Document:

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.Unassociated Document

Exhibit
10.51

Description
of Compensation Arrangements for Non-Management Directors

Following
is a description of the current compensation arrangements for the non-management
directors of Constellation Brands, Inc.:

The
Company’s current compensation program for non-management directors for their
services as directors includes cash, restricted stock, and stock option
components.

The
cash component consists of (i) an annual retainer of $35,000, (ii) a Board
meeting fee of $1,500 for each Board meeting attended (which includes regular,
special and annual Board meetings and attendance in person or by conference
telephone); (iii) a committee meeting fee of $1,000 per meeting attended
(including by conference telephone); and (iv) an annual fee of $10,000 to the
Chair of the Audit Committee and a fee of $5,000 to the position of Chairs of
each of the Human Resources Committee and the Corporate Governance Committee.

Long-term
incentive awards in the form of options and restricted stock are another element
of non-management director compensation. 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.
Each
non-management director receives annually, if and as approved by the Board of
Directors, a stock option grant and a restricted stock award. The number of
shares that may be subject to an annual option grant will not exceed the number
obtained by dividing $70,000 by the closing price of a share of the Company’s
Class A Common Stock on the date of the grant. The number of shares of
restricted stock that may be awarded is calculated by dividing the sum of
$20,125 by the closing price of a share of the Company’s Class A Common Stock on
the date of grant. While the Board has the flexibility to determine at the time
of each grant or award the vesting provisions for that grant or award,
historically stock option grants vest six (6) months following the date of grant
and annual awards of restricted stock vest one (1) year from the date of grant.
The plan, the form of Terms and Conditions Memorandum provided to non-management
directors who receive options and the form of restricted stock agreement are
filed as Exhibits 10.4 through 10.10, 10.12 and 10.13 to the Form 10-K.

Non-management
directors are reimbursed for reasonable expenses incurred in connection with
their attendance at Board and committee meetings. They also receive
complimentary wine products and 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.

Members
of the Board of Directors who are members of management serve without receiving
any additional fee or other compensation for their service on the
Board.WAIVER  AND  AMENDMENT  #4 TO THIRD  RESTATED  AND  AMENDED  LOAN  AND  SECURITY
--------------------------------------------------------------------------------
AGREEMENT
---------

         THIS WAIVER AND AMENDMENT #4 TO THIRD RESTATED AND AMENDED LOAN AND
SECURITY AGREEMENT (this "Agreement") is made as of May 10, 2005 by and between
GMAC COMMERCIAL FINANCE LLC, as successor by merger to GMAC Commercial Credit
LLC, which was the successor in interest to BNY Financial Corporation ("GMAC
CF"), as Agent and Lender, and PNC BANK, NATIONAL ASSOCIATION ("PNC", and
together with GMAC CF, "Lenders"), as Lender and Co-Agent, JACO ELECTRONICS,
INC. ("Jaco"), NEXUS CUSTOM ELECTRONICS, INC. ("Nexus") and INTERFACE
ELECTRONICS, INC. ("Interface", and together with Jaco and Nexus, the
"Borrowers").

                              W I T N E S S E T H :
                              ---------------------

         WHEREAS, Borrowers, GMAC CF, PNC and Jaco de Mexico, Inc. entered into
that certain Third Restated Amended Loan and Security Agreement, dated December
22, 2003 (the "Third Restated Agreement"), as amended by (i) Amendment #1 to the
Third Restated Agreement, dated September 20, 2004, (ii) Amendment #2 to the
Third Restated Agreement, dated November 23, 2004, and (iii) Amendment #3 to the
Third Restated Agreement, dated February 11, 2005 (as heretofore amended and as
hereafter restated, supplemented, extended, renewed, amended and otherwise
modified from time to time, the "Loan Agreement"), and into various instrument,
agreements and other documents executed and/or delivered in connection therewith
(all of the foregoing, together with the Loan Agreement, as the same now exist
or may hereafter be amended, restated, renewed, extended, substituted, modified
or supplemented from time to time, collectively, the "Loan Documents"); and

         WHEREAS, Events of Default have occurred under the Loan Agreement as
the result of (i) the failure by Borrowers to maintain, as of March 31, 2005,
the minimum EBITDA required by Section 6.9(a) of the Loan Agreement, and (ii)
the failure by Borrowers, since February 28, 2005, to maintain the minimum Net
Worth required by Section 6.10 of the Loan Agreement, and each of such Events of
Default continues to exist under the Loan Agreement (such continuing Events of
Default, collectively, the "Existing Defaults"); and

         WHEREAS, Borrowers have requested that Lenders agree to waive the
Existing Defaults and to amend certain terms of the Loan Agreement, and Lenders
have agreed to accommodate Borrowers' request subject to the terms and
conditions set forth herein, all as more particularly set forth below.

