Exhibit 10.1
SYSCO CORPORATION
AMENDED AND RESTATED 2005 NON-EMPLOYEE DIRECTORS STOCK PLAN
ARTICLE 1
General
This Amended and Restated 2005 Non-Employee Directors Stock Plan (the “Plan”) is established
to attract, retain and compensate for service as members of the Board of Directors highly qualified
individuals who are not current employees of Sysco Corporation (the “Corporation”) and to enable
them to increase their ownership in the Corporation’s common stock. This Plan will be beneficial to
the Corporation and its stockholders since it will allow these Directors to have a greater personal
financial stake in the Corporation through the ownership of the Corporation’s common stock, in
addition to underscoring their common interest with stockholders in increasing the value of the
Corporation over the longer term. The Plan provides for the grant of Stock Options, Restricted
Stock, Restricted Stock Units, Elected Shares and Additional Shares (all as defined herein, and
collectively, “Awards”)
Section
1.1
Eligibility.
All members of the Corporation’s Board of Directors who
are not current employees of the Corporation or any of its subsidiaries (“Non-Employee Directors”)
are eligible to participate in this Plan.
Section
1.2
Shares Available.
(a)
Number of Shares Available.
There are reserved for issuance under this Plan 550,000
shares of the Corporation’s Common Stock, $1.00 par value (“Common Stock”), which may be authorized
but unissued shares, treasury shares, or shares purchased on the open market. For purposes of
applying the limitation in the preceding sentence and subject to the adjustment and replenishment
provisions included in Sections 1.2(b) and (c) below:
(i) the maximum number of shares of Common Stock that may be issued pursuant to Stock Options
shall be 220,000;
(ii) the maximum number of shares of Common Stock that may be issued pursuant to Restricted
Stock Awards, Restricted Stock Unit Awards, Elected Shares and Additional Shares shall be 320,000,
inclusive of all shares issued prior to November 8, 2007 as retainer stock awards; and
(iii) the maximum number of shares of Common Stock that may be issued pursuant to dividends
or dividend equivalents with respect to shares subject to unexercised Options, Restricted Stock or
Restricted Stock Units shall be 10,000.
(b)
Recapitalization Adjustment.
In the event of a reorganization, recapitalization, stock
split, stock dividend, combination of shares, merger, consolidation, rights offering, or any other
change in the corporate structure or shares of the Corporation, adjustments in the number and kind
of shares authorized by this Plan, in the number and kind of shares that may or are required to be
issued hereunder pursuant to any type of award hereunder (including without limitation the maximum
numbers set forth in Section 1.2(c) below), in the number and kind of shares covered by outstanding
stock options (“Options”) under this Plan and in the option price thereof, and in the number and
kind of shares subject to outstanding retainer stock awards granted prior to November 8, 2007,
Restricted Stock and/or Restricted Stock Units shall automatically be made if, and in the same
manner as, similar adjustments are made to awards issued under the Corporation’s incentive plans
for management of the Corporation then in effect.
(c)
Replenishment.
To the extent any shares of Common Stock covered by an Option, retainer
stock award granted prior to November 8, 2007, Restricted Stock Award or Restricted Stock Unit
Award are forfeited by or are not delivered to a Non-Employee Director or his or her beneficiary
because the Option, retainer stock award, Restricted Stock or Restricted Stock Unit is forfeited or
canceled, or the shares of Common Stock are not delivered because they are used to satisfy any
applicable tax withholding obligation, such shares shall not be deemed to have been delivered for
purposes of determining the
maximum number of shares of Common Stock available for delivery with respect to the respective type
of award and with respect to all grants under the Plan.
ARTICLE 2
Option Awards
Section
2.1
Options.
Awards may be made under this Plan of Options to purchase
Common Stock. No Options granted pursuant to this Plan may be “Incentive Stock Options” under
Section 422 of the Internal Revenue Code of 1986, as amended. The grant of an Option entitles the
recipient to purchase shares of Stock at an exercise price established by the Board of Directors.
Section
2.2
Exercise Price.
The exercise price of each Option granted under this
Article 2 shall be established by the Board of Directors or shall be determined by a method
established by the Board of Directors at the time the Option is granted. The exercise price shall
not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of
the Option. For purposes of determining the “Fair Market Value” of a share of Common Stock as of
any date, then the “Fair Market Value” as of that date shall be the last closing price of the
Common Stock on the first business day prior to that date on the New York Stock Exchange or, if the
Common Stock is not listed on the New York Stock Exchange, on any other exchange or quotation
system on which the Common Stock is listed or quoted. No Option may be “repriced,” as such term is
used in rules established by the New York Stock Exchange.
Section
2.3
Exercise.
Subject to the provisions of this Plan, an Option shall be
exercisable in accordance with such terms and conditions and during such periods as may be
established by the Board of Directors; provided, however, that no Option may be exercised more than
seven years after its grant date and no Option granted hereunder may vest in excess of 1/3 of the
number of shares subject to the Option per year for the first three years after the grant date.
Section
2.4
Payment of Option Exercise Price.
The payment of the exercise price
of an Option granted under this Article 2 shall be subject to the following:
(a) Subject to the following provisions of this subsection 2.4, the full exercise price for
shares of Common Stock purchased upon the exercise of any Option shall be paid at the time of such
exercise (except that, in the case of an exercise arrangement approved by the Board of Directors
and described in paragraph 2.4(c), payment may be made as soon as practicable after the exercise).
(b) The exercise price shall be payable in cash or by tendering, by either actual delivery
of shares or by attestation, shares of Common Stock acceptable to the Board of Directors that have
been held by the optionee for at least six months and valued at Fair Market Value as of the day of
exercise, or in any combination thereof, as determined by the Board of Directors.
(c) Subject to compliance with applicable law, the Board of Directors may permit an Option
recipient to elect to pay the exercise price upon the exercise of an Option by irrevocably
authorizing a third party to sell shares of Common Stock (or a sufficient portion of the shares)
acquired upon exercise of the Option and remit to the Corporation a sufficient portion of the sale
proceeds to pay the entire exercise price and any tax withholding resulting from such exercise.
Section
2.5
Settlement of Award.
Shares of Common Stock delivered pursuant to the
exercise of an Option shall be subject to such conditions, restrictions and contingencies as the
Board of Directors may establish in the applicable Option grant agreement. The Board of Directors,
in its discretion, may impose such conditions, restrictions and contingencies with respect to
shares of Common Stock acquired pursuant to the exercise of an Option as the Board of Directors
determines to be desirable.
Section
2.6
Nontransferability of Options.
No Option granted under this Plan is
transferable other than by will or the laws of descent and distribution. During the grantee’s
lifetime, an Option may be exercised only by the grantee or the grantee’s guardian or legal
representative.
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Section
2.7
Dividends and Dividend Equivalents.
An Option, at the time of grant
or subsequent thereto, may provide the grantee with the right to receive dividend payments or
dividend equivalent payments with respect to Common Stock subject to the Option. Such payments may
either be made currently or credited to an account for the grantee, and may be settled in cash or
Common Stock as determined by the Board. Any such settlements, and any such crediting of dividends
or dividend equivalents or reinvestment in shares of Stock, may be subject to such conditions,
restrictions and contingencies as the Board shall establish.
ARTICLE 3
Election to Receive Common Stock
Section
3.1
Eligibility.
A Non-Employee Director who is otherwise eligible to
receive cash payment for services provided as a Director may elect to receive up to 50% of his or
her annual retainer fee, in 10% increments, exclusive of any fees or other amounts payable for
attendance at the meetings of the Board or for service on any committee thereof, in the form of
Common Stock (a “Stock Election”), subject to the following terms of this Article 3. The amount of
the fee which a Non-Employee Director elects to receive in Common Stock is referred to herein as
the “Elected Amount.” The Elected Amount shall be deducted ratably from the quarterly payments of
the annual retainer fee payable to such Non-Employer Director in that fiscal year in which the
Elected Amount would have been paid but for the Stock Election.
Section
3.2
Common Stock.
Any Non-Employee Director who makes a stock election
pursuant to Section 3.1 (an “Electing Director”) shall have an account created on the books of the
Corporation to which shares of Common Stock shall be credited and debited as provided in this
Article 3 (the “Stock Account”). Each Electing Director shall have credited to his or her Stock
Account on the date of each quarterly payment of the annual retainer fee (the “Quarterly Payment
Date”) the sum of (i) that number of shares of Common Stock determined by dividing his or her
Elected Amount by the Fair Market Value on such Quarterly Payment Date (such shares are referred to
as “Elected Shares”) and (ii) that number of shares of Common Stock determined by dividing 50% of
the Elected Amount by the Fair Market Value on such Quarterly Payment Date (such shares are
referred to as “Additional Shares”).
Section
3.3
Vesting.
All Elected Shares and Additional Shares shall be 100%
vested as of the date they are credited to the Electing Director’s Stock Account, but may not be
sold or transferred prior to the date they are issued. Additional Shares, however, may not be sold
or transferred for a period of two years after the date as of which they are issued and such shares
shall bear a legend setting forth this restriction (the “Restriction”). The Restriction shall
remain in effect after the date an Electing Director ceases to be a Director; provided, however,
that (i) if an Electing Director ceases to be a Director by reason of death, disability or
departure under the circumstances described in Section 5.1 (a) or (b), or as otherwise determined
by the Board of Directors, the Restriction shall lapse and be of no further force or effect on or
after the date of such death, disability, departure or determination; and (ii) the Restriction
shall lapse and be of no further force or effect on the date of a Change in Control, as such term
is defined in the Corporation’s 2004 Stock Option Plan.
Section
3.4
Date of Issuance.
The date of issuance of Common Stock issued
pursuant to this Article 3 (the “Issue Date”) shall be December 31 for any year as to which a
Non-Employee Director has made a stock election as described in Section 3.1 hereof, or if December
31 is not a business day for the Corporation’s transfer agent, on the last business day of the
Corporation’s transfer agent prior to December 31. As of the Issue Date, a certificate for the
total number of vested shares in his or her account on the Issue Date shall be issued to such
Electing Director subject to the other terms and conditions of this Plan and at that time, the
balance in each Electing Director’s Stock Account shall be debited by the number of shares issued.
Notwithstanding the foregoing, if a Non-Employee Director ceases to be a director for any reason
when there are shares accrued to such director’s Stock Account, certificates for such shares shall
be issued within 60 days of the date such Non-Employee Director ceases to be a director and the
date such shares are issued shall be the Issue Date of such shares.
Section
3.5
Method of Election.
A Non-Employee Director who wishes to make a
Stock Election must deliver to the Secretary of the Corporation a written irrevocable election
specifying the
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Elected Amount by January 31 of the calendar year to which the Stock Election relates (or at such
other time required under rules established by the Board).
ARTICLE 4
Restricted Stock and Restricted Stock Units
Section
4.1
Grant of Restricted Stock or Restricted Stock Units.
Subject to the
terms and provisions of the Plan, the Board of Directors, at any time and from time to time, may
grant shares of Restricted Stock and/or Restricted Stock Units, as such terms are defined below, to
participants in such amounts and upon such terms and conditions as the Board shall determine;
provided, however, that no grant of Restricted Stock or of any Restricted Stock Unit shall in any
event vest more than 1/3 per year for each of the first three years following the date of grant.
“Restricted Stock” means an award of Common Stock subject to forfeiture based on the passage of
time, the achievement of performance goals, and/or upon the occurrence of other events as
determined by the Board in its discretion, granted subject to the terms of this Plan. “Restricted
Stock Unit” means an award denominated in units whose value is derived from Common Stock and which
is subject to forfeiture based on the passage of time, the achievement of performance goals, and/or
upon the occurrence of other events as determined by the Board in its discretion, granted subject
to the terms of this Plan.
Section
4.2
Restricted Stock or Restricted Stock Unit Agreement.
Each Restricted
Stock and/or Restricted Stock Unit grant shall be evidenced by an Award Agreement duly executed by
the Corporation and the Non-Employer Director to whom the award is granted that shall specify the
period(s) and types of restrictions, the number of shares of Restricted Stock or the number of
Restricted Stock Units granted, and any such other provisions as the Board shall determine.
Section
4.3
Other Restrictions.
(a) The Board shall impose, in the Award Agreement at the time of grant or anytime
thereafter, such other conditions and/or restrictions on any shares of Restricted Stock or
Restricted Stock Units granted pursuant to this Plan as it may deem advisable including, without
limitation, a requirement that participants pay a stipulated purchase price for each share of
Restricted Stock or each Restricted Stock Unit, that specific performance goals be obtained, the
imposition of time-based restrictions on vesting following the attainment of the performance goals,
time-based restrictions, restrictions under applicable laws or under the requirements of any stock
exchange or market upon which such shares are listed or traded, or holding requirements or sale
restrictions placed on the shares by the Corporation upon vesting of such Restricted Stock or
Restricted Stock Units. Except as otherwise provided in this Article 4 or the applicable award
agreement, shares of Restricted Stock covered by each Restricted Stock award shall become freely
transferable by the participant, subject to compliance with applicable laws, after all conditions
and restrictions applicable to such shares have been satisfied or lapse.
(b) Common Stock subject to a Restricted Stock award may not be sold, assigned, transferred,
pledged or otherwise encumbered prior to the date it is vested, and except as otherwise specified
by the Board, Restricted Stock Units may not be transferred.
(c) Each certificate issued in respect of Common Stock pursuant to a Restricted Stock award
shall be registered in the name of the Non-Employee Director and deposited with the Corporation
until such time as all restrictions have lapsed.
Section
4.4
Certificate Legend.
In addition to any other legends placed on
certificates, each certificate representing shares of Restricted Stock granted pursuant to the Plan
may bear a legend such as the following:
The sale or other transfer of the shares of stock represented by this certificate, whether
voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer as
set forth in the SYSCO Corporation 2005 Non-Employee Directors Stock Plan, and in the associated
Award Agreement. A copy of the Plan and such Award Agreement may be obtained from SYSCO
Corporation.
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Section
4.5
Voting Rights.
To the extent required by law, participants in whose
names shares of Restricted Stock granted hereunder shall be issued, shall be granted the right to
exercise full voting rights with respect to those shares during the period of restriction. A
participant shall have no voting rights with respect to any Restricted Stock Units granted
hereunder.
Section
4.6
Dividends and Other Distributions.
During the period of restriction,
participants holding shares of Restricted Stock or Restricted Stock Units granted hereunder may, if
the Board so determines, be credited with dividends paid with respect to the underlying shares or
dividend equivalents while they are so held in a manner determined by the Board in its sole
discretion. The Board may apply any restrictions to the dividends or dividend equivalents that the
Board deems appropriate. The Board, in its sole discretion, may determine the form of payment of
dividends or dividend equivalents, including cash, unrestricted Common Stock, Restricted Stock, or
Restricted Stock Units.
Section
4.7
Payment in Consideration of Restricted Stock Units.
When and if
Restricted Stock Units become payable, a participant having received the grant of such units shall
be entitled to receive payment from the Corporation in cash, shares of Common Stock of equivalent
value (based on the Fair Market Value thereof), in some combination thereof, or in any other form
determined by the Board in its sole discretion. The Board’s determination regarding the form of
payout shall be set forth or reserved for later determination in the Award Agreement pertaining to
the grant of the Restricted Stock Unit.
ARTICLE 5
Miscellaneous
Section
5.1
Cessation of Service.
Except as set forth below and unless otherwise
determined by the Board, upon cessation of service as a Non-Employee Director (for reasons other
than death), all Options, whether or not exercisable at the date of cessation of service, and all
unvested retainer stock awards granted prior to November 8, 2007, Restricted Stock and Restricted
Stock Units shall be forfeited by the grantee; provided, however, that, unless otherwise determined
by the Board, if (a) any Non-Employee Director serves out his/her term but does not stand for
re-election at the end thereof or (b) any Non-Employee Director shall retire from service on the
Board (for reasons other than death) prior to the expiration of his or her term and on or after the
date he or she attains age 71, such grantee’s Options, retainer stock awards granted prior to
November 8, 2007, Restricted Stock and Restricted Stock Units shall remain in effect, vest, become
exercisable and expire as if the grantee had remained a Non-Employee Director of the Corporation.
The status of Elected Shares and Additional Shares shall be governed by Section 3.3.
Section
5.2
Death.
Upon the death of a Non-Employee Director, all unvested
Options held by him or her will vest immediately and may be exercised by his or her estate, or by
the person to whom such right devolves from the Non-Employee Director by reason of his or her
death, at any time within three years after the date of the Non-Employee Director’s death, but in
no event later than the original termination date of the Option. In no event may an Option be
exercised after three years following the holder’s death. In addition, all unvested retainer stock
awards granted prior to November 8, 2007, Restricted Stock and Restricted Stock Units shall vest
and all restrictions with respect to Additional Shares shall lapse.
Section
5.3
Administration.
This Plan shall be administered by the Board of
Directors of the Corporation. This Plan may be terminated or amended by the Board of Directors as
they deem advisable. The Board may delegate its authority hereunder to the Non-Employee Directors,
or to any two or more thereof.
Section
5.4
Amendments.
No amendment may revoke or alter in a manner unfavorable
to the grantees any Options, retainer stock awards granted prior to November 8, 2007, Restricted
Stock, Restricted Stock Units or Elected Shares then outstanding, and no amendment, unless approved
by Corporation stockholders, can increase the number of shares authorized for issuance hereunder,
in total or pursuant to any award type, modify the method by which the Option exercise price is
determined or allow
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for the “repricing” of any Option issued hereunder, as such term is used in rules established by
the New York Stock Exchange.
Section
5.5
Term.
No Option, Restricted Stock, Restricted Stock Unit, Elected
Shares or Additional Shares may be issued under this Plan after November 11, 2010, but Options
granted prior to that date shall continue to become exercisable and may be exercised according to
their terms. Restricted Stock and Restricted Stock Units granted prior to November 11, 2010 shall
continue to vest in accordance with their terms, dividend equivalents awarded prior to November 11,
2010 may be paid in accordance with the terms thereof, and Additional Shares credited prior to
November 11, 2010 shall continue to be subject to the provisions hereof.
Section
5.6
No Other Rights.
Except as provided in this Plan, no Non-Employee
Director shall have any claim or right to be granted or issued an Option, Restricted Stock Award,
Restricted Stock Unit, Elected Shares or Additional Shares under this Plan. Neither this Plan nor
any actions hereunder shall be construed as giving any Director any right to be retained in the
service of the Corporation.
Section
5.7
Prior Plan.
This Plan superseded the Corporation’s prior
Non-Employee Directors Stock Plan (the “Prior Directors Plan”). Options granted under the Prior
Directors Plan shall continue to become exercisable and may be exercised according to their terms,
retainer stock awards granted under the Prior Directors Plan shall continue to vest in accordance
with their terms and Additional Shares (as defined in the Prior Directors Plan) granted under the
Prior Directors Plan shall continue to be subject to the provisions thereof.
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Exhibit 10.2
EXECUTION COPY
FIRST AMENDED AND RESTATED
SYSCO CORPORATION 2005
BOARD OF DIRECTORS DEFERRED COMPENSATION PLAN
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Approved November 2007
Effective January 1, 2005
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FIRST AMENDED AND RESTATED
SYSCO CORPORATION 2005
BOARD OF DIRECTORS DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
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Page
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ARTICLE I
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DEFINITIONS
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2
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ARTICLE II
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ELIGIBILITY
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7
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ARTICLE III
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DEFERRAL
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8
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3.1
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Election to Defer
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8
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3.2
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Failure to Elect
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8
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3.3
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Revocation or Change of Election
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8
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3.4
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Timing and Form of Election
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8
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ARTICLE IV
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ACCOUNT
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4.1
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Establishing a Participant’s Account
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4.2
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Credit of the Participant’s Deferral
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9
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4.3
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Deemed Investments
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9
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4.4
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Procedure to Credit/Debit Interest, Earnings, or Losses Upon an Event of Distribution
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10
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ARTICLE V
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VESTING
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13
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ARTICLE VI
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DISTRIBUTIONS
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6.1
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Form and Time of Distribution
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6.2
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Death/Beneficiary Designation
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15
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6.3
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Termination Distributions
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16
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6.4
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Hardship Withdrawals
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16
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6.5
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Payments upon Income Inclusion Under Section 409A
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6.6
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Expenses Incurred in Enforcing the Plan
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6.7
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Responsibility for Distributions and Withholding of Taxes
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ARTICLE VII
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ADMINISTRATION
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[renumber]
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7.3
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Powers of the Board
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7.4
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Board Discretion
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7.5
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Reimbursement of Expenses
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7.6
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Indemnification
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ARTICLE VIII
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AMENDMENT AND/OR TERMINATION
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8.1
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Amendment or Termination of the Plan
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8.2
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No Retroactive Effect on Account
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-i-
TABLE OF CONTENTS
(continued)
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Page
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8.3
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Effect of Termination
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ARTICLE IX
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FUNDING
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9.1
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Payments Under This Plan Are the Obligation of SYSCO
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9.2
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Plan Obligations May Be Funded Through Rabbi Trust
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9.3
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Reversion of Excess Assets
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9.4
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Participants Must Rely Only on General Credit of SYSCO
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ARTICLE X
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MISCELLANEOUS
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24
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10.1
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Limitation of Rights
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10.2
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Distributions to Incompetents or Minors
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10.3
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Nonalienation of Benefits
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10.4
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Reliance Upon Information
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25
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10.5
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Severability
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10.6
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Notice
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10.7
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Gender and Number
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25
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10.8
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Governing Law
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25
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10.9
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Effective Date
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25
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10.10
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Compliance with Section 409A
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-ii-
FIRST AMENDED AND RESTATED
SYSCO CORPORATION 2005
BOARD OF DIRECTORS DEFERRED COMPENSATION PLAN
WHEREAS
, the American Jobs Creation Act of 2004 added Section 409A to the Internal Revenue
Code of 1986, as amended (the “
Code
”), and Section 409A of the Code imposes certain
restrictions on compensation deferred on and after January 1, 2005;
WHEREAS
, SYSCO Corporation sponsors and maintains the SYSCO Corporation 2005 Board of
Directors Deferred Compensation Plan effective as of January 1, 2005, which is intended to comply
with Section 409A of the Code (the “Current Plan”);
WHEREAS
, on April 17, 2007, the U.S. Department of Treasury promulgated final regulations
under Section 409A of the Code; and on October 22, 2007, the Internal Revenue Service (the “IRS”)
issued Notice 2007-86, extending the transition relief under the final 409A regulations by allowing
Participants until December 31, 2008 (previously December 31, 2007) to change certain previous
distribution elections;
WHEREAS,
Section 8.1 of the Current Plan authorizes the employee members of the Board of
Directors of SYSCO Corporation to amend the Current Plan; and
WHEREAS,
the sole employee member of the Board of Directors of SYSCO Corporation, acting upon
the recommendation of the Corporate Governance and Nominating Committee of the Board, has
determined that it is in the best interests of SYSCO Corporation and its non-employee directors to
amend and restate the Current Plan to: (i) take advantage of extended transitional relief provided
under the final 409A regulations as supplemented by IRS Notice 2007-86, by allowing Participants
until December 31, 2008, to change certain previous distribution elections; (ii) clarify, pursuant
to the final 409A regulations, the circumstances that constitute an “Unforeseeable Emergency” for
purposes of hardship distributions; (iii) provide that on a going forward basis, the Board shall
administer the Current Plan; (iv) provide that the Board of Directors (as opposed to only employee
directors) has the authority to amend and terminate the Current Plan; and (v) make other various
changes to comply with the final 409A regulations.
