Unassociated Document




 

 

Exhibit
10.50

 

 

Description
of Compensation Arrangements for Certain Executive Officers




Following
is a description of the compensation arrangements for each of the Named
Executive Officers (as defined in Item 402(a)(3) of Regulation S-K) of
Constellation Brands, Inc. The Company’s Named Executive Officers are (1)
Richard Sands, (2) Robert Sands, (3) Stephen B. Millar, (4) Alexander L. Berk,
and (5) Thomas S. Summer. Specific compensation information for each of these
individuals for the fiscal year ended February 28, 2005 (“FY 2005”) will be
disclosed in the Company’s proxy statement for its 2005 annual meeting and other
specific compensation information is disclosed from time to time as required by
Form 8-K.




Generally,
the compensation for these executive officers consists of base salary, annual
cash bonus compensation, long-term incentive compensation, the right to
participate in various benefit plans sponsored by the Company or a subsidiary of
the Company, and perquisites. Each of the Named Executive Officers, other than
Messrs. Millar and Berk, is an “at-will” employee of the Company and serves at
the pleasure of the Board of Directors. Messrs. Millar and Berk are employed
pursuant to employment contracts, each of which is incorporated by reference as
an exhibit to this Form 10-K. Mr. Millar’s employment contract is filed through
incorporation by reference as Exhibits 10.46 through 10.48 to this Form 10-K for
FY 2005 (the “Form 10-K”) and Mr. Berk’s employment contract is filed through
incorporation by reference as Exhibits 10.2 and 10.3 to the Form 10-K. Mr.
Summer’s original offer letter also is filed through incorporation by reference
as Exhibit 10.43 to the Form 10-K.




In the
course of the employment relationship with each of the Company’s executive
officers, including each Named Executive Officer, the Company communicates to
the executive officers the amount of base salary, target bonus opportunity, and
long-term incentive compensation approved by the Human Resources Committee of
the Board of Directors, which compensation is subject to change in the
discretion of the Human Resources Committee. The following are the base salaries
(on an annual basis) of the Company’s Named Executive Officers for FY 2005 and
the fiscal year ended February 28, 2006 (“FY 2006”):

 

 




	
      Name
      and Title
	
      FY
      2005 Base Salary
	
      FY
      2006 Base Salary

	 	 	 
	
      Richard
      Sands

      Chairman
      of the Board and Chief Executive Officer
	
      $950,000
	
      $1,000,000

	 	 	 
	
      Robert
      Sands

      President
      and Chief Operating Officer
	
      $750,000
	
      $820,000

	 	 	 
	
      Stephen
      B. Millar

      Chief
      Executive Officer, Constellation Wines
	
        $698,360*
	
       
      $726,294*

	 	 	 
	
      Alexander
      L. Berk

      Chief
      Executive Officer, Constellation Beers and Spirits
	
      $562,277
	
      $584,768

	 	 	 
	
      Thomas
      S. Summer

      Executive
      Vice President and Chief Financial Officer
	
      $424,360
	
      $441,334









* Mr.
Millar is paid in Australian dollars. The amount appearing in this table has
been converted into United States dollars at a conversion rate of Australia A$1
= US$ 0.79.




The
annual cash bonus compensation for each of the Named Executive Officers is
determined by the Human Resources Committee pursuant to the Company’s Annual
Management Incentive Plan. Pursuant to that Plan, the Committee would award cash
bonuses to participants in the event the Company attains one or more pre-set
performance targets. The Annual Management Incentive Plan is filed through
incorporation by reference as Exhibits 10.19 through 10.21 to the Form
10-K.




Long-term
incentive awards in the form of options are another element of compensation that
the Human Resources Committee makes available to employees, including Named
Executive Officers. Long-term incentive awards in the form of, among others,
stock options, stock appreciation rights and restricted stock are available for
grant under the Company’s Long-Term Stock Incentive Plan and the Company’s
Incentive Stock Option Plan. These plans and the form of Terms and Conditions
Memorandum provided to recipients of options under each of these plans are filed
through incorporation by reference as Exhibits 10.4 through 10.11 and 10.14
through 10.18 to the Form 10-K.




Named
Executive Officers (other than Richard Sands and Robert Sands) also are eligible
to participate in the Company’s 1989 Employee Stock Purchase Plan, an Internal
Revenue Code Section 423 plan which allows employees to purchase shares of
Company Class A Common Stock at a discount through salary deductions. This plan
is filed through incorporation by reference as Exhibit 99.1 to the Form
10-K.




Named
Executive Officers who are resident in the United States are eligible to
participate in the Company’s 401(k) and Profit Sharing Plan, an Internal Revenue
Code Section 401(k) plan, under which the Company can make to each participant a
matching contribution and a profit sharing contribution. That plan is generally
available to salaried employees. 




In
addition, those Named Executive Officers who are resident in the United States
also are eligible to participate in the Company’s Supplemental Executive
Retirement Plan and the Company’s 2005 Supplemental Executive Retirement Plan.
Mr. Millar, who is a resident of Australia, is eligible to participate in the
Hardy Wine Company Superannuation Plan. These three plans are filed through
incorporation by reference as Exhibits 10.23 through 10.27 and 10.49 to the Form
10-K. 




Named
Executive Officers also receive customary employee benefits such as the ability
to participate in the Company’s health insurance program, long-term and
short-term disability insurance programs, Paid Time Off (vacation/sick leave),
and life insurance programs.




Messrs.
Millar and Berk have use of a Company automobile; Mr. Millar receives air
transportation services and telephone services and Mr. Berk has the use of a
club membership. The Named Executive Officers are permitted to make personal use
of the corporate aircraft. They also receive complimentary wine and spirits
products, are eligible to participate in a matching contribution program of the
Company whereby they can direct a portion of the Company’s charitable
contributions not in excess of $5,000, and also receive miscellaneous nominal
benefits.