SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[ ] 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)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14.
[ ] $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 (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:
<PAGE>
December 27, 1995
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
Canandaigua Wine Company, Inc. at Chase Tower, One Chase Square, Rochester, New
York, on Thursday, January 18, 1996 at 11:00 a.m.
The matters expected to be acted upon at the meeting are described in
detail in the accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement. The Company's 1995 Annual Report, which is contained in this package,
sets forth important business and financial information concerning the Company.
We hope you are able to attend this year's Annual Meeting.
Very truly yours,
Marvin Sands Richard Sands
Chairman of the Board President and
Chief Executive Officer
<PAGE>
CANANDAIGUA WINE COMPANY, INC.
116 Buffalo Street
Canandaigua, New York 14424
-----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
January 18, 1996
-----------
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 18,
1996 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 ("Proposal No. 1").
2. To approve an Amended and Restated Certificate of Incorporation of the
Company which amends the Company's Restated Certificate of Incorporation to
authorize the issuance of 1,000,000 shares of a class of preferred stock
("Proposal No. 2").
3. 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, 1996 ("Proposal No.
3").
4. 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 27, 1995
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
Robert Sands, Secretary
Dated at Canandaigua, New York
December 27, 1995
<PAGE>
CANANDAIGUA WINE COMPANY, INC.
116 Buffalo Street
Canandaigua, New York 14424
Dated December 27, 1995
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
(January 18, 1996)
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 18, 1996 (the "Meeting"), and
at any adjournments thereof. This Proxy Statement and accompanying proxy are
being first mailed to stockholders on or about December ___, 1995. 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 (Proposal No. 1), unless otherwise
indicated, FOR the Amended and Restated Certificate of Incorporation of the
Company which amends the Restated Certificate of Incorporation to authorize the
issuance of 1,000,000 shares of a class of preferred stock (Proposal No. 2) and,
unless otherwise indicated, FOR the selection of Arthur Andersen LLP as the
Company's independent auditors for the fiscal year ending August 31, 1996
(Proposal No. 3).
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 27, 1995,
consisted of 16,246,046 shares of Class A Common Stock, par value $.01 per share
(the "Class A Stock"), and 3,365,958 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 27, 1995, 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 (1) 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 (10) 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 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.
<PAGE>
With regard to the election of directors, votes may be cast in favor or
withheld; because directors are elected by a plurality, votes that are withheld
will be excluded entirely from the vote and will have no effect.
Abstentions and broker "non-votes" will be counted toward determining the
presence of a quorum for the transaction of business. Abstentions may be
specified on all proposals except the election of directors. With respect to all
proposals other than the election of directors, abstentions will have the effect
of a negative vote. A broker "non-vote" will have the effect of a negative vote
with respect to the Amended and Restated Certificate of Incorporation
authorizing a class of preferred stock but will not have an effect with respect
to approving Arthur Andersen LLP as the Company's independent auditors. The
treatment of abstentions and broker "non-votes" is consistent with applicable
Delaware law and the Company's By-Laws.
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):
<PAGE>
<TABLE>
<S> <C> <C>
Shares Beneficially Owned
Class A Stock
Name and Address of Beneficial Owner Amount and Nature of Beneficial Percent of Class
- ------------------------------------ -------------------------------- ----------------
Ownership
---------
Marvin Sands (1)
116 Buffalo Street 1,738,418 (2) (3) 10.7% (2) (3)
Canandaigua, NY 14424
Marilyn Sands (1)
116 Buffalo Street 1,738,418 (2) (4) 10.7% (2) (4)
Canandaigua, NY 14424
Richard Sands (1)
116 Buffalo Street 1,738,418 (2) (5) 10.7% (2) (5)
Canandaigua, NY 14424
Robert Sands (1)
116 Buffalo Street 1,738,418 (2) (6) 10.7% (2) (6)
Canandaigua, NY 14424
CWC Partnership - I (1)
116 Buffalo Street 1,738,418 (2) (7) 10.7% (2) (7)
Canandaigua, NY 14424
CWC Partnership - II (1)
116 Buffalo Street 1,738,418 (2) (8) 10.7% (2) (8)
Canandaigua, NY 14424
Marilyn Sands, as Trustee under Irrevocable
Declarations of Trust Nos. 3 and 4 (1) 1,738,418 (2) (9) 10.7% (2) (9)
116 Buffalo Street
Canandaigua, NY 14424
Richard Sands and Robert Sands, as Co-Trustees under
Irrevocable Trust Agreement (1) 1,738,418 (2) (10) 10.7% (2) (10)
116 Buffalo Street
Canandaigua, NY 14424
David A. Rocker (11)
Suite 1759 929,279 (11) 5.7% (11)
45 Rockefeller Plaza
New York, NY 10111
Wellington Management Company (12)
75 State Street 1,040,780 (12) 6.4% (12)
Boston, MA 02109
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Class B Stock
Name and Address of Beneficial Owner Amount and Nature of Percent of Class
- ------------------------------------ --------------------- ----------------
Beneficial Ownership
---------------------
Marvin Sands (1) 2,838,371 (13) 84.3% (13)
116 Buffalo Street
Canandaigua, NY 14424
Marilyn Sands (1) 2,838,371 (14) 84.3% (14)
116 Buffalo Street
Canandaigua, NY 14424
Richard Sands (1) 2,838,371 (15) 84.3% (15)
116 Buffalo Street
Canandaigua, NY 14424
Robert Sands (1) 2,838,371 (16) 84.3% (16)
116 Buffalo Street
Canandaigua, NY 14424
Richard Sands and Robert Sands, as Co-Trustees under 2,838,371 (17) 84.3% (17)
Irrevocable Trust Agreement (1)
116 Buffalo Street
Canandaigua, NY 14424
Marilyn Sands, as Trustee under Irrevocable Declarations of 2,838,371 (18) 84.3% (18)
Trust Nos. 3 and 4 (1)
116 Buffalo Street
Canandaigua, NY 14424
CWC Partnership - I (1) 2,838,371 (19) 84.3% (19)
116 Buffalo Street
Canandaigua, NY 14424
CWC Partnership - II (1) 2,838,371 (20) 84.3% (20)
116 Buffalo Street
Canandaigua, NY 14424
</TABLE>
(1) Richard and Robert Sands are adult children of Marvin and Marilyn
Sands. Laurie Sands, an adult child of Marvin and Marilyn Sands, died on March
9, 1995. On June 17, 1993, Richard Sands, Robert Sands and Laurie Sands entered
into a Stockholders Agreement (the "Stockholders Agreement") which provided 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. On January 17, 1995, Richard
Sands, Robert Sands and Laurie Sands each executed a consent, permitting Laurie
Sands to transfer, free of all restrictions arising under the Stockholders
Agreement, all of her shares of Class A and Class B Stock to CWC Partnership -
I, a New York partnership formed on January 17, 1995 ("CWCP-I"). The partners of
CWCP-I are Richard Sands, Robert Sands and the Estate of Laurie Sands. See
footnote (7) below. Also on January 17, 1995, CWCP-I agreed to be bound by the
terms of the Stockholders Agreement. Pursuant to the terms of an Affiliates
Agreement, dated June 29, 1993 (the "Affiliates Agreement"), each of the
following 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. For
additional information regarding the Affiliates Agreement, see "PROPOSAL NO. 1 -
NOMINATION AND ELECTION OF DIRECTORS." 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. Irrevocable Declaration of
Trust, No. 2, referred to above, terminated by its terms on November 18, 1995.
