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. __)
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[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
Ravenswood Winery, Inc.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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RAVENSWOOD WINERY, INC.
18701 GEHRICKE ROAD
SONOMA, CALIFORNIA 95476
------------------------
NOTICE OF ANNUAL MEETING
------------------------
Dear Shareholder:
On Tuesday, November 7, 2000, Ravenswood Winery, Inc. will hold its Annual
Meeting of Shareholders at the Quarry Facility, 26200 Arnold Drive, Sonoma,
California. The meeting will begin at 11:00 a.m.
Only shareholders that owned stock at the close of business on September
11, 2000 can vote at this meeting. A list of such shareholders will be available
at 18701 Gehricke Road, Sonoma, California 95476 for ten days prior to the
Annual Meeting. At the meeting, we will consider the following proposals:
1. To elect a Board of Directors to hold office until the next Annual
Meeting of Shareholders or until their respective successors have been
elected or appointed;
2. To ratify an amendment to the 1999 Equity Incentive Plan to increase
the number of shares issuable under the Plan; and
3. To ratify the appointment of Odenberg, Ullakko, Muranishi & Co. LLP
as our independent auditors for the 2001 fiscal year;
4. To transact such other business as may properly come before the
meeting or any postponement or adjournment of the meeting.
Our 2000 Annual Report to Shareholders accompanies this Notice of
Annual Meeting and Proxy Statement.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSALS
OUTLINED IN THIS PROXY STATEMENT.
Our Management will also report on our 2000 fiscal year business results and
other matters of interest to shareholders at the meeting.
By Order of the Board of Directors,
Justin M. Faggioli
Executive Vice President and Secretary
Sonoma, California
October 6, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN THE ACCOMPANYING PROXY
CARD IN THE ENCLOSED ENVELOPE.
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RAVENSWOOD WINERY, INC.
18701 GEHRICKE ROAD
SONOMA, CALIFORNIA 95476
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PROXY STATEMENT
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TABLE OF CONTENTS
Questions and Answers....................................................... 1
Proposals You May Vote On................................................... 3
Nominees for the Board of Directors......................................... 6
Statement of Corporate Governance........................................... 8
Directors' Compensation..................................................... 8
Officers' Compensation...................................................... 8
Directors' and Officers' Ownership of Our Common Stock...................... 10
Certain Transactions........................................................ 12
Directors' and Officers' Indemnification.................................... 13
Section 16(a) Beneficial Ownership Reporting Compliance..................... 13
Other Matters............................................................... 13
Annual Report............................................................... 13
<PAGE>
QUESTIONS AND ANSWERS
1. Q: WHO IS SOLICITING MY VOTE?
A: This proxy solicitation is being made and paid for by Ravenswood
Winery, Inc.
2. Q: WHEN WAS THIS PROXY STATEMENT MAILED TO SHAREHOLDERS?
A: This proxy statement was first mailed to shareholders on or about
October 6, 2000.
3. Q: WHAT MAY I VOTE ON?
A: (1) The election of nominees to serve on our Board of Directors; (2)
The ratification of the amendment to the 1999 Equity Incentive Plan;
and (3) The ratification of the appointment of Odenberg, Ullakko,
Muranishi & Co. LLP as our independent auditors for the 2001 fiscal
year;
4. Q: HOW DOES THE BOARD RECOMMEND I VOTE ON THE PROPOSALS?
A: The Board recommends a vote FOR each of the nominees. The Board
recommends a vote FOR the amendment to the 1999 Equity Incentive Plan.
The Board recommends a vote FOR the ratification of the appointment of
Odenberg, Ullakko, Muranishi & Co. LLP as our independent auditors for
the 2001 fiscal year.
5. Q: WHO IS ENTITLED TO VOTE?
A: Only shareholders of record at the close of business on September 11,
2000 (the Record Date) can vote at this meeting.
6. Q: HOW DO I VOTE?
A: You may vote by signing and dating each proxy card you receive and
returning it in the enclosed prepaid envelope. If you return your
signed proxy card but do not mark the boxes showing how you wish to
vote, your shares will be voted FOR each of the director nominees, FOR
the ratification of the amendment to the 1999 Equity Incentive Plan and
FOR the ratification of the appointment of Odenberg, Ullakko, Muranishi
& Co. LLP as our independent auditors. You have the right to revoke
your proxy at any time before the meeting by: (1) notifying the
Secretary, Justin M. Faggioli, at the address shown above; (2) voting
in person; or (3) submitting a later-dated proxy card.
7. Q: HOW DO I VOTE MY SHARES IF THEY ARE HELD IN THE NAME OF MY BROKER
(STREET NAME)?
A: If your shares are held by your broker, often referred to as "in street
name," you will receive a form from your broker seeking instruction as
to how your shares should be voted. If you do not issue instructions to
your broker, your broker will vote your shares at its discretion on
your behalf.
8. Q: WHO WILL COUNT THE VOTE?
A: A representative of our transfer agent, ChaseMellon Shareholder
Services, will count the votes and act as the inspector of election.
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9. Q: IS MY VOTE CONFIDENTIAL?
A: Proxy cards, ballots and voting tabulations that identify individual
shareholders are mailed or returned directly to ChaseMellon Shareholder
Services, and handled in a manner that protects your voting privacy.
