8-K: Current report filing
Published on April 9, 2009
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 6,
2009
|
CONSTELLATION
BRANDS, INC.
|
|
(Exact
name of registrant as specified in its
charter)
|
|
Delaware
|
001-08495
|
16-0716709
|
||
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
207
High Point Drive, Building 100, Victor, NY 14564
(Address of
Principal Executive
Offices)
(Zip Code)
|
Registrant’s
telephone number, including area code
|
(585)
678-7100
|
|
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
5.02.
|
Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
|
(e)
Compensatory Arrangements of Certain Officers.
At a meeting held
on April 6, 2009, 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
2010 Base Salaries
The
Committee set annual base salaries, for the fiscal year ending February 28, 2010
(“Fiscal 2010”), for the Company’s Executive Officers. The following
table sets forth the annual base salary levels for Fiscal 2010 of those
Executive Officers identified below:
|
Name
and Position
|
Fiscal
2010 Base Salary
|
|
Richard
Sands,
Chairman
of the Board
|
$1,136,329
|
|
Robert
Sands,
President
and Chief
Executive Officer
|
$1,103,130
|
|
Robert
Ryder,
Executive
Vice President and
Chief
Financial Officer
|
$541,008
|
|
Jose
F. Fernandez,
Chief
Executive Officer,
Constellation
Wines North America
|
$682,890
|
|
Jon
Moramarco,
Chief
Executive Officer,
Constellation
International
|
$546,312
|
Stock Option
Awards
The
Committee granted options to purchase shares of the Company’s Class 1 Common
Stock under the Company’s Long-Term Stock Incentive Plan (the “Stock Plan”) to
certain of the Company’s management personnel, including its Executive Officers,
subject to the Terms and Conditions Memorandum with respect to the Company’s
Amended and Restated Long-Term Stock Incentive Plan, the form of which is
attached hereto as Exhibit 99.1 and incorporated herein by
reference. The following table sets forth information regarding
grants to those Executive Officers identified below:
|
Name
|
Number of Stock Options (1)
|
Exercise Price Per Share (2)
|
|
Richard
Sands
|
719,200
|
$
11.85
|
|
Robert
Sands
|
698,190
|
$
11.85
|
|
Robert
Ryder
|
239,690
|
$
11.85
|
|
Jose
F. Fernandez
|
302,550
|
$
11.85
|
|
Jon
Moramarco
|
242,040
|
$
11.85
|
______________________________
(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 6, 2010, April 6, 2011, April 6, 2012 and
April 6, 2013 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) The
exercise price is equal to the closing price of the Class A Common Stock (into
which, in certain limited circumstances, shares of Class 1 stock is convertible
on a one-for-one basis) on the New York Stock Exchange on April 6,
2009.
Restricted Stock
Awards
The
Committee awarded shares of the Company’s Class A Common Stock under the Stock
Plan to certain of the Company’s management personnel, including its Executive
Officers, subject to the provisions of Restricted Stock Award Agreements, the
form of which is attached hereto as Exhibit 99.2 and incorporated herein by
reference. On April 6, 2009, which was the date of the restricted
stock awards, the closing price of the Company’s Class A Common Stock was $11.85
per share. The following table sets forth information regarding
awards to those Executive Officers identified below:
|
Name
|
Number of Shares (1)
|
|
Richard
Sands
|
95,900
|
|
Robert
Sands
|
93,100
|
|
Robert
Ryder
|
27,400
|
|
Jose
F. Fernandez
|
34,580
|
|
Jon
Moramarco
|
27,670
|
______________________________
(1) Unvested
shares under each of the awards are subject to forfeiture upon the occurrence of
certain events related to termination of employment. One-fourth of
the awarded shares vest on each of the following dates: May 1, 2010, May 1,
2011, May 1, 2012 and May 1, 2013 provided that the recipient of the award
remains employed on that date. The awards can vest at an earlier date
upon the death or Disability (as that term is defined in the Stock Plan) of the
recipient of the award. Under the terms of the Stock Plan, awards
become fully vested in the event of a change in control.
