<PAGE>
- --------------------------------------------------------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A-2
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 000-22857
SCHEID VINEYARDS INC.
(Name of small business issuer in its charter)
DELAWARE 77-0461833
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
13470 WASHINGTON BLVD.
MARINA DEL REY, CALIFORNIA 90292
(Address of principal executive offices) (Zip Code)
(310) 301-1555
(Issuer's telephone number)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: Class A Common
Stock, $.001 Par Value
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 / /
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
Issuer's revenues for its most recent fiscal year: $12,844,000
Aggregate market value of the voting stock held by non-affiliates computed by
reference to the closing price at which the Class A Common Stock was sold on the
Nasdaq Stock Market National Market System on March 8, 2000: $10,108,000. The
voting stock held by non-affiliates on that date consisted of 2,310,463 shares
of Class A Common Stock.
Number of shares outstanding of each of the issuer's classes of common stock at
March 8, 2000:
Class A 2,310,463 Class B 3,374,100
Transitional Small Business Disclosure Format (check one) Yes / / No /X/
- --------------------------------------------------------------------------------
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT.
The following sets forth certain information as of April 5, 2000 with
regard to each of the Directors and executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Alfred G. Scheid(1) 68 Chairman of the Board of Directors and Chief Executive
Officer
Scott D. Scheid 39 Vice President, Chief Operating Officer and Director
Heidi M. Scheid(2) 36 Vice President Finance, Chief Financial Officer, Treasurer,
Secretary and Director
Kurt J. Gollnick 41 Vice President Vineyard Operations
John L. Crary(1)(2) 46 Director
Robert P. Hartzell(1)(2) 65 Director
</TABLE>
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
ALFRED G. SCHEID, the Company's Chairman of the Board and Chief Executive
Officer, was one of the founders of the Company in 1972 and has served
continuously as its Chief Executive Officer since that time. Mr. Scheid has been
engaged full-time in the business of SVI since 1988, when he became the sole
owner of the Company. Prior to 1988, Mr. Scheid had other business affairs
outside SVI. Mr. Scheid is a founder of the California Association of Winegrape
Growers, a trade association that represents the interests of California wine
grape producers and has served as its chairman. He is also a founder of Monterey
County Vintners and Growers Association, a trade association composed primarily
of wine grape and wine producers. Mr. Scheid is a graduate of the Harvard
Graduate School of Business, and is the father of Scott D. Scheid and Heidi M.
Scheid.
SCOTT D. SCHEID became Chief Operating Officer and a Director of the
Company in 1997. Mr. Scheid joined the Company in 1986 as Vice President and has
been engaged full-time in the business of the Company since that time. Prior to
joining SVI, he was employed as an options trader with E.F. Hutton & Company
Inc. Mr. Scheid is a director of the California Association of Winegrape
Growers, and he previously has served as a director of Monterey County Vintners
and Growers Association. Mr. Scheid holds a B.A. degree in economics from
Claremont Men's College.
HEIDI M. SCHEID became the Company's Vice President Finance, Chief
Financial Officer, Treasurer and a Director in 1997. Ms. Scheid joined the
Company in 1992 as Director of Planning after serving as a senior valuation
analyst at Ernst & Young, LLP for two years. Prior to that, she was an associate
with Interven Partners, a venture capital firm. Ms. Scheid is a director and
treasurer of Wine Market Council, a wine industry association aimed at expanding
the American wine consumer base. Ms. Scheid holds an M.B.A. degree from the
University of Southern California.
KURT J. GOLLNICK has been the Company's Vice President Vineyard Operations
since 1997. Mr. Gollnick joined SVI in 1988 as General Manager, Vineyard
Operations. For seven years prior to joining the Company, Mr. Gollnick was a
vineyard manager for Thornhill Ranches of Santa Maria, California, where he
managed 1,200 acres of vineyards. He has served as a director of the California
Association of Winegrape
2
<PAGE>
Growers from 1989 through 1997 and is currently a director of the Monterey
County Vintners & Growers Association. Mr. Gollnick has also served as president
of the Central Coast Grape Growers and Monterey Grape Growers Associations. Mr.