Your vote will not be disclosed except: (1) as needed to permit
ChaseMellon Shareholder Services to tabulate and certify the vote; and
(2) as required by law. Additionally, all comments written on the proxy
card or elsewhere will be forwarded to our management. Your identity
will be kept confidential unless you ask that your name be disclosed.
10. Q: HOW MANY SHARES CAN VOTE?
A: As of September 11, 2000, 4,858,929 shares of Common Stock were issued
and outstanding. Every shareholder is entitled to one (1) vote for each
share of Common Stock held.
11. Q: WHAT IS A "QUORUM"?
A: A "quorum" is a majority of the outstanding shares. They may be present
at the meeting or represented by proxy. There must be a quorum for the
meeting to be held. Abstentions are counted for the purposes of
determining the presence or absence of a quorum. Abstentions are not
counted for any purpose in determining whether a particular proposal is
approved or disapproved.
12. Q: HOW ARE MATTERS PASSED OR DEFEATED?
A: Director nominees receiving the highest number of affirmative votes up
to the number of directors to be elected will be elected. The
ratification of the amendment to the 1999 Equity Incentive Plan and the
appointment of Odenberg, Ullakko, Muranishi & Co. LLP as our
independent auditors must receive affirmative votes from more than 50%
of the shares voting in order to be adopted.
13. Q: WHAT IS CUMULATIVE VOTING AND IS IT ALLOWED?
A: Each shareholder entitled to vote at an election for Directors may
cumulate the votes to which such shareholder is entitled. This means
that the shareholder may cast a total number of votes equal to the
number of Directors to be elected multiplied by the number of shares of
Common Stock held by the shareholder. Further, the shareholder may cast
such total number of votes for one or more nominees in such proportions
as the shareholder sees fit. However, no shareholder is entitled to
cumulate such shareholder's votes unless the nominees for which such
shareholder is voting have been placed in nomination prior to the
voting and the shareholder has given notice at the meeting, prior to
the vote, of an intention to cumulate votes.
14. Q: WHO CAN ATTEND THE ANNUAL MEETING AND HOW DO I GET ON THE GUEST LIST?
A: Shareholders of record at the close of business on September 11, 2000
can attend. This Notice of Annual Meeting and Proxy Statement and our
2000 Annual Report are accompanied by an invitation to the meeting. You
may indicate your intention to attend the meeting by checking the
appropriate box on your proxy card or, if your shares are held through
a broker and you'd like to attend, please write to Justin M. Faggioli,
Secretary, at Ravenswood Winery, Inc., 18701 Gehricke Road, Sonoma,
California 95476. Include a copy of your brokerage account statement or
an omnibus proxy (which you can get from your broker), and we will
place your name on the guest list.
15. Q: HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
A: We do not know of any business to be considered at the 2000 Annual
Meeting other than the proposals described in this proxy statement. If
any other business is presented at the Annual Meeting, your signed
proxy card gives authority to designated proxies named therein to vote
on such matters at their discretion.
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16. Q: WHEN ARE THE SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING DUE?
A: Any shareholder proposals to be considered for inclusion in next year's
proxy statement must be submitted in writing to Justin M. Faggioli,
Secretary, Ravenswood Winery, Inc., 18701 Gehricke Road, Sonoma,
California 95476, prior to July 10, 2001.
17. Q: CAN A SHAREHOLDER NOMINATE SOMEONE TO BE A DIRECTOR OF RAVENSWOOD OR
BRING BUSINESS BEFORE AN ANNUAL MEETING?
A: Our Bylaws 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 by writing to the Board of Directors, c/o Justin
M. Faggioli, Secretary, Ravenswood Winery, Inc., 18701 Gehricke Road,
Sonoma, California 95476. Specifically, the shareholder must give
written notice to the Secretary not less than 30 days nor more than 60
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 45 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 10th 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.
Finally, the recommendation must include the written consent of each
nominee to serve as a Director, if elected.
PROPOSALS YOU MAY VOTE ON
1. ELECTION OF DIRECTORS
There are currently seven members of the Board of Directors. All seven
current members of the Board of Directors are nominees for election this
year: W. Reed Foster, Joel E. Peterson, Callie S. Konno, Justin M.
Faggioli, James F. Wisner, Robert E. McGill, III and John D. Nichols. All
directors are elected annually and serve until the next Annual Meeting of
Shareholders or until their respective successors are elected and
qualified. If any director is unable to stand for re-election, the Board
may reduce the Board's size or designate a substitute. If a substitute is
designated, proxies voting on the original director candidate will be cast
for the substituted candidate.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THESE DIRECTORS.
2. RATIFICATION OF THE AMENDMENT TO RAVENSWOOD'S 1999 EQUITY INCENTIVE PLAN
The shareholders are being asked to vote to approve an amendment to
Ravenswood's 1999 Equity Incentive Plan (the "1999 Plan"), adopted by the
Board on August 1, 2000 subject to your approval, that will increase the
number of shares available for issuance under the 1999 Plan by 250,000
shares. The Board believes the amendment is necessary in order to provide
Ravenswood with the ability to grant a sufficient amount of stock options
to attract and retain the services of key individuals. The principal terms
and provisions of the 1999 Plan as modified by the recent amendment are
summarized below. The summary is not intended to be a complete description
of all the terms of the 1999 Plan. A copy of the 1999 Plan, as amended,
will be furnished by Ravenswood to any shareholder upon written request to
the Secretary of Ravenswood.
