SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-K/A
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2002
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM TO
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COMMISSION FILE NUMBER 1-7823
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ANHEUSER-BUSCH COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 43-1162835
(State or Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification No.)
ONE BUSCH PLACE
ST. LOUIS, MISSOURI 63118
(Address of Principal Executive Offices)
REGISTRANT'S PHONE NUMBER, INCLUDING AREA CODE: 314-577-2000
--------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
-------------------------------
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
COMMON STOCK--$1 PAR VALUE NEW YORK STOCK EXCHANGE
PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
6 1/2% SINKING FUND DEBENTURES, DUE JANUARY 1, 2028 NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2): Yes X No
----- -----
As of June 28, 2002, the aggregate market value of the voting stock
held by non-affiliate was $43,106,017,200.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest practicable date.
$1 PAR VALUE COMMON STOCK 836,078,250 SHARES AS OF MARCH 11, 2003
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Annual Report to Shareholders for the Year ended
December 31, 2002. . . . . . . . . . . . . . . .PART I, PART II, AND PART IV
Portions of Definitive Proxy Statement for Annual Meeting of
Shareholders on April 23, 2003. . . . . . . . . . . PART III and PART IV
Item 15 on pages 11 through 13 of the Annual Report on Form 10-K for the
fiscal year ended December 31, 2002 is amended by the addition of the
following exhibits:
Exhibit 23.1 Consent of Independent Accountants
Exhibit 24.1 Power of Attorney
Exhibit 24.2 Resolution authorizing signature by certain officers of the
Company
Exhibit 99.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Exhibit 99.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Exhibit 99.3 Financial Statements of the Anheuser-Busch Global Employee
Stock Purchase Plan for the years ended March 31, 2003 and 2002.
This Form 10-K/A is filed pursuant to Rule 15d-21 promulgated under the
Securities Exchange Act of 1934, as amended, and is submitted in order to
file with the Securities and Exchange Commission the financial statements of
the Anheuser-Busch Global Employee Stock Purchase Plan, an employee benefit
plan. This Form 10-K/A does not contain any financial statements or
financial information of Anheuser-Busch Companies, Inc. Accordingly, the
certifications made below and in exhibits 99.1 and 99.2 concerning the
absence of misstatements and omissions in the report and the fair
presentation by the financial statements included in the report apply to the
employee benefit plan and not to Anheuser-Busch Companies, Inc.
2
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
amendment to this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ANHEUSER-BUSCH COMPANIES, INC.
(Registrant)
By: /s/ JoBeth G. Brown
------------------------------
JoBeth G. Brown
(Vice President and Secretary)
Date: July 28, 2003
Pursuant to the requirements of the Securities Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
Title Date
PATRICK T. STOKES * Chief Executive Officer July 28, 2003
--------------------------- and President and
Patrick T. Stokes Director (Principal
Executive Officer)
W. RANDOLPH BAKER * Vice President and July 28, 2003
--------------------------- Chief Financial Officer
W. Randolph Baker (Principal Financial Officer)
JOHN F. KELLY * Vice President and July 28, 2003
--------------------------- Controller (Principal
John F. Kelly Accounting Officer)
AUGUST A. BUSCH III * Director July 28, 2003
---------------------------
August A. Busch III
CARLOS FERNANDEZ G. * Director July 28, 2003
---------------------------
Carlos Fernandez G.
Director
---------------------------
James J. Forese
JOHN E. JACOB * Director July 28, 2003
---------------------------
John E. Jacob
3
JAMES R. JONES * Director July 28, 2003
---------------------------
James R. Jones
CHARLES F. KNIGHT * Director July 28, 2003
---------------------------
Charles F. Knight
VERNON R. LOUCKS, JR. * Director July 28, 2003
---------------------------
Vernon R. Loucks, Jr.
