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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Craft Brew Alliance Inc | NASDAQ:BREW | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 16.51 | 16.55 | 16.51 | 0 | 01:00:00 |
1.
|
To elect
eight
directors to serve until the
2020
Annual Meeting of Shareholders and until their successors are elected and qualified;
|
2.
|
To ratify the appointment of Moss Adams LLP as our independent registered public accounting firm for our fiscal year ending
December 31, 2019
;
|
3.
|
To conduct an advisory vote to approve named executive officer compensation; and
|
4.
|
To transact such other business as may properly come before the meeting or any adjournments or postponements thereof.
|
/s/ David R. Lord
|
|
David R. Lord
|
|
Chairman of the Board
|
|
|
|
Portland, Oregon
|
|
April 10, 2019
|
|
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 14, 2019:
The Proxy Statement for the 2019 Annual Meeting of Shareholders and 2018 Annual Report to Shareholders are available at
http://phx.corporate-ir.net/phoenix.zhtml?c=95666&p=irol-proxy
YOUR VOTE IS IMPORTANT!
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE PROVIDED OR FOLLOW THE INSTRUCTIONS FOR ELECTRONIC VOTING ON THE CARD. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
|
•
|
the election of
eight
directors to hold office until the next annual meeting of shareholders and until their successors are elected and qualified;
|
•
|
a proposal to ratify the appointment of Moss Adams LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2019
;
|
•
|
a non-binding advisory vote to approve our named executive officer compensation ("say-on-pay" vote); and
|
•
|
any other business that may properly come before the meeting.
|
•
|
FOR the election as directors of the nominees listed below under Proposal No. 1;
|
•
|
FOR the proposal to ratify the appointment of Moss Adams LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2019
; and
|
•
|
FOR approval, on an advisory basis, of our named executive officer compensation as disclosed in the Compensation Discussion and Analysis section and accompanying compensation tables included in this proxy statement.
|
•
|
delivering written notification of your revocation to our secretary;
|
•
|
voting in person at the meeting; or
|
•
|
delivering another proxy bearing a later date.
|
•
|
Proposal No. 1
: The election of directors is subject to a plurality vote of the shares of common stock voted at the meeting. “Plurality” means that the eight individuals who receive the largest number of votes cast “FOR” are elected as directors. Consequently, any shares not voted “FOR” a particular nominee (whether as a result of marking the proxy to withhold votes or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election. See “Who is entitled to vote?” above for an explanation of cumulative voting in the election of directors.
|
•
|
Proposal No. 2:
The ratification of the appointment of Moss Adams LLP must receive more votes “FOR” than votes “AGAINST” at the meeting to be approved. Broker non-votes and abstentions from voting on this proposal will have no effect on the outcome of this proposal.
|
•
|
Proposal No. 3:
The proposal to approve, on a non-binding advisory basis, the compensation paid to our named executive officers during
2018
must receive more votes “FOR” than votes “AGAINST” at the meeting to be approved. Broker non-votes and abstentions from voting on this proposal will have no effect on the outcome of the proposal. Because the shareholder vote is advisory only, it will not be binding on us or on our Board of Directors. However, the Board of Directors will review the voting results and take them into consideration when making future decisions regarding executive compensation.
|
Shareholder
|
|
Number of
Shares
(1)
|
|
Percent of Shares
Outstanding
|
||
Anheuser-Busch Companies, LLC
One Busch Place St. Louis, Missouri 63118 |
|
6,069,047
|
|
|
31.3
|
%
|
The Bill Healy Foundation PO Box 4525
Portland, Oregon 97208 |
|
1,211,764
|
|
|
6.3
|
%
|
Dimensional Fund Advisors LP
(2)
6300 Bee Cave Road Austin, Texas 78746 |
|
1,334,339
|
|
|
6.9
|
%
|
Timothy P. Boyle
(3)
|
|
486,209
|
|
|
2.5
|
%
|
Andrew J. Thomas
|
|
70,354
|
|
|
*
|
|
Kevin R. Kelly
(4)
|
|
40,754
|
|
|
*
|
|
David R. Lord
|
|
37,399
|
|
|
*
|
|
Marc J. Cramer
|
|
26,749
|
|
|
*
|
|
J. Scott Mennen
|
|
26,886
|
|
|
*
|
|
Derek Y. Hahm
|
|
18,101
|
|
|
*
|
|
Kenneth C. Kunze
|
|
18,027
|
|
|
*
|
|
Paul D. Davis
|
|
10,220
|
|
|
*
|
|
Edwin A. Smith
|
|
6,886
|
|
|
*
|
|
Joseph K. Vanderstelt
|
|
4,920
|
|
|
*
|
|
Nickolas A. Mills
|
|
2,702
|
|
|
*
|
|
Jacqueline S. Woodward
|
|
2,534
|
|
|
*
|
|
Matthew E. Gilbertson
|
|
—
|
|
|
*
|
|
|
|
|
|
|
||
All current executive officers and directors as a group (12 persons)
|
|
739,935
|
|
|
3.8
|
%
|
(1)
|
Includes shares of common stock subject to options currently exercisable or exercisable within 60 days of
March 25, 2019
as follows:
|
(2)
|
The information as to beneficial ownership is based on a Schedule 13G filed by Dimensional Fund Advisors LP (“Dimensional”) with the Securities and Exchange Commission on February 8, 2019. Dimensional has sole voting power with respect to
1,316,249
shares and sole dispositive power with respect to all
1,334,339
shares.