SHARES SUBJECT TO THE 1999 PLAN
A total of 500,000 shares was originally authorized under the 1999
Plan. Ravenswood is seeking shareholder approval to increase the authorized
number by 250,000 shares to a total number of 750,000 shares. Shares
issuable in
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connection with the 1999 Plan are subject to adjustment in the event of
stock splits, stock dividends and other situations. As of June 30, 2000,
there were options outstanding to purchase an aggregate of 482,750 shares
of Common Stock under the 1999 Plan, at exercise prices ranging from $10.50
to $12.23 per share, or a weighted average per share exercise price of
$11.20. If any option granted under the 1999 Plan expires or terminates for
any reason without having been exercised in full, then the unpurchased
shares subject to that option will once again be available for additional
awards. As of June 30, 2000, only 17,250 shares of Common Stock were
available for future grants under the 1999 Plan.
PARTICIPANTS
Any person who is an employee, consultant or other person who provides
services to Ravenswood or a subsidiary of Ravenswood is eligible to receive
awards under the 1999 Plan. Awards may be approved by the Board of
Directors or an authorized committee of the Board of Directors.
ADMINISTRATION
The 1999 Plan is administered by the Board of Directors. The Board of
Directors may periodically adopt rules and regulations for carrying out the
1999 Plan. The Board of Directors may amend the 1999 Plan, as desired,
without further action by Ravenswood's shareholders except as required by
applicable law.
TERMS OF STOCK OPTIONS
Awards under the 1999 Plan consist of nonstatutory stock options
("NSOs") and incentive stock options ("ISOs"). Options granted pursuant to
the 1999 Plan need not be identical. The purchase price under each option
is established by the Board of Directors but in no event can the option
price for ISOs be less than one hundred percent (100%) of the fair market
value of the stock on the date of grant. The closing sale price per share
of the Common Stock as reported on the Nasdaq Stock Market on September 21,
2000 was $14.00. The option price must be paid in full at the time of
exercise. The price may be paid in cash or, if permitted by the Stock
Option Agreement, by delivery of an irrevocable direction to a securities
broker to sell shares and to deliver part of the sale proceeds to
Ravenswood, by the surrender of shares of Ravenswood Common Stock owned by
the participant exercising the option and having a fair market value on the
date of exercise equal to the option price, or by any combination of the
foregoing. Options have such terms and are exercisable in such manner and
at such times as the Board of Directors may determine. In addition, no
optionee may be granted options in excess of 500,000 shares of the Common
Stock. However, each option must expire within a period of not more than
ten years from the grant date. Unless the Stock Option Agreement otherwise
provides, each option is transferable only by will or laws of descent and
distribution and shall only be exercisable by the participant during his or
her lifetime. The Board of Directors may modify, extend or renew
outstanding options or may accept the cancellation of outstanding options
in return for the grant of new options at the same or a different price,
except the optionee must consent to any modification, extension or renewal
which impairs his or her rights or increases his or her obligations under
such option.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the federal income tax consequences of the
1999 Plan is intended to be a summary of applicable federal law. State and
local tax consequences may differ. Because the federal income tax rules
governing options and related payments are complex and subject to frequent
change, optionees are advised to consult their tax advisors prior to
exercise of options or dispositions of stock acquired pursuant to option
exercise. ISOs and NSOs are treated differently for federal income tax
purposes. ISOs are intended to comply with the requirements of Section 422
of the Code. NSOs need not comply with such requirements. An optionee is
not subject to ordinary income tax on the grant or exercise of an ISO. The
difference between the exercise price and the fair market value on the
exercise date of the shares acquired under an ISO will, however, be a
preference item for purposes of the alternative minimum tax. If an optionee
holds the shares acquired upon exercise of an ISO for at least two years
following grant and at least one year following exercise, the optionee's
gain, if any, upon a subsequent disposition of such shares is capital gain.
The measure of the gain is the difference between the proceeds received on
disposition and the optionee's basis in the shares (which generally equals
the option exercise price). If an optionee disposes of stock acquired
pursuant to exercise of an ISO
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before satisfying the one and two year holding periods described above, the
optionee may recognize both ordinary income and capital gain in the year of
disposition. The amount of the ordinary income will be the lesser of (i)
the amount realized on disposition less the optionee's adjusted basis in
the stock (usually the option exercise price) or (ii) the difference
between the fair market value of the stock on the exercise date and the
option exercise price. The balance of the consideration received on such a
disposition will be capital gain (long-term capital gain if the stock had
been held for more than one year following exercise of the ISO). Ravenswood
is not entitled to an income tax deduction on the grant or exercise of an
ISO or on the optionee's disposition of the shares after satisfying the
holding period requirements described above. If the holding periods are not
satisfied, Ravenswood will be entitled to a deduction in the year the
optionee disposes of the shares, in an amount equal to the ordinary income
recognized by the optionee. An optionee is not taxed on the grant of an
NSO. On exercise, however, the optionee recognizes ordinary income equal to
the difference between the option price and the fair market value of the
shares on the date of exercise. Ravenswood is entitled to an income tax
deduction in the year of exercise in the amount recognized by the optionee
as ordinary income. Any gain on subsequent disposition of the shares is
long-term capital gain if the shares are held for more than one year
following exercise. Ravenswood does not receive a deduction for this gain.
