BERINGER WINE ESTATES HOLDINGS INC, SC 14D9, 2000-09-01

BERINGER WINE ESTATES HOLDINGS INC
SC 14D9, 2000-09-01
BEVERAGES

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934

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BERINGER WINE ESTATES HOLDINGS, INC.
(Name of Subject Company)

BERINGER WINE ESTATES HOLDINGS, INC.
(Name of Person(s) Filing Statement)

Class A Common Stock, Par Value $.01 per Share
Class B Common Stock, Par Value $.01 per Share
(Title of Class of Securities)

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Not Applicable
084102102
(CUSIP Number of Class of Securities)

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Douglas W. Roberts
Vice President, General Counsel and Secretary
Beringer Wine Estates Holdings, Inc.
610 Airpark Road
Napa, CA 94558
(707) 259-4500

(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communication on Behalf of the Person(s) Filing Statement)

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Copy to:

Gregg F. Vignos, Esq.
Pillsbury Madison & Sutro LLP
50 Fremont Street
San Francisco, CA 94105
(415) 983-1000

[_]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.

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Item 1. Subject Company Information.

(a) Name and Address. The name of the subject Company to which this
Solicitation/Recommendation Statement on Schedule 14D-9 (this "Statement")
relates is Beringer Wine Estates Holdings, Inc., a corporation formed under
the laws of the State of Delaware (the "Company"). The address of the
principal executive offices of the Company is 610 Airpark Road, Napa,
California 94558. The telephone number of the principal executive offices of
the Company is (707) 259-4500.

(b) Securities. The titles of the classes of securities to which this
Statement relates are the Class A common stock, par value $.01 per share, of
the Company (the "Class A Common Stock") and the Class B common stock, par
value $.01 per share, of the Company (the "Class B Common Stock," and together
with the Class A Common Stock, the "Shares"). As of August 28, 2000, there
were 1,337,962 shares of Class A Common Stock and 18,439,214 shares of Class B
Common Stock outstanding, and 1,854,238 shares of Class B Common Stock
issuable upon exercise of outstanding employee stock options.

Item 2. Identity and Background of Filing Person.

(a) Name and Address. The name, address and telephone number of the Company,
which is the person filing this Statement, are set forth in Item 1(a) above.

(b) Tender Offer. This Statement relates to the tender offer by Bordeaux
Acquisition Corp., a corporation formed under the laws of the State of
Delaware ("Purchaser") and an indirect wholly-owned subsidiary of Foster's
Brewing Group Limited, a corporation formed under the laws of the State of
South Australia, Commonwealth of Australia ("Foster's"), disclosed in a Tender
Offer Statement on Schedule TO filed by Purchaser and Foster's (the "Schedule
TO") with the United States Securities and Exchange Commission (the
"Commission") on September 1, 2000, to purchase all the outstanding Shares at
a purchase price of $55.75 per share, net to the seller in cash, without
interest, prorated for fractional Shares (the "Offer Price"), upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated
September 1, 2000 and filed as Exhibit (a)(1) to the Schedule TO (the "Offer
to Purchase"), and the related Letter of Transmittal (the "Letter of
Transmittal" which, together with the Offer to Purchase, as they may be
amended and supplemented from time to time, constitute the "Offer").

The Offer is being made pursuant to the Agreement and Plan of Merger, dated
August 28, 2000, among Foster's, Purchaser and the Company (the "Merger
Agreement"). The Merger Agreement provides, among other things, that as soon
as practicable after consummation of the Offer and the satisfaction or waiver
of certain conditions set forth in the Merger Agreement, in accordance with
the relevant provisions of the Delaware General Corporation Law (the "DGCL"),
Purchaser will be merged with and into the Company (the "Merger"). Following
the effective time of the Merger (the "Effective Time"), the Company will
continue as the surviving corporation (the "Surviving Corporation") and an
indirect wholly-owned subsidiary of Foster's.

In the Merger, each of the Shares issued and outstanding immediately prior
to the Effective Time (other than Shares held by the Company or owned by
Foster's, Purchaser or any other subsidiary of Foster's or the Company, which
shall be canceled, and other than the Shares, if any, held by stockholders who
have properly demanded and perfected their appraisal rights under Section 262
of the DGCL) will, by virtue of the Merger and without any action on the part
of the holders of the Shares be converted into the right to receive $55.75 per
share (or any higher price paid per share in the Offer), net to the record
holder thereof, in cash, without interest, upon surrender of the certificate
formerly representing such Shares, less any required withholding taxes. The
Merger Agreement is more fully described in Section 12 of the Offer to
Purchase which is incorporated herein by reference.

Certain holders of the Shares (including TPG Partners, L.P., TPG Parallel I,
L.P., TPG GenPar, L.P., and Wine Partners, L.P., each of which are affiliates
of the Texas Pacific Group, and certain of the directors and officers of the
Company) who together hold approximately 55% of the Shares on a fully diluted
basis as of August 22, 2000 (the "Selling Stockholders") have entered into a
Tender, Voting and Option Agreement dated as of August 28,

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2000 (the "Tender Agreement") with Foster's and Purchaser pursuant to which
the Selling Stockholders have, among other things, agreed to tender in the
Offer such Shares beneficially owned by them and vote their Shares in favor of
the Merger and the Merger Agreement.

Copies of the Merger Agreement and the Tender Agreement (collectively, the
"Transaction Agreements") are filed herewith as Exhibits (e)(1) and (e)(2),
respectively, and are incorporated herein by reference. A copy of the press
release issued by the Company on August 28, 2000 is filed as Exhibit (a)(3)
hereto and is incorporated herein by reference.

As set forth in the Schedule TO, the address of the principal executive
offices of Foster's and the Purchaser are located at 77 Southbank Boulevard,
Southbank, Victoria, Australia 3006.

Item 3. Past Contacts, Transactions, Negotiations and Agreements.

Certain contacts, agreements, arrangements or understandings between the
Company or its affiliates and certain of its directors and executive officers
are, except as noted below, described in the Information Statement pursuant to
Section 14(f) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and Rule 14f-1 thereunder (the "Information Statement") that
is attached as Annex B to this Statement and is incorporated herein by
reference. Except as set forth in this Item 3 or in the Information Statement
or as incorporated by reference herein, to the knowledge of the Company, as of
the date hereof there are no material agreements, arrangements or
understandings and no actual or potential conflicts of interest between the
Company or its affiliates and (1) the Company or the Company's executive
officers, directors or affiliates, or (2) Foster's, the Purchaser, or their
respective executive officers, directors or affiliates.

The Transaction Agreements. The summaries of the Transaction Agreements and
the description of the conditions of the Offer contained in Sections 12 and
14, respectively, of the Offer to Purchase, which is being mailed to
stockholders together with this Statement, are incorporated herein by
reference. Such summaries and description are qualified in their entirety by
reference to the Transaction Agreements, which are incorporated herein by
reference.

Fee Agreement with TPG GenPar, L.P. Pursuant to a letter agreement, dated
August 28, 2000 (the "Fee Agreement"), between TPG GenPar, L.P. ("TPG GenPar")
and the Company, the Company agreed to pay to TPG GenPar a fee of $4,000,000
(the "Transaction Fee") in the event that (i) the Effective Time occurs or
(ii) any termination fee becomes payable by the Company pursuant to the Merger
Agreement. The Transaction Fee is to be paid in consideration of the
investment banking and financial advisory services provided by TPG GenPar to
the Company in connection with Foster's proposed acquisition of the Company.
TPG GenPar is an affiliate of the Texas Pacific Group and certain of the
Selling Stockholders.

The Transaction Fee is payable in cash on the first business day following
August 28, 2003. However, the Fee Agreement provides that in lieu of making a
cash payment the Company can satisfy its obligation to pay the Transaction Fee
by granting TPG GenPar an option (the "Property Option") to purchase certain
real properties (the "Properties") that are owned by the Company and its
subsidiaries, or which the Company currently has an option to acquire. The
exercise price of the Property Option would be the book value of the
Properties as of August 28, 2000. The Properties consist of a manor house and
surrounding land in California and a villa and surrounding land in Italy. The
Fee Agreement also provides that the Property Option will contain certain
other terms to be agreed upon, including (i) a right of first offer in favor
of the Company should TPG GenPar dispose of the Properties in the future (if
requested by the Company), (ii) rights of the Company to certain continued use
of the Properties, and (iii) rights of the Company to use certain intellectual
property related to the Properties. The Property Option may be granted by the
Company in satisfaction of its obligation to pay the Transaction Fee only if
the terms of the Property Option are agreed to by the Company and TPG GenPar.
TPG GenPar and the Company have agreed to use their reasonable best efforts to
negotiate the terms of the Property Option.

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Under the Fee Agreement, the Company has agreed to indemnify TPG GenPar
against certain liabilities in connection with any action, suit or proceeding
brought by or on behalf of any stockholder of the Company with respect to the
Fee Agreement or the Property Option.

The Fee Agreement was approved unanimously by those directors of the Company
who are not affiliated with the Texas Pacific Group (Walter T. Klenz, Richard
L. Adams, Randy Christofferson, Timm F. Crull, William A. Franke, E. Michael
Moone, and Jesse Rogers). In approving the Fee Agreement, those directors took
into account the benefits received by the Company and its stockholders (other
than those stockholders affiliated with the Texas Pacific Group) from the
Offer and the Merger and the investment banking and advisory services provided
by TPG GenPar in connection with the structuring and negotiation of the
transaction agreements (including assistance in negotiating the provisions
permitting the Company Board to terminate the Merger Agreement under certain
circumstances where a superior proposal has been received from a third party).

Employment Agreements. The Company does not presently have employment
agreements with any of its executive officers. The Company is, however, a
party to severance agreements with each of Ben Lawrence and Lloyd P. Chasey.
See "Severance Agreements" in the Information Statement attached as Annex B to
this Statement.