|
(3)
|
Includes 1,818 shares held by Mr. Boyle’s child.
|
(4)
|
Includes 352 shares held by Mr. Kelly's spouse.
|
•
|
the highest ethical character;
|
•
|
the ability to read and understand financial statements;
|
•
|
attained 21 years of age;
|
•
|
no material conflict, whether personal, financial or otherwise, associated with being on the Board;
|
•
|
satisfaction of the requirements for regulatory approval; and
|
•
|
adequate time to devote to Board activities.
|
•
|
the ability to offer advice and guidance to our Chief Executive Officer based on relevant expertise and experience;
|
•
|
attributes of independence or financial expertise as required by the Nasdaq Listing Rules and Securities and Exchange Commission (“SEC”) regulations;
|
•
|
skills, experience and background complementary to those of other directors; and
|
•
|
the ability to maintain a constructive working relationship with other directors.
|
Name
|
|
Fees
earned or
paid in
cash
|
|
Stock
awards
(1)
|
|
Total
|
||||||
Timothy P. Boyle
|
|
$
|
57,500
|
|
|
$
|
47,513
|
|
|
$
|
105,013
|
|
Marc J. Cramer
|
|
62,500
|
|
|
47,513
|
|
|
110,013
|
|
|||
Paul D. Davis
|
|
56,500
|
|
|
47,513
|
|
|
104,013
|
|
|||
Kevin R. Kelly
|
|
64,500
|
|
|
47,513
|
|
|
112,013
|
|
|||
David R. Lord
|
|
77,000
|
|
|
70,013
|
|
|
147,013
|
|
|||
Nickolas A. Mills
|
|
44,500
|
|
|
47,513
|
|
|
92,013
|
|
|||
Michael R. Taylor
(2)
|
|
17,514
|
|
|
47,513
|
|
|
65,027
|
|
|||
João Paulo Falcão Vieira
(3)
|
|
23,352
|
|
|
—
|
|
|
23,352
|
|
|||
Jacqueline S. Woodward
|
|
49,500
|
|
|
47,513
|
|
|
97,013
|
|
(1)
|
Represents the value of
2,534
fully-vested shares of our common stock (
3,734
shares for Mr. Lord) granted on
May 16, 2018
. The fair value of the stock awards was determined based on the fair value of our common stock on the date of grant. See Notes 2 and 14 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31,
2018
for additional information.
|
(2)
|
Mr. Taylor ceased to be a director effective May 17, 2017.
|
(3)
|
Mr. Falcão Vieira served as a director from June 13, 2018 to December 31, 2018.
|
|
Respectfully Submitted:
|
|
|
|
Kevin R. Kelly (Chair)
|
|
Marc J. Cramer
|
|
David R. Lord
|
|
Audit Committee Members
|
•
|
Base salary
. Base salary is the guaranteed element of an executive’s annual cash compensation. The level of base salary reflects the Committee’s assessment of the employee’s long-term performance, his or her skill set and the market value of that skill set.
|
•
|
Annual cash bonus opportunities
. Performance-based incentive cash bonuses awarded under our Annual Cash Incentive Plan (the "STI Plan") are intended to reward executives for achieving specific financial and operational goals both at a corporate and an individual level.
|
•
|
Long-term incentive awards
. Long-term incentives are provided through grants of performance share awards ("PBAs") and restricted stock units ("RSUs"). These equity-based awards are intended to encourage our executives to take steps that they believe are necessary to ensure our long-term success, and to align their interests with our other shareholders.
|
•
|
Severance payments
. Executive employment agreements provide for severance payments as a means of recruiting and retaining top quality executives, by assuring them of a reasonable amount of compensation in the event of termination of employment under specified circumstances, including a change in control.
