<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as Permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Beringer Wine Estate Holdings, Inc.
--------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
/ / Fee paid previously with preliminary materials.
/ / 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:
Notes:
<PAGE>
[BERINGER WINE ESTATES LOGO]
BERINGER WINE ESTATES HOLDINGS, INC.
610 Airpark Road
Napa, CA 94558
--------------------------
NOTICE OF ANNUAL MEETING
--------------------------
Dear Beringer Wine Estates Holdings, Inc. Shareholders:
On Thursday, November 4, 1999, Beringer Wine Estates Holdings, Inc. will
hold its Annual Meeting of Shareholders at the Mandarin Oriental Hotel, 222
Sansome Street, San Francisco, California. The meeting will begin at 9:00 a.m.
Only shareholders that own stock at the close of business on September 30,
1999 can vote at this meeting. At the meeting we will:
1. Elect a Board of Directors;
2. Approve the appointment of our independent auditors for fiscal year
2000;
3. Attend to any other business properly brought before the meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE TWO
PROPOSALS OUTLINED IN THIS PROXY STATEMENT.
By Order of the Board of Directors,
/s/ Douglas W. Roberts
Douglas W. Roberts
Vice President, General Counsel and
Secretary
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Questions and Answers...................................................... 3
Proposals You May Vote On.................................................. 6
Nominees for the Board of Directors........................................ 7
Statement of Corporate Governance.......................................... 9
Board Committee Membership Roster.......................................... 10
Directors' Compensation.................................................... 10
Stock Ownership Guidelines................................................. 10
Holders of 5% or more and Directors' and Officers' Ownership of
Beringer Wine Estates Holdings, Inc. Stock................................ 11
Executive Compensation: Report of the Compensation Committee............... 11
Summary Compensation Table................................................. 14
Option Grants in Fiscal 1999 Table......................................... 15
Aggregate Option Exercises and Year-End Values Table....................... 16
Stock Performance Graph.................................................... 17
Directors' and Officers' Indemnification................................... 17
Section 16(a) Beneficial Ownership Reporting Compliance.................... 18
</TABLE>
2
<PAGE>
QUESTIONS AND ANSWERS
<TABLE>
- -------------------------------------------------------------------------------
<C> <C> <S>
1. Q: WHO IS SOLICITING MY VOTE?
A: This proxy solicitation is being made and paid for by Beringer Wine
Estates.
- -------------------------------------------------------------------------------
2. Q: WHEN WAS THIS PROXY STATEMENT MAILED TO SHAREHOLDERS?
A: This proxy statement was first mailed to shareholders on or about
October 4, 1999.
- -------------------------------------------------------------------------------
3. Q: WHAT MAY I VOTE ON?
A: (1) The election of nominees to serve on our Board of Directors; AND
(2) The approval of the appointment of our independent auditors for
fiscal year 2000.
- -------------------------------------------------------------------------------
4. Q: HOW DOES THE BOARD RECOMMEND I VOTE ON THE PROPOSALS?
A: The Board recommends a vote FOR each of the nominees. The Board
recommends a vote FOR the appointment of PricewaterhouseCoopers LLP as
independent accountants for fiscal year 2000.
- -------------------------------------------------------------------------------
5. Q: WHO IS ENTITLED TO VOTE?
A: Shareholders as of the close of business on September 30, 1999 (the
Record Date) are entitled to vote at the Annual Meeting.
- -------------------------------------------------------------------------------
6. Q: HOW DO I VOTE?
A: Sign and date each proxy card you receive and return it in the prepaid
envelope. If you return your signed proxy card but do not mark the
boxes showing how you wish to vote, your shares will be voted FOR the
two proposals. You have the right to revoke your proxy at any time
before the meeting by:
(1) notifying the Corporate Secretary, Douglas W. Roberts, at the
address shown above;
(2) voting in person; OR
(3) returning a later-dated proxy card.
- -------------------------------------------------------------------------------
7. Q: WHO WILL COUNT THE VOTE?
A: Representatives of our transfer agent, EquiServe, will count the
votes.
- -------------------------------------------------------------------------------
8. Q: IS MY VOTE CONFIDENTIAL?
A: Proxy cards, ballots and voting tabulations that identify individual
shareholders are mailed or returned directly to EquiServe, and handled
in a manner that protects your voting privacy. Your vote will not be
disclosed except: (1) as needed to permit EquiServe to tabulate and
certify the vote; and (2) as required by law. Additionally, all
comments written on the proxy card or elsewhere will be forwarded to
management. Your identity will be kept confidential unless you ask
that your name be disclosed.
- -------------------------------------------------------------------------------
9. Q: HOW MANY SHARES CAN VOTE?
A: As of June 30, 1999, 1,312,326 shares of Class A Common Stock and
18,242,071 shares of Class B Common Stock were issued and outstanding.
