<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[] Definitive Additional Materials
[] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CANANDAIGUA WINE COMPANY, INC.
(Name of Registrant as Specified in Its Charter)
Robert S. Sands, Executive Vice President and General Counsel
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:/1/
(4) Proposed maximum aggregate value of transaction:
[] 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 No.:
(3) Filing party:
(4) Date filed:
- -------------------------
/1/Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
CANANDAIGUA WINE COMPANY, INC.
116 BUFFALO STREET
CANANDAIGUA, NEW YORK 14424
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 19, 1995
----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Meeting") of
Stockholders of CANANDAIGUA WINE COMPANY, INC. (the "Company") will be held at
Chase Tower, One Chase Square, Rochester, New York, on Thursday, January 19,
1995 at 11:00 a.m., local time, for the following purposes more fully described
in the accompanying Proxy Statement:
1. To elect directors of the Company.
2. To consider and act upon a proposal to approve and ratify the selection of
Arthur Andersen LLP, Certified Public Accountants, as the Company's independent
auditors for the fiscal year ending August 31, 1995.
3. To transact such other business as may properly come before the Meeting or
any adjournment thereof.
The Board of Directors has fixed the close of business on November 30, 1994
as the record date for the determination of stockholders entitled to notice of
and to vote at the Meeting.
A Proxy Statement and Proxy are enclosed.
WE HOPE YOU WILL ATTEND THIS MEETING IN PERSON, BUT IF YOU CANNOT, PLEASE
SIGN AND DATE THE ENCLOSED PROXY. RETURN THE PROXY IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
BY ORDER OF THE BOARD OF DIRECTORS
LYNN K. FETTERMAN, Secretary
Dated at Canandaigua, New York
December 27, 1994
<PAGE>
CANANDAIGUA WINE COMPANY, INC.
116 BUFFALO STREET
CANANDAIGUA, NEW YORK 14424
DATED DECEMBER 27, 1994
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
(JANUARY 19, 1995)
This proxy statement is furnished to stockholders in connection with the
solicitation of proxies by the Board of Directors of CANANDAIGUA WINE COMPANY,
INC. (the "Company") to be used at the Annual Meeting of Stockholders of the
Company which will be held on Thursday, January 19, 1995 (the "Meeting"), and
at any adjournments thereof. This proxy statement and accompanying form of
proxy are being first mailed to stockholders on or about December 30, 1994. The
proxy, when properly executed and received by the Secretary of the Company
prior to the Meeting, will be voted as therein specified unless revoked by
filing with the Secretary prior to the Meeting a written revocation or a duly
executed proxy bearing a later date. A stockholder may also revoke his or her
proxy in person at the Meeting. Unless authority to vote for one or more of the
director nominees is specifically withheld, a signed proxy will be voted FOR
the election of the director nominees named herein and, unless otherwise
indicated, FOR the selection of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending August 31, 1995.
As described below under the heading "Voting Securities," the outstanding
capital stock of the Company consists of Class A Common Stock and Class B
Common Stock. The Company has enclosed with the proxy materials a proxy which
has been designed in a manner so that it can be used by stockholders owning
Class A Common Stock or Class B Common Stock or both Class A Common Stock and
Class B Common Stock.
The cost of soliciting proxies will be borne by the Company. In addition to
the solicitation by use of the mails, directors, officers or regular employees
of the Company, without extra compensation, may solicit proxies personally, by
telephone, telegraph or facsimile transmission. The Company has requested
persons holding stock for others in their names or in the names of nominees to
forward soliciting material to the beneficial owners of such shares and will,
if requested, reimburse such persons for their reasonable expenses in so doing.
VOTING SECURITIES
The total outstanding capital stock of the Company as of November 30, 1994,
consisted of 16,049,368 shares of Class A Common Stock, par value $.01 per
share (the "Class A Stock"), and 3,390,051 shares of Class B Common Stock, par
value $.01 per share (the "Class B Stock"). Each share of Class B Stock is
convertible into one share of Class A Stock at any time at the option of the
holder. Only holders of Class A Stock and holders of Class B Stock of record on
the books of the Company at the close of business on November 30, 1994, the
record date for eligibility to vote at the Meeting (the "Record Date"), are
entitled to notice of and to vote at the Meeting and at any adjournments
thereof. Each holder of Class A Stock is entitled to one vote for each share of
Class A Stock registered in his or her name and each holder of Class B Stock is
entitled to ten votes for each share of Class B Stock registered in his or her
name. Pursuant to the Company's Restated Certificate of Incorporation, the
holders of the Class A Stock, voting as a separate class, are entitled to elect
one-fourth ( 1/4) of the number of directors to be elected at the Meeting
(rounded, if the total number of directors to be elected is not evenly
divisible by four (4), to the next higher whole number) and the holders of the
Class B Stock, voting as a separate class, are entitled to elect the remaining
number of directors to be elected at the Meeting. Pursuant to the provisions of
the Delaware General Corporation Law, the certificate of incorporation or by-
laws of a corporation authorized to issue stock may specify the votes that
shall be
<PAGE>
necessary to elect directors. In the absence of such specification, directors
shall be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
directors. Such votes of the shares shall include abstentions but shall not
include votes of shares registered on the books of the corporation in the name
of brokers who are not present in person or represented by proxy at the
meeting. The Company's Restated Certificate of Incorporation and By-Laws
provide for an equivalent method for the election of directors as under the
Delaware General Corporation Law. Subject to the provisions of the Delaware
General Corporation Law and the Company's Restated Certificate of
Incorporation, the holders of the Class A Stock and the holders of the Class B
Stock vote together as a single class on all other items of business before the
stockholders.
BENEFICIAL OWNERSHIP
The following table, with notes thereto, sets forth as of the Record Date or
such other date specifically noted (i) the persons known to the Company to own
beneficially more than 5% of the Company's Class A Stock or Class B Stock, (ii)
the number of shares owned by them, and (iii) the percent of such class so
owned, rounded to the nearest one-tenth of one percent (such information being
based on information furnished by or on behalf of each person concerned):
SHARES BENEFICIALLY OWNED CLASS A STOCK
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------ ----------------------- ----------------
<S> <C> <C>
Marvin Sands (1) 1,786,161(2)(3) 11.1%(2)(3)
116 Buffalo Street
Canandaigua, NY 14424
Marilyn Sands (1) 1,786,161(2)(4) 11.1%(2)(4)
116 Buffalo Street
Canandaigua, NY 14424
Richard Sands (1) 1,786,161(2)(5) 11.1%(2)(5)
116 Buffalo Street
Canandaigua, NY 14424
Robert Sands (1) 1,786,161(2)(6) 11.1%(2)(6)
116 Buffalo Street
Canandaigua, NY 14424
Laurie Sands (1) 1,786,161(2)(7) 11.1%(2)(7)
116 Buffalo Street
Canandaigua, NY 14424
Marilyn Sands as Trustee under 1,786,161(2)(8) 11.1%(2)(8)
Irrevocable
Declarations of Trust Nos. 2, 3 and 4
(1)
116 Buffalo Street
Canandaigua, NY 14424
Richard Sands, Robert Sands and Laurie 1,786,161(2)(9) 11.1%(2)(9)
Sands as Co-Trustees under
Irrevocable Trust
Agreement (1)
116 Buffalo Street
Canandaigua, NY 14424
David A. Rocker (10) 929,279(10) 5.8%(10)
Suite 1759
45 Rockefeller Plaza
New York, NY 10111
</TABLE>
2
<PAGE>
CLASS B STOCK
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------ -------------------- ----------------
<S> <C> <C>
Marvin Sands (1) 2,838,371(11) 83.7%(11)
116 Buffalo Street
Canandaigua, NY 14424
Marilyn Sands (1) 2,838,371(12) 83.7%(12)
116 Buffalo Street
Canandaigua, NY 14424
Richard Sands (1) 2,838,371(13) 83.7%(13)
116 Buffalo Street
Canandaigua, NY 14424
Robert Sands (1) 2,838,371(13) 83.7%(13)
116 Buffalo Street
Canandaigua, NY 14424
Laurie Sands (1) 2,838,371(13) 83.7%(13)
116 Buffalo Street
Canandaigua, NY 14424
Richard Sands, Robert Sands and Laurie 2,838,371(14) 83.7%(14)
Sands as
Co-Trustees under Irrevocable Trust
Agreement (1)
116 Buffalo Street
Canandaigua, NY 14424
Marilyn Sands as Trustee under 2,838,371(15) 83.7%(15)
Irrevocable
Declarations of Trust Nos. 2, 3 and 4
(1)
116 Buffalo Street
Canandaigua, NY 14424
</TABLE>
- ---------------------
(1) Richard Sands, Robert Sands and Laurie Sands are adult children of Marvin
and Marilyn Sands. On June 17, 1993, Richard Sands, Robert Sands and
Laurie Sands entered into a Stockholders Agreement (the "Stockholders
Agreement") which provides each with a right of first refusal to purchase,
under certain circumstances, the shares of Class A Stock and Class B Stock
owned by the others and which may be terminated only by the consent of all
parties. Additionally, Laurie Sands delivered a Power of Attorney (the
"Power of Attorney") and Irrevocable Proxy (the "Irrevocable Proxy") (both
dated June 17, 1993) to Richard Sands and Robert Sands. The Power of
Attorney grants to Richard Sands and Robert Sands, jointly and severally,
the power to act on behalf of Laurie Sands with respect to all matters
permitted by law. The Irrevocable Proxy grants to Richard Sands and Robert
Sands, jointly and severally, the power to vote in person or by proxy
shares now owned or hereafter acquired by Laurie Sands until June 17,
2003, when the Irrevocable Proxy terminates. Pursuant to the terms of an
Affiliates Agreement, dated June 29, 1993 (the "Affiliates Agreement"),
each of the following has agreed to vote his/her Class B Stock to cause
Ellis Goodman and Sir Harry Solomon to be elected to the Board of
Directors as Class B Directors subject to certain conditions as set forth
in the Affiliates Agreement: Marvin Sands; Marilyn Sands; Richard Sands;
Robert Sands; Laurie Sands; Marilyn Sands, as Trustee under Irrevocable
Declarations of Trust Nos. 1, 2, 3 and 4, each dated November 18, 1987;
and Richard Sands, Robert Sands and Laurie Sands, as Co-Trustees under an
Irrevocable Trust Agreement dated November 18, 1987. Irrevocable
Declaration of Trust, No. 1, referred to above, terminated by its terms on
November 18, 1993. As a result of such Trust's termination, 22,500 shares
of Class B Stock were distributed to each of Richard Sands, Robert Sands
and Laurie Sands. Pursuant to Rule 13(d)-5(b)(1) under the Securities
Exchange Act (the "Exchange Act"), by virtue of the Stockholders Agreement
and the Affiliates Agreement, the aforementioned persons and Trusts are a
group (the "Group") and, as such, the Group is deemed to have beneficial
ownership of all securities of the Company beneficially owned by the
members of the Group. Except with respect to the shares subject to the
Stockholders Agreement, Power of Attorney and Irrevocable Proxy, the
shares subject to the Affiliates Agreement and the shares subject to the
Irrevocable Trust Agreement described in footnote (14) below, no member of
the Group is required to consult with any other family member with respect
to the voting or disposition of any shares of the Company and each such
member of the Group disclaims beneficial ownership of each others' shares
with respect to matters not governed by the Stockholders Agreement, the
Power of Attorney, the Irrevocable Proxy, the Affiliates Agreement or the
Irrevocable Trust Agreement described in footnote (14) below.