|
Name
|
Goal
|
Achievement %
|
Andrew Thomas
|
Weighted average of achievement of individual objective metrics by executive team
|
96%
|
Joseph Vanderstelt
|
Index of 2018 quarterly results relative to budget
|
—%
|
Scott Mennen
|
Weighted average beer COGS/bbl across all breweries and all volume
|
100%
|
Kenneth Kunze
|
Home market brand volume
|
93%
|
Derek Hahm
|
Domestic beer and restaurant and retail gross profit
|
94%
|
•
|
The annual total compensation of our CEO was
$1,249,277
.
|
•
|
The median of the annual total compensation of all of our employees other than our CEO (based on our median employee identified under the methodology described below) was
$54,543
.
|
•
|
The resulting ratio of our CEO's annual total compensation to the annual total compensation of our median employee is
23
to 1.
|
•
|
On December 31,
2018
, our employee population consisted of approximately
665
individuals, including full-time, part-time, temporary, and seasonal employees employed on that date.
|
•
|
To find the median of the annual total compensation of all our employees (other than our CEO), we used wages from our payroll records as reported to the Internal Revenue Service on Form W-2 for the fiscal year
2018
. In making this determination, we annualized the compensation of full-time and part-time permanent employees who were employed on December 31,
2018
but who did not work for us the entire year. No full-time equivalent adjustments were made for part-time employees.
|
•
|
We identified our median employee using this compensation measure and methodology, which was consistently applied to all employees included in the calculation.
|
•
|
After identifying the median employee, we added together all of the elements of that employee’s compensation for
2018
in accordance with the requirements applicable to calculating annual total compensation for purposes of the Summary Compensation Table below.
|
•
|
For the annual total compensation of our CEO, we used the amount reported for our CEO in the “Total” column for
2018
in the Summary Compensation Table below.
|
Name
|
|
Age
|
|
Position
|
|
Executive
Officer Since
|
Andrew J. Thomas
|
|
51
|
|
Chief Executive Officer
|
|
2011
|
Christine N. Perich
|
|
50
|
|
Chief Financial and Strategy Officer, Executive Vice President and Treasurer
|
|
2019
|
Derek Y. Hahm
|
|
49
|
|
Vice President, Sales and Brewpubs
|
|
2016
|
Kenneth C. Kunze
|
|
60
|
|
Vice President, Chief Marketing Officer
|
|
2014
|
J. Scott Mennen
|
|
54
|
|
Vice President, Chief Operating Officer
|
|
2014
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
(4)
|
|
Stock
Awards
($)
(5)
|
|
Non-Equity
Incentive
Plan
Compen-
sation ($)
(6)
|
|
All Other
Compen-
sation
($)
(7)
|
|
Total
($)
|
||||||||||||
Andrew J. Thomas
Chief Executive Officer
|
|
2018
|
|
$
|
475,036
|
|
|
$
|
50,000
|
|
|
$
|
391,864
|
|
|
$
|
332,377
|
|
|
$
|
—
|
|
|
$
|
1,249,277
|
|
|
|
2017
|
|
452,170
|
|
|
—
|
|
|
499,577
|
|
|
289,695
|
|
|
—
|
|
|
1,241,442
|
|
||||||
|
|
2016
|
|
439,006
|
|
|
120,000
|
|
|
404,148
|
|
|
123,698
|
|
|
—
|
|
|
1,086,852
|
|
||||||
Joseph K. Vanderstelt
(1)
Former Executive Vice President,
Chief Financial Officer |
|
2018
|
|
166,347
|
|
|
—
|
|
|
173,996
|
|
|
—
|
|
|
1,593
|
|
|
341,936
|
|
||||||
|
|
2017
|
|
272,976
|
|
|
—
|
|
|
187,696
|
|
|
124,161
|
|
|
—
|
|
|
584,833
|
|
||||||
|
|
2016
|
|
265,031
|
|
|
51,235
|
|
|
182,976
|
|
|
51,511
|
|
|
16,903
|
|
|
567,656
|
|
||||||
J. Scott Mennen
Vice President, Chief Operating Officer
|
|
2018
|
|
270,865
|
|
|
|
|
|
111,599
|
|
|
166,565
|
|
|
8,642
|
|
|
557,671
|
|
||||||
|
|
2017
|
|
262,650
|
|
|
—
|
|
|
120,412
|
|
|
121,888
|
|
|
8,710
|
|
|
513,660
|
|
||||||
|
|
2016
|
|
255,024
|
|
|
—
|
|
|
117,380
|
|
|
72,154
|
|
|
8,756
|
|
|
453,314
|
|
||||||
Kenneth C. Kunze
Vice President, Chief Marketing Officer
|
|
2018
|
|
272,264
|
|
|
—
|
|
|
112,037
|
|
|
163,075
|
|
|
7,950
|
|
|
555,326
|
|
||||||
|
|
2017
|
|
263,680
|
|
|
—
|
|
|
120,888
|
|
|
118,312
|
|
|
9,327
|
|
|
512,207
|
|
||||||
|
|
2016
|
|
256,050
|
|
|
—
|
|
|
117,842
|
|
|
73,957
|
|
|
78,324
|
|
|
526,173
|
|
||||||
Derek Y. Hahm
(2)
Vice President, Sales and Brewpubs
|
|
2018
|
|
228,126
|
|
|
|
|
|
94,097
|
|
|
211,678
|
|
|
7,950
|
|
|
541,851
|
|
||||||
|
|
2017
|
|
221,474
|
|
|
—
|
|
|
101,536
|
|
|
180,349
|
|
|
6,697
|
|
|
510,056
|
|
||||||
|
|
2016
|
|
215,030
|
|
|
—
|
|
|
88,697
|
|
|
46,425
|
|
|
7,023
|
|
|
357,175
|
|
||||||
Edwin A. Smith
(3)
Corporate Controller and Principal Accounting Officer
|
|
2018
|
|
153,255
|
|
|
—
|
|
|
32,889
|
|
|
23,380
|
|
|
—
|
|
|
209,524
|
|
(1)
|
Mr. Vanderstelt's employment terminated on July 13, 2018.
