<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-12
GOLDEN STATE VINTNERS, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
SEPTEMBER 28, 2000
[LOGO]
GOLDEN STATE VINTNERS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
GOLDEN STATE VINTNERS, INC.
TO BE HELD ON NOVEMBER 15, 2000
TO ALL STOCKHOLDERS:
It is with great pleasure that we invite you to the Annual Meeting of
Stockholders of Golden State Vintners, Inc., which will be held at 9:00 a.m.,
Pacific time, on Wednesday, November 15, 2000, at the offices of Golden State
Vintners' at 607 Airpark Road, Napa, California, for the following purposes:
1. Election of directors for the ensuing year.
2. Ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending June 30, 2001.
3. Consideration and action on any other matter properly brought before the
meeting.
Stockholders of record as of the close of business on September 25, 2000,
the record date, are entitled to notice of, and to vote at, the Annual Meeting
and any postponement or adjournment thereof.
You are requested to date, complete and sign the enclosed proxy, which is
solicited by the Company's Board of Directors, and to return it promptly in the
envelope provided. Even if you return this proxy, and you later decide to attend
the Annual Meeting, you may vote your shares in person by completing a ballot or
proxy at the meeting.
By Order of the Board of Directors,
[LOGO]
Jeffrey J. Brown
Chairman of the Board
Napa, California
September 28, 2000
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. WHETHER OR
NOT YOU PLAN TO BE PRESENT AT THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE
IT IS VOTED AT THE ANNUAL MEETING.
<PAGE>
GOLDEN STATE VINTNERS, INC.
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 15, 2000
------------------------
INFORMATION CONCERNING THE SOLICITATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Golden State Vintners, Inc.,
a Delaware corporation (the "Company"), for use at the 2000 Annual Meeting of
Stockholders of the Company, to be held at 9:00 a.m., Pacific time, on
Wednesday, November 15, 2000, at the Company's offices at 607 Airpark Road,
Napa, California and any adjournments thereof (the "Meeting").
Holders of the Company's Class A Common Stock and Class B Common Stock
(collectively the "Common Stock") of record as of the close of business on
September 25, 2000, the record date fixed by the Board, will be entitled to
notice of, and to vote at, the Meeting. As of the record date, 4,342,528 shares
of Class A Common Stock and 5,155,733 shares of Class B Common Stock were issued
and outstanding. Holders of Class A Common Stock are entitled to cast ten votes
for each share held of record by them, or a total of 43,425,280 votes, on each
proposal submitted to a vote at the Meeting. Holders of Class B Common Stock are
entitled to cast one vote for each share held of record by them, or a total of
5,155,733 votes, on each proposal submitted to a vote at the Meeting.
Stockholders may vote in person or by proxy. Execution of a proxy will not in
any way affect a stockholder's right to attend the Meeting and vote in person.
Any stockholder giving a proxy has the right to revoke that proxy by (i) filing
a later-dated proxy or a written notice of revocation with the Secretary of the
Company at the address set forth above at any time before it is exercised, or
(ii) voting in person at the Meeting.
The Company's Secretary and President were appointed by the Board as the
persons to receive and vote the proxies at the Meeting. All properly executed
proxies returned in time to be counted at the Meeting will be voted as stated
below under "Voting Procedures." Any stockholder giving a proxy has the right to
withhold authority to vote for any individual nominee to the Board by so marking
the proxy in the space provided thereon. Where a choice has been specified on
the proxy with respect to the foregoing matters, including the election of
directors, the shares represented by the proxy will be voted in accordance with
the choice specified. If no choice is specified, the proxy will be voted as
follows:
Proxy Item No. 1. FOR election of management's proposed slate of directors,
as set forth herein.
Proxy Item No. 2. FOR ratification of the appointment of Deloitte & Touche
LLP as the Company's independent auditors for fiscal year ending June 30, 2001.
The Board knows of no other matters to be presented at the Meeting. If any
other matter should be presented at the Meeting upon which a vote properly may
be taken, including any proposal to adjourn the Meeting, shares represented by
all proxies received by the Board will be voted with respect thereto in
accordance with the judgment of the persons named as attorneys in the proxies.
An Annual Report to Stockholders on Form 10-K, containing financial
statements for the fiscal year ended June 30, 2000 is being delivered with this
Proxy Statement to all stockholders entitled to vote. This Proxy Statement,
Annual Report and the form of proxy were first mailed to stockholders on or
about October 10, 2000.
1
<PAGE>
VOTING PROCEDURES
The presence, in person or by proxy, of at least a majority of the
outstanding shares each class of Common Stock entitled to vote at the Meeting is
necessary to establish a quorum for the transaction of business. Shares
represented by proxies pursuant to which votes have been withheld from any
nominee for director, or which contain one or more abstentions or votes withheld
by brokers in the absence of instructions from street-name holders ("broker
non-votes") will be counted as present for purposes of determining the presence
or absence of a quorum for the Meeting. Abstentions will be counted towards the
tabulation of votes cast on proxy items submitted to stockholders, whereas
broker non-votes are not counted for purposes of determining whether a proxy
item has been approved.
HOW CAN YOU VOTE
Stockholders of record can give a proxy to be voted at the Meeting either
(i) over the telephone by calling a toll-free number, (ii) electronically, using
the Internet, or (iii) by mail.
The telephone and Internet voting procedures are designed to authenticate
each stockholder's identity, to permit voting and to confirm that such votes are
recorded accurately. Any stockholder of record who wishes to vote by telephone
or the Internet should refer to the specific instructions set forth on the
enclosed proxy card. Stockholders who prefer to vote by mail should return a
signed proxy card to the Company before the Meeting.
Whether voting by telephone, the Internet or by mail, stockholders may
specify whether shares should be voted for all, some, or none of the nominees
for director (Proxy Item No. 1) and approve, disapprove, or abstain from the
ratification of the Company's independent auditors (Proxy Item No. 2).
On all matters, the holders of Class A Common Stock and the holders of
Class B Common Stock vote together as a single class, with each Class A share
entitled to ten votes, or a total of 43,425,280 Class A votes, and each Class B
share entitled to one vote, or a total of 5,155,733 Class B votes.
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Meeting as specified in such proxies. A
stockholder submitting a proxy may revoke it at any time before it is voted at
the Meeting by notifying the Secretary of the Company in writing of such
revocation, by properly executing a later-dated proxy, or by voting in person at
the Meeting.
ELECTION OF DIRECTORS
(PROXY ITEM NO. 1)
Management is proposing and supports re-election of all eight of the
nominees named herein.
All of the nominees for election are currently members of the Company's
Board.
At the Meeting, directors will be elected to serve until the 2001 Annual
Meeting or until their successors have been duly elected and qualified. Each
nominee has consented to be named in this Proxy Statement and has consented to
serve as a director if so elected and qualified. The Company has no reason to
believe that any of the nominees will not be available to serve; if, however,
any nominee should for any reason become unable or unwilling to serve, the
Company's Bylaws permit the Board may vote to fix the number of directors at a
lesser number, but not less than six (6), or direct that the shares represented
by proxies received by the Company be voted for the election of such person as
the Board may recommend, in place of the unavailable nominee.
2
<PAGE>
DIRECTOR-NOMINEES
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Jeffrey J. 39 Chairman of the Board of Directors, Assistant
Brown(1)(2)........... Secretary and Director
Jeffrey B. O'Neill...... 44 Chief Executive Officer and Director
Nicholas B. 55 Director
Binkley(2)............
Greg J. Forrest......... 53 Director
Keith R. Fox(2)......... 46 Director
W. Scott Hedrick(1)..... 55 Director
Peter W. Mullin(1)...... 59 Director
Douglas R. Wolter....... 33 Director
</TABLE>
------------------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
JEFFREY J. BROWN has been a director of the Company since April 1995 and has
served as Chairman of the Board and Assistant Secretary since October 1996.
Since June 1993, Mr. Brown has been an executive officer and director of Forrest
Binkley & Brown Venture Co. ("Venture Co."), the general partner of Forrest
Binkley & Brown L.P. ("FBB") and the managing partner of SBIC Partners. Prior to
the formation of FBB in June 1993, Mr. Brown was a Senior Vice President of
BankAmerica Venture Capital Corporation, a position he held from April 1992 to
May 1993. He currently serves on the Board of Directors of Stamps.com Inc. as
well as a number of private companies.
JEFFREY B. O'NEILL has been a director of the Company since April 1995 and
has served as the Company's Chief Executive Officer since January 2000. From
October 1996 to January 2000, Mr. O'Neill served as President and Chief
Executive Officer. From July to October of 1996, Mr. O'Neill served as Executive
Vice President of the Company. Mr. O'Neill joined the predecessor to the Company
in 1981 as a grape buyer and has held a number of executive positions with the
Company's predecessor entities, including as the President and Chief Executive
Officer of Golden State Vintners since 1996. He currently serves on the Board of
Directors of several leading agricultural concerns, including Fresh
Express Inc.
NICHOLAS B. BINKLEY has been a director of the Company since October 1996.
Since June 1993, Mr. Binkley has been an executive officer and director of
Venture Co. Prior to the formation of FBB, Mr. Binkley was Vice Chairman of the
board of directors of BankAmerica Corporation, a position he held from
April 1992 through May 1993. He currently serves on the board of directors of
Vista Medical Technologies, Inc., a medical device company, as well as a number
of private companies.
GREG J. FORREST has been a director of the Company since May 1998. Since
June 1993, Mr. Forrest has been an executive officer and director of Venture Co.
Prior to the formation of FBB, Mr. Forrest was Chief Executive Officer of
BankAmerica Venture Capital Corporation, a position he held from April 1992 to
May 1993. Mr. Forrest currently serves on the boards of directors of a number of
private companies.
