparing the
financial statements as well as the clarity of the disclosures in the
financial statements.
The Audit Committee reviewed with the independent accountants,
PricewaterhouseCoopers, their judgments as to the acceptability as well as
the appropriateness of the Company's application of accounting principles.
PricewaterhouseCoopers has the responsibility for expressing an opinion on
the conformity of the Company's annual financial statements with U.S.
generally accepted accounting principles. The Audit Committee also
discussed with PricewaterhouseCoopers such other matters as are required to
be discussed under U.S. generally accepted auditing standards.
In addition, the Audit Committee discussed with PricewaterhouseCoopers
its independence from management and the Company, including the impact of
non-audit-related services provided to the Company, and the matters
included in the written disclosures required by the Independence Standards
Board. The Audit Committee concluded that the non-audit services provided
by PricewaterhouseCoopers do not impact PricewaterhouseCoopers'
independence.
The Audit Committee discussed with the General Auditor and
PricewaterhouseCoopers the overall scope and plans for their respective
audits. The Audit Committee meets with the General Auditor and
PricewaterhouseCoopers, with and without management present, to discuss the
results of their audits, their opinions of the Company's system of internal
controls and the overall quality of the Company's financial reporting.
The Audit Committee held five meetings in 2002.
In reliance on the reviews and discussions noted above, the Audit
Committee recommended to the full Board of Directors that the audited
financial statements be included in the Company's Annual Report on Form
10-K for the year ended December 31, 2002 for filing with the U.S.
Securities and Exchange Commission. The Audit Committee and the full Board
of Directors have also recommended, subject to shareholder approval, the
selection of PricewaterhouseCoopers as the Company's independent
accountants for 2003.
Audit Committee
Bernard A. Edison (Chair)
Vernon R. Loucks, Jr.
Vilma S. Martinez
Andrew C. Taylor
Douglas A. Warner III
19
FEES PAID TO PRICEWATERHOUSECOOPERS
The following fees were paid to PricewaterhouseCoopers, the Company's
independent auditors, for services rendered in 2002 ($ in Millions):
Audit Fees.................................................. $ 3.1
Tax Planning and Compliance Fees............................ 2.3
Financial Information Systems Design and Implementation
Fees...................................................... 2.6
All Other Fees.............................................. 2.3
-----
Total PricewaterhouseCoopers Fees........................... $10.3
=====
Audit Fees represent the aggregate fees billed for professional
services rendered for the audit of the Company's annual financial
statements for 2002, and reviews of Company financial statements included
in SEC Forms 10-Q during the year.
Tax Planning and Compliance Fees represent domestic and international
income tax planning, compliance and audit assistance, expatriate and
executive tax work, and tax work related to foreign entity statutory
audits.
Financial Information Systems Design and Implementation Fees represent
amounts paid for work on general ledger and related systems used in
creating the Company's financial statements. Anheuser-Busch makes all
project-related management and operating decisions on these projects. In
October 2002, PricewaterhouseCoopers sold its systems consulting group to
IBM. As a result, PricewaterhouseCoopers no longer provides systems related
consulting services to Anheuser-Busch.
All Other Fees include amounts paid for non-financial systems design,
financial due diligence assistance, international compliance reporting,
internal controls review, and audits of benefit plans.
When considering matters that could bear on the independence of
PricewaterhouseCoopers, the Committee takes into account both the nature of
any potential work performed and the related fees. The Audit Committee has
considered whether the provision of the non-audit services described above
is compatible with maintaining PricewaterhouseCoopers' independence and has
concluded that it is compatible. Recurring, non-audit fees include
financial due diligence assistance, tax planning and compliance fees,
foreign statutory audits, benefit plan audits and financial, systems and
operational control reviews.
The Committee therefore aggregates all audit-related and recurring,
non-audit costs when evaluating the potential impact of
PricewaterhouseCoopers fees for discretionary projects on auditor
independence. For its evaluation purposes, the Committee categorized 2002
fees paid to PricewaterhouseCoopers as follows ($ in Millions):
Audit and Recurring Non-Audit Fees.......................... $ 6.9
Financial Information System Design and Implementation
Fees...................................................... 2.6
Non-Financial Systems Design Fees........................... .8
-----
Total PricewaterhouseCoopers Fees........................... $10.3
=====
EXECUTIVE COMPENSATION
REPORT OF THE EXECUTIVE SALARIES
AND STOCK OPTION PLANS COMMITTEE
The Executive Salaries and Stock Option Plans Committee has the
responsibility of recommending to the Board of Directors appropriate
salaries and other compensation for executive officers, administering the
Officer Bonus Plan, and administering the Company's stock option program.
The Committee consists entirely of independent directors.
20
COMPENSATION PHILOSOPHY
The Committee adheres to several guiding principles in carrying out its
responsibilities:
* Total compensation should reward individual and corporate performance
and provide incentive for enhancement of shareholder value.
* Anheuser-Busch provides a base salary that will maintain its
competitive market position. The Company offers an annual bonus
opportunity that aligns corporate objectives and performance with
individual achievements. Anheuser-Busch utilizes stock options to
foster a long-term perspective aligned with that of the shareholders.
* Compensation plans should be simple and easily understood. Executives
must clearly understand variable compensation opportunities and how
to earn variable rewards.
* The Anheuser-Busch program should reflect competitive levels of fixed
and variable compensation. An external compensation consultant
annually reports to the Committee on the competitive mix of base,
bonus, and long-term incentives for a comparator group of national
and local companies.
2002 COMPENSATION
The Committee considers several factors when determining compensation
for executive officers, including the Chief Executive Officer:
* OVERALL COMPANY PERFORMANCE. In addition to their current knowledge
of Company operations through participation at regular Board
meetings, the Committee specifically looked at annual and long term
sales, earnings, and cash flow growth; market share gains; return to
shareholders (see chart on page 24); progress toward long-term
objectives; individual divisional results as appropriate; and various
qualitative factors relating to Company performance. There is no set
weighting of these variables as applied to individual executive
positions.
* INDIVIDUAL PERFORMANCE. The Committee considers, in addition to
business results, the executive's achievement of various other
managerial objectives and personal development goals.
* COMPETITIVE COMPENSATION. The Committee is provided a report from a
compensation consulting firm which details Anheuser-Busch
compensation practices relative to a comparable group of 19
companies. This group is comprised of large national consumer goods
companies as well as several large St. Louis-based corporations. The
companies in the sample are chosen in consultation with the
consulting firm to be representative of the types of companies
Anheuser-Busch competes with for executive talent. The report reviews
base salary, annual bonus, and long-term incentive awards for the CEO
and other officer positions with responsibilities that are comparable
across the group. The consulting firm believes, and the Committee
concurs, that this sample of benchmarks not only provides guidance
for specific positions, but also is indicative of overall Company pay
practices when viewed in the aggregate.
* TARGETED COMPENSATION. Total compensation for executive officers
including the CEO is targeted at a market level which approximates
the median of the sample group of comparable companies for base
salary and bonus and the top quartile for long-term incentives after
adjusting for the different magnitude of sales for each company,
using a method called regression analysis. An executive's
compensation is considered to be at the market level if it is within
(+-)20% of the targeted compensation. Actual compensation may vary
from the targeted compensation based on the Committee's subjective
evaluation of the Company's financial performance and the
individual's performance. In light of the Company's strong 2002
performance and Mr. Stokes' contribution to that strong performance,
Mr. Stokes' total compensation for 2002 was in the top quartile for
total compensation compared to his peers from the comparison group.
21
SALARY:
The Company does not have an employment agreement with Mr. Stokes or
any of its other executive officers. In setting base salaries the Committee
generally considers the overall financial performance of the Company during
the prior year, particularly beer sales volume and market share
performance, gross and operating margin trends, earnings and cash flow per
share growth, returns on capital and equity, and total returns to
shareholders. Actual salary determination is subjective in that there are
no specific weightings for the variables considered. Mr. Busch III's 2002
base salary of $1,200,000 was at the market level of salaries for CEOs in
the comparable group of companies. In July 2002, the Board of Directors
named Mr. Stokes President and Chief Executive Officer, replacing Mr. Busch
III as Chief Executive Officer. Mr. Busch III remains Chairman of the
Board. In July, Mr. Busch III's salary was reduced to $600,000. Mr. Stokes'
2002 base salary of $1,325,000 was at the market level of salaries for CEOs
in the comparable group of companies.
Salaries for other executive officers were targeted at the market level
where appropriate benchmarks were available. Actual 2002 salaries were
within (+-)20% of the targeted salary and were determined by a subjective
evaluation of responsibilities, individual performance, and to a lesser
degree, length of service.
BONUS:
2002 bonuses for Mr. Stokes, 13 other executive officers and 33 other
officers were paid under the Officer Bonus Plan (the "Plan"), which was
most recently reapproved by shareholders at the 2000 Annual Meeting. The
Plan authorizes the Committee to establish programs that allow payment of
cash bonuses to participants based on pre-established minimum performance
goals for designated performance periods. Pursuant to the Plan, in February
2002 the Committee adopted the 2002 Officer Bonus Program ("2002 Program"),
which established a minimum performance goal and a formula for determining
a maximum bonus pool, both of which were based on pretax earnings of the
Company for 2002 after adjustments for certain items. The Committee also
determined a bonus formula for allocating the pool among the participants
in which amounts for participants were expressed as a percentage of the
total pool.
In February 2003 the Committee certified that the 2002 performance goal
was met and approved individual bonuses. The Company achieved record sales
and earnings in 2002. In view of this, the Committee, through the exercise
of discretion and after taking into consideration individual performance
and targeted compensation levels, approved bonus payments that were
generally at the market levels, but less than the maximum available in the
bonus pool. Due to regulations of the Internal Revenue Service and
provisions of the Plan and 2002 Program, any adjustments to the bonuses for
the participating executives named in the summary compensation table on
page 23 could only be reductions from the amounts determined by formula.
Bonuses for other participants were determined after subjectively taking
into consideration individual performance toward corporate or divisional
objectives. Mr. Stokes' 2002 bonus was $3,100,000.
LONG-TERM INCENTIVES:
Stock options are the Company's only long-term incentive. Stock option
awards are made to approximately 2,700 middle and upper level managers,
including Mr. Stokes and the other executive officers. The size of awards
is subjectively determined by the Committee based on position,
responsibilities, and individual performance, subject to plan limits. In
2002, the Committee granted Mr. Stokes options for 1,354,200 shares under
the 1998 Incentive Stock Plan.
POLICY ON DEDUCTIBILITY OF COMPENSATION EXPENSES
The Company is not allowed a deduction for certain compensation paid to
certain executive officers in excess of $1 million, except to the extent
such excess constitutes performance-based compensation. The Committee
considers its primary goal is to design compensation strategies that
further the best interests of the Company and its shareholders. To the
extent they are not inconsistent with that goal, the Committee will attempt
where practical to use compensation policies and programs that preserve the
tax deductibility of compensation expenses.
22
Stock options granted under the 1998 Incentive Stock Plan and bonuses
paid to selected executive officers pursuant to the Officer Bonus Plan are
designed to qualify as performance-based compensation.
Executive Salaries and Stock Option Plans Committee
Bernard A. Edison (Chair)
Vernon R. Loucks, Jr.
Vilma S. Martinez
William Porter Payne
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All members of the Executive Salaries and Stock Option Plans Committee
are independent, non-employee directors.
Mr. Busch III served on the Human Resources Committee of SBC
Communications Inc. during 2002 and until March 1, 2003. He no longer
serves on that committee. Mr. Whitacre, an executive officer of SBC
Communications Inc., is a Director of the Company.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
----------------------------------------------- ------------
AWARDS OF ALL OTHER
OTHER ANNUAL STOCK COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) OPTIONS (#) ($)(2)
--------------------------- ---- ---------- --------- ---------------- ------------ ------------
P. T. Stokes 2002 1,325,000 3,100,000 16,060 1,354,200 131,028
President and Chief 2001 1,058,000 2,200,000 43,662 1,354,200 103,438
Executive Officer 2000 900,000 2,000,000 19,506 750,000 80,264
A. A. Busch III 2002 900,000 2,700,000 40,972 1,000,000 131,593
Chairman of the Board 2001 1,176,000 3,300,000 127,811 1,083,400 136,466
2000 1,152,600 3,000,000 37,944 900,000 121,163
A. A. Busch IV 2002 600,000 700,000 11,875 500,000 53,228
Vice President 2001 510,000 565,000 32,981 216,700 40,107
and Group Executive 2000 440,000 515,000 10,675 150,000 28,308
W. R. Baker 2002 530,000 625,000 11,126 300,000 58,742
Vice President and 2001 500,000 550,000 7,977 270,900 51,482
Chief Financial Officer 2000 475,000 500,000 8,705 250,000 42,234
S. K. Lambright 2002 540,000 550,000 13,609 225,000 67,273
Group Vice President 2001 511,000 475,000 36,149 216,700 59,581
and General Counsel 2000 470,000 475,000 13,050 200,000 49,037
--------
(1) Salary and bonus amounts include any amounts deferred under the Executive Deferred Compensation Plan.
(2) The 2002 amounts disclosed in this column include:
(a) Company matching contributions and certain other allocations under certain defined contribution
and deferred compensation plans of $110,148 for Mr. Stokes, $85,332 for Mr. Busch III, $50,250 for
Mr. Busch IV, $45,858 for Mr. Baker and $46,771 for Mr. Lambright.
(b) Payments in connection with life and accidental death insurance coverage of $20,880 for Mr. Stokes,
$35,307 for Mr. Busch III, $2,978 for Mr. Busch IV, $12,884 for Mr. Baker and $12,654 for
Mr. Lambright.
(c) Payment of director fees from subsidiary or affiliated companies of $10,953 for Mr. Busch III and
$7,848 to Mr. Lambright.