At Foster's request, nine of Beringer's executive officers (Walter T. Klenz,
Edward B. Sbragia, Peter F. Scott, Robert E. Steinhauer, James W. Watkins,
Thomas W. Peterson, Douglas W. Roberts, Ben Lawrence and Lloyd P. Chasey) have
agreed to enter into employment agreements with Beringer following the
completion of the merger. Each of the proposed employment agreements provides
for an employment term of three years, which will automatically renew for an
additional one-year period on each anniversary date of the agreement unless
either the Company or the covered executive gives notice that it or he does
not desire to extend the term of the agreement.

The proposed form of employment agreement provides for an annual base salary
equal to the covered executive's current base salary (subject to review at
least annually), continued participation in the Company's current short-term
bonus plan and other employee benefits consistent with those currently
provided to the covered executive by the Company (other than stock options and
other stock-based compensation). Foster's has also agreed to implement a long-
term incentive plan for the covered executives providing incentives comparable
to the Company's existing stock-based long-term incentive program.

The proposed form of employment agreement provides that if the employment of
the covered executive is terminated by the Company other than for "cause" or
by the covered executive for "good reason" (as those terms are defined in the
proposed agreement), the covered executive will be entitled to receive a lump-
sum severance payment equal to either one or two years of annual base salary
(two years for Messrs. Klenz, Sbragia, Scott, Steinhauer and Watkins, and one
year for each of the other covered executives), plus an amount equal to 100%
of the covered executive's target bonus under the Company's then existing
short and long-term incentive plans.

The foregoing summary of the proposed employment agreements does not purport
to be complete and is qualified in its entirety by the complete text of the
proposed form of employment agreement, which is filed as Exhibit (e)(4) to
this Statement and incorporated herein by this reference.

EFFECTS OF THE OFFER AND THE MERGER UNDER COMPANY STOCK PLANS AND AGREEMENTS
BETWEEN THE COMPANY AND ITS EXECUTIVE OFFICERS; CERTAIN OTHER ARRANGEMENTS.

Stock Options. The Merger Agreement provides that the Company shall take all
actions necessary to provide that each of the Options (as defined below)
outstanding immediately prior to the Merger granted under any of the Company's
Option Plans (as defined below) will be canceled by the Company as of the
Effective Time, with the holder thereof becoming entitled to receive an amount
in cash equal to (i) the excess, if any, of

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(A) $55.75 over (B) the exercise price per share of Class B Common Stock
subject to such Options, multiplied by (ii) the number of shares of Class B
Common Stock for which such Options shall not theretofore have been exercised.
However, all amounts payable as set forth above with respect to Options will
be subject to any required withholding of taxes or proof of eligibility of
exemption therefrom and to receipt of the written consent of the holder
thereof and shall be paid at or as soon as practicable following the Merger,
without interest. Under the Merger Agreement the Company also agreed to take
all actions necessary to provide that on and after the date of the Merger
Agreement, (i) no shares of Class B Common Stock shall be purchased under any
Option Plan that is an "employee stock purchase plan," as defined in Section
423(b) of the Internal Revenue Code of 1986, as amended, from and after the
date of the Merger Agreement and (ii) any amounts previously contributed by
employees (through payroll deduction or otherwise) for the purpose of
purchasing shares of Class B Common Stock under any such Option Plan (for
which the shares of Class B Common Stock have not been purchased as of the
date of the Merger Agreement) will be returned to such employees prior to the
Effective Time.

"Options" means any option to purchase Shares granted under any of the
Option Plans. "Option Plans" means the Company's 1996 Stock Option Plan and
1998 Stock Option Plan, all separate stock option agreements under which
options were issued since January 1, 1999 and the provisions of the employment
agreements for officers that include certain terms of options granted under
the Company's 1996 Stock Option Plan and 1998 Stock Option Plan.

Benefit Plans. The Merger Agreement provides that at the Effective Time the
Surviving Corporation will continue as the plan sponsor of each Employee Plan
(as defined in the Merger Agreement). In addition, for at least one year
following the Effective Time, the Surviving Corporation, except as set forth
above, shall provide employee benefits to employees of the Company and its
subsidiaries that, in the aggregate, are substantially comparable to the
employee benefits provided immediately prior to the date of the Merger
Agreement (other than equity or equity-based programs).

Employment/Severance Agreements. The purchase of Shares pursuant to the
Offer will constitute a "change of control" under the terms of the Company's
1996 Stock Option Plan and the Company's 1998 Stock Option Plan and the terms
of Options granted thereunder under separate option agreements. All Options
granted thereunder will vest upon the "change of control." Similarly, the
Company's matching contribution to the Retirement Savings Plan (as defined in
the Merger Agreement) will vest upon the "change of control."

Indemnification and Insurance. The Merger Agreement provides (i) for the
indemnification of the Company's directors and officers in certain
circumstances, including with respect to the Merger Agreement and the
transactions contemplated thereby, (ii) that the existing indemnification
obligations of the Company in favor of its directors and officers contained in
its certificate of incorporation and bylaws will remain in place for a period
of six years after the Effective Time, and (iii) that director and officer
indemnity insurance coverage will be maintained for the Company's directors
and officers for a period of six years after the Effective Time. A more
detailed summary of these provisions in the Merger Agreement is contained in
Section 12 of the Offer to Purchase (which is attached as Exhibit (a)(1) to
the Schedule TO and is incorporated herein by reference).

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constituting the same percentage of each such committee as Foster's designees
are of the Company Board. The Company shall, upon request by Foster's,
promptly increase the size of the Company Board or use its best efforts to
secure the resignations of such number of directors as is necessary to enable
Foster's designees to be elected to the Company Board and shall cause Foster's
designees to be so elected. However, even if the Foster's designees are
appointed or elected to the Company Board, until the Effective Time, the
Company Board shall include at least three directors who are directors on the
date of the Merger Agreement and who are neither officers of the Company nor
designees, stockholders, affiliates or associates (within the meaning of the
Federal securities laws) of Foster's (the "Independent Directors").

Prior to the Effective Time the affirmative vote of a majority of the
Independent Directors is necessary to do the following under the Merger
Agreement (i) amend or terminate such agreement on behalf of the Company, (ii)
exercise or waive any of the Company's rights or remedies thereunder, (iii)
extend the time for performance by Foster's, (iv) take any other action by the
Company required to be taken by the Company Board, or (v) enforce any rights
or remedies of the Company thereunder.

Item 4. The Solicitation or Recommendation.

(a) Recommendation of the Board of Directors. At a meeting held on August
28, 2000, the members of the Company Board present at such meeting unanimously
(with one director absent) and duly (i) determined that each of the
transactions contemplated by the Merger Agreement, including the Offer, and
the Merger is advisable, fair to, and in the best interests of, the Company's
stockholders, (ii) approved and adopted the Merger Agreement and approved the
Tender Agreement and the transactions contemplated by the Merger Agreement and
the Tender Agreement, including the Offer and the Merger, (iii) determined to
recommend that the Company's stockholders accept the Offer and tender their
Shares pursuant thereto and approve and adopt the Merger Agreement and the
transactions contemplated thereby, and (iv) resolved that the Merger Agreement
and Tender Agreement and the transactions contemplated thereby were exempted
from the provisions of Section 203 of the DGCL (assuming that Foster's and
Purchaser were not "interested stockholders," as such term is defined in
Section 203 of the DGCL).

(b) BACKGROUND; REASONS FOR THE COMPANY BOARD'S RECOMMENDATION

Because of competitive pressures in the wine industry and the potential
cost-saving and revenue-enhancing effects of a business combination with other
industry participants, the Company Board and the Texas Pacific Group had been
considering possible strategic alternatives for the Company, including
potential business combination transactions, during the course of 1999 and
2000.

In July 1999, the Company retained Goldman, Sachs & Co. to act as its
financial adviser in connection with exploring certain strategic alternatives.

During August 1999, representatives of the Company engaged in preliminary
discussions regarding a potential business combination transaction with a
major participant in the wine industry (the "First Potential Partner"). The
Company and the First Potential Partner executed a customary confidentiality
agreement shortly thereafter.

On August 18, 1999, the Company's management reported to the Company Board
regarding the progress of its exploration of potential strategic alternatives,
and the Company Board directed management to continue its activities in this
regard.

On September 16, 1999, at the request of Ted Kunkel, President and Chief
Executive Officer of Foster's, James Coulter, a principal of Texas Pacific
Group and a member of the Company Board, met with Mr. Kunkel to discuss
possible strategic transactions between Foster's and the Company. Mr. Kunkel
informed Mr. Coulter that Foster's was interested in expanding its wine
operations and wished to explore the possibility of acquiring or merging with
the Company. Mr. Coulter informed Mr. Kunkel that although the Company was not
for sale, he would discuss these possibilities with the other members of the
Company Board.

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In October 1999, representatives of the Company and the First Potential
Partner continued their discussions, during which the First Potential Partner
indicated that it might be prepared to acquire the Company for a combination
of stock and cash that, at then prevailing market prices, would have been
worth approximately $55.00 per Share.

On November 4, 1999, a meeting of the Company Board was held during which
representatives of Goldman, Sachs & Co. and management of the Company reviewed
the discussions that had been held with the First Potential Partner. Because
of, among other things, the form of the proposed transaction with the First
Potential Partner and in light of other potential strategic alternatives, the
Company Board determined not to pursue further discussions with the First
Potential Partner at that time.

