SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
CONSTELLATION BRANDS, INC.
------------------------------------------------
(Name of Registrant as Specified in its Charter)
----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------
(3) Filing Party:
-------------------------------------------------------
(4) Date Filed:
---------------------------------------------------------
[CBI LOGO]
CONSTELLATION BRANDS, INC.
Building stellar brands
------------------------------
ANNUAL MEETING OF STOCKHOLDERS
------------------------------
June 15, 2001
TO OUR STOCKHOLDERS:
You are cordially invited to attend the Annual Meeting of Stockholders of
Constellation Brands, Inc. at One Chase Square, Rochester, New York, on Tuesday,
July 17, 2001 at 11:00 a.m. (local time).
The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement describe in detail the matters expected to be acted upon at the
meeting. Also contained in this package is the Company's 2001 Annual Report to
Stockholders, which consists of the Company's 2001 glossy report and its Form
10-K for the fiscal year ended February 28, 2001 that sets forth important
business and financial information concerning the Company.
We hope you are able to attend this year's Annual Meeting.
Very truly yours,
/s/ Richard Sands
RICHARD SANDS
Chairman of the Board, President
and Chief Executive Officer
[THIS PAGE INTENTIONALLY LEFT BLANK]
CONSTELLATION BRANDS, INC.
300 WillowBrook Office Park
Fairport, New York 14450
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 17, 2001
----------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
CONSTELLATION BRANDS, INC. (the "Company") will be held at One Chase Square,
Rochester, New York, on Tuesday, July 17, 2001 at 11:00 a.m. (local time) for
the following purposes more fully described in the accompanying Proxy Statement:
1. To elect directors of the Company (Proposal No. 1).
2. To consider and act upon a proposal to ratify the selection of Arthur
Andersen LLP, Certified Public Accountants, as the Company's
independent auditors for the fiscal year ending February 28, 2002
(Proposal No. 2).
3. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 31, 2001 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournment thereof.
A Proxy Statement and proxy are enclosed.
WE HOPE YOU WILL ATTEND THIS MEETING IN PERSON, BUT IF YOU CANNOT, PLEASE
SIGN AND DATE THE ENCLOSED PROXY. RETURN THE PROXY IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ David S. Sorce
DAVID S. SORCE, Secretary
Fairport, New York
June 15, 2001
[THIS PAGE INTENTIONALLY LEFT BLANK]
CONSTELLATION BRANDS, INC.
300 WillowBrook Office Park
Fairport, New York 14450
---------------
PROXY STATEMENT
---------------
2001 ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is being furnished to the stockholders of
CONSTELLATION BRANDS, INC. (the "Company") in connection with the solicitation
of proxies by the Board of Directors of the Company. The proxies are for use at
the 2001 Annual Meeting of Stockholders of the Company and at any adjournment
thereof (the "Meeting"). The Meeting will be held on Tuesday, July 17, 2001 at
11:00 a.m. (local time) at One Chase Square, Rochester, New York.
The shares represented by your proxy, if the proxy is properly executed and
returned, and not revoked, will be voted at the Meeting as therein specified.
You may revoke your proxy at any time before the proxy is exercised by
delivering to the Secretary of the Company a written revocation or a duly
executed proxy bearing a later date. You may also revoke your proxy by attending
the Meeting and voting in person.
The shares represented by your proxy will be voted FOR the election of the
director nominees named herein (Proposal No. 1), unless you specifically
withhold authority to vote for one or more of the director nominees. Further,
unless you indicate otherwise, the shares represented by your proxy will be
voted FOR the ratification of the selection of Arthur Andersen LLP as the
Company's independent auditors for the fiscal year ending February 28, 2002
(Proposal No. 2).
The enclosed proxy has been designed so that it can be used by stockholders
owning any combination of the Company's outstanding capital stock. The
outstanding capital stock of the Company consists of Class A Common Stock, par
value $.01 per share (the "Class A Stock") and Class B Common Stock, par value
$.01 per share (the "Class B Stock"). All share, option and similar information
included in this Proxy Statement reflects the effect of the Company's
two-for-one stock split that was distributed in the form of a stock dividend on
May 14, 2001 to stockholders of record on April 30, 2001.
The cost of soliciting proxies will be borne by the Company. In addition to
the solicitation by use of the mails, directors, officers or regular employees
of the Company, without extra compensation, may solicit proxies in person or by
telephone or facsimile. The Company has requested persons holding stock for
others in their names or in the names of nominees to forward these materials to
the beneficial owners of such shares. If requested, the Company will reimburse
such persons for their reasonable expenses in forwarding these materials.
This Proxy Statement and the accompanying proxy are being first mailed to
stockholders on or about June 20, 2001.
- 2 -
VOTING SECURITIES
The total outstanding capital stock of the Company, as of May 31, 2001,
consisted of 35,881,710 shares of Class A Stock and 6,132,995 shares of Class B
Stock. Each share of Class B Stock is convertible into one share of Class A
Stock at any time at the option of the holder.
Only holders of record of Class A Stock and Class B Stock on the books of
the Company at the close of business on May 31, 2001, the record date for
eligibility to vote at the Meeting, are entitled to notice of and to vote at the
Meeting and at any adjournment thereof. Except as otherwise required by Delaware
law, the holders of the Class A Stock and the holders of the Class B Stock vote
together as a single class on all matters other than the election of directors.
Each holder of Class A Stock is entitled to one (1) vote for each share of Class
A Stock registered in his or her name, and each holder of Class B Stock is
entitled to ten (10) votes for each share of Class B Stock registered in his or
her name.
The holders of a majority of the outstanding aggregate voting power of the
Class A Stock and the Class B Stock present at the Meeting, in person or by
proxy, will constitute a quorum. Shares represented by proxies marked as
abstentions will be counted toward determining the presence of a quorum. Proxies
relating to shares held in "street name" by brokers or other nominees which may
be voted with respect to some, but not all, matters without instruction from the
beneficial owner ("broker non-votes") are counted as shares present for
determining a quorum.
Under Delaware law and the Company's Restated Certificate of Incorporation
and By-laws, directors are elected by a plurality of the votes cast (the highest
number of votes cast) by the holders of the shares entitled to vote and actually
voting, in person or by proxy. Pursuant to the Company's Restated Certificate of
Incorporation, the holders of the Class A Stock, voting as a separate class, are
entitled to elect one-fourth of the number of directors to be elected at the
Meeting (rounded up to the next number if the total number of directors to be
elected is not evenly divisible by four). The holders of the Class B Stock,
voting as a separate class, are entitled to elect the remaining number of
directors to be elected at the Meeting. Since the Board of Directors nominated
seven directors, the holders of Class A Stock will be entitled to elect two
directors and the holders of Class B Stock will be entitled to elect five
directors. Because the directors are elected by a plurality of the votes cast in
each election, votes that are withheld will not be counted and therefore, will
not affect the outcome of the elections.
The ratification of the selection of Arthur Andersen LLP as the Company's
independent auditors (Proposal No. 2) requires the affirmative vote of a
majority of the votes entitled to be cast by stockholders present in person or
represented by proxy at the Meeting. With respect to this proposal, holders of
Class A Stock and Class B Stock are entitled to vote as a single class at the
Meeting, with holders of Class A Stock having one (1) vote per share and holders
of Class B Stock having ten (10) votes per share. Therefore, abstentions will
have the effect of negative votes. However, because broker non-votes are not
considered entitled to vote, they will not affect the outcome of the vote.
- 3 -
BENEFICIAL OWNERSHIP
As of May 31, 2001, the following tables and notes set forth (i) the
persons known to the Company to beneficially own more than 5% of the Class A
Stock or Class B Stock, (ii) the number of shares beneficially owned by them,
and (iii) the percent of such class so owned, rounded to the nearest one-tenth
of one percent. This information is based on information furnished to the
Company by or on behalf of each person concerned. Unless otherwise noted, the
percentages of ownership were calculated on the basis of 35,881,710 shares of
Class A Stock and 6,132,995 shares of Class B Stock outstanding as of the close
of business on May 31, 2001.
