-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jesfnj208xXLLIlNx188Bnh8C7GKvSfRXB51WI158QMBofulKyX+oXaIiftXWT5s jrrZjg+7JUK1QV200ufEgw== 0000914062-04-000423.txt : 20040910 0000914062-04-000423.hdr.sgml : 20040910 20040910145956 ACCESSION NUMBER: 0000914062-04-000423 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040903 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20040910 DATE AS OF CHANGE: 20040910 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYSCO CORP CENTRAL INDEX KEY: 0000096021 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & RELATED PRODUCTS [5140] IRS NUMBER: 741648137 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06544 FILM NUMBER: 041025331 BUSINESS ADDRESS: STREET 1: 1390 ENCLAVE PKWY CITY: HOUSTON STATE: TX ZIP: 77077 BUSINESS PHONE: 2815841390 MAIL ADDRESS: STREET 1: 1390 ENCLAVE PKWY CITY: HOUSTON STATE: TX ZIP: 77077 8-K 1 sysco8k90304.txt FORM 8-K - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------- FORM 8-K -------------------------------- CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 3, 2004 ----------------------- SYSCO CORPORATION (Exact name of registrant as specified in its charter) -------------------------
DELAWARE 1-06544 74-1648137 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.)
1390 ENCLAVE PARKWAY, HOUSTON, TX 77077-2099 (Address of principal executive office) (zip code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (281) 584-1390 N/A (Former name or former address, if changed since last report) ------------------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [X] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) - -------------------------------------------------------------------------------- ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. SYSCO Corporation 2004 Long-Term Incentive Cash Plan. On September 3, 2004, the Board of Directors of SYSCO Corporation ("SYSCO"), in accordance with the recommendations of the Compensation and Stock Option Committee (the "Committee"), adopted the 2004 Long-Term Incentive Cash Plan (the "Plan"). The Company's named executive officers (as reported in its annual proxy statements) will not be paid any bonuses under the Plan unless SYSCO's stockholders approve the use of the Plan to pay performance bonuses to such officers. A proposal to approve such use of the Plan will be submitted to the stockholders for approval at SYSCO's 2004 Annual Meeting of Stockholders. All employees designated by the Committee are eligible to participate in the Plan. Plan participants may earn a performance bonus based on the performance of the Company or a particular subsidiary over a particular "performance period," which may be any length of time of at least three years in duration. At the beginning of the performance period, the Committee determines the employees who will receive performance units and the number of units to be awarded to each. Performance units entitle the recipient to receive a bonus at the end of the performance period if certain performance criteria (set by the Committee at the time of the award) are satisfied. The amount of the bonus payable, if any, is determined according to a formula (established by the Committee at the time of the award) and will vary based on the Company's or its subsidiaries' performance over the performance period. Performance goals selected by the Committee under the Plan may generally involve one or more criteria including (but not limited to) return on capital, sales growth, shareholder return, increases in operating pre-tax earnings, increases in net after-tax earnings per share, and other similar measures of the Company's growth or performance. Performance goals applicable to any awards made under the Plan to named executive officers, however, will be selected by the Committee from a limited subset of criteria to be set forth and described in the proxy statement soliciting stockholder approval for use of the Plan to award performance bonuses to such officers. No named executive officer will be entitled to receive a payment in respect of any performance period in excess of one percent of SYSCO's earnings before income taxes, as reported in SYSCO's consolidated financial statements included in its annual report on Form 10-K for the fiscal year ended immediately before the payment date applicable to such performance period. Generally, performance units are forfeited upon termination of employment, and no performance bonus for a particular performance period will be paid to a participant whose employment terminates prior to the expiration of the period. However, certain exceptions are provided in the event that termination results from death, disability or retirement. In