NEW PLAN BENEFITS
With respect to all future grants, the Board of Directors has full
discretion to determine the number and amount of options to be granted to
optionees under the 1999 Plan, subject to an annual limitation on the total
number of options that may be granted to any optionee. Therefore, other
than as described in this paragraph, the benefits and amounts that will be
received by each of the officers named in the Summary Compensation Table
below, the executive officers as a group and all other employees under the
1999 Plan are not presently determinable.
REQUIRED APPROVAL
The affirmative vote of the holders of a majority of shares represented
and voting on the matter at a duly held meeting at which a quorum is
present is required to approve the amendment of the 1999 Plan. Unless
marked to the contrary, proxies received will be voted "FOR" approval of
the ratification of amendment to the 1999 Plan.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
AMENDMENT TO THE 1999 EQUITY INCENTIVE PLAN.
3. RATIFICATION OF THE APPOINTMENT OF ODENBERG, ULLAKKO, MURANISHI & CO. LLP
AS INDEPENDENT AUDITORS
The Audit Review Committee has recommended, and the Board has
appointed, Odenberg, Ullakko, Muranishi & Co. LLP as our independent
auditors for the 2001 fiscal year (July 1, 2000 through June 30, 2001),
subject to your ratification.
Audit services provided by Odenberg, Ullakko, Muranishi & Co. LLP
during fiscal 2000 included an audit of our financial statements. They
reviewed our Annual Report and certain other filings with the SEC and
certain other governmental agencies. They have unrestricted access to the
Audit Review Committee to discuss audit findings and other financial
matters. Odenberg, Ullakko, Muranishi & Co. LLP also provided various
non-audit services to us during fiscal 2000.
Odenberg, Ullakko, Muranishi & Co. LLP have been engaged as our
independent auditors since July 1, 1998. Prior to that date, Field
Accountancy Corporation served as independent accountant, but did not
conduct an audit of, or issue an audit opinion concerning, our financial
statements. During its engagement as our independent accountant, there were
no disagreements with Field Accountancy Corporation on any matter of
accounting principles or practices, or financial statement disclosure.
Field Accountancy Corporation did not resign nor was it dismissed. In
anticipation of our initial public offering, Odenberg, Ullakko, Muranishi &
Co. LLP assumed the role of independent auditors and Field Accountancy
Corporation continued in its role as preparer of Ravenswood's corporate tax
returns. The decision to engage Odenberg, Ullakko, Muranishi & Co. LLP was
approved by the Board. Prior to July 1, 1998, we did not consult with
Odenberg, Ullakko, Muranishi & Co. LLP on items which involved accounting
principles or the form of audit opinion to be issued on our financial
statements.
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A representative of Odenberg, Ullakko, Muranishi & Co. LLP is expected
to attend the Annual Meeting. He or she will have the opportunity to speak
at the meeting if he or she wishes and will also respond to appropriate
questions.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ODENBERG, ULLAKKO, MURANISHI & CO. LLP AS OUR INDEPENDENT
AUDITORS FOR THE 2001 FISCAL YEAR.
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NOMINEES FOR THE BOARD OF DIRECTORS
W. Reed Foster
Director Since 1986
Age 68
W. Reed Foster co-founded Ravenswood in 1976. He has served as Chairman,
Chief Executive Officer and a Director since Ravenswood's incorporation in 1986.
From 1970 until joining Ravenswood, Mr. Foster operated a commercial real estate
firm in San Francisco. He also co-founded the San Francisco Vintner's Club,
serving as its president for six years, and served as an officer of Draper &
Esquin, a retail wine shop, for 15 years. Mr. Foster is a director of Woods
Edge, Inc. He received a B.A. in philosophy from Williams College and an M.B.A.
from the Harvard Graduate School of Business Administration.
Joel E. Peterson
Director Since 1986
Age 53
Joel E. Peterson co-founded Ravenswood in 1976. He has served as President,
Winemaker and a Director since Ravenswood's incorporation in 1986. Mr.
Peterson's duties as Winemaker involve managing and directing the winemaking
process and staff, and sourcing grape and bulk wine supplies. From 1973 until
joining Ravenswood, Mr. Peterson was a wine writer and a consultant in the art
of traditional winemaking as practiced in Bordeaux and Burgundy. Mr. Peterson
holds a B.S. in Microbiology and Biochemistry from Oregon State University and a
Medical Technology degree from the University of California, San Francisco. Mr.
Peterson was actively involved in immunology research at Mt. Zion Hospital until
1977.
Justin M. Faggioli
Director Since October 1996
Age 49
Justin M. Faggioli has served as Executive Vice President of Ravenswood
since January 1995, and as Secretary and a Director since October 1996. Prior to
joining Ravenswood, from May 1991 until January 1995, Mr. Faggioli operated a
2,600-acre ranch in Sonoma County owned by his wife's family and helped develop
a 175-acre vineyard on that property. Since 1991, Mr. Faggioli has been a
director of E. J. Bullard Company. Mr. Faggioli is a director of WineSmart.com.
Mr. Faggioli holds B.S. and M.S. degrees in Earth Sciences from Stanford
University and an M.B.A. from the Harvard Graduate School of Business
Administration.
Callie S. Konno
Director Since February 1999
Age 47
Callie S. Konno has served as Ravenswood's Chief Financial Officer since
1996 and has served as a Director since February 1999. From 1993 until her
appointment as Chief Financial Officer, Ms. Konno served as Secretary of
Ravenswood and was responsible for various accounting and administrative duties.