VILMA S. MARTINEZ * Director July 28, 2003
---------------------------
Vilma S. Martinez
WILLIAM PORTER PAYNE * Director July 28, 2003
---------------------------
William Porter Payne
JOYCE M. ROCHE * Director July 28, 2003
---------------------------
Joyce M. Roche
HENRY HUGH SHELTON * Director July 28, 2003
---------------------------
Henry Hugh Shelton
ANDREW C. TAYLOR * Director July 28, 2003
---------------------------
Andrew C. Taylor
DOUGLAS A. WARNER III * Director July 28, 2003
---------------------------
Douglas A. Warner III
EDWARD E. WHITACRE, JR. * Director July 28, 2003
---------------------------
Edward E. Whitacre, Jr.
*By /s/ JoBeth G. Brown Attorney-in-Fact
------------------------
JoBeth G. Brown
4
CERTIFICATIONS
I, Patrick T. Stokes, certify that:
1) I have reviewed this annual report on Form 10-K of Anheuser-Busch
Companies, Inc.;
2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3) Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4) The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5) The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent function);
a) all significant deficiencies in the design or operations of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6) The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: July 22, 2003 /s/ Patrick T. Stokes
----------------------------
Patrick T. Stokes
President and Chief
Executive Officer
Anheuser-Busch Companies, Inc.
5
CERTIFICATIONS
I, W. Randolph Baker, certify that:
1) I have reviewed this annual report on Form 10-K of Anheuser-Busch
Companies, Inc.;
2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3) Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4) The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5) The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing
the equivalent function);
a) all significant deficiencies in the design or operations of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6) The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: July 22, 2003 /s/ W. Randolph Baker
-------------------------------
W. Randolph Baker
Vice President and Chief
Financial Officer
Anheuser-Busch Companies, Inc.
6
EXHIBIT INDEX
Exhibit 23.1 Consent of Independent Accountants
Exhibit 24.1 Power of Attorney
Exhibit 24.2 Resolution authorizing signature by certain officers of
the Company
Exhibit 99.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Exhibit 99.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Exhibit 99.3 Financial Statements of the Anheuser-Busch Global
Employee Stock Purchase Plan for the years ended March 31,
2003 and March 31, 2002.
7
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-71311) of Anheuser-Busch Companies, Inc. of
our report dated July 17, 2003 relating to the financial statements of the
Anheuser-Busch Global Employee Stock Purchase Plan, which appear in this
Form 10-K/A.
PricewaterhouseCoopers LLP
St. Louis, Missouri
July 28, 2003
EXHIBIT 24.1
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
directors and officers of Anheuser-Busch Companies, Inc. (hereinafter
referred to as the "Company") hereby constitutes and appoints Patrick T.
Stokes, W. Randolph Baker, and JoBeth G. Brown, and each of them acting
singly, the true and lawful agents and attorneys, or agent and attorney,
with full powers of substitution, resubstitution and revocation, for and in
the name, place and stead of the undersigned to do any and all things and to
execute any and all instruments which said agents and attorneys, or any of
them, may deem necessary or advisable to enable the Company to comply with
the Securities Exchange Act of 1934, as amended, and any rules, regulations
and requirements of the Securities and Exchange Commission in respect
thereof, in connection with the 2002 Annual Report on Form 10-K of the
Company, including specifically, but without limiting the generality of the
foregoing, full power and authority to sign the name of each of the
undersigned in the capacities indicated below to the said 2002 Annual Report
on Form 10-K to be filed with the Securities and Exchange Commission, and to
any and all amendments to said 2002 Annual Report on Form 10-K, and each of
the undersigned hereby grants to said attorneys and agents, and to each of
them singly, full power and authority to do and perform on behalf of the
undersigned every act and thing whatsoever necessary or appropriate to be
done in the premises as fully as the undersigned could do in person, hereby
ratifying and confirming all that said attorneys and agents, or any of them,
or the substitutes or substitute of them or of any of them, shall do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has subscribed these presents
this 26th day of March, 2003.
/s/ PATRICK T. STOKES /s/ W. RANDOLPH BAKER
------------------------------------ -----------------------------------
(Patrick T. Stokes) (W. Randolph Baker)
President and Chief Executive Vice President and Chief
Officer and Director Financial Officer
(Principal Executive Officer) (Principal Financial Officer)
/s/ JOHN F. KELLY /s/ AUGUST A. BUSCH III
------------------------------------ -----------------------------------
(John F. Kelly) (August A. Busch III)
Vice President and Controller Director
(Principal Accounting Officer)
/s/ BERNARD A. EDISON /s/ CARLOS FERNANDEZ G.
