SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box: [ ]
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
The Chalone Wine Group, Ltd.
----------------------------------------------------------------------
(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):
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of the transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
<PAGE>
[ ] 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.:
SCHEDULE 14A
(3) Filing Party:
The CHALONE Wine Group, Ltd.
(4) Date Filed:
July 2, 1998
<PAGE>
----------
CHALONE
Wine Group
----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
THE CHALONE WINE GROUP, LTD.
To be held on August 20, 1998
TO ALL SHAREHOLDERS:
It is with great pleasure that we invite you to the Annual Meeting of
Shareholders of The CHALONE Wine Group, Ltd., which will be held at 10:00 a.m.,
Pacific time, on Thursday, August 20, 1998, at the Company's executive offices,
621 Airpark Road, Napa, California, for the following purposes:
1. Election of directors for the ensuing year.
2. Ratification of the appointment of Deloitte & Touche LLP as the
Company's independent certified public accountants for the fiscal year
ending March 31, 1999.
3. Consideration and action on any other matter properly brought before the
meeting.
Shareholders of record as of the close of business on June 15, 1998, the
record date, are entitled to notice of, and to vote at, the Annual Meeting and
any postponement or adjournment thereof.
You are requested to date, complete and sign the enclosed proxy, which is
solicited by the Company's Board of Directors, and to return it promptly in the
envelope provided. Even if you return this proxy, and you later decide to
attend the Annual Meeting, you may vote your shares in person by completing a
ballot or proxy at the meeting.
By Order of the Board of Directors,
/s/ W. Philip Woodward
W. Philip Woodward
Chairman of the Board
Napa, California
July 2, 1998
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. WHETHER OR
NOT YOU PLAN TO BE PRESENT AT THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE
IT IS VOTED AT THE ANNUAL MEETING.
- --------------------------------------------------------------------------------
<PAGE>
----------
CHALONE
Wine Group
----------
Acacia Winery Canoe Ridge Vineyard Carmenet Vineyard Chalone Vineyard Edna
Valley Vineyard Ch-teau Duhart-Milon
PROXY STATEMENT
------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
August 20, 1998
------------------------------------------
INFORMATION CONCERNING THE SOLICITATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The CHALONE Wine Group, Ltd., a California
corporation (the "Company"), for use at the 1998 Annual Meeting of Shareholders
of the Company, to be held at 10:00 a.m., Pacific time, on Thursday, August 20,
1998, at the Company's executive offices, 621 Airpark Road, Napa, California and
any adjournments thereof (the "Meeting").
Only holders of the Company's common stock (the "Common Stock") of record
as of the close of business on June 15, 1998, the record date fixed by the Board
of Directors, will be entitled to notice of, and to vote at, the Meeting. As of
the record date, 8,540,653 shares of Common Stock were issued and outstanding.
Holders of Common Stock are entitled to cast one vote for each share held of
record by them on each proposal submitted to a vote at the Meeting except that,
for the election of directors, upon request made prior to the commencement of
voting, each shareholder will be accorded cumulative voting rights, under which
he or she will be entitled to as many votes as equals the number of shares held,
multiplied by the number of directorship positions to be filled (10), all of
which may be cast for a single candidate or distributed among any or all
candidates in such proportions as each shareholder sees fit. Shareholders may
vote in person or by proxy. Execution of a proxy will not in any way affect a
shareholder's right to attend the Meeting and vote in person. Any shareholder
giving a proxy has the right to revoke that proxy by (i) filing a later-dated
proxy or a written notice of revocation with the Secretary of the Company at the
address set forth above at any time before it is exercised, or (ii) voting in
person at the Meeting.
The Company's Secretary, Assistant Secretary and Chairman were appointed by
the Board of Directors as the persons to receive and vote the proxies at the
Meeting. All properly executed proxies returned in time to be counted at the
Meeting will be voted as stated below under "Voting Procedures." Any shareholder
giving a proxy has the right to withhold authority to vote for any individual
nominee to the Board of Directors by so marking the proxy in the space provided
thereon. Where a choice has been specified on the proxy with respect to the
foregoing matters, including the election of directors, the shares represented
by the proxy will be voted in accordance with the choice specified. If no choice
is specified, the proxy will be voted as follows:
Proxy Item No. 1. FOR election of management's proposed slate of directors,
as set forth herein.
Proxy Item No. 2. FOR ratification of the appointment of Deloitte & Touche
LLP as the Company's independent certified public accountant for the fiscal year
ending March 31, 1999.
1
<PAGE>
The Board of Directors knows of no other matters to be presented at the
Meeting. If any other matter should be presented at the Meeting upon which a
vote properly may be taken, including any proposal to adjourn the Meeting,
shares represented by all proxies received by the Board of Directors will be
voted with respect thereto in accordance with the judgment of the persons named
as attorneys in the proxies.
An Annual Report to Shareholders on Form 10-K, containing financial
statements for the fiscal year ended March 31, 1998, was mailed previously to
all shareholders entitled to vote. This Proxy Statement and the form of proxy
were first mailed to shareholders on or about July 2, 1998.
VOTING PROCEDURES
The presence, in person or by proxy, of at least a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting is necessary
to establish a quorum for the transaction of business. Shares represented by
proxies pursuant to which votes have been withheld from any nominee for
director, or which contain one or more abstentions, including broker non-votes,
are counted as present for purposes of determining the presence or absence of a
quorum for the Meeting.
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Meeting as specified in such proxies. The ten
director-nominees receiving the highest number of affirmative votes of the
shares present or represented and voting on the election of directors at the
Meeting will be elected as directors.
For all other matters being submitted to shareholders at the Meeting, the
affirmative vote of the majority of shares present, in person or represented by
proxy, and voting on that matter is required for approval.