Every shareholder of Class A Common Stock is entitled to twenty (20)
votes for each share held. Every shareholder of Class B Common Stock
is entitled to one (1) vote for each share held. In summary, there
were a total of 44,488,591eligible votes as of June 30, 1999.
- -------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<C> <C> <S>
10. Q: WHAT IS A "QUORUM"?
A: A "quorum" is a majority of the outstanding shares. They may be
present at the meeting or represented by proxy. There must be a quorum
for the meeting to be held. A proposal must receive more than 50% of
the shares voting to be adopted. If you submit a properly executed
proxy card, even if you abstain from voting, then you will be
considered part of the quorum. An abstention has the same effect as a
vote AGAINST a proposal. A WITHHELD vote will be counted for quorum
purposes. However, a WITHHELD vote is not deemed present for purposes
of determining whether shareholder approval has been obtained.
- -------------------------------------------------------------------------------
11. Q: WHO CAN ATTEND THE ANNUAL MEETING AND HOW DO I GET A TICKET?
A: All shareholders on September 30, 1999 can attend. You may check the
box on you proxy card or, if your shares are held through a broker and
you'd like to attend, please write to Douglas W. Roberts, Secretary at
Beringer Wine Estates Holdings, Inc., 610 Airpark Road, P.O. Box 4500,
Napa, CA 94558. Include a copy of your brokerage account statement or
an omnibus proxy (which you can get from your broker), and we will
send you a ticket.
- -------------------------------------------------------------------------------
12. Q: WILL THE ANNUAL MEETING INCLUDE A SHAREHOLDERS' WINE TASTING EVENT?
A: No, this year's Annual Meeting will NOT include a shareholders' wine
tasting event. Instead, we are planning a Gala Shareholders' Event for
May 19, 2000 at Chateau Souverain in the Alexander Valley of Sonoma
County. This Event will be an opportunity for shareholders to sample
our excellent products.
- -------------------------------------------------------------------------------
13. Q: HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
A: We do not know of any business to be considered at the 1999 Annual
Meeting other than the proposals described in this proxy statement. If
any other business is presented at the Annual Meeting, your signed
proxy card gives authority to Peter F. Scott, our Chief Financial and
Administrative Officer, and Douglas W. Roberts, our Secretary, to vote
on such matters at their discretion.
- -------------------------------------------------------------------------------
14. Q: WHO ARE THE LARGEST PRINCIPAL SHAREHOLDERS?
A: As of June 30, 1999, Texas Pacific Group and its related entities
owned 1,259,902 shares of Class A Common Stock (56.6% of the voting
shares) and 8,861,493 shares of Class B Common Stock (19.9% of the
voting shares). These combine for a total of 76.5% of the voting
shares.
- -------------------------------------------------------------------------------
15. Q: WHEN ARE THE SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING DUE?
A: All shareholder proposals to be considered for inclusion in next
year's proxy statement must be submitted in writing to Douglas W.
Roberts, Secretary, Beringer Wine Estates Holdings, Inc., 610 Airpark
Road, P.O. Box 4500, Napa, CA 94558 prior to June 2, 2000. All other
shareholder proposals must be received by Mr. Roberts by August 20,
2000.
Additionally, the proxy for next year's annual meeting will confer
discretionary authority to vote on any shareholder proposal that we do
not know about before August 20, 2000.
- -------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<C> <C> <S>
16. Q: CAN A SHAREHOLDER NOMINATE SOMEONE TO BE A DIRECTOR OF THE COMPANY?
A: As a shareholder, you may recommend any person as a nominee for
director by writing to the Nominating Committee of the Board of
Directors, c/o Beringer Wine Estates Holdings, Inc., 610 Airpark Road,
P.O. Box 4500, Napa, CA 94558. Recommendations must be received
between July 20, 2000 and August 20, 2000 for the 2000 Annual Meeting.
They must be accompanied by the name, residence and business address
of the nominating shareholder. They must include a representation that
the shareholder is a record holder of the stock or holds the stock
through a broker. They must state the number and class of shares held.
The recommendations must include a representation that the shareholder
intends to appear in person or by proxy at the meeting of the
shareholders to nominate the individual(s) if the nominations are to
be made at a shareholder meeting. They must include information
regarding each nominee that would be required to be included in a
proxy statement. They must also include a description of any
arrangement or understanding between and among the shareholder and
each and every nominee. Finally, the recommendations must include the
written consent of each nominee to serve as a director, if elected.
</TABLE>
5
<PAGE>
PROPOSALS YOU MAY VOTE ON
1. ELECTION OF DIRECTORS
There are 11 nominees for election this year. All directors are elected
annually, and serve a one-year term until the next Annual Meeting. If any
director is unable to stand for re-election, the Board may reduce its size
or designate a substitute. If a substitute is designated, proxies voting on
the original director candidate will be cast for the substituted candidate.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THESE DIRECTORS.
2. APPROVAL OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
AUDITORS.