NOW, THEREFORE
, SYSCO Corporation hereby adopts the First Amended and Restated SYSCO
Corporation 2005 Board of Directors Deferred Compensation Plan, effective January 1, 2005 (the
“Plan”), as follows:
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ARTICLE I
DEFINITIONS
Account
. “Account” means a Participant’s Account in the Deferred Compensation Ledger
maintained by SYSCO which reflects the entire interest of the Participant in the Plan. Each
Account shall reflect the Participant’s compensation deferred under this Plan, as adjusted herein
for deemed Investment earnings and losses and credited interest.
Beneficiary
. “Beneficiary” means a person or entity designated by the Participant
under the terms of this Plan to receive any amounts distributed under the Plan upon the death of
the Participant.
Board of Directors
. “Board of Directors” or “Board” means the Board of Directors of
SYSCO.
Business Day
. “Business Day” means any day on which the New York Stock Exchange is
open for trading.
Change of Control
. “Change of Control” means the occurrence of one or more of the
following events:
(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Act (a “
Person
”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Securities Act) of 20% or more of either (i) the
then-outstanding shares of SYSCO common stock (the “
Outstanding SYSCO Common Stock
”) or
(ii) the combined voting power of the then-outstanding voting securities of SYSCO entitled to vote
generally in the election of directors (the “
Outstanding SYSCO Voting Securities
”);
provided, however, that, for purposes of this definition, the following acquisitions shall not
constitute a Change of Control: (1) any acquisition directly from SYSCO, (2) any acquisition by
SYSCO, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained
by SYSCO or any Affiliate, or (4) any acquisition by any corporation; pursuant to a transaction
that complies with subparagraphs (c)(i), (c)(ii) and (c)(iii) of this definition;
(b) Individuals who, as of November 10, 2005, constitute the Board of Directors (the
“
Incumbent Board
”) cease for any reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a director subsequent to November 10,
2005, whose election, or nomination for election by SYSCO’s stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors;
(c) Consummation of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving SYSCO or any of its Affiliates, a sale or other disposition
of all or substantially all of the assets of SYSCO, or the acquisition of assets or stock of
another entity by SYSCO or any of
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its Affiliates (each, a “
Business Combination
”), in each case unless, following such
Business Combination, (i) all or substantially all of the individuals and entities that were the
beneficial owners of the Outstanding SYSCO Common Stock and the Outstanding SYSCO Voting Securities
immediately prior to such Business Combination beneficially own, directly or indirectly, more than
60% of the then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business Combination (including, without
limitation, a corporation that, as a result of such transaction, owns SYSCO or all or substantially
all of SYSCO’s assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to such Business Combination of the
Outstanding SYSCO Common Stock and the Outstanding SYSCO Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such Business Combination or any employee
benefit plan (or related trust) of SYSCO or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation resulting from such Business Combination
or the combined voting power of the then-outstanding voting securities of such corporation, except
to the extent that such ownership existed prior to the Business Combination, and (iii) at least a
majority of the members of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board of Directors providing for such Business Combination; or
(d) Approval by the stockholders of SYSCO of a complete liquidation or dissolution of SYSCO.
Code
. “Code” means the Internal Revenue Code of 1986, as amended from time to time.
Default Distribution Option
. “Default Distribution Option” shall have the meaning set
forth in Section 6.1(c).
Default Investment
. “Default Investment” shall mean a hypothetical investment with an
investment return equal to the monthly average of the Moody’s Average Corporate Bond Yield for the
calendar year ending prior to the beginning of the Plan Year for which such rate shall be
effective, plus one (1) percent; provided, however, for calendar years commencing on or after
January 1, 2006, “Default Investment” shall mean a hypothetical investment with a
per annum
investment return equal to the sum of (x) the monthly average of the Moody’s Average Corporate Bond
Yield (determined by dividing the sum of the Corporate Bond Yield Averages for each month, as
published in Moody’s Bond Survey, by the number of months in the applicable calculation period) for
the period described in (i) or (ii) that produces the higher rate: (i) the six-month period ending
on October 31
st
of the calendar year prior to the calendar year for which such rate
shall be effective, or (ii) the twelve-month period ending on October 31
st
of the
calendar year prior to the calendar year for which such rate shall be effective, plus (y) 1%, or
such other Investment designated by the Board as the “Default Investment” on
Exhibit “A”
attached hereto. The investment return of the Default Investment shall be re-determined annually as
of November 1
st
of the calendar year prior to the calendar year for which such rate
shall be effective. The investment return, once established, shall be effective as of January
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1
st
of the calendar year following the calendar year in which such investment
return is calculated and shall remain in effect for the entire calendar year.
Deferred Compensation Ledger
. “Deferred Compensation Ledger” means the ledger
maintained by SYSCO for each Participant which reflects the amount of the Participant’s
compensation deferred under this Plan, the credits and debits for deemed Investment earnings and
losses pursuant to Section 4.3, interest credited pursuant to Section 4.4, and cash distributed to
the Participant or the Participant’s Beneficiaries pursuant to Article VI.
Eligibility Date
. “Eligibility Date” means the date as of which a member of the Board
of Directors is first eligible to participate in the Plan. A member of the Board of Directors
shall be notified of his Eligibility Date by the Board or its designee.
Fair Market Value
. “Fair Market Value” means, with respect to any Investment, the
closing price on the date of reference, or if there were no sales on such date, then the closing
price on the nearest preceding day on which there were such sales, and in the case of an unlisted
security, the mean between the bid and asked prices on the date of reference, or if no such prices
are available for such date, then the mean between the bid and asked prices on the nearest
preceding day for which such prices are available. With respect to any Investment which reports
“net asset values” or similar measures of the value of an ownership interest in the Investment,
Fair Market Value shall mean such closing net asset value on the date of reference, or if no net
asset value was reported on such date, then the net asset value on the nearest preceding day on
which such net asset value was reported. For any Investment not described in the preceding
sentences, Fair Market Value shall mean the value of the Investment as determined by the Board in
its reasonable judgment on a consistent basis, based upon such available and relevant information
as the Board determines to be appropriate.
Fixed Interest Option
. “Fixed Interest Option” shall have the meaning set forth in
Section 4.3(d).
Installment Distribution Option
. “Installment Distribution Option” shall have the
meaning set forth in Section 6.1(b)(ii).
Investment
. “Investment” means the options set forth in
Exhibit “A
” attached
hereto, as the same may be amended from time to time by the Board in its sole and absolute
discretion.
Lump Sum Distribution Option
. “Lump Sum Distribution Option” shall have the meaning
set forth in Section 6.1(b)(i).
Participant
. “Participant” means a member of the Board of Directors of SYSCO who is
not otherwise employed by SYSCO or a Subsidiary, and any former member the Board of Directors of
SYSCO who is eligible to participate in the Plan or who has an Account in the Deferred Compensation
Ledger.
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Plan
. “Plan” means this First Amended and Restated SYSCO Corporation 2005 Board of
Directors Deferred Compensation Plan, as set forth in this document and amended from time to time.
Plan Year
. “Plan Year” means the calendar year. The Plan’s first Plan Year shall be
the 2005 calendar year.
Section 409A
. “Section 409A” means Section 409A of the Code. References herein to
“Section 409A” shall also include any regulatory and other interpretive guidance promulgated under
Section 409A of the Code.
Securities Act
. “Securities Act” means the Securities Exchange Act of 1934, as
amended from time to time.
Subsequent Elections
. “Subsequent Elections” shall have the meaning set forth in
Section 6.1(a).
Subsidiary
. “Subsidiary” means (a) any corporation which is a member of a “controlled
group of corporations” which includes SYSCO, as defined in Code Section 414(b), (b) any trade or
business under “common control” with SYSCO, as defined in Code Section 414(c), (c) any organization
which is a member of an “affiliated service group” which includes SYSCO, as defined in Code Section
414(m), (d) any other entity required to be aggregated with SYSCO pursuant to Code Section 414(o),
and (e) any other organization or employment location designated as a “Subsidiary” by resolution of
the Board of Directors.
SYSCO
. “SYSCO” means SYSCO Corporation.
Termination
. “Termination” means a Participant’s retirement, resignation, or removal
from the Board of Directors for any reason.
Termination Investment Election
. “Termination Investment Election” shall have the
meaning set forth in Section 4.3(d).
Treasury Regulations
. “Treasury Regulations” means the Federal Income Tax
Regulations, and, to the extent applicable, any Temporary or Proposed Regulations promulgated under
the Code, as such regulations may be amended from time to time (including the corresponding
provisions of succeeding regulations).
Trust
. “Trust” means any trust created by separate agreement as permitted by Section
9.2 of this Plan.
Unforeseeable Emergency
. “Unforeseeable Emergency” shall have the meaning set forth
in Section 6.4.
Variable Investment Option
. “Variable Investment Option” shall have the meaning set
forth in Section 4.3(d).
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ARTICLE II
ELIGIBILITY
All members of the Board of Directors who are not otherwise employed by SYSCO or a Subsidiary
shall be eligible to participate in this Plan.
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ARTICLE III
DEFERRAL
3.1
Election to Defer
. Each Participant may elect to defer under this Plan a
percentage of his Director’s fees in any 10% increment which is not less than 20% nor more than
100% of his Director’s fees. Generally, the election to defer is effective only if received by
SYSCO in proper form prior to the beginning of the Plan Year or Years for which it is to be
applicable; once a Plan Year has commenced, the election to defer shall be irrevocable for that
Plan Year. Notwithstanding the foregoing provisions of this Section 3.1 to the contrary, with
respect to the first Plan Year during which a Participant becomes eligible to participate in the
Plan, the Participant’s election to defer may be made, with respect to Director’s fees for services
to be performed subsequent to the election, within 30 days after the Participant’s Eligibility
Date.
3.2
Failure to Elect
. If the Participant fails to provide his election to SYSCO in
proper form prior to (i) with respect to the initial Plan Year of a Participant’s Plan eligibility,
the 31
st
day following the Participant’s Eligibility Date, and (ii) with respect to Plan
Years after a Participant’s initial year of Plan eligibility, the beginning of a Plan Year for
which no prior election is effective, the Participant shall be deemed to have elected not to defer
any portion of his Director’s fees for that Plan Year.
3.3
Revocation or Change of Election
. Each Participant shall have the right to revoke
or change any prior continuing election to defer a portion or all of his Director’s fees;
provided,
however
, that any such revocation or change of election shall be effective only on a prospective
basis beginning with Director’s fees earned during the Plan Year next following the Plan Year
during which SYSCO receives the revocation or change in proper form. Notwithstanding anything to
the contrary contained herein, if a Participant receives a hardship withdrawal pursuant to Section
6.4, the Participant may elect to cancel his deferral election in effect for such calendar year.
Such cancellation election shall be made in writing by the Participant in such form as the Board
determines from time to time, and any subsequent deferral elections shall be subject to the
requirements of the first sentence of Section 3.1.
3.4
Timing and Form of Election
. The Board shall have the right to make such rules
and regulations regarding the election, revocation, or change of election to defer as are not
inconsistent with the requirements of Sections 3.1, 3.2, and 3.3 or Section 409A, including
establishing election periods, forms for elections, and all other pertinent matters.
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ARTICLE IV
ACCOUNT
4.1
Establishing a Participant’s Account
. SYSCO shall establish an Account for each
Participant in a special Deferred Compensation Ledger which shall be maintained by SYSCO. Each
Account shall reflect the entire interest of the Participant in the Plan.
4.2
Credit of the Participant’s Deferral
. SYSCO shall credit the amount of a
Participant’s deferral to the Participant’s Account in the Deferred Compensation Ledger on the same
day that such amount would have been paid to the Participant but for the deferral which was
elected.
4.3
Deemed Investments
. The credit balance of the Participant’s Account in the
Deferred Compensation Ledger shall be deemed invested and reinvested from time to time in such
Investments as shall be designated by the Participant in accordance with the following:
(a) Upon commencement of participation in the Plan, each Participant shall make
a designation of the Investments in which his Account will be deemed invested. The
Investments designated by a Participant shall be deemed to have been purchased on the
date on which the Participant’s deferrals are credited to the Participant’s Account,
or if such date is not a Business Day, on the first Business Day following such date.
If a Participant has not made a designation of Investments in which his Account will
be deemed invested, the credit balance of the Participant’s Account shall be deemed
to be invested in the Default Investment.
(b) At such times and under such procedures as the Board shall designate, each
Participant shall have the right to change (i) the existing Investments in which the
Participant’s Account is deemed invested by treating a portion of the existing
Investments in the Participant’s Account as having been sold and the new Investments
purchased; and (ii) the Investments which are deemed to be purchased with future
credits to the Participant’s Account.
(c) In the case of any deemed purchase of an Investment, the Participant’s
Account shall be decreased by a dollar amount equal to the number of units of such
Investment treated as purchased multiplied by the per unit net asset value of such
Investment as of such date or, if such date is not a Business Day, on the first
Business Day following such date, and shall be increased by the number of units of
such Investment treated as purchased. In the case of any deemed sale of an
Investment, the Participant’s Account shall be decreased by the number of units of
Investment treated as sold, and shall be increased by a dollar amount equal to the
number of units of such Investment treated as sold multiplied by the per unit net
asset value of such Investment as of such date or, if such date is not a Business
Day, on the first Business Day following such date.
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(d) If a Participant’s Termination occurs on or after January 1, 2006 and the
Participant has elected to receive any portion of the Participant’s distribution
under Section 6.3 (upon Termination) pursuant to the Installment Distribution Option,
with respect such portion, the Participant may elect (the “
Termination Investment
Election
”) either (i) to have interest credited to the declining balance of such
portion of the Participant’s Account at a fixed rate determined pursuant to Section
4.4(b)(ii) (the “
Fixed Interest Option
), or (ii) to have the Participant’s
designation of deemed Investments (which deemed Investments may continue to be
changed pursuant to Section 4.3(b)) remain in effect throughout the period of
distribution (the “
Variable Investment Option
”); provided, however, that if
the Participant dies during the period of distribution, such Participant’s
designation of deemed Investments shall be terminated and such Participant’s Account
shall be deemed invested in the Default Investment. A Participant shall make his or
her Retirement Investment Election at such time and in such form as determined by the
Board. If SYSCO does not receive a Participant’s Retirement Investment Election in
the period prescribed by the Board, the Participant shall be deemed to have elected
the Fixed Interest Option. Once a Participant has made a Retirement Investment
Election (or is deemed to have made a Retirement Investment Election) such election
is irrevocable. Following the Participant’s Termination, interest or deemed
Investment earnings or losses, as the case may be, shall be credited or debited to
the Participant’s Account in accordance with Section 4.4.
(e) In no event shall SYSCO be under any obligation, as a result of any
designation of Investments made by Participants, to acquire any Investment assets, it
being intended that the designation of any Investment shall only affect the
determination of amounts ultimately paid to a Participant.
(f) In determining the amounts of all debits and credits to the Participant’s
Account, the Board shall exercise its reasonable best judgment, and all such
determinations (in the absence of bad faith) shall be binding upon all Participants
and their Beneficiaries. If an error is discovered in the Participant’s Account, the
Board, in its sole and absolute discretion, shall cause appropriate, equitable
adjustments to be made as soon as administratively practicable following the
discovery of such error or omission.
4.4
Procedure to Credit/Debit Interest, Earnings, or Losses Upon an Event of
Distribution
.
(a)
Distributions Upon Termination under the Variable Investment Option.
If a Participant is entitled to receive a distribution pursuant to Section 6.3 (upon
Termination) and elects the Variable Investment Option under Section 4.3(d)(ii), the
declining balance of the portion of the Participant’s Account to which this Section
4.4(a) applies shall continue to be credited or debited with Investment earnings or
losses (including interest credited at the investment return of the Default
Investment, if that Investment option is selected) for the period beginning on the day
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following the day on which the event giving rise to the distribution occurs and
continuing until the final installment distribution is paid. The amount of deemed
Investment earnings or losses credited or debited to the Participant’s Account shall
be determined by the Board in accordance with Section 4.3(f)
(b)
Distributions Upon Death, or Termination
. If a Participant or a
Participant’s Beneficiaries are entitled to receive a distribution pursuant to
Section 6.2 (upon death), or Section 6.3 (upon Termination) unless the Participant
elected the Variable Investment Option under Section 4.3(d)(ii), interest or deemed
Investment earnings or losses shall be credited or debited to the portion of the
Participant’s Account subject to this Section 4.4(b) in accordance with this Section
4.4(b).
(i)
Crediting/Debiting of Interest or Deemed Investment Earnings or Losses Prior to
Commencement of Distributions
. The Participant’s Account shall continue to be credited
or debited with Investment earnings or losses until, (A) for events giving rise to a
distribution that occur before January 1, 2006, the date of the event giving rise to the
distribution, or (B) for events giving rise to a distribution that occur on or after January
1, 2006, the later to occur of (x) the date of the event giving rise to the distribution; or
(y) the last day of the month preceding the month in which distributions will commence (the
“
Conversion Date
”) at which time the deemed Investments in the Participant’s Account
shall be treated as sold and credited with a dollar value in accordance with Section 4.3(c).
After such date, there shall be no additional credits or debits to the Participant’s Account
under this Plan for deemed Investment earnings or losses. Notwithstanding the foregoing, the
Participant’s Account shall be credited with interest, at the rate of the Default
Investment, for the period beginning on the Conversion Date and ending on the day
immediately before the date on which distribution payments commence.
(ii)
Crediting of Interest or Deemed Investment Earnings After Commencement of
Installment Distributions
. With respect to distributions subject to this Section
4.4(b), if any portion of a Participant’s Account is to be paid pursuant to the Installment
Distribution Option, interest shall be credited to the declining balance of the portion of
the Participant’s Account subject to this Section 4.4(b)(ii) beginning on the day on which
distributions commence and continuing until the final installment distribution is paid. The
interest crediting rate for purposes of this Section 4.4(b)(ii) shall be the investment
return of the Default Investment for the last calendar year ending prior to the event giving
rise to the distribution; provided
however
, that for events occurring on or after January 1,
2006 that give rise to a distribution, the interest crediting rate hereunder shall be the
per annum
interest rate equal to the sum of (x) the monthly average of the Moody’s Average
Corporate Bond Yield (determined by dividing the sum of the Corporate Bond Yield Averages
for each month, as published in Moody’s Bond Survey, by the number of months in the
calculation period) for the period described in (i) or (ii) that produces the higher rate:
(i) the six-month period ending on the last day of the month that is two months prior to the
month during
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which distributions are to commence, or (ii) the twelve-month period ending on the last
day of the month that is two months prior to the month during which distributions are to
commence, plus (y) 1%.
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ARTICLE V
VESTING
The amount credited to a Participant’s Account attributable to deferrals of Director’s fees,
adjusted for interest and deemed Investment earnings and losses pursuant to Sections 4.3 and 4.4,
shall be 100% vested at all times.
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ARTICLE VI
DISTRIBUTIONS
6.1
Form and Time of Distribution
.
(a)
Election, Revocation, or Change of Election of the Form of
Distribution
. Each Participant shall have the right to elect, to revoke, or to
change any prior election of the form of distribution at the time and under the rules
established by the Board, which rules shall include the provisions of this Article
VI. A Participant may elect different forms of distribution, as specified in Section
6.1(b), with respect to the distribution options described in Sections 6.2 (death)
and 6.3 (Termination). The initial election of form of distribution with respect to
a particular distribution event, if received by SYSCO in proper form prior to or
concurrent with the time a Participant first makes an election to defer Director’s
fees under this Plan, shall become effective upon receipt, and shall become
irrevocable at the time a Participant first makes an election to defer Director’s
fees under this Plan. Any election of form of distribution or revocations or changes
of election of form of distribution with respect to a distribution event that a
Participant makes after he first makes an election to defer Director’s fees under
this Plan (such elections, revocations, and changes are referred to collectively
herein as “
Subsequent Elections
”) shall be effective only if the Subsequent
Election is received by SYSCO in proper form at least one (1) year prior to the
occurrence of the event giving rise to the distribution to which such Subsequent
election applies. During the one-year period after a Subsequent Election is received
by SYSCO, the Participant’s last effective election, revocation, or change shall
remain in force with respect to such distribution event. In addition, with respect
to distributions resulting from the Participant’s Termination, the first payment
pursuant to such Subsequent Election may not be made within the five (5) year period
commencing on the date such payment would have been made or commenced under the last
effective election, revocation, or change made by the Participant. Notwithstanding
the foregoing provisions of this Section 6.1(a), at such time as the Board shall
determine, but no later than December 31, 2007, a Participant may make a Subsequent
Election to change the form of distribution of a Participant’s Account,
provided
that
a Subsequent Election made during calendar year 2007 may not (i) apply to any amount
that would otherwise be payable during calendar year 2007, and (ii) cause an amount
that is otherwise payable after calendar year 2007 to be paid in calendar year 2007;
and
provided further
, that a Subsequent Election made during calendar year 2008 may
not: (A) apply to any amount that would otherwise be payable during calendar year
2008, (B) cause an amount that is otherwise payable after calendar year 2008 to be
paid in calendar year 2008. Notwithstanding the above, a Subsequent Election shall
not apply to any distribution that is otherwise payable within the six-month period
following the date of such Subsequent Election.
