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:
(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.
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.
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.