CLASS A STOCK
-------------------------------------------------------------------------------------------------------
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)
-----------------------------------------------
NAME AND ADDRESS OF SOLE POWER TO SHARED POWER TO PERCENT OF
BENEFICIAL OWNER VOTE OR DISPOSE VOTE OR DISPOSE TOTAL CLASS (1)
------------------- --------------- --------------- --------- ----------
Marilyn Sands
300 WillowBrook Office Park
Fairport, NY 14450 1,578,106(2) 177,452 (3) 1,755,558 4.9%
Robert Sands
300 WillowBrook Office Park
Fairport, NY 14450 890,200(4) 804,104 (4) 1,694,304 4.7%
Richard Sands
300 WillowBrook Office Park
Fairport, NY 14450 859,503(5) 804,104 (5) 1,663,607 4.6%
CWC Partnership-I
300 WillowBrook Office Park
Fairport, NY 14450 - 766,092 (6) 766,092 2.1%
Trust for the benefit of Andrew Stern,
M.D. under the will of Laurie Sands
300 WillowBrook Office Park
Fairport, NY 14450
- 766,092 (7) 766,092 2.1%
Stockholders Group Pursuant to Section
13(d)(3) of the Securities Exchange
Act of 1934, as amended (8)
- 2,553,807 (8) 2,553,807 7.0%
- 4 -
CLASS B STOCK
-------------------------------------------------------------------------------------------------------
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)
------------------------------------------------
NAME AND ADDRESS OF SOLE POWER TO SHARED POWER TO PERCENT OF
BENEFICIAL OWNER VOTE OR DISPOSE VOTE OR DISPOSE TOTAL CLASS (1)
------------------- --------------- --------------- --------- ----------
Richard Sands
300 WillowBrook Office Park
Fairport, NY 14450 1,477,058 2,715,036 (5) 4,192,094 68.4%
Robert Sands
300 WillowBrook Office Park
Fairport, NY 14450 1,475,648 2,715,036 (4) 4,190,684 68.3%
Trust for the benefit of Andrew
Stern, M.D. under the will of
Laurie Sands
300 WillowBrook Office Park
Fairport, NY 14450 - 1,665,678 (7) 1,665,678 27.2%
CWC Partnership-I
300 WillowBrook Office Park
Fairport, NY 14450 - 1,524,770 (6) 1,524,770 24.9%
Trust for the benefit of the
Grandchildren of Marvin and
Marilyn Sands
300 WillowBrook Office Park
Fairport, NY 14450 - 1,012,500 (10) 1,012,500 16.5%
Marilyn Sands
300 WillowBrook Office Park
Fairport, NY 14450 9,000 203,700 (3) 212,700 3.5%
Stockholders Group Pursuant to
Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (8) - 5,667,742 (8) 5,667,742 92.4%
------------------------------------
(1) The number of shares and the percentage of ownership set forth in the Class
A Stock table includes the number of shares of Class A Stock that can be
purchased by exercising stock options that are exercisable on May 31, 2001
or become exercisable within 60 days thereafter ("presently exercisable").
Such number does not include the number of option shares that may become
exercisable within sixty (60) days of May 31, 2001 due to certain
acceleration provisions in certain awards, which accelerations cannot be
foreseen on the date of this Proxy Statement. Such number also does not
include the shares of Class A Stock issuable pursuant to the conversion
feature of the Class B Stock beneficially owned by each person. The number
of shares and percentage of ownership assuming conversion of Class B Stock
into Class A Stock are contained in the footnotes. For purposes of
calculating the percentage of ownership of Class A Stock in the table and
in the footnotes, additional shares of Class A Stock equal to the number of
presently exercisable options and, as appropriate, the number of shares of
Class B Stock owned by each person are assumed to be outstanding pursuant
to Rule 13d-3(d)(1) under the Securities Exchange Act. Where the footnotes
reflect shares of Class A Stock as being included, such shares are included
only in the Class A Stock table and where the footnotes reflect shares of
Class B Stock as being included, such shares are included only in the Class
B Stock table.
(2) With respect to 1,575,002 shares of the 1,578,106 shares of Class A Stock,
Marilyn Sands is the beneficial owner of a life estate which includes the
right to receive income from and the power to vote
- 5 -
and dispose of such shares. The remainder interest in such shares is held
by Richard Sands, Robert Sands and CWC Partnership-II, a New York general
partnership ("CWCP-II").
(3) The amounts reflected include, as applicable, 29,262 shares of Class A
Stock owned by the Mac and Sally Sands Foundation, Incorporated, a Virginia
corporation (the "Sands Foundation"), of which Marilyn Sands is a director,
36,858 shares of Class B Stock owned by the Marvin Sands Master Trust (the
"Master Trust"), of which Ms. Sands is a trustee, and 148,190 shares of
Class A Stock and 166,842 shares of Class B Stock owned by M,L,R&R, a New
York general partnership ("MLR&R"), of which the Master Trust is a general
partner. Ms. Sands disclaims beneficial ownership with respect to all
shares owned by the Sands Foundation and with respect to all of the other
foregoing shares except to the extent of her beneficial interest in the
Master Trust. Assuming the conversion of Class B Stock beneficially owned
by Ms. Sands into Class A Stock, Ms. Sands would beneficially own 1,968,258
shares of Class A Stock, representing 5.5% of the outstanding Class A Stock
after such conversion.
(4) The amount reflected as shares of Class A Stock over which Robert Sands has
the sole power to vote or dispose includes 254,246 shares of Class A Stock
issuable upon the exercise of options which are presently exercisable by
Mr. Sands. The amounts reflected as shares over which Mr. Sands shares
power to vote or dispose include, as applicable, 617,902 shares of Class A
Stock and 1,357,928 shares of Class B Stock owned by CWC Partnership-I, a
New York general partnership ("CWCP-I"), of which Robert Sands is a
managing partner, 36,858 shares of Class B Stock owned by the Master Trust
of which Robert Sands is a trustee and beneficiary, 148,190 shares of Class
A Stock and 166,842 shares of Class B Stock owned by MLR&R, of which Mr.
Sands and the Master Trust are general partners, 140,908 shares of Class B
Stock owned by CWCP-II, of which Mr. Sands is a trustee of the managing
partner, 1,012,500 shares of Class B Stock owned by the trust described in
footnote (9) below, 29,262 shares of Class A Stock owned by the Sands
Foundation, of which Mr. Sands is a director and officer, and 8,750 shares
of Class A Stock issuable upon the exercise of presently exercisable
options held by the Estate of Marvin Sands ("Marvin Sands' Estate"), of
which Robert Sands is an executor. Mr. Sands disclaims beneficial ownership
of all of the foregoing shares except to the extent of his ownership
interest in CWCP-I and MLR&R and his beneficial interest in the Master
Trust and Marvin Sands' Estate. The amounts reflected do not include 45,880
shares of Class A Stock owned by Mr. Sands' wife, individually and as
custodian for their minor children, the remainder interest Mr. Sands has in
519,698 of the 1,575,002 shares of Class A Stock subject to the life estate
held by Marilyn Sands described in footnote (2) above or the remainder
interest of CWCP-II in 530,302 of such shares. Mr. Sands disclaims
beneficial ownership with respect to all such shares. Assuming the
conversion of Class B Stock beneficially owned by Mr. Sands into Class A
Stock, Mr. Sands would beneficially own 5,884,988 shares of Class A Stock,
representing 14.6% of the outstanding Class A Stock after such conversion.
(5) The amount reflected as shares of Class A Stock over which Richard Sands
has the sole power to vote or dispose includes 257,813 shares of Class A
Stock issuable upon the exercise of options which are presently exercisable
by Mr. Sands. The amounts reflected as shares over which Mr. Sands shares
power to vote or dispose include, as applicable, 617,902 shares of Class A
Stock and 1,357,928 shares of Class B Stock owned by CWCP-I, of which
Richard Sands is a managing partner, 36,858 shares of Class B Stock owned
by the Master Trust, of which Mr. Sands is a trustee and beneficiary,
148,190 shares of Class A Stock and 166,842 shares of Class B Stock owned
by MLR&R, of which Mr. Sands and the Master Trust are general partners,
140,908 shares of Class B Stock owned by CWCP-II, of which Mr. Sands is a
trustee of the managing partner, 1,012,500 shares of Class B Stock owned by
the trust described in footnote (9) below, 29,262 shares of Class A Stock
owned by the Sands Foundation, of which Mr. Sands is a director and
officer, and 8,750 shares of Class A Stock issuable upon the exercise of
presently exercisable options held by Marvin Sands' Estate, of which
Richard Sands is an executor. Mr. Sands disclaims beneficial ownership of
all of the foregoing shares except to the extent of his ownership interest
in CWCP-I and MLR&R and his beneficial interest in the Master Trust and
Marvin Sands' Estate. The amounts reflected do not include 3,930 shares of
Class A Stock owned by Mr. Sands' wife, the remainder interest Mr. Sands
has in 525,002 of the 1,575,002 shares of Class A Stock subject to the life
estate held by Marilyn Sands described in footnote (2) above or the
remainder
- 6 -
interest of CWCP-II in 530,302 of such shares. Mr. Sands disclaims
beneficial ownership with respect to all such shares. Assuming the
conversion of Class B Stock beneficially owned by Mr. Sands into Class A
Stock, Mr. Sands would beneficially own 5,855,701 shares of Class A Stock,
representing 14.5% of the outstanding Class A Stock after such conversion.
(6) The amounts reflected include, as applicable, 148,190 shares of Class A
Stock and 166,842 shares of Class B Stock owned by MLR&R, of which CWCP-I
is a general partner. The shares owned by CWCP-I are included in the number
of shares beneficially owned by Richard Sands and Robert Sands, the
managing partners of CWCP-I, the Marital Trust (defined in footnote (7)
below), a partner of CWCP-I which owns a majority in interest of the CWCP-I
partnership interests, and the group described in footnote (8) below. The
other partners of CWCP-I are trusts for the benefit of Laurie Sands'
children. Assuming the conversion of Class B Stock beneficially owned by
CWCP-I into Class A Stock, CWCP-I would beneficially own 2,290,862 shares
of Class A Stock, representing 6.1% of the outstanding Class A Stock after
such conversion.
