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INFORMATION REQUIRED IN PROXY
STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities
Filed by a Party other than the Registrant
o
Check the appropriate box:
o
Preliminary
Proxy Statement
x
Definitive
Proxy Statement
o
Definitive
Additional Materials
o
Soliciting
Material under Rule 14a-12
Brown-Forman Corporation
Payment of Filing Fee (Check the appropriate box):
| x | No fee required. |
| o | 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: |
| (2) | Aggregate number of securities to which transaction applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of transaction: |
| (5) | Total fee paid: |
| o | Fee paid previously with preliminary materials. |
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| (1) | Amount Previously Paid: |
| (2) | Form, Schedule or Registration Statement No.: |
| (3) | Filing Party: |
| (4) | Date Filed: |
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December 5, 2003
Dear Stockholder:
I am pleased to announce that on November 20, 2003, your Board of Directors authorized a 2-for-1 stock split for all shares of Class A and Class B Common Stock. The stock split will be paid out as a stock dividend and will result in the Company issuing one additional share of stock for each share of stock outstanding.
In order to accomplish this stock split, it is necessary for the stockholders to approve an amendment of the Company’s Restated Certificate of Incorporation to permit the issuance of additional shares. We must receive the approval of more than 50% of the outstanding shares of each class of stock to do this.
The Board of Directors recommends that you consent to the proposed amendment. You can do this by checking the “for” box on the enclosed consent form, signing your name as it appears on the address to you, dating it, and returning it to us in the enclosed envelope.
The stock split will not alter your proportional ownership interest in Brown-Forman. Rather, your ownership interest will be represented by twice the number of shares you now hold. Where an amount of stock issuable as a result of the stock split is less than one share, fractional shares will be issued.
The Board of Directors believes that increasing the number of outstanding common shares will reduce the per share price to levels more convenient and attractive to more investors, thereby potentially facilitating a wider dissemination and improved marketability of the Common Stock.
The proposed amendment is being submitted to stockholders of record as of the close of business on November 28, 2003, and if approved, is expected to be effective on or about January 8, 2004. Please review the enclosed Proxy Statement and vote by completing the enclosed consent card and returning it to the Company in the enclosed postage prepaid envelope at your earliest convenience.
Questions regarding the proposed amendment or your completion of the consent card may be directed to the Company’s Stockholder Relations Department at (502) 774-7690.
| Sincerely, | ||||
|
||||
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PROXY STATEMENT
CONSENT OF STOCKHOLDERS IN LIEU OF MEETING
December 5, 2003
To the Holders of Common Stock of Brown-Forman Corporation (the “Company”):
On November 20, 2003, the Company’s Board of Directors (“we”) authorized
a 2-for-l stock split (the “Stock Split”) for all shares of Class A and Class
B Common Stock. The Stock Split will be paid out as a stock dividend and will
result in the Company’s issuing one additional share of stock for each share
of stock already outstanding. Currently, the Company does not have enough
authorized shares of either class of stock to effect the Stock Split and
approval of the stockholders (“you”) is necessary for any increase in the
number of authorized shares. The Stock Split will not take place without an
increase in the number of authorized shares.
Therefore, the Company’s Board of Directors is soliciting your written
consent to amend the Company’s Restated Certificate of Incorporation (the
“proposed action” or “Amendment”). The Amendment, if approved, will:
If approved, the proposed action will amend the first paragraph of Article
Fourth of the Company’s Restated Certificate of Incorporation to read as set
forth in the attached Appendix A.
SHAREHOLDER CONSENT REQUESTED
We seek your consent to the creation of more of the Company’s Class A and
Class B Common Stock in order to have sufficient authorized shares to carry
out the Stock Split. A majority of the Company’s outstanding Class A and a
majority of the Company’s outstanding Class B shares must be voted in favor of
the proposed action in order to effect the Stock Split.
