x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
CONSTELLATION
BRANDS, INC.
|
(Exact
name of registrant as specified in its charter)
|
Delaware
|
16-0716709
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
370
Woodcliff Drive, Suite 300, Fairport, New York
|
14450
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(585)
218-3600
|
(Registrant’s
telephone number, including area code)
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
Class
|
Number
of Shares Outstanding
|
|
Class
A Common Stock, Par Value $.01 Per Share
|
191,759,160
|
|
Class
B Common Stock, Par Value $.01 Per Share
|
23,819,238
|
1)
|
MANAGEMENT’S
REPRESENTATIONS:
|
(in
millions)
|
||||
Current
assets
|
$
|
20.1
|
||
Property,
plant and equipment
|
0.1
|
|||
Goodwill
|
349.3
|
|||
Trademark
|
36.4
|
|||
Other
assets
|
20.7
|
|||
Total
assets acquired
|
426.6
|
|||
Current
liabilities
|
23.8
|
|||
Long-term
liabilities
|
16.1
|
|||
Total
liabilities assumed
|
39.9
|
|||
Net
assets acquired
|
$
|
386.7
|
(in
millions)
|
||||
Current
assets
|
$
|
390.5
|
||
Property,
plant and equipment
|
241.4
|
|||
Goodwill
|
876.8
|
|||
Trademarks
|
224.3
|
|||
Other
assets
|
49.5
|
|||
Total
assets acquired
|
1,782.5
|
|||
Current
liabilities
|
418.3
|
|||
Long-term
liabilities
|
237.0
|
|||
Total
liabilities assumed
|
655.3
|
|||
Net
assets acquired
|
$
|
1,127.2
|
For
the Three Months Ended May 31,
|
|||||||
2007
|
|
2006
|
|||||
(in
millions, except per share data)
|
|||||||
Net
sales
|
$
|
901.2
|
$
|
1,282.5
|
|||
Income
before income taxes
|
$
|
64.3
|
$
|
97.1
|
|||
Net
income
|
$
|
29.8
|
$
|
52.4
|
|||
Income
available to common stockholders
|
$
|
29.8
|
$
|
49.9
|
|||
Earnings
per common share - basic:
|
|||||||
Class
A Common Stock
|
$
|
0.13
|
$
|
0.23
|
|||
Class
B Common Stock
|
$
|
0.12
|
$
|
0.21
|
|||
Earnings
per common share - diluted:
|
|||||||
Class
A Common Stock
|
$
|
0.13
|
$
|
0.22
|
|||
Class
B Common Stock
|
$
|
0.12
|
$
|
0.20
|
|||
Weighted
average common shares outstanding - basic:
|
|||||||
Class
A Common Stock
|
205.636
|
199.571
|
|||||
Class
B Common Stock
|
23.824
|
23.853
|
|||||
Weighted
average common shares outstanding - diluted:
|
|||||||
Class
A Common Stock
|
233.439
|
240.100
|
|||||
Class
B Common Stock
|
23.824
|
23.853
|
4)
|
INVENTORIES:
|
May
31,
2007
|
|
February
28,
2
007
|
|||||
(in
millions
)
|
|||||||
Raw
materials and supplies
|
$
|
108.1
|
$
|
106.5
|
|||
In-process
inventories
|
1,294.5
|
1,264.4
|
|||||
Finished
case goods
|
552.7
|
577.2
|
|||||
$
|
1,955.3
|
$
|
1,948.1
|
5)
|
GOODWILL:
|
Constellation
Wines
|
|
Constellation
Spirits
|
|
Crown
Imports
|
|
Consolidations
and
Eliminations
|
|
Consolidated
|
||||||||
(in
millions)
|
||||||||||||||||
Balance,
February 28, 200
7
|
$
|
2,939.5
|
$
|
144.4
|
$
|
13.0
|
$
|
(13.0
|
)
|
$
|
3,083.9
|
|||||
Purchase
accounting
allocations
|
(8.0
|
)
|
349.3
|
-
|
-
|
341.3
|
||||||||||
Foreign
currency
translation
adjustments
|
64.4
|
1.4
|
-
|
-
|
65.8
|
|||||||||||
Purchase
price earn-out
|
1.3
|
-
|
-
|
-
|
1.3
|
|||||||||||
Disposal
of business
|
(143.4
|
)
|
-
|
-
|
-
|
(143.4
|
)
|
|||||||||
Balance,
May
31, 2007
|
$
|
2,853.8
|
$
|
495.1
|
$
|
13.0
|
$
|
(13.0
|
)
|
$
|
3,348.9
|
May
31, 2007
|
February
28, 2007
|
||||||||||||
|
Gross
Carrying
Amount
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Net
Carrying
Amount
|
|||||||||
(in
millions)
|
|||||||||||||
Amortizable
intangible assets:
|
|||||||||||||
Customer
relationships
|
$
|
55.2
|
$
|
52.7
|
$
|
32.9
|
$
|
31.3
|
|||||
Distribution
agreements
|
19.9
|
6.7
|
19.9
|
6.9
|
|||||||||
Other
|
3.4
|
2.0
|
2.4
|
1.1
|
|||||||||
Total
|
$
|
78.5
|
61.4
|
$
|
55.2
|
39.3
|
|||||||
Nonamortizable
intangible assets:
|
|||||||||||||
Trademarks
|
1,153.3
|
1,091.9
|
|||||||||||
Agency
relationships
|
4.2
|
4.2
|
|||||||||||
Total
|
1,157.5
|
1,096.1
|
|||||||||||
Total
intangible assets
|
$
|
1,218.9
|
$
|
1,135.4
|
(in
millions
)
|
||||
2008
|
$
|
3.5
|
||
2009
|
$
|
4.6
|
||
2010
|
$
|
4.6
|
||
2011
|
$
|
4.5
|
||
2012
|
$
|
3.9
|
||
2013
|
$
|
3.7
|
||
Thereafter
|
$
|
36.6
|
7)
|
OTHER
ASSETS:
|
For
the
Three
Months
Ended
May
31, 2007
|
||||
(in
millions)
|
||||
Net
sales
|
$
|
658.1
|
||
Gross
profit
|
$
|
204.7
|
||
Net
income
|
$
|
146.4
|
8)
|
BORROWINGS:
|
Tranche
A
Term
Loan
|
|
Tranche
B
Term
Loan
|
|
Total
|
||||||
(in
millions)
|
||||||||||
2008
|
$
|
90.0
|
$
|
7.6
|
$
|
97.6
|
||||
2009
|
210.0
|
15.2
|
225.2
|
|||||||
2010
|
270.0
|
15.2
|
285.2
|
|||||||
2011
|
300.0
|
15.2
|
315.2
|
|||||||
2012
|
150.0
|
15.2
|
165.2
|
|||||||
2013
|
-
|
1,431.6
|
1,431.6
|
|||||||
$
|
1,020.0
|
$
|
1,500.0
|
$
|
2,520.0
|
Senior
notes -
|
9)
|
INCOME
TAXES:
|
10)
|
RETIREMENT
SAVINGS PLANS AND POSTRETIREMENT BENEFIT
PLANS:
|
For
the
Three
Months
Ended
May 31,
|
|
||||||
|
|
2007
|
|
2006
|
|||
(in
millions)
|
|||||||
Service
cost
|
$
|
1.4
|
$
|
0.6
|
|||
Interest
cost
|
6.2
|
4.8
|
|||||
Expected
return on plan assets
|
(7.6
|
)
|
(5.4
|
)
|
|||
Amortization
of prior service cost
|
0.1
|
-
|
|||||
Recognized
net actuarial loss
|
2.2
|
0.5
|
|||||
Net
periodic benefit cost
|
$
|
2.3
|
$
|
0.5
|
|
For
the
Three
Months
Ended
May 31,
|
||||||
|
2007
|
2006
|
|||||
(in
millions
)
|
|||||||
Service
cost
|
$
|
0.1
|
$
|
-
|
|||
Interest
cost
|
0.1
|
0.1
|
|||||
Amortization
of prior service cost
|
-
|
-
|
|||||
Recognized
net actuarial loss
|
-
|
-
|
|||||
Net
periodic benefit cost
|
$
|
0.2
|
$
|
0.1
|
11)
|
STOCKHOLDERS’
EQUITY:
|
12)
|
EAR
NINGS
PER COMMON SHARE:
|
For
the Three Months
Ended
May 31,
|
|
||||||
|
|
2007
|
|
2006
|
|||
(in
millions, except per share data)
|
|||||||
Net
income
|
$
|
29.8
|
$
|
85.5
|
|||
Dividends
on preferred stock
|
-
|
(2.5
|
)
|
||||
Income
available to common stockholders
|
$
|
29.8
|
$
|
83.0
|
|||
Weighted
average common shares outstanding - basic:
|
|||||||
Class
A Common Stock
|
205.636
|
199.571
|
|||||
Class
B Common Stock
|
23.824
|
23.853
|
|||||
Total
weighted average common shares outstanding - basic
|
229.460
|
223.424
|
|||||
Stock
options
|
3.979
|
6.693
|
|||||
Preferred
stock
|
-
|
9.983
|
|||||
Weighted
average common shares outstanding - diluted
|
233.439
|
240.100
|
|||||
Earnings
per common share - basic:
|
|||||||
Class
A Common Stock
|
$
|
0.13
|
$
|
0.38
|
|||
Class
B Common Stock
|
$
|
0.12
|
$
|
0.34
|
|||
Earnings
per common share - diluted:
|
|||||||
Class
A Common Stock
|
$
|
0.13
|
$
|
0.36
|
|||
Class
B Common Stock
|
$