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(b)
Form of Distribution Options Available
. The distribution options
that may be selected by Participants are as follows:
(i) a lump-sum payment (the “
Lump-Sum Distribution Option
”) to the Participant
or the Participant’s Beneficiaries of the Participant’s Account in the Deferred Compensation
Ledger;
(ii) equal quarterly or annual (as elected by the Participant) installment payments to
the Participant or the Participant’s Beneficiaries of principal and interest for a period of
up to 20 years (as elected by the Participant) (the “
Installment Distribution
Option
”); provided, however, if a Participant is entitled to receive a distribution
pursuant to Section 6.3 (upon Termination) and elects the Variable Investment Option under
Section 4.3(d)(ii), each installment payment amount during the period of distribution (as
selected by the Participant) shall be determined as the result of a calculation, to be
performed as soon as administratively practicable before the date on which the installment
payment is to be made, where (A) is divided by (B); and
(A) equals the remaining value of the Participant’s Account in the
Deferred Compensation Ledger as of the date of such calculation; and
(B) equals the remaining number of installment payments.
(iii) a combination of the Lump-Sum Distribution Option and the Installment
Distribution Option, whereby a portion of the Participant’s Account in the Deferred
Compensation Ledger is distributed in part pursuant to the Lump-Sum Distribution Option, and
the balance of the Account is distributed pursuant to the Installment Distribution Option.
(c)
Default Distribution Option
. If a Participant does not have an
effective election as to form of distribution on file with SYSCO at the time
distributions to such Participant are to commence, the Participant shall be
conclusively deemed to have elected to receive the balance of the Participant’s
Account pursuant to the Installment Distribution Option annually over a period of ten
(10) years (the “
Default Distribution Option
”).
(d)
Payment of Amounts less than $30,000
. Notwithstanding any other
provision of this Plan, if a Participant’s account balance is less than $30,000 on
the date installment distributions to such Participant hereunder would otherwise
commence, the distribution shall be made in one lump sum.
(e)
Commencement of Distributions
. Distributions pursuant to this
Section 6.1 shall commence as soon as administratively feasible after the occurrence
of the event giving rise to the distribution, but not later than 90 days after the
event giving rise to the distribution; provided, that, in the case of the death of
the Participant, distributions shall not commence within the 30 day
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period following the Participant’s death,
provided further
, that, in the case of
a Participant who has made a Subsequent Election, distributions shall not commence
earlier than the time prescribed by Section 6.1(a).
6.2
Death/Beneficiary Designation
. Upon the death of a Participant, the Participant’s
Beneficiary or Beneficiaries shall receive, at the time and in the manner provided in Section 6.1,
the balance then credited to the Participant’s Account in the Deferred Compensation Ledger. Each
Participant, at the time of making his initial deferral election, must file with SYSCO a
designation of one or more Beneficiaries to whom distributions otherwise due the Participant shall
be made in the event of his death prior to the complete distribution of the amount credited to his
Account in the Deferred Compensation Ledger. The designation shall be effective upon receipt by
SYSCO of a properly executed form which the Board has approved for that purpose. The Participant
may from time to time revoke or change any designation of Beneficiary by filing another approved
Beneficiary designation form with SYSCO. If there is no valid designation of Beneficiary on file
with SYSCO at the time of the Participant’s death, or if all of the Beneficiaries designated in the
last Beneficiary designation have predeceased the Participant or, in the case of entities,
otherwise ceased to exist, the Beneficiary shall be the Participant’s spouse, if the spouse
survives the Participant, or otherwise the Participant’s estate. A Beneficiary who is an
individual shall be deemed to have predeceased the Participant if the Beneficiary dies within 30
days after the date of the Participant’s death. If any Beneficiary survives the Participant but
dies or, in the case of an entity, otherwise ceases to exist before receiving all amounts due the
Beneficiary from the Participant’s Account, the balance of the amount which would have been paid to
that Beneficiary shall, unless the Participant’s designation provides otherwise, be distributed to
the individual deceased Beneficiary’s estate or, in the case of a Beneficiary which is an entity,
to the Participant’s spouse, if the spouse survives the Participant, or otherwise to the
Participant’s estate. Any Beneficiary designation which designates any person or entity other than
the Participant’s spouse must be consented to in writing by the Participant’s spouse in a form
acceptable to the Board in order to be effective.
6.3
Termination Distributions
. Upon the Participant’s Termination, the Participant
shall receive, at the time and in the manner provided in Section 6.1, the amount credited to the
Participant’s Account in the Deferred Compensation Ledger.
6.4
Hardship Withdrawals
. Any Participant may request a hardship withdrawal to
satisfy an “Unforeseeable Emergency.” No hardship withdrawal can exceed the lesser of the amount
credited to the Participant’s Account or the amount reasonably needed to satisfy the Unforeseeable
Emergency. Whether an Unforeseeable Emergency exists and the amount reasonably needed to satisfy
such emergency shall be determined by the Board based upon the evidence presented by the
Participant and the rules established in this Section 6.4. If a hardship withdrawal is approved by
the Board, it shall be paid within 10 days of the Board’s determination. For purposes of this
Plan, an Unforeseeable Emergency means: (a) a severe financial hardship to the Participant
resulting from an illness or accident of the Participant or of a dependent (as defined in Section
152(a) of the Code) of the Participant, (b) the loss of the Participant’s property due to casualty,
or (c) another similar extraordinary and
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unforeseeable circumstance arising as a result of events beyond the control of the
Participant. The circumstances that constitute a hardship shall depend upon the facts of each
case, but, in any case, amounts distributed with respect to an Unforeseeable Emergency shall not
exceed the amount necessary to satisfy such emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution, after taking into account the extent to
which such emergency is or may be relieved: (i) through reimbursement or compensation by insurance
or otherwise (other than compensation that would otherwise be available to the Participant from
either a tax-qualified plan or another non-qualified deferred compensation plan (irrespective of
whether such non-qualified deferred compensation plan is subject to Section 409A)), (ii) by
liquidation of the Participant’s assets, to the extent the liquidation of such assets will not
itself cause severe financial hardship, or (iii) by additional compensation that may be available
to such Participant by reason of a cancellation of deferrals under Section 3.3 of this Plan.
Foreseeable needs for funds, such as the need to send a Participant’s child to college or the
desire to purchase a home, shall not be considered to be an Unforeseeable Emergency.
6.5
Payments upon Income Inclusion Under Section 409A
. It is intended that the
provisions of this Plan shall comply with the requirements of Section 409A; however, if it is
determined that the provisions of this Plan do not comply with the requirements of Section 409A and
a Participant is required to include in income amounts otherwise deferred under this Plan, the
Participant shall be entitled, upon request, to receive a distribution not to exceed the amount
required to be included in income as a result of the failure of the Plan to meet the requirements
of Section 409A. Amounts distributable pursuant to this Section 6.5 shall be distributed as soon
as administratively feasible, but no later than ninety (90) days after the date of the
determination that the Plan does not comply with the requirements of Section 409A.
6.6
Expenses Incurred in Enforcing the Plan
. SYSCO will, in addition, pay a
Participant for all legal fees and expenses incurred by him in contesting or disputing his removal
from the Board of Directors or in seeking to obtain or enforce any benefit provided by this Plan if
the removal occurs in the Plan Year in which a Change of Control occurs or during the next three
succeeding Plan Years following the Plan Year in which a Change of Control occurs.
6.7
Responsibility for Distributions and Withholding of Taxes
. The Board or its
designee shall furnish information to SYSCO concerning the amount and form of distribution to any
Participant entitled to a distribution so that SYSCO may make or cause the Trust to make the
distribution required. The Board or its designee shall also calculate the deductions from the
amount of the benefit paid under the Plan for any taxes required to be withheld by federal, state,
or local government and shall cause them to be withheld.
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ARTICLE VII
ADMINISTRATION
7.1
Powers of the Board
. The Board shall have the exclusive responsibility for the
general administration of the Plan according to the terms and provisions of the Plan and shall have
all powers necessary to accomplish those purposes, including, but not by way of limitation, the
right, power, and authority:
(a) to make rules and regulations for the administration of the Plan;
(b) to construe all terms, provisions, conditions, and limitations of the Plan;
(c) to correct any defect, supply any omission, or reconcile any inconsistency
that may appear in the Plan in the manner and to the extent it deems expedient to
carry the Plan into effect for the greatest benefit of all parties at interest;
(d) to designate the persons eligible to become Participants;
(e) to determine all controversies relating to the administration of the Plan,
including but not limited to:
(i) differences of opinion arising between SYSCO and a Participant, except when the
difference of opinion relates to the entitlement to, the amount of, or the method or timing
of payment of a benefit affected by a Change of Control, in which event, such difference
shall be decided by judicial action; and
(ii) any question it deems advisable to determine in order to promote the uniform
administration of the Plan for the benefit of all parties at interest;
(f) to delegate by written notice any Plan administration duties of the Board to
such individual members of the Board, individual employees of SYSCO, or groups of
employees of SYSCO, as the Board determines to be necessary or advisable to properly
administer the Plan; and
(g) to designate the investment options treated as Investments for purposes of
this Plan.
7.2
Board Discretion
. The Board, in exercising any power or authority granted under
this Plan or in making any determination under this Plan, shall perform or refrain from performing
those acts pursuant to such
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authority, using its sole discretion and judgment. By way of amplification and without
limiting the foregoing, SYSCO specifically intends that the Board have the greatest possible
discretion to construe the terms of the Plan and to determine all questions concerning eligibility,
participation, and benefits. Any decision made by the Board or any refraining to act or any act
taken by the Board in good faith shall be final and binding on all parties. The Board’s decision
shall never be subject to de novo review. Notwithstanding the foregoing, the Board’s decisions,
refraining to act or acting is to be subject to judicial review for those incidents occurring
during the Plan Year in which a Change of Control occurs and during the next three succeeding Plan
Years.
7.3
Reimbursement of Expenses
. The Board shall serve without compensation for its
services but shall be reimbursed by SYSCO for all expenses properly and actually incurred in the
performance of its duties under the Plan.
7.4
Indemnification
. To the extent permitted by law, members of the Board of
Directors, employees of SYSCO, and all agents and representatives of SYSCO shall be indemnified by
SYSCO, and saved harmless against any claims resulting from any action or conduct relating to the
administration of the Plan, except claims arising from gross negligence, willful neglect, or
willful misconduct.
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ARTICLE VIII
AMENDMENT AND/OR TERMINATION
8.1
Amendment or Termination of the Plan
. The Board of Directors may amend or
terminate this Plan at any time by an instrument in writing.
8.2
No Retroactive Effect on Account
. Absent a Participant’s prior consent, no
amendment shall affect the rights of such Participant to the amounts then standing to his credit in
his Account in the Deferred Compensation Ledger, to change the method of calculating Investment
earnings and losses already accrued prior to the date of the amendment, or to change a
Participant’s rights under any provision relating to a Change of Control after a Change of Control
has occurred. However, the Board of Directors shall retain the right at any time to change in any
manner the method of calculating Investment earnings and losses effective from and after the date
of the amendment if it has been announced to the Participants.
8.3
Effect of Termination
. Upon termination of the Plan, the following provisions of
this Section 8.3 shall apply:
(a) No additional amounts shall be credited to any Participant’s Account in the Deferred
Compensation Ledger, to the extent that such amounts relate to Director’s fees earned on or after
the effective date of the Plan’s termination.
(b) The Board or its designee may, in its sole discretion, authorize distributions of the
balance of the Participant’s Account in the Deferred Compensation Ledger to Participants as a
result of the Plan’s termination, provided that:
(i) All deferred compensation arrangements sponsored by the Company that would be
aggregated with this Plan under Section 1.409A-1(c) of the Treasury Regulations if the
Participant participated in such arrangements are terminated;
(ii) No distributions other than distributions that would be payable under the terms of
the Plan if the termination had not occurred are made within twelve (12) months of the
termination of the Plan;
(iii) The remaining balances of all Participants’ Accounts after distributions pursuant
to Section 8.3(b)(ii), are distributed within twenty-four (24) months of the termination of
the Plan; and
(iv) SYSCO does not adopt a new deferred compensation arrangement at any time within
three (3) years following the date of the termination of the Plan that would be aggregated
with this Plan under Section 1.409A-1(c) of the Treasury Regulations if the Participant
participated in this Plan and the new arrangement.
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(c) Except as otherwise provided in Section 8.3(a) and 8.3(b), on and after the
effective date of the Plan’s termination, (i) the Plan shall continue to be
administered as it was prior to the Plan’s termination, (ii) all amounts credited the
Participant’s Account in the Deferred Compensation Ledger prior to the date of
termination shall be payable only under the conditions, at the time, and in the form
then provided in this Plan, and (iii) no Participant shall be entitled to a
distribution of his Account solely as a result of the Plan’s termination in
accordance with the provisions of this Article VIII.
-20-
ARTICLE IX
FUNDING
9.1
Payments Under This Plan Are the Obligation of SYSCO
. SYSCO shall pay the
benefits due the Participants under this Plan; however, should it fail to do so when a benefit is
due, the benefit shall be paid by the trustee of that certain trust established pursuant to Section
9.2. In any event, if the Trust fails to pay for any reason, SYSCO shall remain liable for the
payment of all benefits provided by this Plan.
9.2
Plan Obligations May Be Funded Through Rabbi Trust
. It is specifically recognized
by both SYSCO and the Participants that SYSCO may, but is not required to, contribute any amount it
finds desirable to a so-called “Rabbi Trust,” established to accumulate assets to fund the
obligations of SYSCO under this Plan. However, under all circumstances, the rights of the
Participants to the assets held in the Trust shall be no greater than the rights expressed in the
Plan and the trust agreement governing the Trust. Nothing contained in any trust agreement which
creates any funding trust or trusts shall constitute a guarantee by SYSCO that assets of SYSCO
transferred to that trust or those trusts shall be sufficient to pay any benefits under this Plan
or would place the Participant in a secured position ahead of general creditors should SYSCO become
insolvent or bankrupt. Any trust agreement prepared to fund SYSCO’s obligations under the Plan
must specifically set out these principles so it is clear in that trust agreement that the
Participants in this Plan are only unsecured general creditors of SYSCO in relation to their
benefits under this Plan.
9.3
Reversion of Excess Assets
. SYSCO may at any time request the record keeper for
the Plan to determine the present Account balance, taking into account credits and debits arising
from the deemed Investment earnings and losses in accordance with Section 4.3 and interest credited
pursuant to Section 4.4, as of the month end coincident with or next following the request, of all
Participants and Beneficiaries of deceased Participants for which SYSCO is or will be obligated to
make payments under this Plan. If the fair market value of the assets held in the Trust, as
determined by the Trustee as of that same date, exceeds the total of the accrued benefits of all
Participants and Beneficiaries by 25%, SYSCO may direct the trustee to return to it all of the
excess funds. However, if there has been a Change of Control, for the purpose of determining if
there are excess funds, all contributions made prior to the Change of Control shall be subtracted
from the fair market value of the assets held in the Trust as of the determination date but before
the determination is made.
9.4
Participants Must Rely Only on General Credit of SYSCO
. It is also specifically
recognized by both SYSCO and the Participants that this Plan is only a general corporate commitment
and that each Participant must rely upon the general credit of SYSCO for the fulfillment of its
obligations hereunder. Under all circumstances the rights of Participants to any asset held by
SYSCO shall be no greater than the rights expressed in this Plan. Nothing contained in this Plan
shall constitute a guarantee by SYSCO that the assets of SYSCO will be sufficient to pay any
benefits under this Plan or would place the Participant in a secured position ahead of general
creditors of SYSCO. Though SYSCO has established and may fund a Rabbi Trust, as indicated in
Section 9.2, to accumulate
-21-
assets to fulfill its obligations, the Plan and any such trust shall not create any lien,
claim, encumbrance, right, title or other interest of any kind whatsoever in any Participant in any
asset held by SYSCO, contributed to any such trust or otherwise designated to be used for payment
of any of its obligations created in this Plan. No specific assets of SYSCO have been or will be
set aside, or will in any way be transferred to any trust or will be pledged in any way for the
performance of SYSCO’s obligations under this Plan which would remove such assets from being
subject to the general creditors of SYSCO.
-22-
ARTICLE X
MISCELLANEOUS
10.1
Limitation of Rights
. Nothing in this Plan shall be construed:
(a) to give any member of the Board of Directors any right to be designated a
Participant in the Plan;
(b) to give a Participant any right with respect to the fee or compensation
deferred, the deemed Investment earnings and losses, or the interest credited in the
Deferred Compensation Ledger, except in accordance with the terms of this Plan;
(c) to limit in any way the right of SYSCO to remove a Participant from the
Board of Directors at any time;
(d) to evidence any agreement or understanding, expressed or implied, that SYSCO
shall retain a Participant as a member of the Board of Directors for any particular
remuneration; or
(e) to give a Participant or any other person claiming through him any interest
or right under this Plan other than that of any unsecured general creditor of SYSCO.
10.2
Distributions to Incompetents or Minors
. Should a Participant become incompetent
or should a Participant designate a Beneficiary who is a minor or incompetent, the Board is
authorized to pay the funds due to the parent of the minor or to the guardian of the minor or
incompetent or directly to the minor or to apply those funds for the benefit of the minor or
incompetent in any manner the Board determines in its sole discretion.
10.3
Nonalienation of Benefits
. No right or benefit provided in this Plan shall be
transferable by the Participant except, upon his death, to a named Beneficiary as provided in this
Plan. No right or benefit under this Plan shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber, or charge the same shall be void. No right or benefit under this Plan shall in
any manner be liable for or subject to any debts, contracts, liabilities or torts of the person
entitled to such benefits. If any Participant or any Beneficiary becomes bankrupt or attempts to
anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit under this
Plan, that right or benefit shall, in the discretion of the Board, cease. In that event, the Board
may have SYSCO hold or apply the right or benefit or any part of it to the benefit of the
Participant or Beneficiary, his or her spouse, children or other dependents or any of them in any
manner and in any proportion the Board believes to be proper in its sole and absolute discretion,
but is not required to do so.
-23-
10.4
Reliance Upon Information
. The Board shall not be liable for any decision or
action taken in good faith in connection with the administration of this Plan. Without limiting
the generality of the foregoing, any decision or action taken by the Board when it relies upon
information supplied to it by any officer of SYSCO, SYSCO’s legal counsel, SYSCO’s independent
accountants, or other advisors in connection with the administration of this Plan shall be deemed
to have been taken in good faith.
10.5
Severability
. If any term, provision, covenant or condition of the Plan is held
to be invalid, void or otherwise unenforceable, the rest of the Plan shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
10.6
Notice
. Any notice or filing required or permitted to be given to SYSCO, the
Board or a Participant shall be sufficient if submitted in writing and hand-delivered or sent by
U.S. mail to the principal office of SYSCO or to the residential mailing address of the
Participant. Notice shall be deemed to be given as of the date of hand-delivery or if delivery is
by mail, as of the date shown on the postmark.
10.7
Gender and Number
. If the context requires it, words of one gender when used in
this Plan shall include the other, and words used in the singular or plural shall include the
other.
10.8
Governing Law
. The Plan shall be construed, administered, and governed in all
respects by the laws of the State of Texas.
10.9
Effective Date
. This Plan shall be operative and effective on January 1, 2005.
10.10
Compliance with Section 409A
.
The Plan (i) is intended to comply with, (ii) shall be interpreted and its provisions shall be
applied in a manner that is consistent with, and (iii) shall have any ambiguities therein
interpreted, to the extent possible, in a manner that complies with Section 409A.
IN WITNESS WHEREOF
, SYSCO has executed this document as of January 1, 2005.
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SYSCO CORPORATION
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By:
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/s/ Michael C. Nichols
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Name:
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Michael C. Nichols
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Title:
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Sr. Vice President, General Counsel and
Corporate Secretary
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-24-
EXHIBIT “A”
INVESTMENT OPTIONS
[Attached]
-25-
Effective January 1, 2005
FIRST AMENDED AND RESTATED
SYSCO CORPORATION 2005
BOARD OF DIRECTORS DEFERRED COMPENSATION PLAN
INVESTMENT OPTIONS
The following are the “Investments” that are available under the First Amended and Restated
2005 SYSCO Corporation Board of Directors Deferred Compensation Plan:
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Options
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Manager
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Equity Income Trust
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T. Rowe Price Associates, Inc.
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500 Index B Trust
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MFC Global Investment Management
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Mid-Value Trust
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T. Rowe Price Associates, Inc.
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Overseas Equity Trust
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Capital Guardian Trust Company
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Small Cap Value Trust
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Wellington Management Company LLC
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Brandes International Equity Fund
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Brandes Investment Partners
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Frontier Capital Appreciation
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Frontier Capital Management Company, LLC
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Bond Index B Trust
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Declaration Management & Research LLC
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Default Investment
Moody’s Average Corporate Bond Yield, plus 1%, as described in the Plan’s Default Investment
definition.