addition, the units vest upon a change 2 of control, and in that event each participant will receive a bonus based on the maximum bonus that could be paid to such participant for the performance period assuming the highest level of performance is achieved. Such bonus payment would be made within 90 days after the change of control whether or not the participant's employment is terminated. Any bonuses paid to the Company's named executive officers will qualify for an exception to the limitation on the deductibility of compensation in excess of $1 million imposed by Section 162(m) of the Internal Revenue Code of 1986 if stockholder approval is obtained. Awards may be made under the Plan until September 3, 2009, unless the Plan is terminated by the Board before that date. Awards made under the Plan remain outstanding according to their terms regardless of Plan termination. Grant of Performance Units to Named Executive Officers. Effective September 3, 2004, an aggregate of 450,000 performance units were granted to certain employees, including the Company's named executive officers, under the Plan, for the performance period 2004 to 2007. Participants under the Plan will not be entitled to any bonus pursuant to these awards unless certain performance criteria are met. Certain participants will not receive a performance bonus pursuant to these grants unless there is a specified minimum level of increase in operating pretax earnings for designated operating subsidiaries of the Company. Other participants, including the Company's named executive officers, will not receive a bonus pursuant to these grants unless there is a specified minimum level of increase in the Company's net after-tax earnings per share (on a consolidated basis). The amount of any bonus payable will be determined in accordance with the following formula:
- ------------------------------------------- ------ -------------- ------ --------------------------------- Number of Performance Units Granted to X Unit Value X Applicable Percentage Participant - ------------------------------------------- ------ -------------- ------ ---------------------------------
The "Unit Value" for the September 3, 2004 grants was set at $35. The "Applicable Percentage" ranges from 50% to 150%, depending upon the amount of the increase in operating pretax earnings or net after-tax earnings per share, as applicable. Set forth below are the number of units awarded to each of the Company's named executive officers listed in the Summary Compensation Table in the Company's proxy statement dated September 29, 2003 (each of whom is expected to be listed in the Summary Compensation Table in the Company's upcoming proxy statement for its November 2004 Annual Meeting of Stockholders): Officer Name Number of Units Awarded ----------------------------------------------------------------------- Richard J. Schnieders.................................79,000 Thomas E. Lankford....................................14,500 John K. Stubblefield, Jr...............................8,500 Lawrence J. Accardi....................................8,500 Kenneth F. Spitler.....................................8,500 3 Copies of the Plan and form of Grant Agreement for named executive officers are incorporated by reference to Exhibit Nos. 10(a) and 10(b) filed with this Form 8-K. There are no material relationships between SYSCO and any of its executive officers, aside from their employment relationships with SYSCO. - -------------------------------------------------------------------------------- THIS FORM 8-K IS FILED TO REPORT THE ADOPTION OF A COMPENSATION PLAN AND THE AWARD OF COMPENSATION THEREUNDER. IT IS NOT INTENDED TO SOLICIT PROXIES WITH RESPECT TO ANY MATTER TO BE PRESENTED AT SYSCO'S 2004 ANNUAL MEETING OF STOCKHOLDERS. SYSCO STOCKHOLDERS SHOULD CAREFULLY READ THE COMPANY'S PROXY STATEMENT WHEN IT IS AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION REGARDING ALL MATTERS TO BE PRESENTED AT SUCH MEETING, INCLUDING INFORMATION REGARDING THE DIRECT AND INDIRECT INTERESTS IN MATTERS TO BE PRESENTED OF SYSCO'S MANAGEMENT, AS WELL AS INFORMATION REGARDING MANAGEMENT'S SHAREHOLDINGS. THE COMPANY'S PROXY STATEMENT, TOGETHER WITH OTHER RELEVANT DOCUMENTS, WILL BE AVAILABLE FOR FREE FROM THE EDGAR DATABASE ON THE WEBSITE OF THE U.S. SECURITIES AND EXCHANGE COMMISSION, LOCATED AT HTTP://WWW.SEC.GOV. COPIES OF THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS WILL ALSO BE AVAILABLE FOR FREE FROM THE COMPANY'S WEBSITE, LOCATED AT HTTP://WWW.SYSCO.COM. - -------------------------------------------------------------------------------- ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements. (b) Pro Forma Financial Information. (c) Exhibits.