|
0.12
|
$
|
0.33
|
13)
|
STOCK-BASED
COMPENSATION:
|
14)
|
COMPREHENSIVE
INCOME:
|
For
the Three Months
Ended
May 31,
|
|
||||||
|
|
2007
|
|
2006
|
|||
(in
millions)
|
|||||||
Net
income
|
$
|
29.8
|
$
|
85.5
|
|||
Other
comprehensive income (loss), net of tax:
|
|||||||
Foreign
currency translation adjustments, net of tax benefit (expense)
of $1.2 and
($7.6), respectively
|
156.6
|
61.4
|
|||||
Cash
flow hedges:
|
|||||||
Net
derivative gains (losses), net of tax (expense) benefit of ($0.3)
and
$1.1, respectively
|
5.2
|
(5.6
|
)
|
||||
Reclassification
adjustments, net of tax benefit of $0.6 and $1.5,
respectively
|
(1.3
|
)
|
(3.2
|
)
|
|||
Net
cash flow hedges
|
3.9
|
(8.8
|
)
|
||||
Pension/postretirement
adjustments, net of tax benefit of $0.6 and $2.7,
respectively
|
(1.4
|
)
|
(6.3
|
)
|
|||
Total
comprehensive income
|
$
|
188.9
|
$
|
131.8
|
Foreign
Currency
Translation
Adjustments
|
|
Net
Unrealized
Gains
on
Derivatives
|
|
Pension/
Postretirement
Adjustments
|
|
Accumulated
Other
Comprehensive
Income
|
|||||||
(in
millions)
|
|||||||||||||
Balance,
February
28, 2007
|
$
|
446.8
|
$
|
13.3
|
$
|
(111.0)
|
|
$
|
349.1
|
||||
Current
period change
|
156.6
|
3.9
|
(1.4)
|
|
159.1
|
||||||||
Balance
,
May 31, 2007
|
$
|
603.4
|
$
|
17.2
|
$
|
(112.4)
|
|
$
|
508.2
|
16)
|
RESTRUCTURING
AND RELATED CHARGES:
|
Fiscal
2007
Wine
Plan
|
|
Vincor
Plan
|
|
Fiscal
2006
Plan
|
|
Robert
Mondavi
Plan
|
|
Total
|
||||||||
(in
millions)
|
||||||||||||||||
Restructuring
liability, February 28, 2007
|
$
|
2.8
|
$
|
21.2
|
$
|
3.5
|
$
|
5.4
|
$
|
32.9
|
||||||
Vincor
acquisition
|
-
|
(1.4
|
)
|
-
|
-
|
(1.4
|
)
|
|||||||||
Restructuring
charges:
|
||||||||||||||||
Employee
termination benefit costs
|
-
|
(0.1
|
)
|
0.1
|
-
|
-
|
||||||||||
Contract
termination costs
|
-
|
-
|
0.2
|
-
|
0.2
|
|||||||||||
Facility
consolidation/relocation costs
|
-
|
0.1
|
0.1
|
-
|
0.2
|
|||||||||||
Restructuring
charges, May 31, 2007
|
-
|
-
|
0.4
|
-
|
0.4
|
|||||||||||
Cash
expenditures
|
(0.3
|
)
|
(2.8
|
)
|
(1.1
|
)
|
(0.4
|
)
|
(4.6
|
)
|
||||||
Foreign
currency translation adjustments
|
0.1
|
0.3
|
-
|
-
|
0.4
|
|||||||||||
Restructuring
liability, May 31, 2007
|
$
|
2.6
|
$
|
17.3
|
$
|
2.8
|
$
|
5.0
|
$
|
27.7
|
For
the Three Months Ended May 31, 2007
|
|||||||||||||
Fiscal
2007
Wine
Plan
|
|
Vincor
Plan
|
|
Fiscal
2006
Plan
|
|
Total
|
|||||||
Accelerated
depreciation/inventory write-down (cost of product sold)
|
$
|
1.1
|
$
|
0.1
|
$
|
1.0
|
$
|
2.2
|
|||||
Asset
write-down/other costs (selling, general and administrative
expenses)
|
$
|
0.3
|
$
|
-
|
$
|
0.2
|
$
|
0.5
|
Fiscal
2007
Wine
Plan
|
Vincor
Plan
|
Fiscal
2006
Plan
|
||||||||
(in
millions)
|
||||||||||
Costs
incurred to date
|
||||||||||
Restructuring
charges:
|
||||||||||
Employee
termination benefit costs
|
$
|
2.0
|
$
|
1.5
|
$
|
26.5
|
||||
Contract
termination costs
|
24.0
|
1.0
|
1.0
|
|||||||
Facility
consolidation/relocation costs
|
-
|
0.3
|
0.9
|
|||||||
Total
restructuring charges
|
26.0
|
2.8
|
28.4
|
|||||||
Other
related costs:
|
||||||||||
Accelerated
depreciation/inventory write-down
|
4.4
|
0.4
|
18.0
|
|||||||
Asset
write-down/other costs
|
13.2
|
-
|
3.7
|
|||||||
Total
other related costs
|
17.6
|
0.4
|
21.7
|
|||||||
Total
costs incurred to date
|
$
|
43.6
|
$
|
3.2
|
$
|
50.1
|
||||
Total
expected costs
|
||||||||||
Restructuring
charges:
|
||||||||||
Employee
termination benefit costs
|
$
|
2.0
|
$
|
1.5
|
$
|
27.2
|
||||
Contract
termination costs
|
24.8
|
1.1
|
8.7
|
|||||||
Facility
consolidation/relocation costs
|
0.2
|
0.3
|
1.6
|
|||||||
Total
restructuring charges
|
27.0
|
2.9
|
37.5
|
|||||||
Other
related costs:
|
||||||||||
Accelerated
depreciation/inventory write-down
|
12.8
|
0.6
|
19.5
|
|||||||
Asset
write-down/other costs
|
24.0
|
-
|
3.7
|
|||||||
Total
other related costs
|
36.8
|
0.6
|
23.2
|
|||||||
Total
expected costs
|
$
|
63.8
|
$
|
3.5
|
$
|
60.7
|
17)
|
CONDENSED
CONSOLIDATING FINANCIAL
INFORMATION:
|
Parent
Company
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Nonguarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||
(in
millions)
|
||||||||||||||||
Condensed
Consolidating Balance Sheet at May 31, 2007
|
||||||||||||||||
Current
assets:
|
||||||||||||||||
Cash
and cash investments
|
$
|
1.0
|
$
|
2.8
|
$
|
29.7
|
$
|
-
|
$
|
33.5
|
||||||
Accounts
receivable, net
|
232.9
|
80.3
|
450.7
|
-
|
763.9
|
|||||||||||
Inventories
|
41.2
|
1,029.7
|
889.6
|
(5.2
|
)
|
1,955.3
|
||||||||||
Prepaid
expenses and other
|
8.2
|
143.0
|
47.1
|
(41.7
|
)
|
156.6
|
||||||||||
Intercompany
receivable (payable)
|
1,035.0
|
(971.2
|
)
|
(63.8
|
)
|
-
|
-
|
|||||||||
Total
current assets
|
1,318.3
|
284.6
|
1,353.3
|
(46.9
|
)
|
2,909.3
|
||||||||||
Property,
plant and equipment, net
|
45.3
|
811.0
|
887.9
|
-
|
1,744.2
|
|||||||||||
Investments
in subsidiaries
|
6,640.4
|
88.2
|
153.0
|
(6,881.6
|
)
|
-
|
||||||||||
Goodwill
|
-
|
1,843.9
|
1,505.0
|
-
|
3,348.9
|
|||||||||||
Intangible
assets, net
|
-
|
623.7
|
595.2
|
-
|
1,218.9
|
|||||||||||
Other
assets, net
|
77.1
|
309.7
|
258.3
|
(40.2
|
)
|
604.9
|
||||||||||
Total
assets
|
$
|
8,081.1
|
$
|
3,961.1
|
$
|
4,752.7
|
$
|
(6,968.7
|
)
|
$
|
9,826.2
|
|||||
Current
liabilities:
|
||||||||||||||||
Notes
payable to banks
|
$
|
45.5
|
$
|
-
|
$
|
196.8
|
$
|
-
|
$
|
242.3
|
||||||
Current
maturities of long-term debt
|
348.5
|
10.6
|
3.7
|
-
|
362.8
|
|||||||||||
Accounts
payable
|
6.9
|
79.6
|
184.1
|
-
|
270.6
|
|||||||||||
Accrued
excise taxes
|
8.6
|
20.0
|
36.3
|
-
|
64.9
|
|||||||||||
Other
accrued expenses and liabilities
|
128.1
|
148.4
|
333.4
|
(43.0
|
)
|
566.9
|
||||||||||
Total
current liabilities
|
537.6
|
258.6
|
754.3
|
(43.0
|
)
|
1,507.5
|
||||||||||
Long-term
debt, less current maturities
|
4,327.2
|
25.9
|
28.7
|
-
|
4,381.8
|
|||||||||||
Deferred
income taxes
|
-
|
|
427.0
|
104.0
|
(40.2
|
)
|
490.8
|
|||||||||
Other
liabilities
|
88.0
|
68.7
|
161.1
|
-
|
317.8
|
Parent
Company
|
Subsidiary
Guarantors
|
Subsidiary
Nonguarantors
|
Eliminations
|
Consolidated
|
||||||||||||
(in
millions)
|
Stockholders’
equity:
|
||||||||||||||||
Preferred
stock
|
-
|
162.0
|
1,430.9
|
(1,592.9
|
)
|
-
|
||||||||||
Class
A and Class B common stock
|
2.5
|
100.7
|
184.3
|
(285.0
|
)
|
2.5
|
||||||||||
Additional
paid-in capital
|
1,292.4
|
1,280.9
|
1,223.9
|
(2,504.8
|
)
|
1,292.4
|
||||||||||
Retained
earnings
|
1,949.1
|
1,617.9
|
283.2
|
(1,901.1
|
)
|
1,949.1