Meetings were held on December 2 and 3, 1999, between Mr. Kunkel, Terry
Davis, Managing Director of Mildara Blass Limited, Ian Frasier Smith, Vice
President--Strategy of Foster's, and Walter Klenz, the Company's Chairman and
Chief Executive Officer, Peter Scott, the Company's Executive Vice President
and Chief Financial and Administrative Officer, William Price, a principal of
Texas Pacific Group and a member of the Company Board, and Mr. Coulter. At
this meeting, the parties discussed the operations and strategies of Foster's
and the Company and a range of various alternatives, including the possibility
of a strategic alliance with Foster's or a merger in which the Company's
shares would be exchanged for stock of Foster's or a subsidiary of Foster's.
No conclusions were reached at this meeting. Following this meeting, Foster's
and the Company signed a customary confidentiality agreement.

During the period between the December meetings and July 2000,
representatives of Foster's and the Company continued to discuss various
structures for potential strategic transactions between the two companies.

In late January 2000, Mr. Klenz met with representatives of another major
participant in the wine industry (the "Second Potential Partner") to discuss a
potential stock-for-stock merger of the Company and the Second Potential
Partner.

From February 2000 through May 2000, Mr. Klenz, representatives of the Texas
Pacific Group and members of the Company Board held discussions with the chief
executive officer and representatives of the Second Potential Partner to
further discuss the possibility of a stock-for-stock merger of the Company and
the Second Potential Partner. The parties discussed the business and prospects
of each company and the potential combined company as well as corporate
governance issues. In April 2000, the Company and the Second Potential Partner
executed a customary confidentiality agreement.

On May 18, 2000, the Company's management reported to the Company Board
regarding the progress of its exploration of potential strategic alternatives,
and the Company Board directed management to continue its activities in this
regard.

On July 6, 2000, at the request of Mr. Kunkel, representatives of Foster's
and the Company renewed their preliminary discussions at a meeting held in San
Francisco, California. In attendance at that meeting were David Bonderman, a
principal of the Texas Pacific Group and a member of the Company Board, Peter
Bobeff, Senior Vice President--Commercial Affairs of Foster's, and Messrs.
Coulter, Klenz and Davis. Mr. Kunkel informed the Company and the Texas
Pacific Group that, subject to completion of its due diligence review of the
Company's operations and financial condition and conditioned on the retention
of the Company's senior management, Foster's was prepared to consider a cash
offer in the range of $52.00 per Share for the Company. Mr. Kunkel indicated
that Foster's might increase its offer if the acquisition were for a
combination of cash and Foster's shares but that Foster's would not
participate in an auction process. Mr. Bonderman responded that the Texas
Pacific Group did not view the mix of Foster's stock and cash as favorable and
that the Texas Pacific Group would not consider supporting any Foster's offer
to acquire the Company unless it offered cash in the range of $55.00 to $58.00
per Share. At the conclusion of the meeting, the parties agreed that there was
sufficient mutual interest to warrant further discussions regarding a possible
sale of the Company.

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On July 19, 2000, Mr. Davis met with Mr. Klenz and Mr. Scott to further
discuss the Company's operations and financial performance. At these meetings,
the Company provided Foster's with its internal estimates of the Company's
future financial performance for its fiscal years ended June 30, 2000, 2001,
2002 and 2003.

During the month of August 2000, Foster's and its financial, legal and
accounting advisers conducted a due diligence review of the Company, including
meetings with the Company's management.

During early to mid-August, 2000 the representatives of the Company and the
Texas Pacific Group continued to meet with representatives of the Second
Potential Partner to further discuss issues related to a possible stock-for-
stock merger between the Company and the Second Potential Partner, including
valuation and operating issues.

On August 14, 2000, Messrs. Kunkel, Bobeff, Davis, Bonderman, Coulter,
Klenz, and Price met again. At that meeting, the representatives of Foster's
stated that they were prepared to recommend to Foster's Board that Foster's
offer $55.00 per Share in cash provided that Texas Pacific Group irrevocably
committed to the transaction and that the transaction terms would otherwise
give Foster's certainty that the transaction would be completed. The Company
representatives indicated that they would communicate Foster's proposal to the
Company Board the following day.

On August 15, 2000, the Company Board held a meeting in which members of
Goldman, Sachs & Co. and Pillsbury Madison & Sutro LLP, the Company's outside
legal counsel, participated to review the status of the Company's strategic
initiatives. At that meeting, Pillsbury Madison & Sutro LLP advised the
members of the Company Board of their fiduciary duties in connection with
potential business combination transactions. Members of senior management and
representatives of Goldman, Sachs & Co. discussed with the Company Board the
terms of the proposed Foster's transaction and reviewed the discussions that
had been held with the First Potential Partner and the Second Potential
Partner. It was noted that because of the decline in its stock price, the
acquisition of the Company by the First Potential Partner for a combination of
stock and cash proposed in 1999 would currently be worth significantly less
than the price proposed by Foster's and that in a recent attempt to revive
discussions with the First Potential Partner representatives of the Company
were informed that the First Potential Partner would not be able to make a
proposal that was as favorable to the Company with respect to price and other
terms as the proposal made by Foster's. It also was noted that significant
issues existed regarding a transaction with the Second Potential Partner,
including capital markets, valuation and operating issues. Therefore, the
proposed stock-for-stock merger with the Second Potential Partner likely would
not provide value to the holders of Shares equivalent to the price proposed by
Foster's. The Company Board also discussed the merits of remaining
independent. Following this discussion, the Company Board authorized
management to continue to pursue discussions of a possible transaction with
Foster's that would include provisions permitting termination of the
transaction if the Company received a superior proposal from a third party.

Later on August 15, 2000, Messrs. Bonderman, Coulter and Price met with
Messrs. Bobeff, Kunkel and Davis. Mr. Bonderman indicated that the Company and
the Texas Pacific Group would be prepared to consider a transaction in the
range of $57.00 per Share if the transaction included customary provisions
permitting termination following receipt by the Company of a superior proposal
from a third party.

On August 16, 2000, Mr. Coulter met with Messrs. Bobeff and Davis. Mr.
Bobeff reported that he and the other Foster's representatives were prepared
to recommend to Foster's Board that Foster's offer $55.75 per Share in cash in
a transaction containing customary provisions permitting termination following
receipt by the Company of a superior proposal from a third party and payment
of a termination fee, subject to completion of Foster's due diligence review
and negotiation of satisfactory documentation. The proposal included a
provision under which the Texas Pacific Group, and members of the Company
Board and senior management would enter into an agreement with Foster's to
tender their shares in the Offer unless the Company terminated the merger
agreement to accept a superior proposal and a provision that the Texas Pacific
Group would share its proceeds in excess of $55.75 per Share from any such
superior proposal with Foster's. Mr. Bobeff further indicated that Foster's
was interested in further pursuing a transaction with the Company only on an
exclusive basis. Mr. Coulter responded that those terms would be communicated
to the Company Board.

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On August 17, 2000, the Company and Foster's entered into an agreement,
providing that, for as long as the Company and Foster's were continuing good
faith negotiations of a potential transaction through August 28, 2000, the
Company and its officers, directors and agents would not solicit or negotiate
with respect to an alternative acquisition of the Company.

During the period between August 17, 2000 and August 28, 2000, Foster's and
its financial, legal and accounting advisers continued their due diligence
review of the Company and its operations and financial condition and the
parties and their legal advisers negotiated the terms of the transaction and
the related agreements. In addition, at the request of Foster's, the parties
discussed the terms of employment arrangements with the Company's senior
executives. The terms of these arrangements are described in Item 3 of this
Schedule 14D-9.

On August 22, 2000, a meeting of the Company Board was held during which Mr.
Klenz reported that Foster's had increased its proposal to $55.75 per Share.
During that meeting, the members of the Company Board reviewed the proposed
terms of the Transaction Agreements with representatives of Goldman, Sachs &
Co. and Pillsbury Madison & Sutro LLP. The members of the Company Board also
were further advised of their fiduciary duties by Pillsbury Madison & Sutro
LLP.

On August 28, 2000, a special meeting of the Company Board was held in which
representatives of Goldman, Sachs & Co. and Pillsbury Madison & Sutro LLP, the
Company's outside counsel, participated. At that meeting, Goldman, Sachs & Co.
presented its valuation analyses regarding the Company and rendered an opinion
to the Company Board to the effect that as of August 28, 2000 the
consideration of $55.75 per Share proposed to be paid in cash by Foster's was
fair to the holders of Shares from a financial point of view. Following
discussions with Goldman, Sachs & Co. and counsel, the Company Board approved
the proposed transaction with Foster's. Later on August 28, 2000, the Company
and Foster's executed and delivered the Merger Agreement and the Texas Pacific
Group and members of the Company Board and Senior Management entered into the
Tender Agreement.

On August 28, 2000, the Company publicly announced that it had entered into
a Merger Agreement and that the Texas Pacific Group and members of the Company
Board and its senior management had entered into the Tender Agreement. The
Offer was formally commenced on September 1, 2000.

For additional information regarding the background of the Offer, see
Section 11 in the Offer to Purchase which is attached as Exhibit (a)(1) to the
Schedule TO.

Reasons for the Company Board's Recommendations; Factors Considered

In approving the Transaction Agreements and the transactions contemplated
thereby, including the Offer and the Merger, and recommending that all holders
of Shares accept the Offer and tender their Shares pursuant to the Offer,
approve the Merger and adopt the Merger Agreement, the Board of Directors
considered a number of factors including:

1. The historical market prices, price to earnings ratios, ratios of
market price to earnings before interest, taxes, depreciation and
amortization and other similar ratios, recent trading activity in, and
trading range of the shares of Class B Common Stock, and particularly the
fact that the Offer Price represents (i) a premium of approximately 28.2%
over the $43.50 closing price of the shares of Class B Common Stock on The
Nasdaq National Market ("NASDAQ") on August 25, 2000, the last full trading
day prior to the announcement of the execution of the Merger Agreement, and
(ii) a premium of approximately 45.6% over the $38.30 one year average
closing price of the Class B Common Stock on NASDAQ during the period
ending August 25, 2000. In addition, the Company Board considered that the
Offer Price would be payable in cash, thus eliminating any uncertainties
involving the value of the consideration to be received by holders of
Shares, but subjecting most holders of Shares to taxation on any gain..