|
(2)
|
Mr. Hahm began serving as our Vice President, Sales and Brewpubs effective November 16, 2016.
|
(3)
|
Mr. Smith began acting in the capacity of Principal Financial Officer following Mr. Vanderstelt's departure in July 2018.
|
(4)
|
The amounts shown for Mr. Thomas for 2018 and 2016 each include $50,000 paid as a retention bonus; the balance shown for 2016 represents a performance bonus based on achievement of the individual goals assigned to him for the year. The amount shown for Mr. Vanderstelt for 2016 reflects a one-time, $25,000 signing bonus, as well as a performance bonus based on achievement of the individual goals assigned to him for 2016.
|
(5)
|
Represents the grant date fair value of PBAs under our 2014 Stock Incentive Plan, which reflects the assessment of probable achievement of performance conditions on the date of grant (
89%
in
2016
,
88%
in
2017
and
71%
in
2018
). The actual value to be received pursuant to these stock awards is dependent on the degree to which company-wide performance goals are met over three-year performance cycles (2.5 years for 2016). The value of the
2018
PBAs at the grant date, assuming the highest level of achievement, was as follows: (i) Mr. Thomas,
$498,754
; (ii) Mr. Vanderstelt,
$221,446
; (iii) Mr. Mennen,
$142,022
; (iv) Mr. Kunze,
$142,606
; (v) Mr. Hahm,
$119,775
; and Mr. Smith,
$0
. Also includes the grant date fair value of RSUs granted under our 2014 Stock Incentive Plan. Additional details regarding the terms of the PBAs and RSUs are set forth in the following two tables. See Notes 2 and 14 to our audited financial statements included in our Annual Report on Form 10-K for the year ended
December 31, 2018
(“
2018
Form 10-K”) for information on the valuation assumptions and other related information.
|
(6)
|
The amounts shown reflect the annual cash incentive awards under the STI Plan based on performance for the years shown and paid in the first quarter of the following year. Additional details of the awards for
2018
are set forth in the Grants of Plan-Based Awards Table.
|
(7)
|
Amounts shown in this column for
2018
represent the sum of the amounts attributable to personal benefits and other items of compensation as listed in the following table:
|
2018
|
|
Andrew Thomas
|
|
Joseph Vanderstelt
|
|
Kenneth Kunze
|
|
Scott Mennen
|
|
Derek Hahm
|
|
Edwin Smith
|
||||||||||||
Reimbursement of taxes
(a)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
692
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Employer matching contributions to 401(k) Plan
|
|
—
|
|
|
1,593
|
|
|
7,950
|
|
|
7,950
|
|
|
7,950
|
|
|
—
|
|
||||||
Total
|
|
$
|
—
|
|
|
$
|
1,593
|
|
|
$
|
7,950
|
|
|
$
|
8,642
|
|
|
$
|
7,950
|
|
|
$
|
—
|
|
(a)
|
For Mr. Mennen, represents a gross-up reimbursement of applicable taxes on excess contributions returned under limits imposed on 401(k) plans.