(2) The number of shares and the percentage of ownership is exclusive of
shares of Class A Stock issuable pursuant to the conversion feature of the
Class B Stock beneficially owned by the members of the Group. Each of the
Sands family stockholders, Marilyn Sands, as Trustee of each of the
Irrevocable Declarations of Trust Nos. 2, 3 and 4 and each of Richard
Sands, Robert Sands and Laurie Sands, in his/her capacity as a Co-Trustee
of the Trust described in footnote (14) below, has advised the Company
that he/she has no plans to convert any Class B Stock into Class A Stock.
(If such shares of Class A Stock issuable upon conversion of
3
<PAGE>
the Class B Stock were to be added to the amount in the table, the amount of
Class A Stock beneficially owned by the Group would be 4,624,532 shares and
the percentage of ownership would be 24.5% based upon 18,887,739 shares
deemed outstanding pursuant to Rule 13d-3(d)(1) under the Securities
Exchange Act.)
(3) Excluding the shares of Class A Stock beneficially owned as a result of
the Affiliates Agreement referred to in footnote (1) above, Marvin Sands
beneficially owns 799,407 shares of Class A Stock, which is 5.0% of such
Class. This total includes 795,720 shares of Class A Stock owned by Mr.
Sands' wife, Marilyn Sands. The 795,720 shares include 787,501 shares of
Class A Stock, a life estate in which is held by Marilyn Sands and the
remainder interest in which is held in equal amounts by each of her three
children. Mr. Sands disclaims beneficial ownership with respect to all
shares owned by Marilyn Sands. (Excluding the effect of the Affiliates
Agreement, and adding the number of shares of Class A Stock issuable
pursuant to the conversion feature of Class B Stock beneficially owned by
Marvin Sands to his 799,407 shares of Class A Stock, the amount of Class A
Stock beneficially owned by Mr. Sands would be 1,115,007 shares and the
percentage of ownership would be 6.8%. These amounts include an aggregate
of 213,750 shares of Class B Stock in which Mr. Sands disclaims beneficial
ownership. See Class B Stock table and footnotes (11) and (12) below.)
(4) Excluding the shares of Class A Stock beneficially owned as a result of
the Affiliates Agreement referred to in footnote (1) above, Marilyn Sands
beneficially owns 795,720 shares of Class A Stock, which is 5.0% of such
Class. With respect to 787,501 shares of the 795,720 shares, Marilyn Sands
is the beneficial owner of a life estate which includes the right to
receive income from and the power to vote and dispose of such shares.
(Excluding the effect of the Affiliates Agreement and adding the number of
shares of Class A Stock issuable pursuant to the conversion feature of
Class B Stock beneficially owned by Marilyn Sands to her shares of Class A
Stock, the amount of Class A Stock beneficially owned by Mrs. Sands would
be 1,009,470 shares and the percentage of ownership would be 6.2%. See
Class B Stock table and footnotes (12) and (14) below.) The 795,720 shares
do not include 3,687 shares of Class A Stock owned by Marilyn Sands'
husband, Marvin Sands. Marilyn Sands disclaims beneficial ownership of all
such securities owned by Marvin Sands.
(5) Excluding the shares of Class A Stock beneficially owned as a result of
the Stockholders Agreement, Power of Attorney and Irrevocable Proxy, and
the Affiliates Agreement, referred to in footnote (1) above, Richard Sands
beneficially owns 332,868 shares of Class A Stock or 2.1%. Such total
includes an aggregate of 10,045 shares of Class A Stock owned by Richard
Sands' wife individually and as custodian for her children and 17,288
shares of Class A Stock owned by Mollie Alpert, Laurie Sands, Robert Sands
and Richard Sands, JTWROS. Richard Sands disclaims beneficial ownership
with respect to all shares owned by his wife individually and as custodian
for her children. (Excluding the effect of the Stockholders Agreement,
Power of Attorney and Irrevocable Proxy, and the Affiliates Agreement, and
adding the number of shares of Class A Stock issuable pursuant to the
conversion feature of Class B Stock beneficially owned by Richard Sands to
his 332,868 shares of Class A Stock, the amount of Class A Stock
beneficially owned by Mr. Sands would be 1,005,042 shares and the
percentage of ownership would be 6.0%. See Class B Stock table and
footnote (13) below.) None of the foregoing amounts include the remainder
interest in 262,501 shares of Class A Stock owned by Richard Sands. The
remainder interest is in 787,501 shares of Class A Stock, a life estate in
which is held by Marilyn Sands. The remainder interest is held in equal
amounts by Richard Sands, Robert Sands and Laurie Sands. (See footnotes
(3) and (4) above.) Richard Sands disclaims beneficial ownership with
respect to such 262,501 shares.
(6) Excluding the shares of Class A Stock beneficially owned as a result of
the Stockholders Agreement, Power of Attorney and Irrevocable Proxy, and
the Affiliates Agreement, referred to in footnote (1) above, Robert Sands
beneficially owns 340,637 shares of Class A Stock or 2.1%. Such total
includes an aggregate of 17,757 shares of Class A Stock owned by Mr.
Sands' wife, individually and as custodian for their children, and 17,288
shares of Class A Stock owned by Mollie Alpert, Laurie Sands, Robert Sands
and Richard Sands, JTWROS. (Excluding the effect of the Stockholders
Agreement, Power of Attorney and Irrevocable Proxy, and Affiliates
Agreement, and adding the number of shares of Class A Stock issuable
pursuant to the conversion feature of Class B Stock beneficially owned by
Robert Sands to his 340,637 shares of Class A Stock, the amount of Class A
Stock beneficially owned by Robert Sands would be 1,012,810 and the
percentage of ownership would be 6.1%. See Class B Stock table and
footnote (13) below.) None of the foregoing amounts include the remainder
interest in 262,500 shares of Class A Stock owned by Robert Sands. (See
footnotes (3) and (4) above.) The remainder interest is in 787,501 shares
of Class A Stock, a life estate in which is held by Marilyn Sands. The
remainder interest is held in equal amounts by Richard Sands, Robert Sands
and Laurie Sands. Robert Sands disclaims beneficial ownership with respect
to such shares subject to the remainder interest.
(7) Excluding the shares of Class A Stock beneficially owned as a result of
the Stockholders Agreement, Power of Attorney and Irrevocable Proxy, and
the Affiliates Agreement, referred to in footnote (1) above, Laurie Sands
beneficially owns 347,825 shares of Class A Stock or 2.2%. Such total
includes 2,600 shares owned by Eleanor Campbell and Ms. Sands, JTWROS, an
aggregate of 22,345 shares of Class A Stock owned by Ms. Sands' husband
and by Ms. Sands as custodian for their children and 17,288 shares of
Class A Stock owned by Mollie Alpert, Laurie Sands, Robert Sands and
Richard Sands, JTWROS. (Excluding the effect of the Stockholders
Agreement, Power of Attorney and Irrevocable Proxy, and Affiliates
Agreement, and adding the number of shares of Class A Stock issuable
pursuant to the conversion feature of Class B Stock beneficially owned by
Laurie Sands to her 347,825 shares of Class A Stock, the amount of Class A
Stock beneficially owned by Laurie Sands would be 1,019,999 and the
percentage of ownership would be 6.1%. See Class B Stock table and
footnote (13) below.) None of the foregoing amounts include a remainder
interest in 262,500 shares owned by Laurie Sands. The remainder interest
is in 787,501 shares of Class A Stock, a life estate in which is held by
Marilyn Sands. The remainder interest is held in equal amounts by Richard
Sands, Robert Sands and Laurie Sands. (See footnotes (3) and (4) above.)
Laurie Sands disclaims beneficial ownership with respect to such shares.
4
<PAGE>
(8) Excluding the shares of Class A Stock beneficially owned as a result of
the Affiliates Agreement and the shares of Class A Stock issuable pursuant
to the conversion feature of the Class B Stock owned by the three Trusts,
none of the Trusts beneficially owns any shares of Class A Stock. (See
Class B Stock table and footnote (15) below.)
(9) Excluding the shares of Class A Stock beneficially owned as a result of
the Affiliates Agreement and the shares of Class A Stock issuable pursuant
to the conversion feature of the Class B Stock owned by the Trust, the
Trust beneficially owns no shares of Class A Stock. If the shares of Class
A Stock issuable pursuant to the conversion feature of the Class B Stock
were included, the Trust would own 506,250 shares of Class A Stock and the
percentage of ownership would be 3.1%. (See Class B Stock Table and
footnote (14) below.)