23
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
ANHEUSER-BUSCH COMPANIES, INC., S&P 500 INDEX
AND RUSSELL TOP 200 INDEX**
(12/31/97-12/31/02)
[GRAPH]
1997 1998 1999 2000 2001 2002
Anheuser-Busch $100.0 $152.2 $167.1 $218.1 $220.1 $239.2
S&P 500 100.0 128.5 155.5 141.4 124.6 97.2
Russell Top 200 Index 100.0 134.0 163.2 143.4 122.5 93.9
--------
* Assumes $100 invested on December 31 of first year of chart in Anheuser-Busch Companies, Inc. Common
Stock, S&P 500 Index and Russell Top 200 Index and that all dividends were reinvested.
** Because only one of the other two leading domestic brewers is independent and domestically based, the
Company has elected to compare shareholder returns with the Russell Top 200 Index. This Index is
comprised of the 200 largest publicly held United States companies, including Anheuser-Busch, based on
market capitalization.
*** Compound Annual Growth Rate.
24
OPTION GRANTS IN 2002
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS(1) FOR OPTION TERM(2)
------------------------------------------------ -----------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED
UNDERLYING TO EXERCISE
OPTIONS EMPLOYEES PRICE EXPIRATION
NAME GRANTED (#) IN 2002(3) ($/SH) DATE 0%(4) 5% 10%
---- ----------- ---------- -------- ---------- ----- -- ---
P. T. Stokes......... 1,354,200 9.57 49.91 11/26/12 $0 $ 42,505,807 $ 107,718,060
A. A. Busch III...... 1,000,000 7.07 49.91 11/26/12 0 31,388,131 79,543,686
A. A. Busch IV....... 500,000 3.53 49.91 11/26/12 0 15,694,065 39,771,843
W. R. Baker.......... 300,000 2.12 49.91 11/26/12 0 9,416,439 23,863,106
S. K. Lambright...... 225,000 1.59 49.91 11/26/12 0 7,062,329 17,897,329
All Shareholders..... N/A N/A N/A N/A 0 26,717,577,107 67,707,585,523
All Employee
Optionees.......... 14,084,641 100.0 49.91 11/26/12 0 442,090,557 1,120,344,261
Employee Optionee
Gain as % of All
Shareholders Gain.. N/A N/A N/A N/A N/A 1.7% 1.7%
--------
(1) All options granted to the named officers were granted on November 27, 2002. The options become
exercisable in three equal parts on the first, second, and third anniversaries of the grant date;
however, the Stock Option Plans Committee is authorized to accelerate exercisability at any time, and
acceleration occurs automatically in the event of the optionee's death, disability, or retirement (under
certain circumstances), or if certain events occur which would result in a change in control of the
Company. The one-third of the 2002 grant which normally would become exercisable on November 27, 2003
was made eligible for earlier vesting if transferred in gifts to certain family members, trusts, or
partnerships. A tax payment feature allows the use of option stock to pay the withholding taxes related
to an option exercise. The number of options granted with the tax payment feature in 2002 to the named
officers were: Mr. Stokes, 1,352,197; Mr. Busch III, 997,997; Mr. Busch IV,497,997; Mr. Baker, 297,997;
and Mr. Lambright, 222,997.
(2) The dollar amounts under these columns are the result of calculations at 0% and at the 5% and 10% rates
set by the SEC and therefore are not intended to forecast possible future appreciation, if any, of the
Company's stock price. Potential realizable values for all shareholders are based on 851.2 million
shares outstanding at November 30, 2002 and a per share price of $49.91, which represents the fair
market value of the Company's stock on the date of the grants.
(3) Based on 14,084,641 options granted to 2,691 employees during 2002.
(4) No gain to the optionees is possible without an increase in stock price, which will benefit all
shareholders commensurately. A zero percent stock price appreciation will result in zero dollars for the
optionee.
25
AGGREGATED OPTION EXERCISES IN 2002 AND 2002 YEAR-END OPTION VALUES
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT
OPTIONS AT 12/31/02
12/31/02 (#) ($)(1)(2)
SHARES ------------ ------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($)(1) UNEXERCISABLE UNEXERCISABLE
---- ------------ --------------- ------------- -------------
P. T. Stokes......................... 386,904 13,471,378 2,373,748/ 29,470,475/
2,507,000 4,911,232
A. A. Busch III...................... 1,001,045 31,009,760 2,809,597/ 30,916,150/
2,022,266 3,929,127
A. A. Busch IV....................... 50,000 1,405,625 442,234/ 4,808,292/
694,466 785,895
W. R. Baker.......................... 56,664 2,056,684 1,209,795/ 22,718,807/
563,933 982,464
S. K. Lambright...................... 267,324 9,040,037 785,568/ 10,980,603/
436,132 785,895
--------
(1) Value before income taxes payable as a result of exercise.
(2) Based on the average of the high and low price of the Company's common stock on the New York Stock
Exchange--Composite Transactions for 12/31/02 ($48.3850).
PENSION PLANS TABLE
YEARS OF SERVICE
-----------------------------------------------------------------------
ELIGIBLE REMUNERATION 5 10 15 20 25 30 OR MORE
--------------------- - -- -- -- -- ----------
$ 500,000............ $ 41,667 $ 83,333 $ 125,000 $ 166,667 $ 208,333 $ 250,000
1,000,000............ 83,333 166,667 250,000 333,333 416,667 500,000
1,500,000............ 125,000 250,000 375,000 500,000 625,000 750,000
2,000,000............ 166,667 333,333 500,000 666,667 833,333 1,000,000
2,500,000............ 208,334 416,667 625,000 833,333 1,041,667 1,250,000
3,000,000............ 250,000 500,000 750,000 1,000,000 1,250,000 1,500,000
3,500,000............ 291,667 583,333 875,000 1,166,667 1,458,333 1,750,000
4,000,000............ 333,333 666,667 1,000,000 1,333,333 1,666,667 2,000,000
4,500,000............ 375,000 750,000 1,125,000 1,500,000 1,875,000 2,250,000
5,000,000............ 416,668 833,334 1,250,000 1,666,666 2,083,334 2,500,000
5,500,000............ 458,333 916,667 1,375,000 1,833,333 2,291,667 2,750,000
The Pension Plans Table above shows a range of estimated total annual
normal retirement pension benefits from qualified and non-qualified defined
benefit pension plans for employees who have the years of credited service
shown at retirement, and whose eligible remuneration is as shown. The
eligible remuneration used to compute actual pension benefits would be the
highest sum, for the calendar year of retirement or any of the four
preceding calendar years, of the employee's annual base salary as of
January 1 of such year plus the bonus earned during the prior calendar
year. An employee's accrued annual pension will not be reduced after age
55. Voluntary deferrals of salary or bonus for any year under the Executive
Deferred Compensation Plan are included for the year of deferral in this
determination. The table shows the benefit payable at normal retirement age
(65), payable in the form of a life annuity with ten years of guaranteed
payments. This is subject to actuarial adjustment for an employee who retires
after age 65. Amounts shown do not reflect the applicable deduction for Social
Security benefits.
26
Years of credited service, to the nearest year, and compensation
covered by the pension plans for executive officers named in the Summary
Compensation Table are as follows: Mr. Stokes--34 years and $4,491,250;
Mr. Busch III--45 years and $4,500,000; Mr. Busch IV--16 years and
$1,500,000; Mr. Baker--32 years and $1,185,000; and Mr. Lambright--25 years
and $1,120,000.
CHANGE IN CONTROL ARRANGEMENTS
An employee who is involuntarily terminated within three years after a
change in control receives an additional five years of age and service in
the calculation of the annual pension benefit under the Company's tax-
qualified pension plan. The minimum increase in benefits under this
provision is 15%.
Under the Company's plans which are not tax-qualified, vesting and
payment of the benefits are accelerated upon a change in control. If
special additional tax were imposed on a participant as to such benefits on
account of a change in control, the participant's benefits would be
increased to the extent required to put the participant in the same
position after payment of the special tax as if the special tax had not
been imposed.
NEW PLAN BENEFITS--2003
The following chart presents the benefits or amounts that will be
received by or allocated to each of the following groups for the calendar
year 2003, to the extent that these benefits or amounts are determinable.
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
NAME AND PRINCIPAL POSITION DOLLAR VALUE NUMBER OF UNITS
--------------------------- ------------ ---------------
P. T. Stokes................................................ N/A N/A
President and Chief
Executive Officer
A. A. Busch III............................................. N/A N/A
Chairman of the Board
A. A. Busch IV.............................................. N/A N/A
Vice President and
Group Executive
W. R. Baker................................................. N/A N/A
Vice President and
Chief Financial Officer
S. K. Lambright............................................. N/A N/A
Group Vice President
and General Counsel
Executive Officers as a Group............................... N/A N/A
Non-Executive Director Group (12 persons)................... (1) 60,000(2)
Non-Executive Officer Employee Group........................ N/A N/A
--------
(1) The dollar value of the options expected to be granted in 2003 can not be determined. The options will
be granted on May 1, 2003 with an exercise price equal to the market price of the Company's common stock
on the date of grant.
(2) Each non-employee director will receive a grant of 5,000 options or SARs.
27
EQUITY COMPENSATION PLANS
The following table sets forth, for the Company's equity compensation
plans, the number of outstanding option grants under such plans, the
weighted average exercise price of outstanding options, and the number of
shares remaining available for issuance under such plans, all as of
December 31, 2002.
NUMBER OF SHARES OF
COMMON STOCK REMAINING
AVAILABLE FOR FUTURE ISSUANCE
NUMBER OF SHARES OF UNDER EQUITY COMPENSATION
COMMON STOCK TO BE ISSUED WEIGHTED-AVERAGE PLANS (EXCLUDING SHARES TO
UPON EXERCISE OF EXERCISE PRICE OF BE ISSUED UPON EXERCISE OF
PLAN CATEGORY OUTSTANDING OPTIONS OUTSTANDING OPTIONS OUTSTANDING OPTIONS)
------------- ------------------------- ------------------- -----------------------------
Equity compensation plans
approved by security
holders(1)............... 73,784,610 $38.32 13,881,035
Equity compensation plans
not approved by security
holders(2)............... 328,660(3) 41.39(4) 1,223,669(5)
---------- ------ ----------
Total...................... 74,113,270 38.33 15,104,704
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(1) The 1989 Incentive Stock Plan and the 1998 Incentive Stock Plan.
(2) The Stock Plan for Non-Employee Directors (which is being submitted to shareholders for approval at the
Annual Meeting) and the Global Employee Stock Plan.
(3) 219,663 shares are attributable to options outstanding under the Stock Plan for Non-Employee Directors
and 108,997 are attributable to the Global Employee Stock Plan.
(4) The weighted-average exercise price of options outstanding under the Stock Plan for Non-Employee
Directors is $41.68; the weighted-average purchase price of stock options outstanding under the Global
Employee Stock Plan is $42.39.
(5) 354,000 shares of common stock are attributable to the Stock Plan for Non-Employee Directors and 869,669
are attributable to the Global Employee Stock Plan.
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
The Stock Plan for Non-Employee Directors is described at page 16.
GLOBAL EMPLOYEE STOCK PLAN
The Anheuser-Busch Global Employee Stock Plan ("Global Plan")
authorizes the Company to issue up to 1,000,000 shares of common stock to
permanent employees of the Company and its subsidiaries located outside of
the United States who elect to participate. The Global Plan is designed to
encourage savings and ownership of Company shares, and was begun in 1999.
Under the Global Plan, participants elect to have a portion of their cash
compensation withheld in special savings accounts each payroll period. Each
year, generally on March 1, each participant is offered up to 100 shares at
the market price on the offer date. If the market price later rises above
the fixed offer price, the offer may be accepted for up to three years from
the offer date. If accepted, payment for the shares purchased must come
from the participant's special savings account and no other source. A
participant may sell purchased shares on designated sale dates. If a
participant retains purchased shares in his or her account for at least two
years, the Company awards additional shares based on the number of retained
shares; the amount of additional shares ranges from 10% to 50%, depending
on the Company's business performance. Participants generally may elect to
reinvest dividends on purchased shares, but reinvestment shares are not
entitled to additional awards.
28
OTHER RELATIONSHIPS INVOLVING DIRECTORS, OFFICERS, OR THEIR ASSOCIATES
In 1993, pursuant to an investment agreement, the Company purchased
equity securities of Grupo Modelo, S.A. de C.V., Mexico's largest brewer
("Grupo Modelo"), and of Diblo, S.A. de C.V., the operating subsidiary of
Grupo Modelo ("Diblo"). The Company subsequently exercised options obtained
by it under the investment agreement to acquire additional equity
securities of Grupo Modelo and Diblo and now holds a 50.2% direct and
indirect interest in Diblo. The Company does not have voting or other
effective control in either Grupo Modelo or Diblo. Carlos Fernandez G. is
Vice Chairman of the Board of Directors and Chief Executive Officer of
Grupo Modelo. Pursuant to the investment agreement, the Company agreed to
use its best efforts to maintain on its Board of Directors a designee of
the controlling shareholders of Grupo Modelo and Diblo as long as the
Company or one of its subsidiaries owns ten percent or more of the
outstanding capital stock of Grupo Modelo. Mr. Fernandez is that designee.
August A. Busch III is the father of August A. Busch IV, an executive
officer of the Company. Another son of Mr. Busch III, Steven A. Busch, is
employed by the Company as Executive Assistant to the Chairman of the
Board, for which he received cash compensation of $156,800 for 2002. Two
sons of Patrick T. Stokes, David Stokes and Michael Stokes, are employed by
the Company's wholly-owned subsidiary, Anheuser-Busch Incorporated, as
Marketing Director, Western Region and Senior Manager of Key Accounts,
respectively. For 2002, Michael Stokes received cash compensation of
$100,120. David Stokes began his employment in August 2002 and his cash
compensation for the partial year was $52,083. Daniel Kloth, a son of
Donald W. Kloth, an executive officer of the Company, is employed by the
Company as a Purchasing Manager for which he received cash compensation of
$98,572 for 2002.
