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| SAM > SEC Filings for SAM > Form 8-K on 14-Dec-2012 | All Recent SEC Filings |
14-Dec-2012
Change in Directors or Principal Officers
2013 Bonus Opportunities
At its meeting on December 11, 2012, the Compensation Committee of the Company's Board of Directors approved bonus objectives for the Company's named executive officers for 2013 and established shared Company-wide goals (the "Shared Company-Wide Goals") that apply to certain officers and other employees. The Shared Company-Wide Goals consist of achieving (i) depletions growth of at least 13% over 2012 (or 14% growth in total depletions that include those beers sold by the Company's subsidiary formed in late 2011, A&S Brewing Collaborative LLC ("A&S")), and (ii) the generation of at least $7.5 million in resource efficiencies and cost savings, while maintaining brand health. Assessment of performance against the Shared Company-Wide Goals and the various objectives listed below is within the purview of the Committee.
Chief Executive Officer
The Committee approved primary 2013 bonus opportunities for Martin F. Roper, the Company's President and CEO, equal to 80% of salary, based on achieving objectives as set forth below. The Delivered Gross Profit and Margin goals are based on the Company's current 2013 financial plan.
TABLE 1 - CEO BONUS OPPORTUNITY = 80% OF BASE SALARY
Performance Measure Bonus Goal Weight
Total depletions growth of at least 14% 15.0%
2013 Depletions
Growth over 2012 Total depletions growth of at least 15% 15.0%
Total depletions growth of at least 16% 15.0%
Delivered gross profit of at least $324 20.0%
Delivered gross million and delivered gross profit margin of
profit at least 48.2%, after adjusting for
commodity impact from plan levels
(a) Market plan for lager draft 5.0%
distribution with core wholesalers is
achieved by March 31, 2013, with at least
85% retained through May 31, 2013;
(b) Achieve at least 70% of 2012 Samuel
Sales Force Adams Seasonal distribution within first
Effectiveness four weeks of each season;
(c) Increase the average number of calls
made by account managers per month by at
least 20%; and
(d) Angry Orchard draft distribution has
increased by at least 75% over 2012
distribution by March 31, 2013
Combined savings of $7.5 million from 10.0%
Resource Savings delivered gross margin and SG&A efficiency
initiatives by the end of 2013
Freshest Beer Program successfully 10.0%
Distribution implemented for wholesalers covering at
least 70% of the Company's volume by the end
of 2013
Organizational Improve organizational capability to 10.0%
Development effectively manager brand complexity and
planned volume growth
TOTAL 100.0%
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In addition, the Committee approved a further 2013 bonus opportunity for Mr. Roper equal to 80% of his primary 2013 bonus potential (which would equal an incremental 64% of his base salary) tied to achieving certain goals that would require substantial out-performance by the Company against its 2013 financial plan, as set forth below:
TABLE 2 - CEO "STRETCH" BONUS OPPORTUNITY = 64% OF BASE SALARY
Performance Measure Bonus Goal Weight
Total depletions growth of at least (a) 17% 20.0%
or (b) 16%, if products of A&S are excluded
Total depletions growth of at least (a) 18% 20.0%
2013 Depletions or (b) 17%, if products of A&S are excluded
Growth over 2012
Total depletions growth of at least 5% 20.0%
greater than that of total craft beer
category (benchmark to be based on best
available syndicated data and approved by
Compensation Committee)
Achieve processing costs of under $2.00 per 20.0%
Cost Savings case equivalent at breweries owned by the
Company
TOTAL 80.0%
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Chairman
The Committee approved 2013 bonus opportunities for C. James Koch, the Company's Chairman, equal to 100% of salary. Mr. Koch's objectives for 2013 as a percentage of his bonus opportunities are set forth below.
TABLE 3 - CHAIRMAN BONUS OPPORTUNITY = 100% OF BASE SALARY
Performance Measure Bonus Goal Weight
Total depletions growth of at least 14% 15.0%
Total depletions growth of at least 15% 15.0%
Total depletions growth of at least 17% 15.0%
2013 Depletions
Growth over 2012 (a) Total depletions growth of at least 17% 20.0%
or (b) depletions growth of at least 16%,
excluding products sold by A&S, or (c)
depletions growth is greater than that of
total craft beer category (benchmark to be
based on best available syndicated data and
approved by Compensation Committee)
Delivered gross profit of at least $324 20.0%
Delivered gross million and delivered gross profit margin of
profit at least 48.2%, after adjusting for
commodity impact from plan levels
Freshest Beer Program successfully 10.0%
Distribution implemented for wholesalers covering at
least 70% of the Company's volume by the end
of 2013
Investment of time and resources in craft 5.0%
Industry Initiatives industry initiatives which support the
category and the Company
TOTAL 100.0%
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Chief Financial Officer
The Committee approved 2013 bonus opportunities for William F. Urich, the Company's Treasurer and Chief Financial Officer, equal to 50% of his 2013 base salary, based on achieving objectives as follows:
TABLE 4 - CFO BONUS OPPORTUNITY = 50% OF BASE SALARY
Performance Measure Bonus Goal Weight
The Company achieves its Shared Company-Wide 30.0%*
Shared Company-Wide Goals Goals and depletions growth greater than the
beer category
Individual Goals
Deliver $2.5 million of resource efficiency 10.0%
improvements outside of Delivered Gross
Margin.