Gollnick holds a B.S. degree in agricultural economics from the California
Polytechnic State University San Luis Obispo.
JOHN L. CRARY became a Director of the Company in 1997. Currently, Mr.
Crary is a Managing Director of ANTs software.com, a publicly traded computer
outsourcing company. He is also founder and chairman of The Lassen Companies,
Inc., a privately held cleaning products company, and he is President of Juniper
Capital LLC, a privately held financial advisory and investment firm. Since
1988, Mr. Crary has been a corporate financial advisor and venture capital
investor active with companies in various high technology as well as basic
industries. Previously, Mr. Crary was an investment banker in the corporate
finance department of E.F. Hutton & Company Inc., which he joined in 1979. Mr.
Crary has been a consultant to SVI and its predecessors since 1993 in connection
with financial matters, acquisitions and business strategy. Mr. Crary is also a
director of a number of private companies. Mr. Crary is a graduate of the
University of California at Irvine and the Columbia University Graduate School
of Business.
ROBERT P. HARTZELL became a Director of the Company in 1997. Mr. Hartzell
is the owner of Harmony Vineyards, a producer of premium Zinfandel wine grapes
near Lodi, California. From 1978 to 1996, Mr. Hartzell was President of the
California Association of Winegrape Growers. For six years during this period,
Mr. Hartzell also served on the Agricultural Policy Advisory Committee to the
U.S. Secretary of Agriculture and the U.S. Trade Representative in connection
with the General Agreement on Trade and Tariffs negotiations. Mr. Hartzell has
also served as Deputy Director of the California Department of Food and
Agriculture. Mr. Hartzell holds a B.S. degree from the University of California
at Davis.
Officers serve at the discretion of the Board of Directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of reports on Forms 3, 4 and 5 and amendments
thereto filed with the Securities and Exchange Commission and furnished to the
Company, there were two failures to file such a report on a timely basis by a
Director, officer or beneficial owner of more than 10% of SVI's Class A Common
Stock. Robert P. Hartzell and John L. Crary, each a Director of SVI, failed to
timely report the granting of options to purchase 2,500 shares of Class A Common
Stock on May 13, 1999. These option grants were reported on Form 5's filed with
the Securities and Exchange Commission in March 2000.
BOARD OF DIRECTORS, COMMITTEES AND COMPENSATION
Directors are elected to serve a one-year term and until their successors
are duly elected and qualified. The Company pays each non-employee Director an
annual fee of $5,000 and meeting fees at the rate of $500 for each Board meeting
attended in person and reimburses such Director for all expenses incurred by him
in his capacity as a Director of the Company. No fees are paid for participation
in telephonic meetings of the Board of Directors or its committees or actions
taken in writing.
Under the Company's 1997 Stock Option/Stock Issuance Plan (the "Plan"),
each individual who was serving as a non-employee Director on the date the
underwriting agreement for the Company's initial public offering was executed
(July 24, 1997) received an option grant on such date for 10,000 shares of Class
A Common Stock, provided such individual had not been in the prior employ of the
Company. Such option grants were made to each of Messrs. Crary and Hartzell.
Each individual who first becomes a non-employee Director in the future will
receive a 10,000-share option grant on the date such individual joins the Board,
provided that such individual has not been in the prior employ of the Company
and has not previously received
3
<PAGE>
an option grant from the Company in his or her capacity as a non-employee
Director. In addition, at each Annual Meeting of Stockholders, each non-employee
Director with at least six months' service who is to continue to serve as a
non-employee Director after the Annual Meeting receives an additional option
grant to purchase 2,500 shares of Class A Common Stock, whether or not such
individual has been in the prior employ of the Company.
