<PAGE> 1
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 (AMENDMENT NO. )
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 Robert Mondavi Corp.
- --------------------------------------------------------------------------------
(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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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 previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of
its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
THE ROBERT MONDAVI CORPORATION
7801 ST. HELENA HIGHWAY
OAKVILLE, CALIFORNIA 94562
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF
THE ROBERT MONDAVI CORPORATION
TO BE HELD NOVEMBER 5, 1999
To the Shareholders:
The Annual Meeting of Shareholders of The Robert Mondavi Corporation (the
"Company") will be held at the Woodbridge Winery, 5950 East Woodbridge Road,
Acampo, California 95258, on Friday, November 5, 1999, at 10:00 a.m. local
time, for the following purposes:
1. To elect three Class A Directors and five Class B Directors;
2. To ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors for the 2000 fiscal year; and
3. To transact such other business as may properly come before the
meeting and any adjournment thereof.
All of the above matters are more fully described in the accompanying
Proxy Statement. Only shareholders of record at the close of business on
September 15, 1999 are entitled to notice of and to vote at the meeting or any
postponement or adjournment thereof.
By Order of the Board of Directors
/s/ MIKE BEYER
Mike Beyer, Secretary
Napa, California
September 28, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED REPLY ENVELOPE. THIS WILL NOT LIMIT
YOUR RIGHT TO ATTEND OR VOTE AT THE MEETING.
<PAGE> 3
THE ROBERT MONDAVI CORPORATION
7801 ST. HELENA HIGHWAY
OAKVILLE, CALIFORNIA 94562
------------------
PROXY STATEMENT
------------------
Your proxy in the form enclosed is solicited by the Board of Directors of
The Robert Mondavi Corporation (the "Company") for use in voting at the Annual
Meeting of Shareholders to be held on Friday, November 5, 1999 at 10:00 a.m.
local time, or at any adjournment thereof. The Annual Meeting will be held at
the Woodbridge Winery, 5950 East Woodbridge Road, Acampo, California 95258.
This Proxy Statement and the enclosed form of proxy, together with the
Company's Annual Report for fiscal 1999, were first mailed to shareholders on
or about September 28, 1999.
The Company's principal executive offices are located at 7801 St. Helena
Highway, Oakville, California 94562, and its telephone number is (707) 226-1395.
The shares represented by those proxies received, properly dated and
executed, and not revoked, will be voted at the Annual Meeting. A proxy may be
revoked at any time before it is exercised by delivering to the Secretary of
the Company at the Company's principal executive offices, no later than the
start of the Annual Meeting, a written notice of revocation or a duly executed
proxy relating to the same shares bearing a later date than the revoked proxy,
or by attending the Annual Meeting and voting the shares covered by the proxy
in person. All shares represented by proxies that are properly dated, executed
and returned, and which have not been revoked, will be voted in accordance with
the specifications on the enclosed proxy. If no such specifications are made,
shares of Class A Common Stock will be voted FOR the election of the three
nominees for Class A Directors listed in this Proxy Statement and FOR approval
of proposal 2 set forth in the Notice of Annual Meeting of Shareholders and
described in this Proxy Statement. Similarly, if no specifications are made,
shares of Class B Common Stock will be voted FOR the election of the five Class
B Directors listed in this Proxy Statement and FOR approval of proposal 2.
The Company will bear the expense of preparing, printing and mailing this
Proxy Statement and the proxies solicited hereby and will reimburse brokerage
firms and nominees for their reasonable expenses in forwarding solicitation
materials to beneficial owners of shares held of record by such brokerage firms
and nominees. In addition to the solicitation of proxies by mail, officers and
regular employees of the Company may communicate with shareholders either in
person or by telephone or facsimile for the purpose of soliciting such proxies;
no additional compensation will be paid for such solicitation. The Company has
retained ChaseMellon Shareholder Services, at an estimated cost of $1,700, plus
reimbursement of expenses, to assist in the solicitation of proxies from
brokers, nominees, institutions and individuals.
OUTSTANDING SHARES AND VOTING RIGHTS
September 15, 1999 has been fixed as the record date for determining the
holders of Class A Common stock and the holders of Class B Common Stock
entitled to notice of and to vote at the Annual Meeting. As of the close of
business on the record date, the Company had outstanding 8,172,414 shares of
Class A Common Stock and 7,306,012 shares of Class B Common Stock. Only holders
of Class A Common Stock are entitled to vote in the election of Class A
Directors. Only holders of Class B
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<PAGE> 4
Common Stock are entitled to vote in the election of Class B Directors. On all
matters other than the election of directors, the holders of Class A Common
Stock and the holders of Class B Common Stock vote together as a single class,
with each Class A share entitled to one (1) vote, or a total of 8,172,414 Class
A votes, and each Class B share entitled to ten (10) votes, or a total of
73,060,120 Class B votes.
A majority of the outstanding shares of Class A Common Stock, represented
in person or by proxy, will constitute a quorum for purposes of electing Class
A Directors, and a majority of the outstanding shares of Class B Common Stock,
represented in person or by proxy, will constitute a quorum for purposes of
electing Class B Directors. On all other matters that may be presented at the
meeting, the holders of shares entitled to cast a majority of the votes which
could be voted thereon will constitute a quorum.