KEITH R. FOX has been a director of the Company since April 1995. Since
February 1994, Mr. Fox has been an executive officer of Exeter Venture
Advisors, Inc., Exeter Equity Advisors, Inc. and Exeter Venture Management
Corporation. Mr. Fox serves on the boards of directors of a number of private
companies and is a non-interested director of more than 20 mutual funds
sponsored by Scudder Kemper Investments, Inc.
W. SCOTT HEDRICK has been a director of the Company since April 1998. Since
1979, Mr. Hedrick has served as a general partner of InterWest Partners, a
venture capital firm that he co-founded. Mr. Hedrick also serves on the boards
of directors of Il Fornaio (America) Corporation and Office Depot, Inc., as well
as a number of private companies.
3
<PAGE>
PETER W. MULLIN has been a director of the Company since April 1998. Since
1969, Mr. Mullin has served as Chief Executive Officer and Chairman of the Board
of Directors of Mullin Consulting, Inc., a consulting firm specializing in
executive compensation and benefit issues. Mr. Mullin serves on the boards of
directors of Avery Dennison Corporation, Mrs. Fields' Original Cookies, Inc. and
Mellon Financial Group--West Coast, as well as several private companies and
foundations.
DOUGLAS R. WOLTER has been a director of the Company October 1996. He
currently is a partner at Forrest Binkley & Brown Venture Advisor Co. ("Advisor
Co."), an affiliate of FBB. Previously, Mr. Wolter had been a principal at
Advisor Co. since August 1994.
RECOMMENDATION
The Board of Directors recommend a vote "For" Management's nominees.
VOTE REQUIRED
The nominees receiving a plurality of the affirmative votes of the shares
entitled to be voted shall be elected as directors.
OTHER EXECUTIVE OFFICERS
The executive officers and key employees of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- -------- --------
<S> <C> <C>
Jeffrey B. O'Neill..... 44 Chief Executive Officer and Director
Mark A. Larson......... 52 President and Chief Operating Officer
Brian R. Thompson...... 49 Chief Financial Officer and Secretary
Michael B. Drobnick.... 44 Vice President, Bulk Sales
Jeffrey L. Dye......... 46 Vice President, Case Goods
Jon M. Powell.......... 44 Vice President, Operations
Donald L. Stanley...... 63 General Manager, Reedley and Director of Wine
Grape Procurement
Robert Darby........... 59 Plant Manager, Fresno
</TABLE>
BRIAN R. THOMPSON joined the Company in November 1995 as Chief Financial
Officer and Secretary. From 1988 to November 1995, Mr. Thompson served in a
number of executive positions, including Executive Vice President and Chief
Financial Officer of Sun World International, Inc., a proprietary produce
company, which filed a petition under Federal bankruptcy laws in October 1994.
MARK A. LARSON has served as the Company's President and Chief Operating
Officer since January 2000. Mr. Larson brings 28 years of senior level
management experience to GSV, most recently having served as President and Chief
Executive Officer of UDV North America-West, a distilled spirits and wines
manufacturer and marketer. Previously, Mr. Larson held various senior level
management positions with various companies including Carlson Companies, Inc.
and Leaf, Inc.
MICHAEL B. DROBNICK joined the Company in 1985 and has served as Vice
President, Bulk Sales since January 1996. Prior to joining the Company,
Mr. Drobnick held various sales management positions with different wine
distributors.
JEFFREY L. DYE has served as Vice President, Case Goods of GSV since
November 1992. Prior to joining the Company, Mr. Dye served in various executive
positions for several wineries and wine distributors.
JON M. POWELL joined the Company in July 2000 as Vice President, Operations.
Mr. Powell has general management responsibility for the Company's five
California production facilities. Mr. Powell's prior experience includes seven
years as Production Manager at Sutter Home Winery and twelve years in various
4
<PAGE>
production management roles at E&J Gallo Winery, the Seagram Company and the
winery operations at Anheuser-Busch.
Officers serve at the discretion of the Board. Mr. O'Neill is married to the
sister of Mr. Drobnick. There are no other family relationships among any of the
directors or executive officers of the Company.
COMMITTEES
The Board has established an Audit Committee and a Compensation Committee.
COMPENSATION COMMITTEE. The Compensation Committee makes recommendations to
the Board with respect to the Company's general and specific compensation
policies and administers the Company's 1996 Stock Option Plan and the 1998
Director Stock Option Plan.
For the 2000 fiscal year, the Compensation Committee consisted of
Messrs. Brown, Mullin and Hedrick and met once.
AUDIT COMMITTEE. The Audit Committee reviews the results and scope of the
annual audit and the services provided by the Company's independent auditors.
For the 2000 fiscal year, the Audit Committee consisted of Messrs. Binkley,
Brown and Fox. During the Company's 2000 fiscal year, the Audit Committee met
twice.
In accordance with new rules adopted by the National Association of
Securities Dealers, Inc.,(1) at a regular meeting on February 29, 2000, the
Board adopted a formal audit committee charter which, among other things,
specifies:
(1) the scope and objectives of the Audit Committee's responsibilities and
the processes by which they will be fulfilled; and
(2) the Audit Committee's responsibility to oversee the Company's financial
reporting, to review the effectiveness and scope of the Company's audits, to
review the objectivity and independence of the Company's auditors and to review
annually any related party transactions between members of the Board, officers
and the Company.
The foregoing summary is qualified in its entirety by the complete text of
the Audit Committee Charter adopted by the Board which is attached as EXHIBIT A
to the Proxy Statement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the Company's fiscal 2000, Messrs. Brown, Mullin and Hedrick served
on the Company's Compensation Committee. Mr. Brown is an executive officer and
director of Venture Co., the general partner of FBB. The Company has agreed to
compensate FBB for management services to be provided to the Company as
described in more detail below under the caption "Certain Relationships and
Related Transactions."
No executive officer of the Company serves as a member of the board of
directors or compensation committee of any other entity which has one or more
executive officers serving as a member of the Company's Board or Compensation
Committee.
------------------------
(1) Self-Regulatory Organizations; Order Appraising Proposed Rule Change by the
National Association of Securities Dealers, Inc. Amending its Audit
Committee Requirements, Sec. Release No. 34-42231 (file No. SR-NASD-99-48).
5
<PAGE>
BOARD MEETINGS AND COMPENSATION
The Board met four times during the Company's 2000 fiscal year. Each
director attended at least 75% of the aggregate of those meetings.
Through the Company's 1999 fiscal year, the Company paid those directors who
were directors at the beginning of the fiscal year, other than Mr. O'Neill,
$12,500 per year, plus full reimbursement for certain out-of-pocket expenses
incurred in connection with attendance at board and committee meetings. For the
Company's 2000 fiscal year, each of the Company's outside Directors received a
director's fee of $12,500, plus reimbursement for certain out-of-pocket
expenses.
In April 1998, options were granted to all of the then-current outside
Directors to purchase 74,975 shares of Class B Common Stock at an exercise price
of $12.08 under the 1998 Director Stock Option Plan. In September 1999, options
to purchase 14,993 shares of Class B Common Stock that had been granted to John
McDonald were canceled upon Mr. McDonald's resignation from the Board. See
"Certain Relationships and Related Transactions."
Under the 1998 Director Stock Option Plan, each of the Company's
non-employee directors receives annual options to purchase 10,005 shares of the
Company's Class B Common Stock at an exercise price up and to the closing NASDAQ
sale price on the date of the grant. The annual options are typically made on
May 1 of each year, beginning in 1999. Each non-employee director has received
options for 1999 and 2000.
In October 1996, and as amended in May 1997, an affiliate of Messrs. Brown,
Binkley, Wolter and Forrest entered into a management agreement with the
Company, which calls for the annual payment of $125,000 to such affiliate for
management services rendered to the Company. See "Certain Relationships and
Related Transactions."
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of September 25, 2000
respecting the beneficial ownership of the Class A Common Stock and the Class B
Common Stock, the Company's only classes of voting securities, by (i) all
persons known by the Company to own more than five percent of either the
Class A Common Stock or the Class B Common Stock, (ii) each director,
director-nominee, and the "Named Executive Officers" and (iii) all directors and
executive officers as a group.
Except as may be noted in the footnotes to the table, the Company believes
that the persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them,
subject to community property laws where applicable.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
--------------------------------------------------------------------
PERCENTAGE OF
NUMBER OF PERCENTAGE OF NUMBER OF PERCENT OF SHARES
CLASS A CLASS A CLASS B CLASS B BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNERS SHARES SHARES SHARES SHARES OWNED(1)
------------------------------------- ---------- ------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
SBIC Partners, L.P ...................................... 3,000,000 64.3% -- -- 31.6%
201 Main Street, Suite 2302
Fort Worth, TX 76102
Jeffrey B. O'Neill ...................................... 1,227,701(2) 26.3% 673,729(3) 13.1% 20.0%
607 Airpark Road
Napa, CA 94558
Scott J. Seligman Revocable Living Trust ................ -- -- 733,500 14.2% 7.7%
One Towne Square, Suite 1913
Southfield, MI 48076
John Hancock Financial Services, Inc. ................... -- -- 658,595 12.8% 6.9%
P.O. Box 111
Boston, MA 02117
FMR Corp ................................................ -- -- 443,600 8.6% 4.7%
82 Devonshire Street
Boston, MA 02109
R. Michael Holloway, Trustee ............................ -- -- 426,900 8.3% 4.5%
201 Main Street, Suite 3300
Fort Worth, TX 76102
State Street Research & Management Company .............. -- -- 389,200 7.6% 4.1%
One Financial Center, 30th Floor
Boston, MA 02111
Wellington Management Company, LLP ...................... -- -- 364,500 7.1% 3.8%
75 State Street
Boston, MA 02109
Exeter(4) ............................................... 435,757 9.4% -- -- 4.6%
10 East 53rd Street
New York, NY 10022
Jeffrey J. Brown(5)(6)................................... -- -- 7,499 * *
Nicholas B. Binkley(5)(6)................................ -- -- 7,499 * *
Douglas R. Wolter(5)(6).................................. -- -- 7,499 * *
Keith R. Fox(4)(6)....................................... -- -- 7,499 * *
W. Scott Hedrick(7)...................................... -- -- 41,993 * *
Peter W. Mullin(8)....................................... -- -- 59,965 1.2% *
Greg J. Forrest(5)....................................... -- -- -- -- *
Brian R. Thompson(9)..................................... -- -- 144,999 2.8% 1.5%
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
--------------------------------------------------------------------
PERCENTAGE OF
NUMBER OF PERCENTAGE OF NUMBER OF PERCENT OF SHARES
CLASS A CLASS A CLASS B CLASS B BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNERS SHARES SHARES SHARES SHARES OWNED(1)
------------------------------------- ---------- ------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Jeffrey L. Dye(10)....................................... -- -- 13,050 * *
Michael B. Drobnick(10).................................. -- -- 13,050 * *
All Directors and Named Executive Officers 4,663,458 100% 976,782 18.9% 58.1%
as a group (11 persons)(11)............................