Exhibit 10.3
EXECUTION COPY
FOURTH AMENDED AND RESTATED
SYSCO CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
Approved November 2007
Effective January 1, 2005
FOURTH AMENDED AND RESTATED
SYSCO CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
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Page
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ARTICLE I — DEFINITIONS
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3
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ARTICLE II — ELIGIBILITY
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11
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ARTICLE III — PARTICIPANT DEFERRALS AND COMPANY CONTRIBUTIONS
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12
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3.1
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Bonus Deferral Election
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12
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3.2
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Company Match
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12
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3.3
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Salary Deferral Election
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13
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3.4
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Discretionary Company Contributions
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14
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3.5
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Cancellation of Salary Deferral Election upon the Occurrence of an Unforeseeable Emergency
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14
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ARTICLE IV — ACCOUNT
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15
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4.1
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Establishing a Participant’s Account
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15
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4.2
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Credit of the Participant’s Bonus Deferral and the Company’s Match
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15
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4.3
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Credit of the Participant’s Salary Deferrals
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15
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4.4
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Deemed Investment of Deferrals
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15
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4.5
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Crediting of Interest on Company Match
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17
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4.6
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Procedure to Credit or Debit Interest, Earnings or Losses Upon an Event of Distribution
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17
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ARTICLE V — VESTING
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20
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5.1
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Deferrals
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20
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5.2
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Company Match
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20
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ARTICLE VI — DISTRIBUTIONS
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22
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6.1
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Death
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22
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6.2
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Disability
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22
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6.3
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Retirement
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22
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6.4
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Distributions Upon Termination
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23
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6.5
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In-Service Distributions
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23
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6.6
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Distribution Elections for Deferrals
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23
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6.7
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Forfeiture For Cause
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26
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6.8
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Forfeiture for Competition
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27
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6.9
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Hardship Withdrawals
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28
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6.10
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Payments Upon Income Inclusion Under Section 409A
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29
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6.11
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Restrictions on any Portion of Total Payments Determined to be Excess Parachute Payments
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29
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6.12
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Responsibility for Distributions and Withholding of Taxes
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30
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ARTICLE VII — ADMINISTRATION
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31
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7.1
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Committee Appointment
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31
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7.2
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Committee Organization and Voting
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31
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7.3
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Powers of the Committee
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31
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7.4
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Committee Discretion
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32
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7.5
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Reimbursement of Expenses
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32
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7.6
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Indemnification
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32
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7.7
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Claims Procedure
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32
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Page
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ARTICLE VIII — ADOPTION BY SUBSIDIARIES
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35
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8.1
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Procedure for and Status After Adoption
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35
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8.2
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Termination of Participation By Adopting Subsidiary
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35
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ARTICLE IX — AMENDMENT AND/OR TERMINATION
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36
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9.1
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Amendment or Termination of the Plan
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36
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9.2
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No Retroactive Effect on Awarded Benefits
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36
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9.3
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Effect of Termination
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36
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ARTICLE X — FUNDING
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38
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10.1
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Payments Under This Agreement are the Obligation of the Company
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38
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10.2
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Agreement May be Funded Through Rabbi Trust
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38
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10.3
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Reversion of Excess Assets
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38
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10.4
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Participants Must Rely Only on General Credit of the Company
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39
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ARTICLE XI — MISCELLANEOUS
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40
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11.1
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Limitation of Rights
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40
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11.2
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Distributions to Incompetents or Minors
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40
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11.3
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Non-alienation of Benefits
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40
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11.4
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Reliance Upon Information
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41
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11.5
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Severability
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41
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11.6
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Notice
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41
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11.7
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Gender and Number
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41
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11.8
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Governing Law
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41
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11.9
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Effective Date
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41
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11.10
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Compliance with Section 409A of the Code
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41
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-ii-
FOURTH AMENDED AND RESTATED
SYSCO CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
WHEREAS
, SYSCO Corporation sponsors and maintains the Third Amended and Restated SYSCO
Corporation Executive Deferred Compensation Plan, effective as of January 1, 2005 (the “Current
Plan”);
WHEREAS
, the American Jobs Creation Act of 2004 added Section 409A to the Internal Revenue
Code of 1986, as amended (the “
Code
”), and Section 409A of the Code imposes certain
restrictions on compensation deferred on and after January 1, 2005; and
WHEREAS,
the Current Plan is intended to comply with Section 409A of the Code;
WHEREAS
, on April 17, 2007, the U.S. Department of Treasury promulgated final regulations
under Section 409A of the Code; and on October 22, 2007, the Internal Revenue Service (the “IRS”)
issued Notice 2007-86, extending the transition relief under the final 409A regulations by allowing
Participants until December 31, 2008 (previously December 31, 2007) to change certain previous
distribution elections;
WHEREAS,
SYSCO Corporation previously adopted the First Amendment to the Current Plan, which
provides that effective July 2, 2006, the definition of “MIP Bonus” under the Current Plan includes
any performance bonus payable under the SYSCO Corporation 2006 Supplemental Performance Based Plan;
and
WHEREAS,
SYSCO Corporation has determined that it is in the best interests of SYSCO
Corporation and its current and former executives to further amend and to restate the Current Plan
to: (i) take advantage of extended transitional relief provided under the final 409A regulations
and IRS Notice 2007-86, by allowing Participants until December 31, 2008 to change certain previous
distribution elections; (ii) clarify, pursuant to the final 409A regulations, the circumstances
that constitute an “Unforeseeable Emergency” for purposes of hardship distributions; (iii) make
other various changes to comply with the final 409A regulations; (iv) revise the forfeiture for
competition covenants under the Current Plan to clarify the scope of the non-competition covenants
and include various non-solicitation covenants; (v) add an arbitration provision; and (vi) change
the governing law under the Current Plan to Delaware law;
NOW, THEREFORE
, SYSCO Corporation hereby adopts the Fourth Amended and Restated SYSCO
Corporation Executive Deferred Compensation Plan, effective January 1, 2005 (the “Plan”), as
follows:
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ARTICLE I
DEFINITIONS
Account
. “Account” means a Participant’s Account in the Deferred Compensation Ledger
maintained by the Committee which reflects the entire interest of the Participant in the Plan, as
adjusted herein for deemed Investment earnings and losses and credited interest. A Participant’s
Account shall be comprised of, if applicable, such Participant’s Termination/Retirement Account and
In-Service Distribution Account(s).
Affiliate
. “Affiliate” means any entity with respect to which SYSCO beneficially
owns, directly or indirectly, at least 50% of the total voting power of the interests of such
entity and at least 50% of the total value of the interests of such entity.
Beneficiary
. “Beneficiary” means a person or entity designated by the Participant
under the terms of this Plan to receive any amounts distributed under the Plan upon the death of
the Participant.
Board of Directors
. “Board of Directors” means the Board of Directors of SYSCO.
Bonus Deferral
. “Bonus Deferral” shall have the meaning set forth in Section 3.1.
Bonus Deferral Election
. “Bonus Deferral Election” shall have the meaning set forth in
Section 3.1.
Business Day
. “Business Day” means any day on which the New York Stock Exchange is
open for trading.
Change of Control
. “Change of Control” means the occurrence of one or more of the
following events:
(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Act (a “
Person
”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Securities Act) of 20% or more of either (i) the
then-outstanding shares of SYSCO common stock (the “
Outstanding SYSCO Common Stock
”) or
(ii) the combined voting power of the then-outstanding voting securities of SYSCO entitled to vote
generally in the election of directors (the “
Outstanding SYSCO Voting Securities
”);
provided, however, that the following acquisitions shall not constitute a Change of Control: (1)
any acquisition directly from SYSCO, (2) any acquisition by SYSCO, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by SYSCO or any Affiliate, or (4)
any acquisition by any corporation; pursuant to a transaction that complies with subparagraphs
(c)(i), (c)(ii) and (c)(iii) of this definition;
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(b) Individuals who, as of November 10, 2005, constitute the Board of Directors (the
“
Incumbent Board
”) cease for any reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a director subsequent to November 10,
2005 whose election, or nomination for election by SYSCO’s stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors;
(c) Consummation of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving SYSCO or any of its Affiliates, a sale or other disposition
of all or substantially all of the assets of SYSCO, or the acquisition of assets or stock of
another entity by SYSCO or any of its Affiliates (each, a “
Business Combination
”), in each
case unless, following such Business Combination, (i) all or substantially all of the individuals
and entities that were the beneficial owners of the Outstanding SYSCO Common Stock and the
Outstanding SYSCO Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that, as a result of such transaction,
owns SYSCO or all or substantially all of SYSCO’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership immediately prior to such
Business Combination of the Outstanding SYSCO Common Stock and the Outstanding SYSCO Voting
Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related trust) of SYSCO or such corporation
resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then-outstanding shares of common stock of the corporation resulting from
such Business Combination or the combined voting power of the then-outstanding voting securities of
such corporation, except to the extent that such ownership existed prior to the Business
Combination, and (iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the Incumbent Board at the
time of the
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execution of the initial agreement or of the action of the Board of Directors providing
for such Business Combination; or
(d) Approval by the stockholders of SYSCO of a complete liquidation or dissolution of SYSCO.
Claimant
. “Claimant” shall have the meaning set forth in Section 7.7.
Code
. “Code” means the Internal Revenue Code of 1986, as amended from time to time.
Company
. “Company” means SYSCO and any Subsidiary that has adopted the Plan with the
approval of the Committee, pursuant to Section 8.1.
Company Match
. “Company Match” shall have the meaning set forth in Section 3.2.
Committee
. “Committee” means the persons who are from time to time serving as members
of the committee administering this Plan.
Default Distribution Option
. “Default Distribution Option” shall have the meaning set
forth in Section 6.6(c)(iv).
Default Investment
. “Default Investment” shall mean a hypothetical investment with an
investment return equal to the monthly average of the Moody’s Average Corporate Bond Yield for the
calendar year ending prior to the beginning of the Plan Year for which such rate shall be
effective, plus one (1) percent; provided, however, for calendar years commencing on or after
January 1, 2006, “Default Investment” shall mean a hypothetical investment with a
per annum
investment return equal to the sum of (x) the monthly average of the Moody’s Average Corporate Bond
Yield (determined by dividing the sum of the Corporate Bond Yield Averages for each month, as
published in Moody’s Bond Survey, by the number of months in the applicable calculation period) for
the period described in (i) or (ii) that produces the higher rate: (i) the six-month period ending
on October 31
st
of the calendar year prior to the calendar year for which such rate
shall be effective, or (ii) the twelve-month period ending on October 31
st
of the
calendar year prior to the calendar year for which such rate shall be effective, plus (y) 1%, or
such other Investment designated by the Committee as the “Default Investment” on
Exhibit
“A”
attached hereto. The investment return of the Default Investment shall be re-determined
annually as of November 1
st
of the calendar year prior to the calendar year for which
such rate shall be effective. The investment return, once established, shall be effective as of
January 1
st
of the calendar year following the calendar year in which such investment
return is calculated and shall remain in effect for the entire calendar year.
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Deferrals
. “Deferrals” shall mean Bonus Deferrals and Salary Deferrals.
Deferral Election
. “Deferral Election” shall mean either a Bonus Deferral Election, a
Salary Deferral Election or both.
Deferred Compensation Ledger
. “Deferred Compensation Ledger” means the ledger
maintained by the Committee for each Participant which reflects the amount of the Participant’s
Deferrals, Company Match, credits and debits for deemed Investment earnings and losses pursuant to
Sections 4.4 and 4.6, interest credited pursuant to Sections 4.5 and 4.6, and cash distributed to
the Participant or the Participant’s Beneficiaries pursuant to Article VI.
Disability
. “Disability” means that a Participant (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period of not
less than twelve (12) months; (ii) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, receiving income replacement benefits for a period not
less than three (3) months under an accident and health plan covering employees of the Company; or
(iii) has been determined by the Social Security Administration to be totally disabled.
Eligibility Date
. “Eligibility Date” means the date as of which an employee of a
Company is first eligible to participate in the Plan. An employee shall be notified of the
employee’s Eligibility Date by the Committee or its designee.
Fair Market Value
. “Fair Market Value” means, with respect to any Investment, the
closing price on the date of reference, or if there were no sales on such date, then the closing
price on the nearest preceding day on which there were such sales, and in the case of an unlisted
security, the mean between the bid and asked prices on the date of reference, or if no such prices
are available for such date, then the mean between the bid and asked prices on the nearest
preceding day for which such prices are available. With respect to any Investment which reports
“net asset values” or similar measures of the value of an ownership interest in the Investment,
Fair Market Value shall mean such closing net asset value on the date of reference, or if no net
asset value was reported on such date, then the net asset value on the nearest preceding day on
which such net asset value was reported. For any Investment not described in the preceding
sentences, Fair Market Value shall mean the value of the Investment as determined by the Committee
in its reasonable judgment on a consistent basis, based upon such available and relevant
information as the Committee determines to be appropriate.
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Fixed Interest Option
. “Fixed Interest Option” shall have the meaning set forth in
Section 4.4(d).
In-Service Account
. “In-Service Account” means a separate recordkeeping account under
a Participant’s Account in the Deferred Compensation Ledger that is created when a Participant
elects a new In-Service Distribution Date with respect to amounts deferred hereunder.
In-Service Distribution
. “In-Service Distribution” means a payment by SYSCO to the
Participant following the occurrence of an In-Service Distribution Date of the amount represented
by the balance in the In-Service Account with respect to such In-Service Distribution Date.
In-Service Distribution Date
. “In-Service Distribution Date” means the date selected
by the Participant following which the Participant’s applicable In-Service Account shall be paid.
In-Service Distribution Election
. “In-Service Distribution Election” shall have the
meaning set forth in Section 6.6(a)(ii).
Installment Distribution Option
. “Installment Distribution Option” shall have the
meaning set forth in Section 6.6(c)(i).
Investment
. “Investment” means the options set forth in
Exhibit “A”
attached
hereto, including interest credited at the investment return of the Default Investment, as the same
may be amended from time to time by the Committee in its sole and absolute discretion.
Lump Sum Distribution Option
. “Lump Sum Distribution Option” shall have the meaning
set forth in Section 6.6(c)(ii).
Management Incentive Plan
. “Management Incentive Plan” means the SYSCO Corporation
1995 Management Incentive Plan, the SYSCO Corporation 2000 Management Incentive Plan, and the SYSCO
Corporation 2005 Management Incentive Plan, as each may be amended from time to time, any successor
plan, and, at the discretion of the Committee, any other management incentive plan of SYSCO.
MIP Bonus
. “MIP Bonus” means a bonus awarded or to be awarded to the Participant
under (i) the Management Incentive Plan; and/or (ii) the SYSCO Corporation 2006 Supplemental
Performance Based Bonus Plan, as may be amended from time to time, and any successor plan with
respect to a given Plan Year ending after July 1, 2006.
MIP Participation
. “MIP Participation” means participation in the Management Incentive
Plan. Solely for purposes of vesting under this Plan, MIP Participation shall include the time the
Participant was not eligible to
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participate in the Management Incentive Plan if, the Participant
(i) was previously eligible to participate in the
Management Incentive Plan, (ii) employed by the Company while such Participant was ineligible
to participate in the Management Incentive Plan; and (ii) later becomes eligible to again
participate in the Management Incentive Plan.
Participant
. “Participant” means an employee of a Company who becomes eligible for or
is participating in the Plan, and any other current or former employee of a Company who has an
Account in the Deferred Compensation Ledger.
Performance Based Compensation
. “Performance Based Compensation” means compensation
that is based on services performed over a period of at least twelve (12) months to the extent it
is contingent on satisfaction of pre-established performance criteria and not readily ascertainable
at the time of the Participant’s deferral election, as determined by the Committee in accordance
with Section 409A.
Plan
. “Plan” means the Fourth Amended and Restated SYSCO Corporation Executive
Deferred Compensation Plan, as set forth in this document and amended from time to time.
Plan Year
. “Plan Year” means a one-year period that coincides with the fiscal year of
SYSCO. SYSCO has a 52/53 week fiscal year beginning on the Sunday next following the Saturday
closest to June 30
th
of each calendar year.
Retirement
. “Retirement” means (i) with respect to any Participant’s Separation from
Service before July 3, 2005, “Retirement” means any Separation from Service of a Participant from
the Company for any reason other than death or Disability on or after attaining age sixty (60); and
(ii) with respect to any Participant’s Separation from Service on or after July 3, 2005,
“Retirement” means a Participant’s Separation from Service from the Company for any reason other
than death or Disability on or after the earlier of (A) the date the Participant attains age sixty
(60), or (B) the date that the Participant has attained age fifty-five (55) and has at least
fifteen (15) years of MIP Participation.
Retirement Investment Election
. “Retirement Investment Election” shall have the
meaning set forth in Section 4.4(d).
Salary Compensation
. “Salary Compensation” means any base salary plus any receipts of
commission compensation which is otherwise payable to a Participant in cash by the Company in any
calendar year. Specifically, “Salary Compensation” shall include contributions made by the Company
on behalf of a Participant under any salary reduction or similar arrangement to a cafeteria plan
described in Section 125 of the Code, elective contributions pursuant
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to an arrangement qualified
under Section 401(k) of the Code, amounts contributed as Salary Deferrals under this Plan, and any
additional amounts determined in the sole discretion of the Committee. “Salary Compensation” shall
exclude
moving expenses, any gross up of moving expenses to account for increased income taxes,
Company contributions under any qualified retirement plan
,
Company accruals to a Participant’s
account under the SYSCO Corporation Supplemental Executive Retirement Plan, any amounts payable to
the Participant under the SYSCO Corporation Long Term Incentive Cash Plan, a Participant’s MIP
Bonus, any amounts relating to the grant of a stock option, the exercise of a stock option, or the
sale or deemed sale of any shares thereby acquired, any compensation paid in the form of shares of
SYSCO stock, bonus paid as an inducement to enter the employment of the Company, any severance
payments or other compensation which is paid to a Participant as a result of the Participant’s
termination of employment with the Company, and any additional amounts determined in the sole
discretion of the Committee.
Salary Deferral
. “Salary Deferral” shall have the meaning set forth in Section 3.3.
Salary Deferral Election
. “Salary Deferral Election” shall have the meaning set forth
in Section 3.3.
Section 409A
. “Section 409A” means Section 409A of the Code. References herein to
“Section 409A” shall also include any regulatory and other interpretive authority promulgated by
the Treasury Department or the Internal Revenue Service under Section 409A of the Code.
Securities Act
. “Securities Act” means the Securities Exchange Act of 1934, as
amended from time to time.
Separation from Service
. “Separation from Service” means “separation from service”
within the meaning of Section 409A.
Specified Employee
. “Specified Employee” means a “specified employee” as defined in
Section 409A(a)(2)(B)(i) of the Code. By way of clarification, “specified employee” means a “key
employee” (as defined in Section 416(i) of the Code, disregarding Section 416(i)(5) of the Code) of
the Company. A Participant shall be treated as a key employee if the Participant meets the
requirements of Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the Treasury
Regulations thereunder and disregarding Section 416(i)(5) of the Code) at any time during the
twelve (12) month period ending on an Identification Date. If a Participant is a key employee as
of an Identification Date, the Participant shall be treated as a Specified Employee for the twelve
(12) month period beginning on the first day of the fourth month following such Identification
Date. For purposes of any “Specified Employee” determination hereunder, the “Identification Date”
shall mean the last day of the calendar year. The
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Committee may in its discretion amend the Plan to
change the Identification Date, provided that any change to the Plan’s Identification Date shall
not take effect for at least twelve (12) months after the date of the Plan amendment authorizing
such change.
Subsidiary
. “Subsidiary” means (a) any corporation which is a member of a “controlled
group of corporations” which includes SYSCO, as defined in Code Section 414(b), (b) any trade or
business under “common control” with SYSCO, as defined in Code Section 414(c), (c) any organization
which is a member of an “affiliated service group” which includes SYSCO, as defined in Code Section
414(m), (d) any other entity required to be aggregated with SYSCO pursuant to Code Section 414(o),
and (e) any other organization or employment location designated as a “Subsidiary” by resolution of
the Board of Directors or by the Committee for purposes of this Plan.
SYSCO
. “SYSCO” means SYSCO Corporation, the sponsor of this Plan.
Termination
. “Termination” means Separation from Service with the Company,
voluntarily or involuntarily, for any reason other than Retirement, death or Disability.
Termination/Retirement Account
. “Termination/Retirement Account” means that portion
of a Participant’s Account in the Deferred Compensation Ledger that has not been allocated to
In-Service Accounts.
Treasury Regulations
. “Treasury Regulations” means the Federal Income Tax
Regulations, and to the extent applicable any Temporary or Proposed Regulations, promulgated under
the Code, as such regulations may be amended from time to time (including corresponding provisions
of succeeding regulations).
Total Payments
. “Total Payments” means all payments or benefits received or to be
received by a Participant in connection with a Change of Control of SYSCO and the termination of
his employment under the terms of this Plan, the SYSCO Corporation Supplemental Executive
Retirement Plan, and in connection with a Change of Control of SYSCO under the terms of any stock
option plan or any other plan, arrangement or agreement with the Company, its successors, any
person whose actions result in a Change of Control or any person affiliated with the Company or
who, as a result of the completion of transactions causing a Change of Control, become affiliated
with the Company within the meaning of Section 1504 of the Code, taken collectively.
Unforeseeable Emergency
. “Unforeseeable Emergency” shall have the meaning set forth
in Section 6.9.
Variable Investment Option
. “Variable Investment Option” shall have the meaning set
forth in Section 4.4(d).
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ARTICLE II
ELIGIBILITY
Initially, all participants in the Management Incentive Plan, exclusive of any participant
whose compensation income from the Company and its Subsidiaries is subject to taxation under the
Canadian income tax laws, shall be eligible to participate in this Plan. However, the Committee
retains the right to establish such additional eligibility requirements for participation in this
Plan as it may determine is appropriate or necessary from time to time and has the right to
determine, in its sole discretion, that any one or more persons who meet the eligibility
requirements shall not be eligible to participate for one or more Plan Years beginning after the
date they are notified of this decision by the Committee.