Each automatic option grant to a non-employee Director has or will have a
term of 10 years, subject to earlier termination following the optionee's
cessation of Board service. The initial 10,000-share option grant becomes or
will become exercisable in a series of four successive equal annual installments
over the optionee's period of Board service. Each additional 2,500-share option
grant becomes or will become exercisable upon the optionee's completion of one
year of Board service measured from the grant date. However, each outstanding
option will immediately vest upon (i) certain changes in the ownership or
control of the Company or (ii) the death or disability of the optionee while
serving as a Director.
The Board of Directors has appointed an Audit Committee and a Compensation
Committee. The members of the Audit Committee are Messrs. Crary and Hartzell and
Ms. Scheid. Responsibilities of the Audit Committee include reviewing financial
statements and consulting with the independent auditors concerning the Company's
financial statements, accounting and financial policies and internal controls
and reviewing the scope of the independent auditors' activities and fees. The
members of the Compensation Committee are Messrs. Crary, Hartzell and Alfred G.
Scheid. The Company's Compensation Committee establishes and reviews salary,
bonus and other forms of compensation for officers of the Company, provides
recommendations to the Board of Directors for the salaries and incentive
compensation of the employees and consultants of the Company, reviews training
and human resources policies and makes recommendations to the Board of Directors
regarding such matters. The Company has no nominating committee or committee
performing similar functions. The Audit Committee held one meeting in 1999, and
the Compensation Committee held one meeting in 1999.
The Board of Directors held four meetings in 1999. Each Director attended
at least 75% of the total number of the meetings held of the Board of Directors
and each committee thereof on which such Director served during the fiscal year
ended December 31, 1999.
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation earned by the Named Executive Officers for services
rendered in all capacities to the Company for the fiscal years ended December
31, 1999, 1998 and 1997. The "Named Executive Officers" include (i) each person
who served as Chief Executive Officer during 1999 (one person), (ii) each person
who (a) served as an executive officer at December 31, 1999, (b) was among the
four most highly paid executive officers of the Company, not including the Chief
Executive Officer, during 1999 and (c) earned total annual salary and bonus
compensation in 1999 in excess of $100,000 (three persons), and (iii) up to two
persons who would be included under clause (ii) above had they served as an
executive officer at December 31, 1999 (no persons).
4
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
----------------------------------------------------- ------------
SHARES
OTHER ANNUAL UNDERLYING ALL OTHER
FISCAL SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
NAME AND CAPACITY IN WHICH SERVED YEAR ($)(2) ($) ($)(3) (#)(4) ($)(5)(6)(7)
- ----------------------------------- ------ -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Alfred G. Scheid................... 1999 $400,000 $0 -- 0 $144,724
CHAIRMAN OF THE BOARD AND 1998 $400,000 $75,000 -- 0 $249,634
CHIEF EXECUTIVE OFFICER 1997 $400,000 $140,000 -- 0 $168,183
Scott D. Scheid..................... 1999 $130,000 $85,000 -- 0 $3,900
VICE PRESIDENT AND CHIEF 1998 $130,000 $85,000 -- 0 $3,900
OPERATING OFFICER 1997 $118,300 $105,000 -- 20,000 $3,550
Heidi M. Scheid..................... 1999 $120,000 $75,000 -- 0 $3,600
VICE PRESIDENT FINANCE, 1998 $120,000 $75,000 -- 0 $3,600
CHIEF FINANCIAL OFFICER, 1997 $106,700 $90,000 -- 20,000 $3,200
TREASURER AND SECRETARY
Kurt J. Gollnick.................. 1999 $120,000 $85,000 -- $3,600
VICE PRESIDENT VINEYARD 1998 $120,000 $85,000 -- 20,000 $53,600
OPERATIONS 1997 $111,700 $105,000 -- 20,000 $3,350
</TABLE>
(1) Amounts shown include cash compensation earned for the periods reported
whether paid or accrued in such periods.
(2) As of April 5, 2000, the annual salary levels for the Named Executive
Officers were: Alfred G. Scheid ($400,000); Scott D. Scheid ($134,000);
Heidi M. Scheid ($124,000); and Kurt J. Gollnick ($124,000).