------------------------------------ -----------------------------------
(Bernard A. Edison) (Carlos Fernandez G.)
Director Director
/s/JOHN E. JACOB /s/JAMES R. JONES
------------------------------------ -----------------------------------
(John E. Jacob) (James R. Jones)
Director Director
/s/CHARLES F. KNIGHT /s/VERNON R. LOUCKS, JR.
------------------------------------ -----------------------------------
(Charles F. Knight) (Vernon R. Loucks, Jr.)
Director Director
/s/VILMA S. MARTINEZ /s/WILLIAM PORTER PAYNE
------------------------------------ -----------------------------------
(Vilma S. Martinez) (William Porter Payne)
Director Director
/s/JOYCE M. ROCHE /s/HENRY HUGH SHELTON
------------------------------------ -----------------------------------
(Joyce M. Roche) (Henry Hugh Shelton)
Director Director
/s/ANDREW C. TAYLOR /s/DOUGLAS A. WARNER III
------------------------------------ -----------------------------------
(Andrew C. Taylor) (Douglas A. Warner III)
Director Director
/s/EDWARD E. WHITACRE, JR.
------------------------------------
(Edward E. Whitacre, Jr.)
Director
EXHIBIT 24.2
I, JOBETH G. BROWN, hereby certify that I am Vice President and
Secretary of Anheuser-Busch Companies, Inc., a Delaware corporation, with
its principal office in the City of St. Louis, State of Missouri, and as
such in charge of its corporate records, including minutes of meetings of
its Shareholders and Board of Directors.
I further certify that the Board of Directors of said corporation
at a meeting duly convened and held on the 26TH day of March 2003, as shown
by said records, adopted the following resolution which has not since been
amended or rescinded and which is in full force and effect at the date
hereof:
RESOLVED, that the Board of Directors does hereby authorize (a) the
proper officers of the corporation to execute a power of attorney
in the name and on behalf of the corporation in favor of Patrick T.
Stokes, W. Randolph Baker, and JoBeth G. Brown, or any of them
(with power of substitution in each) and (b) the execution by the
directors and officers of the corporation, or any of them, of a
power of attorney in favor of said attorneys, and said powers of
attorney shall empower such attorneys, or any of them, to do all
acts and things and to execute any and all instruments on behalf of
the corporation and on behalf of such directors and officers,
including the execution of the corporation's 2002 Annual Report on
Form 10-K or any amendment thereto, which such attorneys, or any of
them, may deem necessary or advisable to enable the corporation to
comply with the reporting requirements of the Securities and
Exchange Commission in respect thereof.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
seal of the said corporation this 25th day of July 2003.
/s/ JoBeth G. Brown
----------------------------
JoBeth G. Brown
Vice President and Secretary
EXHIBIT 99.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
ANHEUSER-BUSCH COMPANIES, INC.
FORM 10-K/A FOR THE YEAR ENDED DECEMBER 31, 2002
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I am the President and Chief Executive Officer of Anheuser-Busch
Companies, Inc., a Delaware corporation (the "Company"). I am delivering
this certificate in connection with the Form 10-K/A of the Company for the
year ended December 31, 2002 and filed with the Securities and Exchange
Commission ("Form 10-K/A"). Pursuant to Rule 15d-21 promulgated under the
Securities Exchange Act of 1934, as amended, the Form 10-K/A sets forth
audited financial statements of the Anheuser-Busch Global Employee Stock
Purchase Plan (the "Issuer") and does not include any financial statements
of the Company.
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, I hereby certify that, to the best of
my knowledge, the Form 10-K/A fully complies with the requirements of
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and
that the information contained in the Form 10-K/A fairly presents, in all
material respects, the financial condition and results of operations of the
Issuer.