(10) The number of shares and the percentage of ownership is as of December 2,
1994 and as reported in Amendment No. 11 to Schedule 13D filed with the
Securities and Exchange Commission by David A. Rocker on December 15,
1994. The total number of shares consists of 878,929 shares of Class A
Stock owned by Rocker Partners, L.P. (5.5% of the outstanding shares of
Class A Stock), 27,350 shares of Class A Stock owned by Compass Holdings,
Ltd. (0.2% of the outstanding shares of Class A Stock), and 23,000 shares
of Class A Stock owned by Centennial Partners I, L.P. (0.1% of the
outstanding shares of Class A Stock). David A. Rocker (i) serves as the
sole Managing Partner of Rocker Partners, L.P., (ii), through Rocker
Offshore Management Company, Inc., serves as investment adviser to
Compass Holdings, Ltd. and (iii) serves as investment advisor for
Centennial Partners I, L.P. David Rocker possesses sole power to vote and
direct the disposition of all shares of Class A Stock owned by Rocker
Partners, L.P., Compass Holdings, Ltd. and Centennial Partners I, L.P.
For further information pertaining to Mr. Rocker, Rocker Partners, L.P.,
Compass Holdings, Ltd., and Centennial Partners I, L.P., reference should
be made to Schedule 13D and Amendment Nos. 1 through 11 thereto filed
with the Securities and Exchange Commission by David A. Rocker.
(11) Excluding the shares of Class B Stock beneficially owned as a result of
the Affiliates Agreement referred to in footnote (1) above, Marvin Sands
beneficially owns 315,600 shares of Class B Stock. These 315,600 shares
include an aggregate of 209,250 shares of Class B Stock held by certain
trusts for the benefit of Mr. Sands' wife and children. Such total also
includes 4,500 shares of Class B Stock owned by his wife, Marilyn Sands.
Mr. Sands disclaims beneficial ownership with respect to all such shares.
The 315,600 shares do not include 506,250 shares of Class B Stock held in
Trust under the Irrevocable Trust Agreement described in footnote (14)
below.
(12) Excluding the shares of Class B Stock beneficially owned as a result of
the Affiliates Agreement described in footnote (1) above, Marilyn Sands
beneficially owns 213,750 shares of Class B Stock. These 213,750 shares
include 209,250 shares of Class B Stock held by three Trusts, of which
Marilyn Sands is the trustee and a beneficiary. (See footnote (15)
below.) The 213,750 shares do not include 101,850 shares of Class B Stock
owned by Marvin Sands. The 213,750 shares also do not include 506,250
shares of Class B Stock held in Trust under the Irrevocable Trust
Agreement described in footnote (14) below.
(13) Excluding the beneficial ownership of Class B Stock resulting from the
Affiliates Agreement, but including beneficial ownership of Class B Stock
resulting from the Stockholders Agreement (both of which are described in
footnote (1) above), Richard Sands, Robert Sands and Laurie Sands own
2,016,521 shares or 59.5% of the outstanding Class B Stock. Excluding the
beneficial ownership of Class B Stock as a result of the Affiliates
Agreement and the Stockholders Agreement, Power of Attorney and
Irrevocable Proxy (all of which are described in footnote (1) above),
Richard Sands, Robert Sands and Laurie Sands each individually
beneficially owns 672,174, 672,173, 672,174 shares, respectively, or
19.8% of the outstanding Class B Stock. These totals do not include the
shares of Class B Stock held in Trust under the Irrevocable Trust
Agreement described in footnote (14) below.
(14) Excluding the shares of Class B Stock beneficially owned as a result of
the Affiliates Agreement described in footnote (1) above, 506,250 shares
of Class B Stock are owned by a Trust created by Marvin Sands under the
terms of an Irrevocable Trust Agreement dated November 18, 1987 (the
"Trust"). The Trust is for the benefit of the present and future
grandchildren of Marvin and Marilyn Sands. The Co-Trustees of the Trust
are Richard Sands, Robert Sands and Laurie Sands. Concurrence of a
majority of the Co-Trustees is required with respect to voting and
disposing of the Class B Stock owned by the Trust. Each of Richard Sands,
Robert Sands and Laurie Sands in his/her individual capacity, disclaims
beneficial ownership with respect to all such shares owned by the Trust.
Each of Marvin Sands and Marilyn Sands also disclaims beneficial
ownership with respect to all such shares owned by the Trust.
(15) Excluding the shares of Class B Stock beneficially owned as a result of
the Affiliates Agreement described in footnote (1) above, the three
Trusts own in the aggregate 209,250 shares of Class B Stock. No one of
these Trusts individually owns more than 5% of the outstanding shares of
Class B Stock.
Information with respect to share ownership of management is set forth in
the table under "Nomination and Election of Directors."
5
<PAGE>
EXECUTIVE COMPENSATION
To meet the goal of providing stockholders with a concise, comprehensive
overview of compensation, shown in the table below is information on the
annual and long-term compensation for services rendered to the Company in all
capacities, for the fiscal years ended August 31, 1994, 1993 and 1992, paid by
the Company to those persons who were, at August 31, 1994, (i) the chief
executive officer of the Company and (ii) the other four most highly
compensated executive officers of the Company during fiscal 1994 (the "Named
Executives"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- ------------------------------------------------------------------ --------------------------- ----------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
- ---------------- ---- ------------ ----------- ------------------ ----------- --------------- ---------- ------------------
NAME AND OTHER RESTRICTED SECURITIES
PRINCIPAL ANNUAL STOCK UNDERLYING LTIP ALL OTHER
POSITION(1) YEAR SALARY($)(2) BONUS($)(2) COMPENSATION($)(3) AWARD(S)($) OPTIONS/SARS(#) PAYOUTS($) COMPENSATION($)(4)
- ---------------- ---- ------------ ----------- ------------------ ----------- --------------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard Sands, 1994 $371,635 $241,748 -- -- -- -- $31,001
President and 1993 $176,522 $ 60,000 $21,960
CEO(1) 1992 $156,935 $ 20,000
Marvin Sands, 1994 $401,196 $260,978 -- -- -- -- $41,203
Chairman of the 1993 $248,173 $ 60,000 $27,950
Board(1) 1992 $224,039 $ 0
Ellis Goodman, 1994 $363,283 $214,200 -- -- -- -- $47,452(6)
Executive Vice 1993 $ 62,769 $ 10,356 $6,497
President(5) 1992 -- --
Robert Sands, 1994 $322,356 $209,692 -- -- -- $30,643
Executive Vice 1993 $161,105 $ 60,000 5,000 $19,099
President 1992 $119,269 $ 50,000
Chris Kalabokes, 1994 $233,548 $ 72,121 $3,740(7) -- 6,000 -- $32,592
Sr. Vice 1993 $199,829 $ 15,000 15,000 $25,087
President 1992 $170,268 $ 0
</TABLE>
- ---------------------
(1) On October 28, 1993, Richard Sands succeeded Marvin Sands as the Company's
Chief Executive Officer. Marvin Sands, Chairman of the Board of Directors,
continues to serve as an executive officer of the Company.
(2) Amounts shown include cash compensation earned and received by the Named
Executives as well as amounts earned but deferred. All non-cash
compensation has been disclosed in items (f)-(i) of the Summary
Compensation Table.
(3) Individual perquisites do not exceed the lesser of $50,000 or 10% of
salary and bonus for any Named Executive.
(4) Amounts reported for 1994 consist of:
--Company match for 401(k): Richard Sands $2,221; Marvin Sands $2,436;
Robert Sands $1,000; and, Chris Kalabokes $1,724.
--Company contributions to the Canandaigua Wine Company, Inc. Profit
Sharing Retirement Plan: Richard Sands $27,848; Marvin Sands $27,848;
Robert Sands $27,848; and, Chris Kalabokes $27,545.
--Company contributions to the profit sharing plan for Ellis Goodman under
the Barton Incorporated Employees' Profit Sharing and 401(k) Plan:
$25,009.
--"Flex credits" under the Canandaigua Wine Company, Inc. flexible health
care benefits plan: Richard Sands $473; Marvin Sands $473; Robert Sands
$473; and, Chris Kalabokes $473.
--Company paid premium on Group Term Life Insurance: Richard Sands $459;
Marvin Sands $5,760; Ellis Goodman $2,250; Robert Sands $297; and, Chris
Kalabokes $783.
--Company owned automobiles for: Marvin Sands $4,686; Ellis Goodman $3,121;
Robert Sands $1,025; and, Chris Kalabokes $2,067.
(5) On June 29, 1993, the Company acquired Barton Incorporated, and in July
1993, Ellis Goodman, the Chief Executive Officer of Barton Incorporated
was appointed a Vice President of Canandaigua Wine Company, Inc. In
October 1993 he was appointed an Executive Vice President of the Company.
Mr. Goodman continues in his capacity as Chief Executive Officer of Barton
Incorporated.
(6) On June 29, 1993, as part of its acquisition of Barton Incorporated, the
Company extended Ellis Goodman's employment agreement with Barton
Incorporated. This agreement provided for reimbursement in year 1994 of
club memberships of $15,638. Barton Incorporated also made a premium
payment for a whole life (split dollar) policy which included $1,434
representing the economic benefit to Mr. Goodman during fiscal year 1994.
(7) This amount represents the excess of the aggregate fair market value of
the number of shares of Class A Stock purchased by Mr. Kalabokes under the
Company's Employee Stock Purchase Plan over the actual aggregate purchase
price of such shares. Such excess amount represents a 15% discount from
the fair market value of the shares as determined under the provisions of
such Plan.