The Audit Committee has recommended, and the Board has approved, the
appointment of PricewaterhouseCoopers LLP as our independent auditors for
fiscal 2000 (July 1, 1999 until June 30, 2000) subject to your approval.
PricewaterhouseCoopers LLP has served as our independent auditors since
1996. They have unrestricted access to the Audit Committee to discuss audit
findings and other financial matters.
Audit services provided by PricewaterhouseCoopers LLP during fiscal 1999
included an audit of our consolidated financial statements. They also
included an audit of the financial statements of our employee benefit plan.
They reviewed our Annual Report and certain other filings with the SEC and
certain other governmental agencies. PricewaterhouseCoopers LLP also
provided various non-audit services to us during fiscal 1999.
A representative of PricewaterhouseCoopers LLP is expected to attend the
Annual Meeting. He or she will have the opportunity to speak at the meeting
if he or she wishes. He or she will also respond to appropriate questions.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS FOR
FISCAL 2000.
6
<PAGE>
NOMINEES FOR THE BOARD OF DIRECTORS
Walter T. Klenz Director since January 1996
Age 54
Mr. Klenz became Chairman of the Board in August 1997. Mr. Klenz joined
Beringer Wine Estates in 1976 as director of marketing for the Beringer brand,
and has served as its President and Chief Executive Officer since 1990. From
1984 until 1990, he served as Senior Vice President, Finance/Operations. He
currently also serves on the Boards of Directors of America West Holdings
Corporation, and its subsidiaries, America West Airlines, Inc. and The Leisure
Company.
Richard L. Adams Director since January 1996
Age 48
Mr. Adams is partner of the law firm Worsham, Forsythe & Wooldridge, L.L.P. He
has been employed by that firm since 1978.
David Bonderman Director since January 1996
Age 56
Mr. Bonderman is a principal of Texas Pacific Group, a partnership he co-
founded in 1992. He currently serves on the Boards of Directors of Continental
Airlines, Inc.; Realty Information Group; Denbury Resources, Inc.; Bell &
Howell Company; Virgin Cinemas Limited; Ducati Motor Holdings, S.p.A.;
GPA/Aerfi; J. Crew Group, Inc.; Oxford Health Plans, Inc.; Rynair, Ltd. and
Washington Mutual, Inc.
Randy Christofferson Director since January 1996
Age 42
Mr. Christofferson is Chief Executive Officer of Walker Digital since 1999. He
served as President of First USA Bank from 1995 until 1999, and from 1990 to
1995 held various positions in the travel and related service business of
American Express. He currently serves on the Board of Directors of Walker
Digital and Monogram Credit Card Services.
James G. Coulter Director since January 1996
Age 39
Mr. Coulter served as Co-Chairman of the Board from January 1996 to August
1997. Mr. Coulter is a principal of Texas Pacific Group, a partnership he co-
founded in 1992. Mr. Coulter currently serves on the Boards of Directors of J.
Crew Group, Inc.; Oxford Health Plans, Inc.; Virgin Entertainment Group, Ltd.;
Northwest Airlines Corporation; Genesis Eldercare, Inc.; and Globespan, Inc.
Timm F. Crull Director since January 1996
Age 68
Mr. Crull was Chairman of the Board of Nestle USA from 1991 to 1994, and is
currently a member of the Boards of Directors of BankAmerica Corporation;
Hallmark Cards; and Smart & Final Inc.
William A. Franke Director since January 1996
Age 62
Mr. Franke has been Chairman, President and Chief Executive Officer of America
West Holdings Corporation and since 1992 has been Chairman of the Board of its
principal subsidiary, America West Airlines, Inc. He served as America West's
Chief Executive Officer from 1993 to 1997, and resumed these duties in 1999.
Mr. Franke is the owner and president of Franke & Company, Inc., a financial
advisory firm, and a managing partner of
7
<PAGE>
Newbridge Latin America, L.P., a private equity investment fund. He is also a
director of Central Newspapers, Inc., publisher of the Phoenix and
Indianapolis morning newspapers, Phelps Dodge Corporation, a major mining and
manufacturing company, and AerFi Group, plc., an entity involved in aircraft
financing and leasing.
E. Michael Moone Director since January 1996
Age 59
Mr. Moone has been Chairman of Napa Valley Kitchens in St. Helena, California,
Chairman of Luna Vineyards in Napa, California and Chairman and a managing
partner of Silverado Equity Partners, L.P. ("Silverado Partners") since 1995.
From 1990 to 1992, Mr. Moone served as President and Chief Executive Officer
of Stouffer Foods Corporation, where he also served as President of Nestle
Frozen Food Company. He is currently a member of the Board of Directors of
Ruiz Mexican Foods, Inc.
William S. Price III Director since January 1996
Age 43
Mr. Price served as Co-Chairman of the Board from January 1996 to August 1997.
