AMENDMENT OF VOTING TRUST
dated the 27th day of May, 1998, as amended
and
ACTION BY THE DIRECTORS OF RAVENSWOOD WINERY, INC.
(Together referred to herein as this "amendment and action")
On December 29, 1998, the undersigned voting trustees and directors,
after telephone discussions, agreed among themselves as to an action. They
hereby consent and agree to this amendment and action in writing as follows:
1. AGREED FACTS AND UNDERSTANDINGS. This amendment and action is based
upon the following facts and understandings which the signatories hereto agree
are true and correct:
a. This amendment and action is made to accomplish two
purposes: (1) the amendment of the voting trust referred to above; and (2)
action by directors of Ravenswood Winery, Inc. (the "corporation") which shall
be included in the minutes of the corporation.
b. In April of 1998, the corporation retained planning counsel
to assist the corporation in planning for its future and its financial stability
with respect to the ownership and succession to ownership of shares of the
corporation, with respect to conversion of debentures and other financing of the
corporation and with respect to likely dispositions of shares by shareholders of
the corporation.
c. Planning counsel having made recommendations with respect
to the matters set forth in subparagraph (b) above, the voting trustees and
directors hereby act and agree as follows:
2. AMENDMENT OF VOTING TRUST. In order to comply with certain
provisions of the Internal Revenue Code and to meet requirements of the
corporation and the beneficiaries of the voting trust, the voting trustees
hereby act and hereby amend the voting trust as follows:
a. Attached to this amendment and action and incorporated
herein by this reference is Exhibit A. Effective December 29, 1998, this Exhibit
sets forth 3,350 Foster shares and 22,400 Peterson shares which are hereby
released from the voting trust. The secretary of the corporation is hereby
directed to prepare and to have executed by the voting trustees such documents
as release the shares from the voting trust and the ownership of the voting
trustees and which place the shares into the respective names and the ownerships
as set forth on Exhibit A.
b. The voting trust is hereby amended by the addition of a new
paragraph 17, immediately preceding the present paragraph 17, which shall be
redesignated as paragraph 18, which new paragraph 17 shall read as follows:
"17. Release of Shares. Notwithstanding anything to
the contrary stated in the Agreement, the trust beneficiaries shall be entitled
to the release of shares from the trust for the following purposes: (i) making
gifts and other estate planning transfers, (ii) making sales of shares to meet
liquidity needs, and (iii) any other purpose that the trustees, acting in the
manner set forth in paragraph ____, may approve in their discretion. The purpose
of this paragraph is to provide for the orderly withdrawal of shares from the
trust when requested by beneficiaries. The trustee may establish withdrawal
procedures consistent with this paragraph 17.
3. ACTION OF DIRECTORS. The directors of the corporation acknowledge
and do not object to the amendment of the voting trust and the action of the
voting trustees set forth in this amendment and action.
Dated: December 29, 1998
Trustees Directors
- ------------------------------------ ----------------------------------
W. Reed Foster W. Reed Foster
- ------------------------------------ ----------------------------------
Joel E. Peterson Joel E. Peterson
- ------------------------------------ ----------------------------------
Justin M. Faggioli Justin M. Faggioli
- ------------------------------------ ----------------------------------
James F. Wisner James F. Wisner
Exhibit A to Amendment to Voting Trust
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT (this "Agreement") is made as of the 27th
day of May, 1998 by and between certain shareholders of Ravenswood Winery Inc.,
a corporation organized under the laws of California, and having its principal
executive office at 18701 Gehricke Lane, Sonoma, California, 95476 (herein
called "Ravenswood"). These shareholders shall become parties to this Agreement
by signing their names at the end of this Agreement (the "Shareholders"). The
shareholders are Joel E. Peterson, W. Reed Foster, Justin M. Faggioli, Julie C.
Morin-Wisner and James F. Wisner. The shareholders, with the exception of Julie
C. Morin-Wisner, shall become the trustees under this Agreement by signing their
acceptance at the end of this Agreement (the "Trustees").
A. Agreed Facts
1. This Agreement is made and entered into based upon the
following facts and understandings which the Shareholders
agree are true and correct.
a. The Shareholders believe it is essential to their
interests to protect themselves as much as possible
against dilution of control in future stock sales.