ELECTION OF DIRECTORS
(PROPOSAL 1 ON PROXY)
The Company's Bylaws provide that the Board of Directors shall consist of
not less than seven nor more than eleven directors. The Board of Directors,
pursuant to the authority conferred on them by the Bylaws, have set the current
number of directors at nine, three of whom are to be elected by holders of the
Company's Class A Common Stock and six of whom are to be elected by holders of
the Class B Common Stock. Three Class A Directors and five Class B Directors,
named below, have been nominated for election at the Annual Meeting. Proxies
cannot be voted for a greater number of persons than the number of nominees
named. Thus there will be one vacancy on the board, entitled to be filled by
holders of the Class B Common Stock or the Class B Directors.
Unless you request on your proxy card that voting of your proxy be
withheld from any one or more of the following nominees for director, each of
whom currently serves as a member of the Board, proxies of Class A Common Stock
will be voted for the election of the three nominees for Class A Directors
named below and proxies of Class B Common Stock will be voted for the election
of the five nominees for Class B Directors named below. In the event any
nominee named below becomes unavailable for election, the proxies in the form
solicited will be voted for an alternative or alternatives designated by the
present Board of Directors. Directors serve until the next Annual Meeting of
Shareholders and until their successors are elected or chosen.
NOMINEES FOR CLASS A DIRECTORS
Philip Greer, age 63, became a director of the Company in 1992. He is
chairman of the Audit Committee and a member of the Compensation Committee. Mr.
Greer is a Senior Managing Director of Weiss, Peck & Greer, L.L.C. ("WPG"), an
investment company. He was a general partner of WPG's predecessor, Weiss, Peck
& Greer, for over twenty-five years. Mr. Greer is also a director of Federal
Express Corporation and Network Computing Devices, Inc. He graduated from
Princeton University and the Harvard Graduate School of Business.
Frank E. Farella, age 70, has been a partner in the law firm of Farella,
Braun & Martel since 1962. He has been a director of the Company since 1992,
and is a member of the Audit Committee. He is a graduate of San Francisco State
University and Standford University Law School.
James L. Barksdale, age 56, became a director in 1996. He is the managing
partner of The Barksdale Group, an investment advisory firm he founded in April
1999. From 1995 to 1999 he was the President, CEO and a member of the Board of
Directors of Netscape Communications Corporation. From 1992 to 1995 Mr.
Barksdale served as President and Chief Operating Officer, and, as of September
1994, Chief Executive Officer, of AT&T Wireless Services. Mr. Barksdale is also
a director of America
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<PAGE> 5
Online, HomeGrocer.Com, 3Com Corporation, Liberate Technologies, Inc. and Sun
Microsystems, Inc. He is a graduate of the University of Mississippi.
NOMINEES FOR CLASS B DIRECTORS
Robert G. Mondavi, age 86, founded the Company in 1966 and has been
Chairman of the Board since that time. Robert Mondavi was also Chief Executive
Officer of the Company from its founding to 1990. He began making wine in
California in 1937 and in 1943 his family purchased the Charles Krug winery in
the Napa Valley where he served as General Manager until 1966. He has been
inducted into Fortune Magazine's Business Hall of Fame. He is a member of the
American Institute of Wine and Food, the American Wine Society and the
Commanderie de Bordeaux. He graduated from Stanford University. Robert Mondavi
is the father of Michael and Timothy Mondavi and Marcia Mondavi Border.
R. Michael Mondavi, age 56, is the Company's President and Chief Executive
Officer. He helped found the Robert Mondavi Winery with his father in 1966
and has been a member of the Board of Directors since that time. Michael
Mondavi has served as Chairman of the Wine Institute and of the Napa Valley
Vintners Association and as a director of the American Vineyard Foundation. Mr.
Mondavi is a director of Premier Package and Label Corporation. He graduated
from Santa Clara University.
Marcia Mondavi Borger, age 52, has been a director of the Company since
1978. She has worked for the Company in various capacities since 1967. From 1982
to 1992, she was the Company's Vice President, Eastern Sales. She is a graduate
of Santa Clara University.
Timothy J. Mondavi, age 48, is the Company's Managing Director and
Winegrower. He began working at the Robert Mondavi Winery in 1974 and has been
a member of the Board of Directors since 1978. Timothy Mondavi is a member of
the Napa Valley Wine Technical Group and has served as a director of the Wine
Institute. He graduated from the University of California at Davis, where he
studied viticulture and enology.
Bartlett R. Rhoades, age 61, became a director of the Company in 1989. He
is chairman of the Compensation Committee and a member of the Audit Committee.
Mr. Rhoades has been involved in the management of a number of "start-up"
companies. He is currently Chief Executive Officer, President and a director of
Healthtrac, Inc., in Menlo Park, California. He graduated from Harvard College
and the Harvard Graduate School of Business.
RECOMMENDATION
The Board of Directors recommends that Class A shareholders vote FOR
re-election of the above-named Class A Directors and that Class B shareholders
vote FOR re-election of the above-named Class B Directors.