The Company leases approximately 209 acres located in St. Louis County,
Missouri and certain other property, in part from a trust established for
the benefit of certain heirs of the late August A. Busch, Jr. and in part
from Grants Farm Manor, Inc., a corporation owned by Andrew Busch, a son of
August A. Busch, Jr. August A. Busch III and his children have no financial
interest in the leases. The Grant's Farm facility (under lease from the
trust) is used extensively by the Company for advertising and public
relations purposes, for public tours, and for corporate entertaining.
Grant's Farm is one of St. Louis' most popular tourist attractions. The
lease arrangements for Grant's Farm require the Company to pay a fixed
annual rent and a percentage of income generated from on-site concession
operations. The lease arrangements with Grants Farm Manor, Inc. are for the
housing and breeding of the Company's Clydesdale horses. The Company is
required to reimburse maintenance and certain other expenses associated
with each of the leased properties. The Company has certain rights of first
refusal and other limited purchase rights relating to the Grant's Farm land
and some of the leased personal property, and to a private residence
situated within the leased premises and certain personal property
associated with the residence. For the year 2002, the Company paid in the
aggregate $2,585,708 under these lease arrangements.
Anheuser-Busch, Incorporated ("ABI") has agreements with Southern Eagle
Distributing, Inc. ("Southern Eagle"), Tri-Eagle Sales, City Beverage,
L.L.C., and Classic Eagle Distributing, L.L.C. ("Classic Eagle") for the
distribution of malt beverage products in Fort Pierce, Florida,
Tallahassee, Florida, Kent, Washington and Lawrence and Leavenworth,
Kansas, respectively. Peter William Busch, a half brother of Mr. Busch III,
is the President and majority owner of Southern Eagle. Southern Eagle
purchased $31,884,485 of products from ABI during 2002. Tri-Eagle Sales is
owned by Tripp and Susan Busch Transou, the son-in-law and daughter of Mr.
Busch III. Tri-Eagle Sales purchased $25,136,350 of products from ABI
during 2002. Steven Knight, the son of Charles F. Knight, a director of the
Company, is the majority owner of City Beverage, L.L.C., which purchased
$17,611,603 of products from ABI during 2002. Classic Eagle, which is owned
by Stephen K. Lambright, Jr., the son of Stephen K. Lambright, an executive
officer of the Company, and another individual purchased $8,783,743 of
products from ABI during 2002. These distribution agreements are ABI's
standard distribution agreements.
James R. Jones, a director of the Company, is Senior Counsel of Manatt,
Phelps and Phillips, a law firm that provided legal services to the Company
during 2002 in an amount of $7,220. Mr. Jones has a consulting and
indemnification agreement in his individual capacity with the Company
relating to his service on the Board of Directors of Grupo Modelo. During
2002, Mr. Jones was paid $49,958 pursuant to this agreement.
29
Ginnaire Rental, Inc. ("Ginnaire"), a corporation wholly owned by Mr.
Busch III, leases aircraft to the Company for business use. For 2002, the
Company paid $695,561 to Ginnaire pursuant to the lease agreements. The
leasing fees are an hourly rate intended to reimburse Ginnaire for the pro
rata share of maintenance costs, engine reserves and aircraft insurance,
plus excise and use taxes attributed to the Company's actual use of the
aircraft, without mark-up.
In the opinion of the Company's Business Practices Committee and the
Board's Conflict of Interest Committee, the terms and conditions of the
foregoing transactions are at least as favorable to the Company and its
subsidiaries as those which would be available from unrelated parties for
comparable transactions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's executive officers and directors are required under the
Securities Exchange Act of 1934 to file reports of ownership and changes in
ownership of common stock of the Company with the Securities and Exchange
Commission and the New York Stock Exchange. Copies of those reports must
also be furnished to the Company.
Based solely on a review of the copies of reports furnished to the
Company and written representations that no other reports were required,
the Company believes that during the preceding year all filing requirements
applicable to executive officers and directors have been complied with.
OTHER MATTERS
The cost of soliciting proxies will be borne by the Company and will
consist primarily of printing, postage, and handling, including the
expenses of brokerage houses, custodians, nominees, and fiduciaries in
forwarding documents to beneficial owners. In addition, to assist in the
solicitation of proxies from brokers, bank nominees, and other
institutional holders and from other stockholders, the Company has engaged
D. F. King & Co., Inc. for a fee not to exceed $11,000 plus out-of-pocket
expenses. Solicitation also may be made by the Company's officers,
directors, or employees, personally or by telephone.
St. Louis, Missouri
March 11, 2003
30
APPENDIX A
CORPORATE GOVERNANCE GUIDELINES
ANHEUSER-BUSCH COMPANIES, INC.
ROLE OF THE BOARD OF DIRECTORS
The Board of Directors selects and supervises the officers of the
Company in the interest and for the benefit of the stockholders. The Board
of Directors has delegated to the Chief Executive Officer, together with
the other officers of the Company, the authority and responsibility for
managing the business of the Company under the direction of the Board. Each
director is expected to spend the time and effort necessary to properly
discharge the director's responsibilities.
COMPOSITION OF THE BOARD OF DIRECTORS
1. Size of Board of Directors
The Corporate Governance Committee makes recommendations to the Board
of Directors concerning the appropriate size of the Board of Directors. The
Board of Directors believes that the quality of the individuals serving on
the Board of Directors and the overall balance of the Board of Directors is
more important than the number of members.
2. Board Membership Criteria
The Board of Directors is responsible for nominating individuals for
election to the Board of Directors by the stockholders and for appointing
individuals as directors between annual meetings of the stockholders. The
Corporate Governance Committee identifies, reviews and makes
recommendations concerning potential members of the Board of Directors.
The Board seeks members from diverse business and professional
backgrounds with outstanding integrity, achievement and judgment and such
other skills and experience as will enhance the Board's ability to serve
the long-term interests of the stockholders. The Board will evaluate each
individual in the context of the entire Board of Directors with the
objective of assembling a Board of Directors that can best perpetuate the
success of the Company and promote the interests of stockholders. Annually
(or more often, if necessary), the Corporate Governance Committee reviews
the qualifications and backgrounds of the directors and makes
recommendations to the Board as to the directors to be nominated for
election by the stockholders at the next annual meeting or to be appointed
as directors between annual meetings of the stockholders.
3. Selection of Chairman
The Board of Directors annually selects a Chairman from among the
directors. The Board of Directors has concluded that the decision as to
whether the offices of the Chief Executive Officer and the Chairman should
be separate should be based upon the determination of the Board of
Directors as to which approach best serves the interests of the Company at
the time.
4. Term Limits
The Board does not believe that it should establish term limits for
directors. Term limits would deprive the Company of the knowledge and
expertise developed by directors from extended service on the Board of
Directors.
5. Retirement of Board Members
The policy of the Board of Directors is that it will not nominate any
individual for election as a director by the stockholders or appoint any
individual as a director if such person is 72 years or older, subject to
the following exception. Individuals who have served as directors of the
Company or its predecessor since 1971 may continue to be nominated until
they reach the age of 75. August A. Busch III is the only remaining
director to which this exception is applicable.
A-1
6. Directors Who Change Their Present Job Responsibility
The Board of Directors does not generally believe that directors who
retire or significantly change the position they held when they became a
member of the Board should leave the Board of Directors. However, upon any
such event, the Corporate Governance Committee will review the
appropriateness of continued service on the Board of Directors by that
director.
7. No Specific Limitation on Other Board Service
The Board of Directors does not believe that its members should be
prohibited from serving on boards and committees of other organizations,
and the Board has not adopted any guidelines limiting such activities. Each
director is expected to ensure that other commitments do not interfere with
the director's discharge of his or her duties. Directors are expected to
inform the Chairman of the Board and the Chairman of the Corporate
Governance Committee upon becoming a director of any other public company
or becoming a member of the audit committee of any other public company.
The Corporate Governance Committee and the Board of Directors will take
into account the nature and extent of an individual's other commitments
when determining whether it is appropriate to nominate such individual for
election or appoint such individual as a director.
8. Director Orientation and Continuing Education
The Company shall conduct an orientation program for newly elected or
appointed directors on subjects that will assist them in discharging their
duties. The Board of Directors and the Company's management shall develop
and implement a continuing education program for directors to assist them
in discharging their duties.
INDEPENDENCE CRITERIA
A director is determined to be independent if the Board of Directors
has determined that the director has no material relationship with the
Company.
The Board of Directors has established the following categorical
standards in connection with determining the independence of directors:
* A director will not be considered to be independent if, during the
past five years, the Company has employed the director or (except in
a non-officer capacity) any of the director's immediate family.
* A director will not be considered to be independent if, during the
past five years, the director has been employed by (or affiliated
with) the Company's present or former independent accountants or any
of the director's immediate family members have been so employed or
affiliated (except in a non-partner capacity not involving the
Company's business).
* A director will not be considered to be independent if, during the
past five years, either the director, or any of the director's
immediate family members, has been part of an "interlocking
directorate" in which an executive officer of the Company serves on
the compensation (or equivalent) committee of another company that
employs the director.
* A director will not be considered to be independent if the director
is a partner, stockholder, or officer of a company or firm that
provides significant consulting, legal, or financial advisory
services to the Company. For purposes of this categorical standard, a
company or firm will be considered to provide non-significant
services if the fees represent less than (i) 1% of the company's or
firm's gross revenues for its last full fiscal year and (ii) 1% of
the Company's gross revenues for its last full fiscal year.
* A director's independence will not be considered to be impaired if
the director or any immediate family member of the director is
employed by (or affiliated with) a non-significant supplier or
customer of the Company. For the purposes of this categorical
standard, a supplier or customer will be considered non-significant
if its sales to, or purchases from, the Company represent less than
(i) 1% of the gross revenues of the customer or supplier for its last
full fiscal year and (ii) 1% of the Company's gross revenues, for its
last full fiscal year.
* A director's independence will not be considered to be impaired if
the director is an employee, officer, or director of a foundation,
university or other non-profit organization to which the Company
gives
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directly, or indirectly through its foundation, no more than $200,000
per annum or 5% of the organization's gross revenues for its last full
fiscal year (whichever is greater).
* A director's independence will not be considered to be impaired if
the director receives fees for service as the Company's
representative on the board of directors of subsidiary or affiliated
companies.
An individual will be considered to be affiliated with a corporation or
other entity, if that individual controls, is controlled by or is under
common control with the corporation or other entity.
The Board of Directors will determine the independence of any director
with a relationship to the Company that is not covered by the above
standards.
BOARD MEETINGS
1. Frequency of Meetings
The Board of Directors determines its schedule of board meetings each
year. The current schedule is for nine regular meetings each year. A
director is expected to regularly attend meetings of the Board and of the
committees on which the director serves, and to review materials
distributed in advance of meetings.
2. Selection of Agenda Items
The Chairman of the Board of Directors establishes the agenda for each
meeting. Each member of the Board may suggest additional items for the
agenda.
3. Distribution of Materials
The minutes of the prior Board meeting, an agenda for the forthcoming
meeting, and selected Company financial information are distributed to
Board members in advance of the meetings.
4. Attendance of Non-Directors
From time to time the Company requests retired directors to continue to
attend Board meetings as advisory directors for the two years following
their retirement so that the Company can continue to benefit from their
experience and advice. Advisory directors do not vote. The Board believes
that attendance by senior management of the Company at Board meetings is
beneficial.
5. Access to Management and Advisers
Board members shall have unrestricted access to management of the
Company. The Board of Directors shall have the authority to retain
independent legal, accounting or other consultants to advise the Board.
6. Separate Sessions of Non-Management Directors
The non-management directors of the Company shall meet in regularly
scheduled executive sessions without management no fewer than four times a
year. The position of lead director at these meetings shall rotate annually
among the independent directors.
DIRECTOR COMPENSATION
The Company believes that the compensation paid to directors should be
competitive and should encourage ownership of the Company's stock by
directors. The Corporate Governance Committee shall periodically review the
compensation paid to directors by the Company and make recommendations to
the Board of Directors concerning such compensation.
Employees of the Company serving as directors shall not receive any
additional compensation for service on the Board of Directors.
A-3
BOARD COMMITTEES
1. Number and Names of Board Committees
The Board of Directors shall establish committees from time to time to
assist it in discharging its obligations. There are currently seven
standing committees:
Audit Committee
Conflict of Interest Committee
Corporate Governance Committee
Executive Committee
Executive Salaries and Stock Option Plans Committee
Finance Committee
Pension Committee
Each committee shall have a written charter, adopted and periodically
reviewed by the Board of Directors. The purpose and responsibility of each
committee shall be described in its respective charter. After each of its
meetings, the committee shall report on the meeting to the Board of
Directors.
2. Independence of Committee Members
The Audit, Corporate Governance, and Executive Salaries and Stock
Option Plans Committees shall be composed entirely of independent
directors. The membership of each committee and the compensation paid to
the members of each committee will comply with the requirements of the law
and the listing standards of the New York Stock Exchange.
3. Committee Agendas
The Chairman of each committee, in consultation with appropriate
members of management, establishes the agenda for each meeting. Each member
of the committee may suggest additional items for the agenda.
4. Assignment of Committee Members
The Chairman of the Board, after consideration of the desires,
experience and expertise of individual directors and in consultation with
the Chairman of the Corporate Governance Committee, recommends to the Board
of Directors the assignment of directors to the committees of the Board of
Directors, including the chairmen of the committees. The Board of Directors
annually appoints the chairmen and members to each committee.
The Board of Directors does not favor mandatory rotation of committee
assignments or chairmen. The Board of Directors believes that the knowledge
and expertise developed by directors through extended service on a
committee outweigh the benefits obtained through mandatory rotation.