|
||||||||||
Accumulated
other comprehensive
income
|
508.2
|
19.4
|
582.3
|
(601.7
|
)
|
508.2
|
||||||||||
Treasury
stock
|
(623.9
|
)
|
-
|
-
|
-
|
(623.9
|
)
|
|||||||||
Total
stockholders’ equity
|
3,128.3
|
3,180.9
|
3,704.6
|
(6,885.5
|
)
|
3,128.3
|
||||||||||
Total
liabilities and
stockholders’
equity
|
$
|
8,081.1
|
$
|
3,961.1
|
$
|
4,752.7
|
$
|
(6,968.7
|
)
|
$
|
9,826.2
|
|||||
Condensed
Consolidating Balance Sheet at February 28, 2007
|
||||||||||||||||
Current
assets:
|
||||||||||||||||
Cash
and cash investments
|
$
|
2.4
|
$
|
1.1
|
$
|
30.0
|
$
|
-
|
$
|
33.5
|
||||||
Accounts
receivable, net
|
342.7
|
57.5
|
480.8
|
-
|
881.0
|
|||||||||||
Inventories
|
38.1
|
1,045.3
|
870.5
|
(5.8
|
)
|
1,948.1
|
||||||||||
Prepaid
expenses and other
|
2.0
|
105.3
|
62.1
|
(8.7
|
)
|
160.7
|
||||||||||
Intercompany
receivable (payable)
|
1,080.3
|
(775.1
|
)
|
(305.2
|
)
|
-
|
-
|
|||||||||
Total
current assets
|
1,465.5
|
434.1
|
1,138.2
|
(14.5
|
)
|
3,023.3
|
||||||||||
Property,
plant and equipment, net
|
42.2
|
810.9
|
897.1
|
-
|
1,750.2
|
|||||||||||
Investments
in subsidiaries
|
6,119.9
|
115.6
|
-
|
(6,235.5
|
)
|
-
|
||||||||||
Goodwill
|
-
|
1,509.1
|
1,574.8
|
-
|
3,083.9
|
|||||||||||
Intangible
assets, net
|
-
|
566.7
|
568.7
|
-
|
1,135.4
|
|||||||||||
Other
assets, net
|
32.2
|
245.4
|
167.8
|
-
|
445.4
|
|||||||||||
Total
assets
|
$
|
7,659.8
|
$
|
3,681.8
|
$
|
4,346.6
|
$
|
(6,250.0
|
)
|
$
|
9,438.2
|
|||||
Current
liabilities:
|
||||||||||||||||
Notes
payable to banks
|
$
|
30.0
|
$
|
-
|
$
|
123.3
|
$
|
-
|
$
|
153.3
|
||||||
Current
maturities of long-term debt
|
299.2
|
10.2
|
7.9
|
-
|
317.3
|
|||||||||||
Accounts
payable
|
7.1
|
112.8
|
256.2
|
-
|
376.1
|
|||||||||||
Accrued
excise taxes
|
10.9
|
31.4
|
31.4
|
-
|
73.7
|
|||||||||||
Other
accrued expenses and liabilities
|
242.4
|
105.2
|
333.5
|
(10.4
|
)
|
670.7
|
||||||||||
Total
current liabilities
|
589.6
|
259.6
|
752.3
|
(10.4
|
)
|
1,591.1
|
||||||||||
Long-term
debt, less current maturities
|
3,672.7
|
18.5
|
23.7
|
-
|
3,714.9
|
|||||||||||
Deferred
income taxes
|
(24.1
|
)
|
405.0
|
93.2
|
-
|
474.1
|
||||||||||
Other
liabilities
|
4.1
|
36.7
|
199.8
|
-
|
240.6
|
|||||||||||
Stockholders’
equity:
|
||||||||||||||||
Preferred
stock
|
-
|
9.0
|
1,013.9
|
(1,022.9
|
)
|
-
|
||||||||||
Class
A and Class B common stock
|
2.5
|
100.7
|
190.3
|
(291.0
|
)
|
2.5
|
||||||||||
Additional
paid-in capital
|
1,271.1
|
1,280.9
|
1,296.9
|
(2,577.8
|
)
|
1,271.1
|
||||||||||
Retained
earnings
|
1,919.3
|
1,553.6
|
349.1
|
(1,902.7
|
)
|
1,919.3
|
||||||||||
Accumulated
other comprehensive
income
|
349.1
|
17.8
|
427.4
|
(445.2
|
)
|
349.1
|
||||||||||
Treasury
stock
|
(124.5
|
)
|
-
|
-
|
-
|
(124.5
|
)
|
|||||||||
Total
stockholders’ equity
|
3,417.5
|
2,962.0
|
3,277.6
|
(6,239.6
|
)
|
3,417.5
|
||||||||||
Total
liabilities and
stockholders’
equity
|
$
|
7,659.8
|
$
|
3,681.8
|
$
|
4,346.6
|
$
|
(6,250.0
|
)
|
$
|
9,438.2
|
|||||
Parent
Company
|
Subsidiary
Guarantors
|
Subsidiary
Nonguarantors
|
Eliminations
|
Consolidated
|
||||||||||||
(in
millions)
|
Parent
Company
|
Subsidiary
Guarantors
|
Subsidiary
Nonguarantors
|
Eliminations
|
Consolidated
|
||||||||||||
(in
millions)
|
Parent
Company
|
Subsidiary
Guarantors
|
Subsidiary
Nonguarantors
|
Eliminations
|
Consolidated
|
||||||||||||
(in
millions)
|
18)
|
BUSINESS
SEGMENT INFORMATION:
|
For
the Three Months
Ended
May 31,
|
|
||||||
|
|
2007
|
|
2006
|
|||
(in
millions)
|
|||||||
Constellation
Wines
:
|
|||||||
Net
sales:
|
|||||||
Branded
wine
|
$
|
619.9
|
$
|
517.2
|
|||
Wholesale
and other
|
184.4
|
247.3
|
|||||
Net
sales
|
$
|
804.3
|
$
|
764.5
|
|||
Segment
operating income
|
$
|
86.2
|
$
|
96.2
|
|||
Equity
in earnings of equity method investees
|
$
|
2.4
|
$
|
0.1
|
|||
Long-lived
tangible assets
|
$
|
1,603.6
|
$
|
1,334.7
|
|||
Investment
in equity method investees
|
$
|
237.1
|
$
|
152.5
|
|||
Total
assets
|
$
|
8,420.9
|
$
|
6,693.3
|
|||
Capital
expenditures
|
$
|
14.9
|
$
|
43.5
|
|||
Depreciation
and amortization
|
$
|
33.2
|
$
|
24.1
|
|||
Constellation
Spirits
:
|
|||||||
Net
sales
|
$
|
96.9
|
$
|
83.3
|
|||
Segment
operating income
|
$
|
15.8
|
$
|
17.7
|
|||
Long-lived
tangible assets
|
$
|
101.1
|
$
|
94.6
|
|||
Total
assets
|
$
|
1,100.4
|
$
|
669.0
|
|||
Capital
expenditures
|
$
|
2.5
|
$
|
1.4
|
|||
Depreciation
and amortization
|
$
|
3.2
|
$
|
2.4
|
|||
Constellation
Beers
:
|
|||||||
Net
sales
|
$
|
-
|
$
|
308.1
|
|||
Segment
operating income
|
$
|
-
|
$
|
65.1
|
|||
Long-lived
tangible assets
|
$
|
-
|
$
|
1.0
|
|||
Total
assets
|
$
|
-
|
$
|
234.1
|
|||
Capital
expenditures
|
$
|
-
|
$
|
-
|
|||
Depreciation
and amortization
|
$
|
-
|
$
|
0.4
|
|||
Corporate
Operations and Other
:
|
|||||||
Net
sales
|
$
|
-
|
$
|
-
|
|||
Segment
operating loss
|
$
|
(19.7
|
)
|
$
|
(14.2
|
)
|
|
Long-lived
tangible assets
|
$
|
39.5
|
$
|
12.4
|
|||
Total
assets
|
$
|
96.1
|
$
|
75.1
|
|||
Capital
expenditures
|
$
|
0.3
|
$
|
0.2
|
Depreciation
and amortization
|
$
|
2.3
|
$
|
1.8
|
For
the Three Months
Ended
May 31,
|
|||||||
2007
|
|
2006
|
|||||
Crown
Imports
:
|
|||||||
Net
sales
|
$
|
658.1
|
$
|
-
|
|||
Segment
operating income
|
$
|
146.3
|
$
|
-
|
|||
Long-lived
tangible assets
|
$
|
2.2
|
$
|
-
|
|||
Total
assets
|
$
|
477.1
|
$
|
-
|
|||
Capital
expenditures
|
$
|
1.1
|
$
|
-
|
|||
Depreciation
and amortization
|
$
|
0.1
|
$
|
-
|
|||
Acquisition-Related
Integration Costs, Restructuring and Related Charges and Unusual
Costs
:
|
|||||||
Operating
loss
|
$
|
(14.1
|
)
|
$
|
(21.8
|
)
|
|
Consolidation
and Eliminations
:
|
|||||||
Net
sales
|
$
|
(658.1
|
)
|
$
|
-
|
||
Operating
income
|
$
|
(146.3
|
)
|
$
|
-
|
||
Equity
in earnings of Crown Imports
|
$
|
73.4
|
$
|
-
|
|||
Long-lived
tangible assets
|
$
|
(2.2
|
)
|
$
|
-
|
||
Investment
in equity method investees
|
$
|
208.8
|
$
|
-
|
|||
Total
assets
|
$
|
(268.3
|
)
|
$
|
-
|
||
Capital
expenditures
|
$
|
(1.1
|
)
|
$
|
-
|
||
Depreciation
and amortization
|
$
|
(0.1
|
)
|
$
|
-
|
||
Consolidated
:
|
|||||||
Net
sales
|
$
|
901.2
|
$
|
1,155.9
|
|||
Operating
income
|
$
|
68.2
|
$
|
143.0
|
|||
Equity
in earnings of equity method investees
|
$
|
75.8
|
$
|
0.1
|
|||
Long-lived
tangible assets
|
$
|
1,744.2
|
$
|
1,442.7
|
|||
Investment
in equity method investees
|
$
|
445.9
|
$
|
152.5
|
|||
Total
assets
|
$
|
9,826.2
|
$
|
7,671.5
|
|||
Capital
expenditures
|
$
|
17.7
|
$
|
45.1
|
|||
Depreciation