As a result of such Trust's termination, 22,500 shares of Class B Stock are
being distributed to Richard Sands, 22,273 shares of Class B Stock are being
distributed to Robert Sands and 22,727 shares of Class B Stock are being
distributed to CWC Partnership - II, a New York partnership formed on January
17, 1995 ("CWCP-II"), the partners of which are the Estate of Laurie Sands and
The Robert Sands Descendants Trust. See footnote (8) below. Pursuant to Rule
13(d)-5(b)(1) under the Securities Exchange Act (the "Exchange Act"), by virtue
of the Stockholders Agreement, the Affiliates Agreement and the partnership
agreements governing CWCP-I and CWCP-II, the aforementioned persons, Trusts and
partnerships 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, the shares subject to the Affiliates Agreement, the
shares owned by CWCP-I and CWCP-II and the shares subject to the Irrevocable
<PAGE>
Trust Agreement described in footnote (10) 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 Affiliates Agreement, the
partnership agreements governing CWCP-I and CWCP-II or the Irrevocable Trust
Agreement described in footnote (10) 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 Irrevocable Declarations of Trust Nos.
3 and 4, Richard and Robert Sands, in their capacities as Co-Trustees of the
Trust described in footnote (10) below, CWCP-I and CWCP-II has advised the
Company that he/she/it has no plans to convert any Class B Stock into Class A
Stock. If such shares of Class A Stock issuable upon conversion of 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 4,576,789 shares and the percentage of
ownership would be 24.0% based upon 19,084,417 shares deemed outstanding
pursuant to Rule 13-3(d)(1) under the Securities Exchange Act.
(3) Excluding the shares of Class A Stock beneficially owned as a result of
his membership in the Group, Marvin Sands beneficially owns 792,283 shares of
Class A Stock, which is 4.9% of such Class. This total includes 788,867 shares
of Class A Stock owned by Mr. Sands' wife, Marilyn Sands. The 788,867 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 by Richard Sands,
Robert Sands and CWCP-II. Mr. Sands disclaims beneficial ownership with respect
to all shares owned by Marilyn Sands. Excluding the effect of his membership in
the Group, and adding the 248,100 shares of Class A Stock issuable pursuant to
the conversion feature of Class B Stock beneficially owned by Mr. Sands to his
792,283 shares of Class A Stock, the amount of Class A Stock beneficially owned
by Mr. Sands would be 1,040,383 shares and the percentage of ownership would be
6.3%. These amounts include an aggregate of 146,250 shares of Class B Stock as
to which Mr. Sands disclaims beneficial ownership. See Class B Stock table and
footnotes (13) and (14) below.
(4) Excluding the shares of Class A Stock beneficially owned as a result of
her membership in the Group, Marilyn Sands beneficially owns 788,867 shares of
Class A Stock, which is 4.9% of such Class. With respect to 787,501 shares of
the 788,867 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 her membership in the Group, and adding the
146,250 shares of Class A Stock issuable pursuant to the conversion feature of
Class B Stock beneficially owned by Marilyn Sands to her 788,867 shares of Class
A Stock, the amount of Class A Stock beneficially owned by Mrs. Sands would be
935,117 shares and the percentage of ownership would be 5.7%. See Class B Stock
table and footnotes (14) and (17) below. The 788,867 shares do not include 3,416
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
his membership in the Group, Richard Sands beneficially owns 314,304 shares of
Class A Stock or 1.9%. 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. Richard Sands disclaims beneficial ownership with respect to all
shares owned by his wife individually and as custodian for her children. Mr.
Sands is a managing partner of CWCP-I, which owns for its own account 308,951
shares of Class A Common Stock. Excluding the effect of his membership in the
Group, and adding the 691,279 shares of Class A Stock issuable pursuant to the
conversion feature of Class B Stock beneficially owned by Richard Sands to his
314,304 shares of Class A Stock, the amount of Class A Stock beneficially owned
by Mr. Sands would be 1,005,583 shares and the percentage of ownership would be
5.9%. See Class B Stock table and footnote (15) 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
by Richard Sands, Robert Sands and CWCP-II. See footnote (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
his membership in the Group, and excluding any ownership interest arising out of
The Robert Sands Descendants Trust, Robert Sands beneficially owns 322,880
shares of Class A Stock or 2.0%. Such total includes an aggregate of 18,564
shares of Class A Stock owned by Mr. Sands' wife, individually and as custodian
for their children. Robert Sands is a managing partner of CWCP-I, which owns for
its own account 308,951 shares of Class A Common Stock. Excluding the effect of
his membership in the Group and any ownership interest arising out of The Robert
Sands Descendants Trust, and adding the 691,051 shares of Class A Stock issuable
pursuant to the conversion feature of Class B Stock owned by Robert Sands to his
322,880 shares of Class A Stock, the amount of Class A Stock beneficially owned
by Robert Sands would be 1,013,931 shares and the percentage of ownership would
be 6.0%. See Class B Stock table and footnote (16) below. None of the foregoing
amounts include the remainder interest in 259,849 shares of Class A Stock owned
by Robert 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 by
<PAGE>
Richard Sands, Robert Sands and CWCP-II. See footnote (4) above. Robert Sands
disclaims beneficial ownership with respect to such 259,849 shares.