She holds an A.B. in History and International Relations from Occidental College
and an M.L.I.S. in Library and Information Studies from the University of
California, Berkeley. In addition, Ms. Konno has passed the Certified Public
Accountants examination.
James F. Wisner
Director Since 1986
Age 66
James F. Wisner has served as a Director since Ravenswood's incorporation
in 1986. Mr. Wisner has practiced law as a sole practitioner since 1992. From
1972 until 1992, Mr. Wisner was a partner in the law firm of Bancroft, Avery &
McAllister in San Francisco, California. He holds an A.B. in American History
from Yale University, a J.D. from Stanford University and an M.B.A. from Golden
Gate University.
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Robert E. McGill, III
Director Since February 1999
Age 69
Robert E. McGill, III has served as a Director of Ravenswood since February
1999. Mr. McGill currently serves as a director of Lydall, Inc. and Chemfab
Corporation, each of which is a specialty materials manufacturing company traded
on the New York Stock Exchange. In addition, he currently serves as a trustee of
Travelers Mutual & Variable Annuity Funds, an investment company. From 1975 to
1995, Mr. McGill served in various senior management positions, including, most
recently, as executive vice president, finance and administration, and, from
1983 to 1995 as a director, of The Dexter Corporation, a specialty materials and
chemical manufacturing company. Mr. McGill received a B.A. in Economics from
Williams College and an M.B.A. from the Harvard Graduate School of Business
Administration.
John D. Nichols
Director Since February 2000
Age 70
John D. Nichols has served as a Director of Ravenswood since February 2000.
He joined Illinois Tool Works in 1980 as Executive Vice President and was named
President, Chief Operating Officer and a director in 1981 and Chairman in 1986.
He served as Chief Executive Officer from 1982 through August 1995. From 1969
through 1979, he was Executive Vice President and Chief Operating Officer of
Aerojet-General Corporation. Mr. Nichols is a director of Household
International, Philip Morris Companies Inc., Rockwell International Corp., and
Grand Eagle Mining Inc. He serves as an Overseer of Harvard University and a
trustee of a number of cultural and business organizations.
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STATEMENT OF CORPORATE GOVERNANCE
Our business is managed under the direction of the Board of Directors. The
Board delegates the conduct of business to our senior management team.
Our Board usually meets four times a year in regularly scheduled meetings.
It may meet more often if necessary. The Board held four meetings during the
2000 fiscal year. All Directors attended at least seventy-five percent of the
Board Meetings and meetings of the committees of the Board on which such
Director served. The Chief Executive Officer usually proposes the agenda for the
meetings. Board members receive the agenda and supporting information in advance
of the meetings. Board members may raise other matters to be included in the
agenda or at the meetings. The Chief Executive Officer, Chief Financial Officer
and other members of senior management make presentations to the Board at the
meetings and a substantial portion of the meeting time is devoted to the Board's
discussion of these presentations. Significant matters that require Board
approval are voted on at the meetings.
Board members have complete access to senior management. They may also seek
independent, outside advice.
Committee Structure. The Board considers all major decisions. The Board has
established two standing committees so that certain areas can be addressed in
more depth than may be possible at a full Board meeting. Each committee is
chaired by an independent, outside Director.
Audit Review Committee. This committee oversees our financial reporting
process and our internal controls. The Audit Review Committee reports on its
activities to the Board. The members of this committee are James F. Wisner,
Robert E. McGill, III and John D. Nichols. This committee held at least two
meetings during the 2000 fiscal year.
Compensation Committee. This committee reviews the compensation of the CEO
and senior management, as well as our general employee compensation and benefits
policies and practices. The members of this committee are James F. Wisner and
Robert E. McGill, III. This committee held one meeting during the 2000 fiscal
year.
DIRECTORS' COMPENSATION
Our outside Directors (those Directors who are not employees of our
company), James F. Wisner, Robert E. McGill, III and John D. Nichols, do not
receive regular compensation for serving on our Board, although they are
reimbursed for reasonable expenses related to the attendance of Board meetings.
We pay for Directors' liability insurance and we have entered into
indemnification agreements with each of our Directors. During the 2000 fiscal
year, we made discretionary nonstatutory option grants to each of Messrs.
Wisner, McGill and Nichols to purchase 5,000 shares of our Common Stock, which
vest at a rate of 20% per year over five years. The exercise price for each of
those grants is $11.12 per share, the market value of our Common Stock on the
date of grant.
During fiscal 2000, Mr. Wisner received approximately $10,500 in fees from
our company for certain legal services he provided to our company.
Employee Directors are not eligible for any additional compensation for
service on the Board or its committees.
OFFICERS' COMPENSATION
Summary Compensation Table (1)
<TABLE>
The following table sets forth information for the 2000 fiscal year,
regarding the compensation earned by the Chief Executive Officer and each of our
three most highly compensated executive officers, other than the Chief Executive
Officer, whose compensation exceeded $100,000 for the 2000 fiscal year ("Named
Executive Officers"). We have not entered into employment agreements with any of
our officers. We have purchased key-man life insurance policies with respect to
Messrs. Peterson and Foster, in the amounts of $7 million and $2 million,
respectively.
