8-K: Current report filing
Published on April 13, 2005
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported) April
7, 2005
CONSTELLATION
BRANDS, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware |
001-08495 |
16-0716709 |
|
(State or other jurisdiction |
(Commission |
(IRS Employer |
|
of incorporation) |
File Number) |
Identification No.) |
370
Woodcliff Drive, Suite 300, Fairport, New York 14450
| (Address of Principal Executive Offices) | (Zip Code) |
|
Registrant's telephone number, including area code |
(585) 218-3600 |
|
Not
applicable
|
|
|
(Former
name or former address, if changed since last
report)
|
|
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under
any
of
the following
provisions
(see
General Instruction A.2. below):
|
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a.12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM
1.01. ENTRY
INTO A MATERIAL DEFINITIVE AGREEMENT
At
meetings held on April 7 and 8, 2005, the Human Resources Committee (the
“Committee”) of the Board of Directors (the “Board”) of Constellation Brands,
Inc. (the “Company”) and the Board, as indicated, took the following actions
with regard to certain compensatory arrangements for certain of the Company’s
senior management personnel, including its executive officers.
Approval
of Fiscal 2006 Base Salaries
The
Committee set annual base salaries, for the fiscal year ending February 28, 2006
(“FY 2006”), for certain of the Company’s senior management personnel, including
its executive officers. The following table sets forth the annual base salary
levels for Fiscal 2006 of those executive officers identified
below:
|
Name
And Position
|
FY
2006 Base Salary
|
|
Richard
Sands,
Chairman
of the Board and Chief
Executive Officer
|
$
1,000,000
|
|
Robert
Sands,
President
and Chief Operating Officer
|
$
820,000
|
|
Stephen
B. Millar,
Chief
Executive Officer, Constellation Wines*
|
$
726,294*
|
|
Alexander L.
Berk,
Chief
Executive Officer, Constellation Beers and Spirits
|
$
584,768
|
|
Thomas
S. Summer,
Executive
Vice President and Chief
Financial Officer
|
$ 441,334
|
__________________
*
Mr. Millar is paid in Australian dollars. The amount appearing in
this table has been converted into United States dollars at a conversion rate of
Australia A$1 =
US$ 0.79.
FY
2005 Incentive Awards
The
Committee
determined the amount to be paid as annual incentive awards under the Company’s
Annual Management
Incentive Plan (the “Annual Bonus Plan”) in accordance with its 2005 Fiscal Year
Award Program (the “2005 Bonus Program”). With respect to the Company's
executive officers, the amounts of awards were calculated in accordance with the
terms of the 2005 Bonus Program based on three variables: the participant’s
management position, salary and achieved Company performance for the plan year.
Awards were based on a percentage of base salary. Performance
targets are based
on operating income, using the first-in, first-out method of accounting for
inventory valuation before adjustments are made for reserves. The following
table sets forth cash payments to those executive officers identified below in
respect of their annual incentive awards for the fiscal year ended February
28, 2005 ("FY 2005"):
|
Name
|
Award
|
|
Richard
Sands
|
$
1,154,250
|
|
Robert
Sands
|
$
911,250
|
|
Stephen
B. Millar*
|
$
631,876*
|
|
Alexander
L. Berk
|
$
630,200
|
|
Thomas
S. Summer
|
$
412,478
|
___________________
*
Mr. Millar is paid in Australian dollars. The amount appearing
in this table has been converted into United States dollars at a conversion rate
of Australia A$1 =
US$ 0.79.
Criteria
for 2006 Fiscal Year Incentive Awards
The
Committee adopted the 2006 Fiscal Year Award Program (the “2006 Bonus Program”)
establishing the criteria and the targets under the Annual Bonus Plan for FY
2006. Awards
will be based on a percentage of base salary, depending upon the participant's
management position, and achieved performance. With respect to the
Company's executive officers, performance will be based solely upon achieved
Company performance for the plan year, with potential awards ranging from a
minimum of 15% to a maximum of 200% of base salaries for executive officers. The
amount of awards will be calculated based on the same variables used in the 2005
Bonus Program and summarized above, including performance targets being based on
operating income, using the first-in, first-out method of accounting for
inventory valuation before adjustments are made for reserves.