</TABLE>
------------------------------
* Represents beneficial ownership of less than 1% of the outstanding voting
power of all shares of Common Stock.
(1) Percent ownership is based on 9,498,261 shares of Common Stock outstanding,
and does not take into account the relative voting power of shares of
Class A Common Stock (ten votes per share) and Class B Common Stock (one
vote per share).
(2) Includes 906,771 shares of Class A Common Stock owned by Mr. O'Neill and
320,930 shares of Class A Common Stock issuable upon exercise of stock
options exercisable within sixty days of September 28, 2000.
(3) Includes 24,381 shares of Class B Common Stock owned by Mr. O'Neill and
649,348 shares of Class B Common Stock issuable upon the exercise of stock
options exercisable within sixty days of September 28, 2000.
(4) Keith R. Fox, a director of the Company, is an executive officer of Exeter
Equity Advisors, Inc., which is the general partner of Exeter Equity
Advisors, L.P., the general partner of EE Partners. Mr. Fox is also an
executive officer of Exeter Venture Advisors, Inc., which is the general
partner of EV Lenders, and an executive officer of Exeter Venture
Management Corporation, which is an affiliate of EV Partners and EV
Lenders. Mr. Fox may be deemed to be a beneficial owner of 435,757 shares
held by EE Partners and EV Lenders to the extent of his ratable economic
interest in EE Partners and EV Lenders.
(5) Greg J. Forrest and Nicholas B. Binkley, each a director of the Company,
are each executive officers, directors and shareholders of Venture Co.
Messrs. Forrest, Binkley and Brown collectively hold all of the outstanding
limited partnership interests in FBB. Mr. Wolter is a principal of Advisor
Co., an affiliate of each of SBIC Partners, FBB and Venture Co. Each of
Messrs. Forrest, Binkley, Brown and Wolter may be deemed to be beneficial
owners of 3,000,000 shares held by SBIC Partners to the extent of their
ratable economic interests in SBIC Partners.
(6) Includes 7,499 shares of Class B Common Stock issuable upon exercise of
stock options exercisable within sixty days of September 28, 2000.
(7) Includes 27,000 shares of Class B Common Stock held by Mr. Hedrick and
14,993 shares of Class B Common Stock, issuable upon exercise of stock
options exercisable within sixty days of September 28, 2000.
(8) Includes 44,972 shares of Class B Common Stock held by Mr. Mullin and
14,993 shares of Class B Common Stock issuable upon exercise of stock
options exercisable within sixty days of September 28, 2000.
(9) Includes 29,617 shares of Class B Common Stock held by Mr. Thompson and
115,382 shares of Class B Common Stock issuable upon exercise of stock
options exercisable within sixty days of September 28, 2000.
(10) Includes 13,050 shares of Class B Common Stock issuable upon the exercise
of stock options exercisable within sixty days of September 28, 2000.
(11) Includes shares held by SBIC Partners and Exeter, and 850,812 of Class B
Common Stock issuable upon exercise of stock options exercisable within
sixty days of September 28, 2000.
VOTING AGREEMENT
In April 1998, SBIC Partners (a 5% stockholder and affiliate of FBB and
Messrs. Forrest, Binkley, Brown and Wolter) and Exeter Equity Partners L.P. and
Exeter Venture Lenders L.P. (collectively, "Exeter"; each an affiliate of
Mr. Fox) agreed to certain co-sale rights and rights of first refusal and
Mr. O'Neill agreed not to seek to participate in the next registered sale of the
Company's Common Stock by SBIC Partners or Exeter. See "Certain Relationships
and Related Transactions."
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth for the Company's 1998, 1999 and 2000 fiscal
years, a summary of compensation awarded to, earned by, or paid to, the
Company's Chief Executive Officer and each of the Company's four other most
highly compensated executive officers who were serving as of June 30, 2000 (the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
COMPENSATION AWARDS(1)
-------------------------------- ------------
SECURITIES
FISCAL UNDERLYING ALL OTHER TOTAL CASH
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS/SARS COMPENSATION(2) COMPENSATION
--------------------------- -------- -------- ---------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey B. O'Neill....... 2000 $350,012 -- -- $49,583 $ 399,595
Chief Executive 1999 350,012 30,000(3) -- 37,015 417,027
Officer(4) 1998 323,551 9,466,888(5) 649,347(6) 35,757 9,826,198
Mark A. Larson........... 2000 172,312 90,000 237,457 27,133 289,455
President and Chief
Operating Officer(4)
Jeffrey L. Dye........... 2000 125,000 45,000 -- 1,482 171,482
Vice President 1999 125,000 90,000 -- 4,794 219,794
Case Goods 1998 128,946 73,435 -- -- 202,381
Michael B. Drobnick...... 2000 140,000 45,000 -- 1,545 186,545
Vice President 1999 140,000 75,000 2,933 217,933
Bulk Sales 1998 144,805 58,435 -- 203,240
Brian R. Thompson........ 2000 190,000 -- -- -- 190,000
Chief Financial Officer 1999 190,000 -- -- -- 190,000
and Secretary(7) 1998 191,962 1,445,000(5) 145,000(6) -- 1,636,962
</TABLE>
------------------------------
(1) For each of the periods set forth in the table above, no Named Executive
Officer received aggregate Other Compensation in excess of the lesser of
$50,000 or 10% of the total of such officer's salary and bonus, nor did any
such Named Executive Officer receive any restricted stock award, stock
appreciation right or payment under any long-term incentive plan.
(2) Consists of disability insurance premiums, moving expenses, and/or car
expenses paid by the Company and the proportionate value of Mr. O'Neill's
life insurance policy the Company has agreed to assign to Mr. O'Neill's
family trust.
(3) Mr. O'Neill's fiscal 1999 bonus represents reimbursement of various expenses
incurred by Mr. O'Neill on behalf of the Company.
(4) As of January 1, 2000, Mark A. Larson has been the Company's President and
Chief Operating Officer. See "Employment Agreements and Executive Officers."
(5) Bonus as earned by Messrs. O'Neill and Thompson in fiscal 1998 were in
connection with the Replacement Incentives issued to them on January 1,
1998. In addition, Mr. O'Neill's fiscal 1998 bonus included a one-time
payment of $2.5 million as prepayment of estimated bonuses Mr. O'Neill would
have been entitled to for fiscal years 1998, 1999 and 2000 under his
previous Management Agreement. Approximately 50% of the after tax proceeds
from such bonus amounts were invested by Messrs. O'Neill and Thompson in the
Company's Common Stock. See "Certain Relationships and Related
Transactions."
(6) The options granted to Messrs. O'Neill and Thompson in fiscal 1998 were made
in connection with the Replacement Incentives issued to them on January 1,
1998.
(7) Per Agreement with the Company, Mr. Thompson is entitled to a minimum annual
bonus of 40% of base salary. These are unpaid for fiscal 1998, 1999 and
2000.
9
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding stock options
granted during the Company's 2000 fiscal year to the Named Executive Officers.
No stock appreciation rights were granted to such persons during the Company's
2000 fiscal year.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OF BASE OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------
GRANTED (#) FISCAL YEAR ($/SH)(1) DATE 5% 10%
----------- ------------ --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mark A. Larson...................... 237,457 100% 3.47 12/13/09 $518,045 $1,312,827
</TABLE>
------------------------------
(1) The exercise price per share of these options was equal to or greater than
the fair market value of the Common Stock on the date of grant.
(2) The potential realizable value is calculated based on the term of the option
at its time of grant. It is calculated assuming that the stock price on the
date of grant appreciates at the indicated annual rate compounded annually
for the entire term of the option, and that the option is exercised and sold
on the last day of its term for the appreciated stock price. No gain to the
optionee is possible unless the stock price increases over the option term,
which will benefit all stockholders.
STOCK OPTION EXERCISES IN LAST FISCAL YEAR
During the Company's fiscal 2000, no stock options were exercised by the
Named Executive Officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information regarding each exercise of stock
options during the Company's 2000 fiscal year, and the number and value of
unexercised stock options held by each Named Executive Officer as of the same
date. The closing price of the Common Stock on June 30, 2000 was $4.125 per
share based on the NASDAQ closing price.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR-END(#) FISCAL YEAR-END ($)
SHARES VALUE ---------------------- --------------------
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE
---- ----------- -------- ---------------------- --------------------
<S> <C> <C> <C> <C>
Jeffrey B. O'Neill........... -- -- 844,572/167,608 35,092/21,146
Mark A. Larson............... -- -- --/237,457 --/155,772
Jeffrey L. Dye............... -- -- 13,050/4,350 --/--
Michael B. Drobnick.......... -- -- 13,050/4,350 --/--
Brian R. Thompson............ -- -- 115,382/-- --/--
</TABLE>
KEY MAN LIFE INSURANCE
The Company, through Golden State Vintners, currently maintains a life
insurance policy in the amount of $10 million on the life of Mr. O'Neill. The
Company has agreed to assign a $2 million portion of this policy to
Mr. O'Neill's family trust.