Date: July 22, 2003
/s/ Patrick T. Stokes
-------------------------------------
Patrick T. Stokes
President and Chief Executive Officer
Anheuser-Busch Companies, Inc.
A signed original of this written statement required by Section 906
or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906 has been provided to
Anheuser-Busch Companies, Inc. and will be retained by Anheuser-Busch
Companies, Inc. and furnished to the Securities and Exchange Commission or
its staff upon request.
EXHIBIT 99.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
ANHEUSER-BUSCH COMPANIES, INC.
FORM 10-K/A FOR THE YEAR ENDED DECEMBER 31, 2002
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I am the Vice President and Chief Financial Officer of
Anheuser-Busch Companies, Inc., a Delaware corporation (the "Company"). I am
delivering this certificate in connection with the Form 10-K/A of the
Company for the year ended December 31, 2002 and filed with the Securities
and Exchange Commission ("Form 10-K/A"). Pursuant to Rule 15d-21 promulgated
under the Securities Exchange Act of 1934, as amended, the Form 10-K/A sets
forth audited financial statements of the Anheuser-Busch Global Employee
Stock Purchase Plan (the "Issuer") and does not include any financial
statements of the Company.
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, I hereby certify that, to the best of
my knowledge, the Form 10-K/A fully complies with the requirements of
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and
that the information contained in the Form 10-K/A fairly presents, in all
material respects, the financial condition and results of operations of the
Issuer.
Date: July 22, 2003
/s/ W. Randolph Baker
--------------------------------
W. Randolph Baker
Vice President and
Chief Financial Officer
Anheuser-Busch Companies, Inc.
A signed original of this written statement required by Section 906
or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906 has been provided to
Anheuser-Busch Companies, Inc. and will be retained by Anheuser-Busch
Companies, Inc. and furnished to the Securities and Exchange Commission or
its staff upon request.
EXHIBIT 99.3
ANHEUSER-BUSCH
GLOBAL EMPLOYEE STOCK
PURCHASE PLAN
Financial Statements
March 31, 2003 and 2002
ANHEUSER-BUSCH GLOBAL EMPLOYEE
STOCK PURCHASE PLAN
CONTENTS
MARCH 31, 2003 AND 2002
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PAGE(S)
Report of Independent Auditors..............................................1
Statement of Net Assets Available for Benefits..............................2
Statement of Changes in Net Assets Available for Benefits...................3
Notes to Financial Statements.............................................4-5
REPORT OF INDEPENDENT AUDITORS
To the Participants and Administrator of
The Anheuser-Busch Global Employee Stock Purchase Plan
In our opinion, the accompanying statement of net assets available for
benefits and the related statement of changes in net assets available for
benefits present fairly, in all material respects, the net assets available
for benefits of The Anheuser-Busch Global Employee Stock Purchase Plan (the
"Plan") at March 31, 2003 and 2002, and the changes in net assets available
for benefits for the years ended March 31, 2003 and 2002 in conformity with
accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the Plan's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States
of America, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
July 17, 2003
1
ANHEUSER-BUSCH GLOBAL EMPLOYEE
STOCK PURCHASE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
MARCH 31, 2003 AND 2002
------------------------------------------------------------------------------
2003 2002
ASSETS
Investments at fair value
Anheuser-Busch Companies, Inc. common stock $0 $0
-------- --------
LIABILITIES
Benefits payable $0 $0
-------- --------
Net assets available for benefits $0 $0
======== ========
The accompanying notes are an integral part of the financial statements.
2
ANHEUSER-BUSCH GLOBAL EMPLOYEE
STOCK PURCHASE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED MARCH 31, 2003 AND 2002
------------------------------------------------------------------------------
2003 2002
Contributions by participants $ 603,657 $ 102,730
Purchases by participants (603,657) (102,730)
----------- -----------
Increase in net assets during the period 0 0
Net assets available for benefits,
beginning of period 0 0
----------- -----------
Net assets available for benefits,
end of period $0 $0
=========== ===========
The accompanying notes are an integral part of the financial statements.