PERFORMANCE EVALUATION; SUCCESSION PLANNING; STOCK OWNERSHIP BY EXECUTIVE
OFFICERS
1. Management Succession
The Board of Directors plans for the succession to the position of
Chief Executive Officer. To assist the Board of Directors, the Chief
Executive Officer annually provides to the Board an assessment of the
Company's executive officers and their potential to succeed him or her. The
Chief Executive Officer also provides to the Board of Directors an
assessment of persons considered potential successors to the other
executive officers. In addition, the Chief Executive Officer prepares a
short-term succession plan providing for temporary delegation of authority
in the event the Chief Executive Officer becomes unexpectedly unable to
perform his or her duties.
2. Evaluation
Annually, the Corporate Governance Committee shall evaluate the
performance of the Board of Directors and each committee thereof. Annually,
the Executive Salaries and Stock Option Plans Committee shall evaluate the
performance of the officers of the Company. The Corporate Governance
Committee and the Executive Salaries and Stock Option Plans Committee shall
discuss the results of their evaluations with the Board of Directors.
A-4
Annually, the Corporate Governance Committee reviews the Corporate
Governance Guidelines and recommends such changes to the Board of Directors
as it determines to be necessary or appropriate.
3. Stock Ownership by Executive Officers
The Board believes that the executive officers of the Company should
have a significant investment in the common stock of the Company, in order
to align their interests with those of the stockholders. Accordingly, the
Board of Directors has established a policy that each executive officer
should own common stock of the Company (including common stock credited in
the executive officer's 401(k) account) with a market value of at least
three times his or her base pay. An executive officer will be permitted
three years to satisfy the requirement.
A-5
APPENDIX B
ANHEUSER-BUSCH COMPANIES, INC.
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
Effective Date: October 1, 1999
(Restated to reflect a 2-for-1 Stock Split effective September 18, 2000 and
amendments effective February 28, 2001 and October 23, 2002)
1. PURPOSE
The purpose of this Plan is to further align the financial interests of
the Non-Employee Directors of Anheuser-Busch Companies, Inc. (the
"Company") with those of the Company's shareowners through the granting of
options to purchase the Company's common stock to such Non-Employee
Directors, and to help the Company attract and retain highly-qualified
individuals to serve as directors.
2. ELIGIBILITY
Participation in this Plan is limited to directors who are not
employees of the Company, including both active and advisory directors
("Non-Employee Directors").
3. GRANTS
(a) Annual Grants. On the effective date of this Plan and on the first
business day of May in each year thereafter, each Non-Employee Director
holding office on such date shall be granted 5,000 Options. The number of
shares and Options to be granted each year shall be subject to adjustment
pursuant to Section 7.
(b) Options. Each "Option" granted under this Plan shall give the
recipient the right to purchase one share of the Company's common stock,
par value $1.00 per share ("Common Stock") at the price, and on the terms
and conditions, set forth in this Plan, including in particular Sections 4
and 5.
(c) Treasury Stock; Reservation. Only shares held in the Company's
treasury may be issued upon exercise of Options. The Company shall reserve
and set aside 600,000 treasury shares for that purpose, subject to
adjustment as provided in Section 7. The Secretary shall count shares
against the reserved number of treasury shares in any convenient,
consistent manner selected by her.
(d) Non-Stockholder Directors - SARs.
(1) Notwithstanding Section 3(a), a person who is a Non-Stockholder
Director on a grant date specified in Section 3(a) shall not receive
Options, but instead shall receive 5,000 stock appreciation rights
("SARs") (subject to adjustment).
(2) A "Non-Stockholder Director" is any Non-Employee Director who,
on the date a grant of Options otherwise would be made to him or her,
is not a stockholder and is permitted not to be a stockholder in
accordance with Section 3:2 of the Company's By-Laws.
(3) An "SAR" is an unsecured obligation of the Company to pay to
the recipient the amount, if greater than zero, by which the Fair
Market Value of a share of Common Stock (as defined in Section 4(b)) on
the exercise date exceeds the base price of the SAR.
(4) Each SAR grant shall be subject to the terms and conditions of
this Section 3(d) and Section 5.
(5) The base price of SARs shall be the same as the option price of
Options granted on the same date.
(6) SARs are subject to the same term, termination, vesting,
transferability, and adjustment provisions as are Options granted on
the same grant date, as provided in Sections 4(d), (e), (f), (g), (h),
(j), and (k).
(7) SARs may be exercised in the same manner as Options, except
that no payment of any option price shall be required. Payment of SARs
upon exercise shall be in cash unless the recipient and the
B-1
Committee mutually agree to make such payment in shares of Common
Stock. If payment is made in Common Stock, the shares so delivered
shall be issued only from the treasury shares reserved in Section 3(c).
(8) Dividends shall not accrue or be paid in respect of SARs, nor
shall SARs confer any voting rights. If, while remaining a Non-Employee
Director, any recipient of SARs ceases to be a Non-Stockholder
Director, then such person's SARs shall be converted into Options
unless the Committee determines in its discretion to cancel the
conversion. Any such converted Options shall have the same price and
other terms as if such person had been a Non-Employee Director who was
not a Non-Stockholder Director at the grant date of the SARs.
(e) Other Grants. In its discretion, the Committee or the Board may
make a grant of Options (or SARs, if applicable) to any person who first
becomes a Non-Employee Director by Board appointment rather than by
shareholder election. Any such special grant may not exceed the annual
limits set forth in Section 3(a), but may be less than those limits in the
Committee's or Board's discretion.
(f) Records. Each year, the Company shall notify each recipient of the
amount and type of each grant. For each Non-Employee Director, the
Secretary shall keep records showing the number of outstanding Options (or
SARs) granted to such Director along with their grant dates, option (or
base) prices, vesting status, and other data deemed significant by the
Secretary.
4. TERMS OF OPTIONS
(a) General. Options shall be governed by this Plan, including in
particular the terms and conditions of this Section 4 and Section 5. The
acceptance of any Options by a Non-Employee Director constitutes his or her
acceptance of the terms and conditions governing the Options.
(b) Price. The option price per share of Common Stock shall be equal to
"Fair Market Value" on the grant date, which is the average of the high and
low sales prices quoted for the Company's Common Stock on the New York
Stock Exchange Composite Tape or similar quotation service for that date.
(c) Type. No Options shall be "incentive stock options" as defined in
Section 422 of the Internal Revenue Code of 1986, as amended.
(d) Normal Term. Options shall expire if not exercised before the tenth
anniversary of their grant date. Other provisions of this Plan may
terminate or otherwise shorten the normal term; no provision of this Plan
is intended to extend the normal ten-year term.
(e) Normal Vesting. Each grant of Options shall become exercisable in
three equal installments on the first three anniversaries of their grant
date, unless accelerated in accordance with this Plan. Any fractions of an
Option shall be allocated to earlier installments from later installments
so that on any anniversary date only whole numbers of Options shall vest.
(f) Discretionary Acceleration of Vesting. Options may be made
exercisable in whole or part, for any individual or group of optionees, at
any time after grant in the discretion of the Committee or the Board.
(g) Acceleration Date. Options shall become exercisable automatically
if and when an "Acceleration Date" occurs as defined in the Company's 1998
Incentive Stock Plan from time to time, or if and when an analogous change
in control event occurs as defined in any successor to such Plan. Changes
to the definition of "Acceleration Date" shall apply automatically and
retroactively to all Options outstanding under this Plan until such time as
an Acceleration Date occurs.
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(h) Effects of Other Events on Term and Vesting. The following events
will affect the term and vesting of Options in the manner indicated:
EVENT EFFECT ON TERM EFFECT ON VESTING
----- -------------- -----------------
Death Options may be exercised for 3 years Options vest immediately upon death.
following death, and not afterward*.
Disability Options may be exercised for 1 year Options vest immediately upon
following termination of Disability.
Non-Employee Director status due to
Disability, and not afterward*.
Retirement Options may be exercised for 5 years Options vest immediately upon
following Retirement, and not Retirement.
afterward*.
Removal for Cause Unexercised Options terminate and Not applicable (forfeiture applies
are forfeited immediately upon to vested and unvested Options)
removal for cause; however, this
provision terminates and is of no
further effect after an Acceleration
Date occurs as provided in
Section 4(g).
Any other termination Unvested, non-accelerated Options Unvested Options become exercisable
of Non-Employee terminate and are forfeited if they have been outstanding at
Director status** immediately; however, this provision least six months and if termination
terminates and is of no further of Non-Employee Director status
effect after an Acceleration Date coincides with the normal end of his
occurs as provided in Section 4(g). or her current term of office (i.e.,
Vested or accelerated Options may be the Director does not stand for
exercised for 3 months following re-election).
termination of Non-Employee Director
status, and not afterwards*.
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* None of the post-event exercise periods shall extend the term beyond the normal ten years.
** If an optionee becomes an employee of the Company, then, for purposes of this Section 4(h) only, that
optionee's "Non-Employee Director" status shall be deemed to continue as long as the optionee remains an
active or advisory director of the Company. In that case, however, the optionee shall no longer be
eligible for future grants under Section 3.
For purposes of this Plan:
"Disability" means the condition of being disabled within the meaning
of Section 422(c)(6) of the Internal Revenue Code of 1986, as amended.
"Retirement" occurs if (A) a Non-Employee Director completes his or her
term of office, does not stand for re-election by the shareholders as an
active director, and is of an age which meets or exceeds the Board's
then-current retirement age for active non-employee directors, and
(B) either he or she (i) is not appointed by the Board as an advisory director
or (ii) later ceases to be an advisory director (regardless of the reason
therefor). In the case of clause (ii), "Retirement" occurs when advisory
director status terminates, not when active status terminated.
"Removal for cause" means removal of a Non-Employee Director from
office "for cause" within the meaning of Section 141(k) of the Delaware
General Corporation Law or other applicable Delaware law.
(i) Exercise and Payment of Option Price. Options may be exercised in
whole or part (to the extent exercisable) by delivering to the Company a
written exercise notice and payment of the option price. The option price
may be paid in cash or shares of Common Stock previously owned. If Stock is
used to pay the option price, such Stock shall be valued at its Fair Market
Value on the exercise date, and the Secretary may require the delivery of
stock certificates, stock powers, written instructions, and such other
documentation as she deems appropriate to satisfy legal requirements and
administrative needs.
(j) Transferability. Options shall not be transferable except by will
or the laws of descent and distribution. In the case of death, Options may
be exercised by the optionee's "Post-Death Representatives," who are the
executor or administrator of the optionee's estate or the person or persons
to whom the optionee's rights to his or her Options under this Plan shall
pass by his or her will or the laws of descent and distribution.
B-3
(k) Capital Change. The option price and number of Options shall be
adjusted as provided in Section 7 in the event of a stock split, stock
dividend, or other capital change.
(l) Non-Stockholder Status. If a participant becomes a Non-Stockholder
Director after receiving one or more grants of Options, such Options shall
be converted into SARs as if such participant had been a Non-Stockholder
Director on the grant date.
(m) No Rights as a Shareholder until Exercise. No optionee nor his or
her executors or administrators, legatees, or distributees, as the case may
be, shall have any of the rights of a shareholder with respect to shares of
stock covered by his or her Options until shares of stock are issued to
him, her, or them upon exercise of the Options.
5. TAXES
If the Company is required to withhold or otherwise collect and remit
taxes at the time of the exercise of Options, then the optionee shall pay
such taxes to the Company in cash promptly after exercise. The Company may
withhold delivery of option shares pending receipt of such tax amounts. In
the case of SARs, the Company may elect to withhold any such required taxes
directly from the amount otherwise owed to the recipient of the SARs.
6. REGULATORY COMPLIANCE AND LISTING
The Company intends to register the issuance of the Common Stock upon
exercise of Options under federal securities laws, and to qualify such
Stock for exemption under applicable state securities laws. The issuance or
delivery of any such shares under this Plan may be postponed by the Company
for such period as may be required to comply with any applicable
requirements under the Federal securities laws (including Rule 144), any
applicable listing requirements of the New York Stock Exchange, Inc. or any
other applicable securities exchange, or any requirements under any other
law or regulation applicable to the issuance or delivery of such shares.
Any stock certificates delivered to a recipient prior to the satisfaction
of any such requirements shall bear an appropriate legend ensuring
compliance with same. In no event will the Company be obligated to issue or
deliver any shares if the issuance or delivery thereof would constitute a
violation of any provision of any law or of any regulation of any
governmental authority or any national securities exchange.
7. CHANGE IN CAPITALIZATION
(a) In the event of a recapitalization or other substantial change in
capitalization affecting the Company's Common Stock (other than a stock
split or stock dividend described in Section 7(b)), an appropriate and
proportionate adjustment shall be made by the Committee or Board:
(1) to the number of treasury shares reserved for issuance under
Section 3(c),
(2) to the number and/or to the option prices or base prices of
outstanding Options and SARs, and
(3) to the number of Options and SARs which may be granted annually
under Sections 3(a) and 3(d)(1) (respectively) of this Plan.
In the event of a spin-off, split-up, or other similar event, either the
Committee or the Board may make such adjustment to Sections 3(a), 3(c) and
3(d)(1), and to the number and/or to the option prices or base prices of
outstanding Options and SARs, as the Committee or Board deems appropriate
and convenient, if material.
(b) In the event that the Company's Common Stock is split or a dividend
in respect of such Common Stock is paid in the form of additional shares of
Common Stock, a numerically proportionate adjustment shall be made
automatically:
(1) to the number of treasury shares reserved for issuance under
Section 3(c),
(2) to the number and to the option prices or base prices of
outstanding Options and SARs, and
(3) to the number of Options and SARs granted annually under
Sections 3(a) and 3(d)(1) of this Plan.
B-4
(c) The Secretary of the Company shall cause this Plan to be
appropriately revised to reflect any such automatic adjustments, and shall
notify affected participants of any adjustments to their outstanding awards
under this Plan.
(d) The primary objective of all adjustments to outstanding Options and
SARs shall be to avoid a material enlargement or dilution of the benefits
represented by such awards.