(7) As a result of capital contributions upon its formation on January 17,
1995, CWCP-I acquired 308,951 shares of Class A Stock or 1.9% (as of the Record
Date). The partners of CWCP-I are Richard Sands, Robert Sands and the Estate of
Laurie Sands. Upon final settlement or earlier distribution, the partnership
interests owned by the Estate of Laurie Sands will be distributed in accordance
with Ms. Sands' Will to a marital trust for the benefit of Ms. Sands' husband,
Andrew Stern, M.D., and to trusts for the benefit of Ms. Sands' children,
Abigail and Zachary Stern. Excluding the effect of its membership in the Group,
and adding the 678,964 shares of Class A Stock issuable pursuant to the
conversion feature of Class B Stock held by CWCP-I to its 308,951 shares of
Class A Stock, the amount of Class A Stock held by CWCP-I would be 987,915
shares and the percentage of ownership would be 5.8%. See Class B Stock table
and footnote (19) below.
(8) Excluding the shares of Class A Stock beneficially owned as a result of
its membership in the Group, CWCP-II beneficially owns no shares of Class A
Stock. The partners of CWCP-II are the Estate of Laurie Sands and The Robert
Sands Descendants Trust. Upon final settlement or earlier distribution, the
partnership interests owned by the Estate of Laurie Sands will be distributed in
accordance with Ms. Sands' Will to a marital trust for the benefit of Ms. Sands'
husband, Andrew Stern, M.D., and to trusts for the benefit of Ms. Sands'
children, Abigail and Zachary Stern. Excluding the effect of its membership in
the Group, and as a result of capital contributions upon its formation on
January 17, 1995 and the termination of Irrevocable Declaration of Trust No. 2,
and adding the 22,727 shares of Class A Stock issuable pursuant to the
conversion feature of Class B Stock owned by CWCP-II, the amount of Class A
Stock held by CWCP-II would be 22,727 shares and the percentage of ownership
would be 0.1%. See Class B Stock table and footnote (20) below. None of the
foregoing amounts include the remainder interest in 265,151 shares of Class A
Stock owned by CWCP-II. The remainder interest is in 787,501 shares of Class A
Stock, a life estate in which is held by Marilyn Sands. See footnote (4) above.
The remainder interest is held by Richard Sands, Robert Sands and CWCP-II.
CWCP-II disclaims beneficial ownership with respect to such 265,151 shares.
(9) Excluding the shares of Class A Stock beneficially owned as a result of
their membership in the Group, and excluding the 141,750 shares of Class A Stock
issuable pursuant to the conversion feature of the Class B Stock owned by the
two Trusts, neither of the Trusts beneficially owns any shares of Class A Stock.
If the 141,750 shares of Class A Stock issuable pursuant to the conversion
feature of Class B Stock owned by the two Trusts were included, the amount of
Class A Stock beneficially owned by the two Trusts would be 141,750 shares and
the percentage of ownership would be 0.9%. See Class B Stock table and footnote
(18) below.
(10) Excluding the shares of Class A Stock beneficially owned as a result
of its membership in the Group, and excluding the 506,250 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
506,250 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 3.0%. See Class B Stock Table and
footnote (17) below.
(11) The number of shares is as of December 2, 1994, 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 percentage of ownership
is calculated on the basis of 16,246,046 shares of Class A Stock outstanding on
the Record Date. The total number of shares consists of 878,929 shares of Class
A Stock owned by Rocker Partners, L.P. (5.4% 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 Amendments Nos. 1 through 11 thereto filed with the Securities
and Exchange Commission by David A. Rocker.
(12) The number of shares equals the number of shares of Class A Stock
reported by Wellington Management Company ("WMC") in its Schedule 13G dated
February 3, 1995, filed with the Securities and Exchange Commission. The
percentage of ownership is calculated on the basis of 16,246,046 shares of Class
A Stock outstanding on the Record Date. In its Schedule 13G, WMC states that, in
its capacity as investment advisor, it may be deemed the beneficial owner of
1,040,780 shares of Class A Stock of the Company which are owned by a variety of
investment advisory clients of WMC, which clients are entitled to receive
dividends and the proceeds from the sale of such shares. Further, the Schedule
13G states that no such client is known to have such interest with respect to
<PAGE>
more than five percent (5%) of the Class A Stock. The Schedule 13G also reports
that Wellington Trust Company, N.A. (BK) is the subsidiary of WMC which acquired
the Class A Stock reported on by WMC. The Schedule 13G indicates that of the
number of shares beneficially owned by WMC, WMC shares voting power with respect
to 733,430 shares and shares dispositive power with respect to 1,040,780 shares.
WMC reported no sole voting or sole dispositive power with respect to the Class
A Stock beneficially owned. For further information pertaining to WMC, reference
should be made to WMC's Schedule 13G.
(13) Excluding the shares of Class B Stock beneficially owned as a result
of his membership in the Group, Marvin Sands beneficially owns 248,100 shares of
Class B Stock or 7.4%. These 248,100 shares include an aggregate of 141,750
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 248,100 shares do not include 506,250 shares of
Class B stock held in Trust under the Irrevocable Trust Agreement described in
footnote (17) below.
(14) Excluding the shares of Class B Stock beneficially owned as a result
of her membership in the Group, Marilyn Sands beneficially owns 146,250 shares
of Class B Stock or 4.3%. These 146,250 shares include 141,750 shares of Class B
Stock held by two Trusts, of which Marilyn Sands is the trustee and a
beneficiary. See footnote (18) below. The 146,250 shares do not include 101,850
shares of Class B Stock owned by Marvin Sands. The 146,250 shares also do not
include 506,250 shares of Class B Stock held in Trust under the Irrevocable
Trust Agreement described in footnote (17) below.
(15) Excluding the shares of Class B Stock beneficially owned as a result
of his membership in the Group, Richard Sands beneficially owns 691,279 shares
of Class B Stock or 20.5%. This total includes 22,500 shares of Class B Stock
being distributed to Richard Sands as a result of the termination of Irrevocable
Declaration of Trust No. 2. See footnote (1) above. This total does not include
the 506,250 shares of Class B Stock held in Trust under the Irrevocable Trust
Agreement described in footnote (17) below. Richard Sands is a managing partner
of CWCP-I, which owns 678,964 shares of Class B Stock. See footnote (19) below.
