-----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, N2XjrTE1QqVgg64ppKjvdYO+n4A6j7QJfJoQoC/QjSML9kgZnTt0XDdJEgMhoCsj SynyUBRx4iVtgFD8fKmVGw== 0000950129-00-000597.txt : 20000215 0000950129-00-000597.hdr.sgml : 20000215 ACCESSION NUMBER: 0000950129-00-000597 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20000101 FILED AS OF DATE: 20000214 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: 10-Q SEC ACT: SEC FILE NUMBER: 001-06544 FILM NUMBER: 540683 BUSINESS ADDRESS: STREET 1: 1390 ENCLAVE PKWY CITY: HOUSTON STATE: TX ZIP: 77077 BUSINESS PHONE: 2815841390 10-Q 1 SYSCO CORPORATION - DATED 01/01/00 1 United States SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 1, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------- --------- Commission file number 1-6544 SYSCO CORPORATION (Exact name of registrant as specified in its charter) Delaware 74-1648137 (State or other jurisdiction of (IRS employer incorporation or organization) identification number) 1390 Enclave Parkway Houston, Texas 77077-2099 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (281) 584-1390 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- 330,007,564 shares of common stock were outstanding as of January 28, 2000. 1 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements The following consolidated financial statements have been prepared by the Company, without audit, with the exception of the July 3, 1999, consolidated balance sheet which was taken from the audited financial statements included in the Company's Fiscal 1999 Annual Report on Form 10-K. The financial statements include consolidated balance sheets, consolidated results of operations and consolidated cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows for all periods presented, have been made. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Fiscal 1999 Annual Report on Form 10-K. A review of the financial information herein has been made by Arthur Andersen LLP, independent public accountants, in accordance with established professional standards and procedures for such a review. A letter from Arthur Andersen LLP concerning their review is included as Exhibit 15. 2 3 SYSCO CORPORATION and its Consolidated Subsidiaries CONSOLIDATED BALANCE SHEETS (In Thousands Except for Share Data)
Jan. 1, 2000 July 3, 1999 Dec. 26, 1998 ------------ ------------ ------------- (Unaudited) (Audited) (Unaudited) ASSETS Current assets Cash $ 95,851 $ 149,303 $ 109,246 Accounts and notes receivable, less allowances of $38,903, $21,095 and $35,539 1,444,083 1,334,371 1,310,972 Inventories 961,846 851,965 888,088 Deferred taxes 43,243 43,353 34,757 Prepaid expenses 31,075 29,775 27,934 ---------- ---------- ---------- Total current assets 2,576,098 2,408,767 2,370,997 Plant and equipment at cost, less depreciation 1,265,320 1,227,669 1,196,871 Goodwill and intangibles, less amortization 403,621 302,100 306,931 Other 173,424 158,046 156,330 ---------- ---------- ---------- Total other assets 577,045 460,146 463,261 ---------- ---------- ---------- Total assets $4,418,463 $4,096,582 $4,031,129 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable $ 13,273 $ 13,377 $ 10,812 Accounts payable 1,060,440 1,013,302 1,001,364 Accrued expenses 456,820 374,271 279,951 Accrued income taxes 3,422 6,103 5,274 Current maturities of long-term debt 20,833 20,487 115,387 ---------- ---------- ---------- Total current liabilities 1,554,788 1,427,540 1,412,788 Long-term debt 1,132,976 997,717 975,496 Deferred taxes 229,247 244,129 224,548 Shareholders' equity Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none - - - Common stock, par value $1 per share Authorized 1,000,000,000 shares, issued 382,587,450 shares 382,587 382,587 382,587 Paid-in capital 35,255 872 1,524 Retained earnings 2,165,683 2,032,068 1,909,068 ---------- ---------- ---------- 2,583,525 2,415,527 2,293,179 Less cost of treasury stock, 53,032,124, 52,915,065 and 49,271,826 shares 1,082,073 988,331 874,882 ---------- ---------- ---------- Total shareholders' equity 1,501,452 1,427,196 1,418,297 ---------- ---------- ---------- Total liabilities and shareholders' equity $4,418,463 $4,096,582 $4,031,129 ========== ========== ==========
Note: The July 3, 1999 consolidated balance sheet has been taken from the audited financial statements at that date. 3 4 SYSCO CORPORATION and its Consolidated Subsidiaries CONSOLIDATED RESULTS OF OPERATIONS (Unaudited) (In Thousands Except for Share Data)