6
<PAGE>
STOCK OPTION GRANTS
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES
OF STOCK PRICE
APPRECIATION
FOR OPTION
INDIVIDUAL GRANTS TERM
- ----------------------------------------------------------------------------------- --------------------
(A) (B) (C) (D) (E) (F) (G)
--- ------------- ------------ ---------------- --------------- --------- ----------
NUMBER
OF SECURITIES % OF TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/SARS GRANTED TO
GRANTED(#) EMPLOYEES IN EXERCISE OR BASE
NAME (1) (2) FISCAL YEAR PRICE ($/SH) EXPIRATION DATE 5%($) 10%($)
---- ------------- ------------ ---------------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard Sands,
President and CEO -- -- -- -- -- --
Marvin Sands,
Chairman of the Board -- -- -- -- -- --
Ellis Goodman,
Executive Vice
President -- -- -- -- -- --
Robert Sands,
Executive Vice
President -- -- -- -- -- --
Chris Kalabokes,
Sr. Vice President 6,000(3) 4.8% $24.25(4) 6/22/04 $ 91,500 $ 231,900
</TABLE>
- ---------------------
(1) Options granted in fiscal 1994 are exercisable starting on June 23, 1999.
(2) The options were granted for a term of no greater than 10 years, subject
to earlier termination upon the occurrence of certain events related to
termination of employment.
(3) The securities underlying the options are shares of Class A Stock.
(4) The exercise price per share is equal to the market price of a share of
Class A Stock on the date of grant.
No stock options were exercised by any of the Named Executives during the
fiscal year ended August 31, 1994. The table on the next page sets forth
information regarding the number and value of unexercised stock options and
values at August 31, 1994. There are no outstanding SARs.
7
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
- ---------------------- --------------- ------------------ ---------------------- -----------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-
OPTIONS/SARS AT MONEY OPTIONS/SARS
FY-END (#)(1) AT FY-END ($)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---------------------- --------------- ------------------ ---------------------- -----------------------
<S> <C> <C> <C> <C>
Richard Sands,
President and CEO -- -- -- --
Marvin Sands,
Chairman of the Board -- -- -- --
Ellis Goodman,
Executive Vice
President -- -- -- --
Robert Sands,
Executive Vice
President -- -- 5,000 (Unexercisable) $ 95,000 (Unexercisable)
Chris Kalabokes,
Sr. Vice President -- -- 21,000 (Unexercisable) $253,750 (Unexercisable)
</TABLE>
- ---------------------
(1) Number of underlying securities relates to shares of Class A Stock
underlying Options.
BENEFIT PLANS
Both Canandaigua Wine Company, Inc. and its wholly-owned subsidiary, Barton
Incorporated ("Barton"), sponser certain profit sharing plans, 401(k) plans and
group health care, long-term disability and term life insurance plans for the
benefit of employees. Set forth below are descriptions of those plans. The
plans sponsored by Canandaigua Wine Company, Inc. do not cover the employees of
Barton and its subsidiaries, as those employees, including Ellis Goodman, are
covered by the plans sponsored by Barton, as described below. Subject to the
eligibility provisions of the Canandaigua Wine Company, Inc. Stock Option and
Stock Appreciation Right Plan and the 1989 Employees' Stock Purchase Plan,
employees of both Canandaigua Wine Company, Inc. and Barton, and their
subsidiaries, are eligible to participate under those plans. Those plans are
also described below.
PROFIT SHARING PLANS
CANANDAIGUA WINE COMPANY, INC.
The Canandaigua Wine Company, Inc. Profit Sharing Retirement Plan (the "PSR
Plan") is a tax qualified profit sharing plan allowing the Company and
affiliated employers to make tax deductible contributions from current or
accumulated profits on behalf of most non-union employees who have completed
one year of service with the Company or an affiliated employer. Generally,
under the PSR Plan, the Company and affiliated employers can contribute and
deduct up to 15% of the total compensation of all participants. The Company has
discretion as to whether and how much to contribute in a given year. Each
participant is credited with an allocation of the annual total contribution
made by the Company and affiliated employers based in part on his base
compensation above the Social Security wage base and, in part, on his total
base compensation. The amounts allocated to each participant become vested
pursuant to a graduated schedule based on years of service, with full vesting
after seven (7) years. The contributed amounts are invested in a tax-exempt
trust fund. No specified pension benefits are guaranteed to participants, who
instead receive at either death, disability or normal retirement date the
vested balance in their respective accounts. Payment is made in a single cash
sum no later than sixty days following the close of the year in which the event
giving rise to the distribution occurs.
8
<PAGE>
BARTON INCORPORATED
The Barton Incorporated Employees' Profit-Sharing and 401(k) Plan and Trust
Agreement (the "Barton Plan") is a tax-qualified plan which was established in
1957. The Barton Plan consists of both (i) a profit sharing plan allowing
Barton and its subsidiaries to make tax deductible contributions from current
or accumulated profits on behalf of most non-union employees who have completed
one year of service with Barton or a subsidiary employer, and (ii) a retirement
savings plan pursuant to Section 401(k) of the Code under which none of Barton
or its subsidiaries contribute. Under the profit sharing component of the
Barton Plan, Barton and its subsidiary employers may contribute up to 15% of
the total compensation of all participants. The employers have discretion as to
whether and how much to contribute in a given year. Contributions are allocated
each year to the accounts of participating employees in the ratio of their
compensation for such year. The amounts allocated to each participant become
vested pursuant to a graduated schedule based on years of service, with full
vesting after seven (7) years. All contributions are held in a general fund
under a tax-exempt trust and invested by the trustees. No specified benefits
are guaranteed to participants, who instead receive either distribution in a
lump sum or installments over a period certain not exceeding the participant's
life expectancy or, at the participant's election, not exceeding the joint life
and last survivor expectancy of the participant and his beneficiary.
401(K) PLAN
CANANDAIGUA WINE COMPANY, INC.
Effective July 1, 1987, Canandaigua Wine Company, Inc. established a
Retirement Savings Plan (the "401(k) Plan") pursuant to Section 401(k) of the
Internal Revenue Code of 1986, as amended (the "Code"). The 401(k) Plan permits
employees of the Company or its adopting subsidiaries to defer a portion of
their compensation on a pre-tax basis. Non-union employees who are neither
temporary nor probationary may participate in the 401(k) Plan on the first
January 1 or July 1 following their employment. Participants may defer up to
10% of their compensation (base pay plus regular bonuses and overtime) for the
year. However, no participant could defer more than $9,240 in fiscal year 1994.
The amount which may be deferred is indexed each year for inflation. The
Company makes a matching contribution of 25% of the first 4% of compensation an
employee defers. Federally mandated discrimination testing limits the amounts
which highly paid employees may defer based on the amounts contributed by all
other employees. Participant accounts are fully vested and are invested at the
direction of the participants among several mutual funds, pooled investment
funds or guaranteed investment contracts selected by the Company. Distributions
of account balances are normally made upon death, disability or termination of
employment after normal retirement date (age 65) or early retirement date (age
55). However, distribution may be made at any time after an employee terminates
employment. Participants may withdraw portions of their deferred accounts in
the event of financial hardship or may borrow portions of their accounts from
the 401(k) Plan, subject to fixed repayment schedules. Amounts payable to an
employee are dependent on the employee's account balance, which is credited and
debited with appropriate earnings, gains, expenses and losses of the underlying
investment. Benefits are determined by contributions and investment performance
over the entire period an employee participates in the 401(k) Plan.
STOCK OPTION AND STOCK APPRECIATION RIGHT PLAN
The Canandaigua Wine Company, Inc. Stock Option and Stock Appreciation Right
Plan, as amended (the "Plan") became effective on July 1, 1987, and provides
for the granting of "incentive stock options" (within the meaning of Section
422(b) of the Code, "non-qualified stock options" (options other than incentive
stock options) and stock appreciation rights "SARs" to key employees. Options
and/or SARs may be granted to those full time officers, key employees and
directors of the Company and its subsidiaries selected by the Compensation
Committee of the Board of Directors (the "Compensation Committee"). Subject to
the anti-dilution provisions of the Plan, options under the Plan to purchase,
and SARs may be granted with respect to, in the aggregate, not more than
3,000,000 shares of the Company's Class A Stock. The term of each option shall
be determined by the Compensation Committee, but in no event shall an option be
exercisable either in
9
<PAGE>
whole or in part after the expiration of ten years from the date on which it is
granted. However, if incentive stock options are granted to a stockholder who,
after the grant, owns 10% or more of the combined voting power of the Company
(a "Ten Percent Stockholder"), such options shall not be exercisable after the
expiration of five years from the date of the grant. The exercise price of
incentive stock options may not be less than the fair market value of the
shares on the date of the grant, except that with respect to Ten Percent
Stockholders, the price must be at least 110% of the fair market value on the
date of the grant. The exercise price of any non-qualified stock option must
equal or exceed fifty percent (50%) of the fair market value of the shares on
the date of the grant. The Plan presently satisfies the requirements and
conditions for a "plan" under Regulation 16b-3 under the Securities Exchange
Act of 1934. In order to acquire the shares underlying a stock option, a
participant must pay the full exercise price to the Company in cash, or, at the
discretion of the Company, by delivery of Company shares already owned by him.
The aggregate fair market value (determined on the date the option is granted)
of the shares with respect to which incentive stock options are exercisable for
the first time by any individual during any calendar year (under all incentive
stock option plans of the Company and its subsidiaries) may not exceed
$100,000. The Plan also authorizes the granting of SARs which are exercisable
over a period of time or which have specified maturity dates, as determined in
the discretion of the Compensation Committee. The maturity date or exercise
period may begin no sooner than six months from the date of the grant and end
no later than ten years from the date of the grant. The value of an SAR shall
be the amount, if any, by which the "Maturity Value" of a share of Class A
Stock exceeds its "Base Value". The Base Value and Maturity Value shall be
based upon the average fair market values of the shares on the date(s) set
forth in the participant's SAR agreement. These dates may not, however, be more
than one year from the date of the grant, in the case of Base Value, or one
year from the date of maturity or exercise, in the case of Maturity Value. The
value of an SAR upon maturity or exercise shall be paid to the participant in
cash, Class A Stock or a combination thereof as determined by the Compensation
Committee and as set forth in the SAR Agreement. Non-qualified stock options
and SARs may, in the discretion of the Compensation Committee, be granted in
tandem. Tandem grants shall be exercised in the alternative, so that to the
extent that an option is exercised, the corresponding SAR shall be
extinguished, and to the extent an SAR is exercised, the corresponding option
shall be extinguished.