(16) Excluding the shares of Class B Stock beneficially owned as a result
of his membership in the Group, and excluding his interest arising out of the
Robert Sands Descendants Trust, Robert Sands beneficially owns 691,051 shares of
Class B Stock or 20.5%. This total includes 22,273 shares of Class B Stock being
distributed to Robert Sands as a result of the termination of Irrevocable
Declaration of Trust No. 2. See footnote (1) above. This total does not include
the 506,250 shares of Class B Stock held in Trust under the Irrevocable Trust
Agreement described in footnote (17) below. Robert Sands is a managing partner
of CWCP-I, which owns 678,964 shares of Class B Stock. See footnote (19) below.
(17) Excluding the shares of Class B Stock beneficially owned as a result
of its membership in the Group, 506,250 shares of Class B Stock, or 15%, 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 and Robert Sands. Unanimity 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 and Robert Sands, in his
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.
(18) Excluding the shares of Class B Stock beneficially owned as a result
of their membership in the Group, the two Trusts own in the aggregate 141,750
shares of Class B Stock. Neither of these Trusts individually owns more than 5%
of the outstanding shares of Class B Stock.
(19) Excluding the shares of Class B Stock beneficially owned as a result
of its membership in the Group, as a result of capital contributions upon its
formation on January 17, 1995, CWCP-I acquired 678,964 shares of Class B Stock
or 20.2% (as of the Record Date). The partners of CWCP-I are Richard Sands,
Robert Sands and the Estate of Laurie Sands. Upon final settlement or earlier
distribution, the partnership interests owned by the Estate of Laurie Sands will
be distributed in accordance with Ms. Sands' Will to a marital trust for the
benefit of Ms. Sands' husband, Andrew Stern, M.D., and to trusts for the benefit
of Ms. Sands' children, Abigail and Zachary Stern.
<PAGE>
(20) Excluding the shares of Class B Stock beneficially owned as a result
of its membership in the Group, and as a result of capital contributions upon
its formation on January 17, 1995, and including shares which are being
distributed to it as a result of termination of Irrevocable Declaration of Trust
No. 2, CWCP-II owns 22,727 shares of Class B Common Stock or 0.7%. See footnote
(1) above. The partners of CWCP-II are the Estate of Laurie Sands and The Robert
Sands Descendants Trust. Upon final settlement or earlier distribution, the
partnership interests owned by the Estate of Laurie Sands will be distributed in
accordance with Ms. Sands' Will to a marital trust for the benefit of Ms. Sands'
husband, Andrew Stern, M.D., and to trusts for the benefit of Ms. Sands'
children, Abigail and Zachary Stern.
Information with respect to share ownership of management is set forth in
the table under "Nomination and Election of Directors."
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, 1995, 1994 and 1993, paid by
the Company to those persons who were, at August 31, 1995, (i) the chief
executive officer of the Company and (ii) the other four most highly compensated
executive officers of the Company during fiscal 1995 (the "Named Executives"):
<TABLE>
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SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Principal Year Salary ($) Bonus ($) Other Annual Restricted Securities LTIP All Other
Position (1) (2) (2) Compensation ($) Stock Underlying Payouts ($) Compen-
(3) Award(s)($) Options/ sation ($)
SARs (#) (4)
Richard Sands,
President and Chief 1995 $387,750 $148,314 $22,456
Executive Officer 1994 $371,635 $241,748 - - - - $31,001
(1) 1993 $176,522 $ 60,000 $21,960
Marvin Sands, 1995 $415,531 $158,941 $44,358
Chairman of the 1994 $401,196 $260,978 - - - - $41,203
Board (1) 1993 $248,173 $ 60,000 $27,950
Ellis Goodman,
Executive Vice
President, Chief 1995 $385,200 $308,150 $39,509 (6)
Executive Officer - 1994 $363,283 $214,200 - - - - $47,452
Spirits and Beers 1993 $ 62,769 $ 10,356 $ 6,497
(5)
Robert Sands,
Executive Vice 1995 $389,546 $149,001 15,000 $22,130
President and 1994 $322,356 $209,692 - - - - $30,643
General Counsel 1993 $161,105 $ 60,000 5,000 $19,099
Lynn Fetterman,
Sr. Vice President 1995 $198,769 $ 66,500 7,500 $26,558
and Chief Financial 1994 $163,077 $ 76,529 - - 6,000 - $25,284
Officer 1993 $143,047 $ 33,632 12,500 $21,089
</TABLE>
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(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 1995 consist of:
- Company contributions under the Company's Retirement Savings Plan (a
plan established under Section 401(k) of the Internal Revenue Code of 1986, as
amended (the "Code")): Richard Sands $2,310; Marvin Sands $642; Robert Sands
$1,148; and Lynn Fetterman $2,546.
- Company contributions to the Canandaigua Wine Company, Inc. Profit
Sharing Retirement Plan: Richard Sands $16,346; Marvin Sands $16,346; Robert
Sands $16,346; and Lynn Fetterman $16,346.
- Company contributions to the profit sharing plan for Ellis Goodman
under the Barton Incorporated Employees' Profit Sharing and 401(k) Plan:
$18,750.
- "Flex credits" under the Canandaigua Wine Company, Inc. flexible
health care benefits plan: Richard Sands $3,265; Marvin Sands $3,265; Robert
Sands $3,265; and Lynn Fetterman $3,265.
<PAGE>
- Imputed income from Company Group Term Life Insurance coverage:
Richard Sands $535; Marvin Sands $11,884; Ellis Goodman $2,250; Robert Sands
$346; and Lynn Fetterman $913.
- Company owned automobiles for: Marvin Sands $12,221; Robert Sands
$1,025; and Lynn Fetterman $3,488.
(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 provides for reimbursement of club memberships,
which amounted to $16,999 in fiscal year 1995. Barton Incorporated also made a
premium payment for a whole life (split dollar) policy which included $1,510
representing the economic benefit to Mr. Goodman during fiscal year 1995.
Stock Option Grants
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term
(a) (b) (c) (d) (e) (f) (g)
Name Number of % of Total Exercise or Base Expiration Date 5% ($) 10% ($)
Securities Options/SARs Price ($/Sh)
Underlying Granted to
Options/SARs Employees in
Granted (#) Fiscal Year
(1) (2)
Richard Sands, - - - - - -
President and Chief
Executive Officer
Marvin Sands, - - - - - -
Chairman of the
Board
Ellis Goodman, - - - - - -
Executive Vice
President, Chief
Executive Officer-
Spirits and Beers
Robert Sands,
Executive Vice
President and 15,000 5.2% $44.75 8/27/05 $422,100 $1,069,800
General Counsel (3) (4)
Lynn Fetterman, Sr.