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ARTICLE III
PARTICIPANT DEFERRALS AND COMPANY CONTRIBUTIONS
3.1
Bonus Deferral Election
. A Participant may elect, what, if any, percentage of his
MIP Bonus earned during a given Plan Year is to be deferred under this Plan (a “
Bonus Deferral
Election
”), and such percentage shall be designated by the Participant pursuant to such form as
approved by the Committee for this purpose (any such amount so deferred, a “
Bonus
Deferral
”). To be eligible to make a Bonus Deferral Election for a given Plan Year, a
Participant’s Eligibility Date must occur or have occurred on or before the first day of the Plan
Year to which such Bonus Deferral Election relates. To make a Bonus Deferral Election, a
Participant must complete, execute and file with the Committee a Bonus Deferral Election form
within the applicable deadlines set forth below. A Bonus Deferral Election shall apply only with
respect to the Plan Year specified in the Bonus Deferral Election form, and except as provided in
Section 3.5 hereof, shall be irrevocable after the applicable deadline for making a Bonus Deferral
Election for such Plan Year. To be effective, a Participant’s Bonus Deferral Election form must be
received by the Committee within the period established by the Committee for a given Plan Year,
provided that such period ends no later than the following times: (i) if the MIP Bonus qualifies as
Performance Based Compensation (as applied on a Participant-by-Participant basis), the date that is
six (6) months before the end of the Plan Year with respect to which such MIP Bonus is payable; or
(ii) if the MIP Bonus does not qualify as Performance Based Compensation, the last day of the Plan
Year immediately preceding the Plan Year with respect to which such MIP Bonus is payable. Prior to
the period the Committee establishes for each Participant to make his Bonus Deferral Election, the
Committee shall notify all eligible Participants of the maximum and minimum percentages of the MIP
Bonus earned during a given Plan Year that may be deferred. If the Committee does not receive a
Participant’s Bonus Deferral Election form within the period established for such purpose by the
Committee for such Plan Year, the Participant shall be deemed to have elected not to make a Bonus
Deferral Election for that Plan Year.
3.2
Company Match
. The Company shall award to each Participant who elects to defer a
portion of his MIP Bonus under this Plan an amount equal to 50% of that portion of the amount of
the MIP Bonus deferred which is not in excess of 20% of his MIP Bonus, for a maximum potential
match by the Company of 10% of the Participant’s MIP Bonus (any such amount so awarded, a
“
Company Match
”);
provided, however, that for Bonus Deferrals made for Plan Years beginning on or after July 3,
2005, the Company shall award to each Participant who
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elects to defer a portion of his MIP Bonus
under this Plan, a Company Match equal to 15% of that portion of the amount of the MIP Bonus
deferred which is not in excess of 20% of his MIP Bonus, for a maximum potential Company Match of
3% of the Participant’s MIP Bonus. Notwithstanding anything herein or otherwise to the contrary,
in no event shall the calculation of the Company Match take into account amounts deferred pursuant
to Section 3.3.
3.3
Salary Deferral Election
. A Participant may elect to defer under this Plan all
or a portion of the Salary Compensation otherwise payable to the Participant by the Company (a
“
Salary Deferral Election
”), which amount shall be designated by the Participant pursuant
to such form as approved by the Committee for this purpose (any such amount so deferred, a
“
Salary Deferral
”). To make a Salary Deferral Election, a Participant must complete,
execute and file with the Committee a Salary Deferral Election form within the applicable deadlines
set forth below. A Salary Deferral Election shall apply only with respect to the calendar year or
portion thereof, specified in the Salary Deferral Election form, and, except as provided in Section
3.5 hereof, shall be irrevocable after the applicable deadline for making a Salary Deferral
Election for such calendar year.
(a)
In General
. To be effective, a Salary Deferral Election form must be received by
the Committee, within the period established by the Committee for a given calendar year; provided
that such period ends on or before December 31 of the year prior to the calendar year for which the
Salary Deferral Election is to be effective. If the Committee fails to receive a Salary Deferral
Election form from a Participant during the period established by the Committee for such calendar
year, the Participant shall be deemed to have elected not to make a Salary Deferral Election for
that calendar year.
(b)
Election for First Year as Participant
. Notwithstanding the provisions of Section
3.3(a), in the calendar year in which a Participant first becomes eligible to participate in the
Plan, the Participant may make a Salary Deferral Election with respect to all or a portion of such
Participant’s Salary Compensation beginning with the payroll period next following the receipt of
the Participant’s Salary Deferral Election form; provided that such Salary Deferral Election form
is received by the Committee prior to the 31
st
day following the Participant’s
Eligibility Date. If the Committee does not receive such Participant’s Salary Deferral Election
prior to the 31
st
day following the Participant’s Eligibility Date, the Participant
shall be deemed to have elected not to make a Salary
Deferral Election for such calendar year. Salary Deferral Elections by such a Participant for
succeeding calendar years shall otherwise be made in accordance with the provisions of Section
3.3(a).
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(c)
Additional Rules and Procedures
. The Committee shall have the discretion to adopt
such additional rules and procedures applicable to Salary Deferral Elections that the Committee
determines are necessary. By way of amplification and not limitation, the Committee shall have the
authority to limit the amount of Salary Compensation deferred by a Participant under this Plan for
any calendar year, require a Participant to pay or provide for payment of cash to the Company,
and/or take such other actions determined to be necessary where, as a result of a Participant’s
Salary Deferral Election, the compensation payable to a Participant currently is less than such
Participant’s tax withholding and other obligations.
3.4
Discretionary Company Contributions
. Notwithstanding anything to the contrary
contained herein, if authorized by the Board of Directors or a committee thereof, the Company, may,
pursuant to a written agreement approved by the Board of Directors or a committee thereof, cause
the Company to make additional contributions to a Participant’s Account. Any discretionary Company
contributions made pursuant to this Section 3.4 shall be credited to a Participant’s
Termination/Retirement Account and shall be paid at the earliest to occur of a Participant’s death,
Disability, Retirement or Termination. Unless otherwise expressly provided in such written
agreement, such discretionary contributions by the Company shall vest in accordance with the
provisions of Section 5.2 of the Plan.
3.5
Cancellation of Deferral Elections upon the Occurrence of an Unforeseeable
Emergency
. Notwithstanding anything to the contrary contained herein, if a Participant
requests a hardship withdrawal pursuant to Section 6.9, and the Committee determines that such
Participant has suffered an Unforeseeable Emergency, the Participant may elect to cancel such
Participant’s Deferral Elections in effect for such calendar year. Such election shall be made in
writing by the Participant in such form as the Committee determines from time to time. In addition,
if a Participant receives a hardship distribution under a 401(k) plan sponsored by the Company, all
Deferral Elections in effect for the calendar year or Plan Year, as the case may be, in which such
hardship distribution is made shall be cancelled, and such Participant may not make additional
Deferral Elections for at least six (6) months following the receipt of such hardship distribution.
Any subsequent Deferral Election shall be subject to the rules of Sections 3.1 or 3.3, as
applicable.
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ARTICLE IV
ACCOUNT
4.1
Establishing a Participant’s Account
. The Committee shall establish an Account
for each Participant in a Deferred Compensation Ledger which shall be maintained by the Company.
Each Account shall reflect the entire interest of the Participant in the Plan.
4.2
Credit of the Participant’s Bonus Deferral and the Company’s Match
. Upon
completion of the Plan Year, the Committee shall determine, as soon as administratively
practicable, the amount of a Participant’s MIP Bonus that has been deferred for that Plan Year and
the amount of the Company Match that has been awarded to the Participant pursuant to Section 3.2
and shall credit those amounts to the Participant’s Account in the Deferred Compensation Ledger as
of the July 1
st
coincident with or closest to the end of the Plan Year for which the MIP
Bonus was awarded.
4.3
Credit of the Participant’s Salary Deferrals
. The Participant’s Account in the
Deferred Compensation Ledger shall be credited with respect to Salary Deferrals, on the same day of
each month on which cash compensation would otherwise have been paid to a Participant, with a
dollar amount equal to the total amount by which the Participant’s cash compensation for such month
was reduced in accordance with the Participant’s Salary Deferral Election.
4.4
Deemed Investment of Deferrals
. The credit balance of the Deferrals in the
Participant’s Account shall be deemed invested and reinvested from time to time in such Investments
as shall be designated by the Participant in accordance with the following:
(a) Upon commencement of participation in the Plan, each Participant shall make a designation
of the Investments in which the Deferrals in such Participant’s Account will be deemed invested.
The Investments designated by a Participant shall be deemed to have been purchased on the date on
which the Deferrals are credited to the Participant’s Account, or if such day is not a Business
Day, on the first Business Day following such date. If a
Participant has not made a designation of Investments in which such Participant’s Deferrals
will be deemed invested, the credit balance of the Deferrals in the Participant’s Account shall be
deemed to be invested in the Default Investment.
(b) At such times and under such procedures as the Committee shall designate, each Participant
shall have the right to (i) change the existing Investments in which the Deferrals in such
Participant’s Account are
-15-
deemed invested by treating a portion of such Investments as having been
sold and the new Investments purchased, and (ii) change the Investments which are deemed purchased
with future Deferral credits to the Participant’s Account.
(c) In the case of any deemed purchase of an Investment, the Participant’s Account shall be
decreased by a dollar amount equal to the number of units of such Investment treated as purchased
multiplied by the per unit net asset value of such Investment as of such date or, if such date is
not a Business Day, on the first Business Day following such date, and shall be increased by the
number of units of such Investment treated as purchased. In the case of any deemed sale of an
Investment, the Participant’s Account shall be decreased by the number of units of such Investment
treated as sold, and shall be increased by a dollar amount equal to the number of units of such
Investment treated as sold multiplied by the net asset value of such Investment as of such date or,
if such date is not a Business Day, on the first Business Day following such date.
(d) If a Participant’s Retirement occurs on or after January 1, 2006, and the Participant has
elected (or is deemed to have elected) to receive any portion of the Participant’s distribution
under Section 6.3 (upon Retirement) pursuant to the Installment Distribution Option, then, with
respect such portion, the Participant may elect (the “
Retirement Investment Election
”)
either (i) to have interest credited to the declining balance of such portion of the Participant’s
Account at a fixed interest rate determined pursuant to Section 4.6(b)(ii) (the “
Fixed Interest
Option
”); or (ii) to have the Participant’s designation of deemed Investments (which deemed
Investments may continue to be changed pursuant to Section 4.4(b)) remain in effect throughout the
period of distribution with respect to such portion (the “
Variable Investment Option
”);
provided, however, that if the Participant dies during the period of distribution, such
Participant’s Investment designations shall be terminated as of the date of the Participant’s death
and such Participant’s Account shall be deemed invested in the Default Investment. A Participant
shall make his or her Retirement Investment Election at such time and in such form as determined by
the Committee. If the Committee does not receive a Participant’s Retirement Investment Election in
the period prescribed by the Committee, the Participant shall be deemed to have elected the Fixed
Interest Option. Once a Participant has made a Retirement Investment Election (or is deemed to have
made a Retirement Investment Election) such election is irrevocable. Interest or deemed Investment
earnings or
losses, as the case may be, shall be credited or debited to the Participant’s Account at such
times and in such amounts as determined under Section 4.6.
-16-
(e) In no event shall the Company be under any obligation, as a result of any designation of
Investments made by Participants, to acquire any Investment assets, it being intended that the
designation of any Investment shall only affect the determination of the amounts ultimately paid to
a Participant.
(f) In determining the amounts of all debits and credits to the Participant’s Account, the
Committee shall exercise its reasonable best judgment, and all such determinations (in the absence
of bad faith) shall be binding upon all Participants and their Beneficiaries. If an error is
discovered in the Participant’s Account, the Committee, in its sole and absolute discretion, shall
cause appropriate, equitable adjustments to be made as soon as administratively practicable
following the discovery of such error or omission.
4.5
Crediting of Interest on Company Match
. Interest will be credited on any Company
Match in the Participant’s Account in accordance with this Section 4.5 at the investment return of
the Default Investment. Interest on such Company Match shall be compounded annually, but credited
on a daily basis. Following the occurrence of an event giving rise to a distribution, interest
will be credited on any Company Match in the Participant’s Account at such times and at the rate
(or rates) determined under Section 4.6.
4.6
Procedure to Credit or Debit Interest, Earnings or Losses Upon an Event of
Distribution
.
(a)
Distributions upon Retirement under the Variable Investment Option
. If a
Participant is entitled to receive a distribution pursuant to Section 6.3 (upon Retirement) and
elects the Variable Investment Option under Section 4.4(d)(ii), the declining balance of the
portion of the Participant’s Account (including any portion of the Company Match (and any interest
credited thereon pursuant to Section 4.5)) to which this Section 4.6(a) applies, shall continue to
be credited or debited with Investment earnings or losses (including interest credited at the
investment return of the Default Investment, if that Investment option is selected) for the period
beginning on the day following the day on which the event giving rise to the distribution occurs
and continuing until the day immediately prior to the final installment distribution is paid. For
purposes of the preceding sentence, any portion of the Company Match (and any interest credited
thereon pursuant to Section 4.5) that is subject to this Section 4.6(a) shall be
deemed invested in the Default Investment. The amount of interest or deemed Investment
earnings or losses credited or debited to the Participant’s Account shall be determined by the
Committee in accordance with Section 4.4(f).
(b)
Distributions Upon Death, Disability, Termination or Retirement (not under the
Variable Investment Option)
. If a Participant or a Participant’s Beneficiaries are entitled to
receive a distribution pursuant to
-17-
Sections 6.1 (upon death), 6.2 (upon Disability), 6.3 (upon
Retirement) and the Participant did not elect the Variable Investment Option under Section
4.4(d)(ii), or 6.4 (upon Termination), interest or deemed Investment earnings or losses shall be
debited or credited to the portion of the Participant’s Account (including any portion of the
Company Match (and interest credited thereon pursuant to Section 4.5)) subject to this Section
4.6(b) in accordance with this Section 4.6(b).
(i)
Crediting of Interest or Deemed Investment Earnings or Losses Prior to Commencement of
Distributions.
The Participant’s Account shall continue to be credited or debited with
Investment earnings or losses until, (A) for events giving rise to a distribution that occur before
the January 1, 2006, the date of the event giving rise to the distribution, or (B) for events
giving rise to a distribution that occur on or after January 1, 2006, the later to occur of (x)
the date of the event giving rise to the distribution; or (y) the last day of the month preceding
the month in which distributions will commence (the “
Conversion Date
”), at which time the
deemed Investments in the Participant’s Account shall be treated as sold and credited with a dollar
value in accordance with Section 4.4(c). For purposes of this Section 4.6(b)(i), for the period
prior to the Conversion Date, any portion of the Company Match (and any interest credited thereon
pursuant to Section 4.5), that is subject to this Section 4.6(b) shall be deemed invested in the
Default Investment. After the Conversion Date, there shall be no additional credits or debits to
the Participant’s Account for deemed Investment earnings or losses. Notwithstanding the foregoing,
the Participant’s Account shall be credited with interest, at the rate of the Default Investment,
for the period beginning on the Conversion Date and ending on the day immediately before the date
on which distribution payments commence.
(ii)
Crediting of Interest After Commencement of Installment Distributions
. With
respect to distributions subject to this Section 4.6(b), if any portion of a Participant’s Account
is to be paid pursuant to the Installment Distribution Option, interest shall be credited to the
declining balance of the portion of the Participant’s Account subject to this Section 4.6(b)(ii),
beginning on the day on which distributions commence and continuing until the day immediately
before the final installment distribution is paid. The interest crediting rate for
purposes of this Section 4.6(b)(ii) shall be the investment return of the Default Investment
for the last calendar year ending prior to the event giving rise to the distribution; provided
however
, that for events occurring on or after January 1, 2006 that give rise to a distribution,
the interest crediting rate hereunder shall be the
per annum
interest rate equal to the sum of (x)
the monthly average of the Moody’s Average Corporate Bond Yield (determined by
-18-
dividing the sum of
the Corporate Bond Yield Averages for each month, as published in Moody’s Bond Survey, by the
number of months in the calculation period) for the period described in (i) or (ii) that produces
the higher rate: (i) the six-month period ending on the last day of the month that is two months
prior to the month during which distributions are to commence, or (ii) the twelve-month period
ending on the last day of the month that is two months prior to the month during which
distributions are to commence, plus (y) 1%.
-19-
ARTICLE V
VESTING
5.1
Deferrals
. The amount credited to a Participant’s Account attributable to
Deferrals, adjusted for deemed Investment earnings and losses pursuant to Section 4.4, shall be
100% vested at all times, except that deemed Investment earnings shall be subject to forfeiture
under Sections 6.7 and 6.8.
5.2
Company Match
.
(a) Each Company Match, together with interest accumulated on those matches pursuant to
Section 4.5, shall vest on the earlier to occur of: (a) the tenth anniversary of the date as of
which the Company Match was credited to the Participant’s Account, (b) the Participant attaining
age 60, (c) the Participant’s death, (d) the Participant’s Disability, or (e) a Change of Control,
provided that such vested Company Matches shall be subject to forfeiture under Sections 6.7 and 6.8
and any reduction caused by the restriction in Section 6.11.
(b) Notwithstanding the foregoing, effective for Plan Years beginning on or after July 3,
2005, upon a Participant’s Retirement, each previously unvested Company Match (together with
interest accumulated on such Company Matches pursuant to Section 4.5) shall be vested according to
the following schedule:
|
|
|
|
|
|
|
Participant’s Combined Full Years of Age
|
|
|
|
|
as of the Participant’s Date of Retirement and
|
|
|
|
|
Full Years of MIP Participation
|
|
Vested Percentage
|
|
|
|
Less than 70
|
|
|
0%
|
|
|
70
|
|
|
50%
|
|
|
71
|
|
|
55%
|
|
|
72
|
|
|
60%
|
|
|
73
|
|
|
65%
|
|
|
74
|
|
|
70%
|
|
|
75
|
|
|
75%
|
|
|
76
|
|
|
80%
|
|
|
77
|
|
|
85%
|
|
|
78
|
|
|
90%
|
|
|
79
|
|
|
95%
|
|
|
80 or more
|
|
|
100%
|
|
By way of clarification, a Participant who is age fifty-five (55) with fifteen (15) years MIP
Participation shall be fifty percent (50%) vested in any previously unvested Company Match, and the
Participant shall be vested in any previously unvested Company Match (i) an additional five percent
(5%) for each full year of his age in excess of fifty-five (55) as of the date of the date of such
Participant’s Retirement; and (ii) an additional five percent (5%) for
-20-
each full year of MIP Participation by such Participant over fifteen (15) years as of the date of
such Participant’s Retirement.
(c) Notwithstanding anything to the contrary contained herein, the Compensation and Stock
Option Committee of the Board of Directors may, within its sole discretion, accelerate vesting
under this Section 5.2 when it determines that specific situations warrant such action.
-21-
ARTICLE VI
DISTRIBUTIONS
6.1
Death
. Upon the death of a Participant, the Participant’s Beneficiary or
Beneficiaries shall be paid the balance of the Participant’s Account in the Deferred Compensation
Ledger pursuant to the distribution option selected by the Participant under Section 6.6(c).
Each Participant, upon making his initial deferral election, shall file with the Committee a
designation of one or more Beneficiaries to whom distributions otherwise due the Participant shall
be made in the event of his death prior to the complete distribution of the amount credited to his
Account in the Deferred Compensation Ledger. The designation shall be effective upon receipt by
the Committee of a properly executed form which the Committee has approved for that purpose. The
Participant may from time to time revoke or change any designation of Beneficiary by filing another
approved Beneficiary designation form with the Committee. If there is no valid designation of
Beneficiary on file with the Committee at the time of the Participant’s death, or if all of the
Beneficiaries designated in the last Beneficiary designation have predeceased the Participant or,
in the case of an entity, otherwise ceased to exist, the Beneficiary shall be the Participant’s
spouse, if the spouse survives the Participant, or otherwise the Participant’s estate. A
Beneficiary who is an individual shall be deemed to have predeceased the Participant if the
Beneficiary dies within 30 days of the date of the Participant’s death. If any Beneficiary survives
the Participant but dies or, in the case of an entity, otherwise ceases to exist before receiving
all amounts due the Beneficiary from the Participant’s Account, the balance of the amount which
would have been paid to that Beneficiary shall, unless the Participant’s designation provides
otherwise, be distributed to the individual deceased Beneficiary’s estate or, in the case of an
entity, to the Participant’s spouse, if the spouse survives the Participant, or otherwise to the
Participant’s estate. Any Beneficiary designation which designates any person or entity other than
the Participant’s spouse must be consented to in writing by the Participant’s spouse in a form
acceptable to the Committee in order to be effective.
6.2
Disability
. Upon the Disability of a Participant, the Participant shall be paid
the balance of the Participant’s Account in the Deferred Compensation Ledger pursuant to the
distribution option selected by the Participant under Section 6.6(c).
6.3
Retirement
. Upon the Retirement of a Participant, the Participant shall be paid
the vested portion of such Participant’s Account in the Deferred Compensation Ledger
pursuant to the Distribution option selected by
-22-
the Participant under Section 6.6(c). Any
amounts not vested at the time of such Participant’s Retirement shall be forfeited.
6.4
Distributions Upon Termination
. Upon a Participant’s Termination, the Participant
shall be paid the vested portion of such Participant’s Account in the Deferred Compensation Ledger
pursuant to the Lump Sum Distribution Option. Any amounts not vested at the time of such
Participant’s Termination shall be forfeited.
6.5
In-Service Distributions
. Each In-Service Distribution shall be paid in a lump
sum at the time provided in the In-Service Distribution election made with respect thereto, or as
soon as administratively practicable after the occurrence of the In-Service Distribution Date.
Notwithstanding a Participant’s election to receive an In-Service Distribution of some or all of
the Participant’s Account, if the Participant’s Retirement, Disability, death or Termination, as
applicable, occurs prior to the commencement or completion of payments elected in connection with
any In-Service Distribution Date(s), the Participant’s remaining In-Service Distribution Account
balance(s) shall be distributed pursuant to the Plan’s provisions regarding distributions upon
Retirement, Disability, death or Termination, as applicable.
6.6
Distribution Elections for Deferrals
. Each Participant shall have the right to
elect, to revoke, or to change any prior election of the timing of payment or the form of
distribution at the time and under the rules established by the Committee, which rules shall
include the provisions of this Section 6.6.
(a)
Initial Distribution Elections
.
(i)
Death/Disability/Retirement Distribution Elections
. A Participant may elect
different forms of distribution, as specified in Section 6.6(c), with respect to the distribution
events described in Sections 6.1 (upon death), 6.2 (upon Disability) and 6.3 (upon Retirement). The
initial election of form of distribution with respect to a particular distribution event, if
received by the Committee in proper form prior to or concurrent with the time a Participant first
makes an affirmative Deferral Election under this Plan, shall be effective upon receipt, and shall
become irrevocable at the time a Participant first makes an affirmative Deferral Election under
this Plan. All elections of form of distribution, with respect to such distribution events, made
after the time a Participant first makes an affirmative Deferral Election under this Plan must
comply with the rules of Section 6.6(b).