2. The financial condition, results of operations, cash flows, business
and prospects of the Company, including the Company's prospects as an
independent company in light of increased competition levels in the wine
industry.

9
<PAGE>

3. The fairness opinion of Goldman, Sachs & Co., dated as of August 28,
2000, to the effect that, as of such date, the consideration to be received
by the holders of the Shares in the Offer and Merger is fair from a
financial point of view to such holders, as well as the valuation analyses
performed by Goldman, Sachs & Co. and presented to the Company Board at its
meeting on August 28, 2000. The full text of the written opinion, dated as
of August 28, 2000, of Goldman, Sachs & Co., which sets forth the
assumptions made, matters considered and limitations on the review
undertaken by Goldman, Sachs & Co. in rendering its opinion, is attached to
this Statement and is filed as Exhibit (a)(2) hereto and is incorporated
herein by reference. Holders of Shares are urged to read such opinion
carefully and in its entirety.

4. The results of discussions with certain other participants in the wine
industry with respect to possible business combinations involving the
Company, which although they did not lead to firm offers to participate in
a transaction, produced indications of interest for transactions which were
not cash sale transactions and which the Company Board concluded, with the
assistance of its financial advisor, Goldman, Sachs & Co., would not
provide value to the holders of Shares equivalent to the Offer Price.

5. The fact that the Offer and the Merger provide for a prompt cash
tender offer for all of the Shares to be followed by the Merger at the same
per Share consideration, thereby enabling the Company's stockholders, at
the earliest possible time, to obtain the benefits of the transaction.

6. The financial strength of Foster's and the fact that Foster's and
Purchaser's obligations under the Offer are not subject to any financing
condition.

7. The limited ability of Foster's or the Purchaser to terminate the
Offer or the Merger Agreement, and the limited conditions to Purchaser's
obligation to purchase Shares in the Offer.

8. The fact that, while prohibiting the Company from actively soliciting
a competing proposal with respect to an alternative Acquisition Transaction
(as defined in the Merger Agreement) involving the Company, the Merger
Agreement permits the Company and its representatives to, subject to
certain limitations, (i) furnish information to a third party who has
submitted a bona fide unsolicited proposal with respect to an Acquisition
Transaction, and (ii) participate in discussions or negotiations with such
third party concerning an unsolicited proposal with respect to an
Acquisition Transaction, if in each case (A) the Company Board determines
in its good faith judgment, taking into account the advice of its financial
advisor and outside counsel that such third party proposal is or is
reasonably likely to lead to a Superior Proposal (as defined in the Merger
Agreement), and (B) the Company Board determines, in its good faith
judgment, taking into account the advice of outside counsel, that failing
to take such action would breach the fiduciary duties of the Company Board
to the Company's stockholders under applicable law.

9. The fact that, pursuant to the Merger Agreement, the Company Board has
the right, prior to the acceptance for payment of Shares by Purchaser
pursuant to the Offer, to terminate the Merger Agreement in order to accept
a Superior Proposal, if (i) the Board of Directors has determined, after
consultation with its financial advisor and outside counsel, that it is
required to accept such proposal because such failure to do so would
violate its fiduciary duties under applicable law, (ii) the Company gives
Foster's four business days advance notice of the Company's intention to
accept such Superior Proposal, (iii) during such four business days, the
Company engages in good faith negotiations with Foster's with respect to
such changes as Foster's may propose to the terms of the Merger and the
Merger Agreement, (iv) Foster's does not make prior to such termination by
the Company a definitive, binding offer which the Board of Directors
determines is at least as favorable to the Company's stockholders as such
Superior Proposal and (v) the Company, prior to or concurrently with
termination, pays to Foster's a $53.7 million termination fee.

10. The fact that the Selling Stockholders have entered into the Tender
Agreement pursuant to which, among other things, such Selling Stockholders
have agreed to tender approximately 55% of the Shares (on a fully diluted
basis).

The foregoing discussion of information and factors considered and given
weight by the Company Board is not intended to be exhaustive, but is believed
to include all of the material factors, both positive and negative, considered
by the Company Board. In view of the wide variety of factors considered in
connection with its evaluation of the Offer and the Merger, the Company Board
did not find it practicable to, and did not, quantify

10
<PAGE>

or otherwise assign relative weights to the specific factors considered in
reaching its determinations and recommendations. In addition, individual
members of the Company Board may have given different weights to different
factors.

The Company Board recognized that, while the consummation of the Offer gives
the Company's stockholders the opportunity to realize a significant premium
over the price at which the shares of Class B Common Stock were traded prior
to the public announcement of the Offer, tendering in the Offer would
eliminate the opportunity for the Company's stockholders to participate in the
future growth and profits of the Company. The Board of Directors believes that
the loss of opportunity to participate in the growth and profits of the
Surviving Corporation was reflected in the Offer Price of $55.75 per Share.

(c) Intent to Tender. Pursuant to the Tender Agreement, the Selling
Stockholders have agreed to (i) tender all Shares held of record or
beneficially by them pursuant to the Offer, and (ii) vote all Shares held of
record or beneficially by them for the adoption of the Merger Agreement and in
favor of the transactions contemplated thereby and against any Adverse
Proposal (as defined in the Tender Agreement). A more detailed summary of the
provisions of the Tender Agreement is contained in Section 12 of the Offer to
Purchase which is attached as Exhibit (a)(1) of the Schedule TO and is
incorporated herein by reference. The Company has been advised, and has
informed Foster's, that each of its directors and executive officers intends
to tender pursuant to the Offer all Shares owned of record and beneficially by
him or her.

Item 5. Person/Assets, Retained, Employed, Compensated Or Used.

Goldman, Sachs & Co. Pursuant to an engagement letter dated January 26,
2000, the Company formalized its engagement of Goldman, Sachs & Co. to act as
its financial advisor in connection with one or more possible transactions,
including a possible acquisition by the Company or a sale of all or a portion
of the Company. The Company Board retained Goldman, Sachs & Co. based upon
Goldman, Sachs & Co.'s qualifications, experience, reputation and expertise.
Goldman, Sachs & Co. is a nationally recognized investment banking and
financial advisory firm. As part of its investment banking and financial
advisory business, Goldman, Sachs & Co. is continuously engaged in the
valuation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes. Goldman, Sachs & Co.
provides a full range of financial advisory and securities services and, in
the course of its normal trading activities, may from time to time effect
transactions and hold securities, including derivative securities of the
Company or Foster's for its own account and for the accounts of customers.
Goldman, Sachs & Co. may provide investment banking services to Foster's and
its subsidiaries in the future.

Pursuant to the aforementioned engagement letter, the Company paid Goldman,
Sachs & Co. an initial fee of $125,000 on July 1, 2000. Upon completion of the
Merger, Goldman, Sachs & Co. will be entitled to an additional fee of
approximately $10,600,000. The Company also has agreed to reimburse Goldman,
Sachs & Co. for its reasonable out-of-pocket expenses, including the fees and
disbursements of its attorneys, and any sales, use or similar taxes, arising
in connection with its engagement by the Company. The Company also has agreed
to indemnify Goldman, Sachs & Co. against certain liabilities, including
certain liabilities arising under Federal securities laws, incurred in
connection with its engagement by the Company.

TPG GenPar L.P. On August 28, 2000, the Company formalized its engagement of
TPG GenPar to provide investment banking and financial advisory services to
the Company in connection with the Offer and the Merger. In the course of its
engagement, TPG GenPar provided the Company with structuring and financial
advice regarding the proposed transaction with Foster's and assisted the
Company in the negotiation of the terms of the Transaction Agreements. For
more information regarding the Company's engagement of TPG GenPar, see Item 3
of this Schedule 14D-9.

Except as described above, neither the Company nor any person acting on its
behalf currently intends to employ, retain or compensate any other person to
make solicitations or recommendations to stockholders on its behalf concerning
the Offer or the Merger.

11
<PAGE>

Item 6. Interest In Securities of the Company.

No transactions in the Shares have been effected during the past 60 days by
the Company or any subsidiary of the Company or, to the best of the Company's
knowledge, by any executive officer, director or affiliate of the Company
other than in the ordinary course of business in connection with the Company's
employee benefit plans.

Item 7. Purposes of the Transaction and Plans or Proposals.

Except as set forth in this Statement and the Offer to Purchase, the Company
is not undertaking or engaged in any negotiations in response to the Offer
that relate to or would result in (1) a tender offer for or other acquisition
of the Company's securities by the Company, any subsidiary of the Company or
any other person; (2) an extraordinary transaction, such as a merger,
reorganization or liquidation, involving the Company or any subsidiary of the
Company; (3) a purchase, sale, or transfer of a material amount of assets of
the Company or any subsidiary of the Company; or (4) any material change in
the present dividend rate or policy, or indebtedness or capitalization of the
Company.

Except as set forth in this Statement, there are no transactions,
resolutions of the Company Board, agreements in principle, or signed contracts
in response to the Offer that relate to one or more of the events referred to
in the preceding paragraph.

Item 8. Additional Information

(a) Section 14(f) Information Statement. The Information Statement attached
at Annex B hereto is being furnished in connection with the possible
designation by Foster's, pursuant to the Merger Agreement, of certain persons
to be appointed to the Company Board other than at a meeting of the Company's
stockholders.