(3) During each of 1999, 1998 and 1997, the Named Executive Officers received
personal benefits, the aggregate amounts of which for each Named Executive
Officer did not exceed the lesser of $50,000 or 10% of the total of the
annual salary and bonus reported for such Named Executive Officer in such
years.
(4) The Named Executive Officers did not receive any restricted stock awards or
long-term incentive plan payouts in 1999, 1998 or 1997. The stock option
grant to Mr. Gollnick in 1998 represents a repricing of the stock options
granted to Mr. Gollnick in 1997. The exercise price was reduced from $10.00
per share to $4.00 per share.
(5) Except as described in notes 6 and 7, all amounts in this column represent
matching contributions under the Company's 401(k) plan. In the case of
Alfred G. Scheid, matching contributions in 1999, 1998 and 1997 were
$4,744, $5,000 and $4,750, respectively. In the case of Mr. Gollnick,
matching contributions in 1998 were $3,600.
(6) In the case of Alfred G. Scheid, includes $139,980, $244,634 and $163,433
in 1999, 1998 and 1997, respectively, representing benefits received under
a split dollar life insurance trust arrangement pursuant to which Alfred G.
Scheid is entitled to designate the beneficiary of a $4,500,000 life
insurance policy and the Company is obligated to advance a portion of the
premiums. The owner of the insurance policy is a trust, the trustees of
which include Scott D. Scheid and Heidi M. Scheid, each of whom is an
executive officer and Director of the Company and a child of Alfred G.
Scheid. Advances by the Company are required to be repaid out of the
surrender proceeds or death benefits payable under the policy. The amount
of the benefits received in each year represents (i) the premiums payable
by the Company during the year ($139,980 in 1999, $244,634 in 1998 and
$163,433 in 1997) plus (ii) the proportionate amount, if any, of the excess
of the actuarially projected cash surrender value of the policy at the end
of such year over the aggregate amount of premiums advanced by the Company
through such year ($0 at each of December 31, 1999, 1998 and 1997). Such
proportionate amount is measured by the time-weighted compounded returns on
the premiums advanced by each of the Company and the policy owner, and
assuming a constant rate of return from inception of the policy.
(FOOTNOTES CONTINUED ON NEXT PAGE)
5
<PAGE>
(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
(7) In the case of Mr. Gollnick, includes $50,000 in 1998 in respect of 10,000
shares of SVI Class B Common Stock gifted to him by Alfred G. Scheid as
Trustee of the Alfred G. Scheid Revocable Trust dated October 8, 1992. Such
shares were valued at a 33% discount from the closing per share price of
the Class A Common Stock on the Nasdaq National Market System on the date
of gift.
OPTION GRANTS
No stock options or stock appreciation rights were granted to the Named
Executive Officers during fiscal 1999.
OPTION EXERCISES AND HOLDINGS
The following table sets forth with respect to the Named Executive Officers
information concerning the exercise of stock options during 1999 and unexercised
options held as of the end of the year. The Company has never granted stock
appreciation rights.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES
AND 1999 YEAR-END OPTION/SAR VALUES
NUMBER
OF UNEXERCISED VALUE OF UNEXERCISED
VALUE OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS AT
SHARES ACQUIRED REALIZED FISCAL YEAR END(#) FISCAL YEAR END($)(1)
-----------------------------------------------------------------
NAME ON EXERCISE(#) ($) UNEXERCISABLE EXERCISABLE UNEXERCISABLE EXERCISABLE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alfred G. Scheid...... 0 $0 0 0 -- --
Scott D. Scheid....... 0 $0 7,917 12,083 $0 $0
Heidi M. Scheid....... 0 $0 7,917 12,083 $0 $0
Kurt J. Gollnick...... 0 $0 7,917 12,083 $0 $0
</TABLE>
(1) The values of unexercised in-the-money options have been determined based
on the per share closing price of the Company's Common Stock as reported on
the Nasdaq National Market System on December 31, 1999 ($3.625).
