Unassociated Document





Exhibit
10.12

 

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CONSTELLATION


 

MEMORANDUM




TERMS AND
CONDITIONS OF STOCK OPTIONS

__________________




The
CONSTELLATION BRANDS, INC. Long-Term Stock Incentive Plan, as amended from time
to time (the “Plan”), enables Constellation Brands, Inc. (the “Company”) to
grant stock options to purchase Class A Common Stock, par value $.01 per share,
of the Company (a “Share” or the “Shares”) to employees and non-employee
directors of the Company or any of its subsidiaries (each, when granted a stock
option, an “Optionee”). The stock options represented by this Memorandum and the
accompanying award letter (respectively, the “Options” and the Memorandum and
accompanying award letter, together, the “Documents”) are subject to all of the
terms and conditions contained in the Documents. By accepting delivery of the
Documents, the Optionee agrees to be bound by the terms and conditions of the
Documents.





	
      1.
	
      Term
      of Options.
      The Options, granted on _________________ (the “Date of Grant”), will
      terminate and expire, to the extent not previously exercised, at 5:00 p.m.
      Eastern Time on _____________, or such earlier date upon which the
      Options, or portion thereof, terminate or expire pursuant to the terms of
      the Plan (the “Expiration Date”).








	
      2.
	
      Exercise
      of Options.








	 	
      (a)
	
      The
      Options may be exercised in whole or in part at any time on or
      after ________________ (the “Vesting Date”), unless they become
      exercisable on an earlier date as indicated in Subsections 2(a)(i), (ii)
      and (iii) below, but no Options may be exercisable after the Expiration
      Date.








	 	
      (i)
	
      If,
      prior to the Vesting Date, the Fair Market Value of a Share equals or
      exceeds $_____ for fifteen (15) consecutive days on which the Shares are
      traded on the New York Stock Exchange or a national securities exchange
      (each, a “Trading Day”), then 25% of the number of shares subject to the
      Options (the “Option Shares”) shall become exercisable. The date on which
      such acceleration occurs is hereafter referred to as the “First
      Acceleration Date”.








	 	
      (ii)
	
      If,
      after the First Acceleration Date and prior to the Vesting Date, the Fair
      Market Value of a Share equals or exceeds $_____ for fifteen (15)
      consecutive Trading Days, then an additional 25% of the Option Shares
      shall become exercisable (so that a total of 50% of the Option Shares will
      be exercisable). The date on which such acceleration occurs is hereafter
      referred to as the “Second Acceleration
Date”.




 


	 	
      (iii)
	
      If,
      after the Second Acceleration Date and prior to the Vesting Date, the Fair
      Market Value of a Share equals or exceeds $_____ for
      fifteen (15) consecutive Trading Days, then the remaining 50% of the
      Option Shares shall become exercisable (so that 100% of the Option Shares
      will be exercisable).




 


	 	
      (b)
	
      The
      Optionee can exercise Options by complying with the provisions of the Plan
      and by following instructions provided in materials distributed by the
      Company. The exercise price, $_____ per share (the “Exercise Price”), for
      the number of Option Shares being purchased and any related withholding
      tax obligations may be paid by the Optionee by (i) delivery of cash, money
      order or a certified or cashier's check; (ii) tendering previously
      acquired Shares, as provided for in the Plan; (iii) delivery of
      irrevocable instructions to a broker or other agent acceptable to the
      Company to promptly sell a sufficient portion of Shares received under the
      Option and to deliver to the Company the appropriate amount of proceeds;
      and/or (iv) any other payment method that is established by the Company
      (which payment method may be restricted or eliminated from time to time by
      the Company, in its sole discretion).








	 	
      (c)
	
      The
      Company will, without transfer or issue tax to the Optionee, issue and
      cause to be delivered to the Optionee a certificate or certificates for
      the number of Option Shares purchased as soon as reasonably practicable
      after the Optionee has appropriately exercised any Options. The Company is
      not required to issue Shares to the Optionee until all obligations to
      withhold taxes have been resolved to the satisfaction of the
      Company.








	
      3.
	
      Termination
      of Relationship.
      








	 	
      (a)
	
      Acceleration
      upon Termination of Relationship.
      Subject to Section 3(c)(iii) below, if an Optionee’s employment with the
      Company or the subsidiary by whom the employee is employed (the
      “Employer”) terminates for reasons of Retirement (as defined in the Plan),
      Disability (as defined in the Plan) or death, all the unvested Option
      Shares shall become immediately vested and exercisable on the date of
      Retirement, date of Disability or date of
death.