3
1. DESCRIPTION OF PLAN
The following description of the Anheuser-Busch Global Employee
Stock Purchase Plan (the "Plan") is intended to give a general
summary of its principal provisions. Participants should refer to
the Plan document for more complete information.
Purpose of the Plan
-------------------
The plan is an employee stock purchase plan designed to encourage
ownership of shares in Anheuser-Busch Companies, Inc. (the
"Company") by permanent employees of the Company and its
subsidiaries located outside the United States. The Plan commenced
March 1, 1999.
PLAN ADMINISTRATION
The Company administers the Plan. The Company has appointed Watson
Wyatt Worldwide, an international employee benefits consulting
firm, to assist in plan administration and record keeping. The
Company has selected DB Alex. Brown, a securities broker in the
United States, as the Plan broker to hold purchased shares on
behalf of Plan participants. Neither of these entities is related
to the Company as an affiliate or subsidiary. The broker maintains
custody of all stock purchased by participants and is responsible
for delivery of shares of stock sold by the participants, except as
otherwise directed by the participants.
PLAN BENEFITS
Under the Plan, participants enrolled in the plan on the offer date
each year will be given the right to purchase up to 200 shares of
the Company's common stock at the offering price, which is fixed at
the market price on the United States business day prior to the
offer date. The offer date is generally March 1. Purchases can only
be made if the market price on the employee's purchase date is
higher than the offer price. Each year's offer expires on the third
anniversary of the offer date.
If shares purchased through the Plan are held in the participant's
DB Alex. Brown account for at least two years after the purchase
date, the Company will award additional shares at a rate of 10
percent, 30 percent, or 50 percent of shares purchased depending
upon business performance. The rate for additional share awards
will be determined and announced prior to the offer date. These
awards are made by the Company directly to the employees. Under
this provision, the Company awarded 298.4 shares in fiscal 2003 and
69.2 shares in fiscal 2002.
All contributions used to purchase shares must be accumulated in a
local savings account in the name of the participant through
payroll deductions. Withdrawals from the savings account can be
made at any time. However, deposits may only be made by payroll
deduction; therefore, previous withdrawals cannot be replaced for
the purpose of purchasing shares. The participant maintains full
ownership of the cash used to purchase shares as well as the newly
issued shares that are purchased. Thus, there are no assets held by
the Plan.
In the United Kingdom, there is a sub-plan designed to qualify for
favorable tax treatment for employees who participate. Under this
"savings related share option scheme," employees enter into a
three-year savings contract and are eligible to purchase shares at
the end of the three-year period.
4
EXPENSES OF THE PLAN
Under the Plan agreement, the Company may pay all expenses incurred
in the administration of the Plan, including custodial fees, but is
not obligated to do so. All expenses of the years ended March 31,
2003 and 2002 were paid by the Company and are not reflected in the
financial statements of the Plan. If shares purchased under the
Plan are subsequently sold by the participant, the participant is
responsible for all fees, commissions, and other costs incurred in
such transactions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The Plan's financial statements are prepared on the accrual basis
of accounting.
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of additions to and
deductions from net assets during the reporting period. Actual
results could differ from those estimates.
VALUATION OF THE COMPANY'S STOCK
The offering or purchase price of the Company's common stock shares
is determined by the market price of the stock on the day prior to
the offer date. Market price is defined as the closing price of one
share in the United States as reported the subsequent day in the
West Coast edition of The Wall Street Journal, New York Stock
Exchange Transactions-Composite Transactions.
3. DIVIDENDS ON PURCHASED SHARES
Any dividends paid on shares purchased under the Plan are retained
by the respective participants and will be reinvested in additional
shares for the benefit of the participants unless the participant
elects otherwise or the law requires otherwise. Shares purchased
with reinvested dividends are not eligible for the additional share
awards.
4. TAX WITHHOLDING
Where required by law, the Company and its subsidiaries will report
to the appropriate governmental authority any amount subject to tax
and social charges on account of any offer, purchase or sale
pursuant to the Plan. Participants are responsible for all tax and
social charge liabilities by means of withholding from the
participants' current pay or other assets.
5