26-Week Period Ended 13-Week Period Ended ---------------------------------- --------------------------------- Jan. 1, 2000 Dec. 26, 1998 Jan. 1, 2000 Dec. 26, 1998 -------------- -------------- -------------- -------------- Sales $ 9,308,569 $ 8,439,305 $ 4,651,535 $ 4,246,675 Costs and expenses Cost of sales 7,565,198 6,895,541 3,771,998 3,469,496 Operating expenses 1,369,662 1,224,711 695,418 616,899 Interest expense 34,624 35,328 16,680 18,397 Other, net 1,565 415 1,754 245 -------------- -------------- -------------- -------------- Total costs and expenses 8,971,049 8,155,995 4,485,850 4,105,037 -------------- -------------- -------------- -------------- Earnings before income taxes 337,520 283,310 165,685 141,638 Income taxes 129,945 110,491 63,789 55,239 -------------- -------------- -------------- -------------- Net earnings before cumulative effect of accounting change 207,575 172,819 101,896 86,399 Cumulative effect of accounting change (8,041) -- -- -- -------------- -------------- -------------- -------------- Net earnings $ 199,534 $ 172,819 $ 101,896 $ 86,399 ============== ============== ============== ============== Earnings before accounting change: Basic earnings per share $ 0.63 $ 0.52 $ 0.31 $ 0.26 ============== ============== ============== ============== Diluted earnings per share $ 0.62 $ 0.51 $ 0.31 $ 0.26 ============== ============== ============== ============== Cumulative effect of accounting change: Basic earnings per share $ (0.02) $ -- $ -- $ -- ============== ============== ============== ============== Diluted earnings per share $ (0.02) $ -- $ -- $ -- ============== ============== ============== ============== Net earnings: Basic earnings per share $ 0.61 $ 0.52 $ 0.31 $ 0.26 ============== ============== ============== ============== Diluted earnings per share $ 0.60 $ 0.51 $ 0.31 $ 0.26 ============== ============== ============== ============== Average number of shares outstanding 328,701,719 334,367,309 328,478,205 333,885,574 ============== ============== ============== ============== Diluted average number of shares outstanding 333,686,134 338,039,496 333,544,018 337,894,965 ============== ============== ============== ============== Dividends paid per common share $ 0.20 $ 0.18 $ 0.10 $ 0.09 ============== ============== ============== ==============
4 5 SYSCO CORPORATION and its Consolidated Subsidiaries CONSOLIDATED CASH FLOWS (Unaudited) (In Thousands)
26 - Week Period Ended ------------------------------- Jan. 1, 2000 Dec. 26, 1998 ------------ ------------- Operating activities: Net earnings $ 199,534 $ 172,819 Add non-cash items: Cumulative effect of accounting change 8,041 -- Depreciation and amortization 106,932 98,093 Deferred (tax benefit) (14,538) (5,329) Provision for losses on accounts receivable 13,052 11,893 Additional investment in certain assets and liabilities, net of effect of businesses acquired: (Increase) in receivables (93,478) (107,255) (Increase) in inventories (95,694) (97,587) (Increase) in prepaid expenses (961) (1,339) Increase in accounts payable 31,037 152,205 Increase (decrease) in accrued expenses 79,605 (12,304) Increase (decrease) in accrued income taxes 1,762 (20,249) (Increase) in other assets (29,708) (21,063) ------------ ------------ Net cash provided by operating activities 205,584 169,884 ------------ ------------ Investing activities: Additions to plant and equipment (126,319) (147,589) Sales and retirements of plant and equipment 6,727 10,549 Acquisition of businesses, net of cash acquired (69,218) -- ------------ ------------ Net cash used for investing activities (188,810) (137,040) ------------ ------------ Financing activities: Bank and commercial paper borrowings (repayments) 135,219 (142,366) Other debt (repayments) borrowings (281) 219,791 Common stock reissued from treasury 31,277 22,175 Treasury stock purchases (170,522) (73,247) Dividends paid (65,919) (60,239) ------------ ------------ Net cash used for financing activities (70,226) (33,886) ------------ ------------ Net (decrease) in cash (53,452) (1,042) Cash at beginning of period 149,303 110,288 ------------ ------------ Cash at end of period $ 95,851 $ 109,246 ============ ============ Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 34,556 $ 29,331 Income taxes, net of refund 129,051 130,244