<CAPTION>
9
<PAGE>
Number of
401(K) Shares
Matching Underlying
Name and Principal Position Year Salary Bonus Contributions Options
--------------------------- ---- ------ ----- ------------- ----------
<S> <C> <C> <C> <C> <C>
W. Reed Foster
Chairman of the Board of Directors
and Chief Executive Officer................... 2000 $236,154 $50,000 $5,603 50,000
1999 $174,350 $45,000 $7,693 50,000
1998 $149,942 $35,000 $7,398 -
Joel E. Peterson
Winemaker and President....................... 2000 $236,154 $50,000 $5,200 50,000
1999 $174,350 $45,000 $5,200 50,000
1998 $149,942 $35,000 $1,467 -
Callie S. Konno
Chief Financial Officer....................... 2000 $157,462 $50,000 $5,523 37,500
1999 $ 97,750 $45,000 $5,710 37,500
1998 $ 76,047 $35,000 $4,442 -
Justin M. Faggioli
Executive Vice President and Secretary........ 2000 $186,923 $50,000 $5,403 37,500
1999 $132,500 $45,000 $7,100 37,500
1998 $108,654 $35,000 $5,749 -
-----------------
<FN>
(1) The "Other Annual Compensation" column was omitted since this compensation
did not exceed the lesser of $50,000 or 10% of the total of any Named
Executive Officer's salary and bonus, nor did any such Named Executive
Officer receive any restricted stock award, stock appreciation right or
payment under any long-term incentive plan.
</FN>
</TABLE>
Option Grants During The 2000 Fiscal Year.
<TABLE>
The following table presents additional information concerning the
option awards shown in the Summary Compensation Table for the 2000 fiscal year.
These options to purchase our Common Stock were granted to the Named Executive
Officers under the 1999 Equity Incentive Plan at exercise prices either equal to
or in excess of the market value of our Common Stock on the date of grant.
<CAPTION>
10
<PAGE>
% of Total
Number of Shares Options Granted to
Underlying Employees in Last Exercise Price Expiration
Name Options Granted Fiscal Year(1) Per Share Date
---- ---------------- ------------------ -------------- -----------
<S> <C> <C> <C> <C>
W. Reed Foster............ 50,000(2) 24.42% $12.23 02/17/05
Joel E. Peterson.......... 50,000(2) 24.42% $12.23 02/17/05
Callie S. Konno........... 37,500(3) 18.31% $11.12 02/17/10
Justin M. Faggioli........ 37,500(3) 18.31% $11.12 02/17/10
------------------
<FN>
(1) Based on options to purchase an aggregate of 204,750 shares of Common Stock
granted during the 2000 fiscal year.
(2) Vests in five 20% installment, the first four of which are annual
installments beginning on 2/18/00. The fifth installment vests 30 days
prior to the expiration date of the option.
(3) Vests at the rate of 20% per year over a five-year period.
</FN>
</TABLE>
Aggregated Option Exercises In Last Fiscal Year And Fiscal Year-End Option
Values.
<TABLE>
The following table shows the number of shares of Common Stock
represented by outstanding stock options held by each of the Named Executive
Officers as of June 30, 2000. None of our Named Executive Officers exercised any
stock options during the 2000 fiscal year.
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year End at Fiscal Year End
Name (1) Exercisable/Unexercisable(1) Exercisable/Unexercisable(2)
-------- ---------------------------- ----------------------------
<S> <C> <C>
W. Reed Foster.................. 10,000/90,000 $12,700/$114,300
Joel E. Peterson................ 10,000/90,000 $12,700/$114,300
Callie S. Konno................. 7,500/67,500 $17,850/$160,650
Justin M. Faggioli.............. 7,500/67,500 $17,850/$160,650
------------------
<FN>
(1) No shares were exercised during Fiscal Year 2000. Therefore, the "Shares
Acquired on Exercise" and "Value Realized" columns have been omitted.
(2) Based on a per share price of $13.50, the closing price of our Common Stock
as reported by The Nasdaq National Market on June 30, 2000, the last trading
day of our fiscal year.
</FN>
</TABLE>
DIRECTORS' AND OFFICERS' OWNERSHIP OF OUR COMMON STOCK
The following tables set forth information regarding the beneficial
ownership of our Common Stock as of September 11, 2000, for:
o each person who is known by us to beneficially own more than 5% of the
outstanding shares of our Common Stock
o each of our Directors
o each of our Named Executive Officers
o all of our Directors and executive officers as a group.
The address of each of the Directors and executive officers of Ravenswood
is c/o Ravenswood Winery, Inc., 18701 Gehricke Road, Sonoma, California 95476.
11
<PAGE>
<TABLE>
The percentages of shares outstanding provided in the tables are based on
4,858,929 shares outstanding as of September 11, 2000. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission and generally includes voting or investment power with respect to
securities. Unless otherwise indicated, each person or entity named in the
tables has sole voting power and investment power, or shares voting and
investment power with his or her spouse, with respect to all shares of capital
stock listed as owned by that person. Shares issuable upon conversion of
debentures that are currently convertible or become convertible within sixty
days of September 11, 2000 are considered outstanding for the purpose of
calculating the percentage of outstanding shares of our Common Stock held by the
individual, but not for the purpose of calculating the percentage of outstanding
shares held by any other individual.