(b) As the Company is a Delaware corporation, the anti-takeover provisions
of Section 203 of the DGCL by their terms apply to the approval of the Offer
and the Merger. A description of these provisions and their applicability to
the approval of the Offer and the Merger is contained in the Offer to Purchase
(which is attached as Exhibit (a)(1) to the Schedule TO and incorporated
herein by reference). At its meeting held on August 28, 2000, the Company
Board approved the Merger Agreement and the transactions contemplated thereby,
which approval rendered Section 203 of the DGCL inapplicable to the Merger
Agreement and the transactions contemplated thereby, including the Offer and
the Merger.

(c) For a description of the appraisal rights applicable to the Merger (such
rights not being applicable to the Offer), see the Offer to Purchase (which is
included as Exhibit (a)(1) to the Schedule TO and incorporated herein by
reference).

(d) Reference is hereby made to the Offer to Purchase and the related Letter
of Transmittal which are attached as Exhibits (a)(1) and (a)(2), respectively,
to the Schedule TO and are incorporated herein by reference.

12
<PAGE>

Item 9. Exhibits.

The following Exhibits are filed herewith:

<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
(a)(1) Letter to Stockholders of the Company, dated September 1, 2000.

(a)(2) Opinion of Goldman, Sachs & Co., dated August 28, 2000 (included
as Annex A to this Statement).

(a)(3) Press Release issued by the Company on August 28, 2000
(incorporated by reference to the Schedule 14D-9C filed by the
Company on August 28, 2000).

(e)(1) Agreement and Plan of Merger, dated as of August 28, 2000, among
Foster's, the Purchaser and the Company.

(e)(2) Tender, Voting and Option Agreement, dated as of August 28,
2000, by and among the Company, Purchaser and Foster's.

(e)(3) Fee Agreement, dated as of August 28, 2000, between TPG GenPar,
L.P. and the Company.

(e)(4) Form of Employment Agreement.

(e)(5) The Information Statement of the Company, dated September 1,
2000 (included as Annex B to this Statement).
</TABLE>

13
<PAGE>

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this Statement is true, complete and correct.

Beringer Wine Estates Holdings, Inc.

/s/ Walter T. Klenz
By: _________________________________
Name: Walter T. Klenz
Title: President, Chief Executive
Officer and Chairman of
the Board

Dated: September 1, 2000

14
<PAGE>

ANNEX A

August 28, 2000

PERSONAL AND CONFIDENTIAL

August 28, 2000

Board of Directors
Beringer Wine Estates Holdings, Inc.
610 Airpark Drive
Napa, CA 94558

Gentlemen:

You have requested our opinion as to the fairness from a financial point of
view to the holders of the outstanding shares of Class A Common Stock, par
value $0.01 per share (the "Company Class A Shares"), and Class B Common
Stock, par value $0.01 per share (the "Company Class B Shares" and, together
with the Company Class A Shares, the "Company Shares"), of Beringer Wine
Estates Holdings, Inc. (the "Company") of the $55.75 per Company Share in cash
proposed to be paid by Purchaser (as defined below) in the Tender Offer and
the Merger (as defined below) pursuant to the Agreement and Plan of Merger,
dated as of August 28, 2000, among Foster's Brewing Group Limited ("Parent"),
Bordeaux Acquisition Corp., an indirect wholly-owned subsidiary of Parent
("Purchaser"), and the Company (the "Agreement"). The Agreement provides for a
tender offer for all of the Company Shares (the "Tender Offer") pursuant to
which Purchaser will pay $55.75 per Company Share in cash for each Company
Share accepted. The Agreement further provides that following completion of
the Tender Offer, Purchaser will be merged into the Company (the "Merger") and
each outstanding Company Share (other than Company Shares already owned by
Purchaser) will be converted into the right to receive $55.75 in cash.

Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings,
competitive biddings, secondary distributions of listed and unlisted
securities, private placements and valuations for estate, corporate and other
purposes. We are familiar with the Company having provided certain investment
banking services to the Company from time to time, including having acted as
lead managing underwriter of an initial public offering of Company Class B
Shares in October 1997 and having acted as its financial advisor in connection
with the transactions contemplated by the Agreement. Goldman, Sachs & Co.
provides a full range of financial advisory and securities services and, in
the course of its normal trading activities, may from time to time effect
transactions and hold securities, including derivative securities, of the
Company or Parent for its own account and for the accounts of customers.
Goldman, Sachs & Co. may provide investment banking services to Parent and its
subsidiaries in the future.

In connection with this opinion, we have reviewed, among other things, the
Agreement; Annual Reports to Stockholders and Annual Reports on Form 10-K of
the Company for the two fiscal years ended June 30, 1999, and the August 21,
2000 draft of the Annual Report on Form 10-K of the Company for the fiscal
year ended June 30, 2000; certain interim reports to stockholders and
Quarterly Reports on Form 10-Q of the Company; certain other communications
from the Company to its stockholders; and certain internal financial analyses
and forecasts for the Company prepared by its management. We also have held
discussions with members of the senior management of the Company regarding
their assessment of its past and current business operations, financial
condition and future prospects. In addition, we have reviewed the reported
price and trading activity for the Company Class B Shares, compared certain
financial and stock market information for the Company with similar
information for certain other companies the securities of which are publicly
traded, reviewed the financial terms of certain recent business combinations
in the wine industry specifically and in other industries generally and
performed such other studies and analyses as we considered appropriate.
<PAGE>

We have relied upon the accuracy and completeness of all of the financial
and other information discussed with or reviewed by us and have assumed such
accuracy and completeness for purposes of rendering this opinion. In addition,
we have not made an independent evaluation or appraisal of the assets and
liabilities of the Company or any of its subsidiaries and we have not been
furnished with any such evaluation or appraisal. We were not requested to
solicit, and did not solicit, interest from other parties with respect to an
acquisition of the Company. Our advisory services and the opinion expressed
herein are provided for the information and assistance of the Board of
Directors of the Company in connection with its consideration of the
transactions contemplated by the Agreement and such opinion does not
constitute a recommendation as to whether or not any holder of Company Shares
should tender such Company Shares in connection with the Tender Offer, or, if
applicable, how any holder of Company Shares should vote with respect to the
Merger.

Based upon and subject to the foregoing and based upon such other matters as
we consider relevant, it is our opinion that as of the date hereof the $55.75
in cash to be received by the holders of Company Shares in the Tender Offer
and the Merger is fair from a financial point of view to such holders.

Very truly yours,

/s/ Goldman, Sachs & Co.
-------------------------------------
(Goldman, Sachs & Co.)
<PAGE>

ANNEX B

BERINGER WINE ESTATES HOLDINGS, INC.
610 AIRPARK ROAD
NAPA, CALIFORNIA 94558
INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF THE SECURITIES EXCHANGE
ACT OF 1934 AND RULE 14F-1 THEREUNDER

This Information Statement is being mailed on or about September 1, 2000 as
part of the Solicitation/ Recommendation Statement on Schedule 14D-9 (the
"Statement") of Beringer Wine Estates Holdings, Inc. (the "Company"). You are
receiving this Information Statement in connection with the possible election
of persons designated by Foster's Brewing Group Limited ("Foster's"), a
corporation formed under the laws of the State of South Australia,
Commonwealth of Australia, to a majority of seats on the Board of Directors
(the "Board of Directors") of the Company. On August 28, 2000, the Company
entered into an Agreement and Plan of Merger (the "Merger Agreement") with
Foster's and Bordeaux Acquisition Corp. ("Purchaser"), a corporation formed
under the laws of the State of Delaware and an indirect wholly-owned
subsidiary of Foster's, pursuant to which Purchaser is required to commence a
tender offer to purchase all outstanding shares of Class A common stock, par
value $.01 per share, of the Company (the "Class A Common Stock") and the
Class B common stock, par value $.01 per share, of the Company (the "Class B
Common Stock", and together with the Class A Common Stock, the "Shares"), at a
price per Share of $55.75, net to the seller in cash, without interest
thereon, prorated for fractional shares (the "Offer Price"), upon the terms
and conditions set forth in Purchaser's Offer to Purchase, dated September 1,
2000, and in the related Letter of Transmittal (the "Letter of Transmittal"
which, together with the Offer to Purchase and any amendments and supplements
thereto, collectively constitute the "Offer"). Copies of the Offer to Purchase
and the Letter of Transmittal have been mailed to stockholders of the Company
and are filed as Exhibits (a)(1) and (a)(2), respectively, to the Tender Offer
Statement on Schedule TO (as amended from time to time, the "Schedule TO")
filed by Purchaser and Foster's with the United States Securities and Exchange
Commission (the "Commission") on September 1, 2000. The Merger Agreement
provides that, subject to the satisfaction or waiver of certain conditions,
following completion of the Offer, and in accordance with the Delaware General
Corporation Law (the "DGCL"), Purchaser will be merged with and into the
Company (the "Merger"). Following consummation of the Merger, the Company will
continue as the surviving corporation (the "Surviving Corporation") and will
be an indirect wholly-owned subsidiary of Foster's. At the effective time of
the Merger (the "Effective Time"), each issued and outstanding Share (other
than Shares that are owned by Foster's, Purchaser, any of their respective
subsidiaries, the Company or any of its subsidiaries, and Shares held by
stockholders of the Company who do not tender their Shares in the Offer and
who comply with all of the relevant provisions of Section 262 of the DGCL)
will be converted into the right to receive $55.75 in cash or any greater
amount per Share paid pursuant to the Offer.

The Offer, the Merger, and the Merger Agreement are more fully described in
the Schedule 14D-9 to which this Information Statement forms Annex B, which
was filed by the Company with the Commission on September 1, 2000 and which is
being mailed to stockholders of the Company along with this Information
Statement.