5 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources The liquidity and capital resources discussion included in Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Fiscal 1999 Annual Report on Form 10-K remains applicable, other than the items described below. In Fiscal 1992, the Company began a common stock repurchase program which continued into the second quarter of Fiscal 2000, resulting in the cumulative repurchase of 80,000,000 shares of common stock. The Board of Directors authorized the repurchase of an additional 8,000,000 shares in July 1999. Under this latest authorization, 3,805,400 shares were purchased for $124,984,000 through January 1, 2000. The increase in treasury stock purchases in the period ended January 1, 2000 primarily reflects shares repurchased for acquisitions. As of January 1, 2000, SYSCO's borrowings under its commercial paper program were $349,115,000. During the 26 weeks ended January 1, 2000, commercial paper and short-term bank borrowings ranged from approximately $199,028,000 to $545,407,000. Long-term debt to capitalization ratio was 43% at January 1, 2000, exceeding the 35% to 40% target ratio due to the shares repurchased and cash paid for acquisitions. SYSCO may exceed this target ratio periodically to take advantage of acquisition and internal growth opportunities. The increase in paid-in capital at January 1, 2000 related primarily to shares issued from treasury in conjunction with acquisitions. On February 10, 2000, the Company filed with the Securities and Exchange Commission a shelf registration covering 2,850,000 shares of common stock to be offered from time to time in connection with acquisitions. Results of Operations For the period ended October 2, 1999, the Company recorded a one-time, after-tax, non-cash charge of $8,000,000 to comply with the required adoption of AICPA Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of Start-up Activities." SOP 98-5 required the write-off of any unamortized costs of start-up activities and organization costs. Going forward such costs have been expensed as incurred. 6 7 Sales increased 10.3% during the 26 weeks and 9.5% in the second quarter of Fiscal 2000 over comparable periods of the prior year. Cost of sales also increased 9.7% during the 26 weeks and 8.7% in the second quarter of Fiscal 2000. Real sales growth for the 26 weeks of Fiscal 2000 was 8.9% after eliminating the effects of 1.8% due to acquisitions and a 0.4% deflation in food costs, due primarily to lower costs for dairy and poultry products. Real sales growth for the quarter was 7.7% after adjusting for a 2.4% increase due to acquisitions and a 0.6% for food cost deflation. Operating expenses for the current periods presented were above the prior periods due primarily to expenses related to the closing of a facility and one-time non-recurring costs associated with the completion of the SYSCO Uniform Systems implementation. There was also a charge to other non-operating expenses in connection with the facility closing. The costs described above were approximately $13,000,000. Interest expense in Fiscal 2000 is lower than the prior periods due to interest income received in the amount of $3,000,000 related to a Federal income tax refund on an amended return. Without this income, interest expense would have been above last year due to higher borrowings. Income taxes for the periods presented reflect an effective rate of 38.5% this year compared to 39% last year. Pretax earnings and net earnings for the 26 weeks, before the accounting change, increased 19.1% and 20.1%, respectively, over the prior year. Pretax earnings and net earnings for the 13 weeks increased 17.0% and 17.9%, respectively, over the prior year. The increases were due to the factors discussed above as well as the Company's success in its continued efforts to increase sales to the Company's higher margin territorial street customers and increasingly higher sales of SYSCO brand products. Basic and diluted earnings per share increased 21.2% and 21.5%, respectively, for the 26 weeks, before the accounting change, and 19.2% for the quarter. The increases were caused by the factors discussed above, along with the decrease in average shares outstanding for the periods presented, reflecting purchases of shares made through the Company's share repurchase program. A reconciliation of basic and diluted earnings per share follows. 7 8 The following table sets forth the computation of basic and diluted earnings per share:
26-Week Period Ended 13-Week Period Ended --------------------------------- --------------------------------- Jan. 1, 2000 Dec. 26, 1998 Jan. 1, 2000 Dec. 26, 1998 -------------- -------------- -------------- -------------- Numerator: Numerator for basic earnings per share -- income available to common shareholders $ 199,534,000 $ 172,819,000 $ 101,896,000 $ 86,399,000 ============== ============== ============== ============== Denominator: Denominator for basic earnings per share -- weighted-average shares 328,701,719 334,367,309 328,478,205 333,885,574 Effect of dilutive securities: Employee and director stock options 4,984,415 3,672,187 5,065,813 4,009,391 -------------- -------------- -------------- -------------- Denominator for diluted earnings per share -- adjusted for weighted-average shares 333,686,134 338,039,496 333,544,018 337,894,965 ============== ============== ============== ============== Basic earnings per share $ 0.61 $ 0.52 $ 0.31 $ 0.26 ============== ============== ============== ============== Diluted earnings per share $ 0.60 $ 0.51 $ 0.31 $ 0.26 ============== ============== ============== ==============
8 9 Acquisitions In July 1999, SYSCO acquired Newport Meat Co. Inc., a southern California based distributor of fresh aged beef and other meats, seafood and poultry products. In August 1999, the company acquired Doughtie's Foods, Inc., a food distributor located in Virginia and bought substantially all of the assets of Buckhead Beef Company, Inc., a distributor located in Georgia of custom-cut fresh steaks and other meats, seafood and poultry products. In November 1999, SYSCO acquired Malcolm Meats, an Ohio based distributor of custom-cut fresh steaks and other meat and poultry products. The transactions were accounted for using the purchase method of accounting and the financial statements for the 26 weeks and 13 weeks ended January 1, 2000 include the results of the acquired companies from the respective dates they joined SYSCO. There was no material effect, individually or in the aggregate, on SYSCO's operating results or financial position from these transactions. Subsequent Events On January 6, 2000, SYSCO entered into a letter of intent to acquire by merger FreshPoint Holdings, Inc., located in Dallas, Texas. FreshPoint is primarily a wholesale produce distributor in North America. On January 26, 2000, SYSCO acquired Watson Foodservice, Inc., a broadline foodservice distributor located in Lubbock, Texas. 9 10 Year 2000 SYSCO is not aware of any significant failures of its systems, software, hardware or those of its suppliers or customers as a result of the occurrence of the Year 2000 date change. The total costs incurred by SYSCO in its Year 2000 readiness effort did not have a material impact on the financial statements of the Company. While SYSCO continues to monitor the Year 2000 issue, it does not believe there will be a material adverse effect to its consolidated results of operations or financial position as a result of the Year 2000 issue. Item 3. Quantitative and Qualitative Disclosures about Market Risks SYSCO does not utilize financial instruments for trading purposes and holds no derivative financial instruments which could expose the Company to significant market risk. SYSCO's exposure to market risk for changes in interest rates relates primarily to its long-term obligations. At January 1, 2000 the Company had outstanding $349,115,000 of commercial paper with maturities through February 22, 2000. The Company's remaining long-term debt obligations of $783,861,000 were primarily at fixed rates of interest. SYSCO has no significant cash flow exposure due to interest rate changes for long-term debt obligations. ----------------------------- Statements made herein regarding continuation of the share repurchase program, the impact of Year 2000 and SYSCO's market risks are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and are based on current expectations and management's estimates; actual results may differ materially. Share repurchases could be affected by market prices of the Company's stock as well as management's decision to utilize its capital for other purposes. The effect of market risks could be impacted by future borrowing levels and certain economic factors, such as interest rates. Those risks and uncertainties that could impact these statements include the risks relating to the foodservice industry's relatively low profit margins and sensitivity to economic conditions, SYSCO's leverage and debt risks and other risks detailed in the Company's Fiscal 1999 Annual Report on Form 10-K. 10 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings SYSCO is engaged in various legal proceedings which have arisen but have not been fully adjudicated. These proceedings, in the opinion of management, will not have a material adverse effect upon the consolidated financial position or results of operations of the company when ultimately concluded. Item 2. Changes in Securities and Use of Proceeds. None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders The Company's Annual Meeting of Stockholders was held on November 5, 1999 ("1999 Annual Meeting"). At the 1999 Annual Meeting the following persons were elected to serve as directors of the Company for three-year terms: John W. Anderson, Judith B. Craven, Bill M. Lindig, Richard G. Merrill and Phyllis S. Sewell. The terms of the following persons as directors of the Company continued after the 1999 Annual Meeting: Gordon M. Bethune, Colin G. Campbell, Charles H. Cotros, Frank A. Godchaux III, Jonathan Golden, Frank H. Richardson, Richard J. Schnieders, Arthur J. Swenka, Thomas B. Walker and John F. Woodhouse. At the 1999 Annual Meeting, the stockholders voted upon the directors as noted above, and on the approval of SYSCO Corporation's proposal to increase the number of authorized shares to one billion (1,000,000,000) shares. 11 12 The results of such votes were as follows:
NUMBER OF VOTES CAST ----------------------------------------------------------------------- Withheld & Broker Matter Voted Upon For Against Abstained Non-votes - ---------------------------------- -------------- -------------- -------------- -------------- Election as Director: John W. Anderson 280,020,105 N/A 2,396,678 None Judith B. Craven 230,614,683 N/A 51,802,100 None Bill M. Lindig 280,022,619 N/A 2,394,164 None Richard G. Merrill 280,020,980 N/A 2,395,803 None Phyllis S. Sewell 280,050,492 N/A 2,366,291 None Approval of proposal to increase authorized shares to 1,000,000,000 264,931,181 16,159,101 1,326,501 None
Item 5. Other Information On February 9, 2000, the Board of Directors announced a regular quarterly cash dividend of $0.12 per common share. On February 14, 2000 the Company issued a press release announcing a shelf registration covering 2,850,000 shares of common stock. The press release is filed herewith as Exhibit 99.1. 12 13 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 3(a) Restated Certificate of Incorporation incorporated by reference to Exhibit 3(a) to Form 10-K for the year ended June 28, 1997 (File No. 1-6544). 3(b) Bylaws, as amended, incorporated by reference to Exhibit 3(a) to Form 10-K for the year ended July 3, 1999 (File No. 1-6544). 3(c) Form of Amended Certificate of Designation Preferences and Rights of Series A Junior Participating Preferred Stock, incorporated by reference to Exhibit 3(c) to Form 10-K for the year ended June 29, 1996 (File No. 1-6544). 3(d)# Certificate of Amendment of Certificate of Incorporation of SYSCO Corporation to increase authorized shares. 4(a) Sixth Amendment and Restatement of Competitive Advance and Revolving Credit Facility Agreement dated May 31, 1996, incorporated by reference to Exhibit 4(a) to Form 10-K in the year ended June 27, 1996 (File No. 1-6544). 4(b) Agreement and Seventh Amendment to Competitive Advance and Revolving Credit Facility Agreement dated as of June 27, 1997 incorporated by reference to Exhibit 4(a) to Form 10-K for the year ended June 28, 1997 (File No. 1-6544). 4(c) Agreement and Eighth Amendment to Competitive Advance and Revolving Credit Facility Agreement dated as of June 22, 1998, incorporated by reference to Exhibit 4(c) to Form 10-K for the year ended July 3, 1999 (File No. 1-6544). 4(d) Senior Debt, dated as of June 15, 1995, between Sysco Corporation and First Union National Bank of North Carolina, Trustee, incorporated by reference to Exhibit 4(a) to Registration Statement on Form S-3 filed June 6, 1995 (File No. 33-60023). 13 14 4(e) First Supplemental Indenture, dated June 27, 1995, between Sysco Corporation and First Union Bank of North Carolina, Trustee as amended, incorporated by reference to Exhibit 4(e) to Form 10-K for the year ended June 29, 1996 (File No. 1-6544). 4(f) Second Supplemental Indenture, dated as of May 1, 1996, between Sysco Corporation and First Union Bank of North Carolina, Trustee as amended, incorporated by reference to Exhibit 4(f) to Form 10-K for the year ended June 29, 1996 (File No. 1-6544). 4(g) Third Supplemental Indenture, dated as of April 25, 1997, between Sysco Corporation and First Union National Bank of North Carolina, Trustee incorporated by reference to Exhibit 4(g) to Form 10-K for the year ended June 28, 1997 (File No. 1-6544). 4(h) Fourth Supplemental Indenture, dated as of April 25, 1997, between Sysco Corporation and First Union National Bank of North Carolina, Trustee incorporated by reference to Exhibit 4(h) to Form 10-K for the year ended June 28,1997 (File No. 1-6544). 