Business Context and Reporting Period
Company: Constellation Brands, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: July 27, 2006
Subject: Entry into a Material Definitive Agreement regarding the compensation arrangements for non-management directors.
Key Financial Metrics
This filing does not report operational financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on director compensation adjustments and equity grants.
Material Changes and Compensation Details
Effective July 27, 2006, the Board of Directors approved the following changes to non-management director compensation:
- Annual Cash Retainer: Increased to $60,000, payable in quarterly installments of $15,000.
- Board Meeting Fees: Increased to $2,500 per meeting attended (regular, special, or annual).
- Committee Meeting Fees: Remained at $1,500 per meeting attended.
- Committee Chair Fees:
- Audit Committee Chair: $12,000 annually ($3,000 quarterly).
- Human Resources Committee Chair: $9,000 annually ($2,250 quarterly).
- Corporate Governance Committee Chair: $9,000 annually ($2,250 quarterly).
- Stock Option Grant: Each non-management director received an option to purchase up to 2,836 shares of Class A Common Stock.
- Exercise Price: $24.68 per share.
- Exercise Period: January 27, 2007 through July 27, 2016.
- Calculation Basis: $70,000 divided by the closing stock price on the grant date.
- Restricted Stock Award: Each non-management director received 1,620 restricted shares of Class A Common Stock.
- Grant Date Closing Price: $24.68 per share.
- Calculation Basis: $40,000 divided by the closing stock price on the grant date.
- Vesting Date: July 27, 2007.
- Other Benefits: Complimentary company products valued up to $5,000.
Management directors continue to serve without additional fees or compensation for Board service.
Guidance, Outlook, and Risks
The filing contains no management commentary regarding business outlook, guidance, risks, contingencies, or unusual items. The document is strictly a disclosure of the Board's actions on director compensation.
Key Facts for Investor Verification
- Verify the total number of non-management directors to calculate the aggregate cost of the new cash retainers and meeting fees.
- Confirm the dilution impact of the 2,836 stock options and 1,620 restricted shares granted per director.
- Review the Company's stock price performance relative to the $24.68 exercise price to assess the value of the option grants.
- Check subsequent filings for the vesting of the restricted stock on July 27, 2007.