This Information Statement is being mailed to you in accordance with Section
14(f) of the Securities Exchange Act of 1934, as amended (the "Securities
Exchange Act") and Rule 14f-l promulgated thereunder. The information set
forth herein supplements certain information set forth in the Statement.
Information set forth herein related to Foster's, Purchaser or Foster's
Designees (as defined herein) has been provided by Foster's. You are urged to
read this Information Statement carefully. You are not, however, required to
take any action in connection with the matters set forth herein.

Pursuant to the Merger Agreement, Purchaser commenced the Offer on Friday,
September 1, 2000. The Offer is scheduled to expire at 12:00 p.m. Midnight,
New York City time, on Friday, September 29, 2000, unless extended by
Purchaser.

B-1
<PAGE>

GENERAL

The Class A Common Stock and the Class B Common Stock are the only classes
of equity securities of the Company outstanding which are entitled to vote at
a meeting of the stockholders of the Company. Each share of Class A Common
Stock is entitled to 20 votes. Each share of Class B Common Stock is entitled
to one vote. Upon any transfer of a share of Class A Common Stock, such share
will become a share of Class B Common Stock with one vote. As of August 28,
2000 there were 1,337,962 shares of Class A Common Stock and 18,439,214 shares
of Class B Common Stock outstanding, of which Foster's and Purchaser own no
shares.

RIGHTS TO DESIGNATE DIRECTORS AND FOSTER'S DESIGNEES

The Company Board of Directors. The Merger Agreement provides that, if
requested by Foster's, following (a) the purchase by Purchaser of any Shares
pursuant to the Offer and thereafter (b) the purchase of Shares pursuant to
the Tender Agreement, and from time to time thereafter as Shares are acquired
by Purchaser, Foster's shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors of
the Company (the "Company Board") as will give Foster's, subject to the
compliance with Section 14(f) of the Exchange Act, representation on the
Company Directors equal to at least that number of directors which equals the
product of the total number of directors on the Company Board (giving effect
to the directors appointed or elected pursuant to this sentence and including
current directors serving as officers of the Company) multiplied by the
percentage that the aggregate number of Shares beneficially owned by Foster's
or any affiliate of Foster's (including such Shares as are accepted for
payment pursuant to the Offer, but excluding Shares held by the Company) bears
to the number of Shares outstanding. At such times, if requested by Foster's,
the Company will also cause each committee of the Company Board to include
persons designated by Foster's constituting the same percentage of each such
committee as Foster's designees are of the Company Board. The Company shall,
upon request by Foster's, promptly increase the size of the Company Board or
use its best efforts to secure the resignations of such number of directors as
is necessary to enable Foster's designees to be elected to the Company Board
and shall cause Foster's designees to be so elected. However, even if the
Foster's designees are appointed or elected to the Company Board, until the
Effective Time, the Company Board shall include at least three directors who
are directors on the date of the Merger Agreement and who are neither officers
of the Company nor designees, stockholders, affiliates or associates (within
the meaning of the Federal securities laws) of Foster's (the "Independent
Directors").

B-2
<PAGE>

Name, Age, Principal Occupation and Employment History

Foster's has informed the Company that it will choose the Foster's designees
from the individuals shown in the table below to serve on the Company Board
("Foster's Designees"). Each of the following individuals has consented to
serve as a director of the Company if appointed or elected. None of the
Foster's Designees currently is a director of, or holds any position with, the
Company. To Foster's knowledge, except as set forth below and in the Offer to
Purchase, none of the Foster's Designees or any of their associates
beneficially owns any equity securities or rights to acquire securities of the
Company, nor has any such person been involved in any transaction with the
Company or any of its directors, executive officers or affiliates that are
required to be disclosed pursuant to the rules and regulations of the United
States Securities and Exchange Commission (the "Commission"). The name, age,
present principal occupation or employment and five-year employment history of
each of the following individuals are set forth below. Each person is a
citizen of Australia and the business address of each person is c/o Foster's
Brewing Group Limited, 77 Southbank Boulevard, Southbank, Victoria, Australia
3006 unless otherwise noted.

<TABLE>
<CAPTION>
Name Age Principal Occupation or Occupations
---- --- -----------------------------------
<S> <C> <C>
Edward Thomas Kunkel....... 57 Mr. Kunkel has been President and Chief
Executive Officer of Foster's for the past five
years.

Peter Athanas Bobeff....... 59 Mr. Bobeff has served as the Senior Vice
President of Commercial Affairs of Foster's
since 1992.

Nuno Alvares D'Aquino...... 59 Mr. D'Aquino was the Managing Director of
Carlton & United Breweries Limited, a subsidiary
of Foster's ("CUB") from 1995 through April
2000. Mr. D'Aquino has served as Deputy Chief
Executive Officer of Foster's since April 2000.

Terry James Davis.......... 42 Mr. Davis was the Managing Director of
Cellarmaster Pty Ltd. (located at Level 25, 500
Oxford, Bondi Junction, NWSW Australia 2022)
from 1987 through 1997. After this time, he
became the Chief Operating Officer of Global
Wine Clubs, Mildara Blass Limited, a subsidiary
of Foster's (located at 170 Bridport St., Albert
Park, Victoria, Australia). Since August 1999,
Mr. Davis has been Managing Director of Mildara
Blass Limited.

James Stephen King......... 48 Mr. King was the President of Kraft General
Foods (Asia) Ltd. (located at 157F One Pacific
Place, 88 Queensway, Hong Kong) from 1991
through 1996. Mr. King was the Managing Director
of Foster's Asia from 1997 through March 2000.
Mr. King has been Managing Director of CUB since
March 2000.

Trevor Louis O'Hoy......... 45 Mr. O'Hoy was the Vice President of Lead
Enterprise of Foster's from 1995 through 1997
and the Vice President of Strategy and
Development from January 1997 until August 1997.
He has served as Foster's Chief Financial
Officer since that time.

Richard W. Scully.......... 54 Mr. Scully was an Executive Director of Courage
Breweries (located in Staines, England) from
1990 through 1995. From January 1996, Mr. Scully
has served as a Senior Vice President of
Foster's International. He is currently the
Managing Director of Foster's Brewing
International since 1996. He is a citizen of the
United States of America.
</TABLE>

B-3
<PAGE>

<TABLE>
<CAPTION>
Name Age Principal Occupation or Occupations
---- --- -----------------------------------
<S> <C> <C>
Robert Graeme 58 Mr. Willersdorf has been with Foster's since
Willersdorf............. 1984 and serves as a Senior Vice President.

Francis Joseph Swan...... 59 Mr. Swan is Chairman of the Board and has served
as a Director of Foster's since 1996. In
addition, he has served as a Director of both
Commonwealth Bank of Australia Limited (located
at 48 Martin Place, Sydney NSW, Australia) and
National Foods Limited (located at Queens Road,
Melbourne, Victoria, Australia) since 1997. He
has also served as the Managing Director of
Global Beverages of Cadbury Schweppes, p.l.c.
(located at 25 Barkbray Square, London WIX 64T,
UK) since 1996.

Margaret Lyndsey 52 Ms. Cattermole is the Chief Executive Officer of
Cattermole.............. Aspect Computing Pty Ltd. (located at 551
Glenferrie Road, Hawthorne, Australia 3122) and
has served as Managing Director of Aspect since
1974. She has served as a Director of Foster's
since 1999.

Geoffrey Arthur Cohen.... 66 Mr. Cohen is a self-employed chartered
accountant. His business address is Level 30, 35
Guerris St., Melbourne, Australia. He has served
as a Director of Foster's since 1991.

Brian Healey............. 66 Mr. Healey has been self-employed as a principal
of Brian Healey & Associates (located at Level
3, 578 St. Kinda Road, Melbourne, Australia
3004) for the previous five years. He has served
as a Director of Foster's since 1993. He is also
Chairman of Portfolio Partners Limited, Biota
Holdings Limited and Centro Properties Limited
and a Director of ICI Australia Limited, AWA
Limited and Norwich Union Australia Limited.

Graeme William McGregor.. 61 Mr. McGregor held senior finance roles for BHP
Co. Ltd. until 1999 including the Executive
Director of Finance (located at 600 Bourke
Street, Melbourne, Australia) from 1956 through
1999. He has also served as a Director of both
Santos Limited (located at King William Street,
Adelaide, Australia) and Were Securities Limited
(located at 101 Collins Street, Melbourne,
Australia) since 1999 and a Director of Nufarm
Limited (located at Farm Road, Laverton North,
Australia) since January of this year.
Mr. McGregor's business address is 65 Park Road,
Middle Park, Victoria Australia, 3206. He has
served as a Director of Foster's since 1999.
</TABLE>

B-4
<PAGE>

STOCK OWNERSHIP

Security Ownership Of Certain Beneficial Owners and Management

The following table sets forth certain information as of August 22, 2000
with respect to the beneficial ownership of the outstanding shares of Class A
Common Stock and Class B Common Stock by (i) all persons owning of record, or
beneficially to the knowledge of the Company, more than five percent of the
outstanding shares of any class, (ii) each director and named executive
officer of the Company individually, and (iii) all directors and executive
officers of the Company as a group.