4(i) Fifth Supplemental Indenture, dated as of July 27, 1998 between Sysco Corporation and First Union National Bank, Trustee incorporated by reference to Exhibit 4 (h) to Form 10-K for the year ended June 27, 1998 (File No. 1-6554). 4(j)# Agreement and Ninth Amendment to Competitive Advance and Revolving Credit Facility Agreement dated as of December 1, 1999. 10(m)+# Sysco Corporation Split Dollar Life Insurance Plan. 10(n)+# Executive Compensation Adjustment Agreement - Bill M. Lindig. 10(o)+# Executive Compensation Adjustment Agreement - Charles H. Cotros. 10(p)+# First Amendment to Fifth Amended and Restated Sysco Corporation Supplemental Executive Retirement Plan dated effective June 29, 1997. 14 15 10(q)+# First Amendment to Amended and Restated Sysco Corporation Executive Deferred Compensation Plan dated effective June 29, 1997. 10(r)+# First Amendment to Sysco Corporation 1995 Management Incentive Plan dated effective June 29, 1997. 15# Letter from Arthur Andersen LLP dated February 10, 2000, re: unaudited interim consolidated financial statements. 27# Financial Data Schedule 99.1# Press release dated February 14, 2000. + Executive Compensation Arrangement pursuant to 601(b)(10) (iii)(A) of Regulation S-K. # Filed Herewith (b) Reports on Form 8-K: On October 21, 1999, the Company filed a Form 8-K to attach a press release dated October 20, 1999 announcing results of operations for the first quarter ended October 2, 1999 (File No. 1-6544). 15 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SYSCO CORPORATION (Registrant) By /s/ JOHN K. STUBBLEFIELD JR. ------------------------------ John K. Stubblefield Jr. Executive Vice President, Finance and Administration Date: February 10, 2000 16 17 EXHIBIT INDEX NO. DESCRIPTION - -------- ----------------------------------------------------------------------- 3(a) Restated Certificate of Incorporation incorporated by reference to Exhibit 3(a) to Form 10-K for the year ended June 28, 1997 (File No. 1-6544). 3(b) Bylaws, as amended, incorporated by reference to Exhibit 3(a) to Form 10-K for the year ended July 3, 1999 (File No. 1-6544). 3(c) Form of Amended Certificate of Designation Preferences and Rights of Series A Junior Participating Preferred Stock, incorporated by reference to Exhibit 3(c) to Form 10-K for the year ended June 29, 1996 (File No. 1-6544). 3(d)# Certificate of Amendment of Certificate of Incorporation of SYSCO Corporation to increase authorized shares. 4(a) Sixth Amendment and Restatement of Competitive Advance and Revolving Credit Facility Agreement dated May 31, 1996, incorporated by reference to Exhibit 4(a) to Form 10-K in the year ended June 27, 1996 (File No. 1-6544). 4(b) Agreement and Seventh Amendment to Competitive Advance and Revolving Credit Facility Agreement dated as of June 27, 1997 incorporated by reference to Exhibit 4(a) to Form 10-K for the year ended June 28, 1997 (File No. 1-6544). 4(c) Agreement and Eighth Amendment to Competitive Advance and Revolving Credit Facility Agreement dated as of June 22, 1998, incorporated by reference to Exhibit 4(c) to Form 10-K for the year ended July 3, 1999 (File No. 1-6544). 4(d) Senior Debt, dated as of June 15, 1995, between Sysco Corporation and First Union National Bank of North Carolina, Trustee, incorporated by reference to Exhibit 4(a) to Registration Statement on Form S-3 filed June 6, 1995 (File No. 33-60023). 4(e) First Supplemental Indenture, dated June 27, 1995, between Sysco Corporation and First Union Bank of North Carolina, Trustee as amended, incorporated by reference to Exhibit 4(e) to Form 10-K for the year ended June 29, 1996 (File No. 1-6544). 18 NO. DESCRIPTION - -------- ----------------------------------------------------------------------- 4(f) Second Supplemental Indenture, dated as of May 1, 1996, between Sysco Corporation and First Union Bank of North Carolina, Trustee as amended, incorporated by reference to Exhibit 4(f) to Form 10-K for the year ended June 29, 1996 (File No. 1-6544). 4(g) Third Supplemental Indenture, dated as of April 25, 1997, between Sysco Corporation and First Union National Bank of North Carolina, Trustee incorporated by reference to Exhibit 4(g) to Form 10-K for the year ended June 28, 1997 (File No. 1-6544). 4(h) Fourth Supplemental Indenture, dated as of April 25, 1997, between Sysco Corporation and First Union National Bank of North Carolina, Trustee incorporated by reference to Exhibit 4(h) to Form 10-K for the year ended June 28,1997 (File No. 1-6544). 4(i) Fifth Supplemental Indenture, dated as of July 27, 1998 between Sysco Corporation and First Union National Bank, Trustee incorporated by reference to Exhibit 4 (h) to Form 10-K for the year ended June 27, 1998 (File No. 1-6554). 