and amortization
|
$
|
38.7
|
$
|
28.7
|
First
Quarter 2008 Compared to First Quarter 2007
|
|
|||||||||
|
|
Net
Sales
|
|
|||||||
|
|
2008
|
|
2007
|
|
%
Increase /
(Decrease)
|
||||
Constellation
Wines:
|
||||||||||
Branded
wine
|
$
|
619.9
|
$
|
517.2
|
20
%
|
|
||||
Wholesale
and other
|
184.4
|
247.3
|
(25)%
|
|
||||||
Constellation
Wines net sales
|
804.3
|
764.5
|
5
%
|
|
||||||
Constellation
Spirits net sales
|
96.9
|
83.3
|
16
%
|
|
||||||
Constellation
Beers net sales
|
-
|
308.1
|
(100)%
|
|
||||||
Crown
Imports net sales
|
658.1
|
-
|
N/A
|
|||||||
Consolidations
and eliminations
|
(658.1
|
)
|
-
|
N/A
|
||||||
Consolidated
Net Sales
|
$
|
901.2
|
$
|
1,155.9
|
(22)%
|
|
First
Quarter 2008 Compared to First Quarter 2007
|
||||||||||
|
Operating
Income (Loss)
|
|||||||||
|
2008
|
2007
|
%
Increase
(Decrease)
|
|||||||
Constellation
Wines
|
$
|
86.2
|
$
|
96.2
|
(10)%
|
|
||||
Constellation
Spirits
|
15.8
|
17.7
|
(11)%
|
|
||||||
Constellation
Beers
|
-
|
65.1
|
(100)%
|
|
||||||
Corporate
Operations and Other
|
(19.7
|
)
|
(14.2
|
)
|
39
%
|
|
||||
Crown
Imports
|
146.3
|
-
|
N/A
|
|||||||
Consolidations
and eliminations
|
(146.3
|
)
|
-
|
N/A
|
||||||
Total
Reportable Segments
|
82.3
|
164.8
|
(50)%
|
|
||||||
Acquisition-Related
Integration Costs,
Restructuring
and Related Charges
and
Unusual Costs
|
(14.1
|
)
|
(21.8
|
)
|
(35)%
|
|
||||
Consolidated
Operating Income
|
$
|
68.2
|
$
|
143.0
|
(52)%
|
|
Tranche
A
Term
Loan
|
Tranche
B
Term
Loan
|
Total
|
||||||||
(in
millions)
|
||||||||||
2008
|
$
|
90.0
|
$
|
7.6
|
$
|
97.6
|
||||
2009
|
210.0
|
15.2
|
225.2
|
|||||||
2010
|
270.0
|
15.2
|
285.2
|
|||||||
2011
|
300.0
|
15.2
|
315.2
|
|||||||
2012
|
150.0
|
15.2
|
165.2
|
|||||||
2013
|
-
|
1,431.6
|
1,431.6
|
|||||||
$
|
1,020.0
|
$
|
1,500.0
|
$
|
2,520.0
|
Period
|
Total
Number
of
Shares
Purchased
|
|
Average
Price
Paid
Per
Share
|
Total
Number
of
Shares Purchased as
Part
of a Publicly Announced
Program
|
Approximate
Dollar Value
of
Shares that May Yet Be
Purchased
Under
the
Program
(1)
|
||||||||
March
1 - 31, 2007
|
-
|
$
|
-
|
-
|
$
|
500,000,000
|
|||||||
April
1 - 30, 2007
|
2,855,600
|
22.52
|
2,855,600
|
435,704,733
|
|||||||||
May
1 - 31, 2007
|
17,543,662
(2)
|
|
24.84
(2)
|
|
17,543,662
|
-
|
|||||||
Total
|
20,399,262
|
$
|
24.51
|
20,399,262
|
$
|
-
|
|
CONSTELLATION
BRANDS, INC.
|
|
Dated:
July 10, 2007
|
By:
|
/s/
Thomas F. Howe
|
Thomas
F. Howe, Senior Vice President, Controller
|
||
Dated:
July 10, 2007
|
By:
|
/s/
Robert Ryder
|
|
Robert
Ryder, Executive Vice President and Chief Financial Officer (principal
financial officer and principal accounting
officer)
|
3.2
|
By-Laws
of the Company (filed as Exhibit 3.2 to the Company’s Quarterly Report on
Form 10-Q for the fiscal quarter ended August 31, 2002 and incorporated
herein by reference). #
|
|
4.1
|
Indenture,
dated as of February 25, 1999, among the Company, as issuer, certain
principal subsidiaries, as Guarantors, and BNY Midwest Trust Company
(successor Trustee to Harris Trust and Savings Bank), as Trustee
(filed as
Exhibit 99.1 to the Company’s Current Report on Form 8-K dated February
25, 1999 and incorporated herein by reference). #
|
|
4.2
|
Supplemental
Indenture No. 3, dated as of August 6, 1999, by and among the Company,
Canandaigua B.V., Barton Canada, Ltd., Simi Winery, Inc., Franciscan
Vineyards, Inc., Allberry, Inc., M.J. Lewis Corp., Cloud Peak Corporation,
Mt. Veeder Corporation, SCV-EPI Vineyards, Inc., and BNY Midwest Trust
Company (successor Trustee to Harris Trust and Savings Bank), as
Trustee
(filed as Exhibit 4.20 to the Company’s Quarterly Report on Form 10-Q for
the fiscal quarter ended August 31, 1999 and incorporated herein
by
reference). #
|
|
4.3
|
Supplemental
Indenture No. 4, with respect to 8 1/2% Senior Notes due 2009,
dated as of
May 15, 2000, by and among the Company, as Issuer, certain principal
subsidiaries, as Guarantors, and BNY Midwest Trust Company (successor
Trustee to Harris Trust and Savings Bank), as Trustee (filed as
Exhibit
4.17 to the Company’s Annual Report on Form 10-K for the fiscal year ended
February 29, 2000 and incorporated herein by reference).
#
|
|
4.4
|
Supplemental
Indenture No. 5, dated as of September 14, 2000, by and among the
Company,
as Issuer, certain principal subsidiaries, as Guarantors, and BNY
Midwest
Trust Company (successor Trustee to The Bank of New York), as Trustee
(filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for
the fiscal quarter ended August 31, 2000 and incorporated herein
by
reference). #
|
|
4.5
|
Supplemental
Indenture No. 6, dated as of August 21, 2001, among the Company,
Ravenswood Winery, Inc. and BNY Midwest Trust Company (successor
trustee
to Harris Trust and Savings Bank and The Bank of New York, as applicable),
as Trustee (filed as Exhibit 4.6 to the Company’s Registration Statement
on Form S-3 (Pre-effective Amendment No. 1) (Registration No. 333-63480)
and incorporated herein by reference).
|
|
4.6
|
Supplemental
Indenture No. 7, dated as of January 23, 2002, by and among the
Company,
as Issuer, certain principal subsidiaries, as Guarantors, and BNY
Midwest
Trust Company, as Trustee (filed as Exhibit 4.2 to the Company’s Current
Report on Form 8-K dated January 17, 2002 and incorporated herein
by
reference). #
|
4.7
|
Supplemental
Indenture No. 9, dated as of July 8, 2004, by and among the Company,
BRL
Hardy Investments (USA) Inc., BRL Hardy (USA) Inc., Pacific Wine
Partners
LLC, Nobilo Holdings, and BNY Midwest Trust Company, as Trustee
(filed as
Exhibit 4.10 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 2004 and incorporated herein by
reference).
|
|
4.8
|
Supplemental
Indenture No. 10, dated as of September 13, 2004, by and among
the
Company, Constellation Trading, Inc., and BNY Midwest Trust Company,
as
Trustee (filed as Exhibit 4.11 to the Company’s Quarterly Report on Form
10-Q for the fiscal quarter ended August 31, 2004 and incorporated
herein
by reference).
|
|
4.9
|
Supplemental
Indenture No. 11, dated as of December 22, 2004, by and among the
Company,
The Robert Mondavi Corporation, R.M.E. Inc., Robert Mondavi Winery,
Robert
Mondavi Investments, Robert Mondavi Affilates d/b/a Vichon Winery
and
Robert Mondavi Properties, Inc., and BNY Midwest Trust Company,
as Trustee
(filed
as
Exhibit 4.12 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended November 30, 2004 and incorporated herein by
reference
).