ELECTION OF DIRECTORS
(Proxy Item No. 1)
At a regular meeting of the Board of Directors, the Board amended Article
III, Section 3.2 of the Bylaws of this Corporation to reduce the size of the
Board to ten (10) directors. Management is proposing re-election of all ten of
the present directors. Three (3) nominees, Messrs. Istel, Rothschild and Salin,
have been designated by Domaines Barons de Rothschild (Lafite) ("DBR"), and two
(2) nominees, Messrs. Hojel and Plant, have been designated by SFI Intermediate,
Ltd. ("SFI"), pursuant to the terms of a voting agreement between the Company,
DBR, SFI and W. Philip Woodward, as more fully described below under the caption
"Voting Agreement."
All of the nominees for election are currently members of the Company's
Board of Directors. Thomas B. Selfridge, the Company's President, was appointed
by the Board on May 14, 1998 in accordance with the Bylaws to fill the vacancy
created by the death of Richard H. Graff in February, and will be standing for
election for the first time. William L. Hamilton will not stand for re-election.
At the Meeting, directors will be elected to serve until the 1999 Annual
Meeting or until their successors have been duly elected and qualified. Each
nominee has consented to be named in this proxy statement and has consented to
serve as a director if so elected and qualified. The Company has no reason to
believe that any of the nominees will not be available to serve; if, however,
any nominee should for any reason become unable or unwilling to serve, the Board
of Directors may vote to fix the number of directors at a lesser number, but not
less than seven (7), or direct that the shares represented by proxies received
by the Company be voted for the election of such person as the Board of
Directors may recommend, in place of the unavailable nominee.
Director-Nominees
W. Philip Woodward. Age 59. Mr. Woodward is a co-founder of the Company and
has served as the Company's Chief Executive Officer since 1974. He has been a
director of the Company since 1972, its chairman since August, 1997, and he is
an ex officio member of the Board's Executive Committee. He joined the Company
as Vice President and Chief Financial Officer in 1972 and in 1974 became its
Chief
2
<PAGE>
Executive Officer. He continued as Chief Financial Officer until 1983. Mr.
Woodward is a director of DBR, the Northern Trust Bank of California, Hog
Island Oyster Company, the Wine Institute and the American Vitners'
Association. He also serves as President and a director of the Marin Theater
Company. Mr. Woodward is a member of the compensation committees of the boards
of Hog Island Oyster Company and The Marin Theater Company.
Eric de Rothschild. Age 57. Baron Eric de Rothschild has been a director of
the Company since 1989, and is a member of the Board's Executive Committee.
Since 1982, he has been a Managing Partner of DBR. He also is chairman of
Paris-Orleans, S.A., a publicly held French company which is one of DBR's major
shareholders; chairman of Francarep, a subsidiary of Paris-Orleans, S.A.; and a
Managing Partner of Ch-teau Lafite Rothschild, a shareholder of DBR. In
addition, Baron de Rothschild is a partner of Rothschild & Cie. Banque, Paris,
France; chairman of Rothschild Asset Management; and a director of N.M.
Rothschild & Sons, London; J.I.B.; and Rothschild Continuation.
Mark A. Hojel. Age 29. Mr. Hojel has been a director of the Company since
1995, and is a member of the Board's Audit Committee. Since 1996, Mr. Hojel has
been President of Monte Xanic, a premium winery located in Mexico City, Mexico.
Mr. Hojel holds a Master's Degree in Business Administration from the Anderson
School at the University of California at Los Angeles and was employed as an
Industrial Engineer from January of 1992 through August of 1994 at PGI
International of Mexico City, Mexico.
Yves-Andre Istel. Age 62. Mr. Istel has been a director of the Company
since 1995 and is a member of the Board's Audit Committee. From 1993 to 1997,
Mr. Istel has been Vice Chairman of Rothschild Inc. He also serves as Vice
Chairman of Rothschild Europe, B.V., and Director of Rothschild et Cie. Banque,
Paris, France.
C. Richard Kramlich. Age 63. Mr. Kramlich has been a director of the
Company since 1990, and is a member of the Board's Executive Committee. He was a
director of Carmenet Vineyard, Inc. from its inception until its merger into the
Company in 1984. Between 1984 and 1990, he served as an advisor to the Board.
Since 1978, Mr. Kramlich has been General Partner of New Enterprise Associates,
a San Francisco-based venture capital firm. He also is a director of Ascend
Communications, Inc., Macromedia, Corp., Silicon Graphics, Inc., Syquest
Technology, Inc. and Com 21. Previously, he has served as a director of Graphix
Zone, Lumisys, Inc. and Neopath, Inc.
William G. Myers. Age 71. Mr. Myers has been a director of the Company
since 1996, and is a member of the Board's Executive and Audit Committees. Since
1962, Mr. Myers has been Chief Executive Officer of Ojai Ranch and Investment
Company, Inc. Mr. Myers currently serves as a director of Security Capital
Industrial Trust; Security Capital Pacific Trust; S.E.E. International; The
Library of Congress, James Madison Council; California Historical Society
Foundation; The H.C. and R.C. Merritt Trust; Santa Barbara Botanical Garden; The
Nature Conservancy; and St. Joseph's Health & Retirement Center Foundation. Mr.
Myers has served as a director in the past for Idetek, Inc., Bank of A. Levy,
Bradley Real Estate Investment Trust, Oregon Shakespeare Festival and Santa
Barbara Museum of Art. Mr. Myers is a member of the compensation committees of
the boards of Security Capital Industrial Trust and Security Capital Pacific
Trust.
James H. Niven. Age 55. Mr. Niven has been a director of the Company since
1993 and is a member of the Board's Audit Committee. Since 1989, Mr. Niven has
been President of Paragon Vineyard Co., Inc., the Company's partner in the Edna
Valley Vineyard Joint Venture (the "Edna Valley Joint Venture"). Mr. Niven also
is a partner in Niven & Smith, a San Francisco law firm specializing in real
estate matters.
Phillip M. Plant. Age 52. Mr. Plant has been a director of the Company
since 1996, and is a member of the Board's Executive Committee. Since 1985, Mr.