Adoption of Amendment Number
1 to the Company’s Annual Management Incentive Plan
On April
6, 2009, the Committee approved Amendment Number 1 to the Company’s Annual
Management Incentive Plan, as amended and restated July 26, 2007 (the
“Amendment”). The Amendment is effective as of April 6,
2009. The Amendment modifies the Annual Management Incentive Plan
(the “Plan”) as follows:
|
(1)
|
reserves
to the Committee the unilateral right to reduce or eliminate the amount of
a Bonus (as that term is defined in the Plan) that is to be paid to a
Participating Executive (as that term is defined in the Plan) who is
designated as a “covered employee” upon the attainment of a performance
target;
|
|
(2)
|
clarifies
the time period during which a bonus shall be paid;
and
|
|
(3)
|
clarifies
the authority of the Committee to establish such rules as it deems
necessary or appropriate to apply when a participating executive dies or
terminates employment.
|
A copy of
the Amendment as approved by the Committee is filed as Exhibit 99.3 hereto and
incorporated herein by reference.
Criteria for 2010 Fiscal
Year Incentive Award
The
Committee adopted the 2010 Fiscal Year Award Program for Executive Officers (the
“2010 Program for Executive Officers”), thereby establishing the performance
criteria and bonus opportunity under the Company’s Annual Management Incentive
Plan, as amended by the Amendment, (the “Amended AMIP”) for the Company’s fiscal
year ending February 28, 2010. Pursuant to the 2010 Program for
Executive Officers, potential incentive awards for the Company’s 2010 fiscal
year, if any, will equal 0.5% of the Company’s “Earnings Before Interest and
Taxes” for each of Richard Sands and Robert Sands and 0.25% of “Earnings Before
Interest and Taxes” for each other executive officer, all as calculated under
the Amended AMIP and the 2010 Program for Executive Officers and measured for
the period from March 1, 2009 through February 28, 2010. The
Committee reserves the right to exercise its negative discretion at
the end of the Company’s Fiscal 2010 Year to reduce the amounts calculated
in the preceding sentence to a bonus payment for each of our executive
officers that it believes to be appropriate based on the Company's
performance.
Action with respect to
Employment and Consulting Arrangements for Alexander L. Berk
On April
6, 2009, the Committee approved an agreement among Alexander L. Berk, the
Company and Constellation Services LLC regarding Mr. Berk's retirement
from the Company and its affiliates on May 31, 2009 (the
“Agreement”). The Company, Constellation Services LLC
(successor
by merger
to Barton Incorporated) and Mr. Berk executed the Agreement effective April 7,
2009. The Agreement provides that (1) Mr. Berk shall receive a
transaction bonus of $260,584 in connection with services he provided in
connection with the recent sale of the Company’s value spirits business (the
“Sale”) and (2) in connection with and subject to Mr. Berk’s retirement on
May 31, 2009, (a) Mr. Berk shall fully vest in all of his unvested options and
his vested options may be exercised until the earlier of (i) February 28, 2011
or (ii) the expiration date of the option and (b) Mr. Berk shall receive the
post-employment benefits as set forth in the Executive Employment Agreement
dated May 21, 2008 among Mr. Berk, Constellation Brands, Inc. and
Constellation Services LLC (successor by merger to Barton Incorporated) as
clarified in the Agreement.
Also on
April 6, 2009, the Committee approved a consultant agreement between Mr. Berk
and the Company regarding consultation services to be provided by Mr. Berk for
up to one year following his departure as an employee (the “Consultant
Agreement”). The Company and Mr. Berk executed the Consultant Agreement
effective April 7, 2009. The Consultant Agreement is intended to
secure Mr. Berk’s services to assist in transition matters associated with the
Sale, as well as provide a mechanism to facilitate continuity with respect to
the Company’s involvement in Crown Imports, LLC, its joint venture with Grupo
Modelo. The Consultant Agreement is intended to provide Mr. Berk with
compensation of $20,833.33 per month during the term of the
agreement.