Vice President and
Chief Financial 7,500 2.6% $44.75 8/27/05 $211,050 $ 534,900
Officer (3) (4)
</TABLE>
- ------------------
(1) The options were granted under the Company's Stock Option and Stock
Appreciation Right Plan and are "non-qualified stock options" (i.e., options
other than "incentive stock options" within the meaning of Section 422(b) of the
Code). The options granted in fiscal 1995 are exercisable starting on August 28,
2000.
(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 closing market price of a share
of Class A Stock on the date of grant.
The table on the next page sets forth information regarding stock options
which were exercised by the Named Executives during the fiscal year ended August
31, 1995, the number of shares acquired and the value realized, and the number
and value of exercisable and unexercisable stock options at August 31, 1995.
There are no outstanding SARs. The stock options which were exercised were
granted under the Company's Stock Option and Stock Appreciation Right Plan.
<PAGE>
<TABLE>
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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs at
Options/SARs at FY-End (#) (1) FY-End ($)
Name Shares Acquired Value Realized ($) Exercisable/ Exercisable/
on Exercise (#) Unexercisable Unexercisable
Richard Sands,
President and Chief - - - -
Executive Officer
Marvin Sands, Chairman
of the Board - - - -
Ellis Goodman,
Executive Vice - - - -
President, Chief
Executive Officer -
Spirits and Beers
Robert Sands,
Executive Vice
President and General - - 20,000 (Unexercisable) $226,250 (Unexercisable)
Counsel
Lynn Fetterman,
Sr. Vice President 2,500 (Exercisable) $108,264 (Exercisable)
and Chief Financial 4,250 (2) $137,611 26,000 (Unexercisable) $417,111 (Unexercisable)
Officer
</TABLE>
- ------------------
(1) Number of underlying securities relates to shares of Class A Stock
underlying options.
(2) Shares of Class A Stock were acquired on exercise of options.
<PAGE>
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),
Richard Sands (director and executive officer), and George Bresler (non-employee
director of the Company).
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 vital 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 1995, the Compensation Committee considered a variety of factors
without assigning specific weight to any particular factors. Among other factors
considered, the Compensation Committee took into account that net sales during
fiscal year 1995 increased approximately 44% to $906.5 million, that net income
increased approximately 249.6% to $41 million, and earnings per share on a fully
diluted basis amounted to $2.13, up from $0.74 for fiscal year 1994. (Excluding
the impact of nonrecurring restructuring expenses, net income was $42.4 million
in fiscal year 1995 as compared to $26.6 million in fiscal year 1994; and fully
diluted earnings per share increased to $2.20 in fiscal year 1995 from $1.65 in
fiscal year 1994.)
The Compensation Committee believes that these results reflect the
Company's rapid growth, which has been 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. The Compensation Committee also recognized that, during fiscal
year 1995, the Company was negotiating to acquire certain assets of United
Distillers Glenmore, Inc., including the Mr. Boston, Canadian LTD, Skol, Old
Thompson, Kentucky Tavern, Glenmore and di Amore distilled spirits brands and
the rights to the Fleischmann's and Chi Chi's distilled spirits brands under
long-term license agreements, which acquisition was agreed to on August 29,
1995, and was consummated on September 1, 1995.
<PAGE>
Compensation of CEO
For fiscal year 1995, the compensation of 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 William H. Mercer Incorporated
("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 performance goals.
These individual goals may include objective and subjective factors, such as
leadership and management skills, successful acquisitions or financings, and
improved performance of assets.
For fiscal year 1995, 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, as described above.
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
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 depends solely upon the future growth and share value of
the Company's Class A stock.
<PAGE>
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.
Richard Sands is the Company's President and Chief Executive Officer. Mr.
Bresler is a partner in the law firm of Rosner, Bresler, Goodman & Bucholz 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".)*
Comparison of Five Year Cumulative Total
Return Among Canandaigua Wine Company, Inc.,
The Nasdaq Market Index and
Selected Peer Group Index
-------------------------------------------------------
[GRAPH APPEARS HERE]
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Measurement period CANANDAIGUA NASDAQ SELECTED PEER GROUP
(Fiscal year Covered) WINE COMPANY, INC. Index Index
- --------------------- ------------------ ------ -------------------
Measurement PT -
08/31/90 $ 100 $ 100 $ 100
FYE 08/31/91 $ 222.22 $ 113.67 $ 116.13
FYE 08/31/92 $ 274.73 $ 115.60 $ 125.50
FYE 08/31/93 $ 452.05 $ 150.49 $ 144.60
FYE 08/31/94 $ 624.38 $ 164.43 $ 148.78
FYE 08/31/95 $ 949.06 $ 195.65 $ 165.97
</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 neither makes nor endorses any predictions as to future stock
performance. On November 10, 1995, the price of the Company's Class A Stock fell
approximately 38% and the price of the Company's Class B Stock fell
approximately 30%.
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 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.
<PAGE>
Certain Relationships and Related Transactions
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 of the Company and is currently 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 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 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, since 1993,
cash payments aggregating $72,559,782. Under the Stock Purchase Agreement, the
Goodman Recipients also received an aggregate of 673,021 shares of the Company's
Class A Stock. On 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 current director of the
Company) and his wife and children (collectively, the "Trusts") have received,
since 1993, cash payments aggregating $17,393,676. Under the Stock Purchase
Agreement, the Trusts also received an aggregate of 161,334 shares of the
Company's Class A Stock. On 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. George Bresler,
James 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.
<PAGE>
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 and
Robert Sands (in his individual capacity) will each receive one-half of the
proceeds of the Policy (less the reimbursement to the Company described below)
if they survive Marvin Sands and Marilyn Sands.
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 1995 with respect to this arrangement
was $209,063; of this amount, the Company, during December 1994, advanced
$200,380 and the Trust paid $8,683, 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, Secretary and a director of the Company. Each of Marvin Sands, Marilyn
Sands, Richard Sands and Robert Sands is the beneficial owner of more than five
percent of each class of the Company's Common Stock. Richard and Robert 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 1995 with respect to this Agreement was $19,370.
Under the terms of a letter agreement with the Company, if Mr. Fetterman's
employment with the Company is terminated by the Company for any reason, except
gross misconduct, then he is entitled to receive from the Company bi-weekly
severance payments equalling his then-current, bi-weekly, base gross
compensation for a period of nine (9) months from the date of his execution of a
mutually acceptable separation agreement with the Company.