(7) The amounts reflected include, as applicable, 617,902 shares of Class A
Stock and 1,357,928 shares of Class B Stock owned by CWCP-I, in which the
Trust for the benefit of Andrew Stern, M.D. under the will of Laurie Sands
(the "Marital Trust") is a partner and owns a majority in interest of the
CWCP-I partnership interests, 140,908 shares of Class B Stock owned by
CWCP-II, in which the Marital Trust is a partner and owns a majority in
interest of the CWCP-II partnership interests, and 148,190 shares of Class
A Stock and 166,842 shares of Class B Stock owned by MLR&R, of which CWCP-I
is a general partner. The Marital Trust disclaims beneficial ownership with
respect to all of the foregoing shares except to the extent of its
ownership interest in CWCP-I and CWCP-II. The amounts reflected do not
include the remainder interest CWCP-II has in 530,302 of the 1,575,002
shares of Class A Stock subject to the life estate held by Marilyn Sands
described in footnote (2) above. The Marital Trust disclaims beneficial
ownership with respect to all such shares except to the extent of its
ownership interest in CWCP-II. Assuming the conversion of Class B Stock
beneficially owned by the Marital Trust into Class A Stock, the Marital
Trust would beneficially own 2,431,770 shares of Class A Stock,
representing 6.5% of the outstanding Class A Stock after such conversion.
(8) The group as reported consists of Richard Sands, Robert Sands, CWCP-I,
CWCP-II, and the trust described in footnote (9) (collectively, the
"Group"). The basis for the Group consists of: (i) a Stockholders Agreement
among Richard Sands, Robert Sands and CWCP-I and (ii) the fact that the
familial relationship between Richard Sands and Robert Sands, their actions
in working together in the conduct of the business of the Company and their
capacity as partners and trustees of the other members of the Group may be
deemed to constitute an agreement to "act in concert" with respect to the
Company's shares. The members of the Group disclaim that an agreement to
act in concert exists. Except with respect to the shares subject to the
Stockholders Agreement, the shares owned by CWCP-I and CWCP-II and the
shares held by the trust described in footnote (9) below, no member of the
Group is required to consult with any other member of the Group with
respect to the voting or disposition of any shares of the Company. Assuming
the conversion of Class B Stock beneficially owned by the Group into Class
A Stock, the Group would beneficially own 8,221,549 shares of Class A
Stock, representing 19.5% of the outstanding Class A Stock after such
conversion.
(9) The trust was created by Marvin Sands under the terms of an Irrevocable
Trust Agreement dated November 18, 1987 (the "Trust"). The Trust is for the
benefit of the present and future grandchildren of Marvin and Marilyn
Sands. The Co-Trustees of the Trust are Richard Sands and Robert Sands.
Unanimity of the Co-Trustees is required with respect to voting and
disposing of the Class B Stock owned by the Trust. The shares owned by the
Trust are included in the number of shares beneficially owned by Richard
Sands, Robert Sands and the Group. Assuming the conversion of Class B Stock
beneficially owned by the Trust into Class A Stock, the Trust would
beneficially own 1,012,500 shares of Class A Stock, representing 2.7% of
the outstanding Class A Stock after such conversion.
- 7 -
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table summarizes the annual and long-term compensation paid
to the Company's Chief Executive Officer and the other four most highly
compensated executive officers at the end of the fiscal year ended February 28,
2001 (collectively, the "Named Executives"). The table is designed to provide
stockholders with a concise, comprehensive view of the Company's executive
compensation during the fiscal years ended February 28, 2001, February 29, 2000
and February 28, 1999. It therefore includes all aspects of compensation for
services rendered to the Company for such periods.
Summary Compensation Table
-----------------------------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS (2)
------------------------------------ ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
COMPENSATION OPTIONS COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) (#)(3) TION(4)
------------------------------- ---- ---------- ---------- ------------ ------------ ---------
Richard Sands, 2001 $ 606,050 $ 425,447 $ 74,359(5) 62,600 $ 49,039
Chairman of the Board, President and 2000 545,782 491,204 - 32,800 51,191
Chief Executive Officer 1999 487,537 438,601 - 33,200 42,592
Robert Sands, 2001 $ 537,601 $ 377,396 $ 84,607(6) 57,600 $ 44,076
Group President 2000 530,241 477,217 87,806(6) 32,000 49,870
1999 473,564 426,031 - 32,200 40,060
Alexander L. Berk, 2001 $ 475,000 $ 328,150 - 50,000 $ 41,196
President and Chief Executive 2000 440,000 374,000 - 50,000 48,800
Officer of Barton Incorporated (7) 1999 399,600 311,688 - 41,800 52,752
Jon Moramarco, 2001 $ 345,000 $ 194,213 - 53,000 $ 11,011
President and Chief Executive 2000 110,000 69,825 - 100,000 -
Officer of Canandaigua Wine Company, 1999 - - - - -
Inc. (8)
Thomas S. Summer, 2001 $ 330,000 $ 178,200 - 38,200 $ 29,025
Executive Vice President and 2000 261,800 176,715 - 11,000 27,053
Chief Financial Officer 1999 233,658 172,125 - 11,400 22,935
-------------------------
(1) None of the Named Executives, other than as indicated, received any
individual perquisites or other personal benefits exceeding the lesser of
$50,000 or 10% of the total salary and bonus reported for such executive
officer during the periods covered by the Summary Compensation Table.
(2) None of the Named Executives received any restricted stock awards or any
pay-outs under long-term incentive plans during the periods covered by the
Summary Compensation Table.
(3) The securities consist of shares of Class A Stock underlying stock options.
See the table below entitled "Option Grants in Last Fiscal Year" and the
footnotes to that table for additional information.
(4) Amounts reported for 2001 consist of:
o Company 401(k) contributions under the Company's 401(k) and Profit
Sharing Plan: Richard Sands $5,100; Robert Sands $5,100; Alexander
Berk $5,214; Jon Moramarco $4,379; and Thomas Summer $5,100.
- 8 -
o Company profit sharing contributions under the Company's 401(k) and
Profit Sharing Plan: Richard Sands $12,325; Robert Sands $12,325;
Alexander Berk $12,878; Jon Moramarco $6,632; and Thomas Summer
$12,325.
o Company contributions under the Company's Supplemental Executive
Retirement Plan: Richard Sands $31,614; Robert Sands $26,651;
Alexander Berk $23,104; and Thomas Summer $11,600.
(5) The amount shown includes $73,463 for use of the corporate aircraft.
(6) The amounts shown include $84,057 in 2001 and $87,176 in 2000 for use of
the corporate aircraft.
(7) Barton Incorporated is a wholly-owned subsidiary of the Company.
(8) Canandaigua Wine Company, Inc. is a wholly-owned subsidiary of the Company.
Jon Moramarco has been responsible for the Company's Canandaigua Wine
segment since October 1999.
STOCK OPTIONS
The following table contains information concerning stock option grants to
the Named Executives during the fiscal year ended February 28, 2001. No stock
appreciation rights ("SARs") were granted to any of the Named Executives in that
year. The columns labeled "Potential Realizable Value" are based on hypothetical
5% and 10% growth assumptions, as required by the Securities and Exchange
Commission. The Company cannot predict the actual growth rate of its Common
Stock.
OPTION GRANTS IN LAST FISCAL YEAR
--------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------------------------------------- VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -------------------------
NAME GRANTED (1) FISCAL YEAR ($/SH) (2) DATE 5% 10%
---- ----------- ------------ ----------- ---------- ---------- -----------
Richard Sands 44,200 (3) 2.3% $ 25.75 04/05/10 $ 715,529 $ 1,813,147
18,400 (4) 1.0% $ 29.70 06/20/05 $ 87,492 $ 253,412
Robert Sands 39,200 (3) 2.0% $ 25.75 04/05/10 $ 634,586 $ 1,608,040
18,400 (4) 1.0% $ 29.70 06/20/05 $ 87,492 $ 253,412
Alexander L. Berk 32,400 (3) 1.7% $ 25.75 04/05/10 $ 524,505 $ 1,329,094
17,600 (4) 0.9% $ 27.00 06/20/10 $ 298,747 $ 757,025
Jon Moramarco 40,200 (3) 2.1% $ 25.75 04/05/10 $ 650,775 $ 1,649,062
12,800 (4) 0.7% $ 27.00 06/20/10 $ 217,271 $ 550,563
Thomas S. Summer 25,800 (3) 1.3% $ 25.75 04/05/10 $ 417,662 $ 1,058,353
12,400 (4) 0.6% $ 27.00 06/20/10 $ 210,481 $ 533,358
-------------------
(1) The securities consist of shares of Class A Stock underlying stock options
that were granted pursuant to Company plans that were approved by its
stockholders. The stock options were granted for terms of no greater than
10 years, subject to earlier termination upon the occurrence of certain
events related to termination of employment. Under the plans, the vesting
of stock options accelerates in the event of a change of control, as
defined in the plans.
- 9 -
(2) The exercise price per share of each option is equal to, or where required,
greater than, the closing market price of a share of Class A Stock on the
date of grant.
(3) The options vest and become exercisable as follows: (i) 33 1/3% (rounded
down to a whole share) became exercisable on April 6, 2001; (ii) an
additional 33 1/3% (rounded down to a whole share) will become exercisable
on April 6, 2002; and (iii) the remaining balance will become exercisable
on April 6, 2003.
(4) The options vest and become exercisable as follows: (i) 20% became
exercisable on April 1, 2001; and (ii) the remaining 80% will become
exercisable in four annual installments beginning on April 1, 2002.
