Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
On April 21, 2022, the Human Resources Committee (the "Committee") of the Board
of Directors of Constellation Brands, Inc. ("Constellation" or the "Company"),
took the following actions with regard to certain compensatory arrangements for
certain of the Company's senior management personnel, including its Executive
Officers.
Stock Option Grants
The Committee granted options to purchase shares of the Company's Class 1 Common
Stock under the Company's Long-Term Stock Incentive Plan (the "Stock Plan") to
certain of the Company's management personnel, including its Executive Officers,
subject to the Stock Option Agreement with respect to the Stock Plan. The form
of Stock Option Agreement was filed as Exhibit 10.5 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 31, 2020, and is
incorporated herein by reference. The following table sets forth information
regarding grants to those individuals identified below:
Name and Position Number of Stock Options
William A. Newlands, 66,404
President and Chief Executive Officer
Robert Sands, 54,186
Executive Chairman of the Board
Richard Sands, 46,058
Executive Vice Chairman of the Board
Garth Hankinson, 20,380
Executive Vice President and Chief Financial Officer
Each of the options granted has a 10-year term, subject to earlier termination
upon the occurrence of certain events related to termination of employment.
One-fourth of the options become exercisable on each of the first, second,
third, and fourth anniversaries of the date of grant, provided that the option
holder remains in continuous employment with the Company or any of its
subsidiaries until each such date. The options will continue to vest upon the
Retirement (as that term is defined in the Stock Option Agreement) of the
recipient at any time on or after November 1, 2022, and can vest at an earlier
date upon the death or Disability (as that term is defined in the Stock Option
Agreement) of the recipient of the grant. Under the Stock Option Agreement,
options become fully exercisable in the event of a termination without Cause or
a termination for Good Reason within the 24-month period following a Change in
Control (as each term is defined in the Stock Option Agreement or the Stock
Plan). The exercise price of each option is $254.21, which is is equal to the
closing price of the Company's Class A Common Stock (into which, subject to
certain requirements, shares of the Company's Class 1 Common Stock are
convertible on a one-for-one basis) on the New York Stock Exchange on April 21,
2022.
Restricted Stock Unit Grants
The Committee granted restricted stock units under the Stock Plan to certain of
the Company's management personnel, including certain of its Executive Officers,
subject to the provisions of Restricted Stock Unit Agreements, the form of which
was filed as Exhibit 10.2 to the Company's Form 8-K filed April 23, 2021. The
restricted stock units entitle the grantee to receive a single share of the
Company's Class A Common Stock for each restricted stock unit granted under the
Stock Plan. The following table sets forth information regarding grants to those
individuals identified below:
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Name and Position Number of Units
William A. Newlands, 9,835
President and Chief Executive Officer
Garth Hankinson, 3,019
Executive Vice President and Chief Financial Officer
Unvested restricted stock units under each of the grants are subject to
forfeiture upon the occurrence of certain events related to termination of
employment. One-fourth of the awarded units vest on each of the first, second,
third, and fourth anniversaries of May 1, 2022, provided that the recipient of
the grant remains in continuous employment with the Company or any of its
subsidiaries until each such date. The grants will continue to vest upon the
Retirement (as that term is defined in the Restricted Stock Unit Agreement) of
the recipient at any time on or after November 1, 2022, and can vest at an
earlier date upon death or RSU Disability (as that term is defined in the
Restricted Stock Unit Agreement) of the recipient of the award. Under the terms
of the Restricted Stock Unit Agreement, grants become fully vested in the event
of a termination without Cause or a termination for Good Reason within the
24-month period following a Change in Control (as each term is defined in the
Stock Plan or the Restricted Stock Unit Agreement).
Performance Share Unit Grants
The Committee granted performance share units to be settled in the Company's
Class A Common Stock under the Stock Plan to certain of the Company's management
personnel, including certain of its Executive Officers, subject to the
provisions of Performance Share Unit Agreements. The form of Performance Share
Unit Agreement was filed as Exhibit 10.7 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended May 1, 2020, and is incorporated herein
by reference. The number of shares of the Company's Class A Common Stock to be
issued pursuant to the performance share units will depend upon the Company's
Relative Total Stockholder Return (as that term is defined in the Performance
Share Unit Agreement) during the period from March 1, 2022 through February 28,
2025. The following table sets forth information regarding target awards to
those individuals identified below:
Name and Position Number of Units
William A. Newlands, 9,835
President and Chief Executive Officer
Garth Hankinson, 3,019
Executive Vice President and Chief Financial Officer
Unvested performance share units are subject to forfeiture upon the occurrence
of certain events related to termination of employment. A participant may vest
in his right to receive the applicable number of performance share units if the
participant remains in continuous employment with the Company or any of its
subsidiaries until May 1, 2025. The participant will only vest in his right to
receive the performance share units if the Company achieves certain Relative
Total Stockholder Return results as set forth in the Performance Share Unit
Agreement. In the event a recipient of an award retires (as the term
"Retirement" is defined in the Performance Share Unit Agreement) at any time on
or after November 1, 2022 and prior to May 1, 2025, vested awards are payable on
a pro rata basis (as set forth in the Performance Share Unit Agreement) and
settled between May 1, 2025 and May 15, 2025 (consistent with the settlement
date for participants with continuing employment). Target awards can vest at an
earlier date upon the death or PSU Disability (as that term is defined in the
Performance Share Unit Agreement) of the recipient of the award. Under the terms
of the Performance Share Unit Agreement, grants shall vest at target in the
event of a termination without Cause or a termination for Good Reason within the
24-month period following a Change in Control (as each term is defined in the
Stock Plan or the Performance Share Unit Agreement).
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Approval of New Annual Base Salaries
The Committee set new annual base salaries for certain of the Company's
Executive Officers, which salaries will take effect on May 23, 2022. The
following table sets forth the new annual base salary levels of the individuals
identified below:
Name New Annual Base Salary Level
William A. Newlands $1,350,000
Garth Hankinson $757,900
Increase to Annual Management Incentive Program Target
The Committee approved an increase, effective March 1, 2022, from 90% of base
salary to 100% of base salary for Mr. Hankinson's annual cash incentive
compensation target under the Fiscal 2023 Annual Management Incentive Program.
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