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
From April 27, 1995 until December 31, 1997, Mr. O'Neill served as President
and Chief Executive Officer of Golden State Vintners pursuant to an employment
agreement dated as of April 27, 1995 (the "Old Agreement"), which provided him
with an annual salary of not less than $300,000, subject to annual increases,
and an annual bonus based on a sliding scale of EBITDA (as defined in the Old
Agreement). Effective as of January 1, 1998, the Company and Mr. O'Neill entered
into a new employment agreement
10
<PAGE>
(the "New Employment Agreement"), which provides for Mr. O'Neill to serve as
President and Chief Executive Officer of the Company on the terms and subject to
the conditions set forth therein. Under the New Employment Agreement,
Mr. O'Neill will receive annual compensation of $350,000, a bonus to be paid in
the discretion of the Board and the reimbursement of certain expenses. The New
Employment Agreement also provides for the payment of severance to Mr. O'Neill
equal to two years of his base compensation and for the acceleration of any
options then held by Mr. O'Neill if his employment is terminated for certain
reasons, including any termination of his employment within six months of a
"Change in Control." The New Employment Agreement defines a Change in Control to
include the sale by the Company of all or substantially all of its capital stock
or assets or the consummation of any transaction or series of related
transactions, including any merger, reorganization or recapitalization, in which
any person or group acquires beneficial ownership of more than 50% of the
outstanding capital stock of the Company. The term of the New Employment
Agreement expires June 30, 2001. Upon the hiring of Mark A. Larson (see below),
Mr. O'Neill serves as the Company's Chief Executive Officer.
On December 15, 1999, the Company entered into an employment agreement with
Mark A. Larson to serve as President and Chief Operating Officer of the Company
(the "Larson Agreement"). The initial term of the Larson Agreement is from
January 1, 2000 to December 31, 2000, and will be automatically extended for
additional one-year terms unless earlier terminated or superseded. Under the
Larson Agreement, Mr. Larson will receive annual base salary of $320,000, an
annual incentive bonus, a one-time stock option grant and reimbursement of
certain expenses. Mr. Larson's annual incentive bonus will be determined by the
Company's Board of Directors and will not exceed sixty percent of his annual
base salary, except Mr. Larson is entitled to minimum annual incentive bonus
payments of $90,000 on each of June 30, 2000 and December 31, 2000, provided he
is employed by the Company on the those dates. The one-time stock option grant
entitles Mr. Larson to receive options to purchase 2.5% of the issued and
outstanding Class A and Class B Common Stock as of December 31, 1999, excluding
all shares reserved for option grants. As of December 31, 1999, a total of
9,498,261 shares of Class A and Class B Common Stock were issued and
outstanding, excluding shares reserved for option grants. The options granted to
Mr. Larson were granted under the Company's 1996 Stock Option Plan and,
therefore, are options to purchase 237,457 shares of the Company's Class B
Common Stock at an exercise price equal to the closing sales price of the
Company's Class B Common Stock on December 15, 1999, the date of the Larson
Agreement, or $3.469 per share. The Company's stockholders approved an amendment
to the 1996 Stock Option Plan to reserve additional shares of Class B Common
Stock to permit, among other things, issuance of the options contemplated under
the Larson Agreement. The Larson Agreement also provides for the payment of
severance to Mr. Larson equal to the annual amount of his then base salary plus
his annual incentive bonus, pro-rated to the date of termination, and for
acceleration of options if his employment is terminated for certain reasons,
including termination following a "Change in Control." The Larson Agreement
defines a Change in Control to include the merger of the Company with a
non-affiliate where the Company is not the surviving corporation and a sale or
transfer of all or substantially all the assets of the Company to a
non-affiliate of the Company.
On June 23, 2000, the Company entered into an employment agreement with Jon
M. Powell to serve as Vice President, Operations. The initial term of this
agreement is from July 17, 2000 to July 16, 2001 and will be automatically
extended for additional one-year terms unless earlier terminated or suspended.
Under this agreement, Mr. Powell will receive an annual base salary of $180,000,
a one-time stock option grant to purchase 25,000 shares of the Company's
Class B Common Stock based on certain vesting criteria and a monthly car
allowance. In addition, Mr. Powell will be eligible to receive an annual
incentive bonus targeted at 35% of his base annual salary.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law ("Delaware Law"),
the Company can indemnify its directors and officers against liabilities they
may incur in such capacities, including liabilities
11
<PAGE>
under the Securities Act. The Company's Certificate of Incorporation provides
that the Company will indemnify its directors, officers, employees and other
agents to the fullest extent permitted by law.
In addition, the Company's Certificate of Incorporation provides that the
Company's directors shall not be liable for monetary damages for breach of such
directors' fiduciary duty of care to the Company and its stockholders except for
liability for breach of the director's duty of loyalty to the Company or its
stockholders, for acts or omissions not in good faith or involving intentional
misconduct or knowing violations of law, for actions leading to improper
personal benefit to the director, and for payment of dividends or approval of
stock repurchases or redemptions that are unlawful under Delaware Law. This
provision in the Certificate of Incorporation does not eliminate the duty of
care, and in appropriate circumstances equitable remedies such as injunctive or
other forms of non-monetary relief will remain available under Delaware Law. The
provision also does not affect a director's responsibilities under any other
law, such as the federal or state securities or environmental laws.
At the 1999 Annual Meeting of Stockholders, the Company's stockholders
approved a form of indemnification agreement to be entered into between the
Company, its directors and, certain of its officers and other agents. The
indemnification agreement attempts to provide the Company's directors and
certain officers and agents the maximum indemnification allowed under applicable
law and under the Company's Certificate of Incorporation. The indemnification
agreement expands the scope of indemnification provided by Section 145 of the
Delaware Law.
There is no pending litigation or proceeding involving a director, officer,
employee or other agent of the Company as to which indemnification is being
sought, nor is the Company aware of any pending or threatened litigation that
may result in claims for indemnification by any director, officer, employee or
other agent.
STOCK OPTION PLANS
1996 STOCK OPTION PLAN. The Company's 1996 Stock Option Plan became
effective in December 1996 upon adoption by the Board and approval of the
stockholders. The 1996 Stock Option Plan provides for the grant of options in
the form of incentive stock options and nonstatutory stock options to officers,
key employees and consultants of the Company or its subsidiaries and members of
the Board. A total of 1,031,093 shares of Class B Common Stock and 362,832
shares of Class A Common Stock have been reserved for issuance under the 1996
Stock Option Plan.
The 1996 Stock Option Plan is administered by a committee appointed by the
Board (the "Committee"). The Board may amend the 1996 Stock Option Plan and,
with the consent of each participant adversely affected, the Committee may make
such changes in the terms and conditions of granted options as it shall deem
advisable.
The purchase price per share of the shares of Common Stock underlying each
option granted under the 1996 Stock Option Plan is established by the Committee
but shall not be less than 100% of the fair market value of the Common Stock on
the date of grant, provided that if the optionee is a 10% stockholder of the
Company (as defined in Section 422(b)(6) of the Internal Revenue Code of 1986,
as amended) at the time such optionee is granted an incentive stock option, the
purchase price per share of the shares of Common Stock shall be not less than
110% of said fair market value.
The 1996 Stock Option Plan provides that, in the event of the dissolution,
liquidation or sale of the Company, any merger or reorganization of the Company,
or acquisition by any person or group of beneficial ownership of more than 50%
of the Company's then outstanding shares of capital stock, the 1996 Stock Option
Plan and each outstanding option granted thereunder shall terminate. Upon the
happening of such event, each participant under the 1996 Stock Option Plan who
is not tendered a substitute option by the entity surviving such event or who
does not accept any such substituted option, shall have the right to exercise,
in whole or in part, any vested and exercisable options which have not then
expired.
12
<PAGE>
As of June 30, 2000, options to purchase a total of 362,832 shares of
Class A Common Stock and 343,157 shares of Class B Common Stock were outstanding
under the 1996 Stock Option Plan. Such options have per share exercise prices
ranging from $3.47 to $12.07, or a weighted average per share exercise price of
$4.42. Expiration dates range from December 2006 to December 2009.
1998 DIRECTOR STOCK OPTION PLAN. The Company's 1998 Director Stock Option
Plan (the "Director Plan") became effective in April 1998 upon adoption by the
Board and approval by the stockholders. The Director Plan provides for the grant
of nonstatutory stock options to the non-employee members of the Board. A total
of 348,000 shares of Class B Common Stock have been reserved for issuance under
the Director Plan.
The purchase price per share of the shares of Common Stock underlying each
option granted under the Director Plan shall be the closing sale price of such
shares on the date of grant if the Common Stock is listed on any established
stock exchange or national market system or the price established by the
committee administering the Director Plan, which shall not be less than 100% of
the fair market value of the Common Stock on the date of grant.
The Director Plan provides that, in the event of the dissolution or
liquidation of the Company, the merger or sale of all or substantially all
assets of the Company requiring shareholder approval, or acquisition by any
person or group of beneficial ownership of the securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding shares, any options outstanding under the Director Plan that are not
yet exercisable and vested shall become fully exercisable and vested.
As of June 30, 2000, options to purchase a total of 200,052 shares of
Class B Common Stock were outstanding under the Director Plan. Such options have
per share exercise prices ranging from $4.50 to $12.08. None of such options
have been exercised. Expiration dates for these options range from April 2008 to
May 2010. In September 1999, options to purchase 14,993 shares of Class B Common
Stock that had been granted to John McDonald were canceled upon Mr. McDonald's
resignation from the Board.
13
<PAGE>
COMPENSATION COMMITTEE REPORT ON COMPENSATION
OF EXECUTIVE OFFICERS
The Compensation Committee met once during the Company's 2000 fiscal year.