They also believe it is essential for the success of
the corporation and for the best interests of all the
Shareholders that the corporation shall be managed
and directed during the next (10) years of its
existence under a definite and stable management in
order to maintain a union of interests, to develop
properly the business opportunities of the
corporation and to continue consistent winemaking
practices. The Shareholders also wish to avoid
deadlocks and they have accordingly included an
arbitration clause in this Agreement.
b. The Shareholders believe that their objectives can be
accomplished by acting together in the manner herein
set forth. The agreement of each shareholder is
consideration for the agreements of the others. In
particular they believe their objectives can be
accomplished by giving to the Trustees, as their
agents and attorneys-in-fact, an irrevocable power to
vote the shares subject to this Agreement upon the
terms and conditions set forth in this Agreement.
c. For the purpose of the protections and objectives of
this Agreement, the undersigned Shareholders hereby
request the Trustees to take and to hold for the
period herein stated, the legal title to the shares,
the shares to be held by them on an active trust, and
to act under the terms of this Agreement, and the
Trustees hereby agree to do so.
d. Since August 25, 1992, the shares of the
Shareholders, with the exception of Justin M.
Faggioli, have been held under a voting trust
agreement (the "1992 Agreement"), which is similar to
this Agreement. The Shareholders agree the 1992
Agreement has been a success; that the 1992 Agreement
achieved its stated objectives and that Ravenswood
has prospered during the term of the 1992 Agreement.
e. Ravenswood has issued convertible debentures to a
group of investors and it is anticipated it will
issue additional securities from time to time, and
the Shareholders wish to assure holders of debentures
of the benefits of the voting trust and its
continuing existence, so they can consider it and
rely on it when making their decision whether or not
to convert their debentures into common stock of
Ravenswood.
f. Since 1992, as a part of its growth and change,
Ravenswood's business has increased, and the
executive staff and the company shareholders have
changed, making it necessary to adapt the voting
trust to these changes. In addition Ravenswood is
planning for expansion, including the construction of
a new winery building which will require financing
from outside sources and the Shareholders wish to
assure prospective lenders, lessees, grape sources
and business associates of the continuing existence
of the voting trust for the next 10 years and the
stability and other beneficial effects it brings to
Ravenswood.
g. For the reasons recited above, the parties to this
Agreement hereby terminate the 1992 Agreement upon
the effective date of this Agreement. This Agreement
shall be in effect when all parties have executed it.
The effective date shall be the date when it has been
executed by the last party or parties. The
Shareholders, in consideration of their mutual
promises agree to and with each other and with the
Trustees, and the Trustees agree with the
Shareholders as follows.
2. Transfer of Stock to Trustees
Each undersigned shareholder holding shares of the capital
stock of Ravenswood, Winery, Inc. for the number set opposite his, her, or
its name, at the end of this Agreement, as owned, respectively, agrees that
simultaneously upon the execution of this Agreement he, she, or it shall
deposit with the Trustees their respective shares evidenced by the share
certificates, with sufficient transfers, in favor of the persons named as
Trustees, and shall receive in exchange voting trust certificates referred
to herein. On the making of the deposit, all shares represented by the stock
certificates deposited shall be transferred on the books of Ravenswood
Winery, Inc., to the names of the Trustees, who are fully authorized and
empowered to cause such transfers to be made, and also to cause any further
transfers of the shares to be made which may become necessary by reason of
any change of the persons holding the office of Trustee has herein provided.
3. Term
The term of this Agreement shall be for a period of ten (10)
years from the effective date of this agreement. The term may be extended as
permitted by law.
4. Trustees' Control Over Stock
a. During the period this Agreement is in force, the
Trustees shall possess the legal title to the shares
deposited, and shall be entitled to exercise all
rights of every name, kind and nature, including but
not limited to, the right to vote in person or by
proxy in respect to any and all of the shares. It is
understood, however, that the holders of the trust
certificates to be issued by the Trustees, as the
beneficial owners of the shares, shall be entitled to
receive payments equal to the dividends or other
distributions, if any, collected by the Trustees on
the shares of stock standing in their names.
b. The Trustees understand that at present the policy of
Ravenswood Winery, Inc. is not to pay dividends.
5. Voting Trust Certificate
The Trustees shall cause to be issued to the several
Shareholders, in respect of all stock deposited by them, certificates in an
aggregate amount equal to the amount of all stock so deposited, which
certificates shall be in substantially the following form:
VOTING TRUST CERTIFICATE
No. of Shares______________________________________________
This certifies that ____________________________________ has deposited
__________________ shares of the capital stock of Ravenswood Winery, Inc. with
the Trustees under an agreement between the Trustees, and certain Shareholders
of the corporation, which agreement was entered into on the ____ day of
_____________, 1998. This certificate and the interest it represents is
transferable only on the books of the Trustees on the presentation and surrender
thereof. The holder of this certificate takes it subject to all terms and
conditions of the agreement between the Trustees and certain Shareholders of the
corporation, and the holder is a party to the agreement, and is entitled to
benefits thereof.
The Trustees have caused this certificate to be signed on the _____ day
of ______________________, 1998.
6. Additional Stock
The Trustees may receive any additional fully paid shares of
the capital stock of Ravenswood Winery, Inc. on the terms and conditions of
this Agreement, and in respect of all such shares so received, the Trustees
shall issue and deliver certificates similar to those above-mentioned,
entitling the holder to all the rights specified in this Agreement.
7. Sale of Stock and Certificates by Shareholders
During the ten year period of time from the date hereof
through the last day of the tenth year following the date hereof the
Shareholders shall not sell their respective shares
although they shall be at liberty to deal with Trustees' certificates in the
way of sale or by any other means they so desire.
8. Sales of all Stock by Trustees
During the period of the Trust Agreement, the Trustees shall
have the exclusive power to sell or otherwise to transfer the shares,
provided that no sale of the shares deposited shall be made by the Trustees
unless it is a sale of all the deposited shares in the aggregate and each
Shareholder consents with respect to the shares for which the Shareholder
owns the beneficial interest. This does not restrict a sale of shares by the
Company.
9. Distribution of Proceeds of Sale of Stock
In case of a sale or other transfer of deposited stock at any
time during the period of the trust, the proceeds shall be distributed by
the Trustees to and among the holders of Trustees' certificates on the
surrender thereof. The distribution shall be pro rata among the shares, and
there shall be no discrimination among the holders in the distribution.
10. Sale or Purchase of Stock or Certificate by Trustees
Nothing herein contained shall deprive the Trustees, as
individuals, of the privilege to be enjoyed by all other depositors of
selling or otherwise depositing of the certificates at their pleasure, or of
purchasing additional stock and selling it, or of joining in a syndicate to
purchase.
11. Trustees' Resignation and Replacement
Any Trustee may at any time resign by delivering to the other
Trustees in writing his or her resignation specifying the date it is to take
effect, and in every case of vacancy whether by death, resignation, or other
cause, the vacancy so occurring shall be filled by the appointment of a
successor or successors to be made by the other Trustees. The term
"Trustees" as herein used shall apply to the original Trustees as well as
their successors.
12. Trustees' Voting Rights
a. All questions arising between the Trustees and all
actions of the Trustees from time to time shall be
determined and resolved by vote of the Trustees,
either at a meeting or in writing with or without a
meeting, and in like manner they may establish their
rules of action. Except for votes to amend or
terminate as provided in Paragraph 16, during the
time that Joel E. Peterson is a Trustee, all
decisions of approval or disapproval shall require
the vote of Joel E. Peterson plus one other Trustee
(the required vote). During any time that Joel E.
Peterson is not a Trustee, then all decisions shall
require the vote of three (3) Trustees (the required
vote).
b. In order to avoid a deadlock it is agreed that if a
decision or an action is proposed by a Trustee but it
is not approved or disapproved, as applicable, by the
required vote, then either Joel E. Peterson on the
one hand or any three (3) of the other Trustees on
the other hand can at any time demand arbitration of
the issue pursuant to the arbitration paragraph of
this Agreement. Thus there can be arbitration to
avoid deadlock only in the absence of the required
vote either for or against an issue. The decisions
and acts of the Trustees when made and done pursuant
to the required vote as set forth above in this
paragraph shall, for all purposes of this Agreement,
be deemed the decision or act of the Trust and shall
be binding upon all of the Trustees. Meetings of the
Trustees shall be held pursuant to notice under the
rules to be adopted by the Trustees. The Trustees
sufficient to cast the votes to make a decision shall
constitute a quorum.
13. Trustees' Liability for Negligence
In voting on matters that may come before them at any meeting
of the Trustees or of the Shareholders, the Trustees shall express their
best judgment to the end that the affairs of the corporation shall be
properly managed. No Trustee shall incur any responsibility by reason of any
error of law or of any matter or thing done or admitted under this
Agreement, except for his or her own individual intentional wrongdoing or
gross negligence.
14. Indemnification of Trustees
In connection with any lost costs, suits or claims against the
Trustees arising out of or in any way connected with this Agreement, the
Trustees under this Trust, whether or not officers or directors, shall be
entitled to indemnity from the corporation to the fullest extent permitted
for employees, shareholders, officers and directors under the California
Corporations Code. In addition, and not by way of limitation, the Trustees
shall be entitled to indemnity from the corporation to the fullest extent
permitted by law.
15. Arbitration
a. It is agreed that the sole remedy of the Trustees for
any and all disputes, claims and causes among or
between them arising out of or in any way connected
with this Agreement which have not been resolved by a
required vote shall be resolved by binding
arbitration which shall be the sole remedy for
disputes under this agreement. Upon approval of this
Trust by the directors and Shareholders of the
corporation, the corporation shall be bound as well
to the terms of this arbitration clause.
b. Unless otherwise agreed by all parties, arbitration
shall be pursuant to the then existing commercial
rules of the American Arbitration Association, and
arbitration shall be carried out by a single neutral
arbitrator chosen from the panel of the Association.
The Arbitrator shall, without limitation,
have the right to make interim orders, to grant
affirmative relief and to discipline, by requiring
payments or otherwise, any parties who delay the
arbitration or who otherwise do not comply with the
orders of the Arbitrator. Arbitration shall be held
in Sonoma County, California. The permitted Trustees
may demand arbitration at any time as provided in
paragraph 12 above.
c. The corporation shall pay for all costs, fees and
expenses of all parties for arbitrating and resolving
disputes under this Agreement. An award when made may
be entered in any court of competent jurisdiction and
enforced under the arbitration law of the State of
California as a binding judgment. The parties agree
and understand that arbitration will likely involve
disputes over business policy without a clear
standard, but that the arbitrator shall be entitled
to make a decision based upon the Arbitrator's
determination of the best business decision.
16. Amendment and Termination
So long as Joel E. Peterson is a Trustee this agreement can be
amended or terminated by the affirmative vote of Joel E. Peterson and two
other Trustees (the required vote). If Joel E. Peterson is not a Trustee
then the vote of all four Trustees is required to amend or to terminate this
Agreement (the required vote). Arbitration shall not be available for any
dispute over the amendment or termination of this Agreement as the purpose
of avoiding deadlocks which do or could affect corporate operations is
deemed by the parties to this Agreement not to apply to amendment or
termination.
17. Acceptance by Trustees
The Trustees accept this Trust subject to all of its terms and
conditions, and agree that they shall exercise their power and perform their
duties as herein set forth. Nothing contained herein shall be construed to
prevent any of or all of the Trustees from resigning as a Trustee.
Executed at Ravenswood Winery, Sonoma CA, this 27th day of May, 1998.
TRUSTEES
/s/ Joel E. Peterson /s/ W. Reed Foster
- ----------------------------- -----------------------------
Joel E. Peterson W. Reed Foster
/s/ Justin M. Faggioli /s/ James F. Wisner
- ----------------------------- -----------------------------
Justin M. Faggioli James F. Wisner
SHAREHOLDERS
------------
Shareholder Number of Shares Date Signed
/s/ Joel E. Peterson 25,000 5/27/98
- ---------------------------------------- ----------------- ------------
Joel E. Peterson
/s/ Justin M. Faggioli 1450 5/27/98
- ---------------------------------------- ----------------- ------------
Justin M. Faggioli
/s/ W. Reed Foster 4500 5/27/98
- ---------------------------------------- ----------------- ------------
W. Reed Foster
/s/ James F. Wisner 2000 4/28/98
- ---------------------------------------- ----------------- ------------
James F. Wisner
/s/ Julie C. Morin-Wisner 500 4/28/98
- ---------------------------------------- ----------------- ------------
Julie C. Morin-Wisner