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company has entered into an employment agreement (collectively, the
"Employment Agreements") with each of Alfred G. Scheid, Scott D. Scheid, Heidi
M. Scheid and Kurt J. Gollnick (collectively, the "Employees") providing for a
minimum employment of three years beginning on July 19, 1997, except for Alfred
G. Scheid, whose Employment Agreement has a minimum one-year term. Under their
respective Employment Agreements, Alfred G. Scheid currently is entitled to an
annual base salary of $400,000, Scott D. Scheid currently is entitled to an
annual base salary of $134,000 and each of Heidi M. Scheid and Kurt J. Gollnick
is entitled to an annual base salary of $124,000. The base salary under each
Employment Agreement is subject to upward adjustment, and each Employee is
eligible for bonus compensation pursuant to bonus arrangements, as determined by
the Board of Directors upon the recommendation of the Compensation Committee.
The Company may terminate each Employees' employment at any time with or without
cause, and no severance payment obligations are provided.
6
<PAGE>
A Buy-Sell Agreement among the Company and the holders of Class B Common
Stock provides, among other things, that the shares of Class B Common Stock held
by Mr. Gollnick (currently 300,093) are purchasable at the option first of the
Company, next of Alfred G. Scheid if the Company does not exercise such option,
and thereafter of Scott D. Scheid and Heidi M. Scheid if the Company and Alfred
G. Scheid do not exercise such options, if Mr. Gollnick's employment with the
Company terminates for any reason. See "Security Ownership of Certain Beneficial
Owners and Management -- Agreement Among Class B Stockholders". If such
termination is a voluntary termination by Mr. Gollnick that occurs prior to July
29, 2004, or is for "cause" (as defined) regardless of when such termination for
"cause" occurs, the per share purchase price for Mr. Gollnick's shares of Class
B Common Stock will be equal to the price per share he paid for such shares, and
if such termination occurs for any other reason or under any other
circumstances, or upon the death of Mr. Gollnick, the per share purchase price
will be the weighted average trading price of the Class A Common Stock for the
immediately preceding 20 trading days on which such Class A Common Stock
actually was traded.
The outstanding stock options exercisable for shares of Class A Common
Stock of the Company that have been granted under the Plan, including those
granted to the Directors and Named Executive Officers, provide for accelerated
vesting in connection with certain corporate transactions involving certain
changes in control of the Company unless the options are assumed, or replaced
with comparable options or a cash incentive program, by the successor
corporation. In addition, the stock options that have been granted to the Named
Executive Officers provide for immediate acceleration of these options upon an
"involuntary termination" of employment occurring within 18 months of a "change
in control." In the event of such an acceleration, the options will remain
exercisable until the earlier of the expiration date specified in the option
grant and one year after the date of involuntary termination. For purposes of
these provisions: an "involuntary termination" means, generally, termination by
the Company other than for "misconduct" (as defined) or termination by the
employee following an involuntary material change in position and
responsibility, an involuntary reduction in compensation by more than 15% or an
involuntary relocation by more than 50 miles; and a "change in control" means,
generally, the acquisition of securities representing a majority of the voting
power of the Company other than by the Company and its affiliates, a change in a
majority of the Board of Directors over a period of 36 month or less involving
new Directors that have not been elected or nominated by the other Directors or
a change in ownership of securities representing more than a majority of the
voting power of certain subsidiaries of the Company.
The Company has entered into agreements to provide indemnification for the
Company's Directors and certain officers in addition to the indemnification
provided for in the Company's Bylaws. These agreements, among other things, will
indemnify the Company's Directors and certain officers to the fullest extent
permitted by Delaware law for certain expenses (including attorneys' fees), and
all losses, claims, liabilities, judgments, fines and settlement amounts
incurred by such person arising out of or in connection with such persons'
service as Directors or officers of the Company or an affiliate of the Company.
These agreements provide for the advancement of expenses incurred in defending a
claim prior to resolution of the merits of the claim. These agreements also
require the Company to maintain directors and officers liability insurance. The
Employment Agreements impose similar indemnification obligations on the Company.