Executive compensation for the Company's 2000 fiscal year was paid pursuant to
employment agreements previously approved by the Board and pursuant to the
Company's existing policies. The general policies of the Compensation Committee
are set forth below.
GENERAL. The Compensation Committee of the Board (the "Committee")
administers the Company's executive compensation program. The Committee is
composed entirely of directors who are not employees of the Company or a parent
or subsidiary of the Company.
The objective of the Company's executive compensation program is to develop
and maintain executive reward programs which (i) contribute to the enhancement
of stockholder value, (ii) are competitive with the pay practices of other
industry-leading companies and (iii) attract, motivate and retain key executives
who are critical to the long-term success of the Company. As discussed below,
the Company's executive compensation program consists of both fixed (base
salary) and variable (incentive) compensation elements. Variable compensation
consists of annual cash incentives and stock option grants under the Company's
1996 Stock Option Plan. These elements are designed to operate on an integrated
basis and together comprise total compensation value.
BASE SALARY. Base salary levels for the Company's executives are
established to compensate executives for their level of responsibility and
management skills.
ANNUAL CASH INCENTIVES. The annual cash incentive, typically paid as a
bonus, is designed to provide a short-term (one-year) incentive. The Company
does not adhere to any firmly established formulas for the award of annual cash
incentives. Rather, incentive awards are based on the achievement of corporate
and individual performance for the year, including subjective factors. The
Summary Compensation Table shows annual cash incentives paid to the Named
Executive Officers, including the Chief Executive Officer during the Company's
1998, 1999 and 2000 fiscal years.
STOCK OPTIONS. Stock options are designed to provide long-term incentives
and rewards tied to the price of the Common Stock. Given the fluctuations of the
stock market, stock price performance and financial performance are not always
consistent. The Committee believes that stock options, which provide value to
participants only when the Company's stockholders benefit from stock price
appreciation, are an important component of the Company's executive compensation
program. The number of options or shares of stock currently held by an executive
is not a factor in determining individual grants, and the Committee has not
established any target level of ownership of the Common Stock by its executives.
However, retention of shares by executives is encouraged.
The Company does not adhere to any firmly established formulas for the
issuance of options. The Summary Compensation Table shows the options granted to
the Named Executive Officers during the Company's 1998, 1999 and 2000 fiscal
years.
In accordance with the provisions of the Plans, the exercise price of all
options granted was equal to the market value of the underlying Common Stock on
the date of grant. Accordingly, the value of these grants to the officers is
dependent solely upon the future growth and share value of the Common Stock.
14
<PAGE>
PERFORMANCE GRAPH
The line graph below compares the cumulative total return to holders of the
Class B Common Stock in the period from July 21, 1998(1) to June 30, 2000, with
the cumulative total return in the same period on (i) the NASDAQ Stock Market
Index (U.S.) and (ii) a peer group index comprised of nine companies whose
returns have been weighted based on market capitalization as of the beginning of
each period for which a return is indicated: Beringer Wine Estates
Holdings Inc., Brown-Forman Corporation, The Robert Mondavi Corp., Canandaigua
Brands, Inc., The Chalone Wine Group, Ltd., Ravenswood Winery, Inc., Scheid
Vineyards and Willamette Valley Vineyards. The graph assumes an investment of
$100.00 on July 21, 1998 in the Company and in two comparison indices. "Total
return," for purposes of the graph, assumes reinvestment of all dividends.
The information contained in the performance graph shall not be deemed to be
"soliciting materials" or to be "filed" with the SEC, nor shall such information
be incorporated by reference into any of the Company's existing shelf
registrations or future filings under the Securities Act of 1933 or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates it by reference into such filing.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG GOLDEN STATE VINTNERS, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND A PEER GROUP
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GOLDEN STATE NASDAQ STOCK
<S> <C> <C> <C>
VINTNERS, INC. MARKET (U.S.) PEER GROUP
7/22/98 $100.00 $100.00 $100.00
6/99 $36.03 $138.31 $103.22
6/00 $24.26 $175.17 $89.57
</TABLE>
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
------------------------
(1) The start date, July 21, 1998, is the date on which trading in the Company's
Class B Common Stock commenced on the NASDAQ.
15
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In October 1996, as amended in May 1997, the Company agreed to pay an annual
fee of $125,000 to Forrest Binkley & Brown Partners L.P., an affiliate of
Messrs. Forrest, Brown, Binkley and Wolter and of SBIC Partners, a 5%
Stockholder, as compensation for management services to be provided with respect
to the Company's operations. In exchange for the annual fee, FBB advises the
Company regarding its indebtedness and plans for expansion, and provides
assistance to the Company in its fund raising activities and presentations to
financial analysts.
In April 1998, SBIC Partners (a 5% Stockholder and affiliate of Forrest
Binkley & Brown Partners L.P. and of Messrs. Forrest, Binkley, Brown and Wolter)
and Exeter Equity Partners L.P. and Exeter Venture Lenders, L.P. (collectively,
"Exeter" and each an affiliate of Mr. Fox) agreed to certain co-sale rights and
rights of first refusal and Mr. O'Neill agreed not to seek to participate in the
next registered sale of Class B Common Stock by SBIC Partners and Exeter, if
any.
In April 1998, in connection with its participation in the Company's initial
public offering, John Hancock agreed to waive all prepayment penalties due with
respect to the Company's repurchase of the shares of Senior Preferred Stock held
by John Hancock.
Mr. O'Neill, in connection with the Company's purchase of all the
outstanding stock of Golden State Vintners, a California corporation (the
predecessor of the Company), and Mr. Thompson, upon employment with the Company,
were granted stock appreciation rights. Effective as of January 1, 1998, the
Company and Messrs. O'Neill and Thompson agreed to terminate such stock
appreciation rights in exchange for certain compensation and the grant of non
qualified stock options, referred to as "Replacement Incentives." Pursuant to
such agreement, Messrs. O'Neill and Thompson were entitled to receive
$6.97 million and $1.38 million, respectively. In connection with the issuance
of the Replacement Incentives, Messrs. O'Neill and Thompson each received cash
payments and promissory notes. As part of the Replacement Incentives,
Messrs. O'Neill and Thompson also received options to purchase 649,348 and
145,000 shares of Class B Common Stock, respectively. Upon receipt of the cash
payments of $6.97 million and $1.38 million, respectively by Messrs. O'Neill and
Thompson, approximately fifty percent of the after-tax cash received by each was
used to exercise options and to purchase Company common stock. The required
promissory notes' principal amounts were paid by the Company, however, interest
under the promissory notes of approximately $370,000 payable by the Company to
Messrs. O'Neill and Thompson accrued to the date of the payment of the principal
amounts and has not yet been paid. Interest continues to accrue at a 7.5%
interest rate. As of June 30, 2000, interest payable under the promissory notes
to Messrs. O'Neill and Thompson is approximately $370,000 and $53,000,
respectively.
The Company's directors, other than Mr. O'Neill, have been granted
nonqualified stock options under the Director Plan. See "Management--Stock
Option Plans--Director Plan."
The Company has entered into indemnification agreements with its directors.
See "Indemnification of Directors and Officers." The agreements require the
Company to indemnify such individuals for certain liabilities to which they may
be subject as a result of their affiliation with the Company, to the fullest
extent permitted by Delaware law.
The Company believes that the foregoing transactions were in its best
interests and on terms no less favorable to the Company than could be obtained
from unaffiliated third parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act ("Section 16") requires the Company's
executive officers, directors and beneficial owners of more than 10% of the
Company's common stock (collectively, "Insiders") to file reports of ownership
and changes in ownership of Common Stock of the Company with the Securities and
Exchange Commission and to furnish the Company with copies of all Section 16(a)
forms they file. The
16
<PAGE>
Company became subject to Section 16 in conjunction with the registration of its
common stock under the Exchange Act effective July 21, 1998.
In November, 1999, Mr. Mullin purchased 14,000 shares of Class B Common
Stock at an average price of $3.63 per share. Mr. Mullin's Form 4 disclosure was
not filed until December 29, 1999, after the required filing date. Based solely
on its review of the copies of such forms received by it, the Company believes
that its Insiders have otherwise complied with all applicable Section 16 filing
requirements during fiscal 1999.
AMENDMENT OF BYLAWS
Article VIII of the Company's Bylaws authorizes the Board to adopt, amend or
repeal bylaws by vote of not less than two-thirds of the directors. At its
regular meeting on June 16, 2000, the Board adopted an advance notice bylaw and
an electronic proxy bylaw.
Under the advance notice bylaw, stockholder proposals must be received
within a specified time period before filing of the Company's proxy materials
for the proposal to be included in the proxy materials. The electronic proxy
bylaw authorizes the stockholders to submit proxies via electronic or oral
telephonic means. The foregoing summary is qualified in its entirety by the
complete text of the newly-adopted bylaws, included as Sections 2.8 and 2.9 in
the complete Bylaws of the Company which are affected as EXHIBIT B to the Proxy
Statement.
RATIFICATION OF APPOINTMENT OF THE
COMPANY'S INDEPENDENT AUDITORS
(PROXY ITEM NO. 2)
The Board has reappointed Deloitte & Touche LLP as the Company's independent
auditors for the fiscal year ending June 30, 2001, subject to ratification by
the stockholders at the Meeting. Deloitte & Touche LLP has been the Company's
independent auditor since 1994.
RECOMMENDATION
The Board recommends a vote "For" ratification and appointment of
Deloitte & Touche LLP as the Company's independent auditors.
VOTE REQUIRED
A majority of affirmative votes of the shares entitled to be voted, in
person or by proxy, and voting on this matter is required for approval.
OTHER MATTERS
The Company does not know of any matter other than those discussed in the
foregoing materials contemplated for action at the Meeting. Should any other
matter be properly brought before the Meeting, it is the intention of the
persons named in the proxies to vote in accordance with the recommendation of
the Board to the extent permitted by applicable law. Discretionary authority for
them to do so is contained in the proxy.