VOTE REQUIRED
The three nominees for Class A Directors and the five nominees for Class B
Directors receiving the highest number of affirmative votes of the shares
entitled to be voted for them shall be elected as Class A Directors and Class B
Directors, respectively. Votes withheld from any director are counted for
purposes of determining the presence or absence of a quorum, but have no legal
effect under California law. While there is no definitive statutory or case
law authority in California as to the proper treatment of abstentions and
broker non-votes in the election of directors, the Company believes that both
abstentions and broker non-votes should be counted for purposes of determining
whether a quorum is
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present at the Annual Meeting. In the absence of precedent to the contrary, the
Company intends to treat abstentions and broker non-votes with respect to the
election of directors in this manner.
OTHER EXECUTIVE OFFICERS
The following are additional executive officers of the Company. All
executive officers serve at the discretion of the Board of Directors, subject
to the terms of any employment agreement.
Gregory M. Evans, age 50, was appointed Executive Vice President and
Chief Operating Officer in July 1998. Prior to that he served for fifteen years
as the Company's Chief Financial Officer. Mr. Evans graduated from the
University of California at Berkeley and holds an M.B.A. degree from the
Harvard Graduate School of Business.
Peter Mattei, age 47, has been the Company's Senior Vice President,
Production and Vineyards since 1991. Mr. Mattei holds a B.S. degree from the
University of California at Davis and an M.B.A. degree from Stanford University.
Michael K. Beyer, age 50, became the Company's Senior Vice President,
General Counsel and Secretary in 1992. From 1978 to 1992, he was a member of
the law firm of Feldman, Waldman and Kline. Mr. Beyer graduated from Harvard
College and Boalt Hall School of Law of the University of California.
Alan E. Schnur, age 46, joined the Company in August 1994 as Senior Vice
President, Human Resources. From 1989 to 1994 he was a principal in Towers
Perrin, a management consulting firm. He has a B.A. and Ph.D. from the
University of California at Berkeley.
Mitchell J. Clark, age 50, began working for the Company in 1979 and
became Senior Vice President, Sales in 1994. He is a graduate of San Diego
State University.
Martin C. Johnson, age 48, joined the Company in 1992 and became Senior
Vice President, Marketing in 1994. Prior to joining the Company, Mr. Johnson
was Vice President, Marketing of Heublein Fine Wine Group. He is a graduate of
Northern Arizona University.
Steven R. Soderberg, age 39, joined the Company in January 1998 as Senior
Vice President, Information Systems. Prior to the joining the Company he was
Director of Information Systems, responsible for both International Information
Systems and Application Development, at Symantec Corporation. Mr. Soderberg is
a graduate of Stanford University.
Stephen A. McCarthy, age 37, was promoted to Senior Vice President and
Chief Financial Officer in July 1998. From 1996 to 1998 he served as Vice
President and Controller. Prior to joining the Company, Mr. McCarthy was a
Senior Manager with Price Waterhouse. Mr. McCarthy graduated from the
University of San Francisco.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held four (4) regular meetings during fiscal 1999.
The Board of Directors has a Compensation Committee and an Audit Committee.
Messrs. Greer and Rhoades comprise the Compensation Committee. They and Mr.
Farella sit on the Audit Committee. There is no Nominating Committee.
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<PAGE> 7
The Compensation Committee adopts and administers compensation plans for
executive officers of the Company, including the Company's Amended and Restated
1993 Equity Incentive Plan. The Compensation Committee held six (6) meetings in
fiscal 1999.
The Audit Committee selects the independent auditors for the Company
(subject to ratification by the shareholders), reviews the scope and results of
the annual audit, approves the services to be performed by the independent
auditors, and reviews the independence of the auditors, the performance and fees
of the independent auditors, the effectiveness and adequacy of the system of
financial reporting and internal accounting controls, and the scope and results
of internal auditing procedures. The Audit Committee held five (5) meetings
during fiscal 1999.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information as of September 15,
1999 with respect to the beneficial ownership of the outstanding shares of Class
A Common Stock and Class B Common Stock by (i) all person known by the Company
to own more than five percent of either class of the Company's Common Stock,
(ii) each director and 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 indicated in the
footnotes to the table, the Company believes that the persons named in the table
have sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them, subject to community property laws where
applicable.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK(1)
---------------------------------------------------------- ------------------------
Shares that May be Acquired
Outstanding Within 60 Days Percent Shares Percent
Shares by Exercise of Options or of Beneficially of
Beneficial Owner Beneficially Owned Conversion of Class B Shares Class(2) Owned Class
- ---------------- ------------------ ---------------------------- --------- ------------- --------
<S> <C> <C> <C> <C> <C>
Robert G. Mondavi 7,045 1,936,732 (3) 19.2 1,936,732 26.5
R. Michael Mondavi - 1,927,342 (4) 19.1 1,693,685 (7) 23.2
Timothy J. Mondavi 13,160 1,014,504 (5) 11.2 917,401 (8) 12.6
Marcia Mondavi Borger 2,635 1,754,850 (6) 17.7 1,731,350 (9) 23.7
Dorothy R. Mondavi 11,110 410,316 (3) 4.9 410,316 5.6
Capital Group Cos. 1,745,900 (10) - 21.4 - -
333 S. Hope St.,
Los Angeles, CA 90071
Zak Capital Inc. 439,000 (10) - 5.4 - -
100 No. Sixth St.,
Ste 476A,
Minneapolis, MN 55403
Gregory M. Evans 2,000 195,476 (11) 2.4 - -
Mitchell J. Clark - 49,720 (11) * - -
Frank E. Farella 1,500 23,500 (11) * - -
Philip Greer 3,300 23,500 (11) * - -
Bartlett R. Rhoades 1,000 23,500 (11) * - -
James L. Barksdale - 9,652 (11) * - -
All executive officers 41,480 7,552,917 (12) 48.2 6,689,484 (13) 91.6
and directors as a
group (16 persons)
</TABLE>
- ---------------
* Less than 1%
(1) 214,209 shares of Class B Common Stock held by Robert Mondavi Properties,
Inc., a wholly-owned subsidiary of the Company, are not considered
outstanding for purposes of these calculations.
