Description of Compensation Arrangements for Non-Management Directors
Following is a description of the current compensation arrangements for the non-management
directors of Constellation Brands, Inc.:
The Companys current compensation program for non-management directors for their services as
directors includes cash, restricted stock, and stock option components.
The cash component consists of (i) an annual retainer of $60,000, payable in quarterly installments
of $15,000 at the beginning of each fiscal quarter; (ii) a Board meeting fee of $2,500 for each
Board meeting attended (which includes regular, special and annual Board meetings and attendance in
person or by conference telephone); (iii) a committee meeting fee of $1,500 per meeting attended
(including by conference telephone); and (iv) an annual fee of $12,000 (payable in quarterly
installments of $3,000) to the Chair of the Audit Committee and an annual fee of $9,000 (payable in
quarterly installments of $2,250) to the position of Chairs of each of the Human Resources
Committee and the Corporate Governance Committee.
Long-term incentive awards in the form of options and restricted stock are another element of
non-management director compensation. Long-term incentive awards in the form of, among others,
stock options, stock appreciation rights and restricted stock are available for grant under the
Companys Long-Term Stock Incentive Plan. Each non-management director receives annually, if and
as approved by the Board of Directors, a stock option grant and a restricted stock award. The
number of shares that may be subject to an annual option grant will not exceed the number obtained
by dividing $140,000 by the closing price of a share of the Companys Class A Common Stock on the
date of the grant. The number of shares of restricted stock that may be awarded is calculated by
dividing the sum of $60,000 by the closing price of a share of the Companys Class A Common Stock
on the date of grant. While the Board has the flexibility to determine at the time of each grant
or award the vesting provisions for that grant or award, historically stock option grants vest six
(6) months following the date of grant and annual awards of restricted stock vest one (1) year from
the date of grant. The Long-Term Stock Incentive Plan is filed as Exhibit 99.1 to the Companys
Current Report on Form 8-K dated December 6, 2007 and filed December 12, 2007. The form of Terms
and Conditions Memorandum provided to non-management directors who receive stock option grants is
filed as Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q for the fiscal quarter ended
August 31, 2008. The form of restricted stock agreement provided to non-management directors who
receive restricted stock awards is filed as Exhibit 10.13 to the Companys Annual Report on Form
10-K for the fiscal year ended February 28, 2005.
Non-management directors are reimbursed for reasonable expenses incurred in connection with their
attendance at Board and committee meetings. They also receive complimentary Company products
having a value of up to $5,000 and are eligible to participate in a matching contribution program
of the Company whereby they can direct a portion of the Companys charitable contributions not in
excess of $5,000.
Members of the Board of Directors who are members of management serve without receiving any
additional fee or other compensation for their service on the Board.