FINANCIAL STATEMENTS
Stockholders should refer to the Consolidated Financial Statements and
Supplemental Data, Management's Discussion and Analysis, and Selected Financial
Data set forth in the Company's Annual Report on Form 10-K which was filed with
the Securities and Exchange Commission on September 28, 2000.
17
<PAGE>
SUBMISSION OF STOCKHOLDER
PROPOSALS FOR 2001 ANNUAL MEETING
Any proposal which a stockholder wishes to have presented at the 2001 Annual
Meeting and included in the Company's proxy statement for that meeting must be
received by the Company, at its principal executive office, 607 Airpark Road,
Napa, California 94558, no later than August 31, 2001. Proposals should be
addressed to the attention of the Chief Financial Officer of the Company. In
order to avoid controversy as to the date on which a proposal was received by
the Company, it is suggested that any stockholder who wishes to submit a
proposal submit such proposal by certified mail, return receipt requested.
The Bylaws of the Company provide that in order for a stockholder to bring
business before or propose director nominations at an annual meeting of
stockholders, the stockholder must provide advance notice of such proposal or
nomination. Specifically, the stockholder must give written notice to the
Corporate Secretary not less than sixty (60) days nor more than ninety
(90) days prior to the date of the annual meeting. The notice must contain
specified information about the proposed business or each nominee and abut the
stockholder making the proposal or nomination. In the event that less than
seventy (70) days' prior notice or prior public disclosure of the date of the
annual meeting is given or made to stockholders, notice by the stockholder in
order to be timely must be received no later than the close of business on the
tenth day following the date on which such notice of the annual meeting date was
mailed or public disclosure of the date of the annual meeting was made,
whichever occurs first.
By Order of the Board of Directors,
[LOGO]
Jeffrey J. Brown
Chairman of the Board
Napa, California
18
<PAGE>
EXHIBIT A
AUDIT COMMITTEE CHARTER
GOLDEN STATE VINTNERS, INC.
AND
GOLDEN STATE VINTNERS
CHARTER OF THE AUDIT COMMITTEE
FEBRUARY 1, 2000
CREATION:
That the Golden State Vintners, Inc., and Golden State Vintners
(collectively "GSV" or the "Company") Audit Committee shall be created as of the
date written above and will be comprised of at least three (3) Directors, as
designated by the full Board of Directors.
CHAIRMANSHIP:
The Company's Audit Committee shall be chaired by one of the members of the
Audit Committee and selected by the Board. Director Keith R. Fox is appointed as
the Chairman of the Audit Committee, effective January 1, 2000.
MEETINGS:
The Audit Committee shall meet a minimum of three times annually, or more
frequently, should circumstances so require. The Chairman of the Audit Committee
shall have the authority to determine the time and place of the minimum required
meetings, and shall have the authority to call additional meetings, if
necessary. The proposed calendar year 2000 meeting schedule and suggested topics
is attached hereto as Exhibit 1. All members of the Audit Committee shall
possess the financial literacy required to carry out Committee objectives, as
stated herein, and as modified from time to time to remain consistent with
Security and Exchange Commission ("SEC") and other applicable regulatory and/or
accounting changes.
OBJECTIVES OF THE AUDIT COMMITTEE:
The objectives of the Company's Audit Committee are established as follows:
(1) Provide assistance to the Board of Directors in fulfilling their
oversight responsibilities relating to the Company's financial reporting
and internal control structure, including ensuring that information
contained in SEC filings is consistent with Company financial statements
and that accounting principles and footnote disclosures are appropriate;
and
(2) Oversee the outside independent auditor and internal audit functions of
the Company, including discussion with outside independent auditors of
any significant findings and management's response(s) thereto; and
(3) Provide assistance to the Board of Directors in fulfilling their
oversight responsibilities relating to the Company's compliance with
pertinent laws and regulations, the ethical conduct of its affairs, and
the maintenance of effective controls against employee conflict of
interest and fraud. Recommended the maintaining or dismissal of the
outside independent auditors, obtain written statements of their
independence and review all services provided and fees paid for such
services.
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FUNCTIONS OF THE AUDIT COMMITTEE:
The major functions of the Audit Committee, in accomplishing the objectives
indicated above, are as follows:
(1) Report to the Board of Directors on Audit Committee activities and
recommendations and provide direct access to the outside independent, and
internal auditors, by members of the Board; and
(2) Review annual financial statements, quarterly reports and any other
public dissemination of financial information with management and the
independent auditors; and
(3) Fulfill the Audit Committee's oversight responsibilities relating to the
Company's financial reporting and the internal control structure through
review of audit reports, discussions with the independent and internal
auditors, and discussions with executives of the Company; and
(4) Review the effectiveness of the audit effort and the adequacy of audit
procedures through meetings with the independent and internal auditors.
The Audit Committee should review the outside independent and internal
auditor's audit plans, audit budgets, audit results and actual costs upon
completion of the audits each year to ensure cost effectiveness; and
(5) Ensure that no restrictions are placed on the scope of the examinations
of the outside independent and internal auditors or on the implementation
of the audits; and
(6) Review the independence of the outside auditors and recommend the
appointment of outside independent auditors for the ensuing year. The
actual appointment of the independent auditors shall remain the
responsibility of the full Board; and
(7) Review corporate policies relating to compliance with laws and
regulations, ethics, conflicts of interest and the investigation of
misconduct or fraud, review officer expense accounts, the use of
corporate assets by officers, and assess the impact of any compliance
issues brought to the attention of the Audit Committee; and
(8) Review annually any related party transactions as that term is defined
in rules promulgated under the Securities Exchange Act of 1934 in respect
to transactions between members of the Board of Directors, Company
Officers and the Company.
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EXHIBIT 1
GOLDEN STATE VINTNER'S, INC.
AND
GOLDEN STATE VINTNERS
EXPECTED AUDIT COMMITTEE SCHEDULE
CALENDAR YEAR BASIS
<TABLE>
<CAPTION>
TOPIC SEPTEMBER NOVEMBER FEBRUARY MAY
----- --------- -------- -------- --------
<S> <C> <C> <C> <C>
Annual review of committee charter................... X
Annual review of code of conduct and compliance...... X
Review of annual report/financial/proxy.............. X
Review of external audit results..................... X
Discussion of D&T management letter.................. X
Review LIFO/FIFO election............................ X
Review of external audit plan/fees................... X
Discussion of quarterly results...................... X X X X
Recommend external audit firm........................ X
Review non-audit services and fees................... X
Review results of audit of officers' expenses........ X
Review legal/regulatory matters...................... X
Discussion/review of area of interest................ X
Private meeting with D&T............................. X X X X
Private meeting with General Counsel................. X
Executive session.................................... X X X X
</TABLE>
21
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------------------------
BYLAWS
OF
GOLDEN STATE ACQUISITION CORP.
A DELAWARE CORPORATION
------------------------
22
<PAGE>
BYLAWS
OF
GOLDEN STATE ACQUISITION CORP.
(hereinafter, the "Corporation")
ARTICLE I
OFFICES
SECTION 1.1. REGISTERED OFFICE. The registered office of the Corporation
shall be established and maintained at the office of UNITED CORPORATE SERVICES,
INC., IN THE CITY OF DOVER, IN THE COUNTY OF KENT, IN THE STATE OF DELAWARE, and
said corporation shall be the registered agent of the Corporation in charge
thereof.
SECTION 1.2. OTHER OFFICES. The Corporation may have other offices, either
within or without the State of Delaware, at such place or places as the Board of
Directors may from time to time appoint or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.1. ANNUAL MEETINGS. Annual meetings of stockholders for the
purpose of electing directors and of transacting such other business as may be
stated in the notice of the meeting, shall be held at such place, either within
or without the State of Delaware, and at such time and date as the Board of
Directors, by resolution, shall determine and as set forth in the notice of the
meeting.
If the date of the annual meeting shall fall upon a legal holiday, the
meeting shall be held on the next succeeding business day. At each annual
meeting, the stockholders entitled to vote shall elect a Board of Directors and
they may transact such other corporate business as shall be stated in the notice
of the meeting.
SECTION 2.2. VOTING. Each stockholder entitled to vote in accordance with
the terms of the Certificate of Incorporation and in accordance with the
provisions of these Bylaws shall be entitled to one vote, in person or by proxy,
for each share of stock entitled to vote held by such stockholder, but no proxy
shall be voted after three years from its date unless such proxy provides for a
longer period. Upon the demand of any stockholder, the vote for directors and
the vote upon any question before the meeting, shall be by ballot. All elections
for directors shall be decided by plurality vote; all other questions shall be
decided by majority vote except as otherwise provided by the Certificate of
Incorporation or by the laws of the State of Delaware.
A complete list of the stockholders entitled to vote at the ensuing
election, arranged in alphabetical order, with the address of each, and the
number of shares held by each, shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
SECTION 2.3. QUORUM. Except as otherwise required by law, by the
Certificate of Incorporation or by these Bylaws, the presence, in person or by
proxy, of stockholders holding a majority of the outstanding shares of each
class of stock of the Corporation entitled to vote shall constitute a quorum at
all meetings of the stockholders. In the absence of a quorum, a majority in
interest of the stockholders entitled to vote thereat, present in person or by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until the requisite amount of stock
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<PAGE>
entitled to vote shall be present. At any such adjourned meeting at which the
requisite amount of stock entitled to vote shall be represented, any business
may be transacted which might have been transacted at the meeting as originally
noticed; but only those stockholders entitled to vote at the meeting as
originally noticed shall be entitled to vote at any adjournment or adjournments
thereof.