Plant has been Senior Vice-President, Investment Counsel of Dain Rauscher Corp.
(formerly Rauscher, Pierce, Refsnes, Inc.), a regional investment banking and
brokerage firm. Mr. Plant also serves as an advisory director of the American
National Bank, Corpus Christi, Texas, and as a director of Plymouth Mortgage
Investments and Rauscher, Pierce & Clark, London, England.
Christophe Salin. Age 43. Mr. Salin has been a director of the Company
since 1991, and is chairman of the Board's Executive Committee. Since 1990, he
has been President and a director of DBR, which he
3
<PAGE>
joined in 1985. He also is chairman of Domaines Barons de Rothschild (Lafite)
Distribution and of Societ- de Gestion et d'Assistance Viticole. He serves as a
director of Ch-teau Rieussec, Societ- Financiere Viticole, Domaines Barons de
Rothschild Development, Vi-a Los Voscos, Quinta do Carmo, La Viticole de
Participation and other affiliates of DBR.
Thomas B. Selfridge. Age 54. Mr. Selfridge was appointed to the Company's
Board of Directors in May 1998. He is an ex officio member of the Board's
Executive Committee and serves as a director of Edna Valley Vineyard and Canoe
Ridge Winery. He joined the Company as President on January 1, 1998. Before
joining the Company, Mr. Selfridge was Executive Vice President of
Kendall-Jackson Winery, Ltd. He joined Kendall-Jackson in 1990 as Vice-President
of Production, and had wide ranging responsibilities over the areas of brand
marketing, creative services, hospitality, public relations, winemaking,
bottling, grower management, quality control and warehouse operations. In all,
Mr. Selfridge has over 25 years experience in the wine industry, initially as
the winemaker at Beaulieu Vineyard where he became president in 1983. He holds a
Masters Degree in Enology and Viticulture from the University of California at
Davis, a Masters Degree in Economics from San Francisco State University and he
has done doctoral studies at the University of Pennsylvania's Wharton School of
Business.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR MANAGEMENT'S
NOMINEES.
Other Executive Officers
The information required by this item is furnished in a separate item
captioned "Executive officers of the registrant," and included in Part I of the
Company's annual report filed on Form 10-K.
Committees
Executive Committee. The Company has a five-person Executive Committee,
with specific jurisdiction over employment and compensation matters concerning
the Company's senior executive officers, compensation and benefits for other
employees and such additional matters customarily handled by such committees.
The Executive Committee's membership currently includes Messrs. Woodward,
Rothschild, Salin, Plant and Myers. The Committee met six times during the year
ended March 31, 1998.
Audit Committee. The Audit Committee, comprised of Messrs. Hojel, Niven and
Istel, concerns itself with the Company's internal accounting controls as well
as meeting and conferring with the Company's certified public accountants and
reviewing the results of their auditing engagement. The Audit Committee
typically meets once annually in conjunction with the Company's annual audit,
including in 1998, with all members in attendance.
Board Meetings and Compensation
The Company's Board of Directors met four times during the year ended March
31, 1998. Each director attended at least 75% of the aggregate of those meetings
and the meetings of those committees of which he was a member, with the
exception of Messrs. Rothschild, Istel and Kramlich.
Each director who is not an employee of the Company is compensated on the
basis of $500 per year plus $100 for each Board of Directors meeting attended
and receives reimbursement of extraordinary travel costs to attend meetings. No
additional compensation is or has been paid for committee participation or
special assignments.
Non-employee directors also receive quarterly grants of options to purchase
the Company's stock, pursuant to the Company's Non-Discretionary Stock Option
Plan. During 1998, the nine non-employee directors received options covering a
total of 27,240 shares. The exercise price in each instance was the market value
of the stock on the date of grant. The weighted average per-share exercise price
of all such options is $11.69.
Shareholding Information as to Directors, Director Nominees and Management
The following table sets forth information as of June 15, 1998 respecting
the beneficial ownership of the Company's no par value common stock, the
Company's only class of voting securities, by (i) all
4
<PAGE>
persons known by the Company to own more than five percent of the Company's
common stock, (ii) each director, director-nominee, and the executive officers
named below under "Executive Compensation-- Summary Compensation Table," and
(iii) all directors and executive officers as a group.
Except as may be noted in the footnotes to the table, the Company believes
that the persons named in the table have sole voting and investment power with
respect to all shares of common stock shown as beneficially owned by them,
subject to community property laws where applicable.
Beneficial Owner(1) Shares Beneficially Owned(2) Percent of Class
- ---------------------------------- ---------------------------- ----------------
Domaines Barons de Rothschild
(Lafite)(3) ..................... 4,530,301 51.2%
33 rue de la Baume
75008 Paris, France
SFI Intermediate Ltd.(4) ......... 1,858,583 21.0%
c/o HM International Inc. .......
5810 East Skelly Drive,
Suite 1000
Tulsa, OK 74135-6403
W. Philip Woodward(5) ............ 420,439 4.8%
William G. Myers(6) .............. 390,265 4.4%
Thomas B. Selfridge(7) ........... -- --
William L. Hamilton(8) ........... 135,697 1.5%
C. Richard Kramlich(9) ........... 46,232 0.5%
Lawrence M. Brooks(10) ........... 78,721 0.9%
Robert B. Farver(11) ............. 37,410 0.4%
Christophe Salin(12) ............. 15,716 0.2%
Eric de Rothschild(13) ........... 13,676 *
James H. Niven(14) ............... 12,966 *
Mark A. Hojel(15) ................ 7,676 *
Phillip M. Plant(16) ............. 7,006 *
Yves-Andr-e Istel(17) ............ 6,676 *
All directors, director-nominees
and executive officers
as a group (13 persons)(18) .... 1,172,480 13.3%
* Less than 1% ownership.
- ------------
1 Pursuant to Item 403(a) of Regulation S-K, addresses are provided only for
beneficial owners of more than 5% of the Company's common stock.