(ii)
In-Service Distribution Elections
. In connection with each Salary Deferral
Election and/or Bonus Deferral Election made for a given calendar year and/or Plan Year, a
Participant may elect to receive such Deferrals in a lump sum distribution at an In-Service
Distribution Date that is at least three (3) years
-23-
after the end of the calendar year in which such
Salary Compensation or MIP Bonus would otherwise have been paid (an “
In-Service Distribution
Election
”); provided, however, that a Participant’s designation of an In-Service Distribution
Date with respect to a Bonus Deferral shall not apply to any Company Match associated with such
Bonus Deferral. For the avoidance of doubt, a vested Company Match shall only be payable in
connection with a distribution event described in Section 6.1 (upon death), 6.2 (upon Disability),
6.3 (upon Retirement), or 6.4 (upon Termination). Except as otherwise required by the Committee, an
In-Service Distribution Election may be made separately with respect to each calendar year’s or
Plan Year’s Salary Deferrals and/or Bonus Deferrals, and In-Service Distribution Accounts shall be
established accordingly. Any portion of a Deferral that is not credited to an In-Service
Distribution Account shall be credited to the Participant’s Termination/Retirement Account, which
credited amounts shall remain credited to the Participant’s Termination/Retirement Account until
such amounts have been distributed to the Participant or the Participant’s Beneficiary and may not
be credited or reallocated to an In-Service Account.
(b)
Subsequent Elections
. Any election, revocation, or change of election of form of
distribution with respect to distributions upon death, Disability and Retirement that a Participant
makes after he first makes an affirmative Deferral Election under this Plan; or any revocation or
change of election of time of payment with respect to In-Service Distributions (such elections,
revocations and changes are referred to collectively herein as “
Subsequent Elections
”)
shall be effective only if the requirements of this Section 6.6(b) are met. Subsequent Elections
may be submitted to the Committee from time to time in the form determined by the Committee and
shall be effective on the date that is twelve (12) months after the date on which such Subsequent
Election is received by the Committee. If an event giving rise to a distribution occurs during the
one-year period after a Subsequent Election is made, or if such Subsequent Election does not meet
the requirements of this Section 6.6(b), distributions under this Plan shall be made pursuant to
the Participant’s last effective election, revocation, or change with respect to the event giving
rise to the distribution. With respect to payments upon Retirement, Termination or upon the
occurrence of an In-Service Distribution Date, (i) the Subsequent Election must be received by the
Committee in proper form at least one year prior to such Participant’s Retirement, Termination or
the occurrence of an In-Service Distribution
Date; and (ii) the first payment pursuant to such Subsequent Election may not be made within
the five-year period commencing on the date such payment would have been made or commenced under
the last effective election, revocation, or change made by the Participant. Notwithstanding the
foregoing provisions of this Section
-24-
6.6(b), at such time as the Committee shall determine, but no
later than December 31, 2008, a Participant may make a Subsequent Election to change the form of
distribution of a Participant’s Account (for distributions upon Retirement, death or Disability)
and such election shall be immediately effective,
provided
that a Subsequent Election made during
calendar year 2007 may not: (i) apply to any amount that would otherwise be payable during calendar
year 2007, or (ii) cause an amount that is otherwise payable after calendar year 2007 to be paid in
calendar year 2007; and
provided further
, that a Subsequent Election made during calendar year 2008
may not: (A) apply to any amount that would otherwise be payable during calendar year 2008, or (B)
cause an amount that is otherwise payable after calendar year 2008 to be paid in calendar year
2008. Notwithstanding the above, such Subsequent Election shall not apply to any distribution
otherwise payable within the six-month period following the date of such Subsequent Election.
(c)
Distribution Options
. The distribution options that may be selected by
Participants pursuant to this Section 6.6 are as follows:
(i)
Installment Distribution Option
. If a Participant selects the “
Installment
Distribution Option
”, with respect to all or a portion of a Participant’s Account, the
Participant or the Participant’s Beneficiaries shall be paid the portion of the Participant’s
Account in the Deferred Compensation Ledger to which this section applies as follows: (A) if the
distribution is pursuant to Section 6.1 (upon death), 6.2 (upon Disability) or 6.3 (upon
Retirement) and the Participant elected the Fixed Interest Option under Section 4.4(e)(i), in equal
quarterly or annual (as selected by the Participant) installments of principal and interest for a
period of up to 20 years (as selected by the Participant); or (B) if the distribution is pursuant
to Section 6.3 (upon Retirement) and the Participant elected the Variable Investment Option under
Section 4.4(e)(ii), each installment payment amount during the period of distribution (as selected
by the Participant) shall be determined as the result of a calculation, performed as soon as
administratively practicable before the date the installment payment is to be made, where (A) is
divided by (B):
(A) equals the remaining value of the Participant’s Account as of the date of such
calculation; and
(B) equals the remaining number of installment payments.
Amounts distributed pursuant to the Installment Distribution Option shall be treated as a single
payment for purposes of Section 409A.
-25-
(ii)
Lump Sum Distribution Option
. If the Participant selects the “
Lump Sum
Distribution Option
”, with respect to all or a portion of the Participant’s Account, the
Participant or the Participant’s Beneficiaries shall be paid the portion of the Participant’s
Account in the Deferred Compensation Ledger to which this Section 6.6(c)(ii) applies, in a lump
sum.
(iii)
Combination Lump Sum and Installment Distribution Option
. Participants may also
elect to have their Accounts distributed in part pursuant to the Lump Sum Distribution Option, and
the balance distributed pursuant to the Installment Distribution Option, by making the appropriate
designation on the form which the Committee has approved for this purpose.
(iv)
Default Distribution Option
. If a Participant does not have an effective
election as to the form of distribution on file with the Committee at the time distributions to
such Participant are to commence, the Participant shall be conclusively deemed to have elected to
receive the vested balance of such Participant’s Account pursuant to the Installment Distribution
Option annually over a period of fifteen (15) years (the “
Default Distribution Option
”).
(d)
Commencement of Distributions
. Distributions pursuant to this Section 6.6 shall
commence as soon as administratively feasible after the event giving rise to the distribution, but
not later than 90 days after the event giving rise to the distribution;
provided,
however, that in
the case of the death of the Participant, distributions shall not commence within the 30-day period
following the Participant’s death; provided further, that, in the case of a Participant who has
made a Subsequent Election, distributions shall not commence earlier than the time prescribed by
Section 6.6(b); provided further, that distributions to a Specified Employee that result from such
Participant’s Separation from Service shall not commence earlier than the date that is six (6)
months after such Specified Employee’s Separation from Service from the Company if such earlier
commencement would result in the imposition of tax under Section 409A. If distributions to a
Participant are delayed because of the six-month distribution delay described in the immediately
preceding sentence, such distributions shall commence as soon as administratively feasible
following the end of such six-month period.
6.7
Forfeiture For Cause
. If the Committee finds, after full consideration of the
facts presented on behalf of both the Company and a Participant, that the Participant
was discharged by the Company for fraud, embezzlement, theft, commission of a felony,
dishonesty in the course of his employment by the Company which damaged the Company, or for
disclosing any confidential information or trade secret of the Company, the entire
-26-
amount credited
to his Account in the Deferred Compensation Ledger, exclusive of the lesser of (a) the total
Deferrals of the Participant, without any adjustments for deemed Investment earnings and losses
pursuant to Section 4.4, or (b) the credit balance of the Participant’s Account attributable to
Deferrals, taking into account the adjustments for deemed Investment earnings and losses pursuant
to Section 4.4, shall be forfeited even though it may have been previously vested under Article V.
The decision of the Committee as to the cause of a Participant’s discharge and the damage done to
the Company shall be final. No decision of the Committee shall affect the finality of the
discharge of the Participant by the Company in any manner. Notwithstanding the foregoing, the
forfeiture created by this Section shall not apply to a Participant discharged during the Plan Year
in which a Change of Control occurs, or during the next succeeding three (3) Plan Years following
the Plan Year in which a Change of Controls occurs unless an arbitrator selected to review the
Committee’s findings agrees with the Committee’s determination to apply the forfeiture.
6.8
Forfeiture for Competition
.
(a) Participant hereby recognizes that the Company would not be providing the valuable
benefits conferred by this Plan but for Participant’s willingness to provide certain
post-employment covenants designed to protect the Company’s valuable confidential information,
trade secrets and goodwill, including, without limitation, its valuable customer and supplier
relationships. By accepting the benefits provided by this Plan, Participant acknowledges that
Participant is engaging in an arms-length transaction of parties with equal bargaining power,
recognizing that Participant may refuse to accept the benefits provided by this Plan and
accordingly refuse to provide the covenants contained in this Section 6.8 without any impact on
Participant’s continued employment with the Company (or, as applicable, any Subsidiary of the
Company).
(b) Participant shall forfeit all amounts otherwise due under this Plan, exclusive of the
lesser of (i) the total Deferrals of the Participant, without any adjustments for deemed Investment
earnings and losses pursuant to Section 4.4, or (ii) the credit balance of the Participant’s
Account attributable to Deferrals, taking into account the adjustments for deemed Investment
earnings and losses pursuant to Section 4.4, even though it may have been previously vested under
Article V, if the Committee finds, after full consideration of the facts, that Participant, at any
time within five years from Participant’s last day of employment and without written consent of the
Company’s CEO or General Counsel, directly or indirectly engages in any of the following acts:
(1) participates (regardless of whether as a director, officer, employee, consultant or independent
contractor) in the management of
-27-
any business that competes with the business of the Company (or,
if applicable, any Subsidiary of the Company if Participant worked for a Subsidiary of the Company
as of Participant’s last day of employment) in any county where the Company (or as applicable, any
Subsidiary of the Company) that employed Participant sold product as of the date of this Plan, as
amended,
provided that
Participant also worked in or had responsibility over such county or
counties at any time during the last twenty-four (24) months of Participant’s employment with the
Company (or, as applicable, any Subsidiary of the Company); (2) solicits, entices or recruits for
any business that competes with the business of the Company (or, if applicable, any Subsidiary of
the Company if Participant worked for a Subsidiary of the Company as of Participant’s last day of
employment) any actual or prospective customer of the Company (or as applicable, any Subsidiary of
the Company) with whom Participant had contact at any time during Participant’s employment; or (3)
solicits, entices or recruits any employee of the Company (or, if applicable, any Subsidiary of the
Company if Participant worked for a Subsidiary of the Company as of Participant’s last day of
employment) to leave such employment to join a competing business.
(c) Notwithstanding the foregoing, the forfeiture created by this Section 6.8 shall not apply
to any Participant whose termination of employment from the Company which adopted this Plan occurs
during the Plan Year in which a Change of Control occurs or during the next three (3) succeeding
Plan Years following the Plan Year in which a Change of Control occurs.
6.9
Hardship Withdrawals
. Any Participant may request a hardship withdrawal to
satisfy an “Unforeseeable Emergency.” No hardship withdrawal can exceed the lesser of (i) the
amount of Deferrals credited to the Participant’s Account, or (ii) the amount reasonably necessary
to satisfy the Unforeseeable Emergency. Whether an Unforeseeable Emergency exists and the amount
reasonably needed to satisfy such need shall be determined by the Committee based upon the evidence
presented by the Participant and the rules established in this Section 6.9. If a hardship
withdrawal under this Section 6.9 is approved by the Committee, it shall be paid within 10 days of
the Committee’s determination. For purposes of this Plan, an “Unforeseeable Emergency” means
either: (i) a severe financial hardship to the Participant resulting from an illness or accident of
the Participant, the Participant’s spouse or of a dependent (as defined in Section 152(a) of the
Code) of the Participant, (ii) loss of the Participant’s property due to casualty, or (iii) other
similar extraordinary and
unforeseeable circumstance arising as a result of events beyond the control of the
Participant, provided that in each case the circumstances qualify as an “unforeseeable emergency”
for purposes of Section 409A. The circumstances that constitute a hardship shall
-28-
depend upon the
facts of each case, but, in any case, amounts distributed with respect to an Unforeseeable
Emergency shall not exceed the amount necessary to satisfy such need plus amounts necessary to pay
taxes reasonably anticipated as a result of the distribution, after taking into account the extent
to which such need is or may be relieved: (a) through reimbursement or compensation by insurance
or otherwise (other than compensation that would otherwise be available to the Participant from
either a tax-qualified plan or another non-qualified deferred compensation plan (irrespective of
whether such non-qualified deferred compensation plan is subject to Section 409A of the Code)), (b)
by liquidation of the Participant’s assets, to the extent the liquidation of such assets will not
itself cause severe financial hardship, or (c) additional compensation that may be available to
such Participant by reason of a cancellation of deferrals under Section 3.5 of this Plan.
Foreseeable needs for funds, such as the need to send a Participant’s child to college or the
desire to purchase a home, shall not be considered to be an Unforeseeable Emergency.
6.10
Payments Upon Income Inclusion Under Section 409A
. It is intended that the
provisions of this Plan shall comply fully with the requirements of Section 409A. In the event that
it is determined that the provisions of this Plan do not comply with the requirements of Section
409A and a Participant is required to include in income amounts otherwise deferred under this Plan
as a result of non-compliance with Section 409A, the Participant shall be entitled, upon request,
to receive a distribution from such Participant’s Account not to exceed the lesser of (i) the
vested portion of the Participant’s Account, or (ii) the amount required to be included in income
as a result of the failure of the Plan to comply with the requirements of Section 409A. Amounts
distributable pursuant to this Section 6.9 shall be distributed as soon as administratively
feasible but no later than ninety (90) days after the date of the determination that the Plan does
not comply with the requirements of Section 409A.
6.11
Restrictions on any Portion of Total Payments Determined to be Excess Parachute
Payments
. In the event that any payment or benefit received or to be received by a Participant
in connection with a Change of Control of SYSCO, or the termination of his employment by the
Company would not be deductible, whether in whole or in part, by the Company or any affiliated
company, as a result of Section 280G of the Code and a reduction
under the SYSCO Corporation Supplemental Executive Retirement Plan is not sufficient to cause
all benefits paid under this Plan to be deductible, the benefits payable under this Plan shall be
reduced until no portion of the Total Payments is not deductible as a result of Section 280G of the
Code, or the benefits payable under this Agreement have been reduced to an amount equal to the
credit balance of the Participant’s Account attributable to
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Deferrals, as adjusted for deemed
Investment earnings and losses pursuant to Section 4.4. In determining this limitation: (a) no
portion of the Total Payments which the Participant has waived in writing prior to the date of the
payment of benefits under this Plan will be taken into account, (b) no portion of the Total
Payments which tax counsel, selected by the Company’s independent auditors and acceptable to the
Participant and reasonably acceptable to the Company (“
Tax Counsel
”), determines not to
constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code will be taken
into account (including, without limitation, amounts not treated as a “parachute payment” as a
result of the application of Section 280G(d)(4)(A)), (c) no portion of the Total Payments which Tax
Counsel, determines to be reasonable compensation for services rendered within the meaning of
Section 280G(d)(4)(B) of the Code will be treated as an “excess parachute payment” in the manner
provided by Section 280G(d)(4)(B), and (d) the value of any non-cash benefit or any deferred
payment or benefit included in the Total Payments will be determined by the Company’s independent
auditors in accordance with Sections 280G(b)(3) and (4) of the Code. Notwithstanding anything
herein or otherwise to the contrary, the Compensation and Stock Option Committee of the Board of
Directors, may, within its sole discretion and pursuant to an agreement approved by the
Compensation and Stock Option Committee, waive application of this Section 6.11, when it determines
that specific situations warrant such action.
6.12
Responsibility for Distributions and Withholding of Taxes
. The Committee shall
furnish information, to the Company last employing the Participant, concerning the amount and form
of distribution to any Participant entitled to a distribution so that the Company may make or cause
the Rabbi Trust to make the distribution required. It shall also calculate the deductions from the
amount of the benefit paid under the Plan for any taxes required to be withheld by federal, state
or local government and will cause them to be withheld.
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ARTICLE VII
ADMINISTRATION
7.1
Committee Appointment
. The Committee shall be appointed by the Board of Directors
or its designee. Each Committee member shall serve until his or her resignation or removal. The
Board of Directors or its designee shall have the sole discretion to remove any one or more
Committee members and to appoint one or more replacement or additional Committee members from time
to time.
7.2
Committee Organization and Voting
. The organizational structure and voting
responsibilities of the Committee shall be as set forth in the bylaws of the Committee.
7.3
Powers of the Committee
. The Committee shall have the exclusive responsibility
for the general administration of the Plan according to the terms and provisions of the Plan and
shall have all powers necessary to accomplish those purposes, including but not by way of
limitation the right, power and authority:
(a) to make rules and regulations for the administration of the Plan;
(b) to construe all terms, provisions, conditions and limitations of the Plan;
(c) to correct any defect, supply any omission or reconcile any inconsistency that may
appear in the Plan in the manner and to the extent it deems expedient to carry the Plan into
effect for the greatest benefit of all parties at interest;
(d) to designate the persons eligible to become Participants and to establish the
maximum and minimum amounts that may be elected to be deferred;
(e) to determine all controversies relating to the administration of the Plan,
including but not limited to:
(i) differences of opinion arising between the Company and a Participant in accordance
with Section 7.7, except when the difference of opinion relates to the entitlement to, the
amount of or the method or timing of payment of a benefit affected by a Change of Control,
in which event, such difference of opinion shall be decided by judicial action; and
(ii) any question it deems advisable to determine in order to promote the uniform
administration of the Plan for the benefits of all parties at interest;
(f) to delegate by written notice any plan administration duties of the Committee to
such individual members of the Committee, individual employees of the Company, or groups of
employees
-31-
of the Company, as the Committee determines to be necessary or advisable to
properly administer the Plan; and
(g) to designate the investment options treated as Investments for purposes of this
Plan.
7.4
Committee Discretion
. The Committee, in exercising any power or authority granted
under this Plan, or in making any determination under this Plan shall perform or refrain from
performing those acts pursuant to such authority using its sole discretion and judgment. By way of
amplification and without limiting the foregoing, the Company specifically intends that the
Committee have the greatest possible discretion to construe the terms of the Plan and to determine
all questions concerning eligibility, participation and benefits. Any decision made by the
Committee or any refraining to act or any act taken by the Committee in good faith shall be final
and binding on all parties. The Committee’s decision shall never be subject to de novo review.
Notwithstanding the foregoing, the Committee’s decisions, refraining to act or acting is to be
subject to judicial review for those incidents occurring during the Plan Year in which a Change of
Control occurs and during the next three succeeding Plan Years.
7.5
Reimbursement of Expenses
. The Committee shall serve without compensation for its
services but shall be reimbursed by SYSCO for all expenses properly and actually incurred in the
performance of its duties under the Plan.
7.6
Indemnification
. To the extent permitted by law, members of the Board of
Directors, members of the Committee, employees of the Company, and all agents and representatives
of the Company shall be indemnified by the Company, and saved harmless against any claims resulting
from any action or conduct relating to the administration of the Plan, except claims arising from
gross negligence, willful neglect or willful misconduct.
7.7
Claims Procedure
. Any person who believes that he or she is being denied a
benefit to which he or she is entitled under the Plan (referred to hereinafter as a
“
Claimant
”) must file a written request for such benefit with the Committee;
provided,
however
, that any claim involving entitlement to, the amount of or the method of or timing of
payment of a benefit affected by a Change of Control shall be governed by Section 7.3(e)(i). Such
written request must set forth the Claimant’s claim and must be addressed to the Committee at
SYSCO’s principal office.
(a)
Initial Claims Decision
. The Committee shall generally provide written notice to
the Claimant of its decision within ninety (90) days (or forty-five (45) days for a
Disability-based claim) after the claim is filed with the Committee;
provided, however
, that the
Committee may have up to an additional ninety (90) days
-32-
(or up to two (2) thirty (30) day periods
for a Disability-based claim), to decide the claim, if the Committee determines that special
circumstances require an extension of time to decide the claim, and the Committee advises the
Claimant in writing of the need for an extension (including an explanation of the special
circumstances requiring the extension) and the date on which it expects to decide the claim.
(b)
Appeals
. A Claimant may appeal the Committee’s decision by submitting a written
request for review to the Committee within sixty (60) days (or 180 days for a Disability-based
claim) after the earlier of receiving the denial notice or after expiration of the initial review
period. Such written request must be addressed to the Committee at SYSCO’s principal office. In
connection with such request, the Claimant (and his or her authorized representative, if any) may
review any pertinent documents upon which the denial was based and may submit issues and comments
in writing for consideration by the Committee. If the Claimant’s request for review is not
received within the earlier of sixty (60) days (or 180 days for a Disability-based claim) after
receipt of the denial or after expiration of the initial review period, the denial shall be final,
and the Claimant shall be barred and estopped from challenging the Committee’s determination.
(c)
Decision Following Appeal
. The Committee shall generally make its decision on the
Claimant’s appeal in writing within sixty (60) days (or forty-five (45) days for a Disability-based
claim) following its receipt of the Claimant’s request for appeal;
provided, however
, that the
Committee may have up to an additional 60 days (or 45 days for a Disability-based claim) to decide
the claim, if the Committee determines that special circumstances require an extension of time to
decide the claim and the Committee advises the Claimant in writing of the need for an extension
(including an explanation of the special circumstances requiring the extension) and the date on
which it expects to decide the claim. The Committee shall notify the Claimant of its decision on
the Claimant’s appeal in writing, regardless of whether the decision is adverse.
(d)
Decisions Final; Procedures Mandatory
. A decision on appeal by the Committee
shall be binding and conclusive upon all persons, and completion of the claims procedures described
in this Section 7.7 shall be a mandatory precondition to commencement of any arbitration proceeding
in connection with the Plan by a person claiming rights under the Plan or by another person
claiming rights through such a person. The Committee may, in its sole discretion, waive the
procedures described in this Section 7.7 as a mandatory precondition to such an action.