<TABLE>
<CAPTION>
Shares of
Common Stock
--------------------
Beneficially Percent
Name Owned Owned
---- ------------ -------
<S> <C> <C>
Walter T. Klenz.......................................... 182,010 **
Robert E. Steinhauer..................................... 81,813 **
Edward B. Sbragia........................................ 94,205 **
Peter F. Scott........................................... 61,101 **
James W. Watkins......................................... 27,000 **
Richard L. Adams......................................... 2,746 **
David Bonderman.......................................... *9,542,007 46.71%
Randy Christofferson..................................... 6,264 **
James G. Coulter......................................... *9,542,007 46.71%
Timm F. Crull............................................ 158,099 **
William A. Franke........................................ 3,144 **
E. Michael Moone......................................... 526,938 2.58%
William S. Price III..................................... *9,542,007 46.71%
Jesse Rogers............................................. 25,109 **
George A. Vare........................................... 207,840 1.02%
Texas Pacific Group and its related entities............. 9,542,007 46.71%
All directors and executive officers as group included
those named above....................................... 11,236,061 55.00%
Wellington Management Company, LLC....................... 1,480,800 7.25%
Capital Research & Management............................ 1,479,600 7.24%
</TABLE>
--------
* Denotes stock owned by TPG Partners, L.P. and three of its related limited
partnerships ("TPG"). Mr. Bonderman, Mr. Coulter and Mr. Price are officers
of TPG Advisors, Inc., which ultimately controls TPG. Each of them
disclaims beneficial ownership of Shares except to the extent of their
respective proportionate interest in each entity. TPG maintains an office
of 301 Commerce Street, Suite 3300, Fort Worth, Texas 76120.

** owns less than 1%.

B-5
<PAGE>

BOARD OF DIRECTORS

Terms of Directors

The directors are elected to serve one-year terms at each annual meeting.

Directors and Executive Officers

The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Walter T. Klenz............... 55 President, Chief Executive Officer and
Chairman of the Board of Directors
Richard L. Adams.............. 49 Director
David Bonderman............... 57 Director
Randy Christofferson.......... 43 Director
James G. Coulter.............. 40 Director
Timm F. Crull................. 69 Director
William A. Franke............. 63 Director
E. Michael Moone.............. 60 Director
William S. Price III.......... 44 Director
Jesse Rogers.................. 43 Director
George A. Vare................ 63 Director
Peter F. Scott................ 47 Executive Vice President, Chief Financial and
Administrative Officer
James W. Watkins.............. 44 Executive Vice President, Chief Operating
Officer
Robert E. Steinhauer.......... 59 Senior Vice President, Vineyard Operations
Edward B. Sbragia............. 51 Senior Vice President, Winemaster
Thomas W. Peterson............ 48 Vice President, Sonoma Operations and
Winemaking
Douglas W. Roberts............ 48 Vice President, General Counsel and Secretary
Ben Lawrence.................. 43 Vice President, Human Resources
Janelle E. Thompson........... 51 Vice President, Marketing and Hospitality
Richard G. Carter............. 56 Vice President, Sales
Martin L. Foster.............. 54 Vice President, Investor Relations
A. Tor Kenward................ 52 Vice President, Winery Communications
Douglas A. Walker............. 44 Vice President, Corporate Planning
Lloyd P. Chasey............... 45 Vice President, Finance and Controller
</TABLE>

Walter T. Klenz has been a director since January 1996 and became Chairman
of the Board in August 1997. Mr. Klenz joined the Company in 1976 as director
of marketing for the Beringer brand, and has served as the Company's President
and Chief Executive Officer since 1990. From 1984 until 1990, he served as
Senior Vice President, Finance and Operations.

Mr. Adams has been a director since January 1996. Mr. Adams is partner of
the law firm Worsham, Forsythe & Wooldridge, L.L.P. He has been employed by
that firm since 1978.

Mr. Bonderman has been a director since January 1996. Mr. Bonderman is a
principal of the Texas Pacific Group, a firm he co-founded in 1992. He
currently serves on the Boards of Directors of Continental Airlines, Inc.; Co-
Star Realty Information Group; Denbury Resources, Inc.; Bell & Howell Company;
Ducati Motor Holdings, S.p.A.; Magellan Health Services, Inc.; ON
Semiconductor Corporation; Oxford Health Plans, Inc.; Paradyne Networks, Inc.;
Rynair, Ltd. and Washington Mutual, Inc.

Mr. Christofferson has been a director since January 1996. Mr.
Christofferson has been Chief Executive Officer of Walker Digital since 1999.
He served as President of First USA Bank from 1995 until 1999, and from

B-6
<PAGE>

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; Atlantis Interactive; Level Three Systems; Monogram Credit Card
Services; Pulse; Pureskill; Retail DNA; and Secret Options.

Mr. Coulter has been a director since January 1996. Mr. Coulter served as
Co-Chairman of the Board from January 1996 to August 1997. Mr. Coulter is a
principal of the Texas Pacific Group, a firm he co-founded in 1992. Mr.
Coulter currently serves on the Boards of Directors of J. Crew Group, Inc.;
Oxford Health Plans, Inc.; Ltd.; Northwest Airlines Corporation; Genesis
Health Ventures, Inc.; and Globespan, Inc.

Mr. Crull has been a director since January 1996. 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 Hallmark Cards; and Smart & Final Inc.

Mr. Franke has been a director since January 1996. 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 Newbridge Latin America, L.P., a
private equity investment fund. He is also a director of ON Semiconductor
Corporation; Phelps Dodge Corporation, a major mining and manufacturing
company; and AerFi Group, p1c., an entity involved in aircraft financing and
leasing.

Mr. Moone has been a director since January 1996. 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.

Mr. Price has been a director since January 1996. Mr. Price served as Co-
Chairman of the Board from January 1996 to August 1997. Mr. Price is a
principal of the Texas Pacific Group, a firm he co-founded in 1992. Mr. Price
currently serves on the Boards of Directors of Aerfi Group, plc.; ATG Group,
Inc.; Bally Management Ltd.; Continental Airlines, Inc.; DoveBid, Inc.; Belden
& Blake Corporation; Del Monte Foods Company; Denbury Resources, Inc.; Gemplus
SA; Landis & Gyr Communications SA; FirstWorld Communications, Inc.; Punch
p1c.; and Zilog, Inc. Mr. Price is also an officer of Newbridge Investment
Partners.

Mr. Rogers has been a director since January 1996. Mr. Rogers is a founder
and Managing Director of Golden Gate Capital, a private equity investment
firm. Previously he was a senior partner of Bain & Company, the international
strategic consulting firm. 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.

Mr. Vare has been a director since January 1996. 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.

Peter F. Scott joined the Company in June 1997 as the Company's Senior Vice
President, Finance and Operations and Chief Financial Officer. Mr. Scott was
promoted to Executive Vice President, Chief Financial and Administrative
officer in August 1999. He served as Chief Financial Officer of Kendall-
Jackson Winery, Ltd. from 1990 until he joined the Company.

James W. Watkins joined the Company in August 1999 as the Company's
Executive Vice President, Chief Operating Officer. From 1997 to 1999 he served
as Senior Vice President of North America Marketing at Burger King Corporation
and from 1994 to 1997 he served as Vice President and General Manager of
Colgate's Hill's Pet Nutrition Division.

B-7
<PAGE>

Robert E. Steinhauer joined the Company in 1979 and has served as the
Company's Senior Vice President, Vineyard Operations since 1989.

Edward B. Sbragia joined the Company in 1976 and has served as the Company's
Senior Vice President, Winemaster since 1989.

Thomas W. Peterson joined the Company in 1986 and has served as the
Company's Vice President, Sonoma Operations and Winemaking since 1996.

Douglas W. Roberts joined the Company in 1976 and has served as the
Company's Secretary since 1990. He was appointed Vice President, General
Counsel in 1997.

Ben Lawrence joined the Company in 2000 as the Company's Vice President,
Human Resources. From 1991 to January 2000, he was employed by the Clorox
Company, and most recently held the position of Vice President, International
Human Resources.

Janelle E. Thompson joined the Company in 1982 and has served as the
Company's Vice President, Marketing and Hospitality since 1987.

Richard G. Carter joined the Company in 1975 and has served as the Company's
Vice President, Sales since 1984.

Martin L. Foster joined the Company in 1992 as Vice President, Treasurer. In
1997 he assumed executive responsibility for Investor Relations.

A. Tor Kenward joined the Company in 1977 and has served as the Company's
Vice President, Winery Communications since 1986.

Douglas A. Walker joined the Company in 1996 as the Company's Vice
President, Corporate Planning. From 1993 to 1996, he served as the President
of Chateau St. Jean winery.

Lloyd P. Chasey joined the Company in 2000 as the Company's Vice President,
Finance and Controller. From 1982 to 2000, he was employed by the Clorox
Company, and most recently held the position of Vice President, Financial
Reporting & Systems.

Director Compensation

Each director (except Walter T. Klenz, who is an employee) receives $2,500
for each Company Board meeting attended. Directors had been allowed to elect
to receive this compensation in cash, in shares of the Company's Class B
Common Stock or 50% in cash and 50% in stock. The program whereby the
directors were allowed to receive stock of the Company as compensation for
attending meetings of the Company Board was voluntarily suspended by the
Company Board at a meeting held on August 22, 2000. All eligible directors
currently elect to receive all the Board meeting compensation in cash. Company
Board members are also paid $1,000 for each committee meeting they attend.
Company Board members are reimbursed for travel expenses to the meetings. They
also each receive ten cases of the Company's wines each year. Employee
directors are not eligible for any additional compensation for service on the
Company Board or its committees.

Meetings of the Company Board in 2000

The Company Board met four times during fiscal 2000.

Committees of the Company Board in 2000

Executive Committee. This committee exercises the authority of the Company
Board during intervals between Company Board meetings. This committee held
three meetings in fiscal 2000.

B-8
<PAGE>

Audit Committee. This committee assures that credibility of the Company's
financial reporting by providing oversight of the Company's financial
reporting process and the Company's internal controls. The Audit Committee
operates pursuant to a charter approved by the Company Board. The Audit
Committee reports on its activities to the Company Board. This committee held
seven meetings in fiscal 2000.

Compensation Committee. This committee reviews the compensation of the CEO
and senior management, as well as the Company's general employee compensation
and benefits policies and practices. They approve the goals for the Company's
incentive plans and they monitor results against those goals. This committee
held three meetings in fiscal 2000.