	 	
      (b)
	
      Duration
      of Exercise Following Termination of Relationship.
      Subject to Section 3(c) below, Options which have vested prior to the
      termination of the Optionee's employment with the Employer may be
      exercised as follows:








	 	
      (i)
	
      within
      thirty (30) days after the date on which the Optionee's employment with
      the Employer terminates (the “Termination Date”), except as otherwise
      provided in Subsections 3(b)(ii), (iii) and (iv) below;









	 	
      (ii)
	
      if
      the Optionee's employment with the Employer terminates as a result of the
      Optionee's Retirement, within one (1) year after the date of Retirement;
      




 


	 	
      (iii)
	
      if
      the Optionee's employment terminates as a result of a Disability, within
      one (1) year after the date of Disability; or









	 	
      (iv)
	
      if
      the Optionee's employment terminates as a result of death, within one (1)
      year after the date of death by the Optionee's designated beneficiary,
      legal representative or permitted
transferee.








	 	
      (c)
	
      Limitations
      on Exercise Following Termination of Relationship.
      








	 	
      (i)
	
      The
      time periods set forth in Section 3(b) above are subject to the
      restriction that Options may not be exercised after their Expiration Date.
      








	 	
      (ii)
	
      The
      time periods set forth in Section 3(b) are also subject to the restriction
      that no Option may be exercised by any person if the Optionee (i) is, or
      at any time after the date of grant has been, in competition with the
      Company or its affiliates, or (ii) has been terminated by the Employer for
      Cause, as defined in the Plan.








	 	
      (iii)
	
      Except
      as otherwise provided by the Committee administering the Plan or by an
      employment agreement between the Optionee and the Employer, (i) the only
      Options that may be exercised after the Termination Date, date of
      Retirement, date of Disability or date of death (as applicable, the “Event
      Date”) are those Options that were exercisable by the Optionee on the
      Event Date; and (ii) any Options which are not exercisable on the Event
      Date will automatically terminate on the Event Date.









	 	
      (iv)
	
      Any
      Options which are exercisable on the Event Date, but which are not
      exercised within the applicable period specified in Section 3(b) above,
      will automatically terminate at the end of that applicable
      period.








	
      4.
	
      Adjustments
      for Certain Events.
      The number and kind of unexercised Options and the Exercise Price of such
      Options are subject to adjustment in the event that certain transactions
      are taken by the Company which affect the Company's
  Shares.








	
      5.
	
      Type
      of Options.
      The Options are nonqualified stock options granted pursuant to Section 5
      of the Plan.








	
      6.
	
      No
      Transfer of Options.
      Unless transferability is authorized by the Option grant or otherwise
      permitted by the Committee, Options are not transferable by the Optionee
      other than (i) by will or the laws of descent and distribution, or (ii)
      pursuant to a domestic relations order. Because of laws affecting the
      transferability of the Option Shares, the Optionee should understand the
      securities laws and other implications of any transfer of Options.
      








	
      7.
	
      General
      Restriction on Issuance of Stock Certificates.
      The Company may require information or documents which enable it to insure
      compliance with any law or Rules (as defined
      in the Plan) of the Securities and Exchange Commission or any other
      governmental authority having jurisdiction under the Plan before it
      delivers any certificate upon the exercise of any Options. If at any time
      the Committee administering the Plan shall determine that the listing,
      registration or qualification of the Option Shares under any state or
      federal law or other applicable Rule, or the consent or approval of any
      governmental regulatory body, is necessary or desirable as a condition of
      the granting of the Options or the issue or purchase of Shares thereunder,
      such Options may not be exercised in whole or in part unless such listing,
      registration, qualification, consent or approval shall have been effected
      or obtained free of any conditions not acceptable to the
      Committee.




 


	
      8.
	
      Limitation
      on Sale or Disposition of Option Shares. If
      the Committee determines that the ability of the Optionee to sell or
      transfer Option Shares is restricted, then the Company may place a
      restrictive legend on certificates representing such Option Shares. If a
      legend is placed on an Optionee's certificate, the Optionee may only sell
      the Option Shares represented by such certificate in compliance with such
      legend.








	
      9.
	
      Incorporation
      of Plan.
      The Options are subject to the terms and conditions of the Plan, which are
      incorporated herein by reference. The Company, upon request, will provide
      a copy of the Plan to the Optionee. To the extent that the terms and
      conditions of the Documents are inconsistent with the Plan, the provisions
      of the Plan shall control. 








	
      10.
	
      Applicable
      Times and Dates.
      All references to times and dates in the Plan and in documents relating to
      the Plan refer, respectively, to Eastern Standard Time (or Eastern
      Daylight Savings Time, as appropriate) in the United States of America and
      to dates in New York State based on such Eastern Standard Time (or Eastern
      Daylight Savings Time, as appropriate).