|
|
|
|
|
Estimated potential
payouts under non- equity incentive plan awards |
|
|
|
Estimated future payouts under equity incentive plan awards
|
|
|
|
|
|||||||||||||||||||
Name |
|
Grant date |
|
Thres-hold
($) (1) |
|
Target
($) (1) |
|
Maxi-mum
($) (1) |
|
Thres-hold
(#) (2) |
|
Target
(#) (2) |
|
Maxi-mum
(#) (2) |
|
All other stock awards: Number of shares of stock or units (#)
|
|
Grant
date fair value of stock and option awards ($) (5) |
|||||||||||||
Andrew J. Thomas
|
|
2/20/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
9,110
|
|
|
18,219
|
|
|
27,329
|
|
|
—
|
|
|
$
|
249,368
|
|
|
|
|
2/20/2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,808
|
|
(3
|
)
|
142,496
|
|
||||
|
|
2/20/2018
|
|
178,125
|
|
|
356,250
|
|
|
445,313
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Joseph K. Vanderstelt
(6)
|
|
2/20/2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,045
|
|
|
8,089
|
|
|
12,134
|
|
|
—
|
|
|
110,723
|
|
|||||
|
|
2/20/2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,467
|
|
(3
|
)
|
63,273
|
|
||||
|
|
2/20/2018
|
|
91,390
|
|
|
182,780
|
|
|
228,475
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
J. Scott Mennen
|
|
2/20/2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,594
|
|
|
5,188
|
|
|
7,782
|
|
|
—
|
|
|
71,011
|
|
|||||
|
|
2/20/2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,224
|
|
(3
|
)
|
40,588
|
|
||||
|
|
2/20/2018
|
|
87,923
|
|
|
175,845
|
|
|
219,806
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Kenneth C. Kunze
|
|
2/20/2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,605
|
|
|
5,209
|
|
|
7,814
|
|
|
—
|
|
|
71,303
|
|
|||||
|
|
2/20/2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,232
|
|
(3
|
)
|
40,734
|
|
||||
|
|
2/20/2018
|
|
88,270
|
|
|
176,540
|
|
|
220,675
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Derek Y. Hahm
|
|
2/20/2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,188
|
|
|
4,375
|
|
|
6,563
|
|
|
|
|
59,878
|
|
||||||
|
|
2/20/2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,875
|
|
(3
|
)
|
34,219
|
|
||||
|
|
2/20/2018
|
|
114,050
|
|
|
228,100
|
|
|
285,125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Edwin A. Smith
|
|
2/20/2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,253
|
|
(3
|
)
|
22,867
|
|
||||
|
|
5/16/2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
(4
|
)
|
9,375
|
|
||||
|
|
2/20/2018
|
|
19,055
|
|
|
38,110
|
|
|
47,638
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Represents the potential annual cash incentive bonus amounts payable under the STI Plan based on the level of achievement of corporate performance goals, as well as individual performance goals, as described under “Compensation Discussion and Analysis” above. Payouts will be on a straight line sliding scale ranging from 50% to 125% of the target amount, based on the level of achievement of the applicable performance goal beginning at the 70% (threshold) level up to the 115% (maximum) level, with 100% of the target amount payable if the overall achievement level is 100%.
|
(2)
|
Represents PBAs under the 2014 Stock Incentive Plan that will vest upon the attainment of performance goals over a three fiscal year performance cycle ending December 31,
2020
as described under “Compensation Discussion and Analysis” above. Upon vesting, the performance shares will be settled in shares of common stock. The performance goals are based on threshold, target and maximum levels of net sales CAGR and EBITDA margin. Payout of shares will be based on a sliding scale from 50% at the threshold to 150% at the maximum. The target amounts will be issuable if the overall achievement level is 100%.
|
(3)
|
Reflects RSU awards granted under the 2014 Stock Incentive Plan that vest on March 31, 2021, approximately three years following the grant date.
|
(4)
|
Reflects RSU awards granted under the 2014 Stock Incentive Plan that vest on May 31, 2019.
|
(5)
|
See Notes 2 and 14 to our audited financial statements included in our
2018
Form 10-K for information on the valuation assumptions and other related information.
|
(6)
|
Mr. Vanderstelt's employment terminated on July 13, 2018, at which time all awards shown in the table were canceled.