8. ADMINISTRATION
This Plan shall be administered by a committee (the "Committee")
appointed by the Company's Board of Directors (the "Board") from time to
time. Until changed by the Board, the initial Committee shall be the
Executive Salaries Committee of the Board or its successor committee from
time to time. This Plan and all actions taken under it shall be governed by
the laws of the State of Delaware.
9. AMENDMENT
The Board has the authority to amend or terminate this Plan at any
time. Without the consent of the affected participant, no such amendment or
termination shall affect previously granted Options or SARs except to
shorten, lessen, or remove restrictions or to comply with applicable laws
and regulations (including in particular Rule 16b-3 under the Securities
Exchange Act of 1934, as amended). No Non-Employee Director shall have any
right in or to Options or SARs (as applicable) prior to grant, nor any
right to maintain this Plan's existence.
B-5
APPENDIX C
ANHEUSER-BUSCH COMPANIES, INC.
AUDIT COMMITTEE CHARTER
OVERVIEW
The Audit Committee of the Board of Directors assists the full Board in
fulfilling its oversight responsibilities with respect to assuring that the
Company maintains (1) appropriate financial accounting and management
controls, (2) sound financial reporting practices, (3) appropriate and
independent advice from its Independent Accountants, and (4) compliance
with legal and regulatory requirements. The Audit Committee reports on
these matters to the full Board regularly.
The Audit Committee's role and proper functioning requires that it
monitor, review and challenge management and the Independent Accountants.
Although the Audit Committee will exercise the powers set forth in this
Charter, it is the responsibility of management throughout the Company to
ensure that overall controls are adequate to meet operating, financial and
compliance objectives, and it is the responsibility of management and the
Independent Accountants to plan and conduct audits, and to determine that
the Company's financial statements are materially complete and accurate and
are in accordance with U.S. generally accepted accounting principles.
The Audit Committee assists the full Board in independently overseeing
the performance of the internal and external audit functions to ensure
adequate audit coverage is achieved. Specifically, the audit function is
designed to ensure:
* A system of internal controls is maintained throughout the Company
which protects the assets of the Company and provides the proper
authorization and recording of transactions such that the financial
information is reliable and materially accurate; and
* Financial statements present fairly, in all material respects, the
financial condition, results of operations and cash flows of the
Company in accordance with U.S. generally accepted accounting
principles.
MEMBERSHIP
The Board of Directors shall appoint the Audit Committee members, all
of whom shall be Directors, but none of whom may be officers or employees
of Anheuser-Busch Companies, Inc. or any of its subsidiaries. All Audit
Committee members shall meet the independence and experience requirements
of the New York Stock Exchange (NYSE) and the U.S. Securities and Exchange
Commission (SEC).
The Audit Committee shall consist of not less than three members,
including a Chairperson. A majority of the members of the Committee shall
constitute a quorum. The Committee shall generally meet four times a year
or at whatever more frequent interval is considered necessary or
appropriate by the Committee in fulfilling its responsibilities. Audit
Committee members should be objective in spirit and judgment, and willing
to ask the right questions in order to obtain necessary facts and act
accordingly. The Audit Committee shall conduct an annual evaluation of the
Committee's performance.
RESPONSIBILITIES
1. Charter Review
The Audit Committee shall reassess the adequacy of its Charter annually
and recommend any proposed changes to the full Board for approval.
2. Selection of Independent Accountants
The Audit Committee shall recommend to shareholders for approval the
selection of the Company's Independent Accountants. The Committee shall
have the sole authority to select, evaluate, and if necessary, replace
the Independent Accountants. The Independent Accountants report directly
to the Audit Committee.
C-1
3. Auditor Evaluation
The Audit Committee shall evaluate and reach conclusions regarding the
qualifications and independence of the Independent Accountants.
The Audit Committee shall:
* Receive and review information from the Independent Accountants on a
periodic basis, including a formal written statement, pertaining to
the Independent Accountants' independence, including matters required
by Independence Standards Board Standard No. 1; discuss such
information with the Independent Accountants; and take appropriate
action as deemed necessary to satisfy itself of such independence.
* Discuss annually with Independent Accountants a report outlining
their internal quality control procedures, including material issues,
if any, cited in the most recent quality-control review, whether an
internal review or peer review. Also obtain and discuss a report
pertaining to any investigation by governmental or professional
authorities within the preceding five years concerning independent
audits carried out by the firm, including resolution of any issues.
* Review, in consultation with management, the terms of the engagement
of the Independent Accountants, including the scope of their audit,
proposed fees and personnel qualifications.
* Pre-approve all services (and related fees) provided by the
Company's Independent Accountants and prohibit the Independent
Accountants from performing any service that is prohibited under NYSE
or SEC auditor independence rules.
* Discuss with the Independent Accountants the matters required to be
discussed by Statement on Auditing Standards No. 61, relating to the
conduct of the audit.
* Receive required communications from the Independent Accountants
including, as necessary, information regarding the timetable for the
rotation of partners under SEC requirements.
* Discuss with the Independent Accountants the quality of the
Company's financial accounting personnel, and any relevant
recommendations of the Independent Accountants.
* Establish clear hiring policies for employees and former employees
of the Independent Auditor and monitor management's compliance with
the policy.
4. Matters Pertaining to the General Auditor
The Audit Committee shall review and make recommendations to the full
Board regarding the overall activities of the General Auditor including:
* Review and concur in the appointment, replacement, reassignment or
dismissal of the General Auditor.
* Review with the General Auditor the planned internal audit
activities and the results of such internal audit activities.
* Review the significant reports to management prepared by the General
Auditor, and management's response.
* Review with the General Auditor the adequacy of the Company's system
of internal accounting and financial controls.
* Review with the General Auditor the extent of compliance with
policies, plans, procedures, laws and regulations which could have a
significant impact on operations and reports.
* Discuss with the Independent Accountants the responsibilities,
budgets and staffing of the Company's internal audit department.
C-2
5. Matters Pertaining to Filings with Government Agencies
The Audit Committee shall:
* Review with the Independent Accountants and management the Company's
Form 10-K prior to filing with the Securities and Exchange Commission
and, if satisfied, recommend its approval to the full Board.
* Prepare the Audit Committee Report required by the Rules of the
Securities and Exchange Commission to be included in the Company's
annual proxy statement.
* Review the results of each quarterly review by the Independent
Accountants before the filing of the Company's Form 10-Q with the
Securities and Exchange Commission.
6. Financial Reporting
The Audit Committee shall:
* Review with management and the Independent Accountants the Company's
annual and quarterly financial statements, including disclosures
contained in Management's Discussion and Analysis.
* Review earnings press releases, as well as financial information or
earnings guidance provided to analysts and rating agencies.
* Review with management and the Independent Accountants both the
adequacy and quality of the Company's financial accounting and
reporting policies.
* Review, in connection with its review of the annual financial
statements, an analysis prepared by management and the Independent
Accountants of significant financial reporting issues and judgments
made in connection with the preparation of the Company's financial
statements.
* Review with the Independent Accountants and management the Company's
"Critical Accounting Policies," as defined by the SEC, including an
assessment regarding the adequacy of the Company's disclosures.
* Review with the Independent Accountants and management the results
of the Independent Accountants' year-end audit, including areas of
significant disagreement, if any, between management and the
Independent Accountants.
7. Controls
The Audit Committee shall:
* Review with management, the Independent Accountants and the General
Auditor their separate opinions as to the adequacy and effectiveness
of the Company's system of internal accounting controls, and review
with them the Independent Accountants' Annual Report on Internal
Controls and management's response thereto.
* Review the Company's procedures with respect to accounting and
financial controls, including changes in auditing and/or accounting
principles, practices and procedures.
* Review with management the Company's major financial risk exposures
and the steps management has taken to monitor, mitigate and control
such exposures.
8. Fraud and Illegal Acts
The Audit Committee shall:
* Receive and review reports regarding fraud involving senior
management and any fraud that causes a material misstatement of the
financial statements.
* Review reports of illegal acts that are not "clearly
inconsequential" that have come to the Independent Accountants'
attention in the course of their audits. Ensure, in such cases, that
management has taken timely and appropriate actions regarding reported
illegal acts that could have a material effect on the financial
statements.
C-3
9. Other Responsibilities
* Periodically, the Audit Committee will meet separately with
representatives from the Independent Accountants, General Auditor, and
management.
* Review with the Company's General Counsel legal matters that may
have a material impact on the financial statements, any material
reports or inquiries received from regulators or governmental
agencies, and other legal matters as appropriate.
* Receive reports from the Environmental Health and Safety Policy
Committee regarding implementation and compliance with the Company's
environmental policies and discuss with management any concerns the
Audit Committee may have with regard to the Company's environmental
practices.
* Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters and the confidential,
anonymous submission by employees of concerns regarding questionable
accounting or auditing matters.
10. General Powers
The Audit Committee may conduct or authorize investigations into any
matters within the scope of the Committee's responsibilities.
To carry out and effectuate the purposes of the foregoing resolutions,
the Audit Committee shall have authority it deems necessary to confer
with the Company's Independent Accountants, General Auditor and
Officers and to conduct or authorize investigations. The Audit
Committee shall have the authority to retain independent legal,
accounting or other consultants to advise the Committee.
C-4
Appendix D
ANHEUSER-BUSCH COMPANIES, INC.
1998 INCENTIVE STOCK PLAN
(RESTATED TO REFLECT A 2-FOR-1 STOCK SPLIT EFFECTIVE
SEPTEMBER 18, 2000, AND AMENDMENTS EFFECTIVE
APRIL 25, 2001 AND APRIL 23, 2003)
SECTION 1. PURPOSE.
The purpose of this Plan is to attract, retain, motivate and reward
employees of the Company and its Subsidiaries and Affiliates with certain
stock-related compensation arrangements.
SECTION 2. MAXIMUM NUMBER OF SHARES.
(a) The maximum number of shares of Stock which may be issued
pursuant to Awards under this Plan, and the maximum number of shares for
which ISOs may be granted under this Plan, shall be 88,000,000 shares,
subject to adjustment as provided in Section 10. Of such shares, no more
than 1,500,000 shares of Restricted Stock may be granted under this Plan,
subject to adjustment as provided in Section 10. For this purpose:
(i) The number of shares underlying an Award shall be counted
against this Plan maximum ("used") at the time of grant.
(ii) When an Award is payable in cash only, the number of shares
of Stock on which the amount of such cash is based shall be deemed
used at the time of grant.
(iii) Shares which underlie Awards that (in whole or part)
expire, terminate, are forfeited, or otherwise become non-payable,
and shares which are recaptured by the Company in connection with a
forfeiture, may be re-used in new grants to the extent of such
expiration, termination, forfeiture, non-payability, or recapture.
(iv) For all purposes of this Section 2, shares underlying two
or more alternative Awards shall be treated as underlying only a
single Award, with no multiple counting of shares. Accordingly: shares
underlying alternative Awards shall be used only once at the time of
grant; and, if one such Award is exercised or (in the case of
Restricted Stock) vests, no re-usage of shares shall result from the
termination of the unexercised or unvested alternative Awards.
(b) Notwithstanding any other provisions of this Plan: (i) the
maximum number of shares underlying Awards (other than Restricted Stock)
that may be granted to any Eligible Person during any calendar year shall be
1,500,000, subject to adjustment as provided in Section 10; and (ii) the
maximum number of shares of Restricted Stock that may be granted to any
Eligible Person during any calendar year shall be 375,000, subject to
adjustment as provided in Section 10.
(c) In its discretion, the Company may issue treasury shares or
authorized but unissued shares, but shall issue treasury shares to the
extent required by the Committee or applicable law. Shares of Stock may be
represented by certificates or may be issued in uncertificated form, as
determined by the Company from time to time.
- 1 -
SECTION 3. ELIGIBILITY.
Officers and management employees of the Company, Subsidiaries, or
Affiliates shall be eligible to receive Awards under this Plan. A director
of the Company, a Subsidiary, or an Affiliate shall be eligible only if he
or she also is an officer or management employee of at least one such
entity. Notwithstanding the foregoing, persons employed only by Affiliates
shall not be eligible to receive ISOs.
SECTION 4. GENERAL PROVISIONS RELATING TO AWARDS.
(a) Subject to the limitations in this Plan, the Committee may cause
the Company to grant Awards to such Eligible Persons, at such times, of such
types, in such amounts, for such periods, becoming exercisable or otherwise
vesting at such times, with such features, with such option prices, purchase
prices or base prices, and subject to such other terms, conditions, and
restrictions as the Committee deems appropriate. Each Award shall be
evidenced by a written Award Document, which (as determined by the
Committee) may be a formal agreement between the Company and the Recipient
or a communication by the Company to the Recipient. The Award Document may
be written and transmitted on paper, electronically, or using any other
medium selected by the Committee, and may be set forth in a single document
or in several documents. In granting an Award, the Committee may take into
account any factor it deems appropriate and consistent with the purposes of
this Plan. Awards may be granted as additional compensation, or in lieu of
other compensation. The payment or issuance of any cash or shares of Stock
to a Recipient, and the vesting or delivery of any shares of Restricted
Stock, may be deferred to a later date if and as provided in the Award
Document. Deferrals may be for such periods and upon such terms and
conditions (including the provision of interest equivalents, dividends or
dividend equivalents, or other return) as the Committee may determine.
(b) Except as otherwise provided in this Plan, one or more Awards may
be granted separately or as alternatives to each other. If Awards are
alternatives to each other:
(i) the exercise of all or part of one automatically shall
cause an immediate equal and corresponding termination of the other;
(ii) if one of the alternative Awards is Restricted Stock, the
vesting of all or part of such Stock shall cause an immediate equal
and corresponding termination of the other Award; and
(iii) unless the Award Document or the Committee expressly
permit otherwise, alternative Awards which are transferable may be
transferred only as a unit, and alternative Awards which are
exercisable must be exercisable by the same person or persons.