<CAPTION>
Number of Shares Percentage of
of Common Stock Common Stock
Name Beneficially Owned Outstanding
---- ------------------ --------------
<S> <C> <C>
W. Reed Foster............... 441,681 9.06%
Joel E. Peterson............. 1,342,370 27.57%
Justin M. Faggioli........... 143,560 2.94%
Callie S. Konno.............. 67,350 1.38%
James F. Wisner.............. 148,500 3.06%
Robert E. McGill, III........ 26,750 *
John D. Nichols.............. 72,765 1.50%
All Directors and Executive Officers as a Group 2,242,976 45.6%
*owns less than 1%
</TABLE>
The disclosure regarding the number of shares of Common Stock beneficially
owned in the preceding table:
o with respect to Mr. Foster, includes 10,000 shares issuable upon the
exercise of outstanding options and 5,625 shares issuable upon the
conversion of outstanding convertible debentures and does not include
151,200 shares held by an irrevocable trust managed by an independent
trustee and established for the benefit of Mr. Foster's children
o with respect to Mr. Peterson, includes 10,000 shares issuable upon the
exercise of outstanding options but does not include 151,200 shares
held by an irrevocable trust managed by an independent trustee and
established for the benefit of Mr. Peterson's children
o with respect to Mr. Faggioli, includes 7,500 shares issuable upon the
exercise of outstanding options and 12,085 shares issuable upon the
conversion of outstanding convertible debentures (4,789 of which are
issuable to Mr. Faggioli's spouse), 1,000 shares held by Mr. Faggioli's
spouse and 4,000 shares held in trusts for Mr. Faggioli's children, for
which Mr. Faggioli serves as trustee
o with respect to Ms. Konno, includes 7,500 shares issuable upon the
exercise of outstanding options
o with respect to Mr. Wisner, includes 1,000 shares issuable upon the
exercise of outstanding options and 31,500 shares held by Mr. Wisner's
spouse
o with respect to Mr. McGill, includes 1,000 shares issuable upon the
exercise of outstanding options and 5,625 shares issuable upon the
conversion of outstanding convertible debentures and 13,500 shares held
in a family trust established for the benefit of Mr. McGill
o with respect to our Directors and executive officers as a group,
includes 23,335 shares issuable upon the conversion of immediately
convertible debentures and 37,000 shares issuable upon exercise of
immediately exercisable options.
12
<PAGE>
CERTAIN TRANSACTIONS
On August 25, 1992, we entered into a deferred compensation agreement with
Reed Foster, our Chairman and Chief Executive Officer, entitling him to receive,
upon termination of his employment, the value of 345,731 shares of Common Stock,
payable in shares or cash at our discretion. Effective July 1, 1998, we mutually
terminated this arrangement, issued 345,731 shares of Common Stock to Mr.
Foster, and agreed to lend him up to $335,000 to pay taxes related to his
receipt of these shares. The loan, which had a balance of $310,000 on June 30,
2000, is due on December 21, 2008, with interest payable annually at 5.3% per
annum. The loan is unsecured.
From August until December 1998, the following officers and Directors
participated in our private placement of an aggregate of $1.7 million of
convertible debentures and $1.7 million of Common Stock:
Amount
Name Security Purchased
---- -------- ---------
W. Reed Foster................ Convertible Debentures $ 62,500
Common Stock $ 62,500
Justin M. Faggioli............ Convertible Debentures $ 134,283
Common Stock $ 187,500
Robert E. McGill, III......... Convertible Debentures $ 62,500
Common Stock $ 62,500
Each $10,000 convertible debenture is convertible into 900 shares of Common
Stock. The price of the Common Stock sold in the private placement was $7.94 per
share. The purchase price of the securities sold to these officers and Directors
in the private placement was determined based on our Board of Directors' good
faith determination of the fair market value of the securities, and was
equivalent to the price paid for the securities by unrelated third parties in
the transaction.
In connection with the proposed expansion of our new facility, which we
refer to as the Quarry Facility, we entered into an agreement to lease
approximately 20 acres of land in Sonoma County, California from Sandra D.
Donnell and Bruce B. Donnell, the wife and brother-in-law, respectively, of Mr.
Faggioli, our Executive Vice President. The lease, which is dated as of January
1, 1999, and is subject to annual adjustments, provides for monthly payments and
expires on December 31, 2032. Our payments to Ms. Donnell and Mr. Donnell under
the current and prior lease totaled $29,255 for calendar 1999 and are expected
to total $30,000 for calendar 2000.
Mr. Faggioli, Ms. Donnell and Mr. Donnell, together, are 15% partners in
Sangiacomo-El Novillero Vineyards. This partnership sells a portion of its
grapes to us. Our payments to the partnership for these grapes totaled $49,609
in calendar year 1999 and is expected to total approximately $60,000 in calendar
2000.
Mr. Peterson's wife, Madeleine Deininger, serves as one of our wine brokers
in the New England states. Under this arrangement, Ms. Deininger received sales
commissions totaling $240,808.68 in calendar 1999 and is expected to receive a
total of approximately $300,000 in calendar 2000.
In February 1999, we paid off the balance of a loan made by Mr. Foster to
our company. The total amount paid, including principal and interest, was
approximately $217,588.
In March 1999, we paid off the balance of a loan made by Mr. Peterson to
our company. The total amount paid, including principal and interest, was
approximately $74,644.
In March 1999, Mr. Peterson paid of the balance of a loan made by our
company to him. The total amount paid, including principal and interest, was
approximately $29,714.