-33-
(e)
Mandatory and Binding Arbitration
. Any dispute that in any way relates to this
Plan, including, without limitation, any benefit allegedly due under this Plan or that is the
subject of any forfeiture decision under this Plan, shall be submitted to mandatory and binding
arbitration before the American Arbitration Association (“AAA”), in accordance with the Employee
Benefit Plan Claims Arbitration Rules established by the AAA, at the sole and exclusive
jurisdiction of the AAA’s regional office for the State of Delaware. The arbitrator shall be
selected by permitting the Company and the Participant to strike one name each from a panel of
three names obtained from the AAA from its panel of Employee Benefit Plan Claims Arbitrators. The
person whose name is remaining shall be the arbitrator. The arbitrator shall determine the extent
of discovery, if any, that is needed to resolve the dispute after hearing the positions of each
party regarding the need for discovery. The arbitrator shall be bound to apply the laws of the
State of Delaware to resolve any dispute without regard for any conflict of law principles, as
Participant acknowledges that the Company is organized under the laws of the State of Delaware.
The decision of the arbitrator shall be final and binding on both parties.
-34-
ARTICLE VIII
ADOPTION BY SUBSIDIARIES
8.1
Procedure for and Status After Adoption
. Any Subsidiary may, with the approval of
the Committee, adopt this Plan by appropriate action of its board of directors. The terms of this
Plan shall apply separately to each Subsidiary adopting this Plan and its Participants in the same
manner as is expressly provided for SYSCO and its Participants except that the powers of the Board
of Directors and the Committee under the Plan shall be exercised by the Board of Directors of SYSCO
or the Committee, as applicable. SYSCO and each Subsidiary adopting this Plan shall bear the cost
of providing plan benefits for its own Participants. It is intended that the obligation of SYSCO
and each Subsidiary with respect to its Participants shall be the sole obligation of the Company
that is employing the Participant and shall not bind any other Company.
8.2
Termination of Participation By Adopting Subsidiary
. Any Subsidiary adopting this
Plan may, by appropriate action of its board of directors, terminate its participation in this
Plan. The Committee may, in its discretion, also terminate a Subsidiary’s participation in this
Plan at any time. The termination of the participation in this Plan by any Subsidiary shall not,
however, affect the rights of any Participant who is working or has worked for the Subsidiary as to
amounts previously standing to his credit in his Account in the Deferred Compensation Ledger,
including, without limitation, all of the Participant’s rights pursuant to Sections 4.4 and 4.5
with respect to amounts deferred by him and matched by the Company and credited to his Account,
prior to the distribution of those funds to the Participant, without his consent.
-35-
ARTICLE IX
AMENDMENT AND/OR TERMINATION
9.1
Amendment or Termination of the Plan
. The Board of Directors, the Committee, or
their designees, may amend this Plan at any time by an instrument in writing without the consent of
any adopting Subsidiary;
provided, however
, that authority to terminate this Plan or to make any
amendment that would have a significant financial statement or benefit impact on the Company shall
be reserved to the Board of Directors or its designee. Notwithstanding the foregoing, in no event
shall the Board of Directors have the authority to terminate this Plan during the two (2) years
following a Change of Control.
9.2
No Retroactive Effect on Awarded Benefits
. Absent a Participant’s prior consent,
no amendment shall affect the rights of such Participant to the amounts then standing to his credit
in his Account in the Deferred Compensation Ledger, to change the method of calculating Investment
earnings and losses already accrued, or the rate of interest already accrued or to accrue in the
future on the Participant’s Company Match prior to the date of the amendment, or to change a
Participant’s rights under any provision relating to a Change of Control after a Change of Control
has occurred. However, the Board of Directors shall retain the right at any time to change in any
manner the method of calculating Investment earnings and losses, effective from and after the date
of the amendment, and the method or the rate of interest on a Participant’s Company Match received
after the date of the amendment, if in both cases the amendment has been announced to the
Participants.
9.3
Effect of Termination
. Upon termination of the Plan, the following provisions of
this Section 9.3 shall apply:
(a) No additional amounts shall be credited to any Participant’s Account in the Deferred
Compensation Ledger, to the extent such amounts relate to salaries or bonuses earned on or after
the effective date of the Plan’s termination.
(b) The Board of Directors or its designee may, in its sole discretion, authorize
distributions of the vested balance of the Participants’ Accounts in the Deferred Compensation
Ledger to Participants as a result of the Plan’s termination; provided, that:
(i) All deferred compensation arrangements sponsored by the Company that would be aggregated
with this Plan under Section 1.409A-1(c) of the Treasury Regulations, if the Participant
participated in such arrangements are terminated;
-36-
(ii) No distributions other than distributions that would be payable under the terms of the
Plan if the termination had not occurred are made within twelve (12) months of the termination of
the Plan;
(iii) All distributions of amounts deferred under the Plan and any other vested amounts are
paid within twenty-four (24) months of the termination of the Plan; and
(iv) The Company does not adopt a new deferred compensation arrangement at any time within
three (3) years following the date of termination of the Plan that would be aggregated with this
Plan under Section 1.409A-1(c) of the Treasury Regulations if the Participant participated in this
Plan and the new arrangement.
(c) Except as otherwise provided in Sections 9.3(a) and (b), on and after the effective date
of the Plan’s termination, (i) the Plan shall continue to be administered as it was prior to the
Plan’s termination until all Participant Account balances have been distributed pursuant to the
terms of the Plan; (ii) a Participant shall continue to be entitled to a distribution of his Plan
Account only if he meets the distribution requirements set forth in Article 6 hereof; (iii) the
forfeiture provisions of Sections 6.6 and 6.7, and the restrictions set out in Section 6.9 shall
continue to apply; and (iv) no Participant shall be entitled to a distribution of the Participant’
Plan Account solely as a result of the Plan’s termination in accordance with the terms of this
Article IX.
-37-
ARTICLE X
FUNDING
10.1
Payments Under This Plan are the Obligation of the Company
. The Company shall
pay the benefits due the Participants under this Plan; however should it fail to do so when a
benefit is due, the benefit shall be paid by the trustee of that certain trust agreement by and
between the Company and JPMorgan Chase Bank, with respect to the funding of the Plan. In any
event, if the trust fails to pay for any reason, the Company still remains liable for the payment
of all benefits provided by this Plan.
10.2
Plan Obligations May be Funded Through Rabbi Trust
. It is specifically
recognized by both the Company and the Participants that the Company may, but is not required to,
purchase life insurance so as to accumulate assets to fund the obligations of the Company under
this Plan, and that the Company may, but is not required to contribute any policy or policies it
may purchase and any amount it finds desirable to a trust established to accumulate assets
sufficient to fund the obligations of all of the Companies under this Plan. However, under all
circumstances, the Participants shall have no rights to any of those policies; and likewise, under
all circumstances, the rights of the Participants to the assets held in the trust shall be no
greater than the rights expressed in this Plan and the trust agreement governing the trust.
Nothing contained in the trust agreement which creates the funding trust shall constitute a
guarantee by any Company that assets of the Company transferred to the trust shall be sufficient to
pay any benefits under this Plan or would place the Participant in a secured position ahead of
general creditors should the Company become insolvent or bankrupt. Any trust agreement prepared to
fund the Company’s obligations under this Plan must specifically set out these principles so it is
clear in that trust agreement that the Participants in this Plan are only unsecured general
creditors of the Company in relation to their benefits under this Plan.
10.3
Reversion of Excess Assets
. Any adopting Company may, at any time, request the
record keeper for the Plan to determine the present Account balance, assuming the Account balance
to be fully vested and taking into account credits and debits arising from deemed Investment
earnings and losses in accordance with Section 4.4 and credited interest pursuant to Section 4.5,
as of the month end coincident with or next preceding the request, of all Participants and
Beneficiaries of deceased Participants for which the Company is or will be obligated to make
payments under this Plan. If the fair market
value of the assets held in the trust, as determined by the Trustee as of that same date,
exceeds the total of the Account balances of all Participants and Beneficiaries by 25%, any
-38-
Company
may direct the trustee to return to each Company its proportionate part of the assets which are in
excess of 125% of the Account balances. Each Company’s share, of the excess assets will be the
Participants’ Accounts earned while in the employ of that Company as compared to the total of the
Account balances earned by all Participants under the Plan times the excess assets. If there has
been a Change of Control, for the purpose of determining if there are excess funds, all
contributions made prior to the Change of Control will be subtracted from the fair market value of
the assets held in the trust as of the determination date but before the determination is made.
10.4
Participants Must Rely Only on General Credit of the Company
. It is also
specifically recognized by both the Company and the Participants that this Plan is only a general
corporate commitment and that each Participant must rely upon the general credit of the Company for
the fulfillment of its obligations under this Plan. Under all circumstances the rights of
Participants to any asset held by the Company will be no greater than the rights expressed in this
Plan. Nothing contained in this Plan will constitute a guarantee by the Company that the assets of
the Company shall be sufficient to pay any benefits under this Plan or would place the Participant
in a secured position ahead of general creditors of the Company. Though the Company may establish
or become a signatory to a Rabbi Trust, as indicated in Section 10.2, to accumulate assets to
fulfill its obligations, the Plan and any such trust will not create any lien, claim, encumbrance,
right, title or other interest of any kind whatsoever in any Participant in any asset held by the
Company, contributed to any such trust or otherwise designated to be used for payment of any of its
obligations created in this Plan. No policy or other specific asset of the Company has been or
will be set aside, or will in any way be transferred to the trust or will be pledged in any way for
the performance of the Company’s obligations under this Plan which would remove the policy or asset
from being subject to the general creditors of the Company.
-39-
ARTICLE XI
MISCELLANEOUS
11.1
Limitation of Rights
. Nothing in this Plan shall be construed:
(a) to give any employee of any Company any right to be designated a Participant in the Plan;
(b) to give a Participant any right with respect to the compensation deferred, the Company
Match, the deemed Investment earnings and losses, or the interest credited in the Deferred
Compensation Ledger except in accordance with the terms of this Plan;
(c) to limit in any way the right of the Company to terminate a Participant’s employment with
the Company at any time;
(d) to evidence any agreement or understanding, expressed or implied, that the Company shall
employ a Participant in any particular position or for any particular remuneration; or
(e) to give a Participant or any other person claiming through him any interest or right under
this Plan other than that of any unsecured general creditor of the Company.
11.2
Distributions to Incompetents or Minors
. Should a Participant become incompetent
or should a Participant designate a Beneficiary who is a minor or incompetent, the Committee is
authorized to pay the funds due to the parent of the minor or to the guardian of the minor or
incompetent or directly to the minor or to apply those funds for the benefit of the minor or
incompetent in any manner the Committee determines in its sole discretion.
11.3
Non-alienation of Benefits
. No right or benefit provided in this Plan shall be
transferable by the Participant except, upon his death, to a named Beneficiary as provided in this
Plan. No right or benefit under this Plan shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber, or charge the same will be void. No right or benefit under this Plan shall in
any manner be liable for or subject to any debts, contracts, liabilities or torts of the person
entitled to such benefits. If any Participant or any Beneficiary becomes bankrupt or attempts to
anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit under this
Plan, that right or benefit shall, in the discretion of the Committee, cease. In that event, the
Committee may have the Company hold or apply the right or benefit or any part of it to the benefit
of the Participant or
Beneficiary, his or her spouse, children or other dependents or any
-40-
of them in any manner and
in any proportion the Committee believes to be proper in its sole and absolute discretion, but is
not required to do so.
11.4
Reliance Upon Information
. The Committee shall not be liable for any decision or
action taken in good faith in connection with the administration of this Plan. Without limiting
the generality of the foregoing, any decision or action taken by the Committee when it relies upon
information supplied it by any officer of the Company, the Company’s legal counsel, the Company’s
independent accountants or other advisors in connection with the administration of this Plan shall
be deemed to have been taken in good faith.
11.5
Severability
. If any term, provision, covenant or condition of the Plan is held
to be invalid, void or otherwise unenforceable, the rest of the Plan shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
11.6
Notice
. Any notice or filing required or permitted to be given to the Committee
or a Participant shall be sufficient if submitted in writing and hand-delivered or sent by U.S.
mail to the principal office of the Company or to the residential mailing address of the
Participant. Notice shall be deemed to be given as of the date of hand-delivery or if delivery is
by mail, as of the date shown on the postmark.
11.7
Gender and Number
. If the context requires it, words of one gender when used in
this Plan will include the other genders, and words used in the singular or plural will include the
other.
11.8
Governing Law and Exclusive Jurisdiction
. The Plan shall be construed,
administered and governed in all respects by the laws of the State of Delaware. Consistent with
Section 7.7(e) of this Plan, Participant and the Company agree that the sole and exclusive
jurisdiction for any dispute under this Plan shall lie with the AAA’s regional office for the State
of Delaware, and the parties hereby waive any jurisdictional or venue-related defense to conducting
arbitration at this location.
11.9
Effective Date
. This Plan will be operative and effective on January 1, 2005.
11.10
Compliance with Section 409A of the Code
. The Plan (i) is intended to comply
with, (ii) shall be interpreted and its provisions shall be
applied in a manner that is consistent with, and (iii) shall have any ambiguities therein
interpreted, to the extent possible, in a manner that complies with Section 409A.
-41-
IN WITNESS WHEREOF
, the Company has executed this document as of January 1, 2005.
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SYSCO CORPORATION
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By:
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/s/ Michael C. Nichols
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Name:
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Michael C. Nichols
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Title:
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Sr. Vice President, General Counsel and Secretary
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EXHIBIT “A”
INVESTMENT OPTIONS
[Attached]
-42-
FOURTH AMEND AND RESTATED
SYSCO CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
INVESTMENT OPTIONS
The following are the “Investments” that are available under the Fourth Amended and Restated
SYSCO Corporation Executive Deferred Compensation Plan:
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Option
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Manager
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Equity Income Trust
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T. Rowe Price Associates, Inc.
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500 Index B Trust
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MFC Global Investment Management
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Mid-Value Trust
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T. Rowe Price Associates, Inc.
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Overseas Equity Trust
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Capital Guardian Trust Company
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Small Cap Value Trust
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Wellington Management Company LLC
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Brandes International Equity Fund
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Brandes Investment Partners, LP
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Frontier Capital Appreciation
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Frontier Capital Management Company, LLC
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Bond Index B Trust
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Declaration Management & Research LLC
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Default Investment
Moody’s Average Corporate Bond Yield, plus 1%, as described in the definition of Default
Investment.
-43-
Exhibit 10.4
SYSCO CORPORATION
2004 CASH PERFORMANCE UNIT PLAN
(As amended and restated on November 8, 2007)
TABLE OF CONTENTS
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ARTICLE I
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Purpose of the Plan
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2
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ARTICLE II
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Definitions
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2
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ARTICLE III
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Participation
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6
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3.1
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Designation of Participants
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6
|
|
|
|
3.2
|
|
Awards
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE IV
|
|
Determination of Performance Goals
|
|
|
7
|
|
|
|
4.1
|
|
Performance Period Determinations
|
|
|
7
|
|
|
|
4.2
|
|
Performance Goals
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE V
|
|
Payment
|
|
|
8
|
|
|
|
5.1
|
|
Determination of Performance
|
|
|
8
|
|
|
|
5.2
|
|
Determination of Payment Amount
|
|
|
8
|
|
|
|
5.3
|
|
Payment of Payment Amount
|
|
|
8
|
|
|
|
5.4
|
|
Overall Limitation Applicable to Covered Employees
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE VI
|
|
Termination of Employment
|
|
|
8
|
|
|
|
6.1
|
|
In General
|
|
|
8
|
|
|
|
6.2
|
|
Retirement
|
|
|
9
|
|
|
|
6.3
|
|
Death
|
|
|
9
|
|
|
|
6.4
|
|
Disability
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE VII
|
|
Change of Control
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE VIII
|
|
Administration
|
|
|
10
|
|
|
|
8.1
|
|
In General
|
|
|
10
|
|
|
|
8.2
|
|
Limitation of Liability
|
|
|
11
|
|
|
|
8.3
|
|
Compliance with Section 409A
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE IX
|
|
Term; Withdrawal or Amendment
|
|
|
11
|
|
|
|
9.1
|
|
Effective Date and Term
|
|
|
11
|
|
|
|
9.2
|
|
Withdrawal or Amendment
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE X
|
|
Miscellaneous
|
|
|
12
|
|
|
|
10.1
|
|
Beneficiaries
|
|
|
12
|
|
|
|
10.2
|
|
Awards Non-Transferable
|
|
|
12
|
|
|
|
10.3
|
|
Withholding for Taxes
|
|
|
12
|
|
|
|
10.4
|
|
Plan Funding
|
|
|
12
|
|
|
|
10.5
|
|
No Contract of Employment
|
|
|
12
|
|
|
|
10.6
|
|
No Right to Participate
|
|
|
12
|
|
|
|
10.7
|
|
Facilitation of Payments
|
|
|
12
|
|
|
|
10.8
|
|
Addresses; Missing Recipients
|
|
|
13
|
|
|
|
10.9
|
|
Governing Law
|
|
|
13
|
|
|
|
10.10
|
|
Successors
|
|
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13
|
|
|
|
10.11
|
|
Third Parties
|
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13
|
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10.12
|
|
Headings
|
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13
|
|
SYSCO CORPORATION
2004 CASH PERFORMANCE UNIT PLAN
WHEREAS, SYSCO Corporation sponsors and maintains the 2004 Mid-Term Incentive Plan (the
“Current Plan”); and
WHEREAS, the American Jobs Creation Act of 2004 added Section 409A to the Internal Revenue
Code of 1986, as amended (the “Code”), and Section 409A of the Code imposes certain restrictions on
plans of non-qualified deferred compensation, such as the Current Plan; and
WHEREAS, the Compensation Committee of the Board of Directors of SYSCO Corporation has
determined that it is in the best interests of SYSCO Corporation and current and former executives
to amend and restate the Current Plan to comply with Section 409A of the Code;
WHEREAS, the Compensation Committee of the Board of Directors of SYSCO Corporation desires to
rename the Current Plan to the SYSCO Corporation 2004 Cash Performance Unit Plan.
NOW, THEREFORE, SYSCO Corporation hereby adopts the SYSCO Corporation 2004 Cash Performance
Unit Plan as follows:
SYSCO CORPORATION
2004 CASH PERFORMANCE UNIT PLAN
ARTICLE I
Purpose of the Plan
The purpose of the Plan is to increase stockholder value and to advance the interests of the
Company and its Subsidiaries by providing financial incentives designed to attract, retain and
motivate key employees of the Company.
ARTICLE II
Definitions
When used in the Plan, the following terms shall have the following meanings:
“
Award
” shall mean the determination by the Committee that a Participant should receive a
given number of Performance Units, as evidenced by a document of notification given a Participant
at the time of such determination.
“
Board of Directors
” means the Board of Directors of the Company.
“
Change of Control
” means the occurrence of one or more events described in paragraphs (i)
through (iii), below.
(i)
Change in Ownership of the Company
. A change in the ownership of the Company shall occur
on the date that any one person, or more than one person acting as a group (within the meaning of
paragraph (i)(D)), acquires ownership of Company stock that, together with Company stock held by
such person or group, constitutes more than 50% of the total fair market value or total voting
power of the stock of the Company.
(A) If any one person or more than one person acting as a group (within the meaning of
paragraph (i)(D)) is considered to own more than 50% of the total fair market value or total voting
power of the stock of the Company, the acquisition of additional Company stock by such person or
persons shall not be considered to cause a change in the ownership of the Company or to cause a
change in the effective control of the Company (within the meaning of paragraph (ii) below).
(B) An increase in the percentage of Company stock owned by any one person, or persons acting
as a group (within the meaning of paragraph (i)(D)), as a result of a transaction in which the
Company acquires its stock in exchange for property, shall be treated as an acquisition of stock
for purposes of this paragraph (i).
(C) The provisions of this paragraph (i) shall apply only to the transfer
2
or issuance of Company stock if such Company stock remains outstanding after such transfer or
issuance.
(D) For purposes of this paragraph (i), persons shall be considered to be acting as a group if
they are owners of a corporation that enters into a merger, consolidation, purchase, or acquisition
of stock, or similar business transaction with the Company. If a person, including an entity, owns
stock in the Company and another entity with which the Company enters into a merger, consolidation,
purchase, or acquisition of stock, or similar business transaction, such shareholder shall be
considered to be acting as a group with other Company shareholders prior to the transaction giving
rise to the change and not with respect to the ownership interest in the other corporation.
Persons shall not be considered to be acting as a group solely because they purchase or own stock
of the same corporation at the same time, or as a result of the same public offering.
(ii)
Change in Effective Control of the Company
.
(A) A change in the effective control of the Company shall occur on the date that either of
(1) or (2) below occurs:
(1) Any one person, or more than one person acting as a group (within the meaning of paragraph
(ii)(D)), acquires (or has acquired during the twelve (12) month period ending on the date of the
most recent acquisition by such person or persons) ownership of stock of the Company possessing 30%
or more of the total voting power of the stock of the Company; or
(2) A majority of members of the Board is replaced during any twelve (12) month period by
directors whose appointment or election is not endorsed by a majority of the Board prior to the
date of the appointment or election.
(B) A change in effective control of the Company also may occur with respect to any
transaction in which either of the Company or the other corporation involved in a transaction
experiences a Change of Control event described in paragraphs (i) or (iii).
(C) If any one person, or more than one person acting as a group (within the meaning of
paragraph (ii)(D)), is considered to effectively control the Company (within the meaning of this
paragraph (ii)), the acquisition of additional control of the Company by the same person or persons
shall not be considered to cause a change in the effective control of the Company (or to cause a
change in the ownership of the Company within the meaning of paragraph (i)).
(D) For purposes of this paragraph (ii), persons shall be considered to be acting as a group
if they are owners of a corporation that enters into a merger, consolidation, purchase, or
acquisition of stock, or similar business transaction with the Company. If a person, including an
entity, owns stock in the Company and another entity with which the Company enters into a merger,
consolidation, purchase, or acquisition of stock, or similar business transaction, such shareholder
shall be considered to be acting as a group with other Company shareholders only with respect to
the ownership in the Company prior to the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation. Persons
3
shall not be considered to be acting as a group solely because they purchase or own stock of
the same corporation at the same time, or as a result of the same public offering.