Mr. Price is a principal of Texas Pacific Group, a partnership he co-founded
in 1992. Mr. Price currently serves on the Boards of Directors of Aerfi;
Continental Airlines, Inc.; Belden & Blake Corporation; Del Monte Holdings;
Denbury Resources, Inc.; Punch plc.; Favorite Brands, Inc.; Zilog, Inc.; and
Vivra Specialty Partners, Inc. Mr. Price is also an officer of Newbridge
Investment Partners.
Jesse Rogers Director since January 1996
Age 42
Mr. Rogers has been an officer of Bain & Company, Inc., an international
strategic consulting firm, since 1989, where he currently serves as a
director. He is currently a member of the Boards of Directors of Bain &
Company, Inc.; Ruiz Food Products, Inc. and the United Way of the Bay Area.
George A. Vare Director since January 1996
Age 62
Mr. Vare has been President of Luna Vineyards and a managing partner of
Silverado Partners since 1995. From 1991 to 1994, Mr. Vare was President and
Chief Executive Officer of the Henry Wine Group, then the fourth largest
California wine wholesaler.
8
<PAGE>
STATEMENT OF CORPORATE GOVERNANCE
Beringer Wine Estates' business is managed under the direction of the Board
of Directors. The Board delegates the conduct of business to Beringer Wine
Estates' senior management team.
Our Board usually meets four times a year in regularly scheduled meetings.
It may meet more often if necessary. The Board held four meetings in fiscal
1999. The CEO in consultation with the Executive Committee usually determines
the agenda for the meetings. Board members receive the agenda and supporting
information in advance of the meetings. Board members may raise other matters
at the meetings. The CEO, CFO and other members of senior management make
presentations to the Board at the meetings and a substantial portion of the
meeting time is devoted to the Board's discussion of these presentations.
Significant matters that require Board approval are voted on at the meetings.
Each year the independent, outside directors meet in executive session,
where the CEO is not present, to review the evaluation and recommendations
made by the Compensation Committee regarding the CEO. The Chairman of the
Executive Committee chairs these executive sessions. Whenever the CEO is also
the Chairman of the Board, the Chairman of the Executive Committee must be an
independent, outside director.
Board members have complete access to senior management. They may also seek
independent, outside advice.
Committee Structure. The Board considers all major decisions. The Board has
established four standing committees so that certain areas can be addressed in
more depth than may be possible at a full Board meeting. Each committee is
chaired by an independent, outside director.
Executive Committee. This committee exercises the authority of the Board
during intervals between Board meetings. This committee held four meetings
in fiscal 1999.
Audit Committee. This committee assures the credibility of our financial
reporting by providing oversight of our financial reporting process and our
internal controls. The Audit Committee operates pursuant to a charter
approved by the Board of Directors. The Audit Committee reports on its
activities to the Board. This committee held one meeting in fiscal 1999.
Compensation Committee. This committee reviews the compensation of the CEO
and senior management, as well as our general employee compensation and
benefits policies and practices. They approve the goals for our incentive
plans and they monitor results against those goals. This committee held
three meetings in fiscal 1999.
Nominating Committee. This committee identifies individuals with the
experience, judgment and skills to become Board members. It recommends to
the Board and our shareholders the slate of directors for nomination and
election each year. This committee did not formally meet in fiscal 1999.
9
<PAGE>
BOARD COMMITTEE MEMBERSHIP ROSTER
(as of June 30, 1999)
<TABLE>
<CAPTION>
Name Executive Audit Compensation Nominating
---- --------- ----- ------------ ----------
<S> <C> <C> <C> <C>
Richard L. Adams................... X
David Bonderman.................... X
Randy Christofferson............... X
James G. Coulter................... X* X* X*
Timm F. Crull...................... X
William A. Franke.................. X
Walter T. Klenz.................... X
E. Michael Moone................... X X X
William S. Price III............... X
Jesse Rogers....................... X
George A. Vare..................... X*
</TABLE>
--------
* denotes Chairman of the committee.
DIRECTORS' COMPENSATION
Each director (except Walter T. Klenz, who is an employee) receives $2,500
for each Board meeting attended. Directors may elect to receive this
compensation in cash, in shares of our Class B Common Stock or 50% in cash and
50% in stock. All eligible directors currently elect to receive all the Board
meeting compensation in stock. The stock is valued at its closing price on the
day of the Board meeting. Board members are also paid $1,000 for each
committee meeting they attend. Board members are reimbursed for travel
expenses to the meetings. They also each receive ten cases of our wines each
year. Employee directors are not eligible for any additional compensation for
service on the Board or its committees.
STOCK OWNERSHIP GUIDELINES
The Board has adopted stock ownership guidelines for directors. Directors
are expected to have an ownership interest equal to at least five times their
annual compensation for attendance at Board meetings in our stock within five
years of joining the Board. This ownership interest may include stock held in
family trusts and stock held by partnerships in which the director is a
general partner. Each Board member currently exceeds these guidelines.
