Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers; Compensatory Arrangements of Certain
Officers.
On October 7, 2020, the Company's Board of Directors, acting in accordance with
its authority under the Company's By-Laws, appointed Michael M. Lynton and
Samuel A. Calagione, III to serve as Class B Directors of the Company, effective
immediately. At the same time, at the recommendation of the
Nominating/Governance Committee, the Board of Directors appointed Mr. Lynton to
serve on the Nominating/Governance Committee and to replace Meghan V. Joyce on
the Compensation Committee.
Mr. Lynton's appointment fills the vacancy created by the resignation of former
Class B Director David P. Fialkow. Mr. Lynton's term expires as of the next
Annual Meeting of Stockholders or until his successor is duly elected and
qualified. The Company anticipates that Mr. Lynton will be a candidate for
reelection as a Class B Director at the next Annual Meeting of Stockholders in
2021.
Mr. Lynton's compensation for services as a Director will be consistent with
that of the Company's other non-employee Directors, as described in the
Company's Definitive Proxy Statement on Schedule 14A with respect to its 2020
Annual Meeting of Stockholders, filed with the Securities and Exchange
Commission on April 3, 2020. There are no other arrangements or understandings
between Mr. Lynton and any other person pursuant to which he was elected as a
director, and Mr. Lynton is not a party to any transaction with the Company that
would require disclosure under Item 404(a) of Regulation S-K. Mr. Lynton is
independent as provided in the New York Stock Exchange and Securities and
Exchange Commission director independence standards.
As previously reported, as part of the merger with Dogfish Head Brewery, the
Company agreed to elect Mr. Calagione, Dogfish Head's Founder, to the Board of
Directors at the 2020 Annual Meeting of Stockholders. As noted in the Company's
Current Report on Form 8-K filed on April 1, 2020, on the recommendation of the
Nominating/Governance Committee, the Board approved increasing the size of the
Board to nine to accommodate the election of Mr. Fialkow's successor and then of
Mr. Calagione. On April 1, 2020, Mr. Calagione and the Company agreed to defer
his election until the Company completed its search for another independent
Director to fill the vacancy left by Mr. Fialkow, thereby maintaining the
Company's compliance with the New York Stock Exchange majority-independent Board
composition requirement. The Company anticipates that Mr. Calagione will be a
candidate for reelection as a Class B Director at the next Annual Meeting of
Stockholders in 2021. There are no other arrangements or understandings between
Mr. Calagione and any other person pursuant to which he was elected as a
Director.
As a full-time employee of the Company, Mr. Calagione will not be compensated
for his services as a Director, consistent with the Company's other employee
Directors. His Employment Agreement dated July 3, 2019, was attached as Exhibit
10.3 to the Company's Current Report on Form 10-Q filed on July 25, 2019. Other
than as previously reported under the heading "Board Review of Related Party
Transactions" on page 22 of the Company's Definitive Proxy Statement on Schedule
14A with respect to its 2020 Annual Meeting of Stockholders, Mr. Calagione is
not a party to any transaction with the Company that would require disclosure
under Item 404(a) of Regulation S-K. As an update to those disclosures, his 2020
base salary is $440,274, and he has not received any bonus or equity awards in
2020. Mr. Calagione's wife, Mariah Calagione, is a coworker and at-will employee
at Boston Beer with the title of Founder and Communitarian. Her 2020 base salary
is $213,725. She has not received any bonus or equity awards in 2020. Mr. and
Ms. Calagione own Red Wagon LLC, which is the owner of the land on which two
Company-owned retail establishments in Delaware, Chesapeake & Maine and Brewing
& Eats, are located. The Company is party to two leases with Red Wagon LLC for
these premises. Both leases, as amended, commenced on July 1, 2019 with an
expiration date of June 30, 2029, terminable by the Company at any time, and
renewable for three (3) consecutive, five (5)-year terms on 180 days' notice.
The combined monthly rent for the two leases is $29,043. The total amount paid
by the Company to Red Wagon LLC from January 1, 2020 through October 7, 2020 is
$270,741. As a full-time employee, Mr. Calagione is not independent as provided
in the New York Stock Exchange and Securities and Exchange Commission director
independence standards, and therefore is not eligible to serve on the standing
committees of the Company's Board of Directors.
The Company issued a press release regarding Mr. Lynton's and Mr. Calagione's
appointments, a copy of which is attached hereto as Exhibit 99.1 and is
incorporated by reference herein.
Statements and Exhibits.
(d) Exhibits.
1
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Exhibit
Number Description
99.1 Press Release of The Boston Beer Company, Inc. dated October 7, 2020 .
104 Cover Page Interactive Data File (embedded within Inline XBRL document).
2
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