SECTION 2.4. SPECIAL MEETINGS. Special meetings of the stockholders for
any purpose may be held at any time upon call of the Chairman of the Board, if
any, the President, the Secretary, or a majority of the Board of Directors, at
such time and place as may be stated in the notice. A special meeting of the
stockholders may be called by the President or the Secretary upon the written
request, stating time, place, and the purpose or purposes of the meeting of
stockholders who together own of record a majority of the outstanding stock of
all classes entitled to vote at such meeting.
SECTION 2.5. NOTICE OF MEETINGS. Written notice, stating the place, date
and time of the meeting, and the general nature of the business to be
considered, shall be given by the President, any Vice President, the Secretary
or an Assistant Secretary to each stockholder entitled to vote thereat at his
address as it appears on the records of the Corporation, not less than ten nor
more than sixty days before the date of the meeting. No business other than that
stated in the notice shall be transacted at any meeting without the unanimous
consent of all the stockholders entitled to vote thereat.
SECTION 2.6. ACTION WITHOUT MEETING. Unless otherwise provided by the
Certificate of Incorporation, any action required to be taken at any annual or
special meeting of stockholders, or any action which may be taken at any annual
or special meeting, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
SECTION 2.7. ADJOURNMENT. Any meeting of stockholders, annual or special,
may adjourn from time to time to reconvene at the same or some other place, and
notice need not be given of any such adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting, the Corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
SECTION 2.8. ADVANCE NOTICE REQUIREMENTS FOR PROPOSAL OF BUSINESS. No
business may be transacted at an annual meeting of stockholders, other than
business that is either (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors (or
any duly authorized committee thereof); (b) otherwise properly brought before
the annual meeting by or at the direction of the Board of Directors (or any duly
authorized committee thereof), or (c) otherwise properly brought before the
annual meeting by any stockholder of the Corporation (1) who is a stockholder of
record on the date of the giving of the notice provided for in this Section 2.8
and on the record date for the determination of stockholders entitled to vote at
such annual meeting, and (ii) who complies with the notice procedures set forth
in this Section 2.8.
In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary of
the Corporation.
To be timely, stockholder's notice to the Secretary must be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than sixty (60) days nor more than ninety (90) days prior to the date of
the annual meeting; provided, however, that in the event that less than seventy
(70) days' notice or prior public disclosure of the date of the annual meeting
is given or made to stockholders,
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<PAGE>
notice by the stockholder in order to be timely must be so received not later
than the close of business on the tenth (10th) day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary must
set forth as to each matter such stockholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and record address of such stockholder, (iii the class or
series and number of shares of capital stock of the Company which are owned
beneficially or of record by such stockholder, (iv) a description of all
arrangements or understandings between such stockholder and any other person or
persons (including their names) in connection with the proposal of such business
by such stockholder and any material interest of such stockholder in such
business, and (v) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to bring such business before the
meeting.
No business shall be conducted at the annual meeting of stockholders except
business brought before the annual meeting in accordance with the procedures set
forth in this Section 2.8; PROVIDED, HOWEVER, that, once business has been
properly brought before the annual meeting in accordance with such procedures,
nothing in this Section 2.8 shall be deemed to preclude discussion by any
stockholder of any such business. If the chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.
SECTION 2.9. PROXIES. Every person entitled to vote shall have the right
to do so either in person or by written, electronic or oral telephonic proxy
signed by such person and filed with the secretary of the corporation. A proxy
shall be deemed signed if the stockholder's name is placed on the proxy by the
stockholder, or by his or her attorney in fact (whether by manual signature,
typewriting, electronic or oral telephonic transmission, or otherwise; PROVIDED,
HOWEVER, that a proxy transmitted by oral telephonic transmission must be
submitted with information from which it may be determined that the proxy was
authorized by the stockholder). A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (i) it is
revoked by the person executing it prior to the vote pursuant to that proxy by a
signed writing or electronic or oral telephonic transmission delivered to the
corporation stating that the proxy is revoked, or by a subsequent proxy executed
by, or attendance at the meeting and voting in person by, the person executing
the proxy; or (ii) written notice of the death or incapacity of the maker of
that proxy is received by the corporation before the vote pursuant to that proxy
is counted; PROVIDED, HOWEVER, that no proxy shall be valid after the expiration
of three (3) years from the date of the proxy unless otherwise provided in the
proxy.
ARTICLE III
DIRECTORS
SECTION 3.1. NUMBER AND TERM OF OFFICE. The business, property, and
affairs of the Corporation shall be managed by or under the direction of a Board
of Directors. The number of directors shall be between six and ten. The
directors shall be elected at the annual meeting of the stockholders, and each
director shall serve (subject to the provisions of Sections 3.2, 3.3 and 3.4 of
these Bylaws) until the next annual meeting of stockholders and until his
respective successor shall be elected and qualified. Directors need not be
stockholders.
SECTION 3.2. RESIGNATIONS. Any director, member of a committee or other
officer may resign at any time. Such resignation shall be made in writing, and
shall take effect at the time specified therein, and if no time be specified, at
the time of its receipt by the President or Secretary. The acceptance of a
resignation shall not be necessary to make it effective.
SECTION 3.3. VACANCIES. If the office of any director, member of a
committee or other officer becomes vacant, the remaining directors in office,
though less than a quorum, by a majority vote, may
25
<PAGE>
appoint any qualified person to fill such vacancy, who shall hold office for the
unexpired term and until his successor shall be duly chosen.
SECTION 3.4. REMOVAL. Except as hereinafter provided, any director or
directors may be removed either for or without cause at any time by the
affirmative vote of the holders of a majority of all the shares of stock
outstanding and entitled to vote, at a special meeting of the stockholders
called for the purpose and the vacancies thus created may be filled, at the
meeting held for the purpose of removal, by the affirmative vote of a majority
in interest of the stockholders entitled to vote.
Unless the Certificate of Incorporation otherwise provides, stockholders may
effect removal of a director who is a member of a classified Board of Directors
only for cause. If the Certificate of Incorporation provides for cumulative
voting and if less than the entire board is to be removed, no director may be
removed without cause if the votes cast against his removal would be sufficient
to elect him if then cumulatively voted at an election of the entire board of
directors, or, if there be classes of directors, at an election of the class of
directors of which he is a part.
If the holders of any class or series are entitled to elect one or more
directors by the provisions of the Certificate of Incorporation, these
provisions shall apply, in respect to the removal without cause of a director or
directors so elected, to the vote of the holders of the outstanding shares of
that class or series and not to the vote of the outstanding shares as a whole.
SECTION 3.5. INCREASE OF NUMBER OF DIRECTORS. The number of directors may
be increased by amendment of these Bylaws by the affirmative vote of a majority
of the directors, though less than a quorum, or, by the affirmative vote of a
majority in interest of the stockholders, at the annual meeting or at a special
meeting called for that purpose, and by like vote the additional directors may
be chosen at such meeting to hold office until the next annual election and
until their successors are elected and qualify.
SECTION 3.6. POWERS. The Board of Directors shall exercise all of the
powers of the Corporation except such as are by law, or by the Certificate of
Incorporation of the Corporation or by these Bylaws, conferred upon or reserved
to the stockholders.
SECTION 3.7. COMMITTEES. The Board of Directors may, by resolution or
resolutions passed by a majority of the whole Board, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of any member of
such committee or committees, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the Board of
Directors, or in these Bylaws, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the Certificate of Incorporation of
the Corporation, adopting an agreement of merger or consolidation, recommending
to the stockholders the sale, lease or exchange of all or substantially all of
the corporation's property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution, or amending the
Bylaws of the Corporation; and, unless the resolution, these Bylaws, or the
Certificate of Incorporation expressly so provides, no such committee shall have
the power or authority to declare a dividend or to authorize the issuance of
stock.
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SECTION 3.8. MEETINGS. The newly elected directors may hold their first
meeting for the purpose of organization and the transaction of business, if a
quorum is present, immediately after the annual meeting of the stockholders; or
the time and place of such meeting may be fixed by consent in writing of all the
directors.
Regular meetings of the Board of Directors may be held without notice at
such place and time as shall be determined from time to time by the Board.
Special Meetings of the Board of Directors shall be held at such time and
place as shall be designated in the notice of the meeting whenever called by the
Chairman of the Board, if any, the President, or by a majority of the directors
then in office.
SECTION 3.9. TELEPHONE MEETINGS. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, members of the Board of Directors,
or any committee designated by the Board of Directors, may participate in a
meeting of the Board of Directors, or any committee, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation in a
meeting shall constitute presence in person at the meeting.
SECTION 3.10. QUORUM. A majority of the directors shall constitute a
quorum for the transaction of business. If at any meeting of the Board there
shall be less than a quorum present, a majority of those present may adjourn the
meeting from time to time until a quorum is obtained, and no further notice
thereof need be given other than by announcement at the meeting which shall be
so adjourned.
SECTION 3.11. COMPENSATION. Directors shall not receive any stated salary
for their services as directors or as members of committees, but by resolution
of the Board a fixed fee and expenses of attendance may be allowed for
attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.
SECTION 3.12. ACTION WITHOUT MEETING. Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting, if prior to such action a written consent
thereto is signed by all members of the Board, or of such committee as the case
may be, and such written consent is filed with the minutes of proceedings of the
Board or committee.
ARTICLE IV
OFFICERS
SECTION 4.1. OFFICERS. The officers of the Corporation shall be a
President, a Treasurer, and a Secretary, all of whom shall be elected by the
Board of Directors and who shall hold office until their successors are elected
and qualified. In addition, the Board of Directors may elect a Chairman, one or
more Vice-Presidents and such Assistant Secretaries and Assistant Treasurers as
they may deem proper. None of the officers of the Corporation need be directors.
The officers shall be elected at the first meeting of the Board of Directors
after each annual meeting. Any person may hold at one time two or more offices.
SECTION 4.2. OTHER OFFICERS AND AGENTS. The Board of Directors may appoint
such other officers and agents as it may deem advisable, who shall hold their
offices for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the Board of Directors.
