_______________________________________________
CONSTELLATION
BRANDS, INC.
_______________________________________________
2005
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
THE
CONSTELLATION BRANDS, INC.
2005
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Article
1
INTRODUCTION
1.1 THE
SERP AND ITS EFFECTIVE DATE. Constellation
Brands, Inc. (the "Company") has adopted, effective April 8, 2005 (the
"Effective Date"), the Constellation Brands, Inc. 2005 Supplemental
Executive Retirement Plan (the "SERP"), as set forth herein.
1.2 PURPOSE. The
Company maintains the Constellation Brands, Inc. 401(k) and Profit Sharing Plan
(the "Plan"). Section 401(a)(17) of the Internal Revenue Code of 1986, as
amended (the "Code") limits to $210,000 (in 2005, as adjusted in subsequent
years by the Secretary of the Treasury) the amount of compensation which may be
taken into account for a year under a qualified plan ("Compensation Limit") and
Code Section 415 limits the annual additions, including employer contributions,
that may be made to an employee's account under a qualified plan (the "Section
415 Limit"). In addition, other limits may apply to limit or reduce the
contributions that may be made to an employee's account under the
Plan.
The Employee Retirement Income
Security Act of 1974, as amended ("ERISA") permits the provision of benefits
under an unfunded plan maintained by the Company primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees. The purpose of the SERP is to provide to those employees
of the Company or a Related Business, as defined in the Plan, who are selected
by the Company from year to year, benefits which would be provided under the
Plan without regard to the Compensation Limit or the Section 415 Limit, or other
limits with respect to certain Company contributions under the Plan. In no case,
however, may any Company contribution to the SERP relate to, or be determined
with respect to, any elective contributions made by any employee to the Plan.
1.3 DEFINED
TERMS. Except as
otherwise indicated, capitalized terms used in this plan document which are not
defined herein have the same meaning as the same terms in the Plan.
1.4 PLAN
ADMINISTRATION. The SERP
shall be administered by a committee (the "Committee") consisting of one or more
individuals appointed by the Board of Directors of the Company. The Committee
shall have, to the extent appropriate, the same powers, rights, duties and
obligations with respect to the SERP as the Committee under the Plan has with
respect to the Plan. In the event that the Board of Directors does not appoint a
Committee, the Company shall act as the Committee.
Article
2
PARTICIPATION
AND BENEFITS
2.1 ELIGIBILITY
FOR BENEFITS. A person
for whom an account is established at any time under the SERP (a "SERP Account")
shall be a participant in the SERP (a "Participant") for purposes of receiving
distributions, maintaining account balances and being credited with net
earnings, gains and losses until all amounts credited to his or her SERP Account
have been distributed or forfeited. The Company, in its discretion, may select
the employees of the Company or a Related Business who shall receive Annual
Benefit Credits, as defined in Section 2.3, under the SERP for a Plan Year (the
"Active Participants"). The Company may, in its discretion, designate an
employee as an Active Participant for the purpose of receiving credits with
respect to some types of contributions under the Plan and not other types of
contributions; furthermore, the Company need not provide to all Active
Participants credits with respect to the same types of contributions under the
Plan. A person who becomes an Active Participant shall remain a Participant
until all amounts credited to his or her SERP Account have been distributed or
forfeited, whether or not such person is selected as an Active Participant for a
subsequent Plan Year.
2.2 INITIAL
ACCOUNT BALANCES. Each
Participant's SERP Account shall be credited as of the Effective Date with such
amount, if any, as is deemed to be transferred from such Participant's account
under the Constellation Brands, Inc. Supplemental Executive Retirement Plan or
the Robert Mondavi Corporation Retirement Restoration Plan, as applicable (the
"Transferred Balance").
2.3 AMOUNT
OF BENEFIT CREDITS. The
amount credited to an Active Participant's SERP Account for a Plan Year ("Annual
Benefit Credits") shall equal (a) the amount, if any, of Employer Basic
Contributions and Employer Supplemental Contributions the Active Participant
would have received under the Plan for that Plan Year if he or
she had received Employer Basic Contributions and Employer Supplemental
Contributions with respect to his or her base compensation above the
Compensation Limit at the same rate that he or she received Employer Basic
Contributions and Employer Supplemental Contributions under the Plan with
respect to his or her Compensation not greater than the Compensation Limit and
if the Section 415 Limit did not apply, and (b) such other amounts as the
Company shall from time to time, in its discretion, determine to credit to the
Active Participant's SERP Account with respect to other limited or reduced
contributions under the Plan, except that in no case shall any contribution or
benefit provided under the SERP be contingent upon, or determined with respect
to, an elective contribution made by any employee to the Plan.