10
<PAGE>
HOLDERS OF 5% OR MORE OF BERINGER WINE ESTATES' STOCK AND DIRECTORS' AND
OFFICERS' OWNERSHIP OF BERINGER WINE ESTATES' STOCK
The following table shows how much stock each of our directors and named
executive officers owned as of June 30, 1999 and also how much stock was
reportedly owned by entities owning 5% or more of our Class B Common Stock as
of June 30, 1999. This table includes both Class A and Class B Common Stock.
The table also includes vested option shares (as of June 30, 1999) that are
exercisable within 60 days. Shares held in family trusts or held in
partnerships where the director or officer is a general partner or exercises
voting control are included in the table.
<TABLE>
<CAPTION>
Shares of Percent of
Common Stock Common Stock
Name Beneficially Owned Owned
- ---- ------------------ ------------
<S> <C> <C>
Walter T. Klenz............................... 144,877 **
Robert E. Steinhauer.......................... 73,150 **
Edward B. Sbragia............................. 73,150 **
Peter F. Scott................................ 37,594 **
Douglas W. Roberts............................ 32,323 **
Richard L. Adams.............................. 5,604 **
David Bonderman............................... *10,121,395 51.76%
Randy Christofferson.......................... 2,891 **
James G. Coulter.............................. *10,121,395 51.76%
Timm F. Crull................................. 159,140 **
William A. Franke............................. 2,891 **
E. Michael Moone.............................. 595,726 3.05%
William S. Price III.......................... *10,121,395 51.76%
Jesse Rogers.................................. 24,791 **
George A. Vare................................ 262,078 1.34%
Texas Pacific Group and its related entities.. 10,121,395 51.76%
All directors and executive officers as a
group including those named above............ 11,706,874 59.87%
Wellington Management Company, LL............. 1,083,200 5.54%
Capital Research & Management................. 1,073,000 5.49%
</TABLE>
- --------
* denotes stock owned by TPG Partners L.P. and four of its related limited
partnerships ("TPG"). Mr. Bonderman, Mr. Coulter and Mr. Price are general
partners of TPG Advisors, Inc., which has voting and investment power over
shares owned by TPG. Each of them disclaims their beneficial ownership
except to the extent of their respective proportionate interest in each
entity. Texas Pacific Group maintains an office at 201 Main Street, Suite
2420, Fort Worth, Texas 76102.
** owns less than 1%.
EXECUTIVE COMPENSATION: REPORT OF THE COMPENSATION COMMITTEE
Compensation Philosophy. The Compensation Committee of the Board of
Directors has instituted a management compensation plan that:
Provides a competitive level of total compensation in order to attract and
retain the best managers;
Links compensation to performance. Compensation is comprised of a balance
of rewards for both short-term and long-term results;
Encourages long-term commitment to Beringer Wine Estates;
Encourages the strong financial and operational performance of Beringer
Wine Estates; and
Recognizes both individual and team performance.
11
<PAGE>
Compensation Methodology. Each year the Compensation Committee reviews
market data and assesses Beringer Wine Estates' competitive position in each
component of executive compensation. These components are base salary, annual
bonus and long-term incentive compensation. Executive compensation surveys
compiled by independent consultants are purchased to assist in this
benchmarking process. Similar survey results are also obtained through
participation in selected surveys. This information is supplemented with
general compensation information that is available from the business press.
Decisions are also based on factors such as individual performance, the level
of responsibility or the unique skills or experience of the executive.
Components of Compensation.
. Base Salary. The annual base salary is designed to compensate executives
for their sustained performance and level of responsibility. Base salary
is based on individual performance and the executive's grade level. The
Committee approves all salary increases for executive officers.
. Annual Bonus. The annual bonus is given in order to promote the
achievement of Beringer Wine Estates' performance objectives. We set
performance criteria that must be met before any payments are made. The
system is to fix a percentage of base salary as the guideline annual
incentive. These range from 30% to 67% of base salary. Payments may
range from 0 to 150% of the guideline incentive, depending on the pre-
tax operating income achievement. Special bonus payments may also be
approved by the Committee.
. Long-Term Incentive Compensation. The CEO recommends to the Committee
the number of option shares, if any, to be granted to each executive.
These recommendations are based on:
The executive's ability to impact the financial and operational
performance of Beringer Wine Estates;
The executive's past performance; and
The CEO's expectation of the executive's future performance and
contributions.
The CEO also recommends the vesting schedule and exercise price of the
options. In fiscal 1999 the options granted to each senior manager had
an exercise price of 116% of the fair market value on the date of
grant. These options vest in the fifth year following the date they
were granted. These rewards were directly tied to increasing
shareholder value. The Committee approves all option grants for
executive officers and the guidelines to be used for option grants for
other senior management and employees. In fiscal 1999, options were
granted to all full-time, regular employees of Beringer Wine Estates.