The Company’s outstanding Common Stock on November 28, 2003
consisted of 28,420,496 shares of Class A Common Stock and 32,258,226 shares of
Class B Common Stock. If you were a Class A or Class B stockholder of record as
of November 28, 2003, you are entitled to vote on the proposed action. If you
consent to the proposed action, and later change
your mind, you may revoke your consent at any time before the Company
announces it has received sufficient votes to adopt the amendment.
Unless marked to the contrary, the consents received will be deemed to be
IN FAVOR of the Amendment. If you mark “abstain,” or do not return your
consent, it will have the same effect as voting against the proposed action.
The Company will bear the cost of soliciting consents. Solicitations
other than by mail may be made by telephone or in person by Company employees,
for which the expense will be nominal.
Upon receiving stockholder approval, the Amendment will become effective
upon filing of a Certificate of Amendment of the Restated Certificate of
Incorporation with the Delaware Secretary of State. Assuming such approval, the
Stock Split also becomes effective as of the close of business on the date the
Certificate of Amendment is filed (the “Effective Date”). We currently expect
this to be on or about January 8, 2004. Upon the filing of the Certificate of
Amendment, all stockholders of the Company will be bound by the Amendment,
whether or not they have consented to it.
TAX AND OTHER CONSEQUENCES
In the opinion of the Company’s counsel, Ogden Newell & Welch PLLC,
neither the Amendment nor the Stock Split will result in any gain or loss to
the stockholders or the Company for federal income tax purposes. The tax basis
of each share held before the Stock Split will be allocated pro-rata among the
two shares held as a result of the split, and the holding period of the new
shares will include the holding period of the shares with respect to which
they were issued.
It should be noted that on sales and purchases of the new Common Stock
that would result from the Stock Split, assuming a transaction involving
equivalent market value, the increased number of shares may result in
brokerage charges and any stock transfer taxes being somewhat higher than on
sales and purchases of the present Common Stock.
IMPLEMENTATION OF THE STOCK SPLIT
The Stock Split will be in the form of a stock dividend, meaning that the
shares distributed to give effect to the split will be paid from the Company’s
authorized but unissued shares, including the newly authorized shares created
as a result of the Amendment. Upon issuance of the new shares, the Company
will transfer approximately $9.4 million from its retained earnings account to
its stated capital account. This transfer represents the $.15 par value per
share of the additional shares issued in the Stock Split.
Following the Amendment and Stock Split, there would remain available as
authorized but unissued stock approximately 159,000 shares of Class A Common
Stock and 30.9 million shares of Class B Common Stock. The increase in the
number of authorized shares not required to give effect to the Stock Split is
proposed by the Board so that additional shares will be
2
available for issuance for various corporate purposes. Except for the Stock
Split, the Board of Directors does not have any plans for issuing the
additional authorized Common Stock. The additional authorized Common Stock,
however, would provide flexibility for future potential financings,
acquisitions and other appropriate corporate transactions. The Board can issue
shares of authorized Common Stock without further stockholder approval unless
such approval is required by applicable law or stock exchange requirements.
The subsequent issuance of additional Common Stock, if it occurred, could
result in dilution of the net income per share and net book value per share of
the Common Stock and the dilution of the voting rights of the Common Stock.
The Company does not believe that an increase in the number of authorized
shares of Common Stock will have any anti-takeover effect because the number of
authorized but unissued Class A shares remaining after the Stock Split is not
material.
Upon the effectiveness of the Stock Split, you will receive one
additional share of Common Stock for each share you own. Where an amount of
stock issuable as a result of the Stock Split is less than one share,
fractional shares will be issued. Certificates representing your additional
shares (or confirmation statements in the case of uncertificated shares) will
be mailed as soon as practicable following the Effective Date. The split
shares would have the same rights as the issued shares now have. The Amendment
and Stock Split would not alter any stockholder’s proportionate ownership
interest in the Company. Rather, each stockholder’s investment in the Company
will be represented by a proportionally greater number of shares than at
present.