A Registration Statement on Form S-8 with respect to 2,963,100 shares of the
Company's Class A Stock subject to the Plan was filed with the Securities and
Exchange Commission on November 22, 1994 and became effective automatically on
that date.
1989 EMPLOYEE STOCK PURCHASE PLAN
The Canandaigua Wine Company, Inc. 1989 Employee Stock Purchase Plan (the
"Stock Purchase Plan") became effective on January 20, 1989, and generally
provides an opportunity for eligible employees of the Company and its
subsidiaries to subscribe for shares of the Company's Class A Stock on an
installment basis through payroll deductions.
A Registration Statement on Form S-8 with respect to the 1,125,000 shares of
the Company's Class A Stock subject to the Stock Purchase Plan (as adjusted to
give retroactive effect to previous Class A Stock splits) was filed with the
Securities and Exchange Commission on January 25, 1989 and became effective
automatically on February 14, 1989. The Company has completed eleven offerings
under the Stock Purchase Plan and a twelfth offering under the Stock Purchase
Plan is currently ongoing and is scheduled to end on February 28, 1995. The
Compensation Committee administers the Stock Purchase Plan. Whether additional
offerings will be made under the Stock Purchase Plan and, if so, the terms and
commencement dates of those offerings, will be decided by the Compensation
Committee.
Participation in the Stock Purchase Plan is completely voluntary. An employee
is eligible to participate in an offering under the Stock Purchase Plan if he
or she is an employee of the Company or of any of its subsidiaries on the
commencement date of such offering. Members of the Compensation Committee and
employees who own in the aggregate 5% or more of the combined voting power or
value of all classes of stock of the Company are not eligible to participate.
If an employee elects to participate in an offering under
10
<PAGE>
the Stock Purchase Plan, deductions are taken from his or her salary or wages
during the offering period in amounts authorized by the employee within
applicable limits. If for any reason, the offering is oversubscribed, each
participant will be allotted shares on a pro-rata basis. Any balance in the
participants' accounts not applied to the purchase of whole shares of Class A
Stock in the event of oversubscription will be refunded to them without
interest. No employee may be granted a subscription right under the Stock
Purchase Plan (i) which would permit him to purchase stock under all employee
stock purchase plans of the Company in any calendar year with a fair market
value (determined as of the date such right is granted) of $25,000 or more or
(ii) if, immediately after such right is granted, such employee would own,
and/or hold outstanding options or rights to purchase, stock of the Company
possessing 5% or more of the total combined voting power or value of all
classes of stock of the Company.
Every participant in an offering under the Stock Purchase Plan is granted the
right to purchase as many full shares of Class A Stock as is possible with the
amount in such participant's payroll deduction account at the end of the
offering period. The purchase price per share for participants is the lower of:
(1) 85% of the fair market value of a share of Class A Stock on the
effective date of the offering (the Initial Offering Price); or
(2) 85% of the fair market value of a share of Class A Stock on the
termination of the offering period (the Alternate Offering Price).
MEDICAL AND INSURANCE BENEFITS
CANANDAIGUA WINE COMPANY, INC.
Canandaigua Wine Company, Inc. sponsors group health care, long-term
disability and term life insurance plans for its and its subsidiaries' eligible
employees and their eligible dependents. The health care benefits under the
Canandaigua Wine Company, Inc. plan include "core" benefits which are fully
paid by the Company. An employee may add to his or her core coverage by
selecting one or more of the optional benefit plans available. As part of this
health care plan, the Company provides "flex credits" to help participants
purchase additional benefits.
BARTON INCORPORATED
Barton sponsors group health care, long-term disability and term life
insurance plans for its and its subsidiaries' eligible employees and their
eligible dependents. Each participating employee contributes $20 per month to
the cost of his health care coverage, and, if such coverage is provided to his
dependent(s), a portion of the cost thereof ranging from $30 to $145 per month
depending upon the employee's rate of compensation. The cost of the other plans
is fully paid by Barton and its subsidiaries.
REPORT OF THE COMPENSATION COMMITTEE WITH RESPECT TO EXECUTIVE COMPENSATION
The following report of the Compensation Committee required by the rules of
the Securities and Exchange Commission to be included in this Proxy Statement
shall not be deemed incorporated by reference into any filing under the
Securities Act of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended (the "Exchange Act") by virtue of any general
statement in such filing incorporating this Proxy Statement by reference,
except to the extent that the Company specifically incorporates the information
contained in this section by reference, and shall not otherwise be deemed filed
under either the Securities Act or the Exchange Act.
General
The Compensation Committee of the Board of Directors administers the
Company's Executive Compensation Program. The Compensation Committee is
composed of the following individuals: Marvin Sands (director and executive
officer), Richards Sands (director and executive officer), and George Bresler
(non-employee director of the Company).
11
<PAGE>
The objective of the Company's Executive Compensation Program is to develop
and maintain executive award programs (i) which are competitive with the pay
practices of other companies of comparable revenues, including those in the
beverage alcohol industry and (ii) which attract, motivate and retain key
executives who are very important to the long-term success of the Company. As
discussed in detail below, the Company's Executive Compensation Program
consists of both fixed (base salary) and variable (incentive) compensation
elements. These elements are designed to operate together to comprise total
compensation value.
The Compensation Committee reviewed executive compensation in light of the
Company's performance during the fiscal year and compensation data for
companies that it considered comparable. In reviewing the Company's performance
during fiscal year 1994, the Compensation Committee considered a variety of
factors without assigning specific weight to particular factors. Among other
factors, the Compensation Committee took into account that net sales for fiscal
year 1994 increased approximately 106% to $629.6 million, that, exclusive of
the impact of a restructuring charge which the Company took in the fourth
quarter of fiscal year 1994, net income increased 71% to $26.6 million, and
(exclusive of the impact of the restructuring charge) earnings per share on a
fully diluted basis amounted to $1.65, up from $1.20 for fiscal year 1993.
After the impact of the restructuring charge, net income for fiscal year 1994
was $11.8 million and earnings per share on a fully diluted basis amounted to
$0.74. These results were principally achieved by reason of the successful
acquisitions program carried out by the Company during fiscal years 1993 and
1994.
The Compensation Committee further reviewed compensation in light of the
Company's rapid growth due primarily to the acquisitions of (i) Barton
Incorporated, which occurred on June 29, 1993, (ii) the assets and business of
Vintners International Company, Inc., which occurred on October 15, 1993, and
(iii) the Almaden, Inglenook and other brands, a grape juice concentrate
product line and related facilities and assets, which occurred on August 5,
1994. For 1994, the Compensation Committee, with the advice of William H.
Mercer Incorporated ("Mercer"), a compensation consulting firm, addressed
certain differences in compensation among executive employees within the
Company as the result of its recent acquisitions and recommended significant
increases in compensation for fiscal year 1994. The Compensation Committee also
recommended changes in title and positions for certain members of senior
management of the Company. Both of these recommendations have been implemented.
Compensation of CEO
For fiscal year 1994, the compensation of Marvin Sands and Richard Sands was
reviewed by the Compensation Committee in the context of (i) the Company's
performance and growth discussed above; and (ii) compensation packages of chief
executive officers at comparable companies selected by Mercer. The companies
included in the comparison were not the same as the companies included in the
peer group index contained in the performance graph included in this Proxy
Statement. The Compensation Committee believes that the Company's most direct
competitors for executive talent are not necessarily the same companies to
which the Company compares itself for stock performance purposes.
Base Salary
Base salary levels for the Company's executives are determined by the
Compensation Committee based on factors such as individual performance (e.g.,
leadership, level of responsibility, management skills and industry
activities), Company performance (as discussed above) and competitive pay
practices. The Company has received data relating to executive compensation
packages of other public companies from Mercer.
Annual Cash Incentives
The annual cash incentive is designed to provide a short-term (one year)
incentive to an executive based on a percentage of that executive's base
salary. The incentive opportunities for the Named Executives vary based on,
among other things, the Company meeting certain pre-determined individual
goals. These individual goals may include objective and subjective factors,
such as leadership and management skills, successful acquisitions or financing,
and improved performance of assets.
12
<PAGE>
For fiscal year 1994, annual cash incentives in the amounts indicated in the
Summary Compensation Table were awarded to each of the Named Executives based
on the achievement of certain goals.
Stock Options and SARs
Stock options and SARs are designed to provide incentives and rewards tied to
the price of the Company's Class A Stock. Given the fluctuations of the stock
market, stock price performance and financial performance are not always
consistent. The Compensation Committee believes that stock options and SARs
would provide value to participants only when the Company's stockholders
benefit from stock price appreciation, an important component of the Company's
Executive Compensation Program.
The Compensation Committee believes that through the use of stock options,
executives' interests are directly tied to enhanced stockholder value. The
exercise prices of all stock options granted were generally equal to the market
value of the underlying Class A Stock on the date of the grant. Accordingly,
the value of these grants to the executives is dependent solely upon the future
growth and share value of the Company's Class A Stock.
The foregoing report is given by the members of the Compensation Committee,
namely:
COMPENSATION COMMITTEE
Marvin Sands
Richard Sands
George Bresler
INSIDER PARTICIPATION IN COMPENSATION COMMITTEE
The Compensation Committee of the Company's Board of Directors consists of
Marvin Sands, Richard Sands and George Bresler. Marvin Sands is the Chairman of
the Board and serves in this capacity as the Company's senior executive
officer, and during fiscal year 1993, and until October 28, 1993 was Chief
Executive Officer. Richard Sands is Chief Executive Officer, and during fiscal
year 1993, was President and Chief Operating Officer. Mr. Bresler is a partner
in the law firm of Rosner, Bresler, Goodman & Golden in New York, New York.