(c) Award Documents may contain any provision approved by the
Committee relating to the period for exercise or vesting after termination
of employment, and relating to the circumstances under which a termination
is deemed to occur. Except to the extent otherwise expressly provided in the
Award Document or determined by the Committee, termination of employment
includes the separation of a Recipient, directly or through the separation
of his or her Employer, from the group of companies comprised of the Company
and its Subsidiaries and Affiliates for any reason, including: (i)
separation of the Recipient by reason of death, permanent or indefinite
disability, retirement, resignation, dismissal, permanent or indefinite
layoff, or other event having a similar
- 2 -
effect; and (ii) separation of the Employer by any method which results in
the Employer ceasing to be a Subsidiary or an Affiliate.
(d) Award Documents may, in the discretion of the Committee, contain
a provision permitting a Recipient to designate the person who may exercise
an Award after the Recipient's death, either by will or by appropriate
notice to the Company. The Committee may impose such conditions and
limitations on such designations as it deems appropriate.
(e) A Recipient shall have none of the rights of a shareholder with
respect to shares of Stock which underlie his or her Award until shares are
issued in his or her name.
(f) Except as otherwise provided in an Award Document pursuant to
this Section, Awards shall not be transferable other than by will or the
laws of descent and distribution, and shall be exercisable during the
Recipient's lifetime only by the Recipient or his or her guardian or legal
representative. However, except in the case of ISOs and Awards which are
alternatives to ISOs, the Committee may expressly provide in any Award
Document that the Award is transferable. Transferability (if permitted) may
be subject to such conditions and limitations as the Committee deems
appropriate.
(g) Notwithstanding Section 15(a), in its discretion the Committee
may provide in any Award Document for the acceleration of vesting or the
termination of any condition, restriction, or forfeiture provision upon the
happening of any specified event (including, for example, an event which
results in an Acceleration Date).
(h) Subject to Section 15(a) in the case of ISOs, and subject to any
express limitations contained in the applicable Award Document: (i) the
Committee may accelerate vesting or waive or terminate any condition,
restriction, or forfeiture provision of any Award at any time and for any
reason; and (ii) the Committee may amend an Award Document after grant at
any time and for any reason so long as such amendment is not inconsistent
with this Plan.
(i) No exercisable Award by its terms shall be exercisable after the
expiration of ten years from the date it is granted.
SECTION 5. OPTIONS AND SARS.
(a) Except as provided in Section 10, the option price per share of
Options or the base price of SARs shall not be less than Fair Market Value
per share of Stock on the Options' or the SARs' grant date, except that SARs
which are alternatives to Options but which are granted at a later time may
have a base price equal to the option price even though the base price is
less than Fair Market Value on the date the SARs are granted.
(b) The grant of Options and their related Award Document must
identify the Options either as ISOs or as NQSOs.
(c) If Options, SARs, and/or Limited Rights are granted as
alternatives to each other, the option prices and the base prices (as
applicable) shall be equal and the expiration dates shall be the same.
(d) In the case of SARs, the Award Document may specify the form of
payment or may provide that the form is to be determined at a later date,
and may require the satisfaction of any rules or conditions in connection
with receiving payment in any particular form.
- 3 -
(e) Notwithstanding any other provision of Sections 4 or 5: (i) no
Options or SARs shall be granted in exchange for so-called "underwater"
Options or SARs (which have option or base prices in excess of the
then-current Fair Market Value per share of Stock), nor shall underwater
Options or SARs be amended to reduce their option or base price; and, (ii)
no Options or SARs shall contain a so-called "reload" feature under which
additional Options or SARs are granted automatically to Recipients upon
exercise of the original Options or SARs.
SECTION 6. LIMITED RIGHTS.
(a) The Committee shall have authority to grant a special type of
stock appreciation rights ("Limited Rights") to any Recipient of any Options
or SARs granted under this Plan (the "Related Award"). Limited Rights are
stock appreciation rights which are exercisable only after the occurrence of
one or more extraordinary events specified by the Committee; such events may
include, for example, the events which result in an Acceleration Date.
Limited Rights shall not be granted separately, but shall be granted only as
alternatives to their Related Award. Limited Rights may be granted either at
the time of grant of the Related Award or at any time thereafter during its
term. Limited Rights shall be exercisable or payable at such times, payable
in such amounts, and subject to such other terms, conditions, and
restrictions as the Committee deems appropriate.
(b) The Committee shall place on any Limited Rights for which the
Related Awards are ISOs such restrictions as may be required by the Code at
the time of grant, and shall amend this Plan accordingly to the extent
required by the Code.
SECTION 7. RESTRICTED STOCK.
(a) "Restricted Stock" means Stock issued to a Recipient which is
nontransferable and is subject to forfeiture upon the happening of such
events or conditions, or upon the failure to satisfy such requirements or
conditions, as the Committee specifies in the Award Document or otherwise.
Stock issued upon the exercise of Options or SARs is not "Restricted Stock"
for purposes of this Plan, even if subject to post-issuance transfer
restrictions or forfeiture conditions. When Restricted Stock vests, it
ceases to be "Restricted Stock" for purposes of this Plan.
(b) The certificate representing shares of Restricted Stock issued in
the name of a Recipient may be held by the Company and/or may have a legend
placed upon it to the effect that the shares represented by it are subject
to, and may not be transferred except in accordance with, this Plan and the
related Award Document. Cash dividends relating to shares of Restricted
Stock may be paid to the Recipient or held by the Company for the
Recipient's benefit, and if held may be made subject to the transfer
restrictions, forfeiture risks, and vesting conditions of the Restricted
Stock, as the Committee may provide in the Award Document or otherwise; if
dividends are held by the Company, the Committee may require that the
Company provide for interest equivalents or other return on any cash
dividends at such rate(s) and time(s) as the Committee provides in the Award
Document or otherwise. Any Stock or other securities issuable in respect of
Restricted Stock pursuant to an event specified in Section 10(a) of this
Plan shall be subject to the Award Document related to such Restricted Stock
and all of the transfer restrictions, forfeiture risks, and vesting
conditions pertaining thereto.
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SECTION 8. STOCK ISSUANCE, PAYMENT, AND WITHHOLDING.
(a) The Recipient of Options may pay the option price in cash, Stock
(including shares of previously-owned Stock or Stock issuable in connection
with the Award, but not including shares of Restricted Stock), or other
property, to the extent permitted or required by the Award Document or the
Committee from time to time.
(b) Except to the extent prohibited by applicable law, the Committee
or the Company may take any necessary or appropriate steps in order to
facilitate the payment of an option price. The Committee may permit deemed
or constructive transfers of shares in lieu of actual transfer and physical
delivery of certificates. The Committee may require satisfaction of any
rules or conditions in connection with paying the option price at any
particular time or in any particular form.
(c) If shares used to pay the option price of Options are subject to
any transfer or other restrictions, an equal number of the shares of Stock
purchased shall be made subject to such prior restrictions in addition to
any further restrictions imposed on such purchased shares by the terms of
the Award Document or Plan.
(d) After the obligation arises to collect and pay Required
Withholding Taxes, the Recipient shall reimburse the Company or Employer (as
required by the Committee or Company) for the amount of such Required
Withholding Taxes in cash, unless the Award Document or the Committee
permits or requires payment in another form. In the discretion of the
Committee or its delegate and at the Recipient's request, the Committee or
its delegate may cause the Company or Employer to pay to the appropriate
taxing authority withholding taxes in excess of Required Withholding Taxes
on behalf of a Recipient, which shall be reimbursed by the Recipient in any
manner determined by the Company or the Committee from time to time. In the
Award Document or otherwise, the Committee may allow a Recipient to
reimburse the Company or Employer for payment of withholding taxes with
shares of Stock or other property. The Committee may require the
satisfaction of any rules or conditions in connection with any non-cash
payment of withholding taxes.
(e) If provided in the Award Document relating to an ISO, the
Committee may (i) cause the Company to hold the shares of Stock issued in
the Recipient's name upon exercise, or (ii) prohibit the transfer by a
Recipient of such shares into the name of a nominee and require the
placement of a legend on certificates for such shares reflecting such
prohibition.
SECTION 9. FORFEITURES.
In its discretion, the Committee may adopt and amend any policies,
and may include in any Award Document any provisions relating to,
forfeitures. Such forfeiture provisions may include, for example,
prohibitions on competing with the Company and its Subsidiaries and
Affiliates and on engaging in other detrimental conduct. Forfeiture
provisions for one Award type may differ from those for another type, and
also may differ among Awards of the same type granted at different times or
to Recipients in different circumstances. As used in this Plan, a
"forfeiture" of an Award includes the recapture of Stock issued or other
economic benefits derived from an Award, as well as the forfeiture of an
Award itself; however, the Committee may define the term more narrowly for
specific Award Documents.
- 5 -
SECTION 10. ADJUSTMENTS AND ACQUISITIONS.
(a) Subject to Section 10(c), in the event that the Committee shall
determine that, as a result of any dividend or other distribution (whether
in the form of cash, Stock, other securities, or other property), stock
split, reverse stock split, recapitalization, reorganization, merger,
consolidation, split-up, split-off, spin-off, combination, repurchase, or
exchange of Stock or other securities of the Company, issuance of warrants
or other rights to purchase Stock or other securities of the Company, or any
other similar corporate transaction, change, or event, an adjustment is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under outstanding Awards or
under the Plan (an "Adjustment Event"), then the Committee shall, in such
manner as it may deem equitable, adjust any or all of:
(i) the number and types of shares of Stock (or other
securities or property) subject to outstanding Awards;
(ii) the limitations on grants of Awards, ISOs, and Restricted
Stock set forth in Section 2(a) of this Plan, and the limitations on
grants to any Eligible Person during any calendar year set forth in
Sections 2(b)(i) and 2(b)(ii) of this Plan (collectively the "Share
Limitations"); and
(iii) the option price, base price, or other similar price with
respect to any Award.
Alternatively to (i) and (iii), if there is an Adjustment Event and the
Committee deems it appropriate, it may provide for cash payments to holders
of outstanding Awards.
(b) Subject to Section 10(c), in the event of an acquisition by the
Company by means of a merger, consolidation, acquisition of property or
stock, reorganization or otherwise, the Committee shall be authorized:
(i) to cause the Company to issue Awards or assume stock
options, stock appreciation rights, or restricted stock issued by the
acquired company, whether or not in a transaction to which Section
424(a) of the Code applies, by means of issuance of new Awards in
substitution for, or an assumption of, previously issued options,
rights, or restricted stock, but only if and to the extent that such
issuance or assumption is consistent with the other provisions of
this Plan and any applicable law, and/or
(ii) to increase the Share Limitations to reflect such issuance
or assumption.
(c) The Committee shall not make an adjustment under Section 10(a),
issue Awards or assume options, rights, or restricted stock under
Section 10(b)(i), or increase the Share Limitations under Section 10(b)(ii),
(i) to the extent such action would affect ISOs or the Share
Limitation relating to ISOs and would require shareholder approval
under Section 422 of the Code, or
(ii) to the extent such action would affect the Share Limitation
set forth in Section 2(b) of this Plan and would require shareholder
approval in order to qualify such Awards, such assumed options,
rights, or restricted stock, or Awards granted thereafter as
performance-based compensation under Section 162(m) of the Code,
unless such action(s) by the Committee are made subject to shareholder
approval and are so approved by the shareholders.
- 6 -
(d) In the event that the Board approves any merger or consolidation
of the Company with or into any other corporation or business entity as a
result of which the Company shall not be the surviving corporation, with
respect to each Award, either (i) the Committee shall, in such manner as it
may deem equitable, cause such Award to vest prior to the effective date of
such merger or consolidation or (ii) the Committee or the Board shall
approve arrangements to substitute an award issued by the surviving
corporation for such Award on terms and conditions deemed equitable by the
Committee or the Board.
SECTION 11. ACCELERATION AND VESTING.
(a) An "Acceleration Date" occurs when any of the following events
occur:
(i) any Person (as defined herein) becomes the beneficial owner
directly or indirectly (within the meaning of Rule 13d-3 under the
Act) of more than 30% of the Company's then outstanding voting
securities (measured on the basis of voting power);
(ii) the shareholders of the Company approve a definitive
agreement of merger or consolidation with any other corporation or
business entity, other than a merger or consolidation that would
result in the voting securities of the Company outstanding
immediately prior to the consummation of the merger or consolidation
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least
50% of the combined voting power of the voting securities of the
surviving entity of such merger or consolidation outstanding
immediately after such merger or consolidation;
(iii) Continuing Directors cease to constitute at least a
majority of the directors of the Company; or
(iv) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or an agreement for the
sale or disposition by the Company of all or substantially all the
Company's assets.
An Acceleration Date as described in (i) above shall not occur as a
result of the ownership of voting securities by (A) the Company or any of
its Subsidiaries, (B) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any of its Subsidiaries or (C) a
corporation owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their ownership of Stock.
Securities held by an underwriter pursuant to an offering of such securities
for a period not to exceed 40 days shall be deemed to be outstanding but
shall not be deemed to be beneficially owned by such underwriter for
purposes of clause (i) above.
For purposes of this Section 11(a), (X) "Affiliate" and "Associate"
shall have the respective meanings ascribed to such terms in Rule 12b-2
under the Act; (Y) "Continuing Directors" shall mean any directors of the
Company who either (i) were directors of the Company on the date of adoption
of the Plan, or (ii) became directors of the Company subsequent to such date
and whose election or nomination for election by the shareholders of the
Company was duly approved, either by a specific vote or by approval of the
proxy statement issued by the Company in which such individuals were named
as nominees for director of the Company, by a majority of the Continuing
Directors who were at the time of election or nomination directors of the
Company; and (Z) "Person" shall mean any individual, firm, corporation,
partnership or other entity and shall include the Affiliates and Associates
of such Person.
- 7 -
(b) If an Acceleration Date occurs while Awards remain outstanding
under this Plan, then all Awards shall vest. This Section shall apply to
ISOs notwithstanding Section 15(a).
