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EXHIBIT 1
Voting Agreement
VOTING AGREEMENT ("Agreement") dated August 31, 2001, between DOMAINES
BARONS XX XXXXXXXXXX (LAFITE) S.C.A., a French company ("DBR"), and SFI
INTERMEDIATE LTD., a Texas limited partnership ("SFI").
Recitals
DBR and SFI each beneficially owns (as defined below) and has voting
control (as defined below) over a significant number of shares of common stock
(no par value) ("Common Stock") of The Chalone Wine Group, Ltd., a California
corporation (the "Company").
DBR currently has three (3) designees on the Company's board of
directors (the "Board") and SFI currently has two (2) designees on the Board.
DBR and SFI each believes it will benefit from entering into this
Agreement relating to the voting of their respective Common Stock.
Terms of Agreement
1. Election of Directors.
1.1 For so long as this Agreement remains in effect, each party
shall use its reasonable best efforts to ensure that, subject to any limitations
imposed by law or fiduciary responsibility, its designee(s) then serving on the
Board will (a) vote for the inclusion of the other party's designees for
election to the Board (as provided in Section 1.3) on the management slate to be
presented for vote by the Company's shareholders, (b) vote for the election of a
person or persons mutually agreed by the parties to fill any vacancy or newly
created position on the Board, and (c) to cause the management slate of nominees
for election to the Board to include the number of designees of each party
determined in accordance with Section 1.3.
1.2 During the term of this Agreement, whether or not a party
beneficially owns and has voting control over Common Stock entitling that party
to designate a nominee or nominees to the Board at the same level as in effect
on the date of
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this Agreement, that party shall vote all Common Stock which it at the time
beneficially owns and over which it has voting control in favor of the designees
of the other party in accordance with Section 1.3.
1.3 For purposes of Sections 1.1 and 1.2, the parties agree that
they each shall be entitled to have that number of designees to serve on the
Board determined as follows:
If a party beneficially owns and The party shall be entitled
has voting control over the following to have the following
percentage of the total Common number of designees to
Stock issued and outstanding serve on the Board
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26 percent or greater 3
12 percent but less than 26 percent 2
5 percent but less than 12 percent 1
less than 5 percent 0
If a party loses its entitlement to have one or more designees to serve
on the Board because of a decrease in the party's beneficial ownership of and
voting control over Common Stock, the other party shall designate a replacement
designee or designees and each party (including the party which has so lost its
entitlement) shall remain obligated to vote the shares of Common Stock which it
beneficially owns and over which it has voting control in favor of the designees
(including replacement designees named in accordance with this sentence) of the
party who continues to have the right to designate director nominees.
1.4 For purposes of this Agreement, the term "beneficial
ownership" means, with respect to shares of Common Stock, the possession of (i)
"voting power" (within the meaning of Rule 13d-3(a)(1) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) or (ii) "investment
power" (within the meaning of Rule 13d-3(a)(2) under the Exchange Act) with
respect to such shares; provided, however, that "beneficial ownership" shall not
include beneficial ownership arising by virtue of the provisions of this
Agreement or any other agreement to act together with any person (including the
other party to this Agreement) for the purpose of acquiring, holding, voting
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or disposing of any shares of Common Stock. The terms "beneficially own" and
"beneficially owns" have correlative meanings. In addition, for purposes of this
Agreement, "voting control" means, with respect to shares of Common Stock, the
possession of "voting power" (within the meaning of Rule 13d-3(a)(1) under the
Securities Act) sufficient to vote or direct the voting of such shares in the
manner provided in this Agreement.
2. Shareholder Votes. During the term of this Agreement, each party,
subject to any limitations imposed by law or fiduciary responsibility, shall
vote all of its Common Stock in accordance with the Joint Vote (as defined
below) on all matters (other than the election of directors) coming before the
shareholders of the Company (the "Shareholders"). Prior to any vote of the
Shareholders (whether at an annual or special meeting or by written consent),
the parties shall in good faith discuss and take an informal vote to determine
the manner in which they each intend to vote their Common Stock on the
applicable matter or matters to be submitted to the Shareholders. If the results
of such informal vote indicate that the parties concur on how to vote with
respect to such matter or matters, the parties shall vote their shares of Common
Stock accordingly (a "Joint Vote"), when such matter or matters are submitted to
the Shareholders.
3. Ownership by Designees.
3.1 For purposes Sections 1.2 and 1.3 of this Agreement, Common
Stock beneficially owned by either party shall include any Common Stock
beneficially owned by that party's designees on Board.
3.2 DBR and SFI agree they each will exercise their respective
reasonable best efforts to cause their respective designees on the Board to vote
the shares of Common Stock beneficially owned by them on all matters coming
before the Shareholders in accordance with the provisions of this Agreement, as
if such shares were owned by the party that designated such person.
4. Transfers of Common Stock. Nothing in this Agreement shall be
construed to restrict the sale, transfer or other disposition of Common Stock
beneficially owned by either party. Shares transferred by either party to a
person or entity who is not a party to this Agreement may be transferred free
and clear of any rights and obligations under this
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Agreement; provided, the transferor no longer has beneficial ownership of or
voting control over the transferred Common Stock.
5. Term; Termination. This Agreement shall automatically terminate on
the earliest to occur of (a) the tenth anniversary hereof, (b) the first date on
which either party no longer beneficially owns or has voting control over any
Common Stock, or (c) the date on which this Agreement is terminated in
accordance with Section 7.4.
6. Notices. All notices and other communications hereunder shall be
in writing and shall be given by (a) personal delivery, (b) courier service, (c)
facsimile (which is confirmed), or (d) registered or certified mail (postage
prepaid, return receipt requested) and shall be effective when received and
shall be addressed as follows:
If to DBR, to:
Domaines Barons xx Xxxxxxxxxx (Lafite) S.C.A.
00, xxx xx xx Xxxxx
00000 Xxxxx
XXXXXX
Attention: Baron Xxxx xx Xxxxxxxxxx
Facsimile: 01-33-1-5389-7801
with a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
1251 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
If to SFI, to:
SFI Intermediate Ltd.
c/o HM International, Inc.
0000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished in writing in the manner set forth above.
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7. Miscellaneous.
7.1 Remedies. Each party hereto recognizes and agrees that if for
any reason any provision of this Agreement is not performed by the other party
in accordance with its specific terms or is otherwise breached, immediate and
irreparable harm or injury would be caused to the non-breaching party for which
money damages would not be an adequate remedy. Accordingly, the parties agree
that, in addition to any other available remedies, the non-breaching party shall
be entitled to seek an injunction restraining any violation or threatened
violation of the provisions of this Agreement.
7.2 Construction. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. Without limiting the
foregoing, with respect to any provision of this Agreement, if it is determined
by a court of competent jurisdiction to be excessive as to duration or scope, it
is the parties' intention that such provision nevertheless be enforced to the
fullest extent which it may be enforced.
7.3 Miscellaneous. This Agreement (a) constitutes the entire
agreement between the parties hereto with respect to its subject matter; (b) may
not be amended, modified or waived except by an instrument in writing signed and
delivered on behalf of both parties hereto; (c) shall be governed by the laws of
the State of California without reference to its conflict of law rules; and (d)
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement.
7.4 Termination. Either DBR or SFI may terminate this Agreement at
any time by giving written notice of termination to the other party.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
DOMAINES BARONS XX XXXXXXXXXX (LAFITE) S.C.A.
By: /s/
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Baron Xxxx xx Xxxxxxxxxx
Managing Director
SFI INTERMEDIATE, LTD.
By: GHA 1 Holdings, Inc.,
its general partner
By: /s/
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Xxxxxxx X. Xxxxx
President
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