2 Shares of common stock subject to stock options exercisable within 60 days
from June 15, 1998 are deemed outstanding for computing the percentage of
the class of securities owned by the person or group holding such
securities.
3 Includes 416,667 shares issuable upon exercise of warrants and 624,476
shares issuable upon conversion of $5 million principal amount of the
Company's 5% Convertible Subordinated Debentures due April 18, 1999.
4 Includes 416,667 shares issuable upon exercise of warrants and 56,770 shares
issuable upon conversion of $5 million principal amount of the Company's 5%
Convertible Subordinated Debentures due April 18, 1999, and 6,956 shares
issuable upon exercise of stock options which are vested or will vest within
5
<PAGE>
the next 60 days. SFI Intermediate Ltd. is a Texas limited partnership of
which GHA 1 Holdings, Inc. is the general partner. Phyllis S. Hojel, mother
of Mark A. Hojel, is the sole stockholder and director of GHA 1 Holdings,
Inc. Mrs. Hojel, GHA 1 Holdings, Inc. and SFI Intermediate Ltd. share voting
power and the power to dispose or direct the disposition of such shares.
5 Includes 1,073 shares held by Mr. Woodward's wife as to all of which Mr.
Woodward disclaims beneficial ownership. Includes 20,800 shares held by
trusts of which Mr. Woodward is the beneficiary, and 132,000 shares issuable
on exercise of options which are vested or will vest within the next 60
days.
6 Includes 56,770 shares issuable upon conversion of the Company's 5%
Convertible Subordinated Debentures due April 18, 1999, and 5,429 shares
issuable to Mr. Myers on exercise of options which are vested or will vest
within the next 60 days.
7 Includes 200,000 shares issuable to Mr. Selfridge on exercise of options
which are vested or will vest within the next 60 days.
8 Includes 109,500 shares issuable to Mr. Hamilton on exercise of options
which are vested or will vest within the next 60 days.
9 Includes 22,076 shares issuable to Mr. Kramlich on exercise of options which
are vested or will vest within the next 60 days.
10 Includes 65,888 shares issuable to Mr. Brooks on exercise of options which
are vested or will vest within the next 60 days.
11 Includes 31,500 shares issuable to Mr. Farver on exercise of options which
are vested or will vest within the next 60 days.
12 Consists of 41,556 shares issuable on exercise of options which are vested
or will vest within the next 60 days. Excludes shares held and acquirable by
DBR, of which Baron de Rothschild is Managing Partner and Mr. Salin is
President, which holdings are set forth separately above, and as to which
the two individuals named disclaim beneficial ownership.
13 Consists of 13,676 shares issuable on exercise of options which are vested
or will vest within the next 60 days. Excludes shares held and acquirable by
DBR, of which Baron Eric de Rothschild is Managing Partner, as set forth in
the next Section, and as to which he disclaims beneficial ownership.
14 Consists of 11,196 shares issuable on exercise of options which are vested
or will vest within the next 60 days. Excludes 10,000 shares held by Paragon
Vineyard Co., Inc., of which Mr. Niven is President, as to which Mr. Niven
disclaims beneficial ownership.
15 Includes 6,747 shares issuable to Mr. Hojel on exercise of options which are
vested or will vest within the next 60 days. Excludes shares held and
acquirable by SFI as set forth above, as to which Mr. Hojel disclaims
beneficial ownership.
16 Includes 300 shares owned by Mr. Plant's family members as to which Mr.
Plant disclaims beneficial ownership. Includes 5,977 shares issuable to Mr.
Plant on the exercise of options which are vested or will vest within the
next 60 days.
17 Includes 6,676 shares issuable to Mr. Istel on exercise of options which are
vested or will vest within the next 60 days.
Voting Agreement
In 1995, DBR, SFI and Mr. Woodward entered into a voting agreement which
provides that they will vote their shares (and use their best efforts to have
certain others vote their shares) for the other signatories' designees to the
Company's Board of Directors, including the nomination of such designees for
directorship positions. The agreement provides for a signatory's right to
designate one or more nominees, according to the percentage of total shares
outstanding then held by the particular signatory, as follows: 26% or greater,
three designees; 12%-26%, two designees; and 5%-12%, one designee. The agreement
has a five (5) year term and supersedes a prior 1993 voting agreement among the
parties and certain other directors and officers of the Company.
6
<PAGE>
<TABLE>
EXECUTIVE COMPENSATION
The following Table sets forth for the calendar years ending December 31,
1995 and 1996, and the fiscal year ending March 31, 1998, a summary of
compensation awarded to, earned by or paid to the Company's Chief Executive
Officer and each of its four other most highly compensated executive officers
who were serving as of March 31, 1998 (the "Named Executive Officers").
Summary Compensation Table
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------ -------------------------------------
Other Securities
Annual Restricted Underlying
Compen- Stock Options/ LTIP
Name And Principal Year Salary Bonus sation Award SARs Payouts
Position ($) ($) ($)2 ($)3 ($) (#)4 ($)
- --------------------------- ------ ----------- ---------- --------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
W. Philip Woodward 1998 $155,000 $48,825 $ 4,750 -- -- --
Chief Executive Officer 1996 $143,333 $25,000 $ 3,600 -- 15,000 --
1995 $121,700 $18,000 $ 2,400 -- 10,000 --
Thomas B. Selfridge1 1998 $ 48,750 $12,188 -- -- 150,000 --
President
William L. Hamilton 1998 $117,250 $34,650 -- -- -- --
Executive Vice-President 1996 $106,833 $15,800 -- -- 10,000 --
Chief Financial Officer 1995 $105,300 $10,300 -- -- 2,500 --
Larry M. Brooks 1998 $120,407 $37,800 $ 4,750 -- -- --
Executive Vice-President, 1996 $100,250 $15,000 $ 4,552 -- 10,000 --
Winegrowing 1995 $ 88,333 $ 5,000 $ 4,620 -- 10,000 --
Managing Director,
Acacia Winery
Robert B. Farver 1998 $100,417 $75,713 $ 4,750 -- -- --
Vice President, Sales 1996 $ 94,583 $65,776 $ 4,750 -- 10,000 --
1995 $ 85,000 $36,056 $ 4,620 -- -- --
<FN>
- ------------
1 Mr. Selfridge joined the Company on January 1, 1998 at a base salary of
$195,000 per annum.