|
|
|
Option Awards
|
|
Stock Awards
|
|
|||||||||||||||||||||||
Name
|
|
Number of sec-urities under-lying
unexer-cised options: exercis-able (#) |
|
Number of sec-urities
under-lying unexer-cised options: unexer-cisable (#) |
|
Option
exercise price ($/Sh) |
|
Option
expiration date |
|
Number
of units of stock that have not vested (#) |
|
Market
value of units of stock that have not vested ($) |
|
Equity
incentive plan awards: number of unearned shares that have not vested (#) |
|
Equity
incentive plan awards: market or payout value of unearned shares that have not vested ($) |
|
|||||||||||
Andrew J. Thomas
|
|
5,215
|
|
|
—
|
|
|
$
|
9.35
|
|
|
6/1/2021
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
11,110
|
|
|
—
|
|
|
7.63
|
|
|
5/14/2022
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
11,757
|
|
|
—
|
|
|
7.54
|
|
|
5/22/2023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
14,543
|
|
|
3,636
|
|
|
10.70
|
|
|
5/20/2024
|
|
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
11,535
|
|
|
3,845
|
|
|
13.10
|
|
|
3/13/2025
|
|
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,428
|
|
(3)
|
506,975
|
|
(10)
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,675
|
|
(4)
|
195,689
|
|
(10)
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,444
|
|
(5)
|
163,764
|
|
(10)
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,127
|
|
(6)
|
245,087
|
|
(10)
|
—
|
|
|
—
|
|
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,559
|
|
(7)
|
122,479
|
|
(10)
|
—
|
|
|
—
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
7,808
|
|
(8)
|
111,732
|
|
(10)
|
—
|
|
|
—
|
|
|
|||||||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,393
|
|
(9)
|
62,864
|
|
(10)
|
—
|
|
|
—
|
|
|
|||
Joseph K. Vanderstelt
(11)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
J. Scott Mennen
|
|
3,710
|
|
|
—
|
|
|
7.54
|
|
|
5/22/2023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
7,000
|
|
|
—
|
|
|
9.41
|
|
|
7/19/2023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
3,636
|
|
|
909
|
|
|
10.70
|
|
|
5/20/2024
|
|
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
3,237
|
|
|
1,079
|
|
|
13.10
|
|
|
3/13/2025
|
|
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,290
|
|
(3)
|
147,250
|
|
(10)
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,972
|
|
(4)
|
56,839
|
|
(10)
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,259
|
|
(5)
|
46,636
|
|
(10)
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,974
|
|
(7)
|
71,178
|
|
(10)
|
—
|
|
|
—
|
|
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,486
|
|
(8)
|
35,575
|
|
(10)
|
—
|
|
|
—
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
2,224
|
|
(9)
|
31,825
|
|
(10)
|
—
|
|
|
—
|
|
|
|||||||
Kenneth C. Kunze
|
|
7,000
|
|
|
—
|
|
|
15.27
|
|
|
11/4/2023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
4,145
|
|
|
1,036
|
|
|
10.70
|
|
|
5/20/2024
|
|
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
3,447
|
|
|
1,149
|
|
|
13.10
|
|
|
3/13/2025
|
|
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,330
|
|
(3)
|
147,822
|
|
(10)
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,987
|
|
(4)
|
57,054
|
|
(10)
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,272
|
|
(5)
|
46,822
|
|
(10)
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,994
|
|
(6)
|
71,464
|
|
(10)
|
—
|
|
|
—
|
|
|
|||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,496
|
|
(7)
|
35,718
|
|
(10)
|
—
|
|
|
—
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
2,232
|
|
(8)
|
31,940
|
|
(10)
|
—
|
|
|
—
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
||||||||||||||||||||
Name
|
|
Number of sec-urities under-lying
unexer-cised options: exercis-able (#) |
|
Number of sec-urities
under-lying unexer-cised options: unexer-cisable (#) |
|
Option
exercise price ($/Sh) |
|
Option
expiration date |
|
Number
of units of stock that have not vested (#) |
|
Market
value of units of stock that have not vested ($) |
|
Equity
incentive plan awards: number of unearned shares that have not vested (#) |
|
Equity
incentive plan awards: market or payout value of unearned shares that have not vested ($) |
|
||||||||
Derek Y. Hahm
|
|
4,640
|
|
|
—
|
|
|
7.63
|
|
|
5/14/2022
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
5,232
|
|
|
|
|
7.54
|
|
|
5/22/2023
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
3,462
|
|
|
865
|
|
|
10.70
|
|
|
5/20/2024
|
|
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
2,927
|
|
|
975
|
|
|
13.10
|
|
|
3/13/2025
|
|
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,786
|
|
(3)
|
140,038
|
|
(10)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,349
|
|
(4)
|
47,924
|
|
(10)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,748
|
|
(5)
|
39,324
|
|
(10)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,194
|
|
(6)
|
60,016
|
|
(10)
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,096
|
|
(7)
|
29,994
|
|
(10)
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
1,875
|
|
(8)
|
26,831
|
|
(10)
|
—
|
|
|
—
|
|
|
||||
Edwin A Smith
|
|
2,272
|
|
|
757
|
|
|
10.40
|
|
|
7/29/2025
|
|
(12)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
2,400
|
|
|
2,400
|
|
|
7.69
|
|
|
5/18/2026
|
(13)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,253
|
|
(8)
|
17,930
|
|
(10)
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
500
|
|
(14)
|
7,155
|
|
(10)
|
|
|
|
|
(1)
|
The unvested options vest on May 20, 2019.