There is no pending litigation or proceeding involving a Director, officer,
employee or agent of the Company, and the Company is not aware of any threatened
litigation or proceeding which may result in a claim for such indemnification.
7
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
SECURITY OWNERSHIP
The following table sets forth certain information as of April 5, 2000,
with respect to persons known by the Company to be beneficial owners of more
than five percent of either the Company's Class A Common Stock or the Company's
Class B Common Stock, as well as beneficial ownership of such classes of Common
Stock by the executive officers and Directors of the Company, and all executive
officers and Directors as a group. The persons named in the table have sole
voting and investment power with respect to all shares beneficially owned,
unless otherwise indicated.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
BENEFICIALLY OWNED (1) BENEFICIALLY OWNED (1)
---------------------- ----------------------
NUMBER OF NUMBER OF
NAME AND ADDRESS OF BENEFICIAL OWNER (2) SHARES PERCENTAGE SHARES PERCENTAGE
- ---------------------------------------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Alfred G. Scheid (3).................................. 1,649,589 41.7 1,649,589 48.9
Scott D. Scheid (4)................................... 359,176 13.5 347,093 10.3
Heidi M. Scheid (5)................................... 369,176 13.8 357,093 10.6
Kurt J. Gollnick (6).................................. 312,896 11.9 300,093 8.9
John L. Crary (7)..................................... 5,000 * 0 0.0
Robert P. Hartzell (7)(8)............................. 5,000 * 0 0.0
Emily K. Liberty (9).................................. 309,066 11.8 309,066 9.2
Tyler P. Scheid....................................... 309,066 11.8 309,066 9.2
Wellington Management Company, LLP (10)............... 582,000 33.0 0 0.0
Putnam Investment Management, Inc. (11)............... 317,000 13.7 0 0.0
First Union Corporation (12).......................... 271,872 11.8 0 0.0
All executive officers and Directors
as a group (6 PERSONS)........................... 2,700,837 53.9 2,653,868 78.7
</TABLE>
* Less than one percent.
(FOOTNOTES ON NEXT PAGE)
8
<PAGE>
(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
(1) Except in the cases of Wellington Management Company, LLP, Putnam
Investment Management, Inc. and First Union Corporation (the "Institutional
Holders") and for certain stock options exercisable for shares of Class A
Common Stock as described in notes 4 through 6 below, all shares of Class A
Common Stock reflected as beneficially owned by each person named in this
table represent shares issuable upon conversion of the beneficial holder's
shares of Class B Common Stock. Beneficial ownership and the percentages of
the Class A Common Stock and Class B Common Stock outstanding have been
determined in accordance with Section 13(d) of the Securities Exchange Act
of 1934, as amended, and the rules promulgated thereunder. In the case of
the Institutional Holders, the stockholdings reported reflect data set
forth in the latest Schedule 13G furnished to the Company by the respective
Institutional Holders or filed with the Securities and Exchange Commission.
(2) The address of each of the persons named in this table, other than the
Institutional Holders, is c/o Scheid Vineyards Inc., 13470 Washington
Boulevard, Marina del Rey, California 90292. The addresses of the
Institutional Holders are set forth in notes 10 through 12 below. Scott D.
Scheid, Heidi M. Scheid, Emily K. Liberty and Tyler P. Scheid are children
of Alfred G. Scheid.
(3) Owned by Alfred G. Scheid as Trustee of the Alfred G. Scheid Revocable
Trust dated October 8, 1992. Does not include 100,000 shares of Class B
Common Stock owned by a revocable trust of which Mr. Scheid's wife is the
sole trustee and over which Mr. Scheid does not have any voting power or
investment power. Mr. Scheid disclaims beneficial ownership of the shares
beneficially owned by his wife's trust.
