Delaware
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002-26821
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61-0143150
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(State or other jurisdiction
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(Commission File Number)
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(I.R.S. Employer
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of incorporation)
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Identification No.)
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850 Dixie Highway, Louisville, Kentucky
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40210
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(Address of principal executive offices)
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(Zip Code)
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Named Executive Officer
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Salary (1)
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Short-Term Incentive Compensation at Target (2)
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Long-Term Incentive Compensation at Target (2)
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Paul C. Varga
Chairman and Chief Executive Officer
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$1,112,500
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$1,300,000
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$3,300,000
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Donald C. Berg
Executive Vice President and Chief Financial Officer
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$588,542
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$415,000
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$735,000
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James S. Welch, Jr.
Vice Chairman
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$588,542
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$305,000
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$720,000
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Mark I. McCallum
Executive Vice President and Chief Operating Officer
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$587,813
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$415,000
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$760,000
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Kris Sirchio
Executive Vice President and Chief Marketing Officer
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$571,666
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$275,000
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$410,000
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(1) Salary includes holiday bonus and is effective as of August 1, 2012.
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(2) Incentive compensation is administered pursuant to the Company’s 2004 Omnibus Compensation Plan, as amended. The fiscal 2013 long-term incentive compensation opportunity for the NEOs is allocated among long-term cash, Class B common stock-settled stock appreciation rights (“SSARs”), and Class A common performance-based restricted stock as follows:
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Named Executive Officer
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Long-Term Cash Award at Target
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Class B
SSARs
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Class A
Restricted Stock
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Paul C. Varga
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$1,155,000
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$990,000
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$1,155,000
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Donald C. Berg
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$220,500
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$294,000
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$220,500
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James S. Welch, Jr
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$190,000
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$266,000
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$304,000
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Mark I. McCallum
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$216,000
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$216,000
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$288,000
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Kris Sirchio
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$139,400
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$135,300
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$135,300
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·
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Sustained Financial Performance (40% of Long-Term Cash Award at Target). For purposes of this metric, Company performance shall be measured based on underlying depletion-based operating income growth. The threshold level of performance (equating to a 0% payout) shall equal 3% growth over the prior fiscal year; the target level of performance (equating to a 100% payout) shall equal 8% growth over the prior fiscal year; and the maximum level of performance (equating to a 200% payout) shall equal 13% growth over the prior fiscal year.
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·
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Relative Financial Performance (40% of Long-Term Cash Award at Target). For purposes of this metric, Company performance shall be measured based on the Company’s underlying depletion-based operating income growth relative to a set of industry peers to be defined by the Plan Administrator. The threshold level of performance (equating to a 0% payout) shall equal 0% growth over the prior fiscal year; the target level of performance (equating to a 100% payout) shall equal the weighted average growth observed among the industry peers; and the maximum level of performance (equating to a 200% payout) shall equal twice the weighted average growth observed among the industry peers. In situations where the weighted average growth for the industry is negative, the Plan Administrator shall exercise judgment in determining the payout level.
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·
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BF150 Progress Scorecard (20% of Long-Term Cash Award at Target). The BF150 progress scorecard consists of five equally-weighted performance categories (each 4% of the Target value of the Long-Term Cash Award). For purposes of this metric, Company performance shall be measured based on cumulative performance over the three-year performance period in the following areas: a) market share growth within the United States, b) financial growth outside of the United States with a focus on emerging markets, c) financial growth of the Jack Daniel’s family of brands, d) financial and volumetric growth of brands other than the Jack Daniel’s family of brands, and e) other strategic initiatives. Each performance category shall receive a score ranging from 0% to 200% of Target.
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Name of Nominee
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For
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Against
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Abstain
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Broker
Non-Votes
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Joan C. Lordi Amble
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52,037,502.06
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43,773.46
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15,071.45
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1,956,054.00
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Patrick Bousquet-Chavanne
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52,025,695.58
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59,246.31
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11,405.09
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1,956,054.00
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Geo. Garvin Brown IV
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51,544,087.39
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542,587.13
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9,672.45
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1,956,054.00
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Martin S. Brown, Jr.