Compensation of the Chief Executive Officer. The Committee meets annually
to evaluate the performance of the CEO. Based on this evaluation, the
Committee may recommend for approval a salary increase, annual bonus and long-
term incentive awards, if any, at an executive session of the Board. Only
independent, outside directors participate in these executive sessions. The
CEO's compensation reflects a higher degree of policy and decision-making
authority and a higher level of responsibility with respect to strategic
direction of Beringer Wine Estates and its financial and operating results. It
also reflects the CEO's long term commitment and contributions to the success
of Beringer Wine Estates.
In June 1998 the Board, in executive session, approved an 8.57% base salary
increase for Mr. Klenz for fiscal 1999. Based on Beringer Wine Estates'
financial performance in fiscal 1998, as well Mr. Klenz's contributions to the
successful initial public offering of Beringer Wine Estates, Mr. Klenz
received an annual bonus of $462,500. The Board also approved an option grant
of 45,000 shares of Class B Common Stock. These options were granted at 116%
of the then fair market value of $37.40 per share, or $43.39 per share. This
option grant vests on September 15, 2003.
Compensation Committee Interlocks and Insider Participation. William A.
Franke, Chairman and CEO of America West Holdings Corporation, and Chairman of
its subsidiaries America West Airlines, Inc. and The Leisure Company, is a
member of the Compensation Committee. Walter T. Klenz, Chairman and CEO of
12
<PAGE>
Beringer Wine Estates Holdings, Inc. was elected to the Boards of Directors of
America West Holdings Corporation, America West Airlines, Inc. and The Leisure
Company in April 1998. Mr. Klenz currently serves as a member of the
compensation committees of America West Holdings Corporation and America West
Airlines, Inc. and also as the chairman of the compensation committee of The
Leisure Company.
Rutherford Quarry Vineyard, which is owned by a family trust for which Timm
Crull is a trustee, has a long-term crop share agreement with Beringer Wine
Estates. During fiscal 1999 the trust was paid approximately $30,000 under
this agreement
William S. Price III controls Sand Hill L.L.C. This company operates
Durrell Vineyards, a well-established and renowned vineyard in the Carneros
and Sonoma Valley appellations of Sonoma County, California. In fiscal 1998
Mr. Price's company entered into a multi-year agreement with Beringer Wine
Estates to supply grapes from Durrell Vineyards. During fiscal 1999 this
company was paid approximately $143,000 for these grapes.
We entered into a warehouse lease agreement in December 1990 with a
partnership in which E. Michael Moone and Walter T. Klenz hold interests. We
paid this partnership rent expense payments of $964,000 in fiscal 1999 and we
expect to pay the same amount in fiscal 2000.
We purchase gourmet food products for resale at our hospitality facilities
from Napa Valley Kitchens. Mr. Moone is Chairman of the Board of Napa Valley
Kitchens. In fiscal 1999 we purchased approximately $39,500 worth of food
products from Napa Valley Kitchens.
We made loans to Walter T. Klenz and Edward G. Sbragia in 1996 to purchase
our common and preferred stock. These loans bear interest at the prime rate
and are secured by 21,124 and 12,342 shares, respectively, of common stock.
The principal balances of these loans at June 30, 1999 were approximately
$106,000 and $58,000, respectively. These loans are due and payable in 2006.
Submitted by the Compensation Committee of the Board of Directors:
James G. Coulter, Chairman
Timm F. Crull
William A Franke
E. Michael Moone
Jesse Rogers
13
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------------
Annual Compensation Awards Payouts
--------------------- ---------------------- -------
Base Restricted Securities LTIP All Other
Name and Principal Salary Bonus Stock Underlying Payouts Compensation
Position Year ($) ($)(2) (3) Awards ($) Options ($) ($) ($)(1)
- ------------------ ---- ------ -------- --- ---------- ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Walter T. Klenz......... 1999 $380,000 $462,500 0 45,000 0 $ 28,128
President, Chief 1998 $350,000 $ 97,500 0 68,000 0 $ 26,113
Executive Officer and 1997 $287,500 $255,000 0 0 0 $474,275
Chairman of the Board
of Directors
Peter F. Scott.......... 1999 $235,833 $217,000 0 12,000 0 $ 19,116
Senior Vice-President-- 1998 $225,000 $ 20,000 0 24,000 0 $ 10,782
Finance & Operations, 1997 $ 68,750 $ 20,000 0 90,000 0 $ 458
Chief Financial Officer
(4)
Edward B. Sbragia....... 1999 $240,000 $115,000 0 12,000 0 $ 16,275
Senior Vice-President 1998 $225,000 $ 34,650 0 24,000 0 $ 15,946
and Winemaster 1997 $156,666 $103,210 0 0 0 $258,181
Robert E. Steinhauer.... 1999 $212,000 $103,000 0 12,000 0 $ 11,360
Senior Vice-President-- 1998 $200,000 $ 31,500 0 24,000 0 $ 14,195
Vineyard Operations 1997 $147,000 $ 92,576 0 0 0 $281,187
Douglas W. Roberts...... 1999 $136,350 $119,300 0 8,000 0 $ 9,560
Vice-President, General 1998 $130,313 $ 30,000 0 16,000 0 $ 9,606
Counsel and Secretary 1997 $ 99,583 $ 50,000 0 30,000 0 $ 80,063
</TABLE>
- --------
(1) These amounts represent matching contributions made by Beringer Wine
Estates under its 401-K, Executive Savings Plan, Executive Deferred
Compensation Plans plus the Basic and Special Contributions to the 401-K
Plan. In fiscal 1997 the former owner of Beringer Wine Estates paid to Mr.