|
|
4.10
|
Supplemental
Indenture No. 12, dated as of August 11, 2006, by and among the
Company,
Constellation Leasing, LLC, and BNY Midwest Trust Company, as Trustee
(filed
as
Exhibit 4.12 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 2006 and incorporated herein by
reference
).
|
|
4.11
|
Supplemental
Indenture No. 13, dated as of November 30, 2006, by and among the
Company,
Vincor International Partnership, Vincor International II, LLC,
Vincor
Holdings, Inc., R.H. Phillips, Inc., The Hogue Cellars, Ltd., Vincor
Finance, LLC, and BNY Midwest Trust Company, as Trustee (filed
as
Exhibit 4.11 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended November 30, 2006 and incorporated herein by
reference
).
|
|
4.12
|
Supplemental
Indenture No. 15, dated as of May 4, 2007, by and among the Company,
Barton SMO Holdings LLC, ALCOFI INC., and Spirits Marque One LLC,
and BNY
Midwest Trust Company, as Trustee (filed herewith).
|
|
4.13
|
Indenture,
with respect to 8 1/2% Senior Notes due 2009, dated as of November
17,
1999, among the Company, as Issuer, certain principal subsidiaries,
as
Guarantors, and BNY Midwest Trust Company (successor to Harris
Trust and
Savings Bank), as Trustee (filed as Exhibit 4.1 to the Company’s
Registration Statement on Form S-4 (Registration No. 333-94369)
and
incorporated herein by reference).
|
|
4.14
|
Supplemental
Indenture No. 1, dated as of August 21, 2001, among the Company,
Ravenswood Winery, Inc. and BNY Midwest Trust Company (successor
to Harris
Trust and Savings Bank), as Trustee (filed as Exhibit 4.4 to the
Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended August
31, 2001
and incorporated herein by
reference).#
|
4.15
|
Supplemental
Indenture No. 3, dated as of July 8, 2004, by and among the Company,
BRL
Hardy Investments (USA) Inc., BRL Hardy (USA) Inc., Pacific Wine
Partners
LLC, Nobilo Holdings, and BNY Midwest Trust Company, as Trustee
(filed as
Exhibit 4.15 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 2004 and incorporated herein by
reference).
|
|
4.16
|
Supplemental
Indenture No. 4, dated as of September 13, 2004, by and among the
Company,
Constellation Trading, Inc., and BNY Midwest Trust Company, as
Trustee
(filed as Exhibit 4.16 to the Company’s Quarterly Report on Form 10-Q for
the fiscal quarter ended August 31, 2004 and incorporated herein
by
reference).
|
|
4.17
|
Supplemental
Indenture No. 5, dated as of December 22, 2004, by and among the
Company,
The Robert Mondavi Corporation, R.M.E. Inc., Robert Mondavi Winery,
Robert
Mondavi Investments, Robert Mondavi Affilates d/b/a Vichon Winery
and
Robert Mondavi Properties, Inc., and BNY Midwest Trust Company,
as Trustee
(filed
as
Exhibit 4.18 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended November 30, 2004 and incorporated herein by
reference
).
|
|
4.18
|
Supplemental
Indenture No. 6, dated as of August 11, 2006, by and among the
Company,
Constellation Leasing, LLC, and BNY Midwest Trust Company, as Trustee
(filed
as
Exhibit 4.19 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 2006 and incorporated herein by
reference
).
|
|
4.19
|
Supplemental
Indenture No. 7, dated as of November 30, 2006, by and among the
Company,
Vincor International Partnership, Vincor International II, LLC,
Vincor
Holdings, Inc., R.H. Phillips, Inc., The Hogue Cellars, Ltd., Vincor
Finance, LLC, and BNY Midwest Trust Company, as Trustee (filed
as
Exhibit 4.18 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended November 30, 2006 and incorporated herein by
reference
).
|
|
4.20
|
Supplemental
Indenture No. 9, dated as of May 4, 2007, by and among the Company,
Barton
SMO Holdings LLC, ALCOFI INC., and Spirits Marque One LLC, and
BNY Midwest
Trust Company, as Trustee (filed
herewith
).
|
|
4.21
|
Indenture,
with respect to 8% Senior Notes due 2008, dated as of February
21, 2001,
by and among the Company, as Issuer, certain principal subsidiaries,
as
Guarantors and BNY Midwest Trust Company, as Trustee (filed as
Exhibit 4.1
to the Company’s Registration Statement filed on Form S-4 (Registration
No. 333-60720) and incorporated herein by reference).
|
|
4.22
|
Supplemental
Indenture No. 1, dated as of August 21, 2001, among the Company,
Ravenswood Winery, Inc. and BNY Midwest Trust Company, as Trustee
(filed
as Exhibit 4.7 to the Company’s Pre-effective Amendment No. 1 to its
Registration Statement on Form S-3 (Registration No. 333-63480)
and
incorporated herein by reference).
|
4.23
|
Supplemental
Indenture No. 3, dated as of July 8, 2004, by and among the Company,
BRL
Hardy Investments (USA) Inc., BRL Hardy (USA) Inc., Pacific Wine
Partners
LLC, Nobilo Holdings, and BNY Midwest Trust Company, as Trustee
(filed as
Exhibit 4.20 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 2004 and incorporated herein by
reference).
|
|
4.24
|
Supplemental
Indenture No. 4, dated as of September 13, 2004, by and among the
Company,
Constellation Trading, Inc., and BNY Midwest Trust Company, as
Trustee
(filed as Exhibit 4.21 to the Company’s Quarterly Report on Form 10-Q for
the fiscal quarter ended August 31, 2004 and incorporated herein
by
reference).
|
|
4.25
|
Supplemental
Indenture No. 5, dated as of December 22, 2004, by and among the
Company,
The Robert Mondavi Corporation, R.M.E. Inc., Robert Mondavi Winery,
Robert
Mondavi Investments, Robert Mondavi Affilates d/b/a Vichon Winery
and
Robert Mondavi Properties, Inc., and BNY Midwest Trust Company,
as Trustee
(filed
as
Exhibit 4.24 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended November 30, 2004 and incorporated herein by
reference
).
|
|
4.26
|
Supplemental
Indenture No. 6, dated as of August 11, 2006, by and among the
Company,
Constellation Leasing, LLC, and BNY Midwest Trust Company, as Trustee
(filed
as
Exhibit 4.26 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 2006 and incorporated herein by
reference
).
|
|
4.27
|
Supplemental
Indenture No. 7, dated as of November 30, 2006, by and among the
Company,
Vincor International Partnership, Vincor International II, LLC,
Vincor
Holdings, Inc., R.H. Phillips, Inc., The Hogue Cellars, Ltd., Vincor
Finance, LLC, and BNY Midwest Trust Company, as Trustee (filed
as
Exhibit 4.25 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended November 30, 2006 and incorporated herein by
reference
).
|
|
4.28
|
Supplemental
Indenture No. 9, dated as of May 4, 2007, by and among the Company,
Barton
SMO Holdings LLC, ALCOFI INC., and Spirits Marque One LLC, and
BNY Midwest
Trust Company, as Trustee (filed
herewith
).
|
|
4.29
|
Indenture,
with respect to 7.25% Senior Notes due 2016, dated as of August
15, 2006,
by and among the Company, as Issuer, certain subsidiaries, as Guarantors
and BNY Midwest Trust Company, as Trustee (filed as Exhibit 4.1
to the
Company’s Current Report on Form 8-K dated August 15, 2006, filed August
18, 2006 and incorporated herein by reference).
|
|
4.30
|
Supplemental
Indenture No. 1, dated as of August 15, 2006, among the Company,
as
Issuer, certain subsidiaries, as G
uarantors
and BNY Midwest Trust Company, as Trustee (filed as Exhibit 4.2
to the
Company’s Current Report on Form 8-K dated August 15, 2006, filed August
18, 2006 and incorporated herein by
reference).
|
4.31
|
Supplemental
Indenture No. 2, dated as of November 30, 2006, by and among the
Company,
Vincor International Partnership, Vincor International II, LLC,
Vincor
Holdings, Inc., R.H. Phillips, Inc., The Hogue Cellars, Ltd., Vincor
Finance, LLC, and BNY Midwest Trust Company, as Trustee (filed
as Exhibit
4.28
to
the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
November 30, 2006 and incorporated herein by reference
).
|
|
4.32
|
Supplemental
Indenture No. 3, dated as of May 4, 2007, by and among the Company,
Barton
SMO Holdings LLC, ALCOFI INC., and Spirits Marque One LLC, and
BNY Midwest
Trust Company, as Trustee (filed herewith).
|
|
4.33
|
Indenture,
with respect to 7 1/4% Senior Notes due May 2017, dated May 14,
2007, by
and among the Company, as Issuer, certain subsidiaries, as Guarantors,
and
The Bank of New York Trust Company, N.A., as Trustee (filed as
Exhibit 4.1
to the Company’s Current Report on Form 8-K dated May 9, 2007, filed May
14, 2007 and incorporated herein by reference).
|
|
4.34
|
Registration
Rights Agreement, with respect to 7 1/4% Senior Notes due May 2017,
dated
May 14, 2007, among the Company, certain subsidiaries, as Guarantors,
and
Banc of America Securities LLC and Citigroup Global Markets Inc.,
as
Initial Purchasers (filed as Exhibit 4.2 to the Company’s Current Report
on Form 8-K dated May 9, 2007, filed May 14, 2007 and incorporated
herein
by reference).