Stock
Option Awards
The
Committee awarded options to purchase shares of its Class A Common Stock under
its Amended and Restated Long-Term Stock Incentive Plan (the “Stock Plan”) to
certain of its management personnel, including its executive officers. The form
of Memorandum attached as an Exhibit 99.1 to this Report and incorporated herein
by reference sets forth the terms and conditions of awards under the Stock Plan.
The following table sets forth information regarding grants to those executive
officers identified below:
|
Name
|
Number
Of Stock Options (1)(3)
|
Exercise
Price Per Share (2)(3)
|
|
Richard
Sands
|
78,100
|
$
54.47
|
|
Robert
Sands
|
64,000
|
$
54.47
|
|
Stephen
B. Millar
|
32,400
|
$
54.47
|
|
Alexander
L. Berk
|
26,900
|
$
54.47
|
|
Thomas
S. Summer
|
20,300
|
$
54.47
|
___________________
(1) Each
of the options granted has a 10-year term, subject to earlier termination upon
the occurrence of certain events related to termination of employment. The
options become fully exercisable on April 7, 2009 provided that the option
holder remains employed on that date. The options may also become exercisable,
in whole or in part, if the option holder remains employed when the Company
attains the following stock price levels: (a) 25% become exercisable if the per
share closing price for the Class A Common Stock exceeds $62.64 for 15
consecutive trading days; (b) an additional 25% become exercisable if the per
share closing price for the Class A Common Stock thereafter exceeds $72.04 for
15 consecutive trading days; and (c) the remaining 50% become exercisable if the
per share closing price for the Class A Common Stock thereafter exceeds $82.85
for 15 consecutive trading days. Under the terms of the Stock Plan, options
become fully exercisable immediately in the event of a change in
control.
(2)
The exercise price is equal to the closing price of the Class A Common Stock on
the New York Stock Exchange on April 7, 2005.
(3)
As previously announced, the Company's Board of Directors approved a two-for-one
stock split to be distributed in the form of a stock dividend on, or about, May
13, 2005, to stockholders of record on April 29, 2005. Pursuant to the
terms of the stock split, each holder of Class A Common Stock will receive one
additional share of Class A Common Stock for each share of Class A Common Stock
held as of the record date. The number of stock options and the exercise
price per share set forth in the table do not reflect the impact of this stock
split.
Third
Amendment to Supplemental Executive Retirement Plan
The Board
approved the Third Amendment to the Company’s Supplemental Executive Retirement
Plan (“SERP”).
This amendment permanently suspends any further deferral of benefits under the
SERP for executive officers after December 31, 2004 and transfers any unvested
benefits accrued by executive officers under the SERP prior to December 31, 2004
to the 2005 SERP (discussed below) effective as of April 8, 2005. This amendment
also merges benefits from another non-qualified deferred compensation plan
assumed by the Company in its acquisition of The Robert Mondavi Corporation into
the SERP for administrative convenience. This amendment is intended to segregate
SERP benefits that are not required to comply with Section 409A of the Internal
Revenue Code (as added by the American Jobs Creation Act of 2004) from deferrals
of compensation that are subject to the new rules under Section 409A. A copy of
the Third Amendment as approved by the Board is filed as Exhibit 99.2 hereto and
incorporated herein by reference.
Adoption
of 2005 Supplemental Executive Retirement Plan
The Board
also adopted a new 2005 Supplemental Executive Retirement Plan (the “2005 SERP”)
effective as of April 8, 2005 to replace the SERP with respect to compensation
deferred after December 31, 2004 and unvested amounts transferred from the SERP.