2 Annual bonuses were paid to eligible employees on February 28, 1997 for the
calendar year ending December 31, 1996, and on May 30, 1998 for the fiscal
year ending March 31, 1998. No bonuses actually were paid during fiscal 1998.
3 Company contributions under The CHALONE Wine Group, Ltd. Profit Sharing 401(k)
Plan.
4 All of the options were incentive stock options, granted pursuant to the
Company's 1987 and 1997 Stock Option Plans, when initially awarded.
</FN>
</TABLE>
Option Grants In Fiscal Year 1998
<TABLE>
The following table sets forth certain information regarding options
granted during the fiscal year ended March 31, 1998 to the Company's Named
Executive Officers:
<CAPTION>
Individual Grants Realizable Potential
-------------------------------------------------------------- -----------------------------
Percentage Of Value at Assumed
Number Of Total Annual Rates of Stock
Securities Options/SARs Price Appreciation For
Underlying Granted to Exercise Option Term(2)
Option/SARs Employees or Expiration -----------------------------
Name Granted(#) In Fiscal Year Base Price Date 5% 10%
- ------------------------- ------------- ---------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
W. Philip Woodward ...... -- -- -- -- -- --
Thomas B. Selfridge ..... 150,000(1) 91.5% $ 11.75 01/02/08 $1,108,427 $2,808,971
William L. Hamilton ..... -- -- -- -- -- --
Larry M. Brooks ......... -- -- -- -- -- --
Robert B. Farver ........ -- -- -- -- -- --
<FN>
- ------------
1 Options are incentive stock options, granted pursuant to the Company's 1997
Stock Option Plan. They become exercisable on January 2, 1999.
2 Potential realizable value is calculated based on an assumption that the price
of the Company's Common Stock appreciates at the annual rate shown (compounded
annually) from the date of grant of the option until the end of the option
term "10 years). The value is net of the exercise price but is not adjusted
for the taxes that would be due upon exercise. The assumed rates of
appreciation are mandated by the rules of the Securities and Exchange
Commission and do not represent the Company's estimate or projection of future
stock prices. Actual gains, if any, will depend on the future performance of
the Company, overall market conditions and the continued employment of the
executive officer during the applicable vesting period.
</FN>
</TABLE>
7
<PAGE>
Aggregate Option Exercises in Fiscal 1998 and Fiscal Year-End Value of
Unexercised Options
<TABLE>
The following table sets forth information regarding each exercise of
stock options during fiscal 1998 and the number and value of unexercised stock
options held by each Named Executive Officer as of March 31, 1998. The Closing
Price of the Company's Common Stock at fiscal year end was $11.50 per share
based on the Nasdaq closing price.
<CAPTION>
Number of
Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options/SARs Options/SARs
at Fiscal Year- at Fiscal Year-
Value End (#) End ($)
Shares Acquired Net Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
- ----------------------------- ----------------- -------------- ------------------------ ---------------------
<S> <C> <C> <C> <C>
W. Phillip Woodward ......... 7,500 39,375 132,000/ $ 378,875/
0 0
William L. Hamilton ......... 6,000 31,500 109,500/ $ 317,250/
0 0
Larry M. Brooks ............. 2,500 13,125 65,888/ $ 185,214/
0 0
Robert B. Farver ............ -- -- 31,500/ $ 60,500/
0 0
</TABLE>
Profit Sharing 401(k) Plan
The Company's Profit Sharing 401(k) Plan (the "401(k) Plan") is intended
to be a qualified retirement plan under Section 401(k) of the Internal Revenue
Code of 1986, as amended (the "Code"). Under this plan, participating employees
(including the Named Executive Officers) may contribute up to 15% of their
compensation, but not exceeding the maximum amount allowed under applicable tax
laws ($9,500 and $10,000 in 1997 and 1998, respectively). All employees of the
Company with one year of service, unless covered by a collective bargaining
agreement, are eligible to participate in the 401(k) Plan. The company's
contribution is fully vested in Common Stock. The Company's Edna Valley
Vineyard joint venture has a similar plan.
Employee Stock Purchase Plan
Under the Company's Employee Stock Purchase Plan (the "Stock Purchase
Plan"), pursuant to Section 423 of the Code, all Company Employees, with one
year of service (including the Named Executive Officers) may contribute up to
10% of their compensation during each 27-month period of the Stock Purchase
Plan. At the end of the period, the participant's contributions are used to
purchase Common Stock at 85% of the market price of said shares on the
commencement or ending date of the offering period, whichever is lower. On
January 20, 1998, the Board renewed the Stock Purchase Plan for the period
February 1, 1998 through January 31, 2001.
Compensation Committee Report on Compensation of Executive Officers
General. The Executive Committee of the Board of Directors (the
"Committee") performs the functions of a compensation committee and administers
the Company's executive compensation program. The Committee is composed
entirely of directors who are not employees of the Company or a parent or
subsidiary of the Company.
The objective of the Company's executive compensation program is to
develop and maintain executive reward programs which (i) contribute to the
enhancement of shareholder value, (ii) are competitive with the pay practices
of other industry-leading companies and (iii) attract, motivate and retain key
executives who are critical to the long-term success of the Company. As
discussed below, the Company's executive compensation program consists of both
fixed (base salary) and variable (incentive) compensation elements. Variable
compensation consists of annual cash incentives and stock option grants under
the Company's 1987 and 1997 Stock Option Plans (the "Stock Option Plans").
These elements are designed to operate on an integrated basis and together
comprise total compensation value.