(iii)
Change in Ownership of a Substantial Portion of the Company’s Assets
. A change in the
ownership of a substantial portion of the Company’s assets shall occur on the date that any one
person, or more than one person acting as a group (within the meaning of paragraph (iii)(C)),
acquires (or has acquired during the twelve (12) month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total gross fair market
value (within the meaning of paragraph (iii)(B)) equal to or more than 40% of the total gross fair
market value of all of the assets of the Company immediately prior to such acquisition or
acquisitions.
(A) A transfer of the Company’s assets shall not be treated as a change in the ownership of
such assets if the assets are transferred to one or more of the following:
(1) A shareholder of the Company (immediately before the asset transfer) in exchange for or
with respect to the Company stock;
(2) An entity, 50% or more of the total value or voting power of which is owned, directly or
indirectly, by the Company;
(3) A person, or more than one person acting as a group (within the meaning of paragraph
(iii)(C)) that owns, directly or indirectly, 50% or more of the total value or voting power of all
of the outstanding stock of the Company; or
(4) An entity, at least 50% of the total value or voting power of which is owned, directly or
indirectly, by a person described in paragraph (iii)(A)(3).
For purposes of this paragraph (iii)(A), and except as otherwise provided, a person’s status
is determined immediately after the transfer of assets.
(B) For purposes of this paragraph (iii), gross fair market value means the value of all
Company assets, or the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets.
(C) For purposes of this paragraph (iii), persons shall be considered to be acting as a group
if they are owners of a corporation that enters into a merger, consolidation, purchase, or
acquisition of assets, or similar business transaction with the Company. If a person, including an
entity shareholder, owns stock in the Company and another entity with which the Company enters into
a merger, consolidation, purchase, or acquisition of stock, or similar business transaction, such
shareholder shall be considered to be acting as a group with other Company shareholders only to the
extent of the ownership in the Company prior to the transaction giving rise to the change and not
with respect to the ownership interest in the other corporation. Persons shall not be considered
to be acting as a group solely because they purchase or own stock of the same corporation at the
same time, or as a result of the same public offering.
4
(iv)
Identification of Relevant Corporations
. To constitute a Change of Control hereunder,
the Change of Control must relate to (A) the corporation for which the Participant is performing
services at the time of the Change of Control, (B) the corporation that is liable for the payment
of the deferred compensation (or all corporations liable for the payment if more than one
corporation is liable), or (C) a corporation that is a majority shareholder of a corporation
identified in (A) or (B), or any corporation in a chain of corporations in which each corporation
is a majority shareholder of another corporation in the chain, ending with the corporation
identified in (A) or (B). For purposes of this paragraph (iv), a majority shareholder is a
shareholder owning more than 50% of the total fair market value and total voting power of such
corporation.
“
Code
” means the Internal Revenue Code of 1986, as amended.
“
Committee
” means the Compensation Committee of the Board of Directors, or such other
committee as the Board of Directors may designate to have primary responsibility for the
administration of the Plan.
“
Company
” means SYSCO Corporation, a Delaware corporation.
“
Completed Fiscal Years
” is defined in Section 6.3.
“
Covered Employee
”
means a “covered employee” within the meaning of Section 162(m)(3) of the
Code.
“
Disability
” means a physical or mental condition that meets the eligibility requirements for
the receipt of disability income under the terms of the disability income plan sponsored by the
Company pursuant to which the Participant is eligible for benefits.
“
Effective Date
” is defined in Section 9.1.
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended.
“
Fiscal Year
” means, as determined in the sole discretion of the Committee, a period used for
purposes of measuring performance for purposes of this Plan which is based as closely as possible
on the fiscal year of the Company.
“
Participant
” means an employee of the Company or any of its Subsidiaries who is designated as
a Participant by the Committee.
“
Payment Amount
” means the total amount to be paid to a Participant with respect to the
Performance Units awarded to such Participant for a particular Performance Period.
“
Payment Date
”
means a date determined by the Committee for purposes of (i) making payment of
amounts earned under this Plan and, (ii) in the event a Participant elects to defer receipt of
amounts earned under this Plan pursuant to the terms of a deferred compensation plan sponsored by
the Company, the date such amounts are credited under the applicable deferred
5
compensation plan. This date shall be no later than the last day of the fourth month following
completion of the respective Performance Period.
“
Performance Goals
” means the performance goals established by the Committee for each
Performance Period pursuant to the Plan against which performance will be measured.
“
Performance Period
” means a period of no less than three Fiscal Years, as determined by the
Committee, during which the Performance Goals shall be measured for purposes of determining the
Payment Amount.
“
Performance Unit
” means a unit of participation which shall constitute the basis from which a
Participant’s Payment Amount shall be determined with regard to the Performance Goals established
by the Committee.
“
Plan
” means the SYSCO Corporation 2004 Cash Performance Unit Plan.
“
Retirement
” means any termination of employment with the Company or a Subsidiary as a result
of retirement in good standing under established rules of the Company then in effect.
“Section 409A
”
means Section 409A of the Code. References herein to “Section 409A” shall also
include any regulatory and other interpretive authority promulgated by the Treasury Department or
the Internal Revenue Service under Section 409A of the Code.
“Specified Employee”
means a “specified employee” as defined in Section 409(A)(a)(2)(B)(i) of
the Code.
“
Subsidiary
” means (i) any entity in which the Company, directly or indirectly, owns more than
50% of the vote or value of the equity interests issued by such entity, and (ii) any other entity
designated by the Committee as a “Subsidiary” for purposes of this Plan.
“Unit Value”
means the per unit amount that is used for purposes of determining the Payment
Amount to be made to Participants in respect of Performance Units awarded under the Plan.
ARTICLE III
Participation
3.1
Designation of Participants
. The Committee shall determine and designate from
time to time those employees of the Company and its Subsidiaries who are to be granted Performance
Units (and who thereby become Participants) and the number of Performance Units to be granted to
each Participant.
3.2
Awards
. Performance Units shall be granted by the Committee by a written
notification to Participants evidencing the Award in such form as the Committee shall approve,
which notification shall comply with and be subject to the terms and
conditions of this Plan.
6
Further Performance Units may be granted by the Committee from time to
time to Participants, so long as this Plan shall continue in full force and effect.
ARTICLE IV
Determination of Performance Goals
4.1
Performance Period Determinations
.
(a)
In General
. Within the first 90 days of each Performance Period, the Committee,
in its sole discretion, shall (a) establish for that Performance Period (i) the beginning and
ending dates, and the Fiscal Years, for the Performance Period, (ii) the Payment Date for the
Performance Period, (iii) the Performance Goals for each Participant, (iv) the method for
evaluating performance for the Performance Period, and (v) the method for determining Unit Value
and the Payment Amount for each Participant, and (b) designate the number of Performance Units to
be granted to each Participant.
(b)
Adjustments for Long Fiscal Years
. If established in writing by the Committee
within the first 90 days of the Performance Period, the Committee may make any adjustments it
determines appropriate for purposes of measuring performance where the fiscal year of the Company
and/or its Subsidiaries is greater than 52 weeks, including, without limitation, proration of
results between fiscal years.
4.2
Performance Goals
. The Performance Goals established by the Committee for a
Performance Period may include any one or more of several criteria, such as, but not limited to,
return on capital employed, sales growth, market share, margin growth, return on equity, total
shareholder return, increase in net after-tax earnings per share, increase in operating pre-tax
earnings, operating profit or improvements in operating profit, improvements in certain asset or
financial measures (including working capital and the ratio of sales to net working capital),
reductions in certain costs (including reductions in inventories or accounts receivable or
reductions in operating expenses), net earnings, pre-tax earnings or variations of income criteria
in varying time periods, economic value added, or general comparisons with other peer companies or
industry groups or classifications with regard to one or more of these criteria. The Performance
Goals may be based on the performance of the Company generally, the performance of a particular
Subsidiary, division or business unit, or the performance of a group of Subsidiaries, divisions or
business units. The relative weights of the criteria that comprise the Performance Goals shall be
determined by the Committee in its sole discretion. In establishing the Performance Goals for a
Performance Period, the Committee may establish different Performance Goals for individual
Participants or groups of Participants.
7
ARTICLE V
Payment
5.1
Determination of Performance
. After the end of each Performance Period, the
performance of the Company and its Subsidiaries will be determined by the Company and approved by
the Committee for each Performance Goal. The Committee shall certify in writing to each
Participant the degree of achievement of each Performance Goal based upon the actual performance
results for the Performance Period.
5.2
Determination of Payment Amount
. After the end of each Performance Period, the
Payment Amount for each Participant for such Performance Period shall be calculated by the Company
and certified by the Committee based upon the level of performance achieved by the Company and its
Subsidiaries for each Performance Goal applicable to such Participant for the Performance Period,
as determined in accordance with Section 5.1.
5.3
Payment of Payment Amount
. The Payment Amount payable to Participants under this
Plan shall be paid solely in cash and shall be paid on or before the Payment Date;
provided,
however
, that subject to the requirements of the applicable deferred compensation plan and such
other rules and requirements as the Committee may from time to time prescribe, the Committee may
allow a Participant to defer receipt of all or a portion of the Payment Amount if permitted under
the terms of the deferred compensation plan sponsored by the Company in which the Participant is
eligible to participate.
5.4
Overall Limitation Applicable to Covered Employees
. Notwithstanding any other
provision in this Plan to the contrary, in no event shall any Covered Employee be entitled to a
payment in respect of any Performance Period in excess of one percent (1%) of the Company’s
earnings before income taxes as publicly disclosed in the “Consolidated Results of Operations”
section of the Company’s annual report to the Securities and Exchange Commission on Form 10-K for
the Fiscal Year ended immediately before the Payment Date applicable to such Performance Period.
ARTICLE VI
Termination of Employment
If a Participant’s employment is terminated before the end of the Performance Period, the
treatment of the Performance Units awarded with respect to such Performance Period will be as
follows:
6.1
In General
. If, before the end of the Performance Period, the Participant’s
employment terminates for any reason other than for the reasons described in Sections 6.2 through
6.4, the Participant’s Performance Units shall be canceled, and the Participant shall receive no
payment under this Plan in respect of such Performance Units. If a Participant’s employment
terminates after the end of the Performance
Period but before the Payment Date, the Participant (or the Participant’s designated beneficiary in
the case of death) shall be paid the
8
Payment Amount with respect to such Performance Period as
determined under Article V hereof on the Payment Date.
6.2
Retirement
. Subject to compliance with the conditions outlined below, if, during
the Performance Period, a Participant’s employment terminates by reason of Retirement, the Payment
Amount for such Performance Period shall be paid on the Payment Date for such Performance Period;
provided, however
, that if such Participant is a Specified Employee, the Payment Amount shall not
be paid to the Participant until the later of six months following the date of Retirement or the
Payment Date with respect to the applicable Performance Period, but only to the extent that making
such Payment Amount would result in a violation of Section 409A. The Participant’s Payment Amount
with respect to such Performance Period shall be determined by taking into account the actual
performance of the Company and/or its Subsidiaries for the entire Performance Period;
provided,
however
, that the Company reserves the right to cancel such Performance Units if the Participant,
prior to the end of the applicable Performance Period, (i) performs any services, whether as an
employee, officer, director, agent, independent contractor, partner or otherwise, for a competitor
of the Company or any of its affiliates without the consent of the Company, or (ii) takes any other
action, including, but not limited to, interfering with the relationship between the Company or any
of its affiliates and any of its employees, clients or agents, which is intended to damage or does
damage to the business or reputation of the Company.
6.3
Death
. If a Participant dies during the Performance Period, the number of
Performance Units awarded to the Participant will be reduced by multiplying the number of
Performance Units initially awarded to the Participant by a fraction, the numerator of which is the
number of full months in the Performance Period during which the Participant was an active employee
of the Company or a Subsidiary and the denominator of which is the number of months in the
Performance Period. A partial month worked shall be counted as a full month if the Participant is
an active employee for 15 days or more in that month. The Payment Amount to be paid to the
Participant’s beneficiaries based on the resulting reduced number of Performance Units shall be
determined as follows:
(a) If the Participant’s death occurs after the end of one or more Fiscal Years during the
Performance Period but within six months or less of the beginning of a Fiscal Year, the Payment
Amount shall be determined using the actual performance of the Company and/or its Subsidiaries for
each completed Fiscal Year prior to the Participant’s death (the “
Completed Fiscal Years
”);
(b) If the Participant’s death occurs more than six months after the start of a Fiscal Year
included in the Performance Period but prior to the end of a Fiscal Year during such Performance
Period, the Payment Amount shall be determined (i) using the actual performance of the Company for
each Completed Fiscal Year, if any, and (ii) using the actual performance of the Company and/or its
Subsidiaries for the Fiscal Year in which the Participant dies; or
(c) If the Participant’s death occurs six months or less after the start of the Performance
Period, the Payment Amount for the Performance Units granted with respect to
such Performance Period shall be zero. The Payment Amount determined pursuant to this
9
Section 6.3
shall be paid to the Participant’s designated beneficiary as soon as practicable following the
determination of the Payment Amount.
6.4
Disability
. If, before the end of the Performance Period, a Participant’s
employment is terminated as a result of Disability, the Payment Amount for such Performance Period
shall be paid on the Payment Date for such Performance Period, and the Participant’s Payment Amount
with respect to such Performance Period shall be determined by taking into account the actual
performance of the Company and/or its Subsidiaries for the entire Performance Period.
ARTICLE VII
Change of Control
If a Change of Control has occurred during a Performance Period, the Participant’s Performance
Units awarded with respect to such Performance Period shall be considered vested, and the Payment
Amount shall be paid to the Participant within 90 days after the date of the Change of Control.
For purposes of this Article VII, the Payment Amount to be made to each Participant shall be the
maximum amount that could be paid to such Participant with respect to the Participant’s Performance
Units for such Performance Period assuming the highest level of performance is achieved.
ARTICLE VIII
Administration
8.1
In General
. The Plan shall be administered under the supervision and direction of
the Committee or its designees, as applicable. In administering the Plan, the Committee will
determine the Participants and the number of Performance Units to be granted to individual
Participants, establish appropriate Fiscal Years, Performance Periods and Performance Goals as
bases for payments under the Plan, establish the methods and procedures for measuring performance,
and determine the Payment Date and methods and procedures for payment of Awards under the Plan.
Further, the Committee may, from time to time, change or waive requirements of the Plan, or
outstanding Performance Units, to conform with the law, to meet special circumstances not
anticipated or covered in the Plan, or to carry on successful operation of the Plan, and in
connection therewith, the Committee or its designee shall have the full power and authority to:
(a) Prescribe, amend and rescind rules and regulations relating to the Plan, or outstanding
Performance Units, establish procedures deemed appropriate for the Plan’s administration, and make
any and all other determinations not herein specifically authorized which may be necessary or
advisable for its effective administration;
(b) Make any amendments to or modifications of the Plan which may be required or necessary to
make the Plan set forth herein comply with the provisions of any laws,
federal or state, or any regulations issued thereunder, and to cause the Company at its
expense to
10
take any action related to the Plan which may be required under such laws or
regulations; and
(c) Contest on behalf of Participants or the Company, at the expense of the Company, any
ruling or decision on any issue related to the Plan, and conduct any such contest and any resulting
litigation to a final determination, ruling or decision.
Notwithstanding anything herein to the contrary, the Committee may, unless otherwise
prohibited from doing so by the Board of Directors or such committee’s charter, delegate any Plan
related function it may deem necessary or appropriate to employees of the Company or its
Subsidiaries or to third parties.
Nothing herein shall be deemed to authorize, and the Committee will have no discretion, to
alter or amend the Performance Goals or the specific Performance Goals of Awards under the Plan
with respect to “named executives” (as that term is defined in Section 402(a)(3) of Regulation S-K)
and Covered Employees after they have been approved by the Committee or communicated to
Participants, whichever shall occur later in time.
8.2
Limitation of Liability
. No member of the Committee shall be liable for any act,
omission, or determination taken or made in good faith with respect to the Plan or any Awards made
hereunder, and the members of the Committee shall be entitled to indemnification, defense and
reimbursement by the Company in respect of any claim, loss, damage, or expenses (including
attorneys’ fees and expenses) arising therefrom to the full extent permitted by law and as provided
for in the bylaws of the Company or under any directors’ and officers’ liability or similar
insurance coverage or any indemnification agreement that may be in effect from time to time. The
Company reserves the right to select counsel to defend any litigation covered by this Section 8.2.
8.3
Compliance with Section 409A
. The Plan (i) is intended to comply with, (ii) shall
be interpreted and its provisions shall be applied in a manner that is consistent with, and (iii)
shall have any ambiguities therein interpreted, to the extent possible, in a manner that complies
with Section 409A.
ARTICLE IX
Term; Withdrawal or Amendment
9.1
Effective Date and Term
. The Plan has been adopted by the Board of Directors
effective as of September 3, 2004 (the “
Effective Date
”). The term of the Plan shall continue
until the fifth anniversary of the Effective Date, unless sooner terminated by the Board; provided,
however, that such termination must comply with the requirements of Section 409A. No new Awards
may be made after the termination of the Plan, but termination of the Plan shall not affect
outstanding Awards.
9.2
Withdrawal or Amendment
. The
Company’s Board of Directors or the Committee may at any time withdraw or amend the Plan, except
that there shall be no withdrawal or amendment which shall adversely affect Awards theretofore
granted.
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ARTICLE X
Miscellaneous
10.1
Beneficiaries
. Each Participant may designate a beneficiary or beneficiaries to
receive, in the event of such Participant’s death, any payments remaining to be made to the
Participant under the Plan. Each Participant shall have the right to revoke any such designation
and to redesignate a beneficiary or beneficiaries by written notice to the Company to such effect.
If any Participant dies without naming a beneficiary or if all of the beneficiaries named by a
Participant predecease the Participant, then any amounts remaining to be paid under the Plan shall
be paid to the Participant’s estate.
10.2
Awards Non-Transferable
. Any rights of a Participant under this Plan, and in or
to an Award, shall be personal in nature and may not be assigned or transferred (other than a
transfer by will or the laws of descent and distribution). Any attempted assignment or transfer of
the Award shall be null and void and without effect.
10.3
Withholding for Taxes
. The Company or its Subsidiaries shall have the right to
deduct from all payments under the Plan any federal, state, or local taxes required by law to be
withheld with respect to such payments.
10.4
Plan Funding
. The Plan shall at all times be unfunded and no provision shall at
any time be made with respect to segregating any assets of the Company or its Subsidiaries for
payment of any benefits under the Plan. The right of a Participant to receive payment under the
Plan shall be an unsecured claim against the general assets of the Company or its Subsidiaries, and
neither the Participant nor any other person shall have any rights in or against any specific
assets of the Company or its Subsidiaries. The Company and its Subsidiaries may establish a reserve
of assets to provide funds for payments under the Plan.
10.5
No Contract of Employment
. The existence of this Plan, as in effect at any time
or from time to time, or any grant of Performance Units under the Plan shall not be deemed to
constitute a contract of employment between the Company, or its Subsidiaries, and any employee or
Participant, nor shall it constitute a right to remain in the employ of the Company or its
Subsidiaries.
10.6
No Right to Participate
. Except as provided in Articles III and IV, no
Participant or other employee shall at any time have a right to be selected for participation in
the Plan, despite having previously participated in an incentive or bonus plan of the Company or
its Subsidiaries.
10.7
Facilitation of Payments
. Notwithstanding anything else in this Plan to the
contrary, in the event that a payment is due to an employee, or former employee (or a beneficiary
thereof), under this Plan and the recipient is a minor, mentally incompetent, or otherwise
incapacitated, such payment shall be made to the recipient’s legal representative, or guardian. If
there is no such legal representative, or guardian, the Committee, in its sole discretion, may
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direct that payment be made to any person the Committee, in its sole discretion, believes, by
reason of a family relationship, or otherwise, will apply. Upon such payment, for the benefit of
the recipient, the Company and each of its Subsidiaries shall be fully discharged of all
obligations therefor.
10.8
Addresses; Missing Recipients
. A recipient of any payment under this Plan who is
not a current employee of the Company, or its Subsidiaries, shall have the obligation to inform the
Company of his or her current address, or other location to which payments are to be sent. Neither
the Company nor its Subsidiaries shall have any liability to such recipient, or any other person,
for any failure of such recipient, or person, to receive any payment if it sends such payment to
the address provided by such recipient by first class mail, postage paid, or other comparable
delivery method. Notwithstanding anything else in this Plan to the contrary, if a recipient of any
payment cannot be located within 120 days following the date on which such payment is due after
reasonable efforts by the Company or its Subsidiaries, such payments and all future payments owing
to such recipient shall be forfeited without notice to such recipient. If, within two years (or
such longer period as the Committee, in its sole discretion, may determine), after the date as of
which payment was forfeited (or, if later, is first due), the recipient, by written notice to the
Company, requests that such payment and all future payments owing to such recipient be reinstated
and provides satisfactory proof of their identity, such payments shall be promptly reinstated. To
the extent the due date of any reinstated payment occurred prior to such reinstatement, such
payment shall be made to the recipient (without any interest from its original due date) within 90
days after such reinstatement.
10.9
Governing Law
. The laws of the State of Delaware (excluding its principles
relating to conflicts of laws) shall govern the Plan.
10.10
Successors
. All obligations of the Company and its Subsidiaries under the Plan
shall be binding upon and inure to the benefit of any successor to the Company or such Subsidiary,
whether the existence of such successor is the result of a direct or indirect purchase, merger,
consolidation, or otherwise.
10.11
Third Parties
. Nothing expressed or implied in this Plan is intended or may be
construed to give any person other than eligible Participants any rights or remedies under this
Plan.
10.12
Headings
. Section and other headings contained in this Plan are for reference
purposes only, and are not intended to describe, interpret, define, or limit the scope, extent or
intent of the provisions of the Plan.
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IN WITNESS WHEREOF
, the Company has executed this document as of the
Effective Date
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SYSCO CORPORATION
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By:
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/s/ Michael C. Nichols
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Name:
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Michael C. Nichols
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Title:
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Sr. Vice President, General Counsel and Secretary
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