4(j)# Agreement and Ninth Amendment to Competitive Advance and Revolving Credit Facility Agreement dated as of December 1, 1999. 10(m)+# Sysco Corporation Split Dollar Life Insurance Plan. 10(n)+# Executive Compensation Adjustment Agreement - Bill M. Lindig. 10(o)+# Executive Compensation Adjustment Agreement - Charles H. Cotros. 10(p)+# First Amendment to Fifth Amended and Restated Sysco Corporation Supplemental Executive Retirement Plan dated effective June 29, 1997. 10(q)+# First Amendment to Amended and Restated Sysco Corporation Executive Deferred Compensation Plan dated effective June 29, 1997. 19 10(r)+# First Amendment to Sysco Corporation 1995 Management Incentive Plan dated effective June 29, 1997. 15# Letter from Arthur Andersen LLP dated February 10, 2000, re: unaudited interim consolidated financial statements. 27# Financial Data Schedule 99.1# Press release dated February 14, 2000. + Executive Compensation Arrangement pursuant to 601(b)(10)(iii)(A) of Regulation S-K. # Filed Herewith EX-3.D 2 CERT.OF AMENDMENT OF CERTIFICATE OF INCORPORATION 1 EXHIBIT 3(d) CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF SYSCO CORPORATION IT IS HEREBY CERTIFIED THAT: 1. The name of the corporation (hereinafter referred to as the "Corporation") adopting the amendment specified below is: Sysco Corporation. 2. The Certificate of Incorporation of the Corporation is hereby amended by striking out Article FOURTH, Section A, and substituting in lieu of said Article the following new Article: "FOURTH: A. The total number of shares of stock which the corporation shall have authority to issue is One Billion One Million Five Hundred Thousand (1,001,500,000) shares, consisting of One Million Five Hundred Thousand (1,500,000) shares of Preferred Stock with a par value of One Dollar ($1.00) each and One Billion (1,000,000,000) shares of Common Stock with a par value of One Dollar ($1.00) each. The corporation may issue fractional shares of stock, which shall be entitled to proportionate dividends, voting and liquidation rights." 3. The amendment of the Certificate of Incorporation herein certified has been duly adopted effective November 5, 1999 by all of the stockholders entitled to vote in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. Signed and attested to be effective as of the 9th day of November, 1999. SYSCO CORPORATION /s/ MICHAEL C. NICHOLS ------------------------------------ Michael C. Nichols Vice President, General Counsel, and Assistant Secretary Attest: /s/ KENT R. BERKE - --------------------------------- Kent R. Berke, Assistant Vice President Assistant Secretary 2 STATE OF TEXAS COUNTY OF HARRIS BE IT REMEMBERED, that on the 9th day of November 1999, before me, a Notary Public duly authorized by law to take acknowledgement of deeds, personally came Michael C. Nichols, Vice President, General Counsel and Assistant Secretary of Sysco Corporation, who duly signed the foregoing instrument before me and acknowledged that such signing is his act and deed, that such instrument as executed is the act and deed of said corporation, and that the facts stated therein are true. GIVEN under my hand and seal on the 9th day of November, 1999. /s/ LINDA F. HARTDEGEN ------------------------------- Linda F. Hartdegen Notary Public in and for the State of Texas EX-4.J 3 9TH AMEND.TO COMPETITIVE ADVANCE & REVOLVING CRED. 1 EXHIBIT 4(j) AGREEMENT AND NINTH AMENDMENT TO COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT THIS AGREEMENT AND NINTH AMENDMENT TO COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT (this "Amendment") dated as of December 1, 1999 is among SYSCO CORPORATION, a Delaware corporation (the "Company"), the banks listed on the signature pages hereof (the "Banks"), CHASE BANK OF TEXAS, NATIONAL ASSOCIATION (formerly known as Texas Commerce Bank National Association), a national banking association, as agent for the Banks (in such capacity, the "Agent"), and THE CHASE MANHATTAN BANK, a New York banking corporation (successor to Chemical Bank), as auction administration agent (in such capacity, the "Auction Administration Agent"). PRELIMINARY STATEMENT The Company, the Banks, certain other banks, the Agent and the Auction Administration Agent have entered into a Competitive Advance and Revolving Credit Facility Agreement dated as of July 27, 1988, as modified by an Agreement and First Amendment to Competitive Advance and Revolving Credit Facility Agreement dated as of February 14, 1989, by an Agreement and Second Amendment to Competitive Advance and Revolving Credit