8
<PAGE>
The Committee reviews executive compensation in light of the Company's
performance during the year. In reviewing the Company's performance during the
1998 fiscal year, the Committee considered a variety of factors. Consolidated
sales increased by 18% for the year to the highest dollar level achieved in the
Company's history. After-tax profits were a record $3,410,000 for the year as
compared to $2,520,000 for 1997, a net after-tax increase of 35%. In addition,
the Company introduced the Echelon brand and acquired a new vineyard (together
with a small winery) on Vintage Lane in Sonoma County. In March and April, it
completed the issuance of 828,571 shares of Common Stock pursuant to the
exercise of previously issued warrants by four of its shareholders whereby it
acquired substantial new equity (as more fully described below under the
caption "Certain Relationships and Related Transactions"). In reviewing Company
performance, the Committee considered these factors as a whole without
assigning specific weights to particular factors.
Base Salary. Base salary levels for the Company's executives are
determined by the Committee based on factors such as individual performance
(e.g., leadership, level of responsibility, management skills and industry
activities), and Company performance (as discussed above). For 1998, base
salaries for the Named Executive Officers, including that of the Chief
Executive Officer, were established as above.
Annual Cash Incentives. The annual cash incentive is designed to provide a
short-term (one-year) incentive. The Company does not adhere to any firmly
established formulas for the award of annual cash incentives. Rather, incentive
awards are based on the achievement of corporate and individual performance for
the year, including subjective factors. The Summary Compensation Table shows
annual cash incentives paid to the Named Executive Officers, including the
Chief Executive Officer for the calendar years ending December 31, 1996 and
1997 and fiscal year ending March 31, 1998.
Stock Options. Stock options are designed to provide long-term incentives
and rewards tied to the price of the Common Stock. Given the fluctuations of
the stock market, stock price performance and financial performance are not
always consistent. The Committee believes that stock options, which provide
value to participants only when the Company's shareholders benefit from stock
price appreciation, are an important component of the Company's executive
compensation program. The number of options or shares of stock currently held
by an executive is not a factor in determining individual grants, and the
Committee has not established any target level of ownership of Common Stock by
the Company's executives. However, retention of shares of Common Stock by
executives is encouraged.
The Company does not adhere to any firmly established formulas for the
issuance of options. The Summary Compensation Table shows the options granted
to the Named Executive Officers for the past three years, including the Chief
Executive Officer. In determining the size of the grants to the Chief Executive
Officer and the other Named Executive Officers, the Committee assessed relative
levels of responsibility and the long-term incentive practices of other
comparable companies.
In accordance with the provisions of the Plans, the exercise price of all
options granted was equal to the market value of the underlying common stock on
the date of grant. Accordingly, the value of these grants to the officers is
dependent solely upon the future growth and share value of the Common Stock.
The foregoing report is given by the members of the Committee, namely:
C. Richard Kramlich
William G. Myers
Phillip M. Plant
Eric de Rothschild
Christophe Salin
Thomas B. Selfridge (ex officio)
W. Philip Woodward (ex officio)
9
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Compensation decisions are made by the Executive Committee of the Board of
Directors, whose current members are: Messrs. Woodward, Plant, Rothschild,
Salin and Myers. Baron de Rothschild and Mr. Salin are, respectively, the
Managing Partner and President of DBR. The Company and DBR engaged in certain
related transactions which are described in more detail below under the caption
"Certain Relationships and Related Transactions."
Performance Graph
The line graph below compares the cumulative total return to holders of
the Common Stock in the period from April 1, 1993 to March 31, 1998, with the
cumulative total return in the same period on (i) the NASDAQ Stock Market Index
(U.S.) and (ii) a peer group index comprised of the following companies whose
returns have been weighted based on market capitalization as of the beginning
of each period for which a return is indicated: Robert Mondavi Corp.,
Canandaigua Wine Inc., Adolph Coors Company, Anheuser-Busch Companies, Inc.,
Brown Forman Corporation, Genesee Corporation and R.H. Phillips, Inc. The graph
assumes an investment of $100.00 on April 1, 1993 in the Company and in two
comparison indices. "Total return," for purposes of the graph, assumes
reinvestment of all dividends.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG THE CHALONE WINE GROUP, LTD.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND A PEER GROUP
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
Cumulative Total Return
-------------------------------------------------
3/93 3/94 3/95 3/96 3/97 3/98
THE CHALONE WINE GROUP, LTD. 100.00 80.77 111.54 146.15 169.23 176.92
PEER GROUP 100.00 103.72 119.12 142.70 176.09 208.43
NASDAQ STOCK MARKET (U.S.) 100.00 107.94 120.07 163.03 181.21 275.03
* $100 INVESTED ON 3/31/93 IN STOCK OR INDEX. INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING MARCH 31.
10
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Edna Valley Joint Venture. Mr. Niven, a director of the Company, is
the President and a substantial shareholder of Paragon Vineyard Co., Inc.
("Paragon"), the Company's partner in the Edna Valley Joint Venture. In
December 1996, the Company and Paragon entered into an agreement (the "Joint
Venture Amendment") which amended and restated the terms of the Edna Valley
Joint Venture. Under the terms of the Joint Venture Amendment, the Company is
obligated to make substantial payments in order to maintain its 50% ownership
interest in the Edna Valley Joint Venture and to extend its term indefinitely.
Specifically, the Company previously paid Paragon $1,070,000 (the "Deposit") as
a deposit toward future payments due for the foregoing purposes, and the sums
of $1,590,000 and $1,406,667 (consisting of $1,050,000 in cash, and $356,667 by
application of one-third of the Deposit) in 1996 and in January 1998,
respectively. Its future obligations in respect of the foregoing rights require
future payments of 1,406,667 (consisting of $1,050,000 in cash and $356,667 by
application of one-third of the Deposit) in 1999 and $1,206,666 (consisting of
$850,000 in cash and $356,667 by application of the balance of the Deposit) in
2001. In the year 2001, the Company will also have an option to purchase 50% of
the "Edna Valley" brand-name for $200,000. If the the Company fails to make the
foregoing payments, it may be removed as the managing joint venture partner in
the Edna Valley Joint Venture. The Edna Valley Joint Venture's lease for the
property on which the winery is located was also amended in December 1996 to
include additional land necessary for expansion of the winery facilities. In
additon to the foregoing payments by the Company to Paragon in respect of the
Joint Venture Amendment and ground lease, in fiscal 1998 the Edna Valley Joint
Venture made distributions to Paragon of approximately $600,000.