The following table sets forth information regarding the number and value
of exercisable and unexercisable stock options held by the Named Executives as
of February 28, 2001. None of the Named Executives exercised any stock options
during the fiscal year ended February 28, 2001 and there are no outstanding
SARs.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
--------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS
AT FY-END (1) AT FY-END
--------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ------------ -------------
Richard Sands 222,350 120,650 $ 3,452,180 $ 757,646
Robert Sands 221,450 113,750 $ 3,533,801 $ 721,217
Alexander L. Berk 133,900 122,100 $ 2,269,504 $ 909,408
Jon Moramarco - 153,000 $ - $ 525,645
Thomas S. Summer 96,600 55,000 $ 1,613,389 $ 321,528
--------------------
(1) The securities consist of shares of Class A Stock underlying stock options
that were granted pursuant to Company plans that were approved by its
stockholders.
REPORT WITH RESPECT TO EXECUTIVE COMPENSATION
The following report is required by the Securities and Exchange
Commission's executive compensation rules in order to standardize the reporting
of executive compensation by public companies. This information shall not be
deemed incorporated by reference in any filing under the federal securities laws
by virtue of any general incorporation of this Proxy Statement by reference and
shall not otherwise be treated as filed under the securities laws.
GENERAL
The Human Resources Committee of the Board of Directors administers the
Company's executive compensation program. During the period March 1, 2000
through July 18, 2000, the Human Resources Committee was composed of Thomas
McDermott and Paul Smith, each of whom is a non-employee director. On July 18,
2000, the Board of Directors elected Jeananne Hauswald, also a non-employee
director, as a member of the Committee.
- 10 -
The objectives of the Company's executive compensation program are to (i)
be competitive with the pay practices of other companies of comparable size and
status, including those in the beverage alcohol industry, and (ii) attract,
motivate and retain key executives who are vital to the long-term success of the
Company. As discussed in detail below, the Company's executive compensation
program consists of both fixed (base salary) and variable, incentive-based
compensation elements. These elements are designed to operate together to
comprise performance-based annual cash compensation and stock-based compensation
which align the interests of the Company's executives with the interests of its
stockholders.
Executive compensation is determined in light of the Company's performance
during the fiscal year and taking into account compensation data of comparable
companies. Specifically considered in fiscal year 2001 was adjusted operating
income as compared to that set forth in the Company's fiscal 2001 operating
plan.
BASE SALARY
With respect to annual compensation, the fundamental objective in setting
base salary levels for the Company's senior management is to pay competitive
rates to attract and retain high quality, competent executives. Competitive pay
levels are determined based upon input of compensation consultants, independent
industry surveys, proxy disclosures, salaries paid to attract new managers and
past experience. The Human Resources Committee reviews data generated by William
M. Mercer, Incorporated, a consultant to the Company, for competitive analyses.
Base salary levels are determined based upon factors such as individual
performance (e.g., leadership, level of responsibility, management skills and
industry activities), Company performance and competitive pay packages.
ANNUAL MANAGEMENT INCENTIVES
In addition to their base salary, the Company's executives have the
opportunity to earn an annual cash bonus. The annual bonus for executive
officers for fiscal 2001 was based on attainment of certain target financial
performance goals for the Company. Awards were based on a percentage of base
salary with target awards ranging from 50% to 65% of base salaries for executive
officers. The purpose of the annual bonus is to motivate and provide an
incentive to management to achieve specific business objectives and initiatives
as set forth in the Company's annual operating plan and budget. For fiscal 2001,
annual cash bonuses were awarded to each of the Named Executives in the amounts
indicated in the Summary Compensation Table.
Future cash bonuses for the participating executives will be determined by
the Human Resources Committee pursuant to, or in a manner similar to, the
Company's Annual Management Incentive Plan. Pursuant to that plan, the Committee
would award cash bonuses to the participating executives in the event that the
Company attains one or more pre-set performance targets.
STOCK OPTIONS, SARS AND RESTRICTED STOCK
In connection with the executive compensation program, long-term incentive
awards in the form of stock options, stock appreciation rights and restricted
stock have been granted under the Company's Long-Term Stock Incentive Plan and
Incentive Stock Option Plan. This arrangement balances the annual operating
objectives of the annual cash incentive plan with the Company's longer-term
stockholder value building strategies. The Human Resources Committee and the
Board of Directors grant these stock-based incentive awards from time to time
for the purpose of attracting and retaining
- 11 -
key executives, motivating them to attain the Company's long-range financial
objectives, and closely aligning their financial interests with long-term
stockholder interests and share value.
The Company believes that through the use of stock options, executives'
interests are directly tied to enhanced stockholder value. The Human Resources
Committee of the Board (as well as the full Board) has the flexibility of
awarding nonqualified stock options, restricted stock, stock appreciation rights
and other stock-based awards under the Company's Long-Term Stock Incentive Plan
and incentive stock options under the Company's Incentive Stock Option Plan.
This flexibility enables the Company to fine-tune its grants in order to
maximize the alignment of the interests of the stockholders and management.
During fiscal 2001, the Human Resources Committee awarded nonqualified
options to all executive officers, including the Company's Chief Executive
Officer, taking into account relevant market survey data, their position with
the Company and the financial performance of the Company. The Committee also
awarded incentive stock options to all executive officers to support the
attainment of certain stock ownership amounts pursuant to guidelines established
by the Company. The exercise prices of all the stock options awarded were equal
to, or where required, greater than, the market value of the underlying shares
on the date of grant. Accordingly, the value of the awards depends solely upon
future growth in the share value of the Company's Class A Stock.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
For fiscal year 2001, the compensation of Richard Sands, the Company's
Chief Executive Officer, was based on the Company's performance and growth as
described under the caption "General" above. In addition, the compensation
packages of chief executive officers of certain comparable companies selected by
William M. Mercer, Incorporated were considered. Also taken into account was the
Company's current executive salary and compensation structure.
Richard Sands' base salary is believed to be in line with salaries of
executives of similar companies and chief executive officers with similar
responsibilities. Mr. Sands' annual cash incentive for fiscal 2001 was a
percentage of his base salary based upon the Company's fiscal 2001 adjusted
operating income as compared to that set forth in the Company's fiscal 2001
operating plan. The range for Mr. Sands' cash incentive award, from threshold,
target and maximum (16%, 65% and 130%, respectively), was comparable to industry
compensation survey data for executives in Richard Sands' position. For the
fiscal year ended February 28, 2001, Richard Sands received a bonus of $425,447.
As noted elsewhere in this Proxy Statement, during fiscal 2001, Mr. Sands also
received stock options to purchase up to 62,600 shares of Class A Stock of the
Company.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code provides that certain
compensation in excess of $1 million per year paid to a company's chief
executive officer and four other most highly paid executive officers may not be
deductible by the company unless it qualifies as performance-based compensation.
The Human Resources Committee recognizes the benefits of structuring executive
compensation so that Section 162(m) does not limit the Company's tax deductions
for such compensation, and the Company's Long-Term Stock Incentive Plan,
Incentive Stock Option Plan and Annual Management Incentive Plan have been
designed so that the Human Resources Committee may award performance-based
compensation that is not subject to the limits imposed by Section 162(m). Under
certain circumstances, the Human Resources Committee may decide to award
executive compensation in an amount and form that is not deductible under
Section 162(m).
- 12 -
The foregoing report is given by the members of the Human Resources
Committee.
HUMAN RESOURCES COMMITTEE
Thomas C. McDermott (Chair)
Jeananne K. Hauswald
Paul L. Smith
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As described above, during fiscal 2001, Jeananne Hauswald, Thomas McDermott
and Paul Smith served as members of the Human Resources Committee of the
Company's Board of Directors. None of these individuals are or have ever been
officers or employees of the Company.
STOCK PRICE PERFORMANCE GRAPH
Set forth below is a line graph comparing, for the fiscal years ended the
last day of February 1997, 1998, 1999, 2000 and 2001, the cumulative total
stockholder return of the Company's Class A Stock and Class B Stock, with the
cumulative total return of the Russell 2000 Index and a peer group index
comprised of companies in the beverage industry (the "Selected Peer Group
Index") (see footnote (1) to the graph). The graph assumes the investment of
$100.00 on February 29, 1996 in the Company's Class A Stock, Class B Stock, the
Russell 2000 Index and the Selected Peer Group Index, and also assumes the
reinvestment of all dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
-----------------------------------------------
[PERFORMANCE GRAPH]
- 13 -
1996 1997 1998 1999 2000 2001
-------- -------- -------- -------- -------- --------
STZ $ 100.00 $ 80.92 $ 146.71 $ 140.46 $ 128.95 $ 168.03
STZ.B 100.00 87.50 151.97 146.71 128.95 168.42
Peer Group Index 100.00 133.29 151.56 160.11 134.00 161.11
Russell 2000 Index 100.00 112.56 146.25 125.00 184.08 150.96
----------------------
(1) The Selected Peer Group Index is weighted according to the respective
issuer's stock market capitalization and is comprised of the following
companies: Adolph Coors Company (Class B Shares); Anheuser-Busch Companies,
Inc; The Boston Beer Company, Inc; Brown-Forman Corporation (Class A and
Class B Shares); Cadbury Schweppes plc; The Chalone Wine Group, Ltd.;
Coca-Cola Bottling Co. Consolidated; Coca-Cola Company; Coca-Cola
Enterprises Inc.; Diageo plc-ADR (included in 1998, 1999, 2000 and 2001
only); LVMH Moet Hennessy Louis Vuitton; The Robert Mondavi Corporation
(Class A Shares); PepsiCo, Inc.; and PepsiAmericas, Inc. Note: Diageo
plc-ADR is included only in the years for which trading and public
information were available.