Klenz, Mr. Steinhauer, Mr. Sbragia and Mr. Roberts a stay bonus of
$458,000, $274,000, $250,000 and $ 77,000, respectively. The stay bonus was
paid pursuant to agreements that required the individuals to continue
their employment with Beringer Wine Estates until September 1996.
(2) The bonus paid in fiscal 1998 was for the six month period beginning
January 1, 1997 and ending June 30, 1997. The period was changed in
connection with the change from a calendar year to a fiscal year ending
June 30. This does not include Mr. Carter's bonus, which is paid twice a
year based on sales results.
(3) The "Other Annual Compensation" column was omitted since this compensation
did not exceed the lesser of $50,000 or 10% of the total of any named
executive officer's salary and bonus.
(4) Mr. Scott joined Beringer Wine Estates in June 1997.
14
<PAGE>
The following table presents additional information concerning the option
awards shown in the Summary Compensation Table for fiscal year 1999. These
options to purchase Class B Common Stock were granted to the Named Executive
Officers under the 1996 Stock Option Plan.
OPTION GRANTS IN FISCAL 1999
<TABLE>
<CAPTION>
Individual Grants Potential Realizable
---------------------------------------------- Value at
Securities Assumed Annual Rates
Underlying of Stock Price
Options Percent of Appreciation for
Granted (2) Total Option Terms (1)
-------------- Options ---------------------
Granted to Exercise 5% 10%
Employees or Base Stock Stock
in Fiscal Price Expiration Price Price
Name Date Number Year ($/share) Date $70.68 $112.54
- ---- ------- ------ ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Walter T. Klenz......... 9/15/98 45,000 11.6792 $43.39 9/15/08 $3,180,600 $5,064,300
President, Chief
Executive Officer and
Chairman of the Board
of Directors
Peter F. Scott.......... 9/15/98 12,000 3.1145 $43.39 9/15/08 $ 848,160 $1,350,480
Senior Vice-President--
Finance & Operations,
Chief Financial Officer
Edward B. Sbragia....... 9/15/98 12,000 3.1145 $43.39 9/15/08 $ 848,160 $1,350,480
Senior Vice-President
and Winemaster
Robert E. Steinhauer.... 9/15/98 12,000 3.1134 $43.39 9/15/08 $ 848,160 $1,350,480
Senior Vice-President--
Vineyard Operations
Douglas W. Roberts...... 9/15/98 8,000 2.0763 $43.39 9/15/08 $ 347,120 $ 900,320
Vice-President, General
Counsel and Secretary
</TABLE>
- --------
(1) These dollar amounts are not intended to forecast future appreciation of
the common stock price. Executives will not benefit unless the common stock
price increases above the stock options exercise price. Any gain to the
executives resulting from common stock appreciation would benefit all
shareholders of the common stock. The additional value realized by all
shareholders of Beringer Wine Estates common stock as a group, based on
these assumed appreciation levels is as follows:
<TABLE>
<CAPTION>
Additional
Appreciation Level Value
------------------ --------------
<S> <C>
5%................. $ 650,770,332
10%................. $1,469,317,391
</TABLE>
(2) The option grants to the Named Executive Officers were made at the fair
market value plus 16%. These options are exercisable on the fifth
anniversary of the grant.
15
<PAGE>
AGGREGATED OPTION EXERCISES AND YEAR-END VALUES
The following table shows information for the Named Executive Officers,
concerning:
(i) exercises of stock options during 1999; and
(ii) the amount and values of unexercised stock options as of June 30,
1999.