|
|
4.35
|
Credit
Agreement,
dated as of June 5, 2006, among Constellation, the Subsidiary
Guarantors party thereto, the Lenders party thereto, JPMorgan Chase
Bank,
N.A., as Administrative Agent, Citicorp North America, Inc., as
Syndication Agent, J.P. Morgan Securities Inc. and Citigroup Global
Markets Inc., as Joint Lead Arrangers and Bookrunners, and The
Bank of
Nova Scotia and SunTrust Bank, as Co-Documentation Agents (filed
as
Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated June 5,
2006, filed June 9, 2006 and incorporated herein by
reference).
|
|
4.36
|
Amendment
No. 1, dated as of February 23, 2007, to the Credit Agreement,
dated as of
June 5, 2006, among Constellation, the subsidiary guarantors referred
to
on the signature pages to such Amendment No. 1, and JPMorgan Chase
Bank,
N.A., in its capacity as Administrative Agent
(filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K, dated
and filed February 23, 2007, and incorporated herein by
reference).
|
4.37
|
Guarantee
Assumption Agreement, dated as of August 11, 2006, by Constellation
Leasing, LLC, in favor of JPMorgan Chase Bank, N.A., as Administrative
Agent, pursuant to the Credit Agreement dated as of June 5, 2006
(as
modified and supplemented and in effect from time to time) (filed
as
Exhibit 4.29 to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 2006 and incorporated herein by
reference).
|
4.38
|
Guarantee
Assumption Agreement, dated as of November 30, 2006, by Vincor
International Partnership, Vincor International II, LLC, Vincor
Holdings,
Inc., R.H. Phillips, Inc., The Hogue Cellars, Ltd., and Vincor
Finance,
LLC in favor of JPMorgan Chase Bank, N.A., as Administrative Agent,
pursuant to the Credit Agreement dated as of June 5, 2006 (as modified
and
supplemented and in effect from time to time) (filed as Exhibit
4.31 to
the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
November 30, 2006 and incorporated herein by
reference).
|
|
4.39
|
Guarantee
Assumption Agreement, dated as of May 4, 2007, by Barton SMO Holdings
LLC,
ALCOFI INC., and Spirits Marque One LLC in favor of JPMorgan Chase
Bank,
N.A., as Administrative Agent, pursuant to the Credit Agreement
dated as
of June 5, 2006 (as modified and supplemented and in effect from
time to
time) (filed herewith).
|
|
10.1
|
Amendment
Number Three to the Company’s Annual Management Incentive Plan (filed as
Exhibit 99.1 to the Company’s Current Report on Form 8-K
dated
April 27, 2007, filed May 2, 2007 and incorporated herein by
reference
).*
|
|
10.2
|
2008
Fiscal Year Award Program for Executive Officers to the Company’s Annual
Management Incentive Plan (
filed
herewith
).
*+
|
|
10.3
|
Guarantee
Assumption Agreement, dated as of May 4, 2007, by Barton SMO Holdings
LLC,
ALCOFI INC., and Spirits Marque One LLC in favor of JPMorgan Chase
Bank,
N.A., as Administrative Agent, pursuant to the Credit Agreement
dated as
of June 5, 2006 (as modified and supplemented and in effect from
time to
time) (filed as Exhibit 4.39 to the Company’s Quarterly Report on Form
10-Q for the fiscal quarter ended May 31, 2007 and incorporated
herein by
reference).
|
|
10.4
|
Confirmation,
dated as of May 6, 2007, with respect to an Issuer Forward Repurchase
Transaction between the Company and Citibank, N.A. (filed
herewith).
|
|
10.5
|
Letter
Agreement dated April 26, 2007 (together with addendum dated May
8, 2007)
between the Company and Robert Ryder addressing compensation (filed
herewith).*
|
|
10.6
|
Purchase
Agreement, dated May 9, 2007, among the Company, certain subsidiaries,
as
Guarantors, and Banc of America Securities LLC and Citigroup Global
Markets Inc., as Initial Purchasers (filed as Exhibit 99.1 to the
Company’s Current Report on Form 8-K dated May 9, 2007, filed May 14, 2007
and incorporated herein by reference).
|
|
10.7
|
First
Amendment to the Constellation Brands, Inc. 2005 Supplemental Executive
Retirement Plan (filed herewith).
*
|
|
31.1
|
Certificate
of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)
of
the Securities Exchange Act of 1934, as amended (filed
herewith).
|
31.2
|
Certificate
of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)
of
the Securities Exchange Act of 1934, as amended (filed
herewith).
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 18 U.S.C. 1350 (filed
herewith).
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to Section 18 U.S.C. 1350 (filed
herewith).
|
CONSTELLATION
BRANDS, INC.
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Senior
Vice President and Treasurer
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Vice
President and
Associate
General Counsel
|
BARTON
SMO HOLDINGS LLC
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
ALCOFI
INC.
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
SPIRITS
MARQUE ONE LLC
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
BNY
MIDWEST TRUST COMPANY
|
|
By:
|
/s/
D.G. Donovan
|
Name:
|
D.G.
Donovan
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
M. Callahan
|
|
Name:
|
M.
Callahan
|
Title:
|
Vice
President
|
CONSTELLATION
BRANDS, INC.
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Senior
Vice President and Treasurer
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Vice
President and
Associate
General Counsel
|
BARTON
SMO HOLDINGS LLC
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
ALCOFI
INC.
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
SPIRITS
MARQUE ONE LLC
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
BNY
MIDWEST TRUST COMPANY
|
|
By:
|
/s/
D.G. Donovan
|
Name:
|
D.G.
Donovan
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
M. Callahan
|
|
Name:
|
M.
Callahan
|
Title:
|
Vice
President
|
CONSTELLATION
BRANDS, INC.
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Senior
Vice President and Treasurer
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Vice
President and
Associate
General Counsel
|
BARTON
SMO HOLDINGS LLC
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
ALCOFI
INC.
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
SPIRITS
MARQUE ONE LLC
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
BNY
MIDWEST TRUST COMPANY
|
|
By:
|
/s/
D.G. Donovan
|
Name:
|
D.G.
Donovan
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
M. Callahan
|
|
Name:
|
M.
Callahan
|
Title:
|
Vice
President
|
CONSTELLATION
BRANDS, INC.
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Senior
Vice President and Treasurer
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Vice
President and
Associate
General Counsel
|
BARTON
SMO HOLDINGS LLC
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
ALCOFI
INC.
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
SPIRITS
MARQUE ONE LLC
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
Barbara J. LaVerdi
|
|
Name:
|
Barbara
J. LaVerdi
|
Title:
|
Assistant
Secretary
|
BNY
MIDWEST TRUST COMPANY
|
|
By:
|
/s/
D.G. Donovan
|
Name:
|
D.G.
Donovan
|
Title:
|
Vice
President
|
Attest:
|
|
/s/
M. Callahan
|
|
Name:
|
M.
Callahan
|
Title:
|
Vice
President
|
BARTON
SMO HOLDINGS LLC
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
ALCOFI
INC.
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
SPIRITS
MARQUE ONE LLC
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
Vice
President
|
Accepted
and agreed:
|
|
/s/
JP Morgan Chase Bank, N.A., as
Administrative
Agent
|
|
By: | /s/ Randolph Cates |
Name:
|
Randolph
Cates
|
Title:
|
Executive
Director
|
U.S.
ISSUERS
|
|||
Issuer
|
Certificate
No.
|
Registered
Owner
|
Number
of Shares
|
ALCOFI
INC.
|
2
|
Barton
SMO Holdings LLC
|
20
Common Shares,
no
par value
|
U.S.
ISSUERS
|
|||
Issuer
|
Certificate
No.
|
Registered
Owner
|
Ownership
Interests
|
Barton
SMO Holdings LLC
|
A-1
|
Barton
Incorporated
|
249,717
Class A
Common
Shares, no
par
value
|
SPIRITS
MARQUE ONE LLC
|
4
|
ALCOFI
INC.
|
100%,
no par value
|
Paragraph | Page |
Purpose
:
|
This
document is intended to describe parameters for making incentive
awards
for the period commencing March 1, 2007 and ending February 29,
2008
during the Company’s 2008 fiscal year (the “Program”). The Company has
adopted the Annual Management Incentive Plan (the “Plan”) which authorizes
the Company to grant incentive compensation to certain employees.