We believe these transactions were in our company's best interest. As a
matter of policy, the transactions were, and all future transactions between our
company and any of its officers, Directors or principal shareholders will be,
approved by a majority of the disinterested members of the Board of Directors,
will be on terms no less favorable to our company than could be obtained from
unaffiliated third parties and will be to serve bona fide business purposes of
our company.
13
<PAGE>
DIRECTORS' AND OFFICERS' INDEMNIFICATION
Our bylaws require that we indemnify our Directors and officers, to the
extent permitted under California law. They are indemnified against any costs,
expenses (including legal fees) and other liabilities in connection with their
service to our company. We have purchased liability insurance to insure against
liabilities of our Directors and officers. We have also entered into
indemnification agreements with each of our Directors and executive officers.
The insurance and indemnification agreements supplement the provisions of our
Articles of Incorporation that eliminate the potential liability of Directors
and officers to our company or its shareholders, in certain situations, as
permitted by law.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
We believe that during the 2000 fiscal year, all SEC filings of Directors,
officers and ten-percent shareholders complied with the requirements of Section
16 of the Securities Exchange Act. This belief is based on our review of forms
filed, or written notice that no forms were required.
OTHER MATTERS
Proxy Solicitation. The expense of solicitation of proxies will by borne by
our company. In addition to solicitation of proxies by mail, certain officers,
Directors and employees who will receive no additional compensation for their
services may solicit proxies by telephone, telegraph or personal interview. We
are required to request that brokers and nominees who hold stock in their name
furnish these proxy materials to beneficial owners of the stock and will
reimburse such brokers and nominees for their reasonable out-of-pocket expenses
related to that effort.
ANNUAL REPORT
We will provide a copy of our 2000 Annual Report to Shareholders, without
charge, to any shareholder who makes a written request to Justin M. Faggioli,
Secretary, Ravenswood Winery, Inc., 18701 Gehricke Road, Sonoma, California
95476.
By Order of the Board of Directors,
Justin M. Faggioli
Executive Vice President and Secretary
Sonoma, California
October 6, 2000
14
<PAGE>
APPENDIX A
--------------------------------------------------------------------------------
PROXY RAVENSWOOD WINERY, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF RAVENSWOOD WINERY, INC.
The undersigned, revoking all previous proxies relating to its shares of
common stock ("Shares") of Ravenswood Winery, Inc. (the "Company"), hereby
acknowledges receipt of the Notice of the Annual Meeting of Shareholders and
Proxy Statement in connection with the Annual Meeting of Shareholders of the
Company to be held at 11:00 A.M., Pacific Time, on November 7, 2000 at the
Quarry Facility, 26200 Arnold Drive, Sonoma, California 95476, and hereby
appoints W. Reed Foster, Joel E. Peterson, Justin M. Faggioli and Callie S.
Konno and each of them, the proxy of the undersigned, each with full power of
substitution, to vote all Shares which the undersigned is entitled to vote
either on his or her own behalf or on behalf of any entity or entities, at the
Annual Meeting and at any adjournments or postponements thereof upon all matters
that may properly come before the meeting and with all powers the undersigned
would have if personally present. Without otherwise limiting the foregoing
general authorization, the proxies are instructed to vote or act as indicated
herein.
THIS PROXY, WHICH IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, WILL BE
VOTED FOR THE MATTERS DESCRIBED HEREIN UNLESS THE SHAREHOLDER SPECIFIES
OTHERWISE, IN WHICH CASE IT WILL BE VOTED AS SPECIFIED. SEE REVERSE SIDE. IF YOU
WISH TO VOTE IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS,
PLEASE MARK THE APPROPRIATE BOX AND SIGN THE PROXY. THIS PROXY MAY BE REVOKED AT
ANY TIME PRIOR TO THE TIME IT IS VOTED.
(Continued, and to be dated and signed on reverse side)
--------------------------------------------------------------------------------
(DELTA) FOLD AND DETACH HERE (DELTA)
15
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
[ ] Please mark
votes as
in this
example.
1. To elect a Board of seven (7) directors. FOR WITHHOLD
ALL FOR ALL
NOMINEES NOMINEES
[ ] [ ]
NOMINEES:
W. Reed Foster, Joel E. Peterson,
Callie S. Konno, Justin M. Faggioli,
James F. Wisner, Robert E. McGill, III and John D. Nichols.
The Board of Directors recommends a vote
IN FAVOR OF the directors listed above and a vote
IN FAVOR OF each of the listed proposals below.
[ ]____________________________________________
For all nominees except
as noted above
FOR AGAINST ABSTAIN
2. To ratify the amendment to Ravenswood's 1999 Equity Incentive Plan [ ] [ ] [ ]
3. To ratify the appointment of Odenberg, Ulakko, [ ] [ ] [ ]
Muranishi & Co., LLP as independent auditors of
Ravenswood for the period ending June 30, 2001.
4. To vote upon such other business as may properly [ ] [ ] [ ]
come before the meeting.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING. [ ]
Please sign exactly as your name appears on your stock
certificate. Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or guardian, please
give full title as such. When shares are held by joint tenants,
both should sign. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized
person.
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW
___________________________________________ [ ]
___________________________________________
Signature(s)______________________________________________________________ Dated ___________________________________
--------------------------------------------------------------------------------------------------------------------
(DELTA) FOLD AND DETACH HERE (DELTA)
</TABLE>
16