(2) Under Rule 13d-3 under the Securities Exchange Act of 1934, as amended, a
holder of Class B Common Stock is deemed to own beneficially the same
number of shares of Class A Common Stock since the holder has the right,
subject to the terms of the Stock Buy-Sell Agreement among the Company
and the holders of the outstanding shares of
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<PAGE> 8
Class B Common Stock, to convert his Class B Common Stock to Class A
Common Stock. Pursuant to the same Rule, for purposes of calculating
the percentages of the outstanding shares of Class A Common Stock owned
by each named shareholder, the shares of Class A Common Stock which a
holder of Class B Common Stock may acquire by conversion are considered
outstanding only with respect to that holder. As a result, the stated
percentages of ownership of the Class A Common Stock do not reflect the
beneficial ownership of the Class A Common Stock which is actually
outstanding as of September 15, 1999.
(3) Represents shares of Class A Common Stock which the holder has the
right to acquire upon conversion of Class B Common Stock.
(4) Includes 1,693,685 shares of Class A Common Stock which the holder has
the right to acquire upon conversion of Class B Common Stock and
233,657 shares of Class A Common Stock issuable pursuant to options
exercisable within 60 days of September 15, 1999.
(5) Includes 917,401 shares of Class A Common Stock which the holder has
the right to acquire upon conversion of Class B Common Stock and 97,103
shares of Class A Common Stock issuable pursuant to options exercisable
within 60 days of September 15, 1999.
(6) Represents 1,626,325 shares of Class A Common Stock which the holder
has the right to acquire upon conversion of Class B Common Stock and
23,500 shares of Class A Common Stock issuable pursuant to options
exercisable within 60 days of September 15, 1999.
(7) Excludes 105,000 shares of Class B Common Stock held by irrevocable
trusts for the benefit of Michael Mondavi's children. Mr. Mondavi
disclaims the beneficial interest in such shares. Includes 224,368
shares of Class B Common Stock owned by or in trust for Isabel Mondavi,
Michael Mondavi's wife.
(8) Excludes 443,083 shares of Class B Common Stock held by irrevocable
trusts for the benefit of Timothy Mondavi's children.
(9) Excludes 152,240 shares of Class B Common Stock held by irrevocable
trusts for the benefit of Ms. Borger's children. Ms. Borger is not the
trustee of such trusts and has neither voting nor dispositive power
with respect to such shares. Includes 105,025 shares of Class B Common
Stock held in trusts for the benefit of Timothy Mondavi's children, for
which Ms. Borger serves as trustee and with respect to which she
disclaims beneficial ownership.
(10) Based on most recent available filings on Form 13F.
(11) Represents shares of Class A Common Stock issuable pursuant to
outstanding options exercisable within 60 days of September 15, 1999.
(12) Includes an aggregate of 863,433 shares of Class A Common Stock
issuable pursuant to outstanding options exercisable within 60 days of
September 15, 1999.
(13) Excludes an aggregate of 616,528 shares of Class B Common Stock owned
outright by or in trusts for members of the Robert Mondavi family not
otherwise listed above.
AGREEMENT AMONG HOLDERS OF CLASS B COMMON STOCK
The holders of the outstanding shares of Class B Common Stock and the
Company are parties to a Stock Buy-Sell Agreement (the "Buy-Sell Agreement").
Pursuant to the Buy-Sell Agreement, no holders of shares of Class B Common
Stock may, with limited exceptions, transfer Class B Common Stock or convert
Class B Common Stock into Class A Common Stock without first offering such
stock to the Company and then to the other parties to the Buy-Sell Agreement.
The Buy-Sell Agreement applies to a broad range of transfers and dispositions
other than (i) certain lifetime or testamentary transfers to issue of Robert
and Marjorie Mondavi, (ii) transfers to or in trust for charitable institutions
or (iii) certain other permitted transfers.
