EX-10.2






Exhibit 10.2




Confidential materials omitted and filed

separately with the Securities and Exchange

Commission. Asterisks denote such omission.









CONSTELLATION BRANDS, INC.



ANNUAL MANAGEMENT INCENTIVE PLAN




2009 FISCAL YEAR AWARD PROGRAM




FOR EXECUTIVE OFFICERS




 









 








CONSTELLATION BRANDS, INC.



ANNUAL MANAGEMENT INCENTIVE PLAN

2009 FISCAL YEAR AWARD PROGRAM

FOR EXECUTIVE OFFICERS




TABLE OF CONTENTS




	 	 	 	 	 
	Paragraph	 	Page
	 
	1. PROGRAM OBJECTIVES
	 	 	1	 
	 
	 	 	 	 
	2. PROGRAM ADMINISTRATION
	 	 	1	 
	 
	 	 	 	 
	3. PROGRAM PARTICIPATION
	 	 	2	 
	 
	 	 	 	 
	4. TERMINATION OF EMPLOYMENT
	 	 	2	 
	 
	 	 	 	 
	5. AWARD LEVELS
	 	 	2	 
	 
	 	 	 	 
	6. PERFORMANCE TARGETS
	 	 	3	 
	 
	 	 	 	 
	7. EFFECT OF EXTRAORDINARY ITEMS, MERGER, ACQUISITION, REORGANIZATION, ETC.
	 	 	3	 
	 
	 	 	 	 
	8. PAYMENT OF AWARDS
	 	 	4	 
	 
	 	 	 	 
	9. ASSIGNMENT
	 	 	4	 
	 
	 	 	 	 
	10. EMPLOYMENT RIGHT
	 	 	4	 
	 
	 	 	 	 
	11. WITHHOLDING FOR TAXES
	 	 	4	 
	 
	 	 	 	 
	12. SPECIAL RULES FOR CERTAIN EXECUTIVES
	 	 	4	 
	 
	 	 	 	 
	13. DEFINITIONS
	 	 	5	 






ii 









 





CONSTELLATION BRANDS, INC.

EXECUTIVE ANNUAL MANAGEMENT INCENTIVE PLAN

2009 FISCAL YEAR AWARD PROGRAM

FOR EXECUTIVE OFFICERS




	 	 	 
	Purpose:

	 	This document is intended to describe parameters for making incentive awards for
the period commencing March 1, 2008 and ending February 28, 2009 during the Company’s 2009
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.






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 Senior 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.





 









 





- 2 -




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 it
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 unless
otherwise stated in a ‘current’ employment contract.






	 	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 shall be paid, subject to the attainment of the applicable performance target at the
end of the plan year. 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 performance target(s) (“Corporate Target”),
and a Division/Company performance target(s) (“Divisional Target”). Schedule C sets forth
the applicable 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 in Schedule D (e.g.,





 









 










- 3 -





	 	 	 	the Award for a Division CEO will be calculated 40% based on the Corporate Target and 60%
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
A1,
had a salary of $450,000, 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
$409,500 (i.e., $450,000 x 40% x 17.5%+ $450,000 x 40% x 140% + $450,000 x 20% x 140%).






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,





 









 










- 4 -





	 	 	 	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.



 









 





- 5 -




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.





13. DEFINITIONS





A. AWARD




“Award” shall mean the award to a Participant as determined under the Program.




B. CAUSE




“Cause” means gross negligence or willful misconduct or commission of a felony or an act of
moral turpitude determined by the Committee to be detrimental to the best interests of the
Company or, such other definition set forth in a written employment agreement with the Company.




C. THE COMPANY




“The Company” shall mean Constellation Brands, Inc. and its direct and indirect subsidiaries.



 









 





- 6 -





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, 2008 and ending on February 28, 2009.




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 2009 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.