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51,716,838.84
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365,868.13
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13,640.00
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1,956,054.00
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Bruce L. Byrnes
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52,059,538.11
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26,443.54
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10,365.33
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1,956,054.00
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John D. Cook
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52,043,037.12
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42,959.39
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10,350.46
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1,956,054.00
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Sandra A. Frazier
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51,706,903.33
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377,757.90
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11,685.74
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1,956,054.00
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William E. Mitchell
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50,963,467.85
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1,121,772.89
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11,105.23
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1,956,055.00
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Dace Brown Stubbs
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51,701,917.07
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383,399.16
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11,030.74
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1,956,054.00
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Paul C. Varga
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51,724,816.25
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362,051.45
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9,479.27
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1,956,054.00
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James S. Welch, Jr.
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51,654,418.87
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431,661.97
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10,266.13
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1,956,054.00
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For
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Against
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Abstain
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51,009,803.92
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1,659,418.76
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1,383,178.30
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For
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Against
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Abstain
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57,231,039.21
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17,998,320.99
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200,189.04
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(Date)
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Nelea A. Absher
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Vice President, Associate General Counsel and Assistant Corporate Secretary
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·
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declining or depressed global or regional economic conditions, particularly in the Euro zone; political, financial, or credit or capital market instability; supplier, customer or consumer credit or other financial problems; bank failures or governmental debt defaults
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failure to develop or implement effective business, portfolio and brand strategies, including the increased U.S. penetration and international expansion of Jack Daniel’s Tennessee Honey, innovation, marketing and promotional activity, and route-to-consumer
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unfavorable trade or consumer reaction to our new products, product line extensions, price changes, marketing, or changes in formulation, flavor or packaging
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inventory fluctuations in our products by distributors, wholesalers, or retailers
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competitors’ consolidation or other competitive activities such as pricing actions (including price reductions, promotions, discounting, couponing or free goods), marketing, category expansion, product introductions, entry or expansion in our geographic markets
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declines in consumer confidence or spending, whether related to the economy (such as austerity measures, tax increases, high fuel costs, or higher unemployment), wars, natural or other disasters, weather, pandemics, security concerns, terrorist attacks or other factors
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changes in tax rates (including excise, sales, VAT, tariffs, duties, corporate, individual income, dividends, capital gains) or in related reserves, changes in tax rules (e.g., LIFO, foreign income deferral, U.S. manufacturing and other deductions) or accounting standards, and the unpredictability and suddenness with which they can occur
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governmental or other restrictions on our ability to produce, import, sell, price, or market our products, including advertising and promotion in either traditional or new media; regulatory compliance costs
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business disruption, decline or costs related to organizational changes, reductions in workforce or other cost-cutting measures
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lower returns or discount rates related to pension assets, interest rate fluctuations, inflation or deflation
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fluctuations in the U.S. dollar against foreign currencies, especially the euro, British pound, Australian dollar, Polish zloty or Mexican peso
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changes in consumer behavior or preferences and our ability to anticipate and respond to them, including societal attitudes or cultural trends that result in reduced consumption of our products; reduction of bar, restaurant, hotel or other on-premise business or travel
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consumer shifts away from spirits or premium-priced spirits products; shifts to discount store purchases or other price-sensitive consumer behavior
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distribution and other route-to-consumer decisions or changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in implementation-related or higher fixed costs
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effects of acquisitions, dispositions, joint ventures, business partnerships or investments, or their termination, including acquisition, integration or termination costs, disruption or other difficulties, or impairment in the recorded value of assets (e.g. receivables, inventory, fixed assets, goodwill, trademarks and other intangibles)
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lower profits, due to factors such as fewer or less profitable used barrel sales, lower production volumes, decreased demand or inability to meet consumer demand for products we sell, sales mix shift toward lower priced or lower margin SKUs, or cost increases in energy or raw materials, such as grain, agave, wood, glass, plastic, or closures
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natural disasters, climate change, agricultural uncertainties, environmental or other catastrophes, or other factors that affect the availability, price, or quality of agave, grain, glass, energy, closures, plastic, water, or wood, or that cause supply chain disruption or disruption at our production facilities or aging warehouses
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negative publicity related to our company, brands, marketing, personnel, operations, business performance or prospects
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product counterfeiting, tampering, contamination, or recalls and resulting negative effects on our sales, brand equity, or corporate reputation
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significant costs or other adverse developments stemming from class action, intellectual property, governmental, or other major litigation; or governmental investigations of beverage alcohol industry business, trade, or marketing practices by us, our importers, distributors, or retailers
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