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<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth all compensation received for services
rendered to the Company in all capacities during the fiscal years ended June
30, 1999, 1998 and 1997, respectively, by (i) the Company's Chief Executive
Officer and (ii) the Company's four other most highly compensated executive
officers (together, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------- --------------------------------------------------
OTHER #SECURITIES PAYOUTS
FISCAL ANNUAL UNDERLYING LONG-TERM ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS INCENTIVE PLAN COMPENSATION
- --------------------------- ------ ------ ----- ------------ ----------- -------------- ------------
(1) (9) (10)
<S> <C> <C> <C> <C> <C> <C> <C>
Robert G. Mondavi 1999 $450,000 - -(2) - - -
Chairman of the Board 1998 450,000 -(2) - - -
1997 450,000 - -(2) - - -
R. Michael Mondavi 1999 400,000 $110,000 $106,935(3) 50,000 - $35,700
President and 1998 400,000 - 127,279(3) 50,000 $524,723 64,731
Chief Executive Officer 1997 400,000 - 75,500(4) 50,000 372,270 263,784
Timothy J. Mondavi 1999 400,000 55,000 -(2) 37,500 - 31,850
Managing Director and 1998 400,000 - -(2) 22,500 524,723 64,731
Winegrower 1997 400,000 25,000 58,524(5) 30,000 372,270 263,784
Gregory M. Evans 1999 321,000 82,000 42,810(6) 50,000 - 28,210
Executive Vice President 1998 292,065 - 48,514(7) 22,500 198,760 34,353
and Chief Operating Officer 1997 292,065 80,000 -(2) 20,000 145,424 189,503
Mitchell J. Clark 1999 20,000 55,000 -(2) 37,500 - 17,850
Sr. Vice President, Sales 1998 200,000 - -(2) 20,000 - 14,000
1997 200,000 65,000 32,488(8) 30,000 - 14,000
</TABLE>
- --------------
(1) Includes perquisites, none of which individually exceeded 25% of total
perquisites for the Named Executive Officer, except as noted.
(2) Individual perquisites do not exceed the lesser of $50,000 or 10% of salary
and bonus.
(3) Includes $94,500 in life insurance benefits.
(4) Includes $35,500 in life insurance benefits and $19,500 in financial
planning services.
(5) Includes $18,524 in life insurance benefits and $23,588 in financial
planning services.
(6) Includes $30,375 in life insurance benefits and $12,435 in automobile
allowance.
(7) Includes $25,249 in life insurance benefits and $12,435 in automobile
allowance.
(8) Includes $12,488 in life insurance benefits and $12,435 in automobile
allowance.
(9) Represents that portion paid in fiscal 1997 and 1998, respectively, of the
named executive officer's accumulated earnings on 1992 and 1993 units
granted under the terms of the Company's Executive Incentive Compensation
Plan (the "E.I.C.P."). Under the E.I.C.P., the Compensation Committee of
the Board of Directors may make annual awards of units to senior management
plan participants. Each unit earns a percentage of plan income, based on
the Company's pre-tax earnings as calculated on a FIFO basis, for a period
of five years. The percentage of plan income earned varies from 0.01% to
0.014%. Unit earnings vest at the rate of 20% per year over the same
five-year period. At the end of five years, a portion of the earnings is
distributed to the participant and any balance is deferred and earns
interest at the Company's average borrowing rate until distribution under
the terms of the E.I.C.P. For units granted prior to fiscal 1989, up to 30%
of the earnings were initially distributed to the participant. For units
granted during and after fiscal 1989, the participant may elect in the year
of grant to receive up to 100% of earnings in the initial distribution or
to defer any portion of such amount. Upon termination of employment due to
death, disability, retirement or involuntary termination without cause, the
participant's units become fully vested and the participant is entitled to
receive all earnings accumulated on units through the end of the fiscal
year in which the termination occurs. Upon termination of employment for
cause or certain voluntary terminations, the participant is entitled to
receive all earnings accumulated on units through the end of the fiscal
year prior to the year the termination occurs. The Company has the option
to distribute plan balances over a ten-year period.
(10) Includes the Company's contribution on behalf of the Named Executive
Officers to the Company's defined contribution retirement plan and
supplemental executive retirement plan. Retirement plan contributions in
fiscal 1999 were $35,700 for R. Michael Mondavi; $31,850 for Timothy J.
Mondavi; $28,210 for Gregory M. Evans; and $17,850 for Mitchell J. Clark.
Also includes earnings under the E.I.C.P. described at Note 9 above for
fiscal 1997. In fiscal 1992, no earnings were declared on outstanding units
under the E.I.C.P. and the plan was amended to provide participants with
higher accrual rates over the 1993 through 1996 fiscal years with respect
to outstanding units. Outstanding units will continue to accrue earnings in
future years, but the Board of Directors has determined that no new unit
awards will be made under the E.I.C.P. subsequent to fiscal 1993. Amounts
indicated do not include interest on plan balances. Amounts reported as
E.I.C.P. earnings are reported again as Long Term Incentive Plan Payouts in
the year payment is made. The accrued but unpaid balances, exclusive of
interest earnings, for all participants as a group under the E.I.C.P. at
June 30, 1997, 1998 and 1999, respectively, were $5,418,056, $3,561,487 and
$3,398,038.