There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted by the graph
above. The Company neither makes nor endorses any predictions as to future stock
performance.
The Stock Price Performance Graph set forth above shall not be deemed
incorporated by reference in any filing under the federal securities laws by
virtue of any general incorporation of this Proxy Statement by reference and
shall not otherwise be treated as filed under the securities laws.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Alexander Berk and Barton Incorporated, a wholly-owned subsidiary of the
Company, are parties to an employment agreement dated as of September 1, 1990,
as amended on November 11, 1996 and October 20, 1998, that provides for Mr.
Berk's compensation and sets forth the terms and conditions of Mr. Berk's
employment with Barton. Under his employment agreement, Mr. Berk serves as the
President and Chief Executive Officer of Barton and, by virtue of his current
responsibilities with Barton, he is deemed an executive officer of the Company.
While the initial term of the employment agreement expired on February 28, 2001,
in accordance with the agreement, the term is automatically extended for
one-year periods unless either Mr. Berk or Barton notifies the other that such
party does not wish to extend it. The agreement will terminate prior to the
expiration of the current term (i) upon Mr. Berk's death or Retirement, (ii) at
Barton's election, for Cause or upon Mr. Berk's Complete Disability, and (iii)
at Mr. Berk's election, for Good Reason (all as set forth in the agreement). If
Barton decides not to extend the term of the agreement, or if the agreement
terminates by reason of Mr. Berk's death, Complete Disability, or Retirement, or
for Good Reason, Barton is obligated to pay to Mr. Berk a post-termination
benefit equal to 100% of his then current base salary plus the bonus amount paid
to him for the immediately prior fiscal year. If Mr. Berk decides not to extend
the term of the agreement, then Barton is obligated to pay to Mr. Berk a
post-termination benefit equal to one half of the foregoing amount. In the event
that Mr. Berk's employment is terminated for Good Reason, or is terminated by
Barton for reasons other than death, Complete Disability, Cause, or Barton's
decision not to extend the term of the agreement, then Mr. Berk is entitled to
be paid (i) if the applicable conditions are satisfied, a supplementary
post-termination benefit equal to what he otherwise would have been entitled to
receive as his share of Barton's contribution to its profit-sharing and
retirement plan for the fiscal year in which such termination occurs and (ii) an
amount equal to the product of his then current base salary multiplied by the
number of years remaining in the then term of the agreement. Post-termination
benefits are payable to Mr. Berk in a lump sum as soon as practicable after
employment terminates, except that any
- 14 -
supplementary post-termination benefit is payable promptly after Barton's
contribution to the retirement plan. The agreement requires Mr. Berk to keep
certain information with respect to the Company confidential during and after
his employment with the Company.
Under the terms of a letter agreement between Canandaigua Wine Company,
Inc., a wholly-owned subsidiary of the Company, and Jon Moramarco, President and
Chief Executive Officer of Canandaigua Wine, if Mr. Moramarco's employment is
terminated without cause, he will be entitled to receive severance compensation
equal to his then current base compensation for a period of eighteen (18)
months.
Under the terms of a letter agreement between the Company and Thomas
Summer, Executive Vice President and Chief Financial Officer of the Company, if
Mr. Summer's employment is terminated without cause or if he voluntarily resigns
within 30 days after a demotion or a material diminishment in his
responsibilities, in either case without cause, or if there is a change in
control of the Company, he will be entitled to receive severance compensation
equal to his then current base compensation for a period of 12 months.
Peter Aikens is the President and Chief Executive Officer of Matthew Clark
plc, a wholly-owned subsidiary of the Company, and by virtue of his
responsibilities with Matthew Clark, he is deemed an executive officer of the
Company. The son of Peter Aikens has an equity interest in Harold Whitehead and
Partners ("HWP"), which provides consulting services to Matthew Clark on an as
needed basis. Over the course of the last year, approximately $502,724 was paid
to HWP for services rendered to Matthew Clark.
Agustin Francisco Huneeus ("Mr. Huneeus") is the President of Franciscan
Vineyards, Inc. ("Franciscan"), a wholly-owned subsidiary of the Company, and by
virtue of his responsibilities with Franciscan, he is deemed an executive
officer of the Company. His father, Agustin Huneeus, and other members of his
immediate family, as well as Mr. Huneeus, individually and through various
family owned entities (the "Huneeus Interests") engaged in certain transactions
with Franciscan during the last fiscal year that are expected to be of an
ongoing nature from year to year. Huneeus Interests (a) engage Franciscan for
certain wine processing services; (b) engage Franciscan as the exclusive
distributor of Quintessa wines under a long-term contract; (c) sell grapes to
Franciscan pursuant to existing long-term contracts; (d) participate as partners
with Franciscan in the ownership and operation of a winery and vineyards in
Chile; (e) render brand management consulting and advisory services in the
United States and internationally with respect to the Veramonte brand; and (f)
render consulting services to Franciscan and the Company. Payments to Huneeus
Interests pursuant to these transactions and arrangements totaled approximately
$5,020,000 for the last fiscal year. Payments from Huneeus Interests to
Franciscan for certain wine processing services totaled approximately $610,000
for the last fiscal year.
By an Agreement dated December 20, 1990, the Company entered into a
split-dollar insurance agreement with a trust established by Marvin Sands of
which Robert Sands is the trustee. Pursuant to the Agreement, the Company pays
the annual premium on an insurance policy (the "Policy") held in the trust,
$209,063 in fiscal 2001, and the trust reimburses the Company for the portion of
the premium equal to the "economic benefit" to Marvin Sands calculated in
accordance with the United States Treasury Department rules then in effect
($24,006 for fiscal 2001). The Policy is a joint life policy payable upon the
death of the second to die of the insureds, Marvin Sands and his wife Marilyn,
with a face value of $5 million. Pursuant to the terms of the trust, Richard
Sands, Robert Sands (in his individual capacity) and the children of Laurie
Sands (the deceased sister of Richard and Robert Sands) will each receive
one-third of the proceeds of the Policy (after the repayment of the
- 15 -
indebtedness to the Company out of such proceeds as described below) if they
survive Marvin Sands and Marilyn Sands. From the inception of the agreement
through the end of fiscal 2001, the Company has paid aggregate premiums, net of
reimbursements, of $2,222,506. The aggregate amount of such unreimbursed
premiums constitutes indebtedness from the trust to the Company and is secured
by a collateral assignment of the Policy. Upon the termination of the Agreement,
whether by the death of the survivor of the insureds or earlier cancellation,
the Company is entitled to be repaid by the trust the amount of such
indebtedness.
Richard Sands, Robert Sands and four trusts formed under the will of Laurie
Sands are the beneficial owners of a limited partnership which owns railroad
cars. These cars are leased by the Company from the partnership at fair market
rates. During fiscal year 2001, with respect to leasing these cars, the Company
made payments to this limited partnership in the amount of $28,564. The Company
expects to continue its present relationship with the limited partnership during
fiscal year 2002.
Richard Sands, Robert Sands and their mother, Marilyn Sands are beneficial
owners of L, R, R & M, LLC, a Delaware limited liability company which owns the
Inn on the Lake in Canandaigua, New York (the "Inn"). The Inn is leased and
operated by a third party. The Inn is frequently used by the Company for Company
functions and for its out-of-town employees visiting the Company on business.
During the last fiscal year, the Company paid the operators of the Inn
approximately $50,512 (exclusive of employee reimbursed expenses).
George Bresler, a director of the Company, is a partner of the law firm of
Bresler Goodman & Unterman, LLP in New York, New York. The Company pays to Mr.
Bresler individually an annual retainer of $30,000 for his legal services to the
Company. The Company also includes Mr. Bresler under its non-working group
medical policy and pays a monthly premium of approximately $207 for his
coverage. James A. Locke, III, a director of the Company, is a partner in the
law firm of Nixon Peabody LLP, Rochester, New York, the Company's principal
outside counsel.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires the Company's
directors and executive officers, and persons who beneficially own more than 10%
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission reports of ownership and changes in ownership
of the Company's Class A Stock and Class B Stock. Executive officers, directors
and greater than 10% stockholders are required to furnish the Company with
copies of all such reports they file. Based solely upon review of copies of such
reports furnished to the Company and related information, the Company believes
that all such filing requirements for fiscal 2001 were complied with in a timely
fashion.
STOCK OWNERSHIP OF MANAGEMENT
The following table and notes thereto set forth, as of May 31, 2001, the
beneficial ownership of the Company's directors and nominees, the Named
Executives, and all of the Company's directors and executive officers as a
group. This information is based on information furnished to the Company by or
on behalf of each person concerned. Unless otherwise noted, the named individual
has sole voting power and investment discretion with respect to the shares
attributed to him and the
- 16 -
percentages of ownership are calculated on the basis of 35,881,710 shares of
Class A Stock and 6,132,995 shares of Class B Stock outstanding as of the close
of business on May 31, 2001.