STOCK PRICE PERFORMANCE GRAPH
Set forth below is a line graph comparing, for the five most recently
concluded fiscal years, the cumulative total stockholder return on a weighted
average of the Company's Class A Stock and Class B Stock, based on the market
price of the Class A Stock and the Class B Stock and assuming reinvestment of
dividends, with the cumulative total return of companies on the Nasdaq Market
Index and an index comprised of companies in the beverage industry (the
"Selected Peer Group Index").*
13
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG CANANDAIGUA WINE COMPANY,
INC.,
THE NASDAQ MARKET INDEX AND SELECTED PEER GROUP INDEX
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG CANANDAIGUA WINE COMPANY INC., THE NASDAQ INDEX
AND SELECTED PEER GROUP INDEX
<CAPTION>
Measurement period CANANDAIGUA NASDAQ SELECTED PEER GROUP
(Fiscal year Covered) WINE COMPANY, INC. Index Index
- --------------------- --------- --------- ---------
<S> <C> <C> <C>
Measurement PT -
08/31/89 $ 100 $ 100 $ 100
FYE 08/31/90 $ 104.9 $ 87.5 $ 91.4
FYE 08/31/91 $ 233.1 $ 99.4 $ 106.7
FYE 08/31/92 $ 287.9 $ 101.1 $ 115.5
FYE 08/31/93 $ 437.7 $ 131.6 $ 132.8
FYE 08/31/94 $ 654.1 $ 143.8 $ 136.8
</TABLE>
* The Selected Peer Group Index is comprised of securities of the following
Companies: Anheuser-Busch Companies Inc., Brown-Forman Corporation (Class A
and Class B Shares), Cable Car Beverage Corporation, Cadbury-Schwepps plc,
Canandaigua Wine Company, Inc. (Class A and Class B Shares), Chalone Wine
Group Ltd., Coca Cola Bottling Consolidated, Coca Cola Company, Coca Cola
Enterprises, Adolph Coors Company (Class B Shares), Genesee Corporation
(Class B Shares), Kirin Brewery Ltd. ADR, LVMH Moet-Hen Louis Vuit, Pepsico
Inc., Seagram Company Ltd., Whitman Corporation.
There can be no assurance that the Company's stock performance will continue
into the future with the same or similar trends depicted by the graph above.
The Company will neither make nor endorse any predictions as to future stock
performance.
The Stock Price Performance Graph set forth above shall not be deemed
incorporated by reference into any filing under the Securities Act or the
Exchange Act by virtue of any general statement incorporating this Proxy
Statement by reference, except to the extent that the Company specifically
incorporates the information contained in this section by reference, and shall
not otherwise be deemed filed under either such Act.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Apart from personal benefits in aggregate amounts not exceeding 10% of the
respective cash compensation amounts reported above, no compensation other than
that described above was paid to the Named Executives for services rendered
during the 1994 fiscal year.
On June 29, 1993, as part of the acquisition of Barton Incorporated
("Barton"), the Company extended Ellis Goodman's employment agreement with
Barton (the "Agreement"). Ellis Goodman serves as Chief Executive Officer of
Barton and is an executive officer and a director of the Company. Mr. Goodman
has, consistent with past practices and subject to annual approval by the
Company's Board of Directors of the
14
<PAGE>
Barton annual plan for the coming year, full and exclusive strategic and
operational responsibility for Barton and all of its subsidiaries, including
responsibility for: (i) day-to-day operations; (ii) all employee welfare,
benefit, profit-sharing and pension programs; (iii) compensation for all
officers and employees; and (iv) all matters impacting on Barton's earnings. If
Barton fails to achieve certain earnings levels in any fiscal year during the
term of the Agreement, then Mr. Goodman's employment may be terminated. If Mr.
Goodman's employment is terminated for this reason, he is entitled to the
severance benefits described in the following paragraph.
The Agreement expires on December 31, 1999, and provides that Mr. Goodman
will serve as the Chairman of the Board and Chief Executive Officer of Barton
and its subsidiaries (the Company's beer and spirits division). Under the
Agreement, (i) Barton is obligated to review Mr. Goodman's compensation
annually as of September 1 each year and afford him participation under
employee benefit and compensation plans offered from time to time to other key
executives of Barton, and (ii) Mr. Goodman has agreed not to compete with
Barton for a period of 12 months following the termination of his employment
with Barton for certain reasons. Upon the expiration of the Agreement or its
earlier termination for certain reasons, Barton is obligated to make a
severance payment to Mr. Goodman in an amount equal to 200% of his then base
salary and 200% of the incentive compensation payable to him for Barton's
fiscal year ended immediately prior to the date of termination, plus an amount
equal to the base compensation, if any, remaining to be paid to Mr. Goodman for
the years then remaining in the term of the Agreement.
Pursuant to the terms of the Stock Purchase Agreement dated April 27, 1993,
as amended, among the Company, Barton and the former stockholders of Barton
(the "Stock Purchase Agreement"), Ellis Goodman, the Gillian and Ellis Goodman
Foundation, and certain trusts established for the benefit of Mr. Goodman's
children (collectively, the "Goodman Recipients") have received, and are
entitled to receive on December 30, 1994, payments aggregating $65,829,557; the
Goodman Recipients also received an aggregate of 673,021 shares of the
Company's Class A Stock. At various times until November 29, 1996, the Goodman
Recipients are entitled to receive additional payments upon the satisfaction by
Barton of certain performance goals.
Pursuant to the terms of the Stock Purchase Agreement, certain trusts
established for the benefit of Sir Harry Solomon (a director of the Company)
and his wife and children (collectively, the "Trusts") have received, and are
entitled to receive on December 30, 1994, payments aggregating $15,780,338; the
Trusts also received an aggregate of 161,334 shares of the Company's Class A
Stock. At various times until November 29, 1996, the Trusts are entitled to
receive additional payments upon the satisfaction by Barton of certain
performance goals.
On July 12, 1993, the Company adopted a policy to pay its non-employee
directors $35,000 per year for their services as directors. Messrs. Bresler,
Locke and Sir Harry Solomon qualify for such payments. Mr. Locke has waived the
payment of directors' fees. The Company also reimburses its directors for
reasonable expenses incurred in connection with attending meetings of the Board
of Directors and Committees of the Board of Directors.
By an Agreement dated December 20, 1990, the Company entered into a split-
dollar agreement with a Trust established by Marvin Sands of which Robert Sands
is Trustee. Pursuant to the Agreement, the Company pays the annual premium on
an insurance policy (the "Policy") held in the Trust net of the amount paid by
the Trust. The Trust pays the portion of the premium equal to the "economic
benefit" to Marvin Sands calculated in accordance with the United States
Treasury Department rules then in effect.
The Policy is a joint life policy payable upon the death of the second to die
of the insureds, Marvin Sands and his wife, Marilyn. The face value of the
Policy is $5 million. Pursuant to the terms of the Trust, Richard Sands, Robert
Sands (in his individual capacity) and Laurie Sands will each receive one-third
of the proceeds of the Policy (less the reimbursement to the Company described
below) if they survive Marvin Sands and Marilyn Sands.
15
<PAGE>
The amount of all premiums paid by the Company constitutes indebtedness from
the Trust to the Company and is secured by a collateral assignment of the
Policy. Upon the termination of the Agreement, whether by the death of the
survivor of the insureds or the sooner cancellation of the Agreement, the
Company is entitled to receive from the Trust the amount equal to the premiums
which it has paid.
The premium paid during fiscal year 1994 with respect to this arrangement was
$216,760; of this amount, the Company, during December 1993, advanced $209,063
and the Trust paid $7,697, which amount represents the "economic benefit" to
Marvin Sands. (Marvin Sands is the Company's Chairman of the Board of
Directors, Richard Sands is the Company's President and Chief Executive Officer
and a director, and Robert Sands is an Executive Vice President, General
Counsel and a director of the Company. Each of Marvin Sands, Marilyn Sands,
Richard Sands, Robert Sands and Laurie Sands is the beneficial owner of more
than five percent of each class of the Company's Common Stock. Richard, Robert
and Laurie Sands are adult children of Marvin and Marilyn Sands.)
By an Agreement dated August 12, 1988, Barton entered into a split-dollar
insurance agreement with a trust established by Ellis M. Goodman of which
Gillian Goodman and Edwin H. Goldberger are the trustees. Pursuant to the
Agreement, Barton pays the annual premium on an insurance policy (the "Policy")
held in the trust. The Policy is a single life policy payable upon the death of
Mr. Goodman. The face value of the Policy is $1 million. The amount of all
premiums paid by Barton is secured by an assignment of certain rights in the
Policy. Upon the termination of the Agreement, whether by the death of Mr.
Goodman or the sooner cancellation of the Agreement, Barton is entitled to
receive an amount equal to the premiums which it has paid. The premium paid
during fiscal year 1994 with respect to this Agreement was $19,370.
On November 10, 1994, the Company entered into a certain Underwriting
Agreement and a certain Subscription Agreement (together, the "Agreements"),
along with certain selling stockholders (the "Selling Stockholders"). The
Selling Stockholders included Ellis Goodman, a director and an Executive Vice
President of the Company, and two separate trusts for the benefit of Mr.