7
<PAGE> 10
OPTION GRANTS
The following table sets forth information with respect to options granted
to the Named Executive Officers during the 1999 fiscal year. The options were
granted at an exercise price equal to 100% of the fair market value of the
Class A Common Stock at the date of grant and they vest at the rate of 1/60 per
month over 60 months. The options expire ten years after the date of grant, or,
if earlier, 180 days after termination of employment:
OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
------------------------------------------------------------------ -----------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTION GRANTED EXERCISE OR
UNDERLYING TO EMPLOYEES BASE PRICE EXPIRATION
NAME OPTIONS GRANTED IN FISCAL YEAR ($/SH) DATE 5% 10%
- ----- --------------- -------------- ----------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Robert G. Mondavi - - - - - -
R. Michael Mondavi 50,000 12.2 $22 1/2 9/9/08 $707,506 $1,792,960
Timothy J. Mondavi 37,500 9.2 $22 1/2 9/9/08 530,630 1,344,720
Gregory M. Evans 50,000 12.2 $22 1/2 9/9/08 707,506 1,792,960
Mitchell J. Clark 37,500 9.2 $22 1/2 9/9/08 530,630 1,344,720
</TABLE>
- -------------
(1) All options in this table relate to shares of Class A Common Stock.
(2) Potential realizable value is based on an assumption that the stock price
appreciates at the annual rate shown (compounded annually) from the date
of grant until the end of the option term (ten years). These numbers are
calculated based on the requirements promulgated by the Securities and
Exchange Commission and do not reflect the Company's estimate of future
stock price growth. Actual gains, if any, on stock option exercises are
dependent on the Company's future financial performance, overall market
conditions and the optionee's continued employment during the prescribed
vesting period.
OPTION EXERCISES AND YEAR-END VALUE OF UNEXERCISED OPTIONS
The following table sets forth information regarding each exercise of
stock options during the 1999 fiscal year by a Named Executive Officer and the
number and value of unexercised stock options held by the Named Executive
Officers at June 30, 1999:
AGGREGATED OPTION EXERCISE IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES(1)
<TABLE>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FISCAL YEAR END FISCAL YEAR END(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert G. Mondavi - - - - - -
R. Michael Mondavi - - 227,500 42,500 $2,254,063 $589,687
Timothy J. Mondavi - - 93,125 31,875 620,547 442,266
Gregory M. Evans - - 183,125 67,375 4,171,688 696,187
Mitchell J. Clark - - 40,041 59,626 512,075 584,203
</TABLE>
- -----------------
(1) All options in this table relate to shares of Class A Common Stock.
(2) Represents the fair value of the underlying securities at fiscal year-end
($36 3/8 per share based on the NASDAQ closing price) minus the exercise
price.
BOARD COMPENSATION
Directors who are not employed by the Company are paid a $12,000 annual
retainer, $1,000 for each Board meeting attended and $500 for each committee
meeting attended. Non-employee directors are also reimbursed for expenses
incurred in attending meetings. Prior to the Company's initial public offering
in June 1993, Messrs. Greer, Farella and Rhoades were each granted options under
the Company's 1993 Non-Employee Directors' Stock Option Plan to buy 12,000
shares of Class A Common Stock at $11.90 per share. The options were fully
vested as of June 1999 and are exercisable over a ten-
8
<PAGE> 11
year period ending February 26, 2003. Pursuant to the Company's 1993
Non-Employee Directors' Stock Option Plan, any non-employee director of the
Company is similarly entitled, on the date of his or her initial election as a
non-employee director, to a grant of options to acquire shares of Class A
Common Stock. On May 29, 1996, Mr. Barksdale was granted options to buy 5,345
shares of Class A Common Stock at $28.0625 per share. The Non-Employee
Directors' Stock Option Plan also provides for additional annual grants to the
outside directors of 2,000 options each year.
REPORT OF THE COMPENSATION COMMITTEE
General
- -------
The Compensation Committee of the Board of Directors administers the
Company's executive compensation program. The Compensation Committee is
composed entirely of directors who are not employees 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 in detail 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, stock
option grants and other stock-based awards under the Company's Amended and
Restated 1993 Equity Incentive Plan (the "1993 Equity Plan") and unit awards
under the Company's Executive Incentive Compensation Plan (the "E.I.C.P.").
These elements are designated to operate on an integrated basis and together
comprise total compensation value.
The Compensation Committee reviews executive compensation in light of the
Company's performance during the fiscal year and compensation data at companies
that are considered comparable. In reviewing the Company's performance during
fiscal 1999, the Compensation Committee considered a variety of factors. Net
revenues increased by 14.0% to $370.6 million in fiscal 1999 from $325.2
million in fiscal 1998. At the same time net income, excluding reorganization
and other one-time charges, increased by 14.3% to $34.5 million in fiscal 1999
from $30.2 million in fiscal 1998. The Company also regained and increased
Woodbridge market share, implemented important operational and organizational
changes, reduced administrative expenses and increased its marketing and sales
focus on the Woodbridge, Robert Mondavi Coastal and Robert Mondavi Winery
brands. In reviewing Company performance, the Compensation 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
Compensation Committee based on factors such as individual performance (e.g.
leadership, level of responsibility, management skills and industry
activities), Company performance (as described above) and competitive pay
practices. The base salary level for Mr. Robert Mondavi is established by his
employment agreement described below.