3
STOCK OWNERSHIP
VOTING STOCK OWNED BY “BENEFICIAL OWNERS.”
This table shows each
“beneficial owner” of more than 5% of our Class A Common Stock, our only class
of voting stock, as of November 20, 2003. The Securities and Exchange
Commission defines “beneficial ownership” to include shares over which a
person has sole or shared voting or investment power, as well as all shares
underlying options that are exercisable within sixty days. Under this
definition, “beneficial owners” may or may not receive any economic benefit
(such as receiving either dividends or sale proceeds) from the shares
attributed to them.
Using this definition, some shares shown below are owned
by more than one person.
Some “beneficial owners” share voting and investment
powers as members of advisory committees of certain trusts of which corporate
fiduciaries are the trustees. Counting each share only once, the aggregate
number of shares of Class A Common Stock beneficially owned by the people in
this table is 20,898,714 shares, or 73.5% of the outstanding shares of that
class.
4
OPINION OF THE BOARD OF DIRECTORS
The Company’s Board of Directors believes that the Stock Split would
be advantageous to the Company and its stockholders because the increased
number of shares of Common Stock outstanding would reduce the per share
price to levels more convenient and attractive to more
5
investors, thereby potentially facilitating a wider distribution and improved
marketability of the Common Stock.
We therefore recommend that you approve the
proposed action.
Financial statements are not deemed material for the exercise of prudent
judgment in regard to the proposed action and therefore are not included in
this Proxy Statement.
*
increase the number of authorized shares of $.15 par value
Class A Common Stock to 57,000,000 from 30,000,000; and
*
increase the number of authorized shares of $.15 par value
Class B Common Stock to 100,000,000 from 60,000,000.
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Amount and Nature of "Beneficial Ownership"
Sole Voting and
Total Sole and Shared
Investment
Shared Voting and
Voting and Investment
Percent of
Name and Address Power
Power
Investment Power
Power
Class
728,207
13,194,649
13,922,856
49.0
%
580,225
11,720,978
12,301,203
43.3
%
1,000
9,604,864
9,605,864
33.8
%
350,277
5,437,385
5,787,662
20.4
%
979,149
3,337,283
4,316,432
15.2
%
252,963
2,793,783
3,046,746
10.7
%
6,728
2,116,314
2,123,042
7.5
%
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STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
. The following table
shows “beneficial ownership” as of November 20, 2003, by each director, by
each Named Executive Officer (defined as those Executive Officers shown on
the Summary Compensation Table included in the Company’s Proxy Statement
dated June 30, 2003), and by all directors and executive officers as a
group, of our Class A and Class B Common Stock.
Class A Common Stock
Class B Common Stock
Voting & Investment
Sole & Shared Voting
Sole & Shared
Power
& Investment Power
Investment Power
Investment Power
Name
Sole
Shared
Total
% of Class
Sole
Shared
Total
% of Class
979,149
3,337,283
4,316,432
15.2
%
17,132
4,596,137
4,613,269
14.3
%
100
0
100
*
16,919
0
16,919
*
62,309
1,310,594
1,372,903
4.8
%
16,220
12,076
28,296
*
350,277
5,437,385
5,787,662
20.4
%
150,839
4,639,725
4,790,564
14.9
%
6,000
6,000
12,000
*
8,528
0
8,528
*
7,663
0
7,663
*
19,577
0
19,577
*
580,225
11,720,978
12,301,203
43.3
%
57,314
7,680,994
7,738,308
24.0
%
0
0
0
*
9,847
0
9,847
*
3,000
0
3,000
*
11,528
0
11,528
*
0
0
0
*
10,098
500
1
10,598
*
3,700
0
3,700
*
7,017
0
7,017
*
560,549
0
560,549
2.0
%
69,636
0
69,636
*
1,000
9,604,864
9,605,864
33.8
%
12,663
7,680,994
7,693,657
23.9
%
74
0
74
*
8,893
0
8,893
*
0
0
0
*
0
0
0
*
as a Group
4
2,554,117
17,181,176
19,735,293
69.4
%
461,750
12,333,295
12,795,045
39.7
%
*
Less than 1%.