(4) Includes 335,093 shares of Class B Common Stock owned by Scott D. Scheid
and 12,000 shares of Class B Common Stock owned by trusts for the benefit
of the children of Heidi M. Scheid, of which Mr. Scheid is a co-trustee
together with Heidi M. Scheid. Class A shareholdings also include 12,083
shares that may be acquired upon the exercise of options granted under the
Plan that are currently exercisable or may become exercisable prior to May
30, 2000. Does not include 11,000 shares of Class B Common Stock owned by
Mr. Scheid's wife and over which Mr. Scheid does not have any voting power
or investment power. Mr. Scheid disclaims beneficial ownership of the
shares beneficially owned by his wife.
(5) Includes 345,093 shares of Class B Common Stock owned by Heidi M. Scheid
and 12,000 shares of Class B Common Stock owned by trusts for the benefit
of the children of Ms. Scheid, of which Ms. Scheid is a co-trustee together
with Scott D. Scheid. Class A shareholdings also include 12,083 shares that
may be acquired upon the exercise of options granted under the Plan that
are currently exercisable or may become exercisable prior to May 30, 2000.
Does not include 1,000 shares of Class B Common Stock owned by Ms. Scheid's
husband and over which Ms. Scheid does not have any voting power or
investment power. Ms. Scheid disclaims beneficial ownership of the shares
beneficially owned by her husband.
(6) Class A shareholdings include 12,083 shares that may be acquired upon the
exercise of options granted under the Plan that are currently exercisable
or may become exercisable prior to May 30, 2000. Does not include 1,000
shares of Class B Common Stock owned by Mr. Gollnick's wife and over which
Mr. Gollnick does not have any voting power or investment power. Mr.
Gollnick disclaims beneficial ownership of the shares beneficially owned by
his wife.
(7) Represents shares that may be acquired upon the exercise of options granted
under the Plan that are currently exercisable or may become exercisable
prior to May 30, 2000.
(8) Does not include 600 shares of Class B Common Stock owned by Mr. Hartzell's
wife and over which Mr. Hartzell does not have any voting power or
investment power. Mr. Hartzell disclaims beneficial ownership of the shares
beneficially owned by his wife.
(9) Does not include 100 shares of Class B Common Stock owned by Ms. Liberty's
husband and over which Ms. Liberty does not have any voting power or
investment power. Ms. Liberty disclaims beneficial ownership of the shares
beneficially owned by her husband.
(FOOTNOTES CONTINUED ON NEXT PAGE)
9
<PAGE>
(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
(10) Wellington Management Company, LLP ("WMC") is an investment adviser to and
parent holding company of Wellington Trust Company, NA ("WTC"), which
beneficially owns 180,000 of the 582,000 shares of Class A Common Stock
beneficially owned by WMC. WMC is an investment advisor to the Dow
Employees' Pension Plan which beneficially owns 150,000 of the 582,000
shares of Class A Common Stock beneficially owned by WMC. The address of
WMC and WTC is 75 State Street, Boston, Massachusetts 02109. The address of
the Dow Employees' Pension Plan is c/o Dow Chemical, Dorinco 100, Midland,
MI 48674.
(11) Putnam Investment Management, Inc. ("PIM") is an indirect wholly-owned
subsidiary of Marsh & McLennan Companies, Inc. PIM is the investment
advisor to the Putnam Capital Appreciation Fund which owns the 317,000
shares of Class A Common Stock beneficially owned by PIM. The address of
PIM is One Post Office Square, Boston Massachusetts 02109.
(12) First Union Corporation ("FUC") is an investment advisor and parent holding
company of First Union Securities, Inc. ("FUS"), Meridian Investment
Company ("MIS"), and First Union National Bank ("FUNB"). FUS and MIS are
investment advisors for mutual funds and other clients; the securities
reported by these subsidiaries are beneficially owned by such mutual funds
or other clients. FUNB holds securities reported in a fiduciary capacity
for its respective customers. The address of FUC, FUS, MIS, and FUNB is One
First Union Center, Charlotte, North Carolina, 28288.
