SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
The Chalone Wine Group, Ltd.
________________________________________________
(Name of Registrant as Specified in Its Charter)
________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[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:
_____________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
_____________________________________________________________________
(4) Proposed maximum aggregate value of the transaction:
_____________________________________________________________________
(5) Total fee paid:
_____________________________________________________________________
[x] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11 (a) (2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
_____________________________________________________
(2) Form, Schedule or Registration Statement No.:
_____________________________________________________
(3) Filing Party:
_____________________________________________________
(4) Date Filed:
_____________________________________________________
JULY 3, 2001
======================================
CHALONE
Wine Group
======================================
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF
THE CHALONE WINE GROUP, LTD.
TO BE HELD ON AUGUST 22, 2001
TO ALL SHAREHOLDERS:
It is with great pleasure that we invite you to the Annual Meeting of
Shareholders of The Chalone Wine Group, Ltd., which will be held at 10:00 a.m.,
Pacific Time, on Wednesday, August 22, 2001, at the Company's executive offices,
621 Airpark Road, Napa, California, for the following purposes:
1. Election of directors for the ensuing year.
2. Ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending December 31, 2001.
3. Consideration and action on any other matter properly brought before
the meeting.
Shareholders of record as of the close of business on June 27, 2001,
the record date, are entitled to notice of, and to vote at, the annual meeting
and any postponement or adjournment thereof.
You are requested to date, complete and sign the enclosed proxy, which
is solicited by the Company's Board, and to return it promptly in the envelope
provided. Even if you return this proxy, and you later decide to attend the
annual meeting, you may vote your shares in person by completing a ballot or
proxy at the meeting.
By Order of the Board of Directors,
/s/ W. PHILIP WOODWARD
-----------------------
W. Philip Woodward
Chairman of the Board
Napa, California
July 3, 2001
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. WHETHER OR
NOT YOU PLAN TO BE PRESENT AT THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE
IT IS VOTED AT THE ANNUAL MEETING.
======================================
CHALONE
Wine Group
======================================
Acacia Winery Canoe Ridge Vineyard Carmenet Winery Chalone Vineyard
Edna Valley Vineyard Chateau Duhart-Milon Echelon Vineyards Sagelands Winery
Jade Mountain
PROXY STATEMENT
------------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 22, 2001
------------------------------------------------------------------------
VOTING PROCEDURES AND INFORMATION CONCERNING THE SOLICITATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board") of The Chalone Wine Group,
Ltd., a California corporation (the "Company"), for use at the 2001 Annual
Meeting of Shareholders of the Company (the "Meeting"), to be held at 10:00
a.m., Pacific time, on Wednesday, August 22, 2001, at the Company's executive
offices, 621 Airpark Road, Napa, California 94558-6272 and any adjournments
thereof (the "Meeting").
Only holders of the Company's common stock (the "Common Stock") of
record as of the close of business on June 27, 2001, the record date fixed by
the Board, will be entitled to notice of, and to vote at, the Meeting. As of the
record date, 10,284,859 shares of Common Stock were issued and outstanding.
Holders of Common Stock are entitled to cast one vote for each share held of
record by them on each proposal submitted to a vote at the Meeting except that,
for the election of directors, upon request made prior to the commencement of
voting, each shareholder will be accorded cumulative voting rights, under which
he or she will be entitled to as many votes as equals the number of shares held,
multiplied by the number of directorship positions to be filled (11), all of
which may be cast for a single candidate or distributed among any or all
candidates in such proportions as each shareholder sees fit. Shareholders may
vote in person or by proxy. Execution of a proxy will not in any way affect a
shareholder's right to attend the Meeting and vote in person. Any shareholder
giving a proxy has the right to revoke that proxy by (i) filing a later-dated
proxy or a written notice of revocation with the Secretary of the Company at the
address set forth above at any time before it is exercised, or (ii) voting in
person at the Meeting.
1
- --------------------------------------------------------------------------------
HOW YOU CAN VOTE
Shareholders of record can give a proxy to be voted at the Meeting
either (i) over the telephone by calling a toll-free number, (ii) electronic-
ally, using the Internet, or (iii) by mail.
The telephone and Internet voting procedures are designed to
authenticate each shareholder's identity, to permit voting and to confirm that
such votes are recorded accurately. Any shareholder of record who wishes to
vote by telephone or the Internet should refer to the specific instructions set
forth on the enclosed proxy card. Shareholders who prefer to vote by mail should
return a signed proxy card to the Company before the Meeting.
Whether voting by telephone, the Internet or by mail, shareholders may
specify whether shares should be voted for all, some, or none of the nominees
for director (Proxy Item No. 1) and approve, disapprove, or abstain from the
ratification of the Company's independent auditors (Proxy Item No. 2).
- --------------------------------------------------------------------------------
The Company's Secretary, President and Chairman were appointed by the
Board as the persons to receive and vote the proxies at the Meeting. All
properly executed proxies returned in time to be counted at the Meeting will be
voted as stated below under "Voting Procedures." Any shareholder giving a proxy
has the right to withhold authority to vote for any individual nominee to the
Board by so marking the proxy in the space provided thereon. Where a choice has
been specified on the proxy with respect to the foregoing matters, including the
election of directors, the shares represented by the proxy will be voted in
accordance with the choice specified. If no choice is specified, the proxy will
be voted as follows:
Proxy Item No. 1. FOR election of management's proposed slate of
directors, as set forth herein.
Proxy Item No. 2. FOR ratification of the appointment of Deloitte &
Touche LLP as the Company's independent auditors for the fiscal year ending
December 31, 2001.
The Board knows of no other matters to be presented at the Meeting. If
any other matter should be presented at the Meeting upon which a vote properly
may be taken, including any proposal to adjourn the Meeting, shares represented
by all proxies received by the Board will be voted with respect thereto in
accordance with the judgment of the persons named as attorneys in the proxies.
An Annual Report to Shareholders on Form 10-K, containing financial
statements for the
2
fiscal year ended March 31, 2001, is being mailed concurrently to all
shareholders entitled to vote. This Proxy Statement and the form of proxy were
first mailed to shareholders on or about July 3, 2001. All costs of this
solicitation will be borne by the Company.
The presence, in person or by proxy, of at least a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting is necessary
to establish a quorum for the transaction of business. Shares represented by
proxies pursuant to which votes have been withheld from any nominee for
director, or which contain one or more abstentions, including broker non-votes,
are counted as present for purposes of determining the presence or absence of a
quorum for the Meeting.
All properly executed proxies delivered pursuant to this solicitation
and not revoked will be voted at the Meeting as specified in such proxies. The
eleven director-nominees receiving the highest number of affirmative votes of
the shares present or represented and voting on the election of directors at the
Meeting will be elected as directors.
For all other matters being submitted to shareholders at the Meeting,
the affirmative vote of the majority of shares present, in person or represented
by proxy, and voting on that matter is required for approval.
ELECTION OF DIRECTORS
(PROXY ITEM NO. 1)
Management is proposing and supports re-election of all eleven of the
nominees named herein, all of whom are currently members of the Company's Board.
At the Meeting, directors will be elected to serve until the 2002
Annual Meeting or until their successors have been duly elected and qualified.
Each nominee has consented to be named in this proxy statement and has consented
to serve as a director if so elected and qualified. The Company has no reason to
believe that any of the nominees will not be available to serve; if, however,
any nominee should for any reason become unable or unwilling to serve, the Board
may vote to fix the number of directors at a lesser number, but not less than
seven (7), or direct that the shares represented by proxies received by the
Company be voted for the election of such person as the Board may recommend, in
place of the unavailable nominee.
DIRECTOR-NOMINEES
W. PHILIP WOODWARD. Age 62. Mr. Woodward is a co-founder of the Company
and has been a director of the Company since 1972. He has been its chairman
since August 1997, and is a member of the Board's Operating Committee. From 1974
to July 1998, Mr. Woodward was the Company's Chief Executive Officer. Mr.
Woodward is a director of DBR (Lafite), the Northern Trust Bank of California,
the Wine Institute, the American Vintners' Association, the American Center for
Wine, Food and the Arts, The Marin Theatre Company, Edna Valley Vineyard and
3
Canoe Ridge Vineyard. He also is a director and member of the compensation
committee of the board of Hog Island Oyster Company. Mr. Woodward also serves as
president and as a director of The Chalone Wine Foundation.
THOMAS B. SELFRIDGE. Age 57. Mr. Selfridge joined the Company as
President on January 1, 1998 and was appointed the Company's Chief Executive
Officer as of July 1, 1998. He has been a director of the Company since May 1998
and is a member of the Board's Operating Committee. Mr. Selfridge also is a
director of Edna Valley Vineyard and Canoe Ridge Vineyard. Before joining the
Company, Mr. Selfridge was Vice President-Production of Kendall-Jackson Winery,
Ltd. He also serves as secretary and as a director of The Chalone Wine
Foundation.
CRISTINA G. BANKS. Age 48. Dr. Banks has been a director of the Company
since January 1999 and is a member of the Board's Audit Committee. She is a
principle and co-owner of Terranova Consulting Group, a management-consulting
firm. Since 1985, Dr. Banks has served as a senior lecturer at the University of
California's Walter A. Haas School of Business in Berkeley, California. Until
March 1999, Dr. Banks also was a director of Whole Foods Market, Inc.
MARK A. HOJEL. Age 32. Mr. Hojel has been a director of the Company
since 1995 and is a member of the Board's Operating and Compensation Committees.
Since 1996, Mr. Hojel has been President of Monte Xanic, a premium winery
located in Mexico City, Mexico.
YVES-ANDRE ISTEL. Age 65. Mr. Istel has been a director of the Company
since 1995. From 1993 to date, Mr. Istel has been Vice Chairman of Rothschild
Inc. He is Vice Chairman of Rothschild Europe, B.V., and Director of Rothschild
et Cie. Banque, Paris, France; Compagnie Financiere Richemont; and Valeo S.A.
C. RICHARD KRAMLICH. Age 64. Mr. Kramlich has been a director of the
Company since 1990 and is a member of the Board's Compensation Committee. He was
a director of Carmenet Winery, Inc. from its inception until its merger into the
Company in 1984. Between 1984 and 1990, he served as an advisor to the Board.
Since 1978, Mr. Kramlich has been General Partner of New Enterprise Associates,
a San Francisco-based venture capital firm. He also is a director of Juniper
Networks, Lumisys, Inc., Silicon Graphics, Inc., Com 21, Inc., NetSolve, Inc.
and various private companies.
WILLIAM G. MYERS. Age 74. Mr. Myers has been a director of the Company
since 1996. Since 1962, Mr. Myers has been Chief Executive Officer of Ojai Ranch
and Investment Company, Inc. Mr. Myers also serves as a director of ProLogis
Trust and several not-for-profit entities including The Library of Congress,
James Madison Council; California Historical Foundation; H.C. and R.C. Merritt
Trusts; Santa Barbara Botanic Garden; The Nature Conservancy; and St. Joseph's
Health & Retirement Center Foundation.
JAMES H. NIVEN. Age 58. Mr. Niven has been a director of the Company
since 1993 and is Chairman of the Board's Audit Committee. Since 1995, Mr. Niven
has been President of Paragon Vineyard Co., Inc., the Company's partner in the
Edna Valley Vineyard Joint Venture.
4
He also is a partner of Niven & Smith, a San Francisco law firm, and a member of
the management committee of Independence Wine Company, which owns and operates
the Seven Peaks Winery. Mr. Niven also is a director of The Chalone Wine
Foundation and several private companies.
PHILLIP M. PLANT. Age 56. Mr. Plant has been a director of the Company
since 1996 and is a member of the Board's Audit Committee. Since 1998, Mr. Plant
has been a partner in the firm of Herndon Plant Oakley, Ltd. Previously, he was
Senior Vice-President, Investment Counsel, of Dain Rauscher Corp. (formerly
Rauscher, Pierce, Refsnes, Inc.). Mr. Plant also serves as an advisory director
of RPC Ltd. and the American National Bank of Corpus Christi, Texas and as an
advisory director of The Trust Company of San Antonio, Texas and various private
companies.
CHRISTOPHE SALIN. Age 46. Mr. Salin has been a director of the Company
since 1989, is chairman of the Board's Operating Committee and a member of the
Board's Compensation Committee. Since 1990, he has been President and a director
of DBR (Lafite), which he joined in 1985. Mr. Salin also is chairman of Les
Domaines Barons de Rothschild (Lafite) Distribution and of Societe de Gestion et
d'Assistance Viticole. He serves as a director of Chateau Rieussec, Societe
Financiere Viticole, Vina Los Vascos (Chile), Quinta do Carmo (Portugal), La
Viticole de Participation, Pasternak Wine Import, Domaines d'Aussieres. Mr.
Salin is also a director of The Chalone Wine Foundation and of the Comite
Colbert.
ERIC DE ROTHSCHILD. Age 60. Baron Eric de Rothschild has been a
director of the Company since 1989. Since 1982, he has been a Managing Partner
of DBR (Lafite). Baron de Rothschild also is chairman of Paris-Orleans, S.A., a
publicly held French company which is one of DBR (Lafite)'s major shareholders;
chairman of Francarep, a subsidiary of Paris-Orleans, S.A., Rothschild Asset
Management. Baron Eric is also the Managing Partner of Chateau
Lafite-Rothschild, a shareholder of DBR (Lafite).
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" MANAGEMENT'S NOMINEES
OTHER EXECUTIVE OFFICERS
The information required by this Item is included in Part I of the
Company's Annual Report filed under the caption "Executive Officers of the
Registrant" on Form 10-K.
BOARD MEETINGS AND COMPENSATION
The Company's Board met four times during the year ended March 31,
2001. Each director attended at least 75% of the aggregate of those meetings,
except Messrs. Istel, Niven,
5
and Baron de Rothschild.
Each director who is not an employee of the Company is paid
compensation of $500 per year plus $100 for each Board meeting attended and
reimbursement of extraordinary travel costs to attend meetings. Additionally,
each non-employee director receives quarterly grants of options to purchase the
Company's Common Stock ("Automatic Quarterly Options") and is eligible to
receive additional stock options as set forth below ("Additional Options"), in
each case pursuant to the Company's 1997 Stock Option Plan. Baron de Rothschild
declines to take non-employee director options.
The exercise price of the Automatic Quarterly Options is the fair
market value of the Company's Common Stock as of the final day of each calendar
quarter. The exercise price of the Additional Options is the fair market value
of the Company's Common Stock as of the date of the grant. The number of
Automatic Quarterly Options granted is equal to ten (10) shares per each 100,000
shares of the Company's Common Stock outstanding as the same date. Additional
Options are granted in amounts established annually by the Board to recognize
and encourage active participation by non-employee directors in the committees
established by the Board for various purposes. For the fiscal year ended March
31, 2001, non-employee directors were eligible for additional grants as follows:
to each member of the Compensation Committee, 1,500 additional shares per
meeting attended; to each member of the Operating Committee, 750 additional
shares per meeting attended; to each member of the Audit Committee, 500
additional shares per meeting attended; to each of the vice chairman of the
Board and the chairman of the operating committee, 10,000 additional shares;
and, to the chairman of the compensation committee, 1,000 additional shares.
For the fiscal year ended March 31, 2001, Automatic Quarterly Options
covering a total of 32,640 shares were granted to and among the Company's eight
non-employee directors. The weighted average per-share exercise price of all
Automatic Quarterly Options is $8.67.
In May 2001, the Board granted Additional Options to certain
non-employee directors for the fiscal year ended March 31, 2001 covering a total
of 42,000 shares. The exercise price is $8.38, the closing price of the
Company's Common Stock on May 17, 2001 (the grant date). Although these
Additional Options are intended to reward non-employee directors for their
services rendered during the fiscal year ended March 31, 2001, they were granted
subsequent to the end of the fiscal year and, therefore, will be included in the
directors' compensation for the 2002 fiscal year, rather than the 2001 fiscal
year.
COMMITTEES
The Board of Directors has established three standing committees to
which it has delegated certain responsibilities: an Operating Committee, Audit
Committee and Compensation Committee. It does not have a standing Nominating
Committee. Nominees for election to the Board are selected by the Board.
6
OPERATING COMMITTEE. The Operating Committee, which was formed in 1999,
consists of Messrs. Woodward, Salin, Hojel, and Selfridge. The Operating
Committee may exercise all the powers and authority of the Board of Directors in
the management of the business and affairs of the Company, subject to the
limitations prescribed by the Board of Directors, the Bylaws of the Company and
California law. The Operating Committee met four times during the year ended
March 31, 2001.
AUDIT COMMITTEE. The Audit Committee, is comprised of Dr. Banks and
Messrs. Niven and Plant. Dr. Banks and Mr. Plant are each "independent" as
defined in Rule 4200(a)(14) of the National Association of Securities Dealers'
listing standards. Mr. Niven is not independent under the NASD rule because of
his interest in Paragon Vineyard Co., Inc. ("Paragon"), the Company's partner in
the Edna Valley Vineyard Joint Venture. The Company and the Edna Valley Joint
Venture have made and will continue to make certain significant payments to
Paragon in exchange for grapes used in the Company's and Edna Valley's Joint
Venture wines. In addition, the Company has made a secured loan to Paragon. The
Company's transactions with Paragon are described in more detail below under the
caption "Certain Relationships and Related Transactions--The Edna Valley
Vineyard Joint Venture." The Company's Board of Directors has determined that,
due to Mr. Niven's long time membership in the California bar, his many years of
financial management of Paragon and his prior service on the Company's Audit
Committee, that Mr. Niven's service as a member of the Audit Committee was in
the best interests of the Company and its shareholders.
The Audit Committee operates in accordance with a written charter
adopted by the Company's Board of Directors on May 18, 2000. Among other things,
the Audit Committee Charter specifies:
(1) the scope of the Audit Committee's responsibilities and the processes
by which they will be carried out;
(2) the Audit Committee's responsibility for ensuring its receipt from the
outside auditors of a formal written statement delineating all
relationships between the auditor and the Company, the Audit
Committee's responsibility for actively engaging in a dialogue with
the auditor with respect to any disclosed relationship or services
that may impact the objectivity and independence of the auditor and
for taking, or recommending that the full Board of Directors take,
appropriate action to oversee the independence of the outside auditor;
and
(3) the outside auditor's ultimate accountability to the Board and the
Audit Committee, as representatives of the shareholders, and the
ultimate authority of the Board to select, evaluate and, where
appropriate, replace the outside auditor (or to nominate the outside
auditor to be proposed for shareholder approval in any proxy
statement).
The Audit Committee met three times during the Company's 2001 fiscal year.
COMPENSATION COMMITTEE. The Compensation Committee of the Board is
comprised of C. Richard Kramlich, Christophe Salin, and Mark A. Hojel. The
Compensation Committee administers the Company's Executive Compensation Program
by recommending for approval of the company's Executive Compensation Program
are carried out. The Compensation Committee met twice during the Company's
2001 fiscal year.
7
AUDIT COMMITTEE REPORT
The Audit Committee monitors the Company's internal accounting controls
and confers with the Company's independent auditors and reviews the results of
their auditing engagement. The Company's Board of Directors adopted a written
charter for the audit Committee on May 18, 2000. A copy of the charter was
included as an exhibit to the Company's Proxy Statement filed with the
Securities and Exchange Commission on July 3, 2000.
The Audit Committee has reviewed the Company's audited consolidated
financial statements and discussed such statements with the Company's
management. The Audit Committee has discussed with Deloitte & Touche LLP, the
Company's independent accountants during the 2001 fiscal year, the matters
required to be discussed by Statement of Auditing Standards No. 61
(Communication with Audit and Finance Committees, as amended).
The Audit Committee received from Deloitte & Touche LLP the written
disclosures required by Independence Standards Board Standard No. 1 and
discussed with them their independence. Based on the review and discussions
noted above, the Audit Committee recommended to the Board of Directors that the
Company's audited consolidated financial statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 2001, and be
filed with the Securities and Exchange Commission.
This report of the Audit Committee shall not be deemed incorporated by
reference by any general statement into any filing under the Securities Act of
1933, as amended, or the securities Exchange Act of 1934, as amended, except to
the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
The foregoing report is given by the members of the Audit Committee,
namely:
Cristina G. Banks
James H. Niven
Phillip M. Plant
SHAREHOLDING INFORMATION AS TO DIRECTORS, DIRECTOR NOMINEES AND MANAGEMENT
The following table sets forth information as of March 31, 2001
respecting the beneficial ownership of the Common Stock, the Company's only
class of voting securities, by (i) all persons known by the Company to own more
than five percent of the Common Stock, (ii) each director, director-nominee, and
the executive officers named below under "Executive Compensation--Summary
Compensation Table," and (iii) all directors and executive officers as a group.
Except as may be noted in the footnotes to the table, the Company
believes that the
8
persons named in the table have sole voting and investment power with respect to
all shares of Common Stock shown as beneficially owned by them, subject to
community property laws where applicable.
BENEFICIAL OWNER(1) SHARES BENEFICIALLY OWNED(2) PERCENT OF CLASS
- ---------------- ------------------------- ----------------
Les Domaines Barons de Rothschild 4,535,826 44.3%
(Lafite)
33 Rue de la Baume
75008 Paris, France
The Hojel Family(3) 1,816,464 17.7%
c/o Phillip Plant
Herndon Plant Oakley, Ltd.
One Shoreline Plaza
Suite 2200, North Tower
Corpus Christi, TX 78401-3700
W. Philip Woodward(4) 481,266 4.6%
621 Airpark Road
Napa, CA 94558-6272
William G. Myers(5) 402,486 3.9%
Thomas B. Selfridge(6) 188,776 1.8%
C. Richard Kramlich(7) 56,836 *
Robert B. Farver(8) 84,675 *
<FN>
- ------------------
1 Pursuant to Item 403(a) of Regulation S-K, addresses are provided only for
beneficial owners of more than 5% of the Company's Common Stock.
2 Except as otherwise noted, all shareholding information is reported as of
March 31, 2001. Shares of Common Stock subject to stock options exercisable
within 60 days from March 31, 2001 are deemed outstanding for computing the
percentage of the class of securities owned by the person or group holding such
securities.
3 Includes the following: 845,238 shares owned by Hook Financial, Inc.; 914,456
shares owned by SFI Intermediate. Ltd. and 56,770 shares owned by HC Holding
Company, Ltd. SFI Intermediate Ltd. is a Texas limited partnership of which GHA
1 Holdings, Inc. is the general partner. Phyllis S. Hojel, mother of Mark A.
Hojel, is the sole stockholder and director of GHA 1 Holdings, Inc. Mrs. Hojel,
GHA 1 Holdings, Inc., and SFI Intermediate Ltd. share voting power and the power
to dispose or direct the disposition of such shares. Excludes the personal
holdings of Mark A. Hojel set forth elsewhere herein.
4 Includes 129,519 shares held by various family members as to which Mr.
Woodward may have shared voting power. Includes certain shares held by trusts of
which Mr. Woodward is the beneficiary, and 132,000 shares issuable on exercise
of options which are vested or will vest within the next 60 days.
5 Includes 267,086 shares held by various family members as to which Mr. Myers
may have shared voting power. Includes 16,800 options shares issuable to Mr.
Myers on exercise of options which are vested or will vest within the next 60
days.
6 Includes 187,500 shares issuable to Mr. Selfridge on exercise of options
which are vested or will vest within the next 60 days.
7 Includes 31,830 shares issuable to Mr. Kramlich on exercise of options which
are vested or will vest within the next 60 days.
9
Christophe Salin(9) 97,834
*
Eric de Rothschild(10) 18,100 *
James H. Niven(11) 22,950 *
Mark A. Hojel(12) 25,720 *
Phillip M. Plant(13) 22,810 *
Yves-Andre Istel(14) 17,720 *
Cristina A. Banks(15) 14,030 *
Paul Novak(16) 10,000 *
All directors, director-nominees and 1,443,203 13.2%
executive officers as a group (13
persons)
EXECUTIVE COMPENSATION
The following table sets forth for the fiscal years ended March 31,
1999, March 31, 2000
- ------------------
8 Includes 40 shares held by various family members as to which Mr. Farver may
have shared voting power. Includes 76,500 shares issuable to Mr. Farver on
exercise of options which are vested or will vest within the next 60 days.
9 Includes of 97,830 shares issuable on exercise of options which are vested or
will vest within the next 60 days. Excludes shares held and acquirable by DBR
(Lafite), of which Mr. Salin is President, which holdings are set forth
separately above and as to which Mr. Salin disclaims beneficial ownership.
10 Consists of 18,100 shares issuable on exercise of options which are vested or
will vest within the next 60 days. Excludes shares held and acquirable by DBR
(Lafite), of which Baron de Rothschild is Managing Partner, which holdings are
set forth separately above and as to which he disclaims beneficial ownership.
11 Consists of 22,950 shares issuable on exercise of options which are vested or
will vest within the next 60 days. Excludes 10,000 shares held by Paragon
Vineyard Co., Inc., of which Mr. Niven is President, as to which Mr. Niven
disclaims beneficial ownership.
12 Includes 24,720 shares issuable to Mr. Hojel on exercise of options which are
vested or will vest within the next 60 days. Excludes shares held and acquirable
by the Hojel family as set forth above, as to which Mr. Hojel disclaims
beneficial ownership.
13 Includes 300 shares owned by Mr. Plant's family members as to which Mr. Plant
disclaims beneficial ownership. Includes 21,510 shares issuable to Mr. Plant on
the exercise of options which are vested or will vest within the next 60 days.
14 Includes 17,720 shares issuable to Mr. Istel on exercise of options which are
vested or will vest within the next 60 days.
15 Includes 12,930 shares issuable to Dr. Banks upon exercise of options which
are vested or will vest within the next 60 days.
16 Consists of 10,000 shares issuable on exercise of options which are vested or
will vest within the next 60 days.
</FN>
10
and March 31, 2001 a summary of compensation awarded to, earned by, or paid to,
the Company's Chief Executive Officer and each of the Company's four other most
highly compensated executive officers who were serving as of March 31, 2001 (the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
____________________________________________________________________________________________________________________
Annual Compensation Long-Term Compensation
____________________________________________________________________________________________________________________
Securities
Other Restricted Underlying
Annual Stock Options/ LTIP
Name And Principal Year Salary Bonus Compensation Award SARs Payouts
Position ($) ($) ($) (1) ($)(3) ($) (#) (2) ($)
Thomas B. Selfridge 2001 $250,000 $85,000 $9,000 -- 37,500 --
Chief Executive Officer 2000 210,000 75,000 5,000 -- 37,500 --
1999 199,500 60,000 -- --
W. Philip Woodward 2001 $150,000 $20,000 $4,200 -- 20,000
Chairman of the Board 2000 150,000 38,000 2,446 -- 20,000
1999 116,058 38,000 3,600 -- 25,000
Robert B. Farver 2001 $135,000 $83,125 $9,000 -- 15,000
Vice President, Sales and 2000 115,000 86,000 13,784 -- 15,000
Distribution 1999 105,808 67,000 13,761 -- 15,000
Shawn C. Blom 2001 $43,077 $ 9,500 $12,000 -- --
Chief Financial Officer 2000 -- -- -- -- --
1999 -- -- -- -- --
Paul K. Novak 2001 $110,000 $22,000 $6,000 -- 10,000
Vice President, Marketing 2000 21,154 8,000 1,250 -- --
1999 -- -- -- -- --
<FN>
(1) Bonuses of each of the Named Executive Officers for the fiscal year ended
March 31, 2001 were approved at a regular meeting of the Board on May 17,
2001 and paid in July 2001.
(2) All of the options were incentive stock options, granted pursuant to the
Company's 1987 and 1997 Stock Option Plans.
(3) Other Annual Compensation includes car allowances and a sign on bonus for
the C.F.O.
</FN>
OPTION GRANTS IN FISCAL YEAR 2001
The following table sets forth certain information regarding options
granted during the fiscal year ended March 31, 2001 to the Company's Named
Executive Officers:
11
Individual Grants
____________________________________________________________________________________________
Percentage Of Potential Realizable
Number Of Total Value at Assumed
Securities Options/SARs Annual Rates of Stock
Underlying Granted to Exercise Price Appreciation For
Option/SARs Employees or Expiration Option Term (1)
Name Granted(#) In Fiscal Year Base Price Date 5% 10%
---- ----------- -------------- ---------- ---------- -- ---
Thomas B. Selfridge 2/ 37,500 45.5% $8.38 5/17/10 $197,630 $500,834
-
W. Philip Woodward 20,000 24.2% $8.38 5/17/10 $105,403 $267,111
Robert B. Farver 15,000 18.2% $8.38 5/17/10 $79,052 $200,333
Paul K. Novak 10,000 12.1% $8.38 5/17/10 $52,701 $133,556
<FN>
- --------------------------
1. Potential realizable value is calculated based on an assumption that the
price of the Common Stock appreciates at the annual rate shown (compounded
annually) from the date of grant of the option until the end of the option
term (10 years). The value is net of the exercise price but is not adjusted
for the taxes that would be due upon exercise. The assumed rates of
appreciation are mandated by the rules of the Securities and Exchange
Commission and do not represent the Company's estimate or projection of
future stock prices. Actual gains, if any, will depend on the future
performance of the Company, overall market conditions and the continued
employment of the executive officer during the applicable vesting period.
2. Includes 12,500 options which were granted to Mr. Selfridge pursuant to an
employment agreement dated November 10, 1997.
</FN>
AGGREGATED OPTIONED EXERCISES IN FISCAL 2001 AND FISCAL YEAR-END VALUE OF
UNEXERCISED OPTIONS
The following table sets forth information regarding each exercise of
stock options during the fiscal year ended March 31, 2001, and the number and
value of unexercised stock options held by each Named Executive Officer as of
the same date. The closing price of the Common Stock on March 31, 2001 was $8.69
per share based on the NASDAQ closing price.
12
Number of
Securities
Underlying Value of Unexercised
Unexercised In-The-Money
Options/SARs Options/SARs
Value at Fiscal Year-End at Fiscal Year-
Net (#) End ($)
Shares Acquired Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
---- --------------- -------- ------------------ --------------------
Thomas B. Selfridge 0 187,500/37,500 $11,813/$0
W. Philip Woodward 10,000 $3,750 132,000/0 $58,550/$0
Robert B. Farver 0 76,500/0 $9,450/$0
Paul Novak 0 10,000/0 $3,150/$0
PROFIT SHARING 401(K) PLAN
The Company's Profit Sharing 401(k) Plan (the "401(k) Plan") is
intended to be a qualified retirement plan under Section 401(k) of the Internal
Revenue Code of 1986, as amended (the "Code"). Under this plan, participating
employees (including the Named Executive Officers) may contribute up to 15% of
their compensation, but not exceeding the maximum amount allowed under
applicable tax laws. All employees of the Company with one year of service,
unless covered by a collective bargaining agreement, are eligible to participate
in the 401(k) Plan. The Company's Edna Valley Vineyard joint venture has a
similar plan.
EMPLOYEE STOCK PURCHASE PLAN
Under the Company's Employee Stock Purchase Plan (the "Stock Purchase
Plan"), pursuant to Section 423 of the Code, all Company employees, with one
year of service (including the Named Executive Officers) may contribute up to
10% of their compensation during each 27-month period of the Stock Purchase
Plan. At the end of the period, the employee's contributions are invested in the
Common Stock at 85% of the market price of said shares on the commencement or
ending date of the offering period, whichever is lower. On January 20, 1998, the
Board renewed the Stock Purchase Plan for the period February 1, 1998 through
January 31, 2001. The Company expects that the Board will renew the Stock
Purchase Plan at the next Board meeting.
13
COMPENSATION COMMITTEE REPORT ON COMPENSATION OF EXECUTIVE OFFICERS
GENERAL. The objective of the Company's executive compensation program
is to develop and maintain executive reward programs which (i) contribute to the
enhancement of shareholder value, (ii) are competitive with the pay practices of
other industry-leading companies and (iii) attract, motivate and retain key
executives who are critical to the long-term success of the Company. As
discussed below, the Company's executive compensation program consists of both
fixed (base salary) and variable (incentive) compensation elements. Variable
compensation consists of annual cash incentives and stock option grants under
the Company's 1997 Stock Option Plan (the "Plan"). These elements are designed
to operate on an integrated basis and together comprise total compensation
value.
The Committee reviews executive compensation in light of the Company's
performance during the year. In reviewing the Company's performance during the
2001 fiscal year, the Committee considered a variety of factors. Consolidated
gross revenues increased by 18% for the year to the highest dollar level
achieved in the Company's history, while the Company's gross profits and net
profits decreased by $1.5 million and $2.2 million, respectively. In addition,
the Committee considered the continued success of the new Echelon brand, the
acquisition of the minority interest in the Canoe Ridge Winery and the launch of
the Sagelands Winery brand and the continued progress toward the launch of a new
luxury-priced red wine brand. In reviewing Company performance, the Committee
considered these factors as a whole without assigning specific weight to
particular factors.
BASE SALARY. Base salary levels for the Company's executives are deter-
mined by the Committee based on factors such as individual performance (e.g.,
leadership, level of responsibility, management skills, and industry activities)
and Company performance (as discussed above). For fiscal year 2001, base
salaries for the Named Executive Officers, including that of the Chief Executive
Officer, were established as above.
ANNUAL CASH INCENTIVES. The annual cash incentive, typically paid as a
bonus, is designed to provide a short-term (one-year) incentive. The Company
does not adhere to any firmly established formula for the award of annual cash
incentives. Rather, incentive awards are based on the achievement of corporate
and individual goals for the year, including subjective factors. The Summary
Compensation Table shows annual cash incentives paid to the Named Executive
Officers during the fiscal years ended March 31, 1999, 2000 and 2001.
STOCK OPTIONS. Stock options are designed to provide long-term incen-
tives and rewards tied to the price of the Common Stock. Given the fluctuations
of the stock market, stock price performance and financial performance are not
always consistent. The Committee believes that stock options, which provide
value to recipients only when the Company's shareholders benefit from stock
price appreciation, are an important component of the Company's executive
compensation program. The number of options or shares of stock currently held by
an executive is not a factor
14
in determining individual grants, and the Committee has not established any
target level of ownership of the Common Stock by its executives. However,
retention of shares by executives is encouraged. For certain of the Company's
sales personnel, including Mr.Farver, there is a formula for annual cash
incentives based on meeting sales, depletion, and budgetary goals including
subjective factors.
The Company does not adhere to any firmly established formula for the
issuance of options. The Summary Compensation Table shows the options granted to
the Named Executive Officers during the past three years. In determining the
size of the grants to the Named Executive Officers, the Committee assessed
relative levels of responsibility and the long-term incentive practices of other
comparable companies.
In accordance with the provisions of the Plan, the exercise price of
all options granted was equal to the market value of the underlying Common Stock
on the date of grant. Accordingly, the value of these grants to the officers is
dependent solely upon the future growth and share value of the Common Stock.
The foregoing report is given by the members of the Committee, namely:
C. Richard Kramlich
Christophe Salin
Mark A. Hojel
PERFORMANCE GRAPH
The line graph on the following page compares the cumulative total
return to holders of the Common Stock in the period from April 1, 1996 to March
31, 2001, 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 six companies
whose returns have been weighted based on market capitalization as of the
beginning of each period for which a return is indicated: Brown-Forman
Corporation, Constellation Brands, Inc., Robert Mondavi Corp., Golden State
Vintners, Scheid Vineyards, and Willamette Valley Vineyards. The graph assumes
an investment of $100.00 on April 1, 1996 in the Company and in the two
comparison indices. "Total return," for purposes of the graph, assumes
reinvestment of all dividends.
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 of the Company's existing
shelf registrations or future filings under the Securities Act of 1933 or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates it by reference into such filing.
15
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG THE CHALONE WINE GROUP, LTD.,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND A PEER GROUP
* * * Graph Appears Here * * *
Key Appears Here
*$100 invested on 3/31/96 in stock or index-including reinvestment of dividends.
Fiscal year ending March 31.
16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
THE EDNA VALLEY VINEYARD JOINT VENTURE (the "EVV Joint Venture"). Mr.
Niven, a director of the Company, is the President and a substantial shareholder
of Paragon Vineyard Co., Inc. ("Paragon"), the Company's partner in the EVV
Joint Venture. In December 1996, the Company and Paragon entered into an
agreement (the "Joint Venture Amendment") which amended and restated the terms
of the EVV Joint Venture. Under the terms of the Joint Venture Amendment, the
Company is obligated to make substantial payments in order to maintain its 50%
ownership interest in the EVV Joint Venture and to extend its term indefinitely.
Specifically, the Company previously paid Paragon $1,070,000 (the "Deposit") as
a deposit toward future payments due for the foregoing purposes and the sum of
$4,540,000 in three installments, the most recent of which was paid in December
1999. The Company's future obligations in respect of the foregoing rights
require a single future payment $1,206,667 (consisting of $850,000 in cash and
$356,667 by application of the balance of the Deposit) in 2001. In the year
2001, the Company will also have an option to purchase 50% of the "EDNA VALLEY"
brand-name for $200,000. If the Company fails to make the foregoing payment, it
may be removed as the managing joint venture partner in the EVV Joint Venture.
In addition to the foregoing payments by the Company to Paragon in respect of
the Joint Venture Amendment and ground lease, in fiscal 2001 the EVV Joint
Venture made distributions to Paragon of approximately $700,000.
Under the terms of a grape purchase agreement, Paragon sells fixed
quantities of Chardonnay grapes to the Edna Valley Joint Venture at prices
calculated by reference to the average prices paid for Chardonnay grapes in Napa
County during the preceding year, with certain adjustments depending on the
grapes' sugar content. Paragon also supplies grapes to Carmenet Winery. During
fiscal year 2001, the value of the grapes sold by Paragon to the Edna Valley
Joint Venture and Carmenet Winery pursuant to the foregoing contracts was
approximately $5,001,679.
On December 28, 1995, the Company loaned $500,000 to Paragon pursuant
to a secured promissory note which provides for repayment of principal and
interest in the amount of $132,430.54 during 1997 and four (4) equal annual
installments of $130,218.21 commencing on January 15, 1998. Paragon has made
each of the payments required in 1997-2001. The note has been paid in full as of
March 31, 2001. The note bears interest at the rate of 9-1/2% per annum and is
secured by a pledge of Paragon's interest in the Edna Valley Joint Venture.
LES DOMAINES BARONS DE ROTHSCHILD (LAFITE). Certain directors-
nominees have a relationship with DBR (Lafite). Baron Eric de Rothschild and Mr.
Salin are, respectively, a Managing Partner and President of DBR (Lafite), and
Mr. Istel is a director of certain affiliates of DBR (Lafite).
Pursuant to DBR (Lafite)'s investment in the Company, the Company
receives an allocation of the wines of DBR (Lafite), including the wines of
Chateau Lafite-Rothschild and Duhart-Milon. During the 2001 fiscal year, the
Company paid approximately $1,758,140 to DBR (Lafite), of which approximately
$460,616 represents deposits for wine which will be delivered in future years
(i.e., wine "futures").
17
OTHER
In the judgment of the Company, all material transactions between the
Company and its directors, officers and principal shareholders, and their
affiliates, have been made on terms no less favorable to the Company than could
have been obtained from unaffiliated third parties.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's executive officers, directors and
greater-than-ten-percent beneficial owners are required under Section 16(a) of
the Exchange Act to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Copies of those reports must also be
furnished to the Company. Based on Company records, copies of filings received
by it and upon written representations from certain reporting persons and their
agents, the Company believes that all SEC filing requirements applicable to its
officers and directors under Section 16(a) of the Exchange Act were complied
with during the applicable year.
RATIFICATION OF APPOINTMENT OF THE COMPANY'S
INDEPENDENT AUDITORS
(PROXY ITEM NO. 2)
The Board has reappointed Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending December 31, 2001 subject to
ratification by the shareholders at the Meeting. Deloitte & Touche and its
predecessor, Touche Ross & Co., have been the Company's independent auditors
since 1986. Representatives of Deloitte & Touche are expected to be in
attendance at the Meeting, with the opportunity to make a statement, and to be
available to answer shareholders' questions.
AUDIT FEES
The aggregate fees billed by Deloitte & Touche for professional
services rendered for the audit of the Company's annual financial statements for
the fiscal year ended March 31, 2001, and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q for that
fiscal year, were $166,357.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Deloitte & Touche did not render professional services relating to
financial information systems design and implementation for the fiscal year
ended March 31, 2001.
ALL OTHER FEES
The aggregate fees billed by Deloitte & Touche for services rendered to
the Company, other than the services described above under "Audit Fees" for the
fiscal year ended March 31, 2001, were $30,643. Such fees relate to tax services
and other consulting activities.
18
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION
AND APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.
OTHER MATTERS
The Company does not know of any matter other than those discussed in
the foregoing materials contemplated for action at the Meeting. Should any other
matter be properly brought before the Meeting, it is the intention of the
persons designated by the Board to receive and vote the proxies to vote in
accordance with the recommendation of the Board. Discretionary authority for
them to do so is contained in the proxy.
FINANCIAL STATEMENTS
Shareholders should refer to the Consolidated Financial Statements and
Supplemental Data, Management's Discussion and Analysis, and Selected Financial
Data set forth in the Company's Annual Report on Form 10-K, which was previously
filed with the Securities and Exchange Commission and is being furnished to
shareholders concurrently with this proxy statement.
SUBMISSION OF SHAREHOLDER
PROPOSALS FOR 2002 ANNUAL MEETING
Any proposal which a shareholder wishes to have presented at the 2002
Annual Meeting and included in the Company's proxy statement for that meeting
must be received by the Company, at its principal executive office, 621 Airpark
Road, Napa, California 94558-6272, no later than February 28, 2002. Proposals
should be addressed to the attention of the Chief Financial Officer of the
Company. In order to avoid controversy as to the date on which a proposal was
received by the Company, it is suggested that any shareholder who wishes to
submit a proposal submit such proposal by certified mail, return receipt
requested.
The Bylaws of the Company provide that in order for a shareholder to
bring business before or propose director nominations at an annual meeting of
shareholders, the shareholder must provide advance notice of such proposal or
nomination. Specifically, the shareholder must give written notice to the
Corporate Secretary not less than sixty (60) days nor more than ninety (90) days
prior to the date of the annual meeting. The notice must contain specified
information about the proposed business or each nominee and about the
shareholder making the proposal or nomination. In the event that less than
seventy (70) days' prior notice or prior public disclosure of the date of the
annual meeting is given or made to shareholders, notice by the shareholder in
19
order to be timely must be received no later than the close of business on the
tenth day following the date on which such notice of the annual meeting date was
mailed or public disclosure of the date of the annual meeting was made,
whichever occurs first.
By Order of the Board of Directors,
/s/ W. PHILIP WOODWARD
------------------------
W. Philip Woodward
Chairman of the Board
Napa, California
APPENDIX B
VOTE VIA TELEPHONE OR THE INTERNET -- IT'S QUICK, EASY AND
IMMEDIATE
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card. PLEASE
NOTE THAT ALL VOTES CAST VIA THE TELEPHONE OR THE INTERNET MUST BE CAST PRIOR TO
5 P.M., AUGUST 21, 2001. If you wish to change your address or notify the
Company that you plan to attend the meeting, please mark the boxes below and
return your proxy by mail.
TELEPHONE VOTING
o There is NO CHARGE for this call.
o On a Touch Tone Telephone call TOLL FREE 1-877-779-8683 twenty-four hours per
day - 7 days a week.
o You will be asked to enter the Control Number which is located above your name
and address below.
- --------------------------------------------------------------------------------
OPTION #1: If you wish to vote as the Board of Directors RECOMMENDS, PRESS 1
- --------------------------------------------------------------------------------
Your vote will be confirmed and cast as you directed.
END OF CALL
20
- --------------------------------------------------------------------------------
OPTION # 2: If you choose to vote on each proposal separately, PRESS 2
- --------------------------------------------------------------------------------
You will hear these instructions:
Proposal 1: To vote as the Board of Directors RECOMMENDS, PRESS 1; to vote
AGAINST, PRESS 2; to ABSTAIN, PRESS 3
Proposal 2: To vote as the Board of Directors RECOMMENDS, PRESS 1; to vote
AGAINST, PRESS 2; to ABSTAIN, PRESS 3
Your vote will be confirmed and cast as you directed.
END OF CALL
INTERNET VOTING
Log on to the Company's transfer agent's Internet voting site at
http://www.eproxyvote.com and follow the instructions on your screen.
- --------------------------------------------------------------------------------
If you vote via telephone or the Internet, it is not necessary to
return your proxy by mail. THANK YOU FOR VOTING.
-------------------------------------------------------------------------------
DETACH HERE
======================================
CHALONE
Wine Group
======================================
THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.
Dear Shareholder:
Regardless of whether you plan to attend the 2001 Annual Meeting of
Shareholders, you can be sure your shares are represented at the meeting by
promptly returning your proxy card in the enclosed envelope or by voting via
telephone or the Internet. Instructions are on the reverse side of this card.
Thank you,
21
Investor Relations Department
PROXY
THE CHALONE WINE GROUP, LTD.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
for the Annual Meeting of Shareholders, August 22, 2001.
The undersigned, shareholder(s) of The Chalone Wine Group, Ltd. do(es) hereby
appoint the Corporation's Secretary and Chairman, and each of them, proxies,
each with full power of substitution, for and in the name and stead of the
undersigned at the Annual Meeting of Shareholders of The Chalone Wine Group,
Ltd., to be held on August 22, 2001, and at any and all postponements or
adjournments thereof, to vote all shares of capital stock held by the
undersigned, with all powers that the undersigned would possess if personally
present, on each of the matters referred to herein.
[x] PLEASE MARK VOTES AS IN THIS EXAMPLE.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED "FOR" ELECTION OF MANAGEMENT'S DIRECTOR-NOMINEES AND "FOR"
RATIFICATION OF THE APPOINTMENT OF THE COMPANY'S INDEPENDENT AUDITORS, AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING AND ANY POSTPONEMENT(S) OR ADJOURNMENT(S) THEREOF.
FOR WITHHELD FOR ALL
1. ELECTION OF DIRECTORS [ ] [ ] [ ]
Nominees:
--------
Cristina Banks
Mark A. Hojel
Yves-Andre Istel
C. Richard Kramlich
William G. Myers
James H. Niven
Phillip M. Plant
Eric de Rothschild
Christophe Salin
Thomas B. Selfridge
W. Philip Woodward
-------------------
22
If you wish to withhold authority to vote [ ] [ ] [ ]
for any individual nominee(s), write such
nominee(s) name on the lines above.
2. Proposal to ratify the appointment of Deloitte & Touche LLP as the Company's
independent certified public accountants for the fiscal year ending December
31, 2001.
[ ] MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
(This Proxy should be marked, dated and signed by the shareholder(s) exactly as
his or her name appears hereon and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both shareholders should sign.)
___________________ __________ , 2001 ___________________ __________ , 2001
Signature Date Signature Date
23