 









 





- 7 -




SCHEDULE
A

CONSTELLATION BRANDS, INC. ANNUAL MANAGEMENT INCENTIVE PLAN FOR EXECUTIVE OFFICERS




EXECUTIVE PARTICIPATION LIST




	 	 	 	 	 
	Participation Category	 	Title	 	Participant
	[****]

	 	Chairman of the Board, COB
	 	R. Sands *
	 

	 	President, CEO
	 	R.S. Sands *
	[****]
	 	 	 	 
	 

	 	EVP Chief Financial Officer
	 	R. Ryder*
	 

	 	EVP Chief Legal Officer
	 	T. Mullin *
	 

	 	EVP Strategy & Business Development
	 	P. Hetterich *
	 

	 	EVP Chief Administrative Officer
	 	K. Wilson *
	 

	 	President & CEO Constellation Beers & Spirits
	 	A. Berk*
	 

	 	CEO Constellation International
	 	J. Moramarco*
	 

	 	President & CEO Constellation Wines North America
	 	J. Fernandez*








 


			
	*	 	“Covered” employee


 




 


			
	Confidential materials omitted and filed separately with the Securities and Exchange Commission.
Asterisks denote such omission.


  




 








 






- 8 -




SCHEDULE B




AWARD SCHEDULE

FOR EXECUTIVE OFFICERS




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Participation	 	 	 	 	 	 	 	 	 	 
	Category	 	Threshold	 	Midpoint	 	Target	 	Midpoint	 	Maximum
	A2

	 	 	30	%	 	 	60	%	 	 	120	%	 	 	180	%	 	 	240	%
	A1

	 	 	17.5	%	 	 	35	%	 	 	70	%	 	 	105	%	 	 	140	%






 









 





- 9 -




SCHEDULE C




PERFORMANCE SCHEDULE

(000,000’s)




EBIT




	 	 	 	 	 	 	 	 	 
	AMIP Factor	 	[****]*	 	[****]*	 	[****]**	 	[****]**
	 
	2.00
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	1.75
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	1.50
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	1.25
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	1.00
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	0.50
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	0.25
	 	$[****]	 	$[****]	 	$[****]	 	$[****]







	 		
	*	 	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, 2008 through
February 28, 2009.
	 
	**	 	Given the intra-company transfers and transactions that occur in these entities, the Company
has determined that Divisional EBIT for the wine divisions, for purposes of this program, shall
be calculated as EBIT (Earnings Before Interest and Taxes) of the Operating Company for the
period from March 1, 2008 through February 28, 2009, plus EBIT earned by inter-company trading
companies for exported products and EBIT earned by brand owner companies for imported products.




 




Confidential materials omitted and filed separately with the Securities and Exchange Commission.
Asterisks denote such omission.








 









 




- 10 -



Free Cash Flow




	 	 	 	 	 	 	 	 	 	 
	AMIP Factor	 	 	[****]	 	[****]	 	[****]	 	[****]
	2.00

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	1.75

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	1.50

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	1.25

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	1.00

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	0.50

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	0.25

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]





The measure of “Free Cash Flow” for purposes hereof shall be calculated as follows: Net Cash
Provided by (Used in) Operating Activities minus Purchases of Property, Plant and Equipment.
“Free Cash Flow” is measured based on the Company’s performance for the period from March 1,
2008 through February 28, 2009. For divisional Free Cash Flow, results are calculated before
tax payments.






 

 

			
	Confidential materials omitted and filed separately with the Securities and Exchange Commission.
Asterisks denote such omission.



 









 










- 11 -




SCHEDULE D




WEIGHTINGS FOR CORPORATE AND DIVISIONAL/COMPANY TARGETS




	 	 	 	 	 	 	 	 	 
	 	 	Corporate	 	 	 	 
	Corporate/CBI	 	EBIT	 	Corporate Free Cash Flow
	Chairman/CEO

	 	 	80%	 	 	 	20%	 
	EVP

	 	 	80%	 	 	 	20%	 






	 	 	 	 	 	 	 	 	 
	 	 	Corporate	 	Divisional	 	Divisional Free
	Division/Company	 	EBIT	 	EBIT/Other	 	Cash Flow
	CEO
	 	40%	 	40%	 	 	20%