Base compensation for Michael Mondavi, the Company's Chief Executive
Officer, was reviewed by the Compensation Committee in the context of
compensation packages awarded to senior executive officers at comparable
companies selected by an outside compensation consultant. The companies
included in the comparison are not the same as the companies included in the
peer group index in the performance graph included elsewhere herein. The
Compensation Committee believes that the
9
<PAGE> 12
Company's most direct competitors for executive talent in the San Francisco Bay
Area are not necessarily the same companies to which the Company would be
compared for stock performance purposes. The Chief Executive Officer's base
salary was reviewed against the 75th percentile of the comparative data.
Annual Cash Incentives
- ----------------------
The annual cash incentive is designed to provide a short-term (one-year)
incentive to executives, is based on the Company meeting certain predetermined
levels of pre-tax operating income, and is allocated among the executives based
on the Committee's assessment of the performance of each executive, following
consultation with the Chief Executive Officer. In addition, cash incentive
compensation may be granted by the Committee to certain executives based on
their performance of individual goals established in advance by the Committee.
These individual goals may include objective and subjective factors, such as
leadership and management skills, successful acquisitions or financings and
improved performance of assets. Annual cash incentives were awarded to the
Named Executive Officers, as indicated in the above Summary Compensation Table,
based on the Committee's evaluation of each Named Executive Officer's
contribution to the Company's performance in fiscal 1999.
Stock Options
- -------------
Stock options are designed to provide long-term (ten-year) incentives and
rewards tied to the price of the Company's Class A Common 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, 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 Compensation Committee has
not established any target level of ownership of Company Class A Common Stock
by the Company's executives. However, retention of shares of Company stock by
executives is encouraged.
On July 27, 1999, the Board of Directors, on recommendation of the
Compensation Committee, awarded an aggregate of 183,660 options at an exercise
price of $36.125 per share to the Company's executive officers, including
39,802 options for Michael Mondavi, 17,058 options for Timothy Mondavi, 27,862
options for Mr. Evans and 22,744 options for Mr. Clark. The options vest at the
rate of 1/60 per month and expire ten years from the grant date.
E.I.C.P.
- --------
Like the 1993 Equity Plan, the E.I.C.P. is designed to provide long-term
(five-year) incentives and rewards tied to the Company performance. Under the
E.I.C.P., the Compensation Committee may make annual awards of units to
executive officers which earn a percentage of plan income based on the
Company's pre-tax net income, as more fully described in footnote 9 to the
Summary Compensation Table. The use of the E.I.C.P. as a regular element of
compensation for executive officers was discontinued upon adoption of the 1993
Equity Plan and no awards were made during fiscal 1999. However, pursuant to
the terms of the E.I.C.P., outstanding units will continue to accrue earnings
in future years. The Summary Compensation Table shows under the caption
"Payouts - Long Term Incentive Plan" the cash payments made to the Named
Executive Officers under the E.I.C.P. during fiscal 1999. While use of E.I.C.P.
awards will no longer be a regular element of long-term compensation, the
Compensation Committee believes that the E.I.C.P. has and continues to serve as
a valuable long-term incentive for executive officers and as a strong and
direct link between corporate performance and compensation.
10
<PAGE> 13
IRC Section 162(m)
- ------------------
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), denies a deduction to any publicly held corporation for compensation
paid to certain covered employees in a taxable year to the extent such
compensation exceeds $1 million. Certain types of compensation, however,
including "performance-based compensation," are disregarded for purposes of the
deduction limitation. Awards of options and other stock-based incentives under
the 1993 Equity Plan are intended by the Compensation Committee to qualify for
the exclusion for performance-based compensation.
The foregoing report is given by the members of the Compensation
Committee, namely:
Philip Greer
Barlett R. Rhoades
PERFORMANCE GRAPH
The line graph below compares the cumulative total return to holders of
the Company's Common Stock in the period from June 30, 1994 to June 30, 1999,
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
June 30, 1999: Chalone Wine Group, Ltd., Canandaigua Wine Inc., Adolph Coors
Company, Anheuser-Busch Companies, Inc., Brown-Forman Corporation and Beringer
Wine Estates Holdings, Inc. The graph assumes an investment of $100.00 on June
30, 1994 in the Company and in the comparison indices, "Total return," for
purposes of the graph, assumes reinvestment of all dividends.
[LINE GRAPH]
The information contained in the performance graph shall not be deemed to
be "soliciting material" or to be "filed" with the SEC, nor shall such
information be incorporated by reference into any future filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934 (the "Exchange
Act"), except to the extent that the Company specifically incorporates it by
reference into such filing.
11
<PAGE> 14
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 SEC. Copies of those
reports must also be furnished to the Company.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during fiscal 1999 all
filing requirements applicable to the Company's officers, directors and
greater-than-ten-percent beneficial owners under Section 16(a) of the Exchange
Act were complied with.
EMPLOYMENT AGREEMENT
In February 1993, Robert Mondavi entered into an agreement with the
Company which replaced his Personal Services Agreement executed in 1979. The
current agreement provides for a fixed annual salary of up to $500,000.
CERTAIN TRANSACTIONS
Frank Farella is a partner in the law firm of Farella, Braun & Martel
which provides certain legal services to the Company. The Company also buys
wine grapes from Mr. Farella at market prices pursuant to a written agreement.
The Company paid Mr. Farella $68,000 for grapes during the fiscal year ended
June 30, 1999.