CLASS A STOCK (1) CLASS B STOCK
--------------------------------------------------- -----------------------------
SHARES BENEFICIALLY OWNED
--------------------------------
SHARES
ACQUIRABLE PERCENT OF PERCENT OF
WITHIN 60 DAYS CLASS SHARES CLASS
OUTSTANDING BY EXERCISE OF BENEFICIALLY BENEFICIALLY BENEFICIALLY
NAME OF BENEFICIAL OWNER SHARES OPTIONS (2) OWNED OWNED OWNED
------------------------ --------------- -------------- ------------ ------------- ------------
Richard Sands 1,397,044 (3) 266,563 (3) 4.6% (3) 4,192,094 (3) 68.4% (3)
Robert Sands 1,431,308 (3) 262,996 (3) 4.7% (3) 4,190,684 (3) 68.3% (3)
Alexander L. Berk - 178,720 * - *
Jon Moramarco 134 (4) 40,960 * - *
Thomas S. Summer 3,954 (5) 110,800 * - *
James A. Locke, III 3,608 30,000 * (6) 66 *
George Bresler 1,510 - * - *
Jeananne K. Hauswald 1,510 6,000 * - *
Paul L. Smith 2,310 24,000 * - *
Thomas C. McDermott 1,510 24,000 * - *
All Executive Officers
Directors as a Group
(14 persons) (7) 2,048,840 1,269,235 8.9% (7) 5,667,808 92.4%
----------------------
* Percentage does not exceed one percent (1%) of the outstanding shares of
such class.
(1) The shares and percentages of Class A Stock set forth in this table do not
include (i) shares of Class A Stock that may be acquired within 60 days by
an employee under the Company's Employee Stock Purchase Plan (because such
number of shares is not presently determinable) and (ii) shares of Class A
Stock that are issuable pursuant to the conversion feature of the Company's
Class B Stock, although, such information is provided in a footnote where
appropriate. For purposes of calculating the percentage of Class A Stock
beneficially owned in the table and in the footnotes, additional shares of
Class A Stock equal to the number of presently exercisable options and, as
appropriate, the number of shares of Class B Stock owned by the named
person or by the persons in the group of executive officers and directors
are assumed to be outstanding only for that person or group of persons
pursuant to Rule 13-3(d)(1) under the Securities Exchange Act.
(2) Reflects the number of shares of Class A Stock that can be purchased by
exercising stock options that are exercisable on May 31, 2001 or become
exercisable within sixty (60) days thereafter. Such number does not include
the number of option shares that may become exercisable within sixty (60)
days of May 31, 2001 due to certain acceleration provisions in certain
awards, which accelerations cannot be foreseen on the date of this Proxy
Statement.
(3) Includes shares with respect to which the named individual shares voting
power or investment discretion. See tables and footnotes under "Beneficial
Ownership" above for information with respect to such matters and for the
number and percentage of shares of Class A Stock that would be owned
assuming the conversion of Class B Stock into Class A Stock.
(4) Mr. Moramarco shares the power to vote and dispose of these shares with his
spouse.
(5) Mr. Summer shares the power to vote and dispose 1,474 shares with his
spouse.
- 17 -
(6) Assuming the conversion of Mr. Locke's 66 shares of Class B Stock into
Class A Stock, Mr. Locke would beneficially own 33,674 shares of Class A
Stock, representing less than one percent (1%) of the outstanding Class A
Stock after such conversion.
(7) This group consists of the Company's current executive officers and
directors. Assuming the conversion of a total of 5,667,808 shares of Class
B Stock beneficially owned by the executive officers and directors as a
group into Class A Stock, all executive officers and directors as a group
would beneficially own 8,985,883 shares of Class A Stock, representing
21.0% of the outstanding Class A Stock after such conversion.
PROPOSAL NO. 1
--------------
ELECTION OF DIRECTORS
DIRECTOR NOMINEES
The Board of Directors of the Company nominated seven directors to be
elected by the stockholders to hold office until the next Annual Meeting of
Stockholders and until their successors are elected and qualified. The nominees
for election to the Board of Directors are Richard Sands, Robert Sands, George
Bresler, Jeananne K. Hauswald, James A. Locke, III, Thomas C. McDermott and Paul
L. Smith, all of whom currently serve as directors of the Company. Of the seven
nominees, Messrs. McDermott and Smith have been designated as the nominees to be
elected by the holders of the Class A Stock, voting as a separate class. The
remaining five nominees are to be elected by the holders of the Class B Stock,
voting as a separate class.
Management does not anticipate that any of the nominees will become
unavailable for any reason, but if that should occur before the Meeting, proxies
will be voted FOR another nominee or nominees to be selected by the Board of
Directors of the Company. The following paragraphs contain certain biographical
information about the nominees.
GEORGE BRESLER DIRECTOR SINCE 1992
--------------
Mr. Bresler, age 76, has been engaged in the practice of law since 1957. From
August 1987 through July 1992, Mr. Bresler was a partner of the law firm of
Bresler and Bab, New York, New York. Since 1992, Mr. Bresler has been a partner
of the law firm of Kurzman Eisenberg Corbin Lever & Goodman, LLP and its
predecessor firm, in New York, New York. Mr. Bresler provides legal services to
the Company.
JEANANNE K. HAUSWALD DIRECTOR SINCE 2000
--------------------
Ms. Hauswald, age 57, has been a managing partner of Solo Management Group, LLC,
a corporate financial and investment management consulting company, since
September 1998. From 1987 to 1998, Ms. Hauswald was employed by The Seagram
Company Ltd., a beverage and entertainment/communications company, where she
served in various positions, including Vice President Human Resources from
1990-1993 and Vice President and Treasurer from 1993-1998. Ms. Hauswald
currently serves on the Board of Directors of Thomas & Betts Corporation.
- 18 -
JAMES A. LOCKE, III DIRECTOR SINCE 1983
-------------------
Mr. Locke, age 59, has been a partner in the law firm of Nixon Peabody LLP, and
its predecessor firm, in Rochester, New York, the Company's principal outside
counsel, since January 1, 1996. For twenty years prior to joining Nixon Peabody,
Mr. Locke was a partner in the law firm of Harter, Secrest and Emery, Rochester,
New York.
THOMAS C. MCDERMOTT DIRECTOR SINCE 1997
-------------------
Mr. McDermott, age 63, has been a proprietor of Forbes Products, LLC, a custom
vinyl business products company, since January 1998. From 1994 to 1997, Mr.
McDermott was President and Chief Executive Officer of Goulds Pumps,
Incorporated, a centrifugal pumps company for industrial, domestic and
agricultural markets, where he also was Chairman from 1995 to 1997. From 1986 to
1993, he was President and Chief Operating Officer of Bausch & Lomb
Incorporated, a contact lens, lens-care and eyewear products company.
RICHARD SANDS, PH.D. DIRECTOR SINCE 1982
--------------------
Mr. Sands, age 50, is the Chairman of the Board, President and Chief Executive
Officer of the Company. He has been employed by the Company in various
capacities since 1979. He was elected Executive Vice President and a director in
1982, became President and Chief Operating Officer in May 1986, and was elected
Chief Executive Officer in October 1993. In September 1999, Mr. Sands was
elected Chairman of the Board. He is the brother of Robert Sands.
ROBERT SANDS DIRECTOR SINCE 1990
------------
Mr. Sands, age 43, is Group President of the Company. He was appointed Group
President in April 2000 and has served as a director since January 1990. Mr.
Sands also had served as General Counsel from June 1986 to May 2000, as Vice
President from June 1990 through October 1993, and as Executive Vice President
from October 1993 through April 2000. He is the brother of Richard Sands.
PAUL L. SMITH DIRECTOR SINCE 1997
-------------
Mr. Smith, age 65, retired from Eastman Kodak Company in 1993 after working
there for thirty-five years. Mr. Smith was employed in various positions at
Eastman Kodak Company, the last of which was from 1983 to 1993, when he served
as Senior Vice President and Chief Financial Officer. Also from 1983 to 1993,
Mr. Smith served on the Board of Directors of Eastman Kodak Company. Mr. Smith
currently serves on the Board of Directors of Home Properties of New York, Inc.
and Performance Technologies, Incorporated.
See also information regarding George Bresler, Richard Sands, and Robert
Sands under the caption "Certain Relationships and Related Transactions". For
information with respect to the number of shares of the Company's common stock
beneficially owned by each of the above named director nominees, see the table
and the footnotes thereto under the caption "Stock Ownership of Management".
DIRECTOR COMPENSATION
The Company's general policy is to pay its non-employee directors $35,000
per year for their services as directors, with no additional compensation for
serving as members of committees of the Board. However, the compensation of
non-employee directors was revised with respect to the two- year period
beginning on September 1, 2000 and ending on August 31, 2002, such that each
non-employee director will be paid partly in cash and partly in the form of an
award of restricted shares of Class A Stock. The cash component consists of an
annual amount of $17,500 and the restricted stock component consists of an award
of 1,510 shares, which was valued at the time of the award to be
- 19 -
approximately $35,000 for the two-year period. Subject to applicable provisions
in the award document, fifty percent (50%) of the restricted stock will vest on
August 31, 2001 and fifty percent (50%) of the award will vest on August 31,
2002. George Bresler, Jeananne K. Hauswald, James A. Locke, Thomas C. McDermott
and Paul L. Smith qualify for such payments. During fiscal 2001, the Company
also awarded options to Ms. Hauswald (as a newly elected director) to purchase
up to 6,000 shares of Class A Stock at an exercise price of $26.8125 per share
and with an exercise period of March 16, 2001 through September 14, 2010. The
Company also reimburses its directors for reasonable expenses incurred in
connection with attending meetings of the Board of Directors and committees of
the Board of Directors. Directors who are also employees of the Company receive
no additional compensation for serving as directors.