7.5%
Support the Operations group in identifying
and executing against a 2013 Delivered Gross
Margin goal to achieve $5 million of
Resource Efficiency savings/efficiencies by year-end 2013 7.5%
Lead the Operations/Brewing performance
improvement measurements, KPI's and financial
reporting to drive focus on key measurable
and continuous financial improvement. Lead IT
initiatives to improve SAP tracking of
materials, yields, cost reporting and shop
floor reporting.
Through effective use of procurement 10.0%
department, identify and execute 2% savings
Procurement for non-contracted procurement spend and
deliver $1.0 million savings. Identify and
execute $1.5 million of Delivered Gross
Margin savings for full year 2013.
Identify unplanned pricing opportunities (not 5.0%
Sales Force Effectiveness including opportunities created by
competitive moves) of at least $250,000.
Improve data and analysis delivery to Sales.
Develop required back office support system 10.0%
to support projects of A&S, including
Support of A&S Initiatives start-up of regional breweries and
tracking/support for new brands. Support due
diligence on new business development or
potential acquisitions.
Improve departmental or functional talent 10.0%
Organizational Development bench strength and depths, especially in key
positions, and drive culture of high
performance.
Improve effectiveness, productivity, business 10.0%
impact and efficiency of IT department. Lead
IT efforts to improve sales mobility tools,
information flow, dashboard and effectiveness
of technology in support of sales execution
goals.
TOTAL 100.0%
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*
15% if depletions growth over 2012 depletions is greater than 9% but less than 13%, provided that the Samuel AdamsŪ brand grows at least 2% and total company depletions growth is faster than the beer category.
Vice President of Sales
The Committee approved 2013 bonus opportunities for John C. Geist, the Company's Vice President of Sales, equal to 50% of his 2013 base salary, based on achieving objectives as follows:
TABLE 5 - VICE PRESIDENT OF SALES
BONUS OPPORTUNITY = 50% OF BASE SALARY
Performance Measure Bonus Goal Weight
Shared Company-Wide The Company achieves its Shared Company-Wide 30.0%*
Goals Goals and depletions growth greater than the
beer category
Individual Goals
Samuel Adams depletions growth of at least 4% 10.0%
Twisted Tea depletions growth of at least 15% 5.0%
2013 Depletions Growth
over 2012 Angry Orchard depletions growth to at least 5.0%
115%
15.0%
Total depletions growth of at least 14%
Pricing Price adjustments of at least 1% 5.0%
Market plan for lager draft distribution with 2.5%
core wholesalers is achieved by March 31,
2013, with at least 85% retained through May
31, 2013;
2.5%
Achieve at least 70% of 2012 Samuel Adams
Seasonal distribution within first four weeks
Sales Execution of each season; 2.5%
Increase the average number of calls made by
account managers per month by at least 20%; 2.5%
and
Angry Orchard draft distribution has
increased by at least 75% over 2012
distribution by March 31, 2013
Update wholesaler execution requirements and 2.5%
track effectiveness
Track displays on key holidays and achieve 2.5%
performance better than 2012
Wholesaler Initiatives Freshest Beer Program successfully 2.5%
implemented for wholesalers covering at least
70% of the Company's volume by the end of
2013
2.5%
Support new product testing and rollouts and
achieve A&S depletions of at least 400,000
case equivalents
Improve departmental or functional talent 10.0%
Organizational bench strength and depths, especially in key
Development positions, and drive culture of high
performance.
TOTAL 100.0%
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*
15% if depletions growth over 2012 depletions is greater than 9% but less than 13%, provided that the Samuel AdamsŪ brand grows at least 2% and total company depletions faster than the beer category.
Vice President of Operations
The Committee approved 2013 bonus opportunities for Thomas W. Lance, the Company's Vice President of Operations, equal to 50% of his 2013 base salary, based on achieving objectives set forth below. The bonus opportunity is subject to reduction if any product that does not meet the Company's quality standards is shipped from a brewery.
TABLE 6 - VICE PRESIDENT OF OPERATIONS
BONUS OPPORTUNITY = 50% OF BASE SALARY
Performance Measure Bonus Goal Weight
Shared Company-Wide The Company achieves its Shared Company-Wide 20.0%*
Goals Goals and depletions growth greater than the
beer category
Individual Goals
Develop and implement safety programs that 5.0%
assures brewery total incident rate at no
greater than 5.3.