Nominating Committee. This committee identifies individuals with the
experience, judgment and skills to become Company Board members. It recommends
to the Company Board and the Company's stockholders the slate of directors for
nomination and election each year. This committee did not formally meet in
fiscal 2000.

BOARD COMMITTEE MEMBERSHIP ROSTER
(as of June 30, 2000)

<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.......................
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.

Section 16(a) Beneficial Ownership Reporting Compliance

To the Company's knowledge based on review of copies of such forms furnished
to the Company and written representations, all Forms 3, 4, and 5 required by
Section 16(a) of the Securities Exchange Act have been timely filed with
respect to the most recently concluded fiscal year.

B-9
<PAGE>

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the cash compensation paid by the Company in
Fiscal Years 1998-2000 as well as certain other compensation paid, awarded or
accrued for those years to the Company's Chief Executive Officer and the other
four highest-paid executive officers (the "named executive officers") during
the 2000 fiscal year.

<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------
Annual Compensation Awards Payouts
------------------------------ --------------------- -------
Other Annual Restricted Securities LTIP All Other
Name and Principal Base Bonus Compensation Stock Underlying Payouts Compensation
Position Year Salary (2) (3) Awards Options ($) (1)
------------------ ---- -------- -------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Walter T. Klenz......... 2000 $400,000 $253,460 0 25,000 0 $25,429
President, Chief 1999 $380,000 $462,500 0 45,000 0 $28,128
Executive Officer and 1998 $350,000 $ 97,500 0 68,000 0 $26,113
Chairman of the Board
of Directors

Peter F. Scott.......... 2000 $325,000 $ 83,100 0 12,000 0 $13,739
Executive Vice- 1999 $235,833 $217,000 0 12,000 0 $19,116
President Chief 1998 $225,000 $ 20,000 0 24,000 $10,782
Financial and
Administrative Officer

Edward B. Sbragia....... 2000 $275,000 $ 96,200 0 11,000 0 $10,804
Senior Vice-President 1999 $240,000 $115,000 0 12,000 0 $16,275
and Winemaster 1998 $225,000 $ 34,650 0 24,000 0 $15,946

James W. Watkins (4).... 2000 $266,042 $100,000 $73,252 0 135,000 0 --
Executive Vice 1999 -- -- 0 -- 0 --
President Chief 1998 -- -- 0 -- 0 --
Operating Officer

Robert E. Steinhauer.... 2000 $234,513 $ 72,800 0 9,000 0 $ 9,604
Senior Vice-President 1999 $212,000 $103,000 0 12,000 0 $11,360
Vineyard Operations 1998 $200,000 $ 31,500 0 24,000 0 $14,145
</TABLE>
--------
(1) These amounts represent matching contributions made by Beringer Wine
Estates Company under its 401-K, Executive Savings Plan, Executive
Deferred Compensation Plans plus the basic and special contributions to
the 401-K Plan.

(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.

(3) The Other Annual Compensation that Mr. Watkins received was for moving
expenses in connection with accepting his position with Beringer Wine
Estates Company.

(4) Mr. Watkins joined Beringer Wine Estates Company in September 1999.

B-10
<PAGE>

The following table presents additional information concerning the option
awards shown in the Summary Compensation Table for fiscal year 2000. 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 2000

<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------
Percent of Potential Realizable
Securities Total Value at Assumed
Underlying Options Annual Rates of Stock
Options Granted Granted to Exercise Price Appreciation for
(2) Employees of Base Option Term (1)
--------------- in Fiscal Price Expiration ----------------------
Name Number Year ($/share) Date 5% 10%
---- Date ------- ---------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Walter T. Klenz......... 9/15/99 25,000 4.7909 $40.50 9/15/09 $1,649,250 $ 2,626,250
President, Chief
Executive Officer and
Chairman of the Board
of Directors
Peter F. Scott.......... 9/15/99 12,000 2.2996 $40.50 9/15/09 $ 791,640 $ 1,260,600
Executive Vice-
President Chief
Financial and
Administrative Officer
Edward B. Sbragia....... 9/15/99 11,000 2.1080 $40.50 9/15/09 $ 725,670 $ 1,155,550
Senior Vice-President
and Winemaster
James W. Watkins........ 8/11/99 135,000 25.8707 $38.19 8/10/09 $8,398,011 $13,373,100
Executive Vice-
President Chief
Operating Officer
Robert E. Steinhauer.... 9/15/99 9,000 1.7247 $40.50 9/15/09 $ 593,730 $ 945,450
Senior Vice-President
Vineyard Operations
</TABLE>
--------
(1) These dollar amounts are not intended to forecast future appreciation of
the common stock price. There is no assurance provided to any executive
officer or any other holder of the Company's securities that the actual
stock price appreciation over the 10-year option term will be at the
assumed 5% or 10% annual rates of compounded stock price appreciation or
at any other defined level. Unless the market price of the shares
appreciates over the option term, no value will be realized from the
option grants made to the executive officers. Any gain to the executives
resulting from common stock appreciation would benefit all stockholders of
the common stock.

(2) The option grants to the Named Executive Officers were made at the fair
market value at the time of grant. These options are exercisable on the
fifth anniversary of the grant, except for those granted to Mr. Watkins,
whereby 27,000 shares are exercisable on each of the next five
anniversaries of the grant.

B-11
<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 2000; and

(ii) the amount and values of unexercised stock options as of June 30,
2000.

Aggregated Option Exercises in 2000 and Year-End Option Values

<TABLE>
<CAPTION>
Number of Number of Securities Value of Unexercised
Securities Underlying Options In-the-Money
Underlying Value Granted (#) Options at Year-End ($)
Options Realized ------------------------- -------------------------
Name Exercised (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Walter T. Klenz......... 11,684 $384,788.04 103,930 145,654 $3,670,080 $5,143,480
President, Chief
Executive Officer and
Chairman of the Board
of Directors

Peter F. Scott.......... 0 $ 0.00 56,000 82,000 $1,977,528 $2,895,666
Executive Vice-
President Chief
Financial and
Administrative Officer

Edward B. Sbragia....... 0 $ 0.00 57,188 55,186 $2,019,480 $1,948,783
Senior Vice-President
and Winemaster

Robert E. Steinhauer.... 20,057 $608,373.88 37,131 53,186 $1,311,207 $1,878,157
Senior Vice-President
Vineyard Operations

James W. Watkins........ 0 $ 0.00 27,000 108,000 $ 953,451 $3,813,804
Executive Vice-
President Chief
Operating Officer
</TABLE>

Certain Relationships and Related Transactions.

See Employment/Severance Agreements under Item 3 of the Statement with
respect to the continued employment of certain officers with the Company.

Severance Agreements

We entered into a severance agreement with Ben Lawrence on December 27,
1999. In the event Mr. Lawrence is terminated without cause, or his position
is eliminated, within the two years following the starting date of his
employment, he is entitled to receive nine months of his then current salary
as severance. We entered into a severance agreement with Lloyd Chasey on May
30, 2000. In the event Mr. Chasey is terminated without cause, or his position
is eliminated, within the two years following the starting date of his
employment, he is entitled to receive twelve months of his then current salary
as severance. We entered into a severance agreement with Ivano Reali on March
13, 2000. In the event Mr. Reali is terminated without cause, or his position
is eliminated, within the three years following the starting date of his
employment, he is entitled to receive one year of his then current salary as
severance. If Mr. Reali is terminated without cause following the third
anniversary of his starting date, he is entitled to receive six months salary
as severance.

B-12
<PAGE>

Related Party Transactions

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 Company, as subsidiary of the Company ("BWEC"). During fiscal 2000 the
trust was paid $42,214.51 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 Valley appellations of Sonoma County,
California. In fiscal 1998 Mr. Price's company entered into a multi-year
agreement with BWEC to supply grapes from Durrell Vineyards. During fiscal
2000 this company was paid $244,755.89 for these grapes.

BWEC entered into a warehouse lease agreement in December 1990 with a
partnership in which E. Michael Moone and Walter T. Klenz hold interests. BWEC
paid this partnership rent expense payments of $1,045,671 in fiscal 2000 and
the rent is scheduled to increase in fiscal 2001.

BWEC sold wine in the amount of $13,990 to America West Airlines in fiscal
2000. William A. Franke is Chairman and Chief Executive Officer of America
West Airlines.

The Company 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. These loans were paid in full in fiscal 2000. We made a $300,000
loan to Mr. Watkins on October 15, 1999, payable on October 14, 2005, in
connection with our offer of employment. This loan has an interest rate of
5.8% and interest is payable on or about September 15 of each year of the
term. The principal balance is forgiven at the rate of $50,000 per year. In
the event Mr. Watkins is terminated for cause, the loan is payable in full
within 30 days.

B-13
<PAGE>

STOCK PERFORMANCE GRAPH

The following graph was prepared by Research Data Group, Inc. It shows how
an initial investment of $100 in the Company's stock would have compared to an
equal investment in the S&P 500 index or in an index of peer group companies.
The Company selected Brown Forman Corporation, Canadaigua Brands, Chalone Wine
Group LTD, R.H. Phillips Inc. and Robert Mondavi Corporation as its peer
group. The graph compares the total cumulative return and assumes all
dividends, if any, were reinvested.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG BERINGER WINE ESTATES HOLDINGS, INC., S&P 500 INDEX AND PEER GROUP

PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
BERINGER
Measurement Period WINE ESTATES S&P
(Fiscal Year Covered) HOLDINGS, INC. 500 INDEX Peer Group
------------------- -------------- --------- ----------
<S> <C> <C> <C>
Measurement Pt- 10/29/97 $100 $100 $100
FYE 6/98 $169.47 $124.66 $108.05
FYE 6/99 $160.7 $153.03 $114.88
FYE 6/00 $135.82 $164.12 $ 99.61
</TABLE>

B-14