The
descriptions above of the Agreement and the Consultant Agreement are a summary
and are qualified in their entirety by the forms of agreement filed
herewith as Exhibits 99.4 and 99.5, both of which Exhibits 99.4 and 99.5 are
incorporated herein by reference.
|
Item
7.01.
|
Regulation
FD Disclosure.
|
On April
9, 2009, the Company issued a news release, a copy of which is furnished
herewith as Exhibit 99.6 and is incorporated herein by reference, providing
information regarding Alexander L. Berk’s role with the Company.
References
to Constellation’s website in the release do not incorporate by reference the
information on such website into this Current Report on Form 8-K and
Constellation disclaims any such incorporation by reference. The
information in the news release attached as Exhibit 99.6 is incorporated by
reference into this Item 7.01 in satisfaction of the public disclosure
requirements of Regulation FD. This information is “furnished” and
not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934,
and is not otherwise subject to the liabilities of that section. It
may be incorporated by reference in another filing under the Securities Exchange
Act of 1934 or the Securities Act of 1933 only if and to the extent such
subsequent filing specifically references the information incorporated by
reference herein.
|
Item
9.01.
|
Financial
Statements and Exhibits.
|
|
(a)
|
Financial
statements of businesses acquired.
|
|
|
Not
applicable.
|
||
|
(b)
|
Pro
forma financial information.
|
|
|
Not
applicable.
|
||
|
(c)
|
Shell
company transactions.
|
|
|
Not
applicable.
|
||
|
(d)
|
Exhibits.
|
|
|
The
following exhibits are furnished as part of this Current Report on
Form 8-K:
|
|
Exhibit
No.
|
Description
|
||
|
99.1
|
Form
of Terms and Conditions Memorandum with respect to
the Company’s Amended and Restated Long-Term Stock Incentive
Plan.
|
||
|
99.2
|
Form
of Employee Restricted Stock Award Agreement with respect to the Company’s
Amended and Restated Long-Term Stock Incentive
Plan.
|
||
|
99.3
|
Amendment Number 1, dated April 6, 2009, to the Company’s Annual Management Incentive Plan, as amended and restated July 26, 2007. | ||
|
99.4
|
Agreement dated April 7, 2009 among Constellation Brands, Inc., Constellation Services LLC (successor by merger to Barton Incorporated) and Alexander L. Berk. | ||
|
99.5
|
Consultant
Agreement dated April 7, 2009 between Constellation Brands, Inc. and
Alexander L. Berk.
|
||
|
99.6
|
News
Release of Constellation Brands, Inc. dated April 9,
2009.
|
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.
|
Date: April
9, 2009
|
CONSTELLATION BRANDS,
INC.
|
|
|
By: /s/ Robert Ryder
|
||
|
Robert
Ryder
|
||
|
Executive
Vice President and
Chief
Financial Officer
|
||
INDEX
TO EXHIBITS
|
Exhibit
No.
|
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 Amended
and Restated Long-Term Stock Incentive Plan.
|
|
|
(99.2)
|
Form
of Employee Restricted Stock Award Agreement with respect to the Company’s
Amended and Restated Long-Term Stock Incentive
Plan.
|
|
|
(99.3)
|
Amendment
Number 1, dated April 6, 2009, to the Company’s Annual Management
Incentive Plan, as amended and restated July 26,
2007.
|
|
|
(99.4)
|
Amendment
dated April 7, 2009 to the Executive Employment Agreement dated May
21, 2008 between Constellation Brands, Inc., Constellation Services LLC
(successor by merger to Barton Incorporated) and Alexander L.
Berk.
|
|
|
(99.5)
|
Consultant
Agreement dated April 7, 2009 between Constellation Brands, Inc.,
Constellation Services LLC and Alexander L. Berk.
|
|
|
(99.6)
|
News
Release of Constellation Brands, Inc. dated April 9,
2009.
|
|
|
(100)
|
XBRL-RELATED
DOCUMENTS
|
|
|
Not
Applicable.
|