Aggregated Option Exercises in 1999 and Year-End Option Values
<TABLE>
<CAPTION>
Number of Number of Securities Value of Unexercised
Securities Underlying Options In-the-Money
Underlying Granted (#) Options at Year-End ($)
Options Value ------------------------- --------------------------
Name Exercised (#) Realized ($) Exercisable Unexercisable Exercisable Unexerciseable
- ---- ------------ ------------ ----------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Walter T. Klenz......... 0 $0.00 82,460 153,808 $3,445,179 $6,426,098
President, Chief
Executive Officer and
Chairman of the Board
of Directors
Peter F. Scott.......... 0 $0.00 36,332 89,668 $1,517,950 $3,746,329
Senior Vice-President--
Finance & Operations,
Chief Financial Officer
Edward B. Sbragia....... 0 $0.00 40,002 61,372 $1,671,284 $2,564,122
Senior Vice-President
and Winemaster
Robert E. Steinhauer.... 0 $0.00 40,002 61,372 $1,671,284 $2,564,122
Senior Vice-President--
Vineyard Operations
Douglas W. Roberts...... 0 $0.00 22,000 32,000 $ 919,160 $1,336,960
Vice-President, General
Counsel and Secretary
</TABLE>
16
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph was prepared by Research Data Group, Inc. It shows how
an initial investment of $100 in Beringer Wine Estates' stock would have
compared to an equal investment in the S&P 500 Index or in an index of peer
group companies. We selected Brown Forman Corporation, Canandaigua Brands,
Chalone Wine Group LTD, R.H. Phillips Inc. and Robert Mondavi Corporation as
our peer group. The graph compares the total cumulative return and assumes all
dividends, if any, were reinvested.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG BERINGER WINE ESTATES HOLDINGS, INC.
PEER GROUP AND S&P 500 INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
BERINGER WINE
ESTATES S&P
CUMULATIVE TOTAL RETURN HOLDINGS, INC. PEER GROUP 500 INDEX
- ----------------------- -------------- ---------- ---------
<S> <C> <C> <C>
10/29/1997 $100.00 $100.00 $100.00
6/1998 $136.00 $108.00 $125.00
6/1999 $129.00 $115.00 $153.00
</TABLE>
DIRECTORS' AND OFFICERS' INDEMNIFICATION
Our bylaws require that we indemnify our directors and officers, to the
extent permitted under Delaware law. They are indemnified against any costs,
expenses (including legal fees) and other liabilities in connection with their
service to Beringer Wine Estates. We have purchased liability insurance to
insure against these liabilities. We have also entered into indemnification
agreements with each of our directors and executive officers. The insurance
and indemnification agreements supplement the provisions of our Certificate of
Incorporation that eliminate the potential liability of directors and officers
to Beringer Wine Estates or its shareholders in situations, as permitted by
law.
17
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
We believe that during fiscal 1999, all SEC filings of directors, officers
and ten percent shareholders complied with the requirements of Section 16 of
the Securities Exchange Act. This belief is based on our review of forms filed,
or written notice that no forms were required.
By Order of the Board of Directors,
/s/ Douglas W. Roberts
Douglas W. Roberts
Vice President, General Counsel and
Secretary
Napa, California
September 30, 1999
18
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
BWE818 DETACH HERE
PROXY
BERINGER WINE ESTATES HOLDINGS, INC.
This Proxy is solicited on behalf of the Board of Directors
ANNUAL MEETING OF SHAREHOLDERS, NOVEMBER 4, 1999
The undersigned shareholder of Beringer Wine Estates Holdings, Inc. hereby appoints Peter F. Scott and Douglas W. Roberts or each
of them attorneys and proxies, with full power of substitution, to represent the undersigned and vote all of the shares of Beringer
Wine Estates Holdings, Inc.'s Common Stock, of which the undersigned is entitled to vote at the Annual Meeting of Shareholders, on
November 4, 1999, at 9:00 A.M. (local time) or any adjournment(s) thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE
- ------------------ ------------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ------------------ ------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
BWE818 DETACH HERE
Please mark
[X] votes as in
this example.
The shares represented by this proxy will be voted as directed by the shareholder. If no direction is given when the duly
executed proxy is returned, such shares will be voted "FOR ALL" NOMINEES IN ITEM 1 and "FOR" item 2.
1. Election of the following nominees as Directors:
FOR AGAINST ABSTAIN
Nominees: Richard L. Adams, David Bonderman,
Randy Christofferson, James G. Coulter, Timm F. 2. Ratification of Independent [ ] [ ] [ ]
Crull, William A. Franke, Walter T. Klenz, Public Accountants.
(Chairman), E. Michael Moone, William S. Price III,
Jesse Rogers and George A. Vare.
FOR WITHHELD The undersigned hereby authorizes the proxies, in their
ALL [ ] [ ] FROM ALL discretion, to vote on any other business as may properly be
NOMINEES NOMINEES brought before the meeting or any adjournment thereof.
MARK HERE IF YOU WOULD LIKE TO ATTEND THE ANNUAL
MEETING OF SHAREHOLDERS [ ]
[ ]
---------------------------------------------- Name: Phone:
To withhold authority to vote for any individual -------------------------- --------------------
nominee, write that nominee's name on the line Address:
provided above. ---------------------------------------------------
---------------------------------------------------
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please mark, date and sign as your name appears hereon and return
in the enclosed envelope. If acting as executor, administrator,
trustee, guardian, etc. you should so indicate when signing. If
the signer is a corporation, please sign in full corporate name,
by duly authorized officer.
Signature: Date: Signature: Date:
-------------------------------- ------------ -------------------------------- ------------
</TABLE>