1
Owned by The O’Neil Foundation, of which Mr. O’Neil is President.
Mr. O’Neil disclaims beneficial ownership of these shares.
2
Mr. Street was formerly a Named Executive Officer due to his position as President of the Company. On
October 1, 2003, he resigned from this position, but continues to serve on
the Board of Directors.
3
Mr. Varga was elected to the Board of Directors effective October 1,2003.
4
In computing the aggregate number of shares and percentages owned
by all directors and executive officers as a group, we counted each
share only once.
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STOCKHOLDER PROPOSALS
The Company must receive proposals from stockholders by March 2, 2004 for inclusion in the proxy materials relating to the 2004 Annual Meeting of Stockholders.
| By Order of the Board of Directors | ||
|
MICHAEL B. CRUTCHER
Secretary |
||
|
Louisville, Kentucky
December 5, 2003 |
||
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APPENDIX A
The Amendment would be as follows:
The first paragraph of Article Fourth of the Corporation’s Restated Certificate of Incorporation is amended to read in its entirety as follows:
| FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue is One Hundred Fifty-Seven Million (157,000,000) shares, divided into (a) Fifty-Seven Million (57,000,000) shares of Class A Common Stock of the par value of Fifteen Cents (15¢) each; and (b) One Hundred Million (100,000,000) shares of Class B Common Stock of the par value of Fifteen Cents (15¢) each. |
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Consent
This consent is solicited on behalf of the Board of Directors of Brown-Forman Corporation. The Board of Directors recommends consenting to the proposal. The undersigned, a holder of Class A Common Stock of Brown-Forman Corporation, does hereby consent by checking the square after the word “FOR,” or does not consent by checking the square after the word “AGAINST,” or abstains from consenting by checking the square after the word “ABSTAIN,” to the proposed action, which would amend the Restated Certificate of Incorporation.
This consent will be deemed FOR the amendment
if not otherwise indicated.
AGAINST
o
ABSTAIN
o
PROPOSAL:
To
amend Article Fourth of the Restated Certificate of
Incorporation of Brown-Forman Corporation as set forth in the
Proxy Statement dated December 5, 2003 to increase the
authorized number of shares of (a) Class A Common
Stock to 57,000,000 and (b) Class B Common Stock to
100,000,000.
Please sign and date on reverse side and return promptly.
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(Continued from other side)
Each consent must be signed and dated. Please sign exactly as addressed to you.
| Dated: _____________________ , 200______ | |
|
|
|
| Signature(s) | |
|
|
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Consent
This consent is solicited on behalf of the Board of Directors of Brown-Forman Corporation. The Board of Directors recommends consenting to the proposal. The undersigned, a holder of Class B Common Stock of Brown-Forman Corporation, does hereby consent by checking the square after the word “FOR,” or does not consent by checking the square after the word “AGAINST,” or abstains from consenting by checking the square after the word “ABSTAIN,” to the proposed action, which would amend the Restated Certificate of Incorporation.
This consent will be deemed FOR the amendment if not otherwise indicated.
|
FOR
o
|
AGAINST o | ABSTAIN o | PROPOSAL: To amend Article Fourth of the Restated Certificate of Incorporation of Brown-Forman Corporation as set forth in the Proxy Statement dated December 5, 2003 to increase the authorized number of shares of (a) Class A Common Stock to 57,000,000 and (b) Class B Common Stock to 100,000,000. |
Please sign and date on reverse side and return promptly.
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(Continued from other side)
Each consent must be signed and dated. Please sign exactly as addressed to you.
| Dated: ______________________ , 200____ | |
|
|
|
| Signature(s) | |
|
|