Goodman's children. (Those trusts are identified earlier in this section of the
Proxy Statement.) The Selling Stockholders also included two separate trusts
for the benefit of Sir Harry Solomon (a director of the Company) and his wife
and children. (Those trusts are also identified earlier in this section of the
Proxy Statement.) Under the terms of the Agreements, the Company issued and
sold, and the Selling Stockholders sold to CS First Boston Corporation, Merrill
Lynch, Pierce, Fenner & Smith, Incorporated, William Blair & Company, Chase
Securities, Inc., Merrill Lynch International Limited, among others (the
"Underwriters"), shares of Class A Stock of the Company. Pursuant to the
Agreements, on November 18, 1994, the Company and the Selling Stockholders
completed the sale of 3,937,744 shares of Class A Stock to the Underwriters at
a price of $32.076 per share in simultaneous United States and international
public offerings. (The price to the public for such shares was $33.50.) Of the
total number of shares, 3 million were sold by the Company and 937,744 were
sold by the Selling Stockholders. Of the amount sold by the Selling
Stockholders, (i) Mr. Goodman sold 176,079 shares beneficially owned by him,
(ii) each of the trusts for Mr. Goodman's children sold 68,031 shares and (iii)
the trust for Sir Harry and his wife and the trust for Sir Harry's children
each sold 34,572 shares. The Company did not receive any of the proceeds from
the sale of the Class A Stock owned individually by the Selling Stockholders.
All of the shares of Class A Stock sold by the Company and the Selling
Stockholders were registered for sale with the Securities and Exchange
Commission pursuant to a Registration Statement on Form S-3 and amendments
thereto (the "Registration Statement"). Under the terms of the Agreements, the
Underwriters have agreed to indemnify, under certain conditions, the Company,
its directors, certain of its officers and persons who control the Company
within the meaning of the Securities Act against certain liabilities. Further,
under the terms of the Agreements, the Company and the Selling Stockholders,
made certain representations and warranties to the Underwriters, made certain
covenants with the Underwriters and agreed to indemnify the Underwriters
against certain liabilities. The Registration Statement reported that total
expenses to be incurred in connection with the offerings were estimated at
$875,000, of which approximately $800,000 would be borne by the Company and
approximately $75,000 would be borne by the Selling Stockholders.
16
<PAGE>
Richard Sands, Robert Sands and Laurie Sands are the beneficial owners of a
limited partnership which owns railroad cars. These cars are leased by the
Company from the partnership at fair market rates. The Company's payments are
offset to the extent that railroads using these cars reimburse the partnership
for such use.
George Bresler, a director of the Company, is a partner in the law firm of
Rosner, Bresler, Goodman & Golden in New York, New York. Mr. Bresler has in
the past rendered legal services to the Company and Mr. Bresler intends to
continue to offer his professional services to the Company.
James A. Locke, III, a director of the Company, is a partner in the law firm
of Harter, Secrest & Emery, Rochester, New York, the Company's principal
outside counsel.
NOMINATION AND ELECTION OF DIRECTORS
On April 26, 1993, the Board of Directors of the Company increased the
number of directors on the Board of Directors from six (6) to eight (8)
pursuant to the terms of the Affiliates Agreement with the former stockholders
of Barton Incorporated (the "Affiliates Agreement"). On July 12, 1993, the
Board of Directors first appointed Ellis Goodman and Sir Harry Solomon to fill
the newly created vacancies. On November 15, 1994, the Board of Directors
nominated eight (8) directors to be elected by the stockholders to hold office
until the next Annual Meeting of Stockholders and until their successors are
elected and qualified. Pursuant to the Affiliates Agreement, certain holders
of a majority of the Class B Stock* have agreed to cause Ellis Goodman and Sir
Harry Solomon to be nominated and elected to the Company's Board of Directors
as Class B Directors, to hold office until the later to occur of (i) payment
of all amounts due to the former stockholders of Barton pursuant to the Stock
Purchase Agreement; or (ii) the Company's 1997 Annual Meeting of Stockholders.
The nominees for election to the Board of Directors are Marvin Sands, Richard
Sands, Ellis Goodman, Robert Sands, Sir Harry Solomon, George Bresler, James
A. Locke, III and Bertram E. Silk. Messrs. Locke and Bresler have been
designated as the nominees to be elected by the holders of the Class A Stock,
voting as a separate class. The remaining directors are to be elected by the
holders of the Class B Stock, voting as a separate class. Unless authority to
vote for one or more of the nominees is specifically withheld, it is intended
that the shares represented by the enclosed proxy, when properly executed,
will be voted FOR the election of the eight (8) nominees.
Management does not anticipate that any of the nominees will become
unavailable for any reason, but if that should occur before the Meeting,
proxies will be voted FOR another nominee or nominees to be selected by the
management of the Company.
- ---------------------
* The Class B Stockholders who executed the Affiliates Agreement are: Marvin
Sands; Marilyn Sands; Richard Sands; Robert Sands; Laurie Sands; Marilyn
Sands under Irrevocable Declaration of Trust Nos. 1 (subsequently
terminated) 2, 3 and 4 each dated November 18, 1987; and Richard Sands,
Robert Sands and Laurie Sands, as Co-Trustees under an Irrevocable Trust
Agreement dated November 18, 1987.
17
<PAGE>
The information appearing in the following table and in the notes thereto has
been furnished to the Company by the respective nominees to the Board of
Directors and the Company's Executive Officers. Unless otherwise indicated, the
named individual has sole voting power and investment discretion with respect
to the shares attributed to him.
<TABLE>
<CAPTION>
SHARES OF STOCK
SERVED AS BENEFICIALLY PERCENT
DIRECTOR OWNED AS OF OF
NAME AND BACKGROUND SINCE NOVEMBER 30, 1994 CLASS(1)
------------------- --------- ----------------- --------
<S> <C> <C> <C>
Marvin Sands, age 70, is the founder of 1946 1,786,161 11.1%(2)
the Company, which is the successor to Class A Stock(2)
a business he started in 1945. Mr. 2,838,371 83.7%(2)
Sands continues to serve as an officer Class B Stock(2)
of the Company as Chairman of its
Board of Directors. He has been a
director of the Company and its
predecessor since 1946 and was Chief
Executive Officer until October 1993.
He is the father of Richard Sands and
Robert Sands.
Richard Sands, Ph.D., age 43, has been 1982 1,786,161 11.1%(2)
employed by the Company in various Class A Stock(2)
capacities since 1979. He was elected 2,838,371 83.7%(2)
Executive Vice President and a Class B Stock(2)
director in 1982, became President and
Chief Operating Officer in May 1986,
and was elected President and Chief
Executive Officer in October 1993. He
is a son of Marvin Sands and the
brother of Robert Sands.
Ellis Goodman, age 57, has been a 1993 259,680(3) 1.6%(3)
director and Vice President since July Class A Stock
1993 and was elected as an Executive 0 --
Vice President of the Company in Class B Stock
October 1993. Mr. Goodman has been
Chief Executive Officer of Barton
Incorporated since 1987 and Chief
Executive Officer of Barton Brands,
Ltd. (predecessor of Barton
Incorporated) since 1982.
Robert Sands, age 36, was appointed 1989 1,786,161 11.1%(2)
Vice President, General Counsel in Class A Stock(2)
June 1990 and was elected Executive 2,838,371 83.7%(2)
Vice President of the Company in Class B Stock(2)
October 1993. He has served as a
director since 1989. From June 1986,
until his appointment as Vice
President, General Counsel, Mr. Sands
was employed by the Company as General
Counsel. He is a son of Marvin Sands
and the brother of Richard Sands.
Sir Harry Solomon, age 57, has been a 1993 92,190(4) (4)
director since July 1993. From 1976 to Class A Stock
1993, he was Chairman of the Board of 0 --
Hillsdown Holdings plc, a British food Class B Stock
company. Currently, he is a director
of Hillsdown Holdings plc, Frogmore
Estates plc, a real estate development
and investment company, and Princedale
plc, an industrial design and
management consulting company, all of
which are publicly quoted United
Kingdom companies.
George Bresler, age 70, has been a 1992 0 --
director of the Company since 1992 and Class A Stock
has been engaged in the practice of 0 --
law since 1957. From August 1987 Class B Stock
through July 1992, Mr. Bresler was
engaged in the practice of law as a
partner in the law firm of Bresler and
Bab, New York, New York. Currently,
Mr. Bresler is a partner in the law
firm of Rosner, Bresler, Goodman &
Golden in New York, New York. (5)
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
SHARES OF STOCK
SERVED AS BENEFICIALLY PERCENT
DIRECTOR OWNED AS OF OF
NAME AND BACKGROUND SINCE NOVEMBER 30, 1994 CLASS(1)
------------------- --------- ----------------- --------
<S> <C> <C> <C>
James A. Locke, III, age 52, has served 1983 3,082(6) (6)
as a director of the Company since Class A Stock
1983. He is a partner in the law firm 33 (6)
of Harter, Secrest & Emery, Rochester, Class B Stock
New York, which firm is the Company's
principal outside counsel, and has
been associated with the firm since
1967.
Bertram E. Silk, age 62, has been a 1973 11,254(7) (7)
director and a Vice President of the Class A Stock
Company since 1973 and was elected a 1,125 (7)
Senior Vice President of the Company Class B Stock
in October 1993. He has been employed
by the Company since 1965. Currently,
Mr. Silk is in charge of the Company's
grape grower relations in California.
Before moving from Canandaigua, New
York to California in 1989, Mr. Silk
was in charge of production for the
Company. From 1989 to August 1994, Mr.
Silk was in charge of the Company's
grape juice concentrate product line
in California.
Chris Kalabokes, age 47, joined the -- 4,373(8) (8)
Company in October 1991 as President Class A Stock
and Chief Executive Officer of the 0 --
Company's Guild Wineries & Class B Stock
Distilleries, Inc. subsidiary. In
September 1992, he was appointed to
the position of Vice President,
President of the Wine Division of the
Company, and in October 1993 was
appointed a Senior Vice President. For
more than five years prior to joining
the Company, he was employed by Guild
Wineries and Distilleries, a
California cooperative and the company
that sold its assets and business to
the Company in October 1991 ("Old
Guild"). Mr. Kalabokes joined Old
Guild in April 1985 as its Chief
Financial Officer and continued in
that position until June 1987 when he
was promoted to President and Chief
Executive Officer.