Under the terms of a grape purchase agreement, Paragon sells fixed
quantities of Chardonnay grapes to the Edna Valley Joint Venture at prices
calculated by reference to the average prices paid for Chardonnay grapes in
Napa County during the preceding year with certain adjustments depending on the
grapes' sugar content. Paragon also supplies grapes to Carmenet. During 1998,
the value of the grapes sold by Paragon to the Edna Valley Joint Venture and
Carmenet pursuant to the foregoing contracts was approximately $2,250,000 and
$250,000, respectively.
Domaines Barons de Rothschild and SFI Intermediate, Ltd. Certain
directors-nominees have relationship with DBR and SFI. Baron Eric de Rothschild
and Mr. Salin are, respectively, the Managing Partner and President of DBR, and
Mr. Istel is a director of certain affiliates of DBR. Mr. Hojel's mother,
Phyllis S. Hojel, is the President and sole director of SFI. Mr. Plant has
served as a financial advisor to the Hojel family and is related to the Hojel
family by marriage.
Pursuant to DBR's investment in the Company, the Company receives an
allocation of the wines of DBR, including the wines of Chateau
Lafite-Rothschild and Duhart-Milon. In fiscal 1998, the Company paid
approximately $1,865,000 to DBR, of which approximately $310,000 represents
deposits made in prior years for wine to be delivered during fiscal 1998, and
approximately $1,167,000 represents deposits for wine which will be delivered
in future years (often referred to as wine "futures").
Other
In February 1997, the Company purchased from Richard H. Graff, then a
director of the Company, and his affiliates approximately 160 aces of land and
a single family home situated on property adjacent to Chalone Vineyard, with
part of the purchase price of $1,192,503 being paid by a promissory note,
bearing interest at 7.03%, in the original principal amount of $942,503 secured
by the property. As of March 31, 1998, the balance of this note, owed by the
Company to the estate of Richard H. Graff, was $934,000.
Mr. Yves-Andre Istel is an executive officer of Rothschild Inc. to which
the Company paid a retainer of $50,000 in November, 1997 for financial and
investment banking consulting services in connection with a special project.
The terms of the foregoing engagement were determined by a special committee of
the Board consisting of Messrs. Kramlich, Plant and Woodward. Additional fees
for such services and reimburesment for expenses incurred in connection with
the engagement may be paid to Rothschild Inc. in the future.
William L. Hamilton, Executive Vice President and Chief Financial Officer,
owes to the Company a total of $65,000 pursuant to two notes in the principal
amounts of $27,500 and $37,500, respectively. Each
11
<PAGE>
note is secured by shares of the Company's common stock which are owned by Mr.
Hamilton, bear interest at the rate of 1|M/2 point over the Company's cost of
borrowing, and is for a two year term. Both loans were made to Mr. Hamilton in
connection with the exercise of certain stock options.
During March and April 1998, the Company issued 828,571 shares of its
common stock upon the exercise by the principal holders of the all of the
Company's outstanding $7.00 warrants issued on March 29, 1993. The principal
warrantholders included Mr. Woodward and certain persons affiliated with him,
DBR and SFI, among others. The Company received gross proceeds of $5,799,997
from the exercise of the foregoing warrants.
In the judgment of the Company, all material transactions between the
Company and its directors, officers and principal shareholders, and their
affiliates, have been made on terms no less favorable to the Company than could
have been obtained from unaffiliated third parties.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's executive officers, directors and greater-than-ten-percent
beneficial owners are required under Section 16(a) of the Exchange Act to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Copies of those reports must also be furnished to the Company.
Based on review of copies of filings received by it and upon written
representations from certain reporting persons, the Company believes that
during fiscal 1998 all of the Company's officers, directors and
greater-than-ten-percent beneficial owners complied with all filing
requirements applicable.
RATIFICATION OF APPOINTMENT OF THE COMPANY'S
CERTIFIED PUBLIC ACCOUNTANTS
(Proxy Item No. 2)
The Board of Directors has reappointed Deloitte & Touche LLP as the
Company's independent certified public accountants for the fiscal year ended
March 31, 1999 subject to ratification by the shareholders at the Meeting.
Deloitte & Touche and its constituent predecessor, Touche Ross & Co., have been
the Company's certified public accountants since 1986. Representatives of
Deloitte & Touche are expected to be in attendance at the Annual Meeting, with
the opportunity to make a statement if they so desire and to be available to
answer shareholders' questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION AND
APPOINTMENT OF THE COMPANY'S CERTIFIED PUBLIC ACCOUNTS.
OTHER MATTERS
The Company does not know of any matter other than those discussed in the
foregoing materials contemplated for action at the Meeting. Should any other
matter be properly brought before the Meeting, it is the intention of the
persons named in the proxies to vote in accordance with the recommendation of
the Board of Directors. Discretionary authority for them to do so is contained
in the proxy cards.
FINANCIAL STATEMENTS
Shareholders should refer to the Consolidated Financial Statements and
Supplemental Data, Management's Discussion and Analysis, and Selected Financial
Data set forth in the Company's Annual Report on Form 10-K, which was
previously filed with the Securities and Exchange Commission and furnished to
shareholders.