(c) When Awards (other than Restricted Stock) "vest," they become
fully exercisable. Vesting does not mean that such an Award becomes
non-forfeitable, except to the extent provided in the Award Document or
otherwise by the Committee pursuant to Sections 4(g) or 4(h) above. When
shares of Restricted Stock "vest," they become non-forfeitable (except for
any forfeiture conditions which this Plan or the Award Document expressly
provides shall survive vesting) and freely transferable (except for any
legal restrictions imposed on transfers by the Securities Act of 1933, as
amended, or other applicable securities laws).
SECTION 12. ADMINISTRATION.
(a) This Plan shall be administered by the Stock Option Plans
Committee of the Board, or another committee appointed by the Board from
time to time, consisting of three or more persons, each of whom at all times
shall be a member of the Board and none of whom shall be an officer or
employee of the Company or any of its Subsidiaries at the time of service.
Committee members shall not be eligible for selection to receive Awards
under this Plan.
(b) During any time when one or more Committee members may not be
qualified to serve under Rule 16b-3, under Section 162(m) of the Code, or
under any other rule or law which contains special qualifications for
Committee members in order to avoid a penalty or to obtain a benefit, the
Committee may form a sub-Committee from among its qualifying members. The
sub-Committee may act, in lieu of the full Committee, with respect to all or
any category of Awards granted or to be granted to all or any group of
Recipients, and may take other actions deemed appropriate and convenient to
prevent, control, minimize, or eliminate any penalties, loss of benefits, or
other adverse effects of such potential disqualification. Any such
sub-Committee shall have the full authority of the full Committee under this
Plan, except to the extent the full Committee limits the sub-Committee's
powers.
(c) At the Committee's request or on its own motion, the Board may
ratify or approve grants, or any terms of any grants, made by the Committee
during any time that any member of the Committee may not be qualified to
approve such grants or terms under Rule 16b-3 or any other rule or law.
(d) A majority of the members of the Committee shall constitute a
quorum. The acts of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by all of the members
of the Committee, shall be the acts of the Committee. The Committee may meet
in person, by telephone or television conference, or in any other manner
(unless prohibited by applicable law). From time to time the Committee may
adopt, amend, and rescind such rules and regulations for carrying out this
Plan and implementing Award Documents, and the Committee may take such
action in the administration of this Plan, as it deems proper. The
interpretation of any provisions of this Plan by the Committee shall be
final and conclusive unless otherwise determined by the Board.
(e) To the extent the Committee deems it convenient and appropriate,
the Committee may delegate such of its powers and duties, including (among
other things) its power to grant Awards, to one or more officers of the
Company. Any such delegation shall be subject to such limitations and
conditions as the Committee deems appropriate. However, notwithstanding the
foregoing: (i) the power to grant Awards may not be delegated to an officer
who is not also a director of the Company
- 8 -
except in conformity with applicable Delaware law; and, (ii) no officer may
grant Awards to him- or herself or to his or her superiors unless such
grants are ratified by the Committee or the Board.
SECTION 13. AMENDMENT, TERMINATION, SHAREHOLDER APPROVAL.
(a) The Board may amend or terminate this Plan at any time, except
that without the approval of the Company's shareholders, no amendment shall
(i) increase the maximum number of shares issuable, or the maximum number of
shares for which ISOs may be granted, under this Plan, (ii) change the class
of persons eligible to receive ISOs, (iii) change the annual limit on Awards
which may be granted to an Eligible Person provided in Section 2(b), or (iv)
change the provisions of this Section 13(a).
(b) The Committee may amend this Plan from time to time to the extent
necessary to (i) comply with Rule 16b-3 and, to the extent it deems
appropriate, (ii) prevent benefits under this Plan from constituting
"applicable employee remuneration" within the meaning of Section 162(m) of
the Code.
(c) No Awards may be granted under this Plan after April 21, 2008.
(d) The approval by shareholders shall consist of the approving vote
of the holders of a majority of the outstanding shares of Stock present (in
person or by proxy) and voted (for or against) at a meeting of the
shareholders at which a quorum is present, unless a greater vote is required
by the Company's charter or by-laws, by the Board, by the Company's
principal stock exchange, or by applicable law (including Delaware law, Rule
16b-3, or Section 162(m) of the Code).
SECTION 14. DEFINITIONS.
(a) "Acceleration Date" has the meaning given in Section 11(a).
(b) "Act" means the Securities Exchange Act of 1934, as amended from
time to time.
(c) "Adjustment Event" has the meaning given in Section 10(a).
(d) "Affiliate" means any entity in which the Company has a
substantial direct or indirect equity interest (other than a Subsidiary),
but only if expressly so designated by the Committee from time to time.
Without limiting the generality of the foregoing, the term "Affiliate" shall
not include any beer wholesaler or distributor in which Anheuser-Busch
Investment Capital Corporation or other Subsidiary invests, unless the
Committee expressly determines otherwise; the committee may also revoke or
reinstate any such designation from time-to-time.
(e) "Award" means a grant of ISOs, NQSOs, SARs, Limited Rights, or
Restricted Stock.
(f) "Award Document" means the written agreement or other document
referred to in Section 4(a) evidencing an Award.
(g) "Board" means the Board of Directors of the Company.
(h) Options "cease to qualify as ISOs" when they fail or cease to
qualify for the exclusion from income provided in Section 421 (or any
successor provision) of the Code.
(i) "Code" means the U.S. Internal Revenue Code as in effect from
time to time.
- 9 -
(j) "Committee" means the committee of the Board described in Section
12 hereof and any sub-committee established by such committee pursuant to
Section 12(b).
(k) "Company" means Anheuser-Busch Companies, Inc. and its
successors.
(l) "Eligible Person" means a person who is eligible to receive an
Award under Section 3 of this Plan.
(m) "Employer" means the Company, the Subsidiary, or the Affiliate
which employs the Recipient.
(n) "Fair Market Value" of Stock on a given valuation date means (i)
the average of the highest and lowest selling prices per share of Stock
reported on the New York Stock Exchange Composite Tape or similar quotation
service for such date, (ii) if Stock is not listed on the New York Stock
Exchange, the average of the highest and lowest selling prices per share of
Stock as reported for such valuation date on the principal stock exchange or
quotation system in the U.S. on which Stock is listed or quoted (as
determined by the Committee), or (iii) if neither of the preceding clauses
is applicable, the value per share determined by the Committee in a manner
consistent with the Treasury Regulations under Section 2031 of the Code. If
no sale of Stock occurs on such valuation date, but there were sales
reported within a reasonable period both before and after such valuation
date, the weighted average of the means between the highest and lowest
selling prices on the nearest date before and the nearest date after such
valuation date shall be used, with the average to be weighted inversely by
the respective numbers of trading days between the selling dates and such
valuation date.
(o) "Forfeiture" has the meaning given in Section 9.
(p) "ISO" or "Incentive Stock Option" means an option to purchase one
share of Stock for a specified option price which is designated by the
Committee as an "Incentive Stock Option" and which qualifies as an
"incentive stock option" under Section 422 (or any successor provision) of
the Code.
(q) "Limited Right" has the meaning given in Section 6.
(r) "NQSO" or "Non-Qualified Stock Option" means an option to
purchase one share of Stock for a specified option price which is designated
by the Committee as a "Non-Qualified Stock Option," or which is designated
by the Committee as an ISO but which ceases to qualify as an ISO.
(s) "Option" means an ISO or an NQSO.
(t) "Optionee" means a person to whom Options are granted pursuant to
this Plan.
(u) "Plan" means the Anheuser-Busch Companies, Inc. 1998 Incentive
Stock Plan, as amended from time to time.
(v) "Recipient" means an Eligible Person to whom an Award is granted
pursuant to this Plan.
(w) "Reporting Person," as of a given date, means a Recipient who
would be required to report a purchase or sale of Stock occurring on such
date to the Securities and Exchange Commission pursuant to Section 16(a) of
the Act and the rules and regulations thereunder.
(x) "Restricted Stock" has the meaning given in Section 7.
- 10 -
(y) "Rule 16b-3" means Rule 16b-3 (as amended from time to time)
promulgated by the Securities and Exchange Commission under the Act, and any
successor thereto.
(z) "Share Limitations" has the meaning given in Section 10(a).
(aa) "SAR" means a stock appreciation right, which is a right to
receive cash, Stock, or other property having a value on the date the SAR is
exercised equal to (i) the excess of the Fair Market Value of one share of
Stock on the exercise date over (ii) the base price of the SAR. The term
"SAR" does not include a Limited Right.
(bb) "Stock" means shares of the common stock of the Company, par
value $1.00 per share, or such other class or kind of shares or other
securities as may be applicable under Section 10.
(cc) "Subsidiary" means a "subsidiary corporation" of the Company as
defined in Section 424(f) (or any successor provision) of the Code, other
than corporations expressly excluded by the Committee from time-to-time.
(dd) "Vest" has the meaning given in Section 11(c).
(ee) "Required Withholding Taxes" means, in connection with the
exercise of or other taxable event relating to an Award, the total amount of
Federal and state income taxes, social security taxes, and other taxes which
the Employer of the Recipient is required to withhold.
SECTION 15. MISCELLANEOUS.
(a) Each provision of this Plan and the Award Documents relating to
ISOs shall be construed so that all ISOs shall be "incentive stock options"
as defined in Section 422 of the Code or any statutory provision that may
replace Section 422, and any provisions thereof which cannot be so construed
shall be disregarded, subject however to Sections 4(g) and 11(b) and
provided that Award Documents are permitted to have provisions which cause
Options which qualify as ISOs at the time of grant to cease to qualify as
ISOs at a later time or upon the happening of a later event. No discretion
granted or allowed to the Committee under this Plan shall apply to ISOs
after their grant except (i) to the extent the related Award Document shall
so provide or (ii) to the extent that the application of such discretion
would not cause such ISOs to cease to qualify as ISOs. Notwithstanding the
foregoing, nothing shall prohibit an amendment to or action regarding
outstanding ISOs which would cause them to cease to qualify as ISOs, so long
as the Company and the Recipient shall consent to such amendment or action.
(b) Without amending this Plan, Awards may be granted to Eligible
Persons who are foreign nationals or who are employed outside the United
States or both, on such terms and conditions different from those specified
in this Plan as may, in the judgment of the Committee, be necessary or
desirable to further the purposes of this Plan. Such different terms and
conditions may be reflected in Addenda to this Plan. However, no such
different terms or conditions shall be employed if such terms or conditions
constitute, or in effect result in, an increase in the aggregate number of
shares which may be issued under this Plan or a change in the definition of
Eligible Person.
(c) Notwithstanding any other provision in this Plan, the Committee
shall not act with respect to any Reporting Person in a manner which would
result in a forfeiture under Section 16(b) of the Act of some or all of the
economic benefits relating to his or her Awards, without in each case the
written consent of such Reporting Person.
- 11 -
(d) Nothing in this Plan or any Award Document shall confer on any
person any expectation to continue in the employ of his or her Employer, or
shall interfere in any manner with the absolute right of the Employer to
change or terminate such person's employment at any time for any reason or
for no reason.
- 12 -
ANHEUSER-BUSCH COMPANIES, INC. PLEASE MARK /X/
your votes as
indicated in
this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 THROUGH 4.
1 - ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to to vote for all nominees listed
the contrary below) below
/ / / /
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME ON THE LIST BELOW.)
01 JAMES J. FORESE 02 VERNON R. LOUCKS, JR.
03 VILMA S. MARTINEZ 04 WILLIAM PORTER PAYNE
05 EDWARD E. WHITACRE, JR.
FOR AGAINST ABSTAIN
2 - APPROVAL OF AN
AMENDMENT TO THE 1998 / / / / / /
INCENTIVE STOCK PLAN
FOR AGAINST ABSTAIN
3 - APPROVAL OF THE
STOCK PLAN FOR NON- / / / / / /
EMPLOYEE DIRECTORS
FOR AGAINST ABSTAIN
4 - APPROVAL OF
INDEPENDENT / / / / / /
ACCOUNTANTS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 5.
FOR AGAINST ABSTAIN
5 - SHAREHOLDER
PROPOSAL CONCERNING / / / / / /
THE CHAIRMAN OF THE
BOARD
MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
PLEASE MARK, SIGN, DATE, AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Signature Signature
------------------------------ ------------------------------
Dated: , 2003
--------------------
SIGNATURE OF SHAREHOLDER(S) (Sign exactly as your name appears above; in the
case of shares held by joint owners, all joint
owners should sign; fiduciaries should indicate
title and authority.)
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
--------------------------------------
YOU CAN VOTE IN ONE OF THREE WAYS:
--------------------------------------
1. CALL TOLL-FREE 1-800-435-6710 ON A TOUCH TONE TELEPHONE FROM THE
US OR CANADA 24 HOURS A DAY - 7 DAYS A WEEK.
THERE IS NO CHARGE TO YOU FOR THIS CALL.
OR
--
2. VOTE BY INTERNET AT OUR INTERNET ADDRESS: HTTP://WWW.EPROXY.COM/BUD
INTERNET AND TELEPHONE VOTING MUST BE RECEIVED BY 11PM EASTERN TIME ON
APRIL 22, 2003, THE DAY PRIOR TO THE ANNUAL MEETING.
OR
--
3. MARK, SIGN AND DATE YOUR PROXY CARD AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
-----------------------------------------------------------------------------
IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET, HAVE YOUR PROXY CARD IN HAND.
YOU WILL BE ASKED TO ENTER A CONTROL NUMBER, WHICH IS LOCATED
IN THE BOX IN THE LOWER RIGHT HAND CORNER ON THE REVERSE SIDE OF THIS FORM.
-----------------------------------------------------------------------------
THANK YOU FOR VOTING
--------------------------------------------------------------------------------
EACH STOCKHOLDER MAY BE ASKED TO PRESENT VALID PICTURE IDENTIFICATION, SUCH AS
DRIVER'S LICENSE OR EMPLOYEE IDENTIFICATION BADGE, IN ADDITION TO THIS ADMISSION
TICKET.
PLEASE ADMIT: NON-TRANSFERABLE
ADMISSION TICKET
------------------
CONTROL NUMBER
------------------
PROXY
ANHEUSER-BUSCH COMPANIES, INC.
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The person(s) signing this proxy form hereby appoints August A. Busch III,
Patrick T. Stokes, and JoBeth G. Brown as proxies, each with the power of
substitution and hereby authorizes them to represent and to vote, as designated
on the reverse side of this form, all of the shares of stock that the
undersigned would be entitled to vote at the Annual Meeting of Stockholders of
Anheuser-Busch Companies, Inc. to be held at Ports of Call at SeaWorld of
Florida, 7007 SeaWorld Drive, Orlando, Florida, on April 23, 2003, at 10:00 A.M.
local time and at any adjournments thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER INDICATED
BY THE STOCKHOLDER. IN THE ABSENCE OF SUCH INDICATION, SUCH SHARES WILL BE VOTED
FOR THE ELECTION OF DIRECTORS IN ITEM 1, FOR ITEMS 2, 3, AND 4, AND AGAINST ITEM
5. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE DISCRETION OF SAID
PROXIES WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING AND ANY ADJOURNMENTS THEREOF.
(Be sure to sign and date the reverse side of this form)
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
--------------------------------------------------------------------------------
FOLD AND DETACH HERE FOLD AND DETACH HERE
ADMISSION TICKET
[Anheuser-Busch Companies logo]
ANNUAL MEETING OF STOCKHOLDERS
April 23, 2003, 10:00 A.M. (local time) at Ports of Call at
SeaWorld of Florida, 7007 SeaWorld Drive,
Orlando, Florida
ANHEUSER-BUSCH COMPANIES, INC. PLEASE MARK /X/
your votes as
indicated in
this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 THROUGH 4.
1 - ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to to vote for all nominees listed
the contrary below) below
/ / / /
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME ON THE LIST BELOW.)
01 JAMES J. FORESE 02 VERNON R. LOUCKS, JR.
03 VILMA S. MARTINEZ 04 WILLIAM PORTER PAYNE
05 EDWARD E. WHITACRE, JR.
FOR AGAINST ABSTAIN
2 - APPROVAL OF AN
AMENDMENT TO THE 1998 / / / / / /
INCENTIVE STOCK PLAN
FOR AGAINST ABSTAIN
3 - APPROVAL OF THE
STOCK PLAN FOR NON- / / / / / /
EMPLOYEE DIRECTORS
FOR AGAINST ABSTAIN
4 - APPROVAL OF
INDEPENDENT / / / / / /
ACCOUNTANTS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 5.
FOR AGAINST ABSTAIN
5 - SHAREHOLDER
PROPOSAL CONCERNING / / / / / /
THE CHAIRMAN OF THE
BOARD
MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
PLEASE MARK, SIGN, DATE, AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Signature Dated: , 2003
------------------------------------- --------------------
SIGNATURE OF PLAN PARTICIPANT
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
[Anheuser-Busch Companies logo]
TO PARTICIPANTS IN THE ANHEUSER-BUSCH DEFERRED INCOME STOCK
PURCHASE AND SAVINGS PLANS
Enclosed with this voting instruction form are the notice and proxy
statement for the Annual Meeting of Stockholders of Anheuser-Busch Companies,
Inc. which will be held on April 23, 2003. The number of shares shown on this
voting instruction form represents the number of shares with respect to which
you are entitled to direct the voting because of your account under one or more
of these plans. In order for these shares to be voted by the trustee of the
plan(s) in accordance with your confidential instructions, Mellon Investor
Services LLC must receive your voting instructions by no later than April 18,
2003. If your voting instructions are not received by April 18, 2003, shares as
to which you are entitled to direct voting will be voted by the plan trustee in
accordance with instructions from the plans' investment committee.
Your interest in a plan which is invested in the Company stock fund is
measured in terms of share equivalents. Your share equivalents closely
approximate the number of shares as to which you are entitled to direct the
voting.
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK THE APPROPRIATE
BOX ON THIS VOTING INSTRUCTION FORM. Present the ticket below to the
Anheuser-Busch representative at the entrance to the meeting. Keep in mind that
you will not be able to vote any plan shares at the meeting; only the plan
trustee can vote these shares as described above.
--------------------------------------------------------------------------------
EACH STOCKHOLDER MAY BE ASKED TO PRESENT VALID PICTURE IDENTIFICATION, SUCH AS
DRIVER'S LICENSE OR EMPLOYEE IDENTIFICATION BADGE, IN ADDITION TO THIS ADMISSION
TICKET.
PLEASE ADMIT: NON-TRANSFERABLE
ADMISSION TICKET
------------------
CONTROL NUMBER
------------------
VOTING INSTRUCTION CARD
ANHEUSER-BUSCH COMPANIES, INC.
THESE VOTING INSTRUCTIONS ARE SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby directs the Trustee of the Anheuser-Busch Deferred
Income Stock Purchase and Savings Plans to authorize the proxies (a) to vote as
indicated on the reverse side of this form and (B) TO VOTE, IN THEIR DISCRETION,
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING HEREAFTER
DESCRIBED, in each case with respect to all of the shares of stock for which the
undersigned is entitled to direct the voting under these plans. Such votes are
to be cast at the Annual Meeting of Stockholders of Anheuser-Busch Companies,
Inc. to be held at Ports of Call at SeaWorld of Florida, 7007 SeaWorld Drive,
Orlando, Florida, on April 23, 2003, at 10:00 A.M. local time and at any
adjournments thereof.
WHEN PROPERLY EXECUTED AND RETURNED, THE SHARES REPRESENTED BY THIS VOTING
INSTRUCTION CARD WILL BE VOTED IN THE MANNER INDICATED BY THE PLAN PARTICIPANT,
AND IN THE ABSENCE OF SUCH INDICATION, SUCH SHARES WILL BE VOTED BY THE TRUSTEE
IN ACCORDANCE WITH INSTRUCTIONS FROM THE PLANS' INVESTMENT COMMITTEE.
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
--------------------------------------
YOU CAN VOTE IN ONE OF THREE WAYS:
--------------------------------------
1. CALL TOLL-FREE 1-800-435-6710 ON A TOUCH TONE TELEPHONE FROM THE
US OR CANADA 24 HOURS A DAY - 7 DAYS A WEEK BY NOT LATER THAN APRIL 18, 2003.
THERE IS NO CHARGE TO YOU FOR THIS CALL.
OR
--
2. VOTE BY INTERNET AT OUR INTERNET ADDRESS: HTTP://WWW.EPROXY.COM/BUD BY NOT
LATER THAN APRIL 18, 2003.
OR
--
3. MARK, SIGN AND DATE YOUR VOTING INSTRUCTION CARD AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE. MELLON INVESTOR SERVICES LLC MUST RECEIVE YOUR
----
EXECUTED VOTING INSTRUCTION CARD NOT LATER THAN APRIL 18, 2003.
-----------------------------------------------------------------------------
IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET, HAVE YOUR PROXY CARD IN HAND.
YOU WILL BE ASKED TO ENTER A CONTROL NUMBER, WHICH IS LOCATED
IN THE BOX IN THE LOWER RIGHT HAND CORNER ON THE REVERSE SIDE OF THIS FORM.
-----------------------------------------------------------------------------
THANK YOU FOR VOTING
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
[Anheuser-Busch Companies logo]
ANNUAL MEETING OF STOCKHOLDERS
April 23, 2003, 10:00 A.M. (local time) at Ports of Call at
SeaWorld of Florida, 7007 SeaWorld Drive,
Orlando, Florida
March 11, 2003
Dear Shareholder,
You are cordially invited to attend the Annual Meeting of Shareholders of
Anheuser-Busch Companies, Inc. to be held on Wednesday, April 23, 2003 in
Orlando, Florida. Your proxy card and voting instructions are included with
this letter. Previously you elected to view proxy materials over the
Internet; therefore, we did not include the proxy statement and annual
report in the package. Please access our web site at www.anheuser-busch.com
(click on "Financial Info") to read these important documents. If you have
changed your mind and prefer to receive a copy of the proxy statement or
annual report, you may call Mellon Investor Services (toll-free) at
1-888-213-0964 and one will be mailed to you.
After you have read the proxy statement, refer to the enclosed instructions
for voting by telephone, Internet, or mail.
Thank you for voting and thank you for your investment in Anheuser-Busch.
Sincerely,
/s/ JoBeth G. Brown
JoBeth G. Brown
Vice President and Secretary
Enclosures
[Letterhead of Anheuser-Busch Companies, Inc.]
April 4, 2003
Dear Shareholder(s):
The time is approaching for the Annual Meeting of the Shareholders of
Anheuser-Busch Companies, Inc. on April 23, 2003, and our vote tabulator has
not received your Proxy.
It is important that your shares be represented at the meeting. PLEASE VOTE
IN ONE OF THE THREE WAYS AS DESCRIBED ON THE ATTACHED DUPLICATE PROXY AS
SOON AS POSSIBLE.
Sincerely,
/s/ JoBeth G. Brown
JoBeth G. Brown
Vice President and Secretary
ANHEUSER-BUSCH COMPANIES, INC. Please mark
your votes as
indicated in
this example /X/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 THROUGH 4.
1 - ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to to vote for all nominees listed
the contrary below) below
/ / / /
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME ON THE LIST BELOW.)
01 JAMES J. FORESE 02 VERNON R. LOUCKS, JR.
03 VILMA S. MARTINEZ 04 WILLIAM PORTER PAYNE
05 EDWARD E. WHITACRE, JR.
FOR AGAINST ABSTAIN
2 - APPROVAL OF AN
AMENDMENT TO THE 1998 / / / / / /
INCENTIVE STOCK PLAN
FOR AGAINST ABSTAIN
3 - APPROVAL OF THE
STOCK PLAN FOR NON- / / / / / /
EMPLOYEE DIRECTORS
FOR AGAINST ABSTAIN
4 - APPROVAL OF
INDEPENDENT / / / / / /
ACCOUNTANTS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 5.
FOR AGAINST ABSTAIN
5 - SHAREHOLDER
PROPOSAL CONCERNING / / / / / /
THE CHAIRMAN OF THE
BOARD
MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
PLEASE MARK, SIGN, DATE, AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Signature Signature
------------------------------ ------------------------------
Dated: , 2003
--------------------
SIGNATURE OF SHAREHOLDER(S) (Sign exactly as your name appears above; in the
case of shares held by joint owners, all joint
owners should sign; fiduciaries should indicate
title and authority.)
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
--------------------------------------
YOU CAN VOTE IN ONE OF THREE WAYS:
--------------------------------------
1. CALL TOLL-FREE 1-800-435-6710 ON A TOUCH TONE TELEPHONE FROM THE
US OR CANADA 24 HOURS A DAY - 7 DAYS A WEEK.
THERE IS NO CHARGE TO YOU FOR THIS CALL.
OR
--
2. VOTE BY INTERNET AT OUR INTERNET ADDRESS: HTTP://WWW.EPROXY.COM/BUD
INTERNET AND TELEPHONE VOTING MUST BE RECEIVED BY 11PM EASTERN TIME
ON APRIL 22, 2003, THE DAY PRIOR TO THE ANNUAL MEETING.
OR
--
3. MARK, SIGN AND DATE YOUR PROXY CARD AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
-----------------------------------------------------------------------------
IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET, HAVE YOUR PROXY CARD IN HAND.
YOU WILL BE ASKED TO ENTER A CONTROL NUMBER, WHICH IS LOCATED
IN THE BOX IN THE LOWER RIGHT HAND CORNER ON THE REVERSE SIDE OF THIS FORM.
-----------------------------------------------------------------------------
THANK YOU FOR VOTING
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EACH STOCKHOLDER MAY BE ASKED TO PRESENT VALID PICTURE IDENTIFICATION, SUCH AS
DRIVER'S LICENSE OR EMPLOYEE IDENTIFICATION BADGE, IN ADDITION TO THIS ADMISSION
TICKET.
PLEASE ADMIT: NON-TRANSFERABLE
ADMISSION TICKET
==================
CONTROL NUMBER
==================
PROXY
ANHEUSER-BUSCH COMPANIES, INC.
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The person(s) signing this proxy form hereby appoints August A. Busch III,
Patrick T. Stokes, and JoBeth G. Brown as proxies, each with the power of
substitution and hereby authorizes them to represent and to vote, as designated
on the reverse side of this form, all of the shares of stock that the
undersigned would be entitled to vote at the Annual Meeting of Stockholders of
Anheuser-Busch Companies, Inc. to be held at Ports of Call at SeaWorld of
Florida, 7007 SeaWorld Drive, Orlando, Florida, on April 23, 2003, at 10:00 A.M.
local time and at any adjournments thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER INDICATED
BY THE STOCKHOLDER. IN THE ABSENCE OF SUCH INDICATION, SUCH SHARES WILL BE VOTED
FOR THE ELECTION OF DIRECTORS IN ITEM 1, FOR ITEMS 2, 3, AND 4, AND AGAINST ITEM
5. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE DISCRETION OF SAID
PROXIES WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING AND ANY ADJOURNMENTS THEREOF.
(Be sure to sign and date the reverse side of this form)
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
--------------------------------------------------------------------------------
FOLD AND DETACH HERE FOLD AND DETACH HERE
ADMISSION TICKET
[Anheuser-Busch Companies logo]
ANNUAL MEETING OF STOCKHOLDERS
April 23, 2003, 10:00 A.M. (local time) at Ports of Call at
SeaWorld of Florida, 7007 SeaWorld Drive,
Orlando, Florida
APPENDIX
Page 24 of the printed proxy statement contains a Stock Performance
Graph. The information contained within the graph is presented in a tabular
format immediately following the graph.