All Executive Officers and Directors as 2,165,761 13.5%(9)
a Group (10 persons) Class A Stock
2,839,529 83.8%(10)
Class B Stock
</TABLE>
- ---------------------
(1) Unless otherwise noted, percentages of ownership are calculated on the
basis of 16,049,368 shares of Class A Stock outstanding and 3,390,051
shares of Class B Stock outstanding on November 30, 1994.
(2) See table and footnotes under "Beneficial Ownership," above.
(3) Includes 34,680 shares owned of record by the Gillian and Ellis Goodman
Foundation (the "Foundation"). Mr. Goodman is president of the Foundation
with full voting power with respect to the shares and disclaims beneficial
ownership of such shares.
(4) Includes 46,095 shares which the Rothschild Trust (Schweiz) AG and
Rothschild Trust Cayman Limited, as Trustees of the Harry and Judith
Solomon 1986 Own Settlement have the right to vote. Sir Harry Solomon and
his spouse are the Grantors of the Own Settlement and have a lifetime
pecuniary interest in the income of the Own Settlement. Includes 46,095
shares which the Rothschild Trust (Schweiz) AG and Rothschild Trust Cayman
Limited, as Trustees of the Harry and Judith Solomon 1986 No. III
Children's Settlement have the right to vote. Sir Harry Solomon and his
spouse are the Grantors of the Children's Settlement. Sir Harry Solomon
disclaims beneficial ownership of such shares. The percentage of the Class
A Stock beneficially owned by Sir Harry Solomon does not exceed one
percent of such Class.
(5) In his capacity as an attorney, Mr. Bresler has in the past rendered legal
services to the Company. It is expected that he will continue to render
legal services to the Company as required by the Company.
(6) The number of shares of Class A Stock includes presently exercisable
options to purchase up to 3,000 shares and 33 shares of Class A Stock
issuable pursuant to the conversion feature of the Company's Class B Stock
owned by Mr. Locke. The percentage of the Class A Stock beneficially owned
by Mr. Locke does not exceed one percent of such Class. The percentage of
the Class B Stock beneficially owned by Mr. Locke does not exceed one
percent of such Class.
19
<PAGE>
(7) The number of shares of Class A Stock includes presently exercisable
options to purchase up to 6,750 shares and 1,125 shares of Class A Stock
issuable pursuant to the conversion feature of the Company's Class B Stock
owned by Mr. Silk. The percentage of the Class A Stock beneficially owned
by Mr. Silk does not exceed one percent of such Class. The percentage of
the Class B Stock beneficially owned by Mr. Silk does not exceed one
percent of such Class.
(8) The percentage of the Class A Stock beneficially owned by Mr. Kalabokes
does not exceed one percent of such Class.
(9) The percentage of ownership of all executive officers and directors as a
group is based on 16,067,026 shares of Class A Stock deemed outstanding
pursuant to Rule 13d-3(d)(1) under the Securities Exchange Act. The amount
in the table includes presently exercisable options to purchase up to
16,500 shares of Class A Stock and 1,158 shares of Class A Stock issuable
to members of the group pursuant to the conversion feature of Class B Stock
into Class A Stock, but excludes shares of Class A Stock issuable to Marvin
Sands, Richard Sands and Robert Sands pursuant to the conversion feature of
Class B Stock beneficially owned by them. If such shares of Class A Stock
were to be added to the amount in the table, the amount of Class A Stock
beneficially owned by all executive officers and directors as a group would
be 5,004,132 shares and the percentage of ownership would be 26.5%, based
upon 18,905,397 shares deemed outstanding pursuant to Rule 13d-3(d)(1)
under the Securities Exchange Act. (See table and footnotes under
"Beneficial Ownership," above.)
(10) See table and footnotes under "Beneficial Ownership," above.
The Board of Directors of the Company held ten meetings and additionally
acted by unanimous written consent on six occasions during the fiscal year
ended August 31, 1994. There were also three meetings of the Audit Committee
during the fiscal year ended August 31, 1994. The members of the Audit
Committee are Richard Sands and Messrs. Locke and Bresler. The Compensation
Committee acted by unanimous written consent on nine occasions during the
fiscal year ended August 31, 1994. During the period from September 1, 1993
through February 10, 1994, the members of the Compensation Committee were
Marvin Sands, Richard Sands and James Locke. From February 10, 1994 through the
date of this Proxy Statement, the members of the Compensation Committee are
Marvin Sands, Richard Sands and George Bresler.
Under the securities laws of the United States, generally, the Company's
directors, its executive officers, and any persons holding ten percent or more
of any class of the Company's equity securities are required to report their
ownership of the Company's securities and any changes in that ownership to the
Securities and Exchange Commission (the "Commission"). Specific due dates for
these reports have been established and the Company is required to report in
this Proxy Statement any failure to file by these dates during fiscal year
1994. During the fiscal year ended August 31, 1994, each of Marvin Sands and
Marilyn Sands filed two reports late, with each such report relating to one
transaction; each of Richard Sands and Robert Sands filed one report late, with
each such report relating to one transaction; Laurie Sands filed two reports
late, with each report relating to one transaction; and George Bresler filed
one report late relating to one transaction. In making these statements, the
Company has relied on written representations of its incumbent directors,
executive officers and ten percent holders and/or copies of the reports that
they have filed with the Commission.
SELECTION OF INDEPENDENT AUDITORS
The firm of Arthur Andersen LLP, Certified Public Accountants, served as the
independent auditors of the Company for the fiscal year ended August 31, 1994,
and the Board of Directors has again selected Arthur Andersen LLP as the
Company's independent auditors for the fiscal year ending August 31, 1995. This
selection will be presented to the stockholders for their approval at the
Meeting. The Board of Directors recommends a vote in favor of the proposal to
approve and ratify this selection and (unless otherwise directed therein) it is
intended that the shares represented by the enclosed properly executed proxy
will be voted FOR such proposal. If the stockholders do not approve this
selection, the Board of Directors may reconsider its choice.
A representative of Arthur Andersen LLP is expected to be present at the
Meeting. The representative will be given an opportunity to make a statement if
he so desires and will be available to respond to appropriate questions
concerning the audit of the Company's financial statements.
20
<PAGE>
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
In order for any stockholder proposal to be included in the Company's proxy
statement to be issued in connection with the 1996 Annual Meeting of
Stockholders, such proposal must be delivered to the Company no later than
August 29, 1995.
OTHER
As of the date of this Proxy Statement, the Board of Directors does not
intend to present, and has not been informed that any other person intends to
present, any matter other than those specifically referred to in this Proxy
Statement. If any other matters properly come before the Meeting, it is
intended that the holders of the proxies will act in respect thereto in
accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
LYNN K. FETTERMAN, Secretary
Dated at Canandaigua, New York
December 27, 1994
21
<PAGE>
CANANDAIGUA WINE COMPANY, INC
PROXY FOR CLASS A COMMON STOCK AND CLASS B COMMON STOCK
PROXY
The undersigned hereby appoints Bertram E. Silk and Lynn K. Fetterman, or
any one of them, proxies for the undersigned with full power of substitution to
vote all shares of CANANDAIGUA WINE COMPANY, INC. (the "Company") owned by the
undersigned at the Annual Meeting of Stockholders to be held at Chase Tower, One
Chase Square, Rochester, New York, on Thursday, January 19, 1995, at 11:00 am
local time, and at any adjournments thereof.
Class A Stockholders, voting as a separate class, are entitled to elect
two directors at the Meeting. Class B Stockholders, voting as a separate class,
are entitled to elect six directors at the Meeting. Please refer to Proxy
Statement for details. Your Shares (if any) of Class A Common Stock on the back
are designated "CLA" and your Shares (if any) of Class B Common Stock are
designated "CLB". PLEASE SIGN ON THE BACK.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
THIS PROXY WILL BE VOTED AS SPECIFIED BY THE UNDERSIGNED. THIS PROXY REVOKES
ANY PRIOR PROXY GIVEN BY THE UNDERSIGNED. UNLESS AUTHORITY TO VOTE FOR ONE OR
MORE OF THE NOMINEES IS SPECIFICALLY WITHHELD, A SIGNED PROXY WILL BE VOTED FOR
---
THE ELECTION OF DIRECTORS AND, UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE
VOTED FOR PROPOSAL 2.
---
TO APPROVE THE BOARD OF DIRECTORS' RECOMMENDATIONS, SIMPLY SIGN THE BACK. YOU
NEED NOT MARK ANY BOXES.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE SIDE]
<PAGE>
[x] PLEASE MARK VOTES AS IN THIS EXAMPLE.
1. Election of Directors: To elect Directors as set forth in the Proxy
Statement.
CLASS A STOCKHOLDERS
George Bresler, James A. Locke, III
FOR WITHHELD
[_] [_]
[_]
-------------------
For, except vote withheld from the following nominee:
CLASS B STOCKHOLDERS
Marvin Sands, Richard Sands, Robert Sands,
Bertram E. Silk, Ellis Goodman, Sir Harry
Solomon
FOR WITHHELD
[_] [_]
[_]
--------------------
For, except vote withheld from the following nominee(s)
2. Proposal to approve and ratify the selection Arthur Andersen LLP, Certified
Public Accountants, as the Company's independent auditors for the fiscal year
ending August 31, 1995.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. In their discretion, the proxies are authorized to vote upon such other
business not known at the time of the solicitation of this Proxy as may
properly come before the Meeting or at any adjournments thereof.
[_] MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
The undersigned acknowledges receipt with this Proxy of a copy of the Notice of
Annual Meeting and Proxy Statement dated December 27, 1994, describing more
fully the proposals set forth herein.
NOTE: Please date and sign name exactly as it appears herein. Executors,
administrators, trustees, etc. should so indicate when signing. If the
stockholder is a corporation, the full corporate name should be inserted and the
proxy signed by an officer of the corporation, indicating his title.
Signature: Dated:
------------------- --------
Signature: Dated:
------------------- --------