|
(2)
|
The unvested options vest on March 13, 2019.
|
(3)
|
Vesting of this award was contingent upon meeting company-wide performance goals over a three-year period ended December 31, 2018. In February 2019, the Compensation Committee determined that the performance goals were not met and, accordingly, these shares did not vest.
|
(4)
|
Vesting of this award is contingent upon meeting company-wide performance goals at the threshold level. The performance goals are tied to target amounts of adjusted EBITDA margin and net sales CAGR for the three fiscal years ending December 31, 2019. The awards earned will range from 50% at the threshold level to 150% at the maximum level of the target number of performance shares and will be payable no later than April 30, 2020.
|
(5)
|
Vesting of this award is contingent upon meeting company-wide performance goals at the threshold level. The performance goals are tied to target amounts of adjusted EBITDA margin and net sales CAGR for the three fiscal years ending December 31, 2020. The awards earned will range from 50% at the threshold level to 150% at the maximum level of the target number of performance shares and will be payable no later than April 30, 2021.
|
(6)
|
Vesting of the RSUs was contingent on continued employment through March 31, 2019.
|
(7)
|
Vesting of the RSUs is contingent on continued employment through March 31, 2020.
|
(8)
|
Vesting of the RSUs is contingent on continued employment through March 31, 2021.
|
(9)
|
Vesting of RSUs will occur in three installments on December 31, 2018, 2019 and 2020, per a vesting schedule, subject to continued employment through that date.
|
(10)
|
Based on the closing price of our common stock on
December 31, 2018
of
$14.31
per share.
|
(11)
|
Mr. Vanderstelt's employment terminated on July 13, 2018, at which time all outstanding awards terminated other than vested stock options, which were exercised or terminated no later than 90 days thereafter.
|
(12)
|
The unvested options vest on July 29, 2019.
|
(13)
|
The unvested options vest in two equal installments on May 18, 2019 and 2020.
|
(14)
|
Vesting of the RSUs is contingent on continued employment through May 31, 2019.
|
|
|
Option Awards
|
|
RSU Awards
|
||||||||||
Name
|
|
Number of shares acquired on exercise (#)
|
|
Value realized on exercise ($)
|
|
Number of shares acquired on vesting (#)
|
|
Value realized on vesting ($)
|
||||||
Andrew J. Thomas
|
|
—
|
|
|
$
|
—
|
|
|
879
|
|
|
$
|
12,578
|
|
Joseph K. Vanderstelt
|
|
5,115
|
|
|
27,647
|
|
|
—
|
|
|
—
|
|
||
Edwin A. Smith
|
|
—
|
|
|
—
|
|
|
33
|
|
|
647
|
|
•
|
On March 31, 2020, a cash payment equal to 20% of the total STI Plan award paid for services in 2019, but not less than 12% or more than 20% of his 2019 STI target award.
|
•
|
On March 31, 2021, a cash payment equal to 30% of the total STI Plan award paid for services in 2020, but not less than 18% or more than 30% of his 2020 STI target award.
|
•
|
On March 31, 2022, a cash payment equal to 50% of the total STI Plan award paid for services in 2021, but not less than 30% or more than 50% of his 2021 STI target award.
|
Name |
|
Cash
severance based on salary |
|
Continuation
of health benefits (1) |
|
Total
severance benefits |
||||||
Andrew J. Thomas
|
|
$
|
475,000
|
|
|
$
|
13,491
|
|
|
$
|
488,491
|
|
Joseph Vanderstelt
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
J. Scott Mennen
|
|
270,530
|
|
|
13,491
|
|
|
284,021
|
|
|||
Kenneth C. Kunze
|
|
271,600
|
|
|
18,257
|
|
|
289,857
|
|
|||
Derek Y. Hahm
|
|
228,100
|
|
|
18,257
|
|
|
246,357
|
|
|||
Edwin A. Smith
|
|
76,220
|
|
|
9,128
|
|
|
85,348
|
|
(1)
|
Based on COBRA premium rates in effect as of January 1,
2019
.
|
(2)
|
Mr. Vanderstelt's employment terminated on July 13, 2018.