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company held seven (7) meetings during the
Company's fiscal year ended February 28, 2001. The standing committees of the
Board are the Audit Committee, Corporate Governance Committee and Human
Resources Committee. During fiscal 2001, each of the incumbent directors, during
his or her period of service, attended at least 75% of the total number of
meetings held by the Board and each committee of the Board on which he or she
served.
AUDIT COMMITTEE. The Audit Committee is currently composed of Paul L. Smith
(Chair), Jeananne K. Hauswald and Thomas C. McDermott, each of whom is
independent in accordance with the definition in the New York Stock Exchange's
listing standards. The Audit Committee, operating under its charter, a copy of
which is attached as Annex A to this Proxy Statement, assists the Board of
Directors in fulfilling its oversight responsibilities as they relate to the
Company's accounting policies, internal controls and financial reporting
practices. In addition, this Committee maintains a line of communication between
the Board of Directors and the Company's financial management, internal auditors
and independent accountants. The Audit Committee held four (4) meetings during
fiscal 2001.
CORPORATE GOVERNANCE COMMITTEE. The Corporate Governance Committee is currently
composed of James A. Locke (Chair), Thomas C. McDermott, Robert Sands and Paul
L. Smith. The full Board is responsible for nominating candidates to become
Directors, but has delegated the screening process involved to the Corporate
Governance Committee. The Corporate Governance Committee advises the Board
concerning appropriate composition of the Board and its committees and advises
the Board regarding appropriate corporate governance practices and assists the
Board in achieving them. Among other matters, this Committee also makes
recommendations to the full Board with respect to an officer to be designated as
Chief Executive Officer, and a director to serve as Chairman of the Board. In
addition, this Committee recommends to the Board compensation for directors who
are neither present or former full-time officers of the Company. This Committee
held two (2) meetings during fiscal 2001. The Corporate Governance Committee
will consider nominations by stockholders of the Company. Those suggestions
should include sufficient biographical information so that the Committee can
appropriately assess the proposed nominee's background and qualifications. All
submissions should be sent in writing to the attention of the Corporate
Secretary, Constellation Brands, Inc., 300 WillowBrook Office Park, Fairport, NY
14450.
HUMAN RESOURCES COMMITTEE. The Human Resources Committee is currently composed
of Thomas C. McDermott (Chair), Jeananne K. Hauswald and Paul L. Smith. The
Human Resources Committee monitors, among other matters: human resources
policies and procedures as they relate to the goals and objectives of the
Company and good management practices; and procedures and internal controls
which relate to personnel administration, pay practices and benefits
administration. The Human
- 20 -
Resources Committee is responsible for reviewing total executive compensation in
relation to individual executive performance, Company performance, salary
information and other parameters deemed reasonable in the assignment of
executive compensation levels. This Committee also reviews and approves
executive benefits and perquisites and reviews performance systems, including
reward programs. The Human Resources Committee evaluates the performance of the
Chief Executive Officer and approves his salary, as well as the salaries of
other executives. This Committee also presently administers the Company's
Long-Term Stock Incentive Plan, Incentive Stock Option Plan, Annual Management
Incentive Plan, 1989 Employee Stock Purchase Plan and U.K. Sharesave Scheme and
reviews succession planning for the Company and other important human resources
issues. The Human Resources Committee held four (4) meetings during fiscal 2001.
AUDIT COMMITTEE REPORT
The following report shall not be deemed incorporated by reference in any
filing under the federal securities laws by virtue of any general incorporation
of this Proxy Statement by reference and shall not otherwise be treated as filed
under the securities laws.
The Audit Committee of the Board of Directors provides oversight to the
Company's financial reporting process through periodic meetings with the
Company's independent auditors, internal auditors and management. The management
of the Company is responsible for the preparation and integrity of the financial
reporting information and related systems of internal controls. The independent
auditors are responsible for performing an independent audit of the Company's
consolidated financial statements in accordance with generally accepted auditing
standards and for issuing a report thereon. The Committee, in carrying out its
role, relies on the Company's senior management and its independent auditors.
In connection with the preparation and filing of the Company's Annual
Report on Form 10-K for the year ended February 28, 2001, the Audit Committee
has reviewed and discussed the audited financial statements of the Company with
the Company's management. Also, the Committee discussed with Arthur Andersen
LLP, the Company's independent auditors, the matters required to be discussed by
Statement on Auditing Standards No. 61 (Codification of Statements on Auditing
Standards, AU ss. 380).
In addition, the Committee has received the written disclosures and the
letter from Arthur Andersen required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees) and has discussed with
Arthur Andersen the independence of that firm as the Company's independent
auditors.
Based on the review and discussions described above, the Audit Committee
recommended to the Board of Directors that the Company's audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended February 28, 2001 for filing with the Securities and Exchange
Commission.
AUDIT COMMITTEE
Paul L. Smith (Chair)
Jeananne K. Hauswald
Thomas C. McDermott
- 21 -
VOTE REQUIRED
A plurality of the votes cast at the Meeting by the holders of Class A
Stock is required for the election of the two directors elected by the holders
of Class A Stock. A plurality of the votes cast at the Meeting by the holders of
Class B Stock is required for the election of the five directors elected by the
holders of Class B Stock.
The Board of Directors recommends a vote FOR the nominees. Unless authority
to vote for one or more of the nominees is specifically withheld, the shares
represented by your proxy, if properly executed and returned, and not revoked,
will be voted FOR the election of all the nominees for whom you are entitled to
vote.
PROPOSAL NO. 2
--------------
SELECTION OF INDEPENDENT AUDITORS
The firm of Arthur Andersen LLP, Certified Public Accountants, served as
the independent auditors of the Company for the fiscal year ended February 28,
2001, and the Board of Directors has again selected Arthur Andersen as the
Company's independent auditors for the fiscal year ending February 28, 2002.
This selection will be presented to the stockholders for their ratification at
the Meeting. A representative of Arthur Andersen is expected to be present at
the Meeting and will be given an opportunity to make a statement if he or she so
desires and will be available to respond to appropriate questions concerning the
audit of the Company's financial statements. If the stockholders do not approve
the selection of Arthur Andersen, the Board of Directors may reconsider its
choice.
The following sets forth information regarding fees billed to the Company
by Arthur Andersen:
AUDIT FEES: The aggregate fees billed by Arthur Andersen for
professional services rendered in connection with the audit of the
Company's annual financial statements for the year ended February 28,
2001 and for the review of the financial statements included in the
Company's quarterly reports on Form 10-Q for such year were
approximately $497,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES: Arthur
Andersen did not provide any services to the Company for the design
and implementation of financial information systems during the
Company's 2001 fiscal year.
ALL OTHER FEES: The aggregate fees billed by Arthur Andersen for all
other services rendered to the Company during the Company's 2001
fiscal year were approximately $858,000. These fees consisted
primarily of services relating to acquisitions, debt and equity
offerings, and tax compliance.
The Audit Committee has reviewed and determined that the non-audit services
provided by Arthur Andersen during the Company's 2001 fiscal year are compatible
with maintaining the independence of such auditors.
- 22 -
VOTE REQUIRED
Approval of Proposal No. 2 to ratify the selection of Arthur Andersen LLP
as the Company's independent auditors requires the affirmative vote of a
majority of the votes entitled to be cast by stockholders present in person or
represented by proxy at the Meeting. With respect to this proposal, holders of
Class A Stock and Class B Stock are entitled to vote as a single class at the
Meeting, with holders of Class A Stock having one (1) vote per share and holders
of Class B Stock having ten (10) votes per share.
The Board of Directors recommends that the stockholders ratify the
selection of Arthur Andersen LLP as the independent auditors of the Company for
the fiscal year ending February 28, 2002 and accordingly recommends that you
vote FOR Proposal No. 2. Unless otherwise directed therein, the shares
represented by your proxy, if properly executed and returned, and not revoked,
will be voted FOR such proposal.
STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING
In order for any stockholder proposal submitted pursuant to Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as amended (the "Act"),
to be included in the Company's proxy statement to be issued in connection with
the 2002 Annual Meeting of Stockholders, such proposal must be received by the
Company no later than February 15, 2002.
Any notice of a proposal submitted outside the processes of Rule 14a-8
promulgated under the Act, which a stockholder intends to bring forth at the
Company's 2002 Annual Meeting of Stockholders, will be untimely for purposes of
Rule 14a-4 of the Act and the By-laws of the Company, if received by the Company
after February 15, 2002.
FINANCIAL INFORMATION
The Company has furnished its financial statements to stockholders by
including in this mailing the Company's 2001 Annual Report to Stockholders,
which consists of its Form 10-K for the fiscal year ended February 28, 2001
(excluding the exhibits thereto) and its 2001 glossy report. In addition, upon
the request of any stockholder, the Company will provide, without charge,
another copy of its Annual Report on Form 10-K for the fiscal year ended
February 28, 2001, as filed with the Securities and Exchange commission
(excluding the exhibits thereto). Written requests for such copies should be
directed to Constellation Brands, Inc., Attention: Mark Maring, Vice President,
300 WillowBrook Office Park, Fairport, NY 14450; telephone number: (716)
218-2169.