         NOW THEREFORE, in consideration of the foregoing, and for good and
other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

<PAGE>

1. Definitions. Capitalized terms used in this Agreement and not otherwise
defined shall have the meanings ascribed to such terms, respectively, in the
Loan Agreement.

2. Borrowers' Acknowledgement and Reaffirmation.

a. Each Borrower hereby acknowledges, confirms and agrees that as of the date of
Borrowers' execution hereof, none of the Obligations are subject to offset,
defense or counterclaim of any kind, nature or description whatsoever.

b. Each Borrower hereby ratifies and confirms the Loan Agreement and each of the
other Loan Documents as being legal, valid and binding joint and several
obligations of Borrowers, enforceable against Borrowers in accordance with their
respective terms as modified hereby. Each Borrower hereby confirms that there
are no defenses to the performance of any of such Borrower's obligations under
the Loan Agreement or any of the other Loan Documents. Each Borrower hereby
ratifies and confirms such Borrower's grant to Agent, for the ratable benefit of
Agent, Lenders and each Issuer, of the first priority perfected liens upon, and
security interests in, the properties and assets of the Borrowers, respectively,
heretofore mortgaged, pledged, granted or assigned to Agent under the Loan
Agreement and the other Loan Documents, and acknowledges and confirms that such
first priority perfected liens and security interests secure, and shall continue
to secure, the Obligations, subject only to such prior security interests as are
expressly permitted under the Loan Documents.

                   c. By its signature below, each Borrower ratifies and affirms
to the Agent and the Lenders that as of the date hereof, it is in full
compliance with all covenants under the Loan Documents (except as to the
non-compliance that gave rise to the Existing Defaults), and certifies (i) that
all representations and warranties of Borrowers in the Loan Documents are true
and accurate as of the date hereof, with the same effect as if they had been
made as of the date hereof, (ii) no Default or Event of Default, other than the
Existing Defaults, has occurred and is continuing, or would result from the
execution, delivery and performance by Borrowers of this Agreement; (iii) each
Borrower has full power, right and legal authority to execute, deliver and
perform its obligations under this Agreement; (iv) each Borrower has taken all
action necessary to authorize the execution and delivery of, and the performance
of its obligations under, this Agreement; and (v) this Agreement does not
constitute a breach of any other agreement or understanding to which such
Borrower is a party or by which any property of such Borrower is bound.

3. Acknowledgement of Existing Defaults. Each Borrower hereby expressly
acknowledges the occurrence and continuing existence of the Existing Defaults.

<PAGE>

4. Waiver. Each Lender hereby waives the Existing Defaults, subject to the terms
and conditions set forth herein.

5. Amendments and Modifications to Loan Agreement.

                  Section 6.10 of the Loan Agreement is hereby amended to read
in its entirety as follows:

                  "6.10    Minimum Net Worth.

                            Until July 31, 2005, maintain at all times a minimum
                  Net Worth of at least $43,000,000, and at all times
                  thereafter, maintain a minimum Net Worth of at least
                  $44,475,000, to be (x) increased as of the end of each fiscal
                  year by sixty-five (65%) percent of such fiscal year's
                  year-end net profit, if any, and (y) reduced by the amount of
                  (i) any charge for impairment of goodwill, and (ii) any
                  write-off of the note executed by the buyer of Nexus' assets
                  for the benefit of Jaco (during the fiscal year of any such
                  write-off) ."

6. Reservation of Rights. Agent and Lenders hereby reserve all rights and
remedies granted to them, respectively, under the Loan Documents, applicable law
or otherwise, and nothing contained herein shall be construed to limit, impair
or otherwise affect the right of Agent or Lenders to declare a default or an
Event of Default with respect to any existing default or Event of Default, other
than the Existing Defaults, or with respect to any future non-compliance with
any covenant, term or provision of the Loan Documents (including, without
limitation, Section 6.9(a) of the Loan Agreement and Section 6.10 of the Loan
Agreement, as amended hereby) or any other document now or hereafter executed
and delivered in connection therewith. Without limiting the foregoing, nothing
herein contained shall, or shall be deemed to waive any default or Event of
Default that Borrowers have failed to disclose to Lenders as of the date hereof.