Exhibit Number Description -------------- ----------- 10(a) SYSCO Corporation 2004 Long-Term Incentive Cash Plan 10(b) Form of Grant Agreement to Named Executive Officers Under the SYSCO Corporation 2004 Long-Term Incentive Cash Plan adopted on September 3, 2004
4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, SYSCO Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SYSCO CORPORATION Date: September 10, 2004 By: /s/ Michael C. Nichols ------------------------------------ Michael C. Nichols Vice President, General Counsel and Corporate Secretary 5 EX-10 2 sysco8k90304ex10a.txt LONG-TERM INCENTIVE CASH PLAN EXHIBIT 10(a) SYSCO CORPORATION 2004 LONG-TERM INCENTIVE CASH 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 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 Exchange Act (a "PERSON")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then-outstanding shares of Company common stock (the "OUTSTANDING COMPANY COMMON STOCK") or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "OUTSTANDING COMPANY 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 the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (4) any acquisition by any corporation pursuant to a transaction that complies with subparagraphs (c)(i), (c)(ii) and (c)(iii); (b) Individuals who, as of November 7, 2003, 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 7, 2003 whose election, or nomination for election by the Company'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 the Company or any of its Subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its Subsidiaries (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 Company Common Stock and the Outstanding Company 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 the Company or all or substantially all of the Company'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 Company Common Stock and the Outstanding Company 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 the Company 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 the Company of a complete liquidation or dissolution of the Company. "CODE" means the Internal Revenue Code of 1986, as amended. "COMMITTEE" means the Compensation and Stock Option 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. 2 "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 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 Long-Term Incentive Cash 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. "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. 3 "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. 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 4 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. 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. 5 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 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 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; 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"); 6 (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 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, 7 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 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 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 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. 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. 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. 9 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 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 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. 11 EX-10 3 sysco8k90304ex10b.txt FORM OF GRANT AGREEMENT EXHIBIT 10(b) September __, 2004 PERSONAL AND CONFIDENTIAL [Name] [Street Address] [City, State, Zip] Dear [Grantee]: It is our pleasure to announce that SYSCO has adopted a new bonus plan called the SYSCO Corporation 2004 Long-Term Incentive Cash Plan (the "Plan"). In recognition of your long-term commitment to SYSCO and its customers and of your expected future contributions to our corporate financial objectives, you have been granted [_____] "performance units" under the Plan. The value assigned to each of your performance units is $35.00. Subject to the terms and conditions of the Plan, these performance units represent your right to receive a cash bonus of up to 150% of the total value of your units if and to the extent that SYSCO attains certain increases in net after-tax earnings per share during the "performance period" (July 4, 2004 through June 30, 2007), set by the Compensation and Stock Option Committee of SYSCO's Board of Directors. You should be aware that in November 2004, SYSCO will be seeking shareholder approval of the Plan with respect to compensation payable to the CEO and the four highest compensated officers of SYSCO ("Covered Employees"). This is being done so that SYSCO may be permitted to claim a federal income tax deduction for compensation payable under the Plan to the Covered Employees in excess of the limitation prescribed by Section 162(m) of the Internal Revenue Code ("Code"). In order to comply with the applicable requirements of Section 162(m) of the Code, SYSCO must subject to shareholder approval any compensation payable under the Plan to the Covered Employees, including any bonuses that may be earned with respect to the performance units granted for the July 4, 2004 through June 30, 2007 performance period. This means that if SYSCO's shareholders do not approve the Plan as it relates to the Covered Employees, SYSCO may not pay any bonuses earned under the Plan to the Covered Employees. It is possible that you may be a Covered Employee for purposes of Section 162(m) of the Code for the taxable year in which the bonuses would otherwise be deductible. Accordingly, we are requesting that you sign the enclosed agreement to acknowledge that, in the event that SYSCO's shareholders do not approve the Plan as it relates to the Covered Employees and you are a Covered Employee for the relevant taxable year, you agree to waive your right to receive any bonus that may be earned with respect to the performance units granted pursuant to this letter. AS DESCRIBED IN THE AGREEMENT, THE PERFORMANCE UNITS GRANTED PURSUANT TO THIS LETTER SHALL BE FORFEITED ON OCTOBER 1, 2004 IF WE HAVE NOT RECEIVED THE AGREEMENT SIGNED BY YOU (AND YOUR SPOUSE, IF MARRIED) BEFORE SUCH DATE. Also enclosed for your review are copies of the Plan document, a beneficiary designation form, instructions for completing the beneficiary designation form and other explanatory materials. All of the enclosed documents are important legal documents that should be reviewed carefully and kept in a safe place. Please complete the enclosed forms as soon as possible, and return them to Connie Brooks. Letter to [Grantee] September __, 2004 Thank you for your hard work and service. Your efforts, which are an integral part of SYSCO's growth and progress, are deeply appreciated. If you should have any questions about your performance unit grant or the Plan, please contact Mike Nichols. Sincerely, Richard J. Schnieders Thomas E. Lankford Chairman and CEO President and COO Enclosures cc: [________________] -----END PRIVACY-ENHANCED MESSAGE-----