In November, 1998 Michael Mondavi bought approximately 18 plantable acres
of land in Napa Valley from an unaffiliated third party. He has hired Robert
Mondavi Winery to develop and farm the land as vineyards, for which he pays the
winery a fee equal to $250 per plantable acre plus its costs of farm labor,
materials and equipment. From time to time Mr. Mondavi may sell grapes from the
vineyard to the Company at prevailing market prices.
It is the Company's current policy that all transactions by the Company
with its officers, directors, 5% shareholders and their affiliates will be
entered into only if such transactions are approved by a majority of the
disinterested directors, are on terms no less favorable to the Company than
could be obtained from unaffiliated parties and are reasonably expected to
benefit the Company.
APPOINTMENT OF AUDITORS
(PROPOSAL 2 ON PROXY)
The firm of PricewaterhouseCoopers LLP has served as independent auditors
for the Company since fiscal 1978 and has been appointed by the Audit Committee
of the Board of Directors as the Company's independent auditors for the fiscal
year 2000, subject to ratification by the shareholders at the Annual Meeting.
Representatives of PricewaterhouseCoopers LLP are expected to be available at
the annual meeting to respond to appropriate questions from shareholders and
will have the opportunity to make a statement if they wish.
RECOMMENDATION
The Board of Directors recommends that shareholders vote FOR ratification
of the appointment of PricewaterhouseCoopers LLP as the Company's independent
auditors.
12
<PAGE> 15
OTHER MATTERS
GENERAL
The Board of Directors does not know of any business to be presented at
the Annual Meeting other than the matters described above. If any other
business should properly come 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.
DEADLINE FOR SHAREHOLDER PROPOSALS
Any shareholder proposal intended for presentation at the 2000 Annual
Meeting must be received by the Secretary of the Company at the Company's
principal executive offices located at 7801 St. Helena Highway, Oakville,
California 94562 by June 1, 2000 for inclusion in the Company's proxy materials
related to that meeting.
The Bylaws of the Company provide that in order for a shareholder to bring
business before or propose director nominations at an Annual Meeting, the
shareholder must give written notice to the Secretary of the Company 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 70 days' 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 Meting date was mailed or public disclosure of the date of the
Annual Meeting was made, whichever first occurs.
By Order of the Board of Directors,
/s/ MIKE BEYER
-----------------------------------
Mike Beyer
Secretary
September 28, 1999
<PAGE> 16
PROXY
THE ROBERT MONDAVI CORPORATION
CLASS A COMMON STOCK PROXY
FOR ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 5, 1999
The undersigned hereby appoints Gregory M. Evans and Michael K. Beyer, or
either of them, each with the power of substitution, as proxies to represent
the undersigned at the Annual Meeting of Shareholders of THE ROBERT MONDAVI
CORPORATION to be held at the Woodbridge Winery, 5950 East Woodbridge Road,
Acampo, CA on November 5, 1999 at 10:00 a.m., and any adjournment thereof, and
to vote the number of shares of the CLASS A COMMON STOCK OF THE ROBERT MONDAVI
CORPORATION that the undersigned would be entitled to vote if personally
present.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE ROBERT
MONDAVI CORPORATION. THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF
DIRECTION, THIS PROXY WILL BE VOTED FOR THE NOMINEES FOR ELECTION AND FOR THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP. In their
discretion, the proxy holders are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof to the
extent authorized by Rule 14a-4(c) promulgated by the Securities and Exchange
Commission and by applicable state laws (including matters that the proxy
holders do not know, a reasonable time before this solicitation, are to be
presented).
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 17
<TABLE>
<S> <C>
Please mark [X]
your vote as
indicated in
this example.
FOR all nominees WITHHOLD
listed below AUTHORITY
(except as marked to vote for the
to the contrary) nominees listed below
1. ELECTION OF DIRECTORS TO BE ELECTED BY HOLDERS [ ] [ ]
HOLDERS OF CLASS A COMMON STOCK, VOTING AS A CLASS:
Nominees: Philip Greer, Frank E. Farella, James L. Barksdale
To withhold authority to vote for an individual nominee, write such nominee's name below:
______________________________________________________________________________________________________
FOR AGAINST ABSTAIN
2. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP [ ] [ ] [ ]
AS INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR:
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER(S). IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF EACH OF THE
NOMINEES FOR DIRECTORS AND FOR PROPOSAL 2 LISTED ABOVE.
YES NO
I plan to attend the meeting: [ ] [ ]
PROXY INSTRUCTIONS
1. Please sign exactly as the name or names appear on
your stock certificates (as indicated hereon).
2. If the shares are issued in the name of two or more
persons, all of them must sign the proxy.
3. A proxy executed by a corporation must be signed by
its name by an authorized officer.
4. Executors, administrators, trustees and partners
should indicate their capacity when signing.
The undersigned acknowledges receipt of (a) the Notice of 1999 Annual Meeting of Shareholders, (b) the
accompanying Proxy Statement and (c) Company's Annual Report pursuant to SEC Rule 14a-3 for the fiscal
year ended June 30, 1999.
Signature(s) ____________________________________________________________ Dated: _________________, 1999
- ---------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