2.4 INCOME
CREDITS. Each
Participant's SERP Account shall be credited as of each Valuation Date with net
earnings, gains and losses ("Income Credits") in an amount equal to the amount
which such account would have earned, gained or lost if at all times, from the
first business date the Transferred Balance, if any, was credited to the
Participant's SERP Account and from the first business date Annual Benefit
Credits, if any, were
credited to the Participant's SERP Account, such amounts were fully invested as
provided in the following paragraph.
From time to time the Company
shall determine the method of determining Participants' Income Credits under the
SERP. The Company may, in its discretion, determine Income Credits by treating
the Participants' SERP Accounts as if invested in a manner designated by the
Company or by permitting Participants to self-direct the manner in which their
Income Credits are to be determined from among such deemed investment options,
and in accordance with such rules and procedures, as the Company shall from time
to time determine. Any changes which the Company shall make in the method for
determining Income Credits shall be determined and announced to Participants in
advance of the date it becomes effective and shall represent a rate which the
Company could, ignoring the effect of federal, state and local income taxes,
replicate by investing its assets in available markets if it chose to do
so.
2.5 VESTING. Except as
otherwise provided herein, a Participant shall be vested in his or her SERP
Account as follows: (a) he or she shall be vested in any Transferred Balance to
the same extent he or she would have been vested in such amount under the
Constellation Brands, Inc. Supplemental Executive Retirement Plan or under the
Robert Mondavi Corporation Retirement Restoration Plan, as applicable, (b) he or
she shall become vested in one-fifth of any Annual Benefit Credit made to his or
her SERP Account on each of the first five anniversaries of the date such credit
is made to the SERP Account, and (c) he or she shall be vested in any Income
Credits to the same extent he or she is vested in the Transferred Balance or in
the Annual Benefit Credits to which such Income Credits relate.
2.6 PAYMENT
OF BENEFITS. Payments
of the vested amount credited to a Participant's SERP Account, including the
total of any vested Transferred Balance, any vested Annual Benefit Credits, and
any vested Income Credits and other earnings, shall be made as
follows:
(a) DISTRIBUTIONS. Except as
provided in Section 2.6(b) a Participant's vested SERP Account shall be paid in
a lump sum in cash promptly after the date of his or her separation from
service, within the meaning of Code Section 409A(a)(2)(A)(iv) ("Separation
Date"). The unvested portion of the Participant's SERP Account shall be
forfeited on the Separation Date.
In the event that a Participant
is an employee of a Related Business, other than the Company, and 50 percent or
more of the combined voting power of the Related Business becomes owned by an
entity or person that is not a Related Business or substantially all of the
assets of the Related Business are sold, conveyed or otherwise transferred to a
person or entity that is not a Related Business, the Participant shall be 100%
vested in his or her SERP Account and the Participant's entire SERP Account
shall be distributed to the Participant promptly in the form of a lump sum
distribution, to the extent that such distribution is permitted under Code
Section 409A. Notwithstanding the preceding sentence, such vesting and
distribution shall only occur if neither the Company nor an entity that is a
Related Business after such transaction employs the Participant after such
transaction.
(b) SPECIFIED
EMPLOYEES. If the
Participant is a specified employee, as that term is used in Code Section
409A(a)(2)(B)(i), then no distribution shall be made to him or her until the
date which is six months after his or her Separation Date, unless otherwise
permitted by Code Section 409A or by Internal Revenue Service guidance issued
thereunder. Notwithstanding the foregoing, the unvested portion of such
Participant's SERP Account shall be forfeited on the Separation Date.
(c) CHANGE
OF CONTROL. Notwithstanding
anything in this Section 2.6 to the contrary, in the event of the occurrence of
a Change of Control with respect to the Company all Participants shall be 100%
vested in their SERP Accounts, the SERP shall be terminated and the entire SERP
Account of each Participant, whether or not in pay status, shall be distributed
to the Participant promptly in the form of a lump sum distribution. For this
purpose a "Change of Control" shall mean an event which (i) is described in
Code Section 409A(a)(2)(A)(v) and (ii) satisfies either of the following:
(1) A change
in the ownership of the Company. A change in the ownership of the Company is
deemed to occur on the date that any one person, or more than one person acting
as a group (as described below), acquires ownership of stock of the Company
that, together with stock held by such person or group, constitutes more than 50
percent of the total fair market value or total voting power of the stock of the
Company. However, if any one person or more than one person acting as a group,
is considered to own more than 50 percent of the total fair market value or
total voting power of the stock of the Company, the acquisition of additional
stock by the same person or persons is not considered to cause a change in the
ownership of the Company. An increase in the percentage of stock owned by any
one person, or persons acting as a group, as a result of a transaction in which
the Company acquires its stock in exchange for property will be treated as an
acquisition of stock for purposes of this Section 2.6(c)(1). This Section
2.6(c)(1) applies only when there is a transfer or issuance of stock of the
Company and the stock remains outstanding after the transaction.
Persons will not be considered
to be acting as a group solely because they purchase or own stock of the Company
at the same time, or as a result of the same public offering. However, persons
will be considered to be acting as a group if they are owners of a corporation
that enters into a merger, consolidation, purchase or acquisition of stock, or
similar business transaction with the Company. If a person, including an entity,
owns stock in the Company and another corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar transaction with the
Company, such shareholder is considered to be acting as a group with other
shareholders of the other corporation only with respect to their ownership
interest in that corporation prior to the transaction.
Notwithstanding the foregoing,
a Change of Control shall not occur upon the transfer of voting securities of
the Company among or between persons or, if such persons are individuals,
members of their immediate family, or between trusts or other entities
controlled by or operated for the benefit of such individuals or members of
their immediate family, who own more than 50 percent of the total voting power
of the
Company, or upon
the transfer of voting securities of the Company among or between the Company
and a Related Business or two or more Related Businesses.
For purposes of the preceding
paragraph, the term "immediate family" shall include the spouse and the lineal
ascendants and descendants of an individual and the spouses of such lineal
ascendants and descendants and the other individuals who share a common parent
or grandparent with such individual and the spouses of such individuals. Adopted
children shall be considered as the descendants of their adoptive parents and
their parents' parents in the same manner as would be the biological children of
such parents.
(2) The sale
of all or substantially all of the Company's assets. A sale of all or
substantially all of the Company's assets occurs on the date that any one person
or persons acting as a group acquire (or have acquired during the 12-month
period ending on the date of the most recent acquisition by such person or
persons) assets from the Company that have a total gross fair market value equal
to all or substantially all (and in no case less than 40%) of the total gross
fair market value of all of the assets of the Company immediately prior to such
acquisition or acquisitions. For this purpose, gross fair market value means the
value of the assets of the Company, or the value of the assets being disposed
of, determined without regard to any liabilities associated with such assets. A
transfer of assets to an entity that is controlled by the shareholders of the
Company immediately after the transfer, or a transfer of assets by the Company
to any of the following, are not considered to be a sale of all or substantially
all of the Company's assets for purposes of this 2.6(c)(2): (A) a shareholder of
the Company (immediately before the asset transfer) in exchange for or with
respect to its stock; (B) an entity, 50 percent or more of the total value or
voting power of which is owned, directly or indirectly, by the Company; (C) a
person, or more than one person acting as a group, that owns, directly or
indirectly, 50 percent or more of the total value or voting power of all the
outstanding stock of the Company; or (D) an entity, at least 50 percent of the
total value or voting power of which is owned, directly or indirectly, by a
person described in paragraph (C). For purposes of this 2.6(c)(2) and except as
otherwise provided, a person's status is determined immediately after the
transfer of the assets. For example, a transfer to a corporation in which the
Company has no ownership interest before the transaction, but which is a
majority-owned subsidiary of the Company after the transaction is not treated as
a sale of all or substantially all of the assets of the Company.
2.7 BENEFICIARY
DESIGNATION. A
Participant's vested SERP Account shall be paid to the beneficiary properly
designated by the Participant in the manner established by the Committee to
receive his or her SERP Account hereunder. Such distribution shall be made in a
lump sum distribution. If the Participant fails to properly designate a
beneficiary hereunder, including if the Participant's designated beneficiary
predeceases him or her, upon the Participant's death the vested SERP Account
shall be paid to the person or entity which is the Participant's beneficiary
under the Plan, whether by designation of the Participant or by the terms of the
Plan.
2.8 VALUATION
OF ACCOUNTS. The value
of a Participant's vested SERP Account shall be determined as of the Valuation
Date immediately preceding the date on which a distribution is made to such
Participant, based upon the value which the SERP Account would have if at all
times it were earning the rate of return specified by the Company or were fully
invested in the investment options designated by the Company or selected by the
Participant, pursuant to Section 2.4.
2.8 FUNDING. Benefits
payable under the SERP to any person shall be paid directly by the Company. The
Company shall not be required to fund, or otherwise segregate assets to be used
for payment of benefits under the SERP. While the Company may make investments
in amounts equal or unequal to amounts payable hereunder, the Company shall not
be under any obligation to make such investments and any such investments shall
remain an asset of the Company subject to the claims of its general creditors.
Notwithstanding the foregoing, the Company may maintain one or more trusts to
hold assets to be used for payment of benefits under the SERP; provided that the
assets of each trust shall be subject to the creditors of the Company in the
event the Company becomes insolvent (as defined in such trust) and provided that
any such trust must comply with the requirements of Code Section 409A. Any
payments by such a trust to a Participant (or to the beneficiary of a
Participant) under the SERP shall be considered payment by the Company and shall
discharge the Company of any further liability under the SERP to the extent of
the payments made by such trust.
Article
3
MISCELLANEOUS
3.1 EMPLOYMENT
RIGHTS. Status as
a Participant and/or as an Active Participant shall not be construed to give any
employee the right to be retained in the service of the Company or any Related
Business or any right to any benefits not specifically provided by the
SERP.
3.2 INTERESTS
NOT TRANSFERABLE. Except as
to withholding of any tax under the laws of the United States or any state or
locality, no benefit payable at any time under the SERP shall be subject in any
manner to alienation, sale, transfer, assignment, pledge, attachment, or other
legal process, or encumbrance of any kind. Any attempt to alienate, sell,
transfer, assign, pledge or otherwise encumber any such benefits, whether
currently or thereafter payable, shall be void. No benefit shall, in any manner,
be liable for or subject to the debts or liabilities of any person entitled to
such benefits. If any person shall attempt to, or shall alienate, sell,
transfer, assign, pledge or otherwise encumber his or her benefits under the
SERP, or if by reason of his or her bankruptcy or other event happening at any
time, such benefits would devolve upon any other person or would not be enjoyed
by the person entitled thereto under the SERP, then the Company, in its
discretion, may terminate the interest in any such benefits of the person
entitled thereto under the SERP and hold or apply them to or for the benefit of
such person entitled thereto under the SERP or his or her spouse, children or
other dependents, or any of them, in such manner as the Company may deem
proper.
3.3 UNCLAIMED
AMOUNTS. Unclaimed
amounts shall consist of the amounts of the SERP Accounts of a Participant which
cannot be distributed because of the Committee's inability to locate the payee,
after a reasonable search, within a period of two (2) years after the benefits
become distributable under Article 2, as set forth herein. Unclaimed amounts
shall be forfeited at the end of such two-year period. These forfeitures shall
reduce the obligations of the Company under the SERP. After an unclaimed amount
has been forfeited, the Participant or beneficiary, as applicable, shall have no
further right to his or her SERP Account.
3.4 CONTROLLING
LAW. The law
of the State of New York, except its law with respect to choice of law, shall be
controlling in all matters relating to the SERP to the extent not preempted by
ERISA.
3.5 NUMBER. Words in
the plural shall include the singular and the singular shall include the
plural.
3.6
ACTION
BY AN EMPLOYER. Except as
otherwise specifically provided herein, any action required of or permitted by
the Company under the SERP shall be by resolution of the Board of Directors of
the Company or person(s) authorized by resolution of the Board of Directors of
the Company.
3.7
TAXES. The
Company shall have the right to require Participants to remit to the Company an
amount sufficient to satisfy applicable federal, state, and local tax
withholding requirements, and to deduct from all payments made pursuant to the
SERP amounts sufficient to satisfy such withholding requirements.
Article
4
AMENDMENT
AND TERMINATION
4.1 COMPANY
AUTHORITY TO AMEND. The
Company intends the SERP to be permanent, but reserves the right at any time by
action of its Board of Directors to modify, amend or terminate the SERP,
provided however, that if a Participant has a SERP Account, benefits provided
under Section 2.1 shall constitute an irrevocable obligation of the Company as
applicable, to the same extent that such SERP Account, had it been an account
under the Plan, would have been an irrevocable obligation of the
Plan.
[Signature
Page Follows]
Executed
in multiple originals this 8th day of April, 2005.
| CONSTELLATION
BRANDS, INC. |
| |
|
| By: |
/s/
W. Keith Wilson |
| Its: |
Executive
Vice President and
Chief
Human Resources Officer |