All
awards granted under the Program will be granted pursuant and
subject to
the terms of the Plan. Notwithstanding anything to the contrary,
awards to
participants in the Program are subject to the Company’s shareholders
reapproving the terms of the Plan, including Amendment Number
3 to the
Plan. If the Company’s shareholders do not reapprove the Plan (including
Amendment Number 3) prior to February 29, 2008, no awards to
participants
will be made under the
Program.
|
1.
|
PROGRAM
OBJECTIVES
The
objectives of the Program are to:
|
|
A.
|
Support
the Company’s annual planning, budget and strategic planning
process;
|
|
B.
|
Provide
compensation opportunities which are competitive with those of
other
beverage alcohol or industry related companies in order to attract
and
retain key executives;
|
|
C.
|
Motivate
executives to achieve profit and other key goals of the
Company;
|
|
D.
|
Control
overhead by designating a portion of annual compensation as a variable
rather than fixed expense.
|
|
2.
|
PROGRAM
ADMINISTRATION
|
|
A.
|
The
Human Resources Committee (the “Committee”) of the Company’s Board of
Directors is responsible for determining which employees shall
receive
awards and the amounts, terms and conditions of all awards under
the
Program. The Committee will delegate certain administrative duties
to the
Executive Vice President, Chief Human Resources Officer.
|
|
B.
|
Decisions
and determinations by the Committee will be final and binding upon
all
persons, including, but not limited to, participants and their
personal
representatives, heirs and assigns.
|
C.
|
This
Program creates no vested or contractual right to the compensation
provided herein. The Committee shall have the authority to interpret,
amend or cancel the Program at any time, or to make any other
determinations that it believes necessary or advisable for the
administration of the Program. The Committee’s authority includes the
power, in its sole discretion, to reduce the amount of or eliminate
an
Award payable to a participant.
|
3.
|
PROGRAM
PARTICIPATION
|
||
A.
|
The
Committee is responsible for determining who may participate in
the
Program. The Company will provide a written recommendation to the
Committee of the employees who he believes should be included in
the
Program for a Plan Year. Generally, Awards will be made to employees
who
the Committee believes are in a position to make significant contributions
to the financial success of the Company.
|
||
B.
|
The
participants for the Plan Year are identified in Schedule A. These
schedules may be revised at any time during the year, as
appropriate.
|
||
C.
|
To
the extent permitted by Section 162(m) of the Internal Revenue
Code,
participants may be added to the Program at any time during a Plan
Year
provided that such addition occurs before December of the Plan
Year. In
this case, a participant’s Salary for purposes of determining an Award
shall be prorated for the period remaining in the Plan Year. For
purposes
of proration, a participant shall be given credit for the entire
month of
any month in which the participant participates in the
Program.
|
||
4.
|
TERMINATION
OF EMPLOYMENT
|
||
A.
|
In
the event that a participant terminates employment for reasons
other than
death, Disability, Retirement or involuntary termination without
Cause
during a Plan Year, the participant will forfeit all rights to
an Award
with respect to that Plan Year.
|
||
B.
|
In
the event that a participant terminates employment for reasons
of death,
Disability, Retirement, or involuntary termination without Cause,
a
ratable portion of any applicable Award may be paid, subject to
the
attainment of the applicable performance target. The ratable portion
of
the Award shall be determined by multiplying the Award by a fraction
the
numerator of which is the number of full or partial months during
the Plan
Year during which the participant was employed and the denominator
of
which is twelve. Such amount will be paid at the same time as when
Awards
are paid to other participants.
|
||
5.
|
AWARD
LEVELS
|
||
A.
|
The
amount of a participant’s Award will be calculated based on three
variables: the participant’s management position, Salary and achieved
performance for the Plan Year.
|
||
B.
|
Each
participant will be assigned to a certain category (“Participation
Category”) based on the participant’s management position in the Company
(see Schedule A).
|
C.
|
The
Committee has established performance targets for each participant
that
are based on one or more of the following: a Corporate financial
performance target(s) (“Corporate Target”), and a Division/Company
financial performance target(s) (“Divisional Target”). Schedule C sets
forth the applicable Corporate and Divisional Targets. Participants
who
are treated as “Covered Employees” under Section 12 will have their
incentive compensation calculated based solely on Corporate and
Divisional
Targets.
|
||
D. |
A
participant who has a Corporate Target(s) and/or a Divisional
Target(s)
will be assigned a weighting to determine the percentage that
each of the
targets will contribute towards the participant’s total Award. These
weightings are set forth at Schedule D (e.g.,
|
the
Award for a Division CEO/President will be calculated [*****] based
on the
Corporate Target and [*****] based on the participant’s Divisional
Targets). The weightings assigned to the Corporate and Divisional
Targets
will be referred to as the “Corporate Percentage(s)” and “Divisional
Percentage(s)”, respectively.
|
|||
E.
|
A
participant’s Award will be calculated by multiplying the participant’s
Salary by the appropriate percentage set forth in the Award Schedule
(Schedule B) taking into account the participant’s Participation Category
and performance level (e.g., threshold, target, maximum, etc.)
with
respect to the participant’s Corporate Target(s) and multiplying such
amount by the participant’s Corporate Percentage(s). If the actual
performance level falls between the designated levels of performance
set
forth in Schedule B, the percentage by which the participant’s salary is
multiplied will be interpolated. For example, if the actual performance
level falls half way between the “threshold” and “midpoint” levels, the
percentage will be calculated as the average of the percentages
for the
“threshold” and “midpoint” levels. A similar calculation is performed for
the participant’s Divisional Targets, if any, and the participant’s total
Award will be the sum of these calculations.
|
||
Example:
Assume
a Divison CEO of Constellation Brands was listed in Participation
Category
A
1,
had a salary of [*****], and achieved the participant’s “threshold”
Corporate Target and “maximum” Divisional Targets. Based on these facts
and Schedules B, C and D, the participant’s Award would be [*****] (i.e.,
[*****] x [*****] x [*****] + [*****] x [*****] x [*****] + [*****]
x
[*****] x [*****]).
|
|||
6.
|
PERFORMANCE
TARGETS
|
||
A.
|
Performance
measurement criteria will be established for the Plan Year and
such
criteria will relate to corporate and/or divisional objectives.
Performance targets will be established based on the selected criteria.
Schedule C sets forth the applicable corporate and divisional performance
criteria and targets for the Plan Year.
|
||
B.
|
Schedule
B sets forth the Award levels based on the attainment of the Corporate,
Divisional, Individual and Team Targets determined in accordance
with the
criteria and targets set forth in Schedule C.
|
||
7.
|
EFFECT
OF EXTRAORDINARY ITEMS, MERGER, ACQUISITION, REORGANIZATION,
ETC.
|
||
A.
|
The
Committee shall adjust the performance measurement criteria to
take into
account the effects of any “Extraordinary Items.” “Extraordinary Items”
means (1) items presented as such (or other comparable terms) on
the
Company’s audited financial statements, (2) extraordinary, unusual or
nonrecurring items of gain or loss (including, without limitation,
an
unbudgeted material expense incurred by or at the direction of
the Board
of Directors or a Committee of the Board or a material litigation
judgment
or
|
settlement),
(3) changes in tax or accounting laws or rules, and (4) the effects
of
mergers, acquisitions, divestitures, spin-offs or significant transactions
(including, without limitation, a corporate merger, consolidation,
acquisition of property or stock, reorganization, restructuring
charge, or
joint venture), each of which are identified in the audited financial
statements and notes
thereto or in the “management’s
discussion and analysis” of the financial statements in a period report
filed with the SEC under the Exchange Act. The Committee shall
make such
adjustments to the performance measurement criteria as shall be
equitable
and appropriate in order to make the criteria, as nearly as practicable,
equivalent to the criteria immediately prior to such transaction
or
event.
|
|||
B.
|
In
the event of a Change of Control, as defined under the Plan, the
Plan Year
shall end on the date of the Change in Control and the Corporate
and
Divisional Targets shall be adjusted to reflect the early termination
of
the Plan Year. If the Corporate and Divisional Targets, as adjusted,
are
deemed satisfied by the Committee, a participant may receive a
ratable
portion of the Award that would have been paid if the Plan Year
had not
been terminated early and the Corporate and Divisional Targets
had been
satisfied. The ratable portion of the Award shall be determined
by
multiplying the original Award by a fraction with a numerator equal
to the
number of months from the first day of the Plan Year to the date
of the
Change of Control (including any fractional month) and a denominator
equal
to twelve.
|
||
8.
|
PAYMENT
OF AWARDS
|
||
The
entire Award calculated in accordance herewith shall be payable
within
thirty (30) days after the Committee approves the final year end
performance in accordance with the plan document. Before any Award
is paid
to a participant, the Committee will certify, in writing, that
the
applicable performance targets were achieved and the amount of
the Award
is accurately calculated.
|
9.
|
ASSIGNMENT
|
||
No
right or interest of any Participant in the Program shall be assignable
or
transferable, or subject to any lien, directly, by operation of
law, or
otherwise, including levy, garnishment, attachment, pledge or
bankruptcy.
|
|||
10.
|
EMPLOYMENT
RIGHT
|
||
The
Program shall not confer upon any participant any right to continued
employment. The right to dismiss any employee with or without cause
or
notice is specifically reserved to the Company.
|
|||
11.
|
WITHHOLDING
FOR TAXES
|
||
The
Company shall have the right to deduct from all payments under
this
Program any federal or state taxes or other employment related
withholdings required by law to be withheld with respect to such
payments.
|
12.
|
SPECIAL
RULES FOR CERTAIN EXECUTIVES
|
||
A.
|
The
Company’s Chief Executive Officer and certain other individuals designated
by the Committee (“Covered Employees”) will be subject to special rules to
ensure that the Awards granted to such individuals will be treated
as
qualified “performance-based compensation” under Internal Revenue Code
Section 162(m). All provisions of the Program and the Plan shall
be
interpreted and administered consistently with that intent. The
Committee
will designate those individuals who are to be treated as “Covered
Employees” on Schedule A.
|
B.
|
Notwithstanding
any provision to the contrary, the following rules will apply to
Covered
Employees:
|
||
(1)
|
The
Committee shall establish Corporate and Divisional Targets for
Covered
Employees that are tied to one or more of the Performance Criteria
set
forth in the Plan.
|
||
(2)
|
The
Committee shall establish a Corporate Target(s) and, if applicable,
a
Divisional Target(s) for Covered Employees within 90 days of the
commencement of the Plan Year. The satisfaction of such targets
shall be
substantially uncertain at the time they are established.
|
||
(3)
|
The
amount of the Award shall be computed under an objective formula
and the
Committee shall have no discretionary authority to increase the
amount of
the Award or alter the methodology for calculating the Award, except
as
permitted by Section 162(m) of the Internal Revenue Code and the
regulations promulgated thereunder.
|
||
(4)
|
The
maximum amount a Covered Employee can receive under the Plan for
the Plan
Year cannot exceed $5 million.
|
||
(5)
|
Before
any Award is paid to a Covered Employee, the Committee will certify,
in
writing, that the Corporate Target(s) and, if applicable, the Divisional
Target(s) was achieved and the amount of the Award is accurately
calculated.
|
D. |
DISABILITY
|
||
“Disability”
is defined as termination of employment due to the inability of
a
Participant to engage in any substantial gain activity by reason
of any
medically determinable physical or mental impairment which can
be expected
to result in death or which has lasted or can be expected to last
for a
continuous period of not less than six months, all as verified
by a
physician acceptable, or selected by, the Committee.
|
E.
|
PLAN
and PLAN YEAR
|
||
“Plan”
shall mean the Constellation Brands, Inc. Annual Management Incentive
Plan.