- 23 -
OTHER
As of the date of this Proxy Statement, the Board of Directors does not
intend to present, and has not been informed that any other person intends to
present, any matter at the Meeting other than those specifically referred to in
this Proxy Statement. If any other matters properly come before the Meeting, it
is intended that the holders of the proxies will act in respect thereto in
accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ David S. Sorce
DAVID S. SORCE, Secretary
Fairport, New York
June 15, 2001
ANNEX A
-------
CONSTELLATION BRANDS, INC.
BOARD OF DIRECTORS'
AUDIT COMMITTEE CHARTER
COMPOSITION
-----------
The Audit Committee of the Board of Directors shall be composed of at least
three, but not more than five, members of the Board, each of whom shall meet the
independence requirements of the New York Stock Exchange, Inc. Each member of
the Audit Committee shall be financially literate, as such qualification is
interpreted by the Board of Directors in its business judgment. In addition, at
least one member of the Audit Committee shall have accounting or related
financial management expertise, as such qualification is interpreted by the
Board of Directors in its business judgment. The number of members of the Audit
Committee shall be determined from time to time by resolution of the Board of
Directors. The Committee and its Chairperson shall be nominated by the Corporate
Governance Committee and elected by the Board.
PURPOSES
--------
The primary purposes of the Audit Committee shall be to:
o Assist the Board of Directors in fulfilling its oversight
responsibilities as they relate to the Company's accounting policies,
internal controls and financial reporting practices; and
o Maintain, through regularly scheduled meetings, a line of
communication between the Board of Directors and the Company's
financial management, internal auditors and independent accountants.
RESPONSIBILITIES
----------------
The Audit Committee will:
1. Oversee the external audit coverage. The Company's independent
accountants are ultimately accountable to the Board of Directors and
the Audit Committee, which have the ultimate authority and
responsibility to select, evaluate and, where appropriate, replace the
independent accountants. In connection with its oversight of the
external audit coverage, the Audit Committee will:
o Recommend to the Board the appointment of the independent
accountants;
o Review the engagement letter and the fees to be paid to the
independent accountants;
o Obtain confirmation and assurance as to the independent
accountants' independence, including ensuring that they submit on
a periodic basis (not less than annually) to the Audit Committee
a formal written statement delineating all relationships between
the independent accountants and the Company. The Audit Committee
is responsible for actively engaging in a dialogue with the
independent accountants with respect to any
- 2 -
disclosed relationships or services that may impact the
objectivity and independence of the independent accountants and
for recommending that the Board of Directors take appropriate
action in response to the independent accountants' report to
satisfy itself of their independence; and
o Review and evaluate the performance of the independent
accountants, as the basis for a recommendation to the Board of
Directors with respect to reappointment or replacement.
2. Review and discuss the annual audited financial statements with
management and the independent accountants. In connection with such
review, the Audit Committee will:
o Discuss with the independent accountants the matters required to
be discussed by Statement on Auditing Standards No. 61 (as may be
modified or supplemented) relating to the conduct of the audit;
o Review significant changes in accounting or auditing policies;
o Review with the independent accountants any problems encountered
in the course of their audit, including any change in the scope
of the planned audit work and any restrictions placed on the
scope of such work; and
o Review with the independent accountants the condition of the
Company's internal controls, and any significant findings and
recommendations with respect to such controls.
3. Review pertinent Company quarterly financial information in advance of
quarterly earnings releases.
4. Review major accounting policies and significant policy decisions as
they deem appropriate.
5. Obtain from management a notification of issues and responses whenever
a second opinion is sought from an independent public accountant.
6. Review annually executive officers' perquisites, including use of
corporate assets.
7. Review periodically the internal audit charter that explains the
functional and organizational framework for providing services to
management and to the Audit Committee.
8. Meet periodically with the Company's General Counsel to discuss legal,
regulatory and corporate compliance matters that may have a
significant impact on the Company.
9. Review internal audit coverage. In connection with this
responsibility, the Audit Committee will:
o Meet periodically with management and the senior internal
auditing executive to review and assess the Company's major
financial risk exposures and the manner in which such risks are
being monitored and controlled;
o Review, in consultation with management and the senior internal
auditing executive, the plan and scope of internal audit
activities; and
- 3 -
o Review significant reports to management prepared by the internal
auditing department and management's responses to such reports.
10. Review and reassess the adequacy of this Charter annually and propose
to the Board any recommended changes.
11. Report Audit Committee activities to the Board regularly.
12. Prepare the report of the Audit Committee required by the rules of the
Securities and Exchange Commission to be included in the proxy
statement for each annual meeting of stockholders.
PROCEDURES
----------
1. Meetings
--------
The Audit Committee shall meet at least three times annually,
preferably in conjunction with regular Board meetings. Meetings may,
at the discretion of the Committee, include members of management,
independent consultants, and such other persons as the Committee shall
determine. The Committee, in discharging its responsibilities, may
meet privately for advice and counsel with independent consultants,
lawyers, or any other persons, including associates of the Company,
knowledgeable in the matters under consideration. The Committee may
also meet by telephone conference call or by any other means permitted
by law or the Company's By-laws.
2. Action
------
A majority of the members of the entire Audit Committee shall
constitute a quorum. The Committee shall act on the affirmative vote
of a majority of members present at a meeting at which a quorum is
present. Without a meeting, the Committee may act by unanimous written
consent of all members.
3. Rules
-----
The Audit Committee shall determine, as appropriate, its own rules and
procedures, consistent with this Charter and the By-laws of the
Company.
4. Chairperson Responsibilities
----------------------------
The Chairperson of the Audit Committee shall report to the Board on
the Committee's determinations and shall present recommendations for
approval whenever necessary or desirable.
* * * * * * * * * *
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent accountants. Nor is it the duty
of the Audit Committee to initiate investigations, to resolve financial
accounting disagreements, if any, between management and the independent
accountants or to assure compliance with laws and regulations and the Company's
corporate policies.
* * * * * * * * * *
P R O X Y
CONSTELLATION BRANDS, INC.
PROXY FOR CLASS A COMMON STOCK AND CLASS B COMMON STOCK
The undersigned hereby appoints David S. Sorce and Thomas S. Summer, or any
one of them, proxies for the undersigned with full power of substitution to vote
all shares of CONSTELLATION BRANDS, INC. (the "Company") that the undersigned
would be entitled to vote at the Annual Meeting of Stockholders to be held at
One Chase Square, Rochester, New York, on Tuesday, July 17, 2001, at 11:00 a.m.
(local time), and at any adjournments thereof (the "Meeting").
Class A Stockholders, voting as a separate class, are entitled to elect two
directors at the Meeting. Class B Stockholders, voting as a separate class, are
entitled to elect five directors at the Meeting. Please refer to the Proxy
Statement for details. Your Shares of Class A Common Stock and/or Class B Common
Stock appear on the back of this card. PLEASE SIGN ON THE BACK.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED BY THE
UNDERSIGNED. THIS PROXY REVOKES ANY PRIOR PROXY GIVEN BY THE UNDERSIGNED. UNLESS
AUTHORITY TO VOTE FOR ONE OR MORE OF THE NOMINEES IS SPECIFICALLY WITHHELD, THE
SHARES REPRESENTED BY A SIGNED PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS
---
AND, UNLESS OTHERWISE SPECIFIED, THE SHARES REPRESENTED BY A SIGNED PROXY WILL
BE VOTED FOR PROPOSAL 2.
---
TO APPROVE THE BOARD OF DIRECTORS' RECOMMENDATIONS, SIMPLY SIGN ON THE
BACK. YOU NEED NOT MARK ANY BOXES.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[SEE REVERSE SIDE]
BALLOT PLEASE MARK
YOUR VOTES AS [X]
INDICATED IN
THIS EXAMPLE
1. Election of Directors: To elect Directors as set forth in the Proxy
Statement.
CLASS A STOCKHOLDERS CLASS B STOCKHOLDERS
Thomas C. McDermott, Paul L. Smith George Bresler, Jeananne K. Hauswald,
James A. Locke, III, Richard Sands,
Robert Sands
FOR BOTH [ ] WITHHELD [ ] FOR ALL [ ] WITHHELD [ ]
NOMINEES FROM BOTH NOMINEES FROM ALL
(except as NOMINEES (except as NOMINEES
noted below) noted below)
------------------------------ -----------------------------
FOR, except vote withheld FOR, except vote withheld
from nominee identified on from nominee(s) identified on
above line. above line.
2. Proposal to ratify selection of Arthur Andersen LLP, Certified Public
Accountants, as the Company's independent auditors for the fiscal year
ending February 28, 2002.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, the proxies are authorized to vote upon such other
business not known at the time of the solicitation of this Proxy as may
properly come before the Meeting or at any adjournments thereof.
[ ] MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW
The undersigned acknowledges receipt with this Proxy of a copy of the
Notice of Annual Meeting and Proxy Statement for the Company's 2001 Annual
Meeting, describing more fully the proposals set forth herein.
SIGNATURE DATE
------------------------------------ ---------------------------
SIGNATURE DATE
------------------------------------ ---------------------------
NOTE: PLEASE DATE THIS PROXY AND SIGN YOUR NAME ABOVE EXACTLY AS IT APPEARS
HEREON. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD SO INDICATE WHEN
SIGNING. IF THE STOCKHOLDER IS A CORPORATION OR OTHER ENTITY, THE FULL ENTITY
NAME SHOULD BE INSERTED AND THE PROXY SIGNED BY A DULY AUTHORIZED REPRESENTATIVE
OF THE ENTITY, INDICATING HIS OR HER TITLE OR CAPACITY.