<PAGE>
Richard Sands, Robert Sands and the Estate of 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 & Bucholz in New York, New York. 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.
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.
PROPOSAL NO. 1 - 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. (Pursuant to the Affiliates Agreement, certain holders of a
majority of the Class B Stock* 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. During
October, 1995, Messrs. Goodman and Solomon informed the Board of Directors of
the Company that, for personal reasons, they had decided not to stand for
re-election to the Board of Directors. On November 17, 1995, the Board of
Directors of the Company decreased the number of directors on the Board of
Directors to be elected at the Meeting from eight (8) to six (6). On the same
date, the Board of Directors nominated six (6) 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. The nominees for election to
the Board of Directors are Marvin Sands, Richard Sands, Robert Sands, George
Bresler, James A. Locke, III and Bertram E. Silk. Messrs. Bresler and Locke 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 six (6) nominees.
* The Class B Stockholders who executed the Affiliates Agreement are: Marvin
Sands; Marilyn Sands; Richard Sands; Robert Sands; Laurie Sands (deceased);
Marilyn Sands under Irrevocable Declaration of Trust Nos. 1 (subsequently
terminated), 2 (subsequently terminated), 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.
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 information appearing in the following table and in the notes thereto
has been furnished to the Company by the current directors and 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.
<PAGE>
<TABLE>
<S> <C> <C> <C>
Name and Background Served as Shares of Stock Percent
Director Beneficially of
Since Owned as of Class(1)
November 27, 1995
Marvin Sands, age 71, is the founder of the Company, which is the successor to
a business he started in 1945. Mr. Sands continues to serve as an officer of
the Company as Chairman of its Board of Directors. He has been a director of 1946 1,738,418 10.7% (2)
the Company and its predecessor since 1946 and was Chief Executive Officer Class A Stock (2)
until October 1993. He is the father of Richard Sands and Robert Sands. 2,838,371 84.3% (2)
Class B Stock (2)
Richard Sands, Ph.D., age 44, has been employed by the Company in various
capacities since 1979. He was elected Executive Vice President and a director
in 1982, became President and Chief Operating Officer in May 1986, and was 1982 1,738,418 10.7% (2)
elected President and Chief Executive Officer in October 1993. He is a son of Class A Stock (2)
Marvin Sands and the brother of Robert Sands. 2,838,371 84.3% (2)
Class B Stock (2)
Robert Sands, age 37, was appointed Vice President, General Counsel in June 1990
and was elected Executive Vice President of the Company in October 1993.
He has served as a director since 1989. From June 1986, until his 1989 1,738,418 10.7% (2)
appointment as Vice President, General Counsel, Mr. Sands was employed by the Class A Stock(2)
Company as General Counsel. He is a son of Marvin Sands and the brother of 2,838,371 84.3% (2)
Richard Sands. Class B Stock(2)
George Bresler, age 71, has been a director of the Company since 1992 and has
been engaged in the practice of law since 1957. From August 1987 through July 1992 10,000 (3)
1992, Mr. Bresler was engaged in the practice of law as a partner in the law Class A Stock
firm of Bresler and Bab, New York, New York. Currently, Mr. Bresler is a 0 -
partner in the law firm of Rosner, Bresler, Goodman & Bucholz in New York, New Class B Stock
York. (3)
Lynn Fetterman, age 48, joined the Company during April 1990 as its Vice
President, Finance and Administration, Secretary and Treasurer and was elected
Senior Vice President and Chief Financial Officer in October 1993. For more
than ten years prior to that, he was employed by Reckitt and Colman in various
executive capacities, including Vice President, Finance of its Airwick - 4,244 (4) (4)
Industries Division and Vice President, Finance of its Durkee-French Foods Class A Stock
Division. Mr. Fetterman's most recent position with Reckitt and Colman was as 0 -
its Vice President - Controller. Reckitt and Colman's principal business Class B Stock
relates to consumer food and household products.
Ellis Goodman, age 58, has been a director and Vice President since July 1993
and was elected as an Executive Vice President of the Company in October 1993 259,680 (5) 1.6% (5)
1993. Mr. Goodman has been Chief Executive Officer of Barton Incorporated Class A Stock
since 1987 and Chief Executive Officer of Barton Brands, Ltd. (predecessor of 0 -
Barton Incorporated) since 1982. Also, Mr. Goodman is currently a director of Class B Stock
American National Bank and Trust Company of Chicago, a subsidiary of First
Chicago Corporation.
James A. Locke, III, age 53, has served as a director of the Company since 1983 3,082 (6) (6)
1983. He is a partner in the law firm of Harter, Secrest & Emery, Rochester, Class A Stock
New York, which firm is the Company's principal outside counsel, and has been 33 (6)
associated with the firm since 1967. Class B Stock
Bertram E. Silk, age 63, has been a director and a Vice President of the
Company since 1973 and was elected a Senior Vice President of the Company in
October 1993. He has been employed by the Company since 1965. Currently, Mr. 1973 4,607 (7) (7)
Silk is in charge of the Company's grape grower relations in California. Class A Stock
Before moving from Canandaigua, New York to California in 1989, Mr. Silk was 1,125 (7)
in charge of production for the Company. From 1989 to August 1994, Mr. Silk Class B Stock
was in charge of the Company's grape juice concentrate product line in
California.
Sir Harry Solomon, age 58, has been a director since July 1993. From 1976 to 1993 92,190 (8) (8)
1993, he was Chairman of the Board of Hillsdown Holdings plc, a British food Class A Stock
company. Currently, he is a director of Hillsdown Holdings plc, Frogmore 0 -
Estates plc, a real estate development and investment company, and Princedale Class B Stock
plc, an industrial design and management consulting company, all of which are
publicly quoted United Kingdom companies. Sir Harry is also a director of
U.S. Industries, Inc., an industrial conglomerate.
All Executive Officers and Directors as a Group (10 persons) 2,112,221 13.0% (9)
Class A Stock
2,839,529 84.4% (10)
Class B Stock
</TABLE>
- -----------------
(1) Unless otherwise noted, percentages of ownership are calculated on the basis
of 16,246,046 shares of Class A Stock outstanding and 3,365,958 shares of Class
B Stock outstanding on November 27, 1995.
(2) See tables and footnotes under "Beneficial Ownership," above.
<PAGE>
(3) 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. The percentage of the Class
A Stock beneficially owned by Mr. Bresler does not exceed one percent of such
Class.