7. Release. In consideration of the waivers and agreements made by Lenders in
this Agreement and the performance thereof and other good and valuable
consideration, each Borrower, for itself and its successors and assigns
(collectively, the "Releasors"), forever releases and discharges Lenders, and
their respective affiliates, members, officers, directors, consultants, agents,
attorneys, representatives and employees, and their respective successors and
assigns (collectively, the "Released Parties") from any and all actions, causes
of action, suits, debts, dues, sums of money, accounts, reckonings, bonds,
bills, specialties, controversies, variances, trespasses, damages, judgments,
extent, executions, claims and demands whatsoever, in law, admiralty or equity,
without defense, offset or counterclaim, which any Releasor, directly or
indirectly, ever had or now or can, shall or may, have against any of the
Released Parties for, upon, or by reason of any matter, cause or thing arising
under or relating to the Loan Agreement and any other Loan Document and the
transactions contemplated therein. In addition to the foregoing, each Releasor

<PAGE>

agrees to forever refrain and forbear from commencing, assisting, instituting,
prosecuting or encouraging others to institute or prosecute any litigation,
action, arbitration, administrative or other proceeding of any kind against any
of the Released Parties directly or indirectly arising out of, resulting from or
relating in any way to the subject matter of, or the fact and course of conduct
underlying, the releases granted herein.

8. No Other Modifications. Except as specifically set forth herein, no other
changes or modifications to the Loan Agreement or the other Loan Documents are
intended or implied, and, in all other respects, the Loan Agreement and the
other Loan Documents shall continue to remain in full force and effect in
accordance with their respective terms as of the date hereof. Except as
specifically set forth herein, nothing contained herein shall evidence a waiver
by either Lender of any other provision of the Loan Agreement or any of the
other Loan Documents nor shall anything contained herein be construed as a
consent by either Lender to any transaction other than those specifically
consented to herein.

9. No Third Party Beneficiaries. The terms and provisions of this Agreement
shall be for the benefit of the parties hereto and their respective successors
and assigns; no other person, firm, entity or corporation shall have any right,
benefit or interest under this Agreement.

10. Condition to Effectiveness. The effectiveness of the terms and provisions of
this Agreement shall be subject to the receipt by Agent of an original of this
Agreement, duly authorized, executed and delivered by Borrowers.

11. Counterparts. This Agreement may be signed in counterparts, each of which
shall be an original and all of which, when taken together, shall constitute one
agreement. In making proof of this Agreement, it shall not be necessary to
produce or account for more than one counterpart signed by the party to be
charged. Delivery of an executed counterpart of this Agreement by telefacsimile
shall have the same force and effect as the delivery of an original executed
counterpart of this Agreement.

12. Merger. This Agreement sets forth the entire agreement and understanding of
the parties with respect to the matters set forth herein. This Agreement cannot
be changed, modified, amended or terminated except in a writing executed by the
party to be charged.

13. Amendment Fee. In consideration of Lenders' consent to the foregoing,
Borrowers agree to pay to Agent for the ratable benefit of Lenders, concurrently
with Borrowers'

<PAGE>

execution hereof, a fee in the amount of $50,000. Borrowers hereby authorize
Lenders to automatically charge to Borrowers' account the amount of such fee.

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.

                          GMAC COMMERCIAL FINANCE LLC,
                           as Agent and Lender
                           By: /s/ Daniel J. Murray
                               ----------------------------------------
                           Title:1st Vice President
                                 ------------------------------------

                           PNC BANK,
                           NATIONAL ASSOCIATION,
                           as Co-Agent and Lender
                           By:  /s/ Wing Louie
                                -------------------------------------
                           Title: VP
                                  ------------------------------------

                           JACO ELECTRONICS, INC., as Borrower
                           By:  /s/ Jeffrey D. Gash
                                -------------------------------------
                           Title: VP Finance
                                  ------------------------------------

                         NEXUS CUSTOM ELECTRONICS, INC.,
                           as Borrower
                           By: /s/ Jeffrey D. Gash
                                --------------------------------------
                           Title: VP Finance
                                  ------------------------------------

                          INTERFACE ELECTRONICS, INC.,
                             as Borrower
                             By: /s/ Jeffrey D. Gash
                                  ------------------------------------
                             Title: VP Finance
                                  ------------------------------------

                        [Waiver and Amendment Agreement]

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