|
Name |
|
Cash
severance based on salary |
|
Cash
severance equal to target annual cash bonus |
|
Acceleration of vesting of options and RSUs
(3)
|
|
Vesting of PBAs at the minimum level (33%)
(4)
|
|
Continuation
of health benefits (1) |
|
Total
severance benefits |
|
||||||||||||
Andrew J. Thomas
|
|
$
|
950,000
|
|
|
$
|
356,250
|
|
|
$
|
559,940
|
|
|
$
|
288,809
|
|
|
$
|
26,982
|
|
|
$
|
2,181,981
|
|
(5)
|
Joesph Vanderstelt
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
J. Scott Mennen
|
|
405,795
|
|
|
175,845
|
|
|
138,578
|
|
|
83,575
|
|
|
20,236
|
|
|
824,029
|
|
(5)
|
||||||
Kenneth C. Kunze
|
|
407,400
|
|
|
176,540
|
|
|
—
|
|
|
—
|
|
|
27,385
|
|
|
611,325
|
|
|
||||||
Derek Y. Hahm
|
|
342,150
|
|
|
228,100
|
|
|
—
|
|
|
—
|
|
|
27,385
|
|
|
597,635
|
|
|
||||||
Edwin A Smith
|
|
152,440
|
|
|
38,110
|
|
|
—
|
|
|
—
|
|
|
18,257
|
|
|
208,807
|
|
|
(1)
|
Based on COBRA premium rates in effect as of January 1,
2019
.
|
(2)
|
Mr. Vanderstelt's employment terminated on July 13, 2018.
|
(3)
|
Reflects acceleration of vesting under employment agreements effective January 1, 2019, based on the market value of unvested RSUs plus the difference (the “spread”) between the closing sale price of our common stock on December 31, 2018, of $14.31 per share and the per share exercise price for unvested options. See “Outstanding Equity Awards at Year End 2018” above for additional information.
|
(4)
|
Reflects acceleration of vesting under employment agreements effective January 1, 2019; equals one-third of the market value of unvested PBAs on December 31, 2018. See “Outstanding Equity Awards at Year End 2018” above for additional information.
|
(5)
|
Subject to reduction to the extent necessary to avoid imposition of the excise tax imposed under Code Section 4999 on excess parachute payments as defined in Code Section 280G.
|
|
|
Year Ended December 31, 2018
|
||
Gross sales to A-B and Ambev
|
|
$
|
166,534
|
|
International distribution fee earned from ABWI
|
|
3,400
|
|
|
International distribution fee from ABWI, recorded as deferred revenue in Other accrued expenses
|
|
5,985
|
|
|
Margin fee paid to A-B, classified as a reduction of Sales
|
|
2,296
|
|
|
Inventory management and other fees paid to A-B, classified in Cost of sales
|
|
383
|
|
|
Media reimbursement from A-B, classified as a reduction of Selling, general and administrative expenses
|
|
500
|
|
|
|
2018
|
|
2017
|
||||
Audit Fees
(1)
|
|
$
|
502,328
|
|
|
$
|
424,275
|
|
Audit Related Fees
|
|
—
|
|
|
—
|
|
||
Tax Fees
(2)
|
|
16,400
|
|
|
43,905
|
|
||
All Other Fees
|
|
—
|
|
|
—
|
|
||
|
|
$
|
518,728
|
|
|
$
|
468,180
|
|
(1)
|
Audit fees generally include the audit of our annual financial statements, the review and certification of our compliance with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002, reviews of the financial statements included in our Quarterly Reports on Form 10-Q and review of our periodic reports filed with the SEC. Included in the 2017 amount are fees totaling $29,570 for the review of our Registration Statement on Form S-3 and correspondence with the SEC concerning accounting issues. The amount shown for 2018 includes an estimated final billing of $50,000.
|
(2)
|
Tax fees related to routine tax advice concerning federal, state, local and foreign tax matters.
|
•
|
Audit services.
Audit services include work performed for the audit of our financial statements and the review of financial statements included in our quarterly reports, as well as work that is normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings.
|
•
|
Audit related services.
Audit related services are for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not covered above under “audit services.”
|
•
|
Tax services.
Tax services include all services performed by the independent registered public accounting firm’s tax personnel for tax compliance, tax advice and tax planning.
|
•
|
Other services.
Other services are those services not described in the other categories.
|
•
|
our executive compensation program is weighted more toward incentive compensation than fixed elements such as salary; and
|
•
|
a significant portion of executive compensation is in the form of equity grants, with 70% in performance shares with a three-year performance cycle, and 30% in restricted stock units that vest in full approximately three years following the date of grant, as long as the officer continues to be employed by us, thus aligning the interests of our senior management with the long-term interests of our shareholders.
|
|
CRAFT BREW ALLIANCE, INC.
|
|
|
|
|
|
|
/s/ David R. Lord
|
|
|
David R. Lord
|
|
|
Chairman of the Board
|
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