Facility Agreement and Modification of Notes dated as of May 1, 1989, by an Agreement and Third Amendment to Competitive Advance and Revolving Credit Facility Agreement and Modification of Notes dated as of January 2, 1990, by an Agreement and Fourth Amendment to Competitive Advance and Revolving Credit Facility Agreement dated as of January 31, 1994, and by an 2 Agreement and Fifth Amendment to Competitive Advance and Revolving Credit Facility Agreement dated as of November 15, 1994, as amended and restated by a Sixth Amendment and Restatement of Competitive Advance and Revolving Credit Facility Agreement dated as of May 31, 1996, as further modified by an Agreement and Seventh Amendment to Competitive Advance and Revolving Credit Facility Agreement dated as of June 27, 1997, and as further modified by an Agreement and Eighth Amendment to Competitive Advance and Revolving Credit Facility Agreement dated as of June 22, 1998 (said Competitive Advance and Revolving Credit Facility Agreement as so modified, amended and restated and further modified being the "Credit Agreement"). All capitalized terms defined in the Credit Agreement and not otherwise defined herein shall have the same meanings herein as in the Credit Agreement. The Company, the Banks, the Agent and the Auction Administration Agent have agreed, upon the terms and conditions specified herein, to amend the Credit Agreement as hereinafter set forth: NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the Company, the Banks, the Agent and the Auction Administration Agent hereby agree as follows: SECTION 1. Amendments to Section 1.01 of the Credit Agreement. Certain definitions contained in Section 1.01 of the Credit Agreement are hereby amended as follows: (a) The definition of the term"Subsidiary" is amended in its entirety to read as follows: "`Subsidiary' means, with respect to any Person (the `parent') at any date, any corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of -2- 3 the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise controlled, by the parent or one or more Subsidiaries of the parent or by the parent and one or more Subsidiaries of the parent. In the foregoing sentence the term `controlled' refers to the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.". (b) The definition of the term "Wholly-Owned Consolidated Subsidiary" is hereby amended in its entirety to read as follows: "`Wholly-Owned Consolidated Subsidiary' means a Consolidated Subsidiary, all of the outstanding capital stock, member interests, partner interests or other ownership interests in which, other than directors' qualifying shares, are at the time owned by the Company, by any one or more other Wholly-Owned Consolidated Subsidiaries, or by the Company and any one or more Wholly-Owned Consolidated Subsidiaries.". SECTION 2. Amendments to Section 4.18(c) of the Credit Agreement. Section 4.18(c) of the Credit Agreement is hereby amended in its entirety to read as follows: "(c) Neither the Company nor any ERISA Affiliate has incurred, or is reasonably expected to incur, any Withdrawal Liability to any Multiemployer Plan which would exceed in the aggregate 4% of Net Worth.". -3- 4 SECTION 3. Amendments to Section 5.01(i)(iii) of the Credit Agreement. Section 5.01(i)(iii) of the Credit Agreement is hereby amended in its entirety to read as follows: "(iii) The Company will furnish to the Agent (i) if requested by any Bank through the Agent, promptly after the filing thereof with the Internal Revenue Service copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each PBGC Plan; (ii) promptly after becoming aware of the occurrence of any material Termination Event in connection with any PBGC Plan, a written notice signed by the President or Financial Officer of the Company specifying the nature thereof and any action the Company or appropriate ERISA Affiliate proposes to take with respect thereto; (iii) promptly and in any event within five Business Days after receipt thereof by the Company or any of its ERISA Affiliates from the PBGC, copies of each notice received by the Company or any such ERISA Affiliate of the PBGC's intention to terminate any PBGC Plan or to have a trustee appointed under Section 4042(b) of ERISA to administer any PBGC Plan; (iv) promptly a written notice in the event there is either a failure of the Company or an ERISA Affiliate to comply with the minimum funding requirements of Section 412 of the Code or Section 302 of ERISA or an application for a waiver from either or both of such standards is requested or received by the Company or an ