UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934 (Amendment No.
)
Filed by
the Registrant x
Filed by
a Party other than the Registrant o
Check the
appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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x
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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Willamette
Valley Vineyards, Inc.
(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):
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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o
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Fee paid previously with
preliminary materials.
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Check box if any part of the fee
is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule
and the date of its filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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Notice
of the Annual Meeting of Stockholders
To
be held Sunday July 11, 2010
Dear
Shareholders,
You are
cordially invited to the 2010 Annual Meeting of Shareholders the (“Annual
Meeting”) of Willamette Valley Vineyards, Inc., which will be held at our winery
at 8800 Enchanted Way S.E., Turner, Oregon 97392, on Sunday, July 11, 2010,
beginning at 1:00 p.m., local time. The Annual Meeting will be held for the
following purposes:
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1.
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To
consider and vote upon a proposal to elect eight members to our Board of
Directors, each to hold office until the 2011 Annual Meeting or and until
his or her successor is elected and
qualified;
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2.
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To
ratify the appointment by the Board of Directors of Moss Adams LLP as the
independent registered public accounting firm of the Company for the
year ending December 31, 2010; and
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3.
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To
transact such other business as may properly come before the meeting or
any postponements or adjournments of the
meeting.
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The
foregoing items of business are more fully described in the Proxy Statement that
accompanies this Notice.
Our Board
of Directors fixed May 13, 2010 as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting and any
postponements or adjournments of the meeting, and only shareholders of record at
the close of business on that date are entitled to this notice and to vote at
the Annual Meeting. A list of shareholders entitled to vote at the Annual
Meeting will be available at the meeting and at our offices for ten days prior
to the meeting.
We hope
that you will use this opportunity to take an active part in our affairs by
voting on the business to come before the Annual Meeting, either by executing
and returning the enclosed Proxy Ballot or by casting your vote in person at the
meeting. An electronic version of the 2010 Proxy and Annual Report is available
at this web address: www.proxyvote.com. Whether
or not you plan to attend in person, please sign, date and return the enclosed
proxy in the envelope provided. The prompt return of your proxy card will assist
us in preparing for the Annual Meeting. If you receive more than one proxy card
because you own shares registered in different names or addresses, each proxy
card should be completed and returned.
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BY
ORDER OF THE BOARD OF DIRECTORS
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Jim
Bernau
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President
and Chairperson of the
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Board
of Directors
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Turner,
Oregon
June
1st, 2010
TABLE
OF CONTENTS
1.
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INTRODUCTION
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1
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1.1
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General
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1
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1.2
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Solicitation,
Voting and Revocability of Proxies
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1
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1.3
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Directors
and Executive Officers
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2
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1.4
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Board
and Committee Meeting Attendance
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4
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1.5
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Annual
Meeting Attendance
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4
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1.6
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Independence
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4
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1.7
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Committees
of the Board of Directors
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4
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1.8
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Leadership
Structure of Board of Directors
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5
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1.9
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Role
of Board of Directors in Risk Oversight
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6
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1.10
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Director
Compensation
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6
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1.11
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Communications
to the Board of Directors
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7
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1.12
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Code
of Ethics
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7
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2.
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EXECUTIVE
COMPENSATION
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7
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2.1
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Summary
Compensation Table
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7
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2.2
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Bernau
Employment Agreement
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8
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2.3
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Stock
Options
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8
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2.4
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Outstanding
Equity Awards at Fiscal Year-End
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8
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2.5
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Security
Ownership of Certain Beneficial Owners and Management
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8
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2.6
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Equity
Compensation Plan Information
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10
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2.7
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Transactions
with Related Persons
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10
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2.8
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Section
16(a) Beneficial Ownership Reporting Compliance
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10
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2.9
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Compensation
Committee Report
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11
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2.10
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Audit
Committee Report
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11
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3.
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ELECTION
OF DIRECTORS (PROPOSAL NO. 1)
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12
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4.
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RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS (PROPOSAL NO. 2)
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13
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5.
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SHAREHOLDER
PROPOSALS AND NOMINATIONS OF DIRECTORS
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13
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5.1
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Shareholder
Proposals for Inclusion in Next Year’s Proxy Statement
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13
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5.2
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Other
Shareholder Proposals
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13
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5.3
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Shareholder
Director Nominations
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13
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6.
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COST
OF SOLICITATION
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14
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7.
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ADDITIONAL
INFORMATION
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14
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PROXY
STATEMENT
for
the
ANNUAL
MEETING OF SHAREHOLDERS TO BE HELD ON JULY 11, 2010
1. INTRODUCTION
This
proxy statement (the “Proxy Statement”) and the accompanying proxy ballot are
being furnished to the shareholders of Willamette Valley Vineyards, Inc., an
Oregon corporation (the “Company”), as part of the solicitation of proxies by
the Company’s Board of Directors (the “Board”) from shareholders of record of
outstanding shares of the Company’s common stock, no par value (the “Common
Stock”), for use in voting at the Company’s Annual Meeting of Shareholders to be
held on July 11th, 2010 at 1:00 PM at Willamette Valley Vineyards,
8800 Enchanted Way SE, Turner, Oregon 97392 and at any adjournments or
postponements thereof (the “Annual Meeting”).
At the
Annual Meeting, shareholders will be asked to consider and vote upon the
following:
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(i)
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To
elect eight members of the Board of Directors, each to hold office
until the 2011 Annual Meeting or and until his or her successor is elected
and qualified;
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(ii)
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To
ratify the appointment by the Board of Directors of Moss
Adams LLP as the independent registered public
accounting firm of the Company for the year ending December 31, 2010;
and
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(ii)
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To
transact such other business as may properly come before the meeting or
any adjournments thereof.
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This
Proxy Statement, together with the enclosed proxy ballot, is first being mailed
to the Company’s shareholders on or about June 1st,
2010.
Your vote
is important. Accordingly, whether or not you plan to attend the Annual Meeting,
please sign and return the proxy ballot as soon as possible. Shares can be voted
at the Annual Meeting only if the holder is present in person or by proxy. If
you receive more than one proxy card because your shares are registered in
different names or at different addresses, please sign and return each such
proxy so that all of your shares will be represented at the Annual
Meeting.
1.2
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Solicitation,
Voting and Revocability of Proxies
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The Board
of Directors has fixed the close of business on May 13, 2010 as the record date
for the determination of the shareholders entitled to notice of and to vote at
the Annual Meeting. Accordingly, only holders of record of Common Stock at the
close of business on such date will be entitled to vote at the Annual Meeting,
with each such share entitling its owner to one vote on all matters properly
presented at the Annual Meeting. On the record date, there were 5,015 registered
and or beneficial holders holding 4,888,979 shares of Common
Stock. The presence, in person or by proxy, of a majority of the
total number of outstanding shares of Common Stock entitled to vote at the
Annual Meeting is necessary to constitute a quorum at the Annual
Meeting.
Each
enclosed proxy gives discretionary authority to the persons named therein with
respect to any amendments or modifications of the Company proposals and any
other matters that may be properly proposed at the Annual Meeting. The shares
represented by all valid unrevoked proxies returned in time to be voted at the
Annual Meeting will be voted in accordance with the instructions marked
therein. EXECUTED BUT UNMARKED PROXIES WILL BE VOTED FOR THE ELECTION
OF THE DIRECTORS NAMED IN THE PROXY AND FOR THE RATIFICATION OF THE COMPANY’S
AUDITORS. If any other matter(s) properly comes before the Annual
Meeting, the proxies solicited hereby will be exercised in accordance with the
reasonable judgment of the proxy holders named therein. If the meeting is
adjourned or postponed, your shares will be voted by the proxy holders on the
new meeting date as well, unless you have revoked your proxy instructions before
that date. Under Oregon law, shareholders are not entitled to dissenters’ rights
with respect to any of the proposals set forth in this Proxy
Statement.
The
presence of a shareholder at the Annual Meeting will not automatically revoke
such shareholder's proxy. A shareholder may, however, revoke a proxy at any time
prior to its exercise by filing a written notice of revocation with, or by
delivering a duly executed proxy bearing a later date to: Board Secretary,
Willamette Valley Vineyards, Inc., 8800 Enchanted Way S.E., Turner, Oregon
97392, or by attending the Annual Meeting and voting in person. Attending the
Annual Meeting in and of itself will not revoke previously given proxies. In
order to be effective, all revocations and later-filed proxies not delivered in
person at the Annual Meeting must be delivered to the Company at the address
listed above not later than 5:00 p.m. local time, on Saturday, July 10th,
2010. A shareholder who attends the meeting need not revoke a
previously executed proxy and vote in person unless the shareholder wishes to do
so. All valid, unrevoked proxies will be voted at the Annual
Meeting.
A proxy
marked as abstaining will be treated as present for the purpose of determining
whether there is a quorum for the Annual Meeting, but will not be counted as
voting on any matter as to which abstinence is indicated. A Broker "non vote,"
which occurs when a broker or other nominee holder, such as a bank, submits a
proxy representing shares that another person actually owns, and that person has
not given voting instructions on a non-routine matter or matters to the broker
or other nominee holder, will be treated as present for purposes of determining
whether there is a quorum for the Annual Meeting.
The
Company will pay the cost of its proxy solicitation. In addition to the use of
the mails, proxies may be solicited personally, by telephone or by email by
directors, officers and employees of the Company, who will not be specially
compensated for such activities. Your cooperation in promptly completing and
returning the enclosed proxy to vote your shares of Common Stock will help to
avoid additional expense.
If you
are a shareholder of record and you plan to attend the Annual Meeting, please
indicate this when you vote. If you are a beneficial owner of shares of Common
Stock held by a bank, broker or other nominee, you will need proof of ownership
to be admitted to the meeting. A recent brokerage statement or letter from the
bank, broker, or other nominee are examples of proof of ownership. If you want
to vote in person your shares of Company’s Common Stock held in street name, you
will have to obtain a proxy, executed in your favor, from the holder of record.
You may be asked to provide proof of identification to gain entry to the Annual
Meeting.
1.3
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Directors
and Executive Officers
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The
following table sets forth the names of each of our named executive officers and
each of the members of the Board of Directors, each of whom is a nominee for
election as a director for a one-year term, and each such person’s position with
the Company and age.
Name
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Position(s) with the
Company
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Age
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James
W. Bernau ***
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Chairperson
of the Board,
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President
and Director
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56
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R.
Steven Caldwell
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Chief
Financial Officer
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54
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Craig
Smith **
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Secretary
and Director
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63
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Thomas
M. Brian **
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Director
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61
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Sean
M. Cary
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Director
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36
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James
L. Ellis ***
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Director
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65
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Delna
L. Jones * ***
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Director
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69
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Betty
M. O'Brien *
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Director
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Stan
G. Turel * ** ***
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Director
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62
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*Member
of the Compensation Committee
**Member
of the Audit Committee
***Member
of the Executive Committee
All
directors hold office until the next annual meeting of shareholders or until
their successors have been elected and qualified. Executive officers
are appointed by the Board of Directors and serve at the pleasure of the Board
of Directors. Set forth below is additional information as to each
director and executive officer of the Company.
James W.
Bernau. Mr. Bernau has been President and Chairperson of the
Board of Directors of the Company since its inception in May
1988. Willamette Valley Vineyards was originally established as a
sole proprietorship by the Oregon winegrower in 1983, and he co-founded the
Company in 1988 with Salem grape grower, Donald Voorhies. From 1981
to September 1989, Mr. Bernau was Director of the Oregon Chapter of the National
Federation of Independent Businesses, “NFIB”, an association of 15,000
independent businesses in Oregon. Mr. Bernau has served as the President of the
Oregon Winegrowers Association, the Treasurer of that association's Political
Action Committee and the Chair of the Promotions Committee of the Oregon Wine
Advisory Board, the State of Oregon's agency dedicated to the development of the
industry. In March 2005, Mr. Bernau received the industry's Founder's
Award for his service.
R. Steven Caldwell, CPA. Mr.
Caldwell was selected as the Chief Financial Officer of Willamette Valley
Vineyards, Inc. on May 24, 2010 after serving as the Controller since November
30th,
2009. Previously, from 2004 to 2009, Mr. Caldwell served as the Chief
Financial Officer/Controller for Bend Tarp & Liner, Inc. based in Central
Oregon. The principal business of Bend Tarp and Liner, Inc. is the
fabrication and distribution of pond and lake liners throughout the United
States and overseas. Prior to his tenure at Bend Tarp and Liner, Mr.
Caldwell worked in public accounting, most recently with the Salem, OR firm of
Brenner & Co., serving as a technical reviewer in the tax
division. None of his previous employments were with companies that
are a parent, subsidiary or other affiliate of Willamette Valley
Vineyards. Mr. Caldwell is a Certified Public Accountant, licensed in
the state of Oregon since May of 1995 and holds a Bachelor of Science Degree in
Business Administration with an accounting concentration from Oregon State
University.
Craig Smith, CPA, MBA,
JD. Mr. Smith has served as a Director since October 2007 and as
Secretary since January, 2010. Mr. Smith, retired in December 2009 after 23
years as now retired, was the Vice President/Chief Financial Officer of
Chemeketa Community College in Salem, Oregon a position he held since June of
1986. He was an Adjunct Professor at the Atkinson Graduate School of
Management at Willamette University, as well as Managing Partner of Faler Grove
Miller and Smith a large Salem Oregon CPA firm. He has served on many
State of Oregon commissions, and he has served as the Board Chairperson for many
of the local non-profit and educational institutions including the Salem Keizer
School Board, Chemeketa Community College Board of Education, State Fair
Dismissal Appeals Board, Mid-Willamette Valley Council of Governments, Oregon
School Boards Association and the United Way. Mr. Smith is an active
member of the Oregon State Bar and a Certified Public Accountant. Mr.
Smith is an independent director as defined under NASDAQ rules.
Thomas M.
Brian. Mr. Brian was appointed to the Board of Directors in
June of 2004. Mr. Brian has served as Chairman of the Washington
County Board of Commissioners since 1999. Previously, he served for
10 years in the Oregon House of Representatives. While in the
legislature, Mr. Brian was Chairman of the Revenue Committee and served on the
Judicial and Ways and Means Committees. He also served 10 years as City
Councilor and Mayor of Tigard, OR. Mr. Brian has successfully owned
and operated a commercial/industrial real estate company for nineteen
years.
Sean M. Cary. Mr.
Cary was elected to the Board of Directors in 2007. Mr. Cary is the
Corporate Controller of National Warranty Corporation, a Eugene, Oregon based
provider of finance and insurance products sold through automobile dealers
located in the Pacific Northwest, a position he has held since November of
2008. Previously, Mr. Cary served as the CFO of Cascade Structural
Laminators, a laminated bean manufacturer headquartered in Eugene, Oregon from
July 2007 to September of 2008 and prior to that as Controller of Willamette
Valley Vineyards. Mr. Cary served in the U.S. Air Force as a
Financial Officer. Mr. Cary holds a Master of Business Administration
degree from the University of Oregon and a Bachelor of Science Degree in
Management from the U.S. Air Force Academy.
James L. Ellis. Mr.
Ellis, a founding shareholder of the Company, has served as a Director since
July 1991. Mr. Ellis retired from full time duties with the Company in July of
2009 and currently works part-time on selected projects. Mr. Ellis previously
served as the Company's Director of Human Resources from 1993 to
2009. He also served as the Company’s Secretary from 1997 to 2009,
and Vice President /Corporate from 1998 to 2009. From 1990 to 1992,
Mr. Ellis was a partner in Kenneth L. Fisher, Ph.D. & Associates, a
management-consulting firm. From 1980 to 1990, Mr. Ellis was Vice
President and General Manager of R.A. Kevane & Associates, a Pacific
Northwest personnel-consulting firm. From 1962 to 1979, Mr. Ellis was
a member of and administrator for the Christian Brothers of California, owner of
Mont La Salle Vineyards and producer of Christian Brothers wines and
brandy.
Delna L. Jones. Ms.
Jones has served as a Director since November 1994. Ms. Jones resigned from the
Board in December of 2002 having moved to Southern California and was
reappointed by the Board in March of 2005 having returned to
Oregon. From January of 2004 to present, Ms. Jones has served as
President of Delna Jones and Associates, an independent consulting
firm. Ms. Jones also currently serves as the Chair of the Oregon
Ethics Commission. Ms. Jones was elected in 1998 and served as a
County Commissioner for Washington County, Oregon from 1998 to
2000. Ms. Jones previously served as project director for the Capital
Center, an education and business consortium from 1994 to 1998. From
1985 to 1990, Ms. Jones served as Director of Economic Development with US West
Communications. Beginning in 1982, she was elected six times to the
Oregon House as the State Representative for District 6. During her
tenure, she served as the Assistant Majority Leader; she also chaired the
Revenue and School Finance committee, and served on the Legislative Rules and
Reorganization committee and the Business and Consumer Affairs
committee.
Betty M.
O'Brien. Ms. O'Brien, a founding shareholder of the Company,
has served as a Director since July 1991. Ms. O'Brien is co-owner of Elton
Vineyards L.L.C., a commercial vineyard located in Eola Hills in Yamhill County,
Oregon and established in 1983. Ms. O'Brien was the Executive
Director of the Oregon Wine Board from 2001 to 2004. Ms. O'Brien was
employed by Willamette University as its Director of News and Publications from
1988 to 2000. She is a member of the Oregon Winegrowers Association,
having previously served as its President and Treasurer and as a
director. Ms. O’Brien is a member of the Vineyard
Management/Winemaking Program Advisory Committee at Chemeketa Community College
(CCC). She headed a wine industry task force developing a new wine
marketing program and curriculum leading to a two-year degree at
CCC. She now teaches Introduction to Wine Marketing. She
serves as Chair of the Board of Directors of LIVE (Low Input Viticulture and
Enology).
Stan G. Turel. Mr.
Turel, a founding shareholder of the Company, has served as a Director since
November of 1994. From 2001 to present, Mr. Turel has served as President of
Turel Enterprises, a real estate management company managing his own properties
in Oregon, Washington and Idaho. Prior to his current activities, Mr. Turel was
the Principal and CEO of Columbia Turel, (formally Columbia Bookkeeping, Inc.) a
position which he held from 1974 to 2001. Prior to the sale of the company to
Fiducial, one of Europe's largest accounting firms, Columbia had 26,000 annual
tax clients including 4,000 small business clients. Additionally Mr. Turel
successfully operated as majority owner two cable television companies during
the 1980's and 1990's which were eventually acquired by other corporations. Mr.
Turel is a pilot, has previously served as a delegate to the White House
Conference on Small Business and has previously held positions on several state
and local Government committees.
1.4
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Board
and Committee Meeting Attendance
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The Board
of Directors met four times during 2009. Each director attended at least 75% of
the aggregate of the total number of meetings of the Board and the total number
of meetings of each committee on which each director served.
1.5
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Annual
Meeting Attendance
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Although
we do not have a formal policy regarding attendance by members of the Board of
Directors at our annual meeting of shareholders, directors are encouraged to
attend the annual meetings. All eight of our directors attended the
Company’s 2009 annual meeting of shareholders.
The Board
of Directors has determined that each of our directors other than Mr. Bernau,
Mr. Ellis and Mr. Cary is
“independent” within the meaning of the applicable rules and regulations of the
SEC and the director independence standards of The NASDAQ Stock Market, Inc.
(“NASDAQ”), as currently in effect. Furthermore, the Board of Directors has
determined that each of the members of the Compensation and Audit Committees of
the Board of Directors is “independent” under the applicable rules and
regulations of the SEC and the director independence standards of NASDAQ, as
currently in effect. The Board of Directors does not have a separate
standing Nominating Committee. Consistent with NASDAQ rules, only
independent directors participate in meetings where the Board of Directors meets
as the Nominating Committee. The independent directors held two meetings in
2009.
1.7
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Committees
of the Board of Directors
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Compensation
Committee
The Board
of Directors has appointed a Compensation Committee, which reviews executive
compensation and makes recommendations to the full Board regarding changes in
compensation, and also administers the Company's 1992 Stock Incentive Plan.
Executive officers do not play a role in determining executive compensation. The
Compensation Committee does not delegate any of its duties, and it may use
consultants in determining executive compensation. The Compensation
Committee met two times in person or by telephone conference in 2009. The
members of the Compensation Committee are Betty M. O'Brien, Chair, Stan Turel
and Delna Jones. All members of the Compensation Committee are independent under
the applicable rules and regulations of the SEC and the director independence
standards of the NASDAQ Stock Market, as currently in effect. A copy of the
Compensation Committee’s charter can be found on the Company’s website, www.WillametteValleyVineyards.com.
Audit
Committee
The
Company has a separately designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as
amended. The members of the Audit Committee are Thomas M. Brian,
Craig Smith, and Stan G. Turel. All members of the Audit Committee
are independent as defined under the applicable rules and regulations of the SEC
and the director independence standards of the NASDAQ Stock Market, as currently
in effect. The Audit Committee oversees our financial reporting process on
behalf of the Board of Directors and reports to the Board of Directors the
results of these activities, including the systems of internal controls that
management and the Board of Directors have established, our audit and compliance
process and financial reporting. The Audit Committee, among other duties,
engages the independent public accountants retained as the registered public
accounting firm, pre-approves all audit and non-audit services provided by the
independent public accountants, reviews with the independent public accountants
the plans and results of the audit engagement, considers the compatibility of
any non-audit services provided by the independent public accountants with the
independence of such auditors and reviews the independence of the independent
public accountants. Mr. Smith is designated
by the Board of Directors as the “audit committee financial expert” under SEC
rules. The Audit Committee conducted four meetings in the year
ended December 31, 2009 and all members attended all
of the meetings. A copy of the Audit Committee charter can be found
at our website, www.WillametteValleyVineyards.com.
Audit
Committee Financial Expert
Chairperson
Craig Smith serves as the Audit Committee’s financial expert. Mr. Smith is
independent as defined under the applicable rules and regulations of the SEC and
the director independence standards of the NASDAQ Stock Market as currently in
effect.
Nominating
Committee
The Board
of Directors performs the function of a Nominating Committee for selecting
nominees for election as directors. Given its size, the Board believes that it
performing this function is a pragmatic and realistic
approach. Consistent with NASDAQ rules, the independent members of
the Board of Directors select and recommend to the full Board of Directors for
approval nominees for director positions. The Board then determines whether to
approve of such nominations and present them to the Company’s shareholders for
election to the Board of Directors. In seeking nominees, the Board
looks for qualified candidates that will meet the oversight and financial
expertise needs of the Company. The Board also looks for nominees who will meet
the independent qualifications necessary to meet current standards of
independence. While not maintaining a specific policy on Board diversity
requirements, the Board believes that diversity is an important factor in
determining the composition of the Board and, therefore, seeks a variety of
occupational and personal backgrounds on the Board in order to obtain a range of
viewpoints and perspectives and to enhance the diversity of the Board. The
Board, functioning as the Nominating Committee, annually evaluates the Board’s
composition. This evaluation enables the Board to update the skills
and experience they seek in the Board as a whole, and in individual directors,
as the Company’s needs evolve and change over time and to assess the
effectiveness of efforts at pursuing diversity.
Nominations
of candidates by shareholders of the Company to be considered by the Committee
for membership on the Board of Directors may be submitted if such nominations
are made pursuant to timely notice in writing to the Board
Secretary. For more information, please see the information provided
under the heading “Shareholder Proposals and Nominations” below. The current
nominees were selected by the independent members of the Board of Directors,
which nominees were ratified by the entire Board of Directors. The
Nominating Committee does not currently have a charter or formal policy with
respect to the consideration of director candidates recommended by
shareholders. The reason for not having such a formal policy is that
the current approach has functioned well and therefore no formal policy has been
deemed necessary.
Executive
Committee
In 1997
the Board appointed an Executive Committee, its members are: James Bernau, James
Ellis, Delna Jones and Stan Turel. One of the principle charters of
the Executive Committee is to review and approve all proposed purchases over
$50,000.00. The Executive Committee held two meetings during
2009.
1.8
|
Leadership
Structure of Board of Directors
|
Currently,
the Company’s President Mr. Bernau also serves as its Chairman of the
Board. The Board believes the interests of all shareholders are
best served at the present time through a leadership model with the same person
holding the positions of President and Chairman of the Board.
The
Company’s President possesses an in-depth knowledge of the Company, its
operations, and the array of challenges to be faced, gained through over 25
years of successful experience in the industry. The Board believes that these
experiences and other insights put the President in the best position to provide
broad leadership for the Board as it considers strategy and as it exercises its
fiduciary responsibilities to its shareholders.
Further,
the Board has demonstrated its commitment and ability to provide independent
oversight of management.
All
directors other than Mr. Bernau, Mr. Ellis, and Mr. Cary are independent, and
100 percent of the Compensation and Audit Committee members are independent.
Each independent director may call meetings of the independent directors, and
may request agenda topics to be added or dealt with in more detail at meetings
of the full Board or an appropriate Board committee.
1.9
|
Role
of Board of Directors in Risk
Oversight
|
The
entire Board and each of its standing committees are involved in overseeing risk
associated with the Company. The Board monitors the Company’s governance by
regular review with management and outside advisors The Board and the
Audit Committees monitor the Company’s liquidity risk, regulatory risk,
operational risk and enterprise risk by regular reviews with management and
external auditors and other advisors. In its periodic meetings with the
independent accountants, the Audit Committee discusses the scope and plan for
the audit and includes management in its review of accounting and financial
controls, assessment of business risks and legal and ethical compliance
programs. As part of its responsibilities as set forth in its
charter, the Compensation Committee reviews the Company’s executive compensation
program and the associated incentives to determine whether they present a
significant risk to the Company. Based on this review, the
Compensation Committee concluded that the Company’s compensation policies and
procedures are not reasonably likely to have a material adverse effect on the
Company.
1.10
|
Director
Compensation
|
The
following table sets forth information concerning compensation of our directors
other than Mr. Bernau for the fiscal year ended December 31, 2009.
|
|
Fees
Earned
or
Paid
in Cash
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)(1)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
James
L. Ellis
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Sean
M. Cary
|
|
|
2,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
2,000 |
|
Thomas
M. Brian
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Delna
L. Jones
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Craig
Smith
|
|
|
600 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
600 |
|
Betty
M. O’Brien
|
|
|
2,200 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
2,200 |
|
Stan
G. Turel
|
|
|
2,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
2,000 |
|
(1)
|
The
amounts provided in this column represent the aggregate grant date fair
value of option awards granted to our directors in the fiscal year ended
December 31, 2009 as calculated in accordance with FASB ASC Topic 718,
Stock Compensation. The aggregate number of option awards
outstanding for each director as of December 31, 2009 is as follows: Mr.
Ellis – 81,130, Mr. Cary – 16,000, Mr. Brian – 22,000, Ms. Jones – 27,800,
Mr. Smith – 0, Ms. O’Brien – 40,700, and Mr. Turel –
37,517.
|
The
members of the Company's Board of Directors received cash compensation for their
service on the Board in 2009, and were reimbursed for out-of-pocket and travel
expenses incurred in attending Board meetings. Under the Company's
Stock Incentive Plan adopted by the shareholders in 1992 and further amended by
the shareholders in 1996, beginning in 1997 an option to purchase 1,500 shares
of Common Stock is granted to each Director for service on the Board during the
year. This option was increased to 4,000 per year when the 50-share
grant per Director’s meeting was discontinued for the year 2000 and
beyond. In December 2005, each Director was granted 14,000 options
for service during 2005. In the foreseeable future, as a result of
FASB ASC Topic 718, Stock Compensation, requiring all share-based payments to be
recognized as expenses in the statement of operations based on their fair values
and vesting periods, the Company does not intend to issue stock options to the
Directors for their service.
In
January of 2009 the Board of Directors upon recommendation of the Compensation
Committee who sought outside counsel regarding revision of the Company’s Board
Compensation Plan, adopted the final version of the revised WVV Board Member
Compensation Plan. Under the terms of the plan, any Board member can
elect not to receive any or all of the compensation components and the Board
reserves the right to suspend this plan at any time depending on the effects of
the economy on the Company. The basic elements of the plan are: $1,000 yearly
stipend for service on the Board, $500 per Board meeting attended in person,
$250 per Board meeting via teleconference, $200 per committee meeting in person
and $100 per committee meeting via teleconference. A set per diem for expenses
associated with meeting attendance, as well as, a yearly wine and glassware
allowance were also approved.
1.11
|
Communications
to the Board of Directors
|
The Board
of Directors welcomes and encourages shareholders to share their thoughts
regarding the Company. Towards that end, the Board of Directors has adopted a
policy whereby all communications should first be directed to the Company’s
Secretary. The Secretary will then distribute a copy of the
communication to the Chairman of the Board, the Chairperson of the Audit
Committee and the Company's outside counsel. Based on the input and decision of
these persons, along with the entire Board of Directors if it is deemed
necessary, the Company will respond to the communication. Shareholders should
not communicate directly with any other individual officer or director unless
requested to do so.
The
Company adopted a code of ethics applicable to its Chief Executive Officer,
CFO/Controller and other finance leaders, which is a "code of ethics" as defined
by applicable rules of the Securities and Exchange Commission. Amendments to the
code of ethics or any grant of a waiver from a provision of the code of ethics
requiring disclosure under applicable SEC rules, if any, will be disclosed on
our website at, www.WillametteValleyVineyards.com.
Any
person may request a copy of the code of ethics, at no cost, by writing to us at
the following address:
Willamette
Valley Vineyards, Inc.
Attention:
Corporate Secretary
8800
Enchanted Way SE
Turner,
OR 97392
2. EXECUTIVE
COMPENSATION
2.1
|
Summary
Compensation Table
|
The
following table sets forth certain information concerning compensation paid or
accrued by the Company, to or on behalf of the Company's principal executive
officer, James W. Bernau and former principal financial officer, Jeffrey J.
Fox (the “Named Executive Officers”) for the years ending December 31, 2009 and
2008. No other officer, director or other employee of the Company
other than Mr. Bernau and Mr. Fox received total compensation in 2009 in excess
of $100,000. In accordance with Item 402(m) of Regulation S-K, Mr.
Bernau and Mr. Fox were the only executive officers of the Company for whom
disclosure is required during this period.
SUMMARY
COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive
Plan
|
|
|
Compensation
|
|
|
Other
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Name
and Principal Position
|
|
Year
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bernau,
James W.,
|
|
2009
|
|
|
173,379 |
|
|
|
43,653 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5,663 |
|
|
|
222,695 |
|
President,
Chief Executive
|
|
2008
|
|
|
167,840 |
|
|
|
41,960 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
14,476 |
|
|
|
224,276 |
|
Officer
and Chairman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fox,
Jeffrey J.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief
Financial Officer
|
|
2009
|
|
|
113,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,031 |
|
2.2
|
Bernau
Employment Agreement
|
The
Company and Mr. Bernau are parties to an employment agreement dated August 3,
1988 and amended in February 1997 and again amended in January of
1998. Under the amended agreement, Mr. Bernau is paid an annual
salary of $173,379 with annual increases tied to increases in the consumer price
index. Pursuant to the terms of the employment agreement, the Company
must use its best efforts to provide Mr. Bernau with housing on the Company's
property. Mr. Bernau lives in the mobile home free of rent and must
continue to reside there for the duration of his employment in order to provide
additional security and lock-up services for late evening events at the Winery
and Vineyard. The employment agreement provides that Mr. Bernau's
employment may be terminated only for cause, which is defined as non-performance
of his duties or conviction of a crime.
In order
to reward performance and retain high-quality employees, the Company often
grants stock options to its employees. The Company does not
ordinarily directly issue shares of stock to its employees. Options
are typically issued at a per share exercise price equal to the closing price as
reported by the Capital Market at the time the option is granted. The
options vest to the employee over time. Three months following
termination of the employee's employment with the Company, any and all
unexercised options terminate.
2.4
|
Outstanding
Equity Awards at Fiscal Year-End
|
The
following table provides information, with respect to the Named Executive
Officer, concerning exercised options during the last fiscal year and
unexercised options held as of December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Plan
Awards:
|
|
|
|
|
|
Option
Awards
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Market
or
|
|
|
|
|
|
Equity
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Plan
Awards:
|
|
Payout
|
|
|
|
|
|
Incentive
|
|
|
Incentive
|
|
|
|
|
|
|
|
Market
|
|
Number
of
|
|
Value
of
|
|
|
|
|
|
Plan
Awards:
|
|
|
Plan
Awards:
|
|
|
|
|
|
Number
|
|
Value
of
|
|
Unearned
|
|
Unearned
|
|
|
Number
of
|
|
|
Number
of
|
|
|
Number
of
|
|
|
|
|
|
of
Shares
|
|
Shares
or
|
|
Shares,
|
|
Shares,
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
or
Units
|
|
Units
of
|
|
Units
or
|
|
Units
or
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
of
Stock
|
|
Stock
|
|
Other
|
|
Other
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
Option
|
|
|
|
that
|
|
that
|
|
Rights
that
|
|
Rights
that
|
|
|
Options
|
|
|
Options
|
|
|
Unearned
|
|
Exercise
|
|
Option
|
|
Have
Not
|
|
Have
Not
|
|
Have
|
|
Have
Not
|
|
|
(#)
|
|
|
(#)
|
|
|
Options
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Not
Vested
|
|
Vested
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
(#)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bernau,
James
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/11/2005
|
|
|
75,000 |
|
|
|
- |
|
|
|
- |
|
3.289
|
|
2/11/2010
|
|
|
- |
|
-
|
|
|
- |
|
-
|
8/1/2005
|
|
|
4,000 |
|
|
|
- |
|
|
|
- |
|
4.136
|
|
8/1/2010
|
|
|
- |
|
-
|
|
|
- |
|
-
|
12/27/2005
|
|
|
64,000 |
|
|
|
- |
|
|
|
- |
|
5.50
|
|
12/27/2010
|
|
|
- |
|
-
|
|
|
- |
|
-
|
2.5
|
Security
Ownership of Certain Beneficial Owners and
Management
|
The
following table sets forth certain information with respect to beneficial
ownership of the Company's Common Stock as of May 27, 2010, by (i) each person
who beneficially owns more than 5% of the Company's Common Stock, (ii) each
Director of the Company, (iii) each of the Company's named executive officers,
and (iv) all directors and executive officers as a group. Except as
indicated in the footnotes to this table, each person has sole voting and
investment power with respect to all shares attributable to such
person.
|
|
Number
of
|
|
|
Percent
of
|
|
|
|
Shares
Outstanding
|
|
|
Shares
|
|
|
|
Stock
|
|
|
Beneficially
|
|
|
|
|
|
|
Owned
|
|
James
W. Bernau President/CEO,
Chair of the Board
|
|
|
|
|
|
|
2545
Cloverdale Road
|
|
|
614,032 |
(1) |
|
|
12.6 |
% |
Turner,
OR 97392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
L. Ellis Director
|
|
|
|
|
|
|
|
|
7850
S.E. King Road
|
|
|
81,130 |
(2) |
|
|
** |
|
Milwaukie,
OR 97222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
M. Brian Director
|
|
|
|
|
|
|
|
|
7630
SW Fir
|
|
|
22,000 |
(3) |
|
|
** |
|
Tigard,
OR 97223
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delna
L. Jones
Director
|
|
|
|
|
|
|
|
|
14480
SW Chardonnay Ave
|
|
|
27,800 |
(4) |
|
|
** |
|
Tigard,
OR 97224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sean
M. Cary
Director
|
|
|
|
|
|
|
|
|
3188
Blacktail Drive
|
|
|
15,283 |
(5) |
|
|
** |
|
Eugene,
OR 97405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Betty
M. O'Brien Director
|
|
|
|
|
|
|
|
|
22500
Ingram Lane NW
|
|
|
42,200 |
(6) |
|
|
** |
|
Salem,
OR 97304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stan
G. Turel Director
|
|
|
|
|
|
|
|
|
2125
NE 11th
Place
|
|
|
39,517 |
(7) |
|
|
** |
|
Bend,
OR 97701
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Craig
Smith Director
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0 |
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** |
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367
Sanrodee Drive
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Salem,
OR 97317
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Jeff
Fox CFO
through 5/23/2010
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1,000 |
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** |
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14940
Seal Rock Ave NE
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Aurora,
OR 97002
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Thomas R. Riccardi
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560,808 |
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11.5 |
% |
3 Charming Lane
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Loutinville, NY 12211
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All
Directors, Executive
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1,403,770 |
(8) |
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28.7 |
% |
Officers
and persons owning
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5%
or more as a group (10
persons)
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______________________________
** Less
than one percent.
(1)
Includes 68,000 shares issuable upon exercise of options exercisable within 60
days of the date of May 27, 2010.
(2)
Includes 76,000 shares issuable upon the exercise of options exercisable within
60 days of the date of May 27, 2010.
(3)
Includes 22,000 shares issuable upon the exercise of options exercisable within
60 days of the date of May 27, 2010.
(4)
Includes 26,000 shares issuable upon the exercise of options exercisable within
60 days of the date of May 27, 2010.
(5)
Includes 2,083 shares issuable upon the exercise of options exercisable within
60 days of the date of May 27, 2010.
(6)
Includes 30,000 shares issuable upon the exercise of options exercisable within
60 days of the date of May 27, 2010.
(7)
Includes 14,000 shares issuable upon the exercise of options exercisable within
60 days of the date of May 27, 2010.
(8)
Includes an aggregate of 312,500 shares issuable upon exercise of options
exercisable within 60 days of the date of May 27, 2010.
2.6
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Equity
Compensation Plan Information
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The
following table summarizes information, as of December 31, 2009, with respect to
shares of our common stock that may be issued under our existing equity
compensation plans.
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(A)
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(B)
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(C)
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Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights
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Weighted
average
exercise
price of
outstanding
options and
warrants
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Number of
securities
remaining
available for
future issuance
under equity
compensation
plans (excluding
securities reflected
in column (A))
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(share
numbers in table are
in
thousands except per share amounts)
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Equity
compensation plans approved by security holders (1)
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355,700
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$
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4.16
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132,476
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Equity
compensation plans not approved by security holders
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-
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-
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-
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Tot
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355,700
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$
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4.16
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132,476
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(1)
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Includes
shares of our common stock issuable upon exercise of options from the
Company’s 1992 Stock Incentive Plan and 2001 Stock Incentive
Plan.
|
The
Company does not have compensation plans under which equity securities of the
Company are authorized for issuance which were adopted without the approval of
security holders.
2.7
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Transactions
with Related Persons
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In 2007,
the Company entered into a long-term lease for Elton vineyards which consists of
60 acres of mature grapevines, of which approximately 42 acres are Pinot Noir.
The agreement was for an initial 10 year lease with the option to renew for 4
successive terms of 5 years each, plus a first right of refusal on the
property’s sale. Betty O’ Brien, a member of the Company’s Board of
Directors, is a 50% owner of the lessor, Elton Vineyards, LLC. As
such, she is therefore entitled to 50% of the net income of Elton Vineyards,
LLC.
The
Company believes that the transactions set forth above were made on terms no
less favorable to the Company than could have been obtained from unaffiliated
third parties. All future transactions between the Company and its
officers, directors, and principal shareholders will be approved by a
disinterested majority of the members of the Affiliated Transactions Committee
of the Company's Board of Directors, and will be on terms no less favorable to
the Company than could be obtained from unaffiliated third parties.
2.8
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Section
16(a) Beneficial Ownership Reporting
Compliance
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Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's
officers, directors and persons who own more than ten percent of a registered
class of the Company's equity securities to file certain reports with the
Securities and Exchange Commission (the “SEC”) regarding ownership of, and
transactions in, the Company's securities. These officers, directors and
stockholders are also required by SEC rules to furnish the Company with copies
of all Section 16(a) reports that are filed with the SEC. Based
solely on a review of copies of such forms received by the Company and written
representations received by the Company from certain reporting persons, the
Company believes that for the year ended December 31, 2009 all Section 16(a)
reports required to be filed by the Company's executive officers, directors and
10% stockholders were filed on a timely basis.
2.9
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Compensation
Committee Report
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The
Compensation Committee of the Board of Directors is tasked with administering
the Company's 1992 Stock Incentive Plan as amended. The Committee and the Board
believe that equity-based compensation ensures that the Company's employees,
directors and distributors have a continuing stake in the long-term success of
the Company. All options granted by the Company are typically granted
with an exercise price equal to the market price of the Company's Common Stock
on the date of grant and, accordingly, will only have value if the Company's
stock price increases. All options have an individual vesting
schedule and a term of ten years, except in the case of shareholders who hold a
10% or more of Company stock, in which case the term is 5 years and the grant
price must be 10% over market on the day of grant. The Committee met
two times in 2009. Per its Charter, it reviewed the current compensation for the
CEO and it approved the performance bonus of $41,960 for the CEO (see section
“Executive Compensation"). The Committee also awarded a series of small share
grants totaling 425 shares to employees and distributors; no options were
awarded in 2008.
The
members of the Company's Board of Directors received cash compensation for their
service on the Board in 2009, and were reimbursed for out-of-pocket and travel
expenses incurred in attending Board meetings. Under the Company's
Stock Incentive Plan adopted by the shareholders in 1992 and further amended by
the shareholders in 1996, beginning in 1997 an option to purchase 1,500 shares
of Common Stock is granted to each Director for service on the Board during the
year. This option was increased to 4,000 per year when the 50-share
grant per Director’s meeting was discontinued for the year 2000 and
beyond. In December 2005, each Director was granted 14,000 options
for service during 2005. In the foreseeable future, as a result of
FASB ASC Topic 718, Stock Compensation, requiring all share-based payments to be
recognized as expenses in the statement of operations based on their fair values
and vesting periods, the Company does not intend to issue stock options to the
Directors for their service.
In
January of 2009 the Board of Directors upon recommendation of the Compensation
Committee who sought outside counsel regarding revision of the Company’s Board
Compensation Plan, adopted the final version of the revised WVV Board Member
Compensation Plan. Under the terms of the plan, any Board member can
elect not to receive any or all of the compensation components and the Board
reserves the right to suspend this plan at any time depending on the effects of
the economy on the Company. The basic elements of the plan are: $1,000 yearly
stipend for service on the Board, $500 per Board meeting attended in person,
$250 per Board meeting via teleconference, $200 per committee meeting in person
and $100 per committee meeting via teleconference. A set per diem for expenses
associated with meeting attendance, as well as, a yearly wine and glassware
allowance were also approved.
COMPENSATION
COMMITTEE
Betty
O'Brien, Chairperson, Stan Turel, Delna Jones
2.10
|
Audit
Committee Report
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The
general purpose of the Audit Committee is to assist the Board of Directors in
the exercise of its fiduciary responsibility of providing oversight of the
Company's financial statements and the financial reporting processes, internal
accounting and financial controls, the annual independent audit of the Company's
financial statements, and other aspects of the financial management of the
Company. The Audit Committee is appointed by the Board of
Directors. All committee members are financially
literate.
Fees for
professional services provided by our independent registered public accounting
firm in each of the last two fiscal years, in each of the following categories
are:
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Years
Ended
December
31,
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2009
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2008
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Audit
Fees
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$ |
209,665 |
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$ |
292,917 |
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Audit
- Related Fees
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- |
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- |
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Tax
Fees
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28,053 |
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29,830 |
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Other
Fees
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- |
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- |
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$ |
237,718 |
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$ |
322,747 |
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Moss
Adams LLP served as the Company’s independent registered public accounting firm
for the years ended December 31, 2009 and 2008.
Pre-Approval
Policies: It is the policy of the Company not to enter into
any agreement for Moss Adams LLP to provide any audit or non-audit services to
the Company unless (a) the agreement is approved in advance by the Audit
Committee or (b) (i) the aggregate amount of all such non-audit services
constitutes no more than 5% of the total amount the Company pays to Moss Adams
LLP during the fiscal year in which such services are rendered, (ii) such
services were not recognized by the Company as constituting non-audit services
at the time of the engagement of the non-audit services and (iii) such services
are promptly brought to the attention of the Audit Committee and prior to the
completion of the audit were approved by the Audit Committee or by one or more
members of the Audit Committee who are members of the Board of Directors to whom
authority to grant such approvals has been delegated by the Audit
Committee. The Audit Committee will not approve any agreement in
advance for non-audit services unless (1) the procedures and policies are
detailed in advance as to such services, (2) the Audit Committee is informed of
such services prior to commencement and (3) such policies and procedures do not
constitute delegation of the Audit Committee’s responsibilities to management
under the Securities Exchange Act of 1934, amended. We do not intend
to have our auditors provide any non-audit services in the foreseeable
future.
Specific Audit Committee
Actions Related to Review of the Company's Audited Financial
Statements: In discharging its duties, the Audit
Committee, among other actions, has (i) reviewed and discussed the audited
financial statements to be included in the company's Annual Report on Form 10-K
for the twelve months ended December 31, 2009 with management, (ii)
discussed with the Company's independent auditors the matters required to be
discussed by SAS 61, as amended (AICPA, Professional Standards, Vol. 1, AU380),
as adopted by the Public Company Accounting Oversight Board in Rule 3200T,
related to such financial statements, (iii) received the written disclosures and
the letter from the Company's independent accountants required by the applicable
requirements of the Public Company Accounting Oversight Board regarding the
independent accountant’s communications with the Audit Committee concerning
independence, and has discussed with the independent accountant the independent
accountant's independence, and (iv) based on such reviews and discussions, the
Audit Committee has recommended to the Board of Directors that the audited
financial statements be included in the company's Annual Report on Form 10-K for
the twelve months ended December 31, 2009.
AUDIT
COMMITTEE
Craig
Smith, Chairperson, Stan Turel, Tom Brian
3. ELECTION
OF DIRECTORS (PROPOSAL NO. 1)
At the
Annual Meeting eight directors will be elected, each for a one-year term. Unless
otherwise specified on the proxy, it is the intention of the persons named in
the proxy to vote the shares represented by each properly executed proxy for the
election as directors the persons named below as nominees:
Nominees:
James W.
Bernau
Craig
Smith
Thomas M.
Brian
Sean M.
Cary
James L.
Ellis
Delna L.
Jones
Betty M.
O'Brien
Stan G.
Turel
The Board
of Directors believes that the nominees will stand for election and will serve
if elected as directors. However, if any of the persons nominated by
the Board of Directors fails to stand for election or is unable to accept
election, the proxies will be voted for the election of such other person as the
majority of the independent members of the Board of Directors may
recommend. There is no cumulative voting for election of
directors. Directors are elected by a plurality of votes; therefore,
the eight persons receiving the most votes, even if less than a majority of the
votes cast, will be elected directors. Abstentions or failure to vote
will have no effect on the election of directors, assuming the existence of a
quorum. The Board of Directors unanimously recommends a vote FOR this
proposal.
4. RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS (PROPOSAL NO. 2)
The Audit
Committee has appointed Moss Adams LLP (“Moss Adams”) as independent auditors
for the 2010 fiscal year. Moss Adams will audit the Company’s consolidated
financial statements for the 2010 fiscal year and perform other services. While
shareholder ratification is not required by the Company’s by-laws or otherwise,
the Board of Directors is submitting the selection of Moss Adams to the
shareholders for ratification as a good corporate governance practice. If the
shareholders fail to ratify the selection, the Audit Committee may, but is not
required to, reconsider whether to retain Moss Adams. Even if the selection is
ratified, the Audit Committee in its discretion may direct the appointment of a
different independent public accountant or auditor at any time during the year
if it determines that such a change would be in the best interest of the Company
and its shareholders.
The
proposal will be approved if, assuming the existence of a quorum, at least a
majority of the shares of the Company's Common Stock cast on the proposal vote
in favor of approval. Abstentions and broker non-votes are counted for purposes
of determining whether a quorum exists at the Annual Meeting but will not be
counted and will have no effect on the determination of the outcome of the
proposal. The proxies will be voted for or against the proposal, or as an
abstention, in accordance with the instructions specified on the proxy form. If
no instructions are given, proxies will be voted for approval of the
ratification of Moss Adams LLP.
A
representative of Moss Adams LLP is expected to attend the Annual Meeting at his
own expense and will be given an opportunity to make a statement if he desires
to do so and will be available to respond to appropriate questions.
The Board
of Directors unanimously recommends a vote FOR this
proposal. Assuming the existence of a quorum, the appointment of Moss
Adams LLP will be ratified if approved by the holders of a majority of the
shares present in person or by proxy.
5. SHAREHOLDER
PROPOSALS AND NOMINATIONS OF DIRECTORS
5.1
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Shareholder
Proposals for Inclusion in Next Year’s Proxy
Statement
|
To be
considered for inclusion in the proxy statement relating to next year’s annual
meeting, a shareholder proposal must be received at our principal executive
offices no later than February 1, 2011. Such proposals also will need to comply
with SEC regulations under Rule 14a-8 regarding the inclusion of shareholder
proposals in Company-sponsored proxy materials. Proposals should be addressed to
the Secretary, Willamette Valley Vineyards, Inc., 8800 Enchanted Way S.E.,
Turner, Oregon 97392. If the date of the next annual meeting is
changed by more than 30 days from the anniversary of this year’s annual meeting,
then, to be considered for inclusion in the proxy statement relating to next
year’s annual meeting, notice of a shareholder proposal will need to be received
by the Company in a reasonable amount of time before the Company begins to print
and send its proxy materials.
5.2
|
Other
Shareholder Proposals
|
If a
shareholder wishes to present a shareholder proposal at our next annual meeting
that is not intended to be included in the proxy statement, the shareholder
should give notice to our corporate Secretary of such proposal. Such notice
should be addressed to the Secretary, Willamette Valley Vineyards, Inc., 8800
Enchanted Way S.E., Turner, Oregon 97392. The SEC has amended Rule 14a-4(c)
under the Exchange Act that governs the Company’s use of discretionary proxy
voting authority with respect to shareholder proposals that are not included in
the Company’s proxy solicitation materials pursuant to Rule 14a-8 of the
Exchange Act. Therefore, in the event a shareholder does not notify the Company
by at least April 17 2011, which is 45 days before the date on which the Company
mailed its proxy materials for the 2010 Annual Meeting of Shareholders, of an
intent to present such a proposal at the Company’s 2011 Annual Meeting, the
Company’s management proxies will have the right to exercise their discretionary
authority in connection with the matter submitted by the shareholders, without
discussion of the matter in the proxy statement.
5.3
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Shareholder
Director Nominations
|
The
independent members of the Board of Directors select and recommend to the Board
of Directors for approval nominees for director and committee member positions.
The Board then considers the recommendation of these directors and decides which
nominees to present to the Company’s shareholders for election to the Board of
Directors.
Shareholders
who wish to submit a proposed nominee for election to the Board of Directors of
the Company for consideration by the Nominating Committee should send written
notice to the Chairman of the Board of Directors, Willamette Valley Vineyards,
Inc., 8800 Enchanted Way S.E., Turner, Oregon 97392 no later than February 1,
2011. Such notification should set forth all information relating to
the proposed nominee, as is required to be disclosed in solicitations of proxies
for election of directors pursuant to Regulation 14A under the Exchange Act.
This includes the proposed nominee’s written consent to being named in the proxy
statement as a nominee and to serving as a director if elected; the name and
address of such shareholder or beneficial owner on whose behalf the nomination
is being made; and the number of shares of the Company owned beneficially and of
record by such shareholder or beneficial owner. The Nominating Committee will
consider shareholder nominees on the same terms as nominees selected by the
Nominating Committee.
6. COST
OF SOLICITATION
The cost
of soliciting proxies will be borne by the Company. In addition to
use of the mails, proxies may be solicited personally or by telephone by
directors, officers and employees of the Company, who will not be specially
compensated for such activities.
7. ADDITIONAL
INFORMATION
A copy of
the Company's Annual Report to Shareholders for the fiscal year ended December
31, 2009 accompanies this Proxy Statement. The Company is required to
file an Annual Report on Form 10-K with the Securities and Exchange
Commission. Shareholders may obtain, free of charge, a copy of the
Form 10-K by writing to Craig Smith, Secretary, Willamette Valley Vineyards,
Inc., 8800 Enchanted Way S.E., Turner, Oregon 97392, or they may access a copy
through links provided on the Company's web site: www.WillametteValleyVineyards.com.
An electronic version of the 2010 Proxy and Annual Report is available at this
web address: https://materials.proxyvote.com/969136. The
information on the Company’s website is not part of this Proxy
Statement.
By Order
of the Board of Directors
James W.
Bernau
Chairperson
of the Board
June 1,
2010