“Plan
Year” shall be the period commencing on March 1, 2007 and ending on
February 29, 2008.
|
|||
F.
|
RETIREMENT
|
||
“Retirement”
shall mean a termination of employment by an employee who is at
least 60
years of age and after at least 10 years of service with the Company.
For
an individual who becomes employed by the Company in connection
with a
business acquisition (regardless of the form of the transaction),
service
shall include the individual’s service with the acquired business, unless
the Committee determines otherwise.
|
|||
G.
|
SALARY
|
||
“Salary”
shall mean the participant’s actual base compensation earned for the 2008
Fiscal Year. Actual base compensation earned shall be determined
exclusive
of any other compensation such as stock option income, grants of
any kind,
bonus awards, etc.
|
Participation
Category
|
Title
|
Participant
|
[*****]
|
Chairman,
CEO
|
R.
Sands *
|
President,
COO
|
R.S.
Sands *
|
|
[*****]
|
EVP
Chief Financial Officer
|
T.
Summer +
|
EVP
Chief Financial Officer**
|
R.
Ryder *
|
|
EVP
Chief Legal Officer
|
T.
Mullin *
|
|
EVP
Strategy & Business Development
|
P.
Hetterich *
|
|
EVP
Chief Human Resources Officer
|
K.
Wilson *
|
|
CEO
Barton
|
A.
Berk *
|
Participation
Category
|
Threshold
|
Midpoint
|
Target
|
Midpoint
|
Maximum
|
A
2
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
A
1
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
0.25X
|
0.50X
|
1.00X
|
1.50X
|
2.00X
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
0.25X
|
0.50X
|
1.00X
|
1.50X
|
2.00X
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
0.25X
|
0.50X
|
1.00X
|
1.50X
|
2.00X
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
0.25X
|
0.50X
|
1.00X
|
1.50X
|
2.00X
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
· |
The
measure of “EBIT” (Earnings Before Interest and Taxes) for purposes hereof
shall be determined as the sum of Operating Income plus Equity in
Earnings
of Equity Method Investees. “EBIT” is measured based on the Company’s
performance for the period from March 1, 2007 through February 29,
2008.
|
· |
The
measure of “Free Cash Flow” for purposes hereof shall be
calculated
as follows:
|
Corporate/CBI
|
Corporate
EBIT
|
Corporate
Free Cash Flow
|
Chairman/CEO
|
[*****]
|
[*****]
|
President/COO
|
[*****]
|
[*****]
|
EVP
|
[*****]
|
[*****]
|
Division/Company
|
Corporate
EBIT
|
Divisional
EBIT/Other
|
Divisional
Free Cash Flow
|
CEO/President
|
[*****]
|
[*****]
|
[*****]
|
To:
|
Constellation
Brands, Inc.
370
Woodcliff Drive, Suite 300
Fairport,
NY 14450
|
|
|
From:
|
Citibank,
N.A.
388
Greenwich Street, 5
th
Floor
New
York, NY 10013
Attn:
Corporate
Equity Derivatives
Telephone:
(212) 723-7361/(212) 723-7026
Facsimile:
(212) 723-8328
|
Re:
|
Issuer
Forward Repurchase
Transaction
|
General
Terms:
|
||
Trade
Date:
|
May
7, 2007
|
|
Seller:
|
Bank
|
|
Buyer:
|
Counterparty
|
Yours
sincerely,
|
|
CITIBANK,
N.A.
|
|
By:
|
/s/ William Ortner |
Name:
|
William Ortner |
Title:
|
Authorized Representative |
Confirmed
as of the date first above written:
|
|
CONSTELLATION
BRANDS, INC.
|
|
By:
|
/s/
Thomas D. Roberts
|
Name:
|
Thomas
D. Roberts
|
Title:
|
SVP
+ Treasurer
|
Constellation
Brands, Inc.
370
Woodcliff Drive, Suite 300
Fairport,
New York 14450
phone
585-218-3600
fax
585-218-3601
|
||
[LOGO]
|
||
Constellation
|
||
· |
Starting
biweekly base compensation of $19,615.38 ($510,000 per annum "Base
Compensation") subject to all deductions and withholdings required
by
law.
|
· |
The
annual
bonus for your position has a target of 70% and a maximum of 140%
of Base
Compensation. The amount and specific terms of the bonus shall be
determined, in CB's sole discretion, by the CB officers, including
your
direct supervisor, and the Human Resources Committee of CB's Board
of
Directors. Currently the bonus is determined on a basis whereby 100%
is
dependent on Company financial performance (EBIT and free cash flow).
Your
FY08 bonus will be based on full-year participation and will not
be
prorated.
|
· |
With
the
approval of the Human Resource Committee at its next meeting which
is
currently scheduled for in June 2007, you will receive an option
to
purchase 100,000 shares of CB Class A common stock at the market
price on
the date of the grant of such option. You will participate in the
company’s long-term incentive program and be eligible to receive stock
option grants under the plan as recommended by management and approved
by
the Human Resources Committee.
|
· |
Your
relocation expenses will be paid in accordance with our Relocation
Policy
which shall be provided to you. Basically, all reasonable and customary
closing and relocation expenses will be covered with the exception
of home
purchase.
|
· |
You
are
eligible for four (4) weeks paid time off (PTO) during each calendar
year
until such time as you become eligible for more paid time off under
our
paid time off policy, as such policy is amended from time to time.
|
· |
You
will be
eligible for your first performance and compensation review to be
conducted and effective as of March 1,
2008.
|
· |
You
will be
eligible to participate in all existing employee benefit plans as
you
become eligible under the terms of such plans as amended, added to
or
discontinued from time to time, such as the health care, disability
insurance, life insurance, 401(k) and profit sharing, and employee
stock
purchase plans. More information will be provided regarding a summary
of
employee benefits.
|
· |
In
the event
that the Company terminates your employment without cause, the Company
shall provide you with severance compensation (“Severance”) equal to one
year of your then current base compensation (excluding bonus), subject
to
your entering into the Company’s standard form of Severance
Agreement.
|
· |
This
offer is
subject to the terms of the CB Employment
Application.
|
· |
The
start
date for this position is to be
determined.
|
Constellation
Brands, Inc.
370
Woodcliff Drive, Suite 300
Fairport,
New York 14450
phone
585-218-3600
fax
585-218-3601
|
||
[LOGO]
|
||
Constellation
|
||
a) |
The
number of
CB Class A stock options referenced in the third bullet point has
been
increased from 100,000 stock options to 150,000 stock options. This
new
amount remains subject to Human Resource Committee approval in our
scheduled June 2007 meeting.
|
b) |
The
amount of
severance compensation found in the eighth (8
th
)
bullet
point (p. 2) has been increased to include a then target bonus i.e.,
target bonus percentage x base pay, in addition to the then base
compensation.
|
1.
|
By
replacing the second paragraph of Section 1.2 of the SERP with
the
following, effective as of January 1,
2007:
|
2.
|
By
replacing the terms "Related Business" and "Related Businesses"
each time
either term is used in Sections 2.1, 2.6(c)(1), 3.1 with the term
"Affiliate" or "Affiliates," as appropriate, effective as of January
1,
2007.
|
3.
|
By
replacing Section 2.5(b) of the SERP with the following, effective
as of
April 8, 2005:
|
4.
|
By
replacing Section 2.6(a) of the SERP with the following, effective
as of
January 1, 2007:
|
5.
|
By
deleting the second paragraph of Section 2.6(a) of the SERP in
its
entirety, effective as of January 1,
2007.
|
6.
|
By
replacing Section 2.6(b) of the SERP with the following, effective
as of
January 1, 2007:
|
7.
|
By
replacing the first paragraph of Section 2.6(c) with the following,
effective as of January 1, 2007:
|
8.
|
By
adding the following paragraph at the end of Section 2.6(c)(2),
effective
as of January 1, 2007:
|
9.
|
By
replacing the first two sentences of Section 2.7 with the following,
effective as of January 1, 2007:
|
10. |
By
adding the following new Section 3.8, effective as of January 1,
2007:
|
11. |
By
restating Section 4.1 of the SERP in its entirety, effective as
of the
date of this amendment:
|
CONSTELLATION
BRANDS, INC.
|
|
By:
|
/s/ L. Denise Watson
|
Its:
|
L. Denise Watson
Senior Vice President,
Global Compensation and
Benefits
|
Dated:
July 10, 2007
|
/s/ Richard Sands |
Richard
Sands,
Chairman
of the Board and
Chief
Executive Officer
|
Dated:
July 10, 2007
|
/s/ Robert Ryder |
Robert
Ryder,
Executive
Vice President and
Chief
Financial Officer
|