AGREEMENT AMONG CLASS B STOCKHOLDERS
The holders of the outstanding shares of Class B Common Stock and the
Company are parties to an Amended and Restated Buy-Sell Agreement (the "Buy-Sell
Agreement"). Pursuant to the Buy-Sell Agreement, no holder of shares of Class B
Common Stock other than Alfred G. Scheid may, with limited exceptions, transfer
Class B Common Stock or convert Class B Common Stock into Class A Common Stock
without first offering such stock, in a specified order, to the Company, Alfred
G. Scheid, Scott D. Scheid and Heidi M. Scheid. The Buy-Sell Agreement applies
to a broad range of transfers and dispositions other than transfers to (i) the
Company, (ii) certain other Class B stockholders, (iii) a current or former
spouse or direct lineal descendant of any Class B stockholder including, without
limitation, adopted persons (if adopted during minority) and persons born out of
wedlock, and excluding foster children and stepchildren, (iv) a trust under
which all of the beneficiaries are persons described in clauses (ii) or (iii)
above, and (v) a corporation, partnership or limited liability company, all of
the equity interests of which are owned by persons or entities described in
clauses (i), (ii), (iii) and (iv) above or corporations, partnerships and
limited liability companies described in this clause (v). The Buy-Sell Agreement
also grants an option, exercisable in a specified order, to the Company, Alfred
G. Scheid, Scott D. Scheid and Heidi M. Scheid, to purchase the shares of Class
B Common Stock held by certain Class B stockholders at specified prices upon (A)
the death of such Class B Stockholder, (B) the entry or imposition of certain
judgments, levies or attachments affecting the shares of Class B Common Stock
held by such stockholder, (C) certain bankruptcy or insolvency events affecting
such stockholder or (D) in the case of Kurt J. Gollnick, the termination of his
employment with the Company.
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<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
CORPORATE HEADQUARTERS LEASE
Pursuant to a five-year lease (the "Lease"), the Company leases the third
floor of a three-story office building in Marina del Rey, a suburb of Los
Angeles, from Tesh Partners, L.P., a limited partnership comprised of members of
the Scheid family. The Company occupies 6,400 square feet and the rest of the
building (approximately 4,600 square feet) is leased to unrelated parties. The
general partner of Tesh Partners, L.P. is SVI-Cal and the limited partners are
Alfred G. Scheid's four children, two of whom are Scott D. Scheid and Heidi M.
Scheid, each an executive officer and a Director of the Company. The lease runs
until June 2004 and the rent is $119,364 annually, plus an additional annual
amount of $4,800 for parking. The Company believes that the terms of the Lease
are at least as favorable to the Company as if the Lease were entered into with
an unaffiliated third party.
CONSULTING AGREEMENTS
The Company periodically consults with John L. Crary and Robert P.
Hartzell, both Directors of the Company, on various matters relating to its
business activities. The Company pays Messrs. Crary and Hartzell on an hourly
basis, at varying rates depending on the nature of service being provided.
FUTURE TRANSACTIONS
The Company does not have any current intentions to enter into any future
transactions with related parties with respect to the acquisition or development
of additional vineyard or other properties. The Company has adopted a policy
requiring future transactions with affiliates to be on terms no less favorable
to the Company than could be obtained from unaffiliated parties.
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<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Scheid Vineyards Inc.
By: /s/ ALFRED G. SCHEID
----------------------------
Alfred G. Scheid
CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
In accordance with the Securities Exchange 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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ ALFRED G. SCHEID Chairman of the Board and Chief Executive April 5, 2000
- -------------------------------- Officer (Principal Executive Officer)
Alfred G. Scheid
/s/ HEIDI M. SCHEID Vice President Finance, Chief Financial April 5, 2000
- -------------------------------- Officer, Secretary, Treasurer and Director
Heidi M. Scheid (Principal Financial Officer)
/s/ SCOTT D. SCHEID Vice President, Chief Operating Officer and April 5, 2000
- ------------------------------- Director
Scott D. Scheid
/s/ JOHN L. CRARY Director April 5, 2000
- --------------------------------
John L. Crary
/s/ ROBERT P. HARTZELL Director April 5, 2000
- --------------------------------
Robert P. Hartzell
</TABLE>
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