12
<PAGE>
SUBMISSION OF SHAREHOLDER
PROPOSALS FOR 1999 ANNUAL MEETING
Any proposal which a shareholder wishes to have presented at the 1999
Annual Meeting and included in the Company's proxy statement for such meeting
must be received by the Company, at its principal executive office, 621 Airpark
Road, Napa, California 94558-6272, no later than May 31, 1999. Proposals should
be addressed to the attention of the Corporate Secretary of the Company. In
order to avoid controversy as to the date on which a proposal was received by
the Company, it is suggested that any stockholder who wishes to submit a
proposal submit such proposal by Certified Mail, Return Receipt Requested.
The Bylaws of the Company provide that in order for a shareholder to bring
business before or propose director nominations at an annual meeting of
shareholders, the shareholder must provide advance notice of such proposal or
nomination. Specifically, the shareholder must give written notice to the
Corporate Secretary not less than sixty (60) days nor more than ninety (90)
days prior to the date of the annual meeting. The notice must contain specified
information about the proposed business or each nominee and about the
shareholder making the proposal or nomination. In the event that less than
seventy (70) days' prior notice or prior public disclosure of the date of the
annual meeting is given or made to shareholders, notice by the shareholder in
order to be timely must be received no later than the close of business on the
tenth day following the date on which such notice of the annual meeting date
was mailed or public disclosure of the date of the annual meeting was made,
whichever occurs first.
By Order of the Board of Directors,
/s/ W. Phillip Woodward
W. Phillip Woodward
Chairman of the Board
Napa, California
13
<PAGE>
SKU # 1820-PS-98
<PAGE>
APPENDIX A
VOTE VIA TELEPHONE OR THE INTERNET -- IT'S QUICK, EASY AND
IMMEDIATE
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card. Please
note all votes cast via the telephone or the Internet must be cast prior to 5
p.m., August 19, 1998. If you wish to change your address or notify the company
that you plan to attend the meeting, please mark the boxes below and return your
proxy by mail.
TELEPHONE VOTING:
o There is NO CHARGE for this call.
o On a Touch Tone Telephone call TOLL FREE 1-888-807-7699 24 hours per day -
7 days a week.
o You will be asked to enter the Control Number which is located above your
name and address below.
- --------------------------------------------------------------------------------
OPTION #1: If you choose to vote AS THE BOARD OF DIRECTORS RECOMMENDS, press 1
- --------------------------------------------------------------------------------
Your vote will be confirmed and cast as you directed.
END OF CALL
- --------------------------------------------------------------------------------
OPTION # 2: If you choose to vote ON EACH PROPOSAL SEPARATELY, press 2
- --------------------------------------------------------------------------------
You will hear these instructions:
Proposal 1: To vote AS THE BOARD OF DIRECTORS RECOMMENDS, press 1; to vote
AGAINST, press 2; to ABSTAIN, press 3.
Proposal 2: To vote AS THE BOARD OF DIRECTORS RECOMMENDS, press 1; to vote
AGAINST, press 2; to ABSTAIN, press 3.
Your vote will be confirmed and cast as you directed.
END OF CALL.
INTERNET VOTING:
o NOTE: As with all Internet access, there may be usage or server fees charged
to the user.
Log on to the Company's transfer agent's Internet voting site at
http://www.equiserve.com/proxy/ and follow the instructions on your screen.
These instructions are similar to those above for telephone voting.
- --------------------------------------------------------------------------------
If you vote via telephone or the Internet, it is not necessary to
return your proxy by mail. THANK YOU FOR VOTING.
- -------------------------------------------------------------------------------
DETACH HERE
17
<PAGE>
- -------------------
CHALONE THIS IS YOUR PROXY.
Wine Group YOUR VOTE IS IMPORTANT.
- -------------------
Dear Shareholder:
Regardless of whether you plan to attend the Annual Meeting of Shareholders, you
can be sure your shares are represented at the meeting by promptly returning
your proxy in the enclosed envelope or by voting via telephone or the Internet.
Instructions are on the reverse side of this card.
Investor Relations Department
PROXY
THE CHALONE WINE GROUP, LTD.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
for Annual Meeting of Shareholders, August 20, 1998.
The undersigned, shareholders(s) of THE CHALONE WINE GROUP, LTD., do(es)
hereby appoint the corporation's Secretary, Assistant Secretary and Chairman,
and each of them, proxies, each with full power of substitution, for and in the
name and stead of the undersigned at the Annual Meeting of Shareholders of THE
CHALONE WINE GROUP, LTD., to be held on August 20, 1998, and at any and all
postponements or adjournments thereof, to vote all shares of capital stock held
by the undersigned, with all powers that the undersigned would possess if
personally present, on each of the matters referred to herein.
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF MANAGEMENT'S DIRECTOR-NOMINEES, FOR
RATIFICATION OF THE APPOINTMENT OF THE COMPANY'S INDEPENDENT AUDITORS AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING AND ANY POSTPONEMENT(S) OR ADJOURNMENT(S) THEREOF.
FOR WITHHELD FOR ALL
EXCEPT
1. ELECTION OF DIRECTORS / / / / / /
Nominees:
W. Philip Woodward
Eric de Rothschild
Mark A. Hojel
Yves-Andre Istel
C. Richard Kramlich
William G. Myers
James H. Niven
Phillip M. Plant
Christophe Salin
Thomas B. Selfridge
/ / ________________________________
/ / ________________________________
/ / ________________________________
/ / ________________________________
/ / ________________________________
If you wish to withhold authority to vote for
any individual nominee(s), write such
nominee(s) name on the lines above.
2. Proposal to ratify the appointment of / / / / / /
Deloitte & Touche LLP as the Company's
independent certified public accountants
for the fiscal year ending March 31, 1999.
3. In their discretion, upon such other
18
<PAGE>
matters as may properly
come before the meeting
and any postponement(s) or
adjournment(s) thereof.
/ / MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
(This Proxy should be marked, dated and signed by the shareholder(s) exactly as
his or her name appears hereon and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both shareholders should sign.)
Signature:_____________ Date: _______ Signature:_____________ Date: _______
19