5.0%
Reduce brewery total incident rate to 4.3 or
Safety & Quality less. 5.0%
Improve total quality aggregate score at the
breweries by at least 2% from 2012. Metrics
will include tracking coding issues and age
of beer shipped from breweries
Maintain adjusted conversion cost/case at 5.0%
breweries, without depreciation, to plan or
lower. Identify and implement $5 million in
delivered gross margin savings. 15.0%
Implement employee relations strategy within
operations/brewing departments and support a
Brewery Performance high performing work environment. Launch and
and Resource support at least 50 continuous improvement 5.0%
Efficiency teams that deliver measurable improvement.
Develop and recommend optimal warehousing
strategy with balanced consideration of
enhanced changeover capabilities (operational
and technology driven), capacity needs, live
loading practicality, freight costs, and
employee safety by May 1, 2013.
Fully develop and expand to 70% of the 10.0%
Company's volume. Improve out-of-stock
tracking and service levels.
Freshest Beer Program 5.0%
Lead participation and execution of IT
project at breweries for SAP and shop floor
data tracking by the operations/brewing
departments.
Successfully execute capacity/capability 15.0%
projects on time and on budget with intended
benefit delivered in 2013
Capacity 5.0%
Develop leadership and technical competencies
and capability in the planning group to
significantly improve customer service
Improve departmental or functional talent 5.0%
Organizational bench strength and depths, especially in key
Development positions, and drive culture of high
performance.
TOTAL 100.0%
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*
15% if depletions growth over 2012 depletions is greater than 9% but less than 13%, provided that the Samuel AdamsŪ brand grows at least 2% and total company depletions faster than the beer category.
Other Executive Officers
The Committee also approved the 2013 bonus opportunity for four other executive officers, which opportunity consists of a combination of the Company achieving its Shared Company-Wide Goals and the officers achieving their individual goals. The overall bonus opportunities for these officers range from 20% to 50% of their 2013 base salary. The proportion of the overall bonus opportunity that is based on the achievement of the Shared Company-Wide Goals for each of these officers is 20%.
Equity Compensation
Based on the recommendation of the Compensation Committee, the Board of Directors of the Company, at its meeting held on December 12, 2012, approved the following option and restricted stock grants of the Company's Class A Common Stock, pursuant to the Company's Employee Equity Incentive Plan.
Contingent Vesting Options
The Board of Directors approved the grant of contingent vesting options for shares of the Company's Class A Common Stock in the aggregate amount of 10,925 shares to three executive officers, effective January 1, 2013, with an exercise price at the fair market value of such Common Stock on the effective date of the grant.
C. James Koch, the Company's founder and Chairman, and Thomas W. Lance, Vice
President of Brewing, will each be granted an option for 4,725 shares and
Kathleen H. Wade, Vice President-Legal and Corporate Secretary, will be granted
an option for 1,475 shares. The number of shares as to which these options may
become exercisable in any year is dependent upon the Company's meeting certain
2013 depletions targets, as follows: (a) 50% will be eligible to vest if (i)
2013 depletions (excluding those of A&S) are at least 9% over 2012 depletions
and (ii) total depletions growth is greater than that of the beer category; and
(b) 100% will be eligible to vest if (i) 2013 depletions (excluding those of
A&S) are at least 13% over 2012 depletions and (ii) total depletions growth is
greater than those of the beer category. The determination regarding the
eligibility for vesting of these options will be made by the Compensation
Committee by mid-March 2014. Eligible shares will then vest at the rate of 20%
per year over the five-year period commencing January 1, 2013, subject to
accelerated vesting in certain specified circumstances. The options will lapse
to the extent that the above depletions targets are not met.
In addition, a senior manager will be granted a performance-based option for 15,000 shares of the Company's Class A Common Stock, effective January 1, 2013, with an exercise price at the fair market value of such Common Stock on the effective date of the grant. Vesting is based on meeting certain volume growth targets over the next five years and the optionee must be an employee of the Company on the date a volume threshold is met or the option will lapse as to the non-vested shares.
Special Long-Term Retention Options
The Board of Directors also approved the grant of options to three senior managers in amounts ranging from 7,500 to 10,000 shares of the Company's Class A Common Stock for a total of 25,000 shares. All these grants are effective January 1, 2013 and have an exercise price at the fair market value of such Common Stock on the effective date of the grant. Sixty percent (60%) of the shares will vest five years from the effective date of grant, with the remaining shares vesting at the rate of ten percent (10%) each year thereafter. The optionees must be employees of the Company on the applicable vesting date or their option will lapse as to the non-vested shares.
Restricted Stock Awards
In addition, the Board of Directors approved an aggregate of $1,565,000 in restricted stock grants to be awarded to one officer, and certain senior managers and key employees of the Company as of January 1, 2013. The restricted stock will vest over the five-year period commencing January 1, 2013, contingent only on continued employment, such that 20% of the shares will vest on January 1 in each of the years 2014 through 2018, subject to accelerated vesting in certain specified circumstances.
Approval of Class B Stockholder
All of the bonus opportunities and equity compensation grants to executive officers described above were approved by the sole holder of the Company's Class B Common Stock.
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