8-K: Current report filing
Published on April 11, 2006
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
5, 2006
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CONSTELLATION
BRANDS, INC.
|
|
(Exact
name of registrant as specified in its
charter)
|
|
Delaware
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001-08495
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16-0716709
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||
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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370
Woodcliff Drive, Suite 300, Fairport, NY 14450
(Address
of Principal Executive Offices) (Zip Code)
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Registrant’s
telephone number, including area code
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(585)
218-3600
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Not
Applicable
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|
(Former
name or former address, if changed since last
report)
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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):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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ITEM
1.01.
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ENTRY
INTO A MATERIAL DEFINITIVE
AGREEMENT
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At
a
meeting held on April 5, 2006, the Human Resources Committee (the “Committee”)
of the Board of Directors (the “Board”) of Constellation Brands, Inc. (the
“Company”) 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 2007 Base Salaries
The
Committee set annual base salaries, for the fiscal year ending February 28,
2007
(“FY 2007”), 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 2007 of those executive officers identified
below*:
|
Name
And Position
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FY
2007
Base
salary
|
|
Richard
Sands,
Chairman
of the Board and
Chief
Executive Officer
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$
1,040,000
|
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Robert
Sands,
President
and Chief
Operating
Officer
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$
852,800
|
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Alexander
L Berk,
Chief
Executive Officer,
Constellation
Beers and Spirits
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$
608,159
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Thomas
S. Summer, Executive Vice President and Chief
Financial Officer
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$
487,675
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_____________________________
*The
Company has previously announced that the remaining named executive officer,
Stephen Millar, retired from his position of Chief Executive Officer,
Constellation Wines effective February 28, 2006. While he has retained an
employment relationship with the Company, no action was taken with respect
to
his FY2007 base salary.
FY
2006 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 2006 Fiscal Year
Award Program (the “2006 Bonus Program”). With respect to the Company’s
executive officers, the amounts of awards were calculated in accordance with
the
terms of the 2006 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 any 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,
2006 (“FY 2006”):
|
Name
|
Award
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Richard
Sands
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$
1,228,817
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Robert
Sands
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$
1,006,944
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Stephen
B. Millar*
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$
473,278*
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Alexander
L. Berk
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$
493,310
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Thomas
S. Summer
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$
325,463
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______________________________
*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$1
= US$ .7513.
Criteria
for 2007 Fiscal Year Incentive Awards
The
Committee adopted the 2007 Fiscal Year Award Program for Executive Officers
(the
“2007 Program for Executive Officers”) establishing the criteria and the targets
under the Annual Bonus Plan for FY 2007. Awards will be based on a percentage
of
base salary, depending upon the participant’s management position, and achieved
performance. As only executive officers of the Company participate in the
2007
Program for Executive Officers, performance will be based solely upon achieved
Company performance for the plan year, with potential awards ranging from
a
minimum of 17.5% to a maximum of 240% of base salaries for executive officers.
The amounts of awards will be calculated based upon the same variables used
in
the 2006 Bonus Program and summarized above, including performance targets
being
based upon 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 granted 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
following table sets forth information regarding grants to those executive
officers identified below*:
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Name
|
Number
Of Stock Options
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Exercise
Price Per Share
(3)
|
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Richard
Sands
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201,000
(1)
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$
25.88
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Richard
Sands
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30,000
(2)
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$
25.88
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Robert
Sands
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164,800
(1)
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$
25.88
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Robert
Sands
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30,000
(2)
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$
25.88
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Alexander
L. Berk
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82,300
(1)
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$
25.88
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Thomas
S. Summer
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66,000
(1)
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$
25.88
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Thomas
S. Summer
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30,000
(2)
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$
25.88
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______________________________
*The
Company has previously announced that the remaining named executive officer,
Stephen Millar, retired from his position of Chief Executive Officer,
Constellation Wines effective February 28, 2006. While he has retained an
employment relationship with the Company, he did not receive a grant of
options.
(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. One-fourth of the options become exercisable on
each
of the following anniversary dates: April 5, 2007, April 5, 2008, April 5,
2009
and April 5, 2010 provided that the option holder remains employed on that
date.
Under
the
terms
of
the Stock Plan, options become fully exercisable immediately in the event
of a
change in control.
(2)
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. These performance options will vest following
both
the closing of the Company’s acquisition of Vincor International Inc. on or
before December 31, 2006 and the passage of time. One-fourth of the options
become exercisable on each of the following anniversary dates: April 5, 2007,
April 5, 2008, April 5, 2009 and April 5, 2010 provided that the option holder
remains employed on that date. Under
the
terms
of
the Stock Plan, options become fully exercisable immediately in the event
of a
change in control.
(3)
The
exercise price is equal to the closing price of the Class A Common Stock
on the
New York Stock Exchange on April 5, 2006.
Executive
Health Services Perquisite
The
Committee also approved an expanded annual physical health review as a
perquisite for executive officers. The executive may select from an array
of
covered tests. It is estimated that the value of these services is approximately
$3,200 per participant and receipt of this perquisite is voluntary.
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.
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CONSTELLATION
BRANDS, INC.
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Date:
April 10, 2006
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By:
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/s/
Thomas S. Summer
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Thomas
S. Summer, Executive Vice President
and
Chief Financial Officer
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INDEX
TO EXHIBITS
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Exhibit
Number
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Description
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(1)
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UNDERWRITING
AGREEMENT
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Not
Applicable.
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(2)
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PLAN
OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR
SUCCESSION
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Not
Applicable.
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(3)
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ARTICLES
OF INCORPORATION AND BYLAWS
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Not
Applicable.
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(4)
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INSTRUMENTS
DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
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Not
Applicable.
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(7)
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CORRESPONDENCE
FROM AN INDEPENDENT ACCOUNTANT REGARDING NON-RELIANCE ON A PREVIOUSLY
ISSUED AUDIT REPORT OR COMPLETED INTERIM REVIEW
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Not
Applicable.
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(14)
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CODE
OF ETHICS
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Not
Applicable.
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(16)
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LETTER
RE CHANGE IN CERTIFYING ACCOUNTANT
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Not
Applicable.
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(17)
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CORRESPONDENCE
ON DEPARTURE OF DIRECTOR
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Not
Applicable.
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(20)
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OTHER
DOCUMENTS OR STATEMENTS TO SECURITY HOLDERS
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Not
Applicable.
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(23)
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CONSENTS
OF EXPERTS AND COUNSEL
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Not
Applicable.
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(24)
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POWER
OF ATTORNEY
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Not
Applicable.
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(99)
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ADDITIONAL
EXHIBITS
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Not
Applicable.
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(100)
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XBRL-RELATED
DOCUMENTS
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Not
Applicable.
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