(4) The number of shares of Class A Stock includes presently exercisable options
to purchase up to 2,500 shares of Class A Stock. The percentage of the Class A
Stock beneficially owned by Mr. Fetterman does not exceed one percent of such
Class.
(5) 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.
(6) The number of shares of Class A Stock includes presently exercisable options
to purchase up to 3,000 shares of Class A Stock 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.
(7) The number of shares of Class A Stock includes 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) 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.
(9) The percentage of ownership of all executive officers and directors as a
group is based on 16,252,704 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 5,500 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 4,950,592 shares and the percentage
of ownership would be 25.9%, based upon 19,091,075 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 seven meetings and additionally
acted by unanimous written consent on eight occasions during the fiscal year
ended August 31, 1995. There were also two meetings of the Audit Committee
during the fiscal year ended August 31, 1995. The members of the Audit Committee
are Richard Sands and Messrs. Bresler and Locke. The Compensation Committee
acted by unanimous written consent on eight occasions during the fiscal year
ended August 31, 1995. 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 1995.
During the fiscal year ended August 31, 1995, Richard Sands filed two reports
late, with one report pertaining to four transactions and the other report
pertaining to one transaction; Robert Sands filed two reports late, with one
report pertaining to six transactions and the other report pertaining to one
transaction; Laurie Sands filed one report late pertaining to six transactions;
each of The 1995 Robert Sands Descendants Trust, CWC Partnership - I and CWC
Partnership - II filed an Initial Statement of Beneficial Ownership report late;
The 1995 Robert Sands Descendants Trust filed one other report late pertaining
to two transactions; each of Marvin Sands and Marilyn Sands filed one report
<PAGE>
late pertaining to four transactions; and each of Trust for the Benefit of
Abigail Stern U/W Laurie Sands and Trust for the Benefit of Zachary Stern U/W
Laurie Sands filed a late report pertaining to its initial beneficial ownership
of securities of the Company. 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.
PROPOSAL NO. 2 - PROPOSED AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION AUTHORIZING
A CLASS OF PREFERRED STOCK
General
The Board of Directors of the Company has adopted a resolution unanimously
approving and recommending to the Company's stockholders for their approval, an
Amended and Restated Certificate of Incorporation to authorize the issuance of
1,000,000 shares of a class of preferred stock, par value $.01 per share
("Preferred Stock"). The text of the proposed amendments to the Restated
Certificate of Incorporation is attached to this Proxy Statement as Annex A.
Except as set forth in Annex A, there are no other proposed amendments to the
Company's Restated Certificate of Incorporation.
The Company's Restated Certificate of Incorporation does not currently
authorize the issuance of shares of preferred stock. While it is not currently
contemplated that any shares of Preferred Stock will be issued by the Company in
the foreseeable future, the Company believes that this class of securities will
provide greater flexibility for financing the Company's activities in the
future. Since no Preferred Stock has been issued, and the issuance of the same
is not currently contemplated, it is not possible to know whether such Preferred
Stock, if issued, would have preference over the holders of Class A Stock and
Class B Stock in the distribution of any assets in the event of a liquidation.
The Board of Directors believes the authorization of the Preferred Stock is
in the best interests of the Company and its stockholders and believes it
advisable to authorize such shares.
Board's Authority to Issue Preferred Stock
The designations, preferences, conversion rights, cumulative, relative,
participating, optional or other rights, including voting rights,
qualifications, limitations or restrictions of the Preferred Stock will be
determined by the Board of Directors of the Company. As such, the Board of
Directors of the Company will, if this proposal is approved by the Company's
stockholders, be entitled to authorize the issuance of 1,000,000 shares of
Preferred Stock in one or more series, with such rights, qualifications,
limitations and restrictions as may be determined in the Board's sole
discretion, with no further authorization required of the stockholders. The
proposed amendments to the Restated Certificate of Incorporation are subject to
the consent of certain banks under the Company's bank credit agreement. The
Company expects to receive this consent prior to the Meeting.
The Board of Directors is required to make any determination to issue
shares of Preferred Stock based on its judgment as to the best interests of the
stockholders and the Company. Although the Board of Directors has no present
intention of doing so, it could issue shares of Preferred Stock that could,
depending on the terms of such series, make more difficult or discourage an
attempt to obtain control of the Company by means of a merger, tender offer,
proxy contest or other means. For example, such shares could be used to create
voting or other impediments or to discourage persons seeking to gain control of
the Company. Such shares could be privately placed with purchasers favorable to
the Board of Directors in opposing such action. In addition, the Board of
Directors could authorize holders of a series of Preferred Stock to vote either
separately as a class or with the holders of the Company's Class A Stock or
Class B Stock on any merger, sale or exchange of assets by the Company or any
other extraordinary corporate transaction. The existence of the additional
authorized shares could have the effect of discouraging unsolicited takeover
attempts. The issuance of new shares also could be used to dilute the stock
ownership of a person or entity seeking to obtain control of the Company should
the Board of Directors consider the action of such entity or person not to be in
the best interests of the stockholders and the Company.
The Company currently has no agreements or understandings with any third
party to effect any sale or offering of Preferred Stock and no assurances are
given that any sale will in fact be effected. Therefore, the terms of any
Preferred Stock subject to this Proposal No. 2 cannot be stated or estimated
with respect to any or all of the shares authorized.
Vote Required
In accordance with applicable Delaware law and the Company's Restated
Certificate of Incorporation, approval of Proposal No. 2 to authorize a class of
preferred stock requires the affirmative vote of the holders of a majority of
the outstanding shares of Class A and Class B Stock entitled to vote thereon,
voting together as a single class, provided that the holders of Class A Stock
shall have one (1) vote per share and the holders of Class B Stock shall have
ten (10) votes per share.
<PAGE>
No Dissenters' Rights
Under applicable Delaware law, stockholders are not entitled to dissenters'
rights of appraisal with respect to the proposed Amended and Restated
Certificate of Incorporation which authorizes a class of preferred stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS APPROVE THE AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION TO AUTHORIZE A CLASS OF PREFERRED
STOCK AND ACCORDINGLY RECOMMENDS THAT YOU VOTE FOR PROPOSAL NO. 2.
PROPOSAL NO. 3 - 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,
1995, and the Board of Directors has again selected Arthur Andersen LLP as the
Company's independent auditors for the fiscal year ending August 31, 1996. 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.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
In order for any stockholder proposal to be included in the Company's proxy
statement to be issued in connection with the 1997 Annual Meeting of
Stockholders, such proposal must be delivered to the Company no later than
August 29, 1996.
FINANCIAL INFORMATION
The Company has furnished its financial statements to stockholders in its 1995
Annual Report, which accompanies this Proxy Statement. In addition, the Company
will promptly provide, without charge to any stockholder, on the request of such
stockholder, an additional copy of the 1995 Annual Report and the Company's most
recent Form 10-K. Written requests for such copies should be directed to
Canandaigua Wine Company, Inc., Attention: Kristen H. Jenks, Director, Investor
Relations, 116 Buffalo Street, Canandaigua, New York 14424; telephone number
(716) 394-7900.
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
Robert Sands, Secretary
Dated at Canandaigua, New York
December 27, 1995
<PAGE>
ANNEX A
PROPOSED AMENDMENTS TO RESTATED
CERTIFICATE OF INCORPORATION TO
AUTHORIZE A CLASS OF PREFERRED STOCK
1. Article 4 is hereby amended and restated in its entirety as follows:
4. Capitalization; General Authorization. The total number of
shares of stock which the Corporation shall have authority to issue is
Eighty-One Million (81,000,000) consisting of:
(a) Class A Common. Sixty Million (60,000,000) shares
designated as Class A Common Stock, having a par value of One Cent ($.01) per
share (the "Class A Common");
(b) Class B Common. Twenty Million (20,000,000) shares
designated as Class B Common Stock, having a par value of One Cent ($.01) per
share (the "Class B Common"); and
(c) Preferred Stock. One Million (1,000,000) shares designated
as Preferred Stock, having a par value of One Cent ($.01) per share (the
"Preferred Stock").
2. Article 5 is hereby amended by adding the following paragraph as the
first paragraph of Article 5:
The designations, powers, preferences and relative participation,
optional or other special rights and the qualifications, limitations and
restrictions thereof in respect of each class of capital stock of the
Corporation are as follows:
3. Article 5 is hereby further amended by adding the following paragraph as
the last paragraph of Article 5:
Preferred Stock. Subject to the terms contained in any designation of
a series of Preferred Stock, the Board of Directors is expressly authorized, at
any time and from time to time, to fix, by resolution or resolutions, the
following provisions for shares of any class or classes of Preferred Stock of
the Corporation or any series of any class of Preferred Stock:
(a) the designation of such class or series, the number of shares to
constitute such class or series which may be increased or decreased (but not
below the number of shares of that class or series then outstanding) by
resolution of the Board of Directors, and the stated value thereof if different
from the par value thereof;
(b) whether the shares of such class or series shall have voting
rights, in addition to any voting rights provided by law, and, if so, the terms
of such voting rights;
(c) the dividends, if any, payable on such class or series, whether
any such dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall be payable, and the
preference or relation which such dividends shall bear to the dividends payable
on any shares of stock of any other class or any other series of the same class;
(d) whether the shares of such class or series shall be subject to
redemption by the Corporation, and, if so, the times, prices and other
conditions of such redemption;
(e) the amount or amounts payable upon shares of such series upon, and
the rights of the holders of such class or series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any distribution of
the assets, of the Corporation;
(f) whether the shares of such class or series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and manner
in which any such retirement or sinking fund shall be applied to the purchase or
redemption of the shares of such class or series for retirement or other
corporate purposes and the terms and provisions relative to the operation
thereof;
(g) whether the shares of such class or series shall be convertible
into, or exchangeable for, shares of stock of any other class or any other
series of the same class or any other securities and, if so, the price or prices
or the rate or rates of conversion or exchange and the method, if any, of
adjusting the same, and any other terms and conditions of conversion or
exchange;
(h) the limitations and restrictions, if any, to be effective while
any shares of such class or series are outstanding upon the payment of dividends
or the making of other distributions on, and upon the purchase, redemption or
other acquisition by the Corporation of the Common Stock or shares of stock of
any other class or any other series of the same class;
<PAGE>
(i) the conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issue of any additional stock,
including additional shares of such class or series or of any other series of
the same class or of any other class;
(j) the ranking (be it pari passu, junior or senior) of each class or
series vis-a-vis any other class or series of any class of Preferred Stock as to
the payment of dividends, the distribution of assets and all other matters; and
(k) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations and
restrictions thereof, insofar as they are not inconsistent with the provisions
of this Restated Certificate of Incorporation, to the full extent permitted in
accordance with the laws of the State of Delaware.
The powers, preferences and relative, participating, optional and
other special rights of each class or series of Preferred Stock, and the
qualifications, limitations or restrictions thereof, if any, may differ from
those of any and all other series at any time outstanding.
<PAGE>
CANANDAIGUA WINE COMPANY, INC.
PROXY FOR CLASS A COMMON STOCK AND CLASS B COMMON STOCK
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 18, 1996, at 11:00 a.m.,
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 four 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/or "ESP" 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, AND FOR PROPOSAL 3.
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.
<TABLE>
<S>
<C> <C>
Class A Stockholders Class B Stockholders 2. Proposal to approve an Amended and Restated
George Bresler, James A. Locke, III Marvin Sands, Richard Sands, Robert Certificate of Incorporation of the Company
Sands, Bertram E. Silk which amends the Company's Restated Certificate
FOR WITHHELD FOR WITHHELD of Incorporation to authorize the issuance of
[ ] [ ] [ ] [ ] 1,000,000 shares of a class of preferred stock.
FOR AGAINST ABSTAIN
[ ]----------------------- [ ]-------------------------- [ ] [ ] [ ]
For, except vote withheld For, except vote withheld
from the following nominee: from the following nominee(s): 3. Proposal to approve and ratify the selection of
Arthur Andersen LLP, Certified Public Account-
ants, as the Company's independent auditors for
the fiscal year ending August 31, 1996.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. 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 [ ]
NOTE: Please date and sign name exactly as it appears hereon. Executors, administrators,
trustees, etc. should so indicate when signing. If the stockholder is a corporation, the
The undersigned acknowledges receipt full corporate name should be inserted and the Proxy signed by an officer of the
with this Proxy of a copy of the corporation, indicating his title.
Notice of Annual Meeting and Proxy
Statement dated December 27, 1995, Signature:--------------------------------------------------- Dated:------------------------
describing more fully the proposals
set forth herein. Signature:--------------------------------------------------- Dated:------------------------
</TABLE>