SECTION 4.3. CHAIRMAN OF THE BOARD. The Board of Directors may elect one
of their members to be chairman of the Board of Directors (the "Chairman"). The
Chairman shall preside at all meetings of the Board of Directors and shall have
and perform such other duties as from time to time may be assigned to him by the
Board of Directors.
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SECTION 4.4. PRESIDENT. The President shall be the chief executive officer
of the Corporation and shall have the general powers and duties of supervision
and management usually vested in the office of President of a corporation. He
shall preside at all meetings of the stockholders if present thereat, and in the
absence or non-election of the Chairman of the Board of Directors, at all
meetings of the Board of Directors, and shall have general supervision,
direction and control of the business of the Corporation. Except as the Board of
Directors shall authorize the execution thereof in some other manner, he shall
execute bonds, mortgages and other contracts on behalf of the Corporation, and
shall cause the seal to be affixed to any instrument requiring it and when so
affixed the seal shall be attested by the signature of the Secretary or the
Treasurer or an Assistant Secretary or an Assistant Treasurer.
SECTION 4.5. VICE-PRESIDENT. Each Vice-President shall have such powers
and shall perform such duties as shall be assigned to him by the directors.
SECTION 4.6. TREASURER. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the Corporation. He shall
deposit all monies and other valuables in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the Corporation as may be ordered
by the Board of Directors, or the President, taking proper vouchers for such
disbursements. He shall render to the President and Board of Directors at the
regular meetings of the Board of Directors, or whenever they may request it, an
account of all his transactions as Treasurer and of the financial condition of
the Corporation. If required by the Board of Directors, he shall give the
Corporation a bond for the faithful discharge of his duties in such amount and
with such surety as the board shall prescribe.
SECTION 4.7. SECRETARY. The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and directors, and all other notices
required by law or by these Bylaws, and in case of his absence or refusal or
neglect so to do, any such notice may be given by any person thereunto directed
by the President, or by the directors, or stockholders, upon whose requisition
the meeting is called as provided in these Bylaws. He shall record all the
proceedings of the meetings of the corporation and of the directors in a book to
be kept for that purpose, and shall perform such other duties as may be assigned
to him by the directors or the President. He shall have the custody of the seal
of the Corporation and shall affix the same to all instruments requiring it,
when authorized by the directors or the President, and attest the same.
SECTION 4.8. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the directors.
ARTICLE V
CAPITAL STOCK
SECTION 5.1. CERTIFICATES OF STOCK. Certificates of stock, signed by the
Chairman or Vice-Chairman of the Board of Directors, if they be elected,
President or Vice President, and the Treasurer or an Assistant Treasurer, or
Secretary or an Assistant Secretary, shall be issued to each stockholder
certifying the number of shares owned by him in the Corporation. Any of or all
the signatures may be facsimiles.
SECTION 5.2. LOST CERTIFICATES. A new certificate of stock may be issued
in the place of any certificate theretofore issued by the Corporation, alleged
to have been lost or destroyed, and the directors may, in their discretion,
require the owner of the lost or destroyed certificate, or his legal
representatives, to give the Corporation a bond, in such sum as they may direct,
not exceeding double the value of the stock, to indemnify the Corporation
against any claim that may be made against it on account of the alleged loss of
any such certificate, or the issuance of any such new certificate.
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SECTION 5.3. TRANSFER OF SHARES. The shares of stock of the Corporation
shall be transferable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old certificates shall be surrendered to the Corporation by the delivery
thereof to the person in charge of the stock and transfer books and ledgers, or
to such other person as the directors may designate, by whom they shall be
canceled, and new certificates shall thereupon be issued. A record shall be made
of each transfer and whenever a transfer shall be made for collateral security,
and not absolutely, it shall be so expressed in the entry of the transfer.
SECTION 5.4. STOCKHOLDERS RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any charge, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
SECTION 5.5. DIVIDENDS. Subject to the provisions of the Certificate of
Incorporation, the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the Corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the Corporation available
for dividends, such sum or sums as the directors from time to time in their
discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
directors shall deem conducive to the interests of the Corporation.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. CORPORATE SEAL. The corporate seal shall be circular in form
and shall contain the name of the Corporation, the year of its creation and the
words "CORPORATE SEAL" and "DELAWARE." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 6.2. FISCAL YEAR. The fiscal year of the Corporation shall begin
on the 1st day of January in each year and terminate on the 31st day of December
in such year or as shall otherwise be determined from time to time by the Board
of Directors.
SECTION 6.3. CHECKS. All checks, drafts or other orders for the payment of
money, notes or other evidences of indebtedness issued in the name of the
Corporation shall be signed by such officer or officers, agent or agents of the
Corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 6.4. NOTICES AND WAIVERS OF NOTICE. Whenever any notice is
required by law, the Certificate of Incorporation, or these Bylaws to be given,
personal notice is not meant unless expressly so stated, and any notice so
required shall be deemed to be sufficient if given by depositing the same in the
United States mail, postage prepaid, addressed to the person entitled thereto at
his address as it appears on the records of the Corporation, and such notice
shall be deemed to have been given on the day of such mailing. Stockholders not
entitled to vote shall not be entitled to receive notice of any meetings except
as otherwise provided by Statute.
Whenever any notice whatever is required to be given under the provisions of
any law, or under the provisions of the Certificate of Incorporation of the
Corporation or these Bylaws, a waiver thereof in
29
<PAGE>
writing, signed by the person or persons entitled to said notice, whether before
or after the meeting or the time stated therein, shall be deemed equivalent
thereto.
SECTION 6.5. STOCK OF OTHER CORPORATIONS OR OTHER INTERESTS. Unless
otherwise ordered by the Board of Directors, the President, the Secretary, and
such attorneys or agents of the Corporation as may from time to time be
authorized by the Board of Directors or the President, shall have full power and
authority on behalf of this Corporation to attend and to act and vote in person
or by proxy at any meeting of the holders of securities of any corporation or
other entity in which this Corporation may own or hold shares or other
securities, and at such meetings shall possess and may exercise all the rights
and power incident to the ownership of such shares or other securities which
this Corporation, as the owner or holder thereof, might have possessed and
exercised if present. The President, the Secretary, or such attorneys or agents,
may also execute and deliver on behalf of the Corporation powers of attorney,
proxies, consents, waivers, and other instruments relating to the shares or
securities owned or held by this Corporation.
ARTICLE VII
AMENDMENTS
The holders of shares entitled at the time to vote for the election of
directors shall have power to adopt, amend, or repeal the Bylaws of the
Corporation by vote of not less than two-thirds of such shares, and except as
otherwise provided by law, the Board of Directors shall have power equal in all
respects to that of the stockholders to adopt, amend, or repeal the Bylaws by
vote of not less than two-thirds of the entire Board of Directors. However, any
Bylaws adopted by the Board may be amended or repealed by vote of the holders of
two-thirds of the shares entitled at the time to vote for the election of
directors.
30
<PAGE>
GOLDEN STATE VINTNERS, INC.
THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT
Dear Stockholder:
Regardless of whether you plan to attend the 2000 Annual Meeting of
Stockholders, you can be sure your shares are represented at the meeting by
promptly returning your proxy in the enclosed envelope.
Thank you,
Corporate Secretary
PROXY
GOLDEN STATE VINTNERS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
for Annual Meeting of Stockholders, November 15, 2000
The undersigned, stockholder(s) of Golden State Vintners, Inc. do(es) hereby
appoint the corporation's Secretary and President, and each of them, proxies,
each with full power of substitution, for and in the name and stead of the
undersigned at the Annual Meeting of Stockholders of Golden State Vintners,
Inc., to be held on November 15, 2000, and at any and all postponements or
adjournments thereof, to vote all shares of capital stock held by the
undersigned, with all powers that the undersigned would possess if personally
present, on each of the matters referred to herein.
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED "FOR" ELECTION OF MANAGEMENT'S DIRECTOR-NOMINEES, "FOR"
RATIFICATION OF THE APPOINTMENT OF THE COMPANY'S INDEPENDENT AUDITORS AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING AND ANY POSTPONEMENT(S) OR ADJOURNMENT(S) THEREOF.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOR ALL AGAINST ALL
NOMINEES NOMINEES
1. ELECTION OF DIRECTORS / / / /
Nominees: FOR AGAINST ABSTAIN FOR AGAINST
Jeffrey J. Brown / / / / / / Keith R. Fox / / / /
Jeffrey B. O'Neill / / / / / / W. Scott Hedrick / / / /
Nicholas B. Binkley / / / / / / Peter W. Mullin / / / /
Greg J. Forrest / / / / / / Douglas R. Wolter / / / /
2. Proposal to ratify the appointment of Deloitte & Touche LLP as the Company's / / / /
independent auditors for the fiscal year ending June 30, 2001.
3. In their discretion, upon such other matters as may properly come before the meeting / / / /
and any postponement(s) or adjournment(s) thereof.
<S> <C>
1. ELECTION OF DIRECTORS
Nominees: ABSTAIN
Jeffrey J. Brown / /
Jeffrey B. O'Neill / /
Nicholas B. Binkley / /
Greg J. Forrest / /
2. Proposal to ratify the a / /
independent auditors for
3. In their discretion, upo / /
and any postponement(s)
</TABLE>
/ / MARK HERE FOR ADDRESS CHANGE AND NOTE
AT LEFT
/ / MARK HERE IF YOU PLAN TO ATTEND THE
ANNUAL MEETING (You may still submit
this proxy)
Signature _______________________________
Dated _____________________________, 2000
Signature _______________________________
Dated _____________________________, 2000
(This Proxy should be marked, dated and
signed by the stockholder(s) exactly as
his or her name appears hereon and
returned promptly in the enclosed
envelope. Persons signing in a fiduciary
capacity should so indicate. If shares
are held by joint tenants or as community
property, both stockholders should sign.)