Federal tax laws limit the amount of benefits that may be provided under the
Constellation Brands, Inc. 401(k) and Profit Sharing Plan (“401(k) Plan”) in
order to maintain its favorable tax-qualified status. The 2005 SERP makes
participants whole for certain employer contributions that are not provided
under the 401(k) Plan due to limitations under Section 401(a)(17) and Section
415 of the Internal Revenue Code. Amounts deferred under the 2005 SERP are
credited with earnings under investment options as permitted by the Company from
time to time. Amounts under the 2005 SERP generally vest as provided under
the 401(k) Plan, except that all benefits fully vest upon a Change in Control
(as defined in the 2005 SERP), and are distributed to participants in a manner
intended to comply with distribution requirements under Section 409A of the
Internal Revenue Code. A copy of the Company’s 2005 Supplemental Executive
Retirement Plan as adopted and approved by the Board is filed as Exhibit 99.3
hereto and is incorporated herein by reference.
Further
Information
Additional
information regarding compensation awarded to certain of the Company’s executive
officers for FY 2005 will be provided in the Company’s proxy statement for the
Company’s 2005
annual meeting of stockholders, which is expected to be filed with the
Securities and Exchange Commission in June 2005.
ITEM
9.01 FINANCIAL STATEMENTS AND
EXHIBITS.
(c) The following exhibits are furnished as part of
this Form 8-K
No. Description
99.1 Form of Terms and Conditions Memorandum with respect to
the Company's Long-Term Stock Incentive Plan.
99.2 Third Amendment to the Company's Supplemental Executive
Retirement Plan.
99.3 2005 Supplemental Executive Retirement Plan of the
Company.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
|
CONSTELLATION
BRANDS, INC.
|
||
|
Date: April
13, 2005
|
By:
|
/s/
Thomas S. Summer
|
|
Thomas
S. Summer, Executive Vice President
|
||
|
and
Chief Financial Officer
|
||
|
Exhibit
Number
|
Description
|
|
(1)
|
UNDERWRITING
AGREEMENT
|
|
Not
Applicable.
|
|
|
(2)
|
PLAN
OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR
SUCCESSION
|
|
Not
Applicable.
|
|
|
(3)
|
ARTICLES
OF INCORPORATION AND BYLAWS
|
|
Not
Applicable.
|
|
|
(4)
|
INSTRUMENTS
DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
|
|
Not
Applicable.
|
|
|
(7)
|
CORRESPONDENCE
FROM AN INDEPENDENT ACCOUNTANT REGARDING NON-RELIANCE ON A PREVIOUSLY
ISSUED AUDIT REPORT OR COMPLETED INTERIM REVIEW
|
|
Not
Applicable.
|
|
|
(14)
|
CODE
OF ETHICS
|
|
Not
Applicable.
|
|
|
(16)
|
LETTER
RE CHANGE IN CERTIFYING ACCOUNTANT
|
|
Not
Applicable.
|
|
|
(17)
|
CORRESPONDENCE
ON DEPARTURE OF DIRECTOR
|
|
Not
Applicable.
|
|
|
(20)
|
OTHER
DOCUMENTS OR STATEMENTS TO SECURITY HOLDERS
|
|
Not
Applicable.
|
|
|
(23)
|
CONSENTS
OF EXPERTS AND COUNSEL
|
|
Not
Applicable.
|
|
|
(24)
|
POWER
OF ATTORNEY
|
|
Not
Applicable.
|
|
|
(99)
|
ADDITIONAL
EXHIBITS
|
|
99.1
|
Form
of Terms and Conditions Memorandum with respect to the Company's Long-Term
Stock Incentive Plan.
|
|
99.2
|
Third Amendment to the Company's Supplemental Executive Retirement Plan. |
|
99.3
|
2005 Supplemental Executive Retirement Plan of the Company. |
|
|
|
|
(100)
|
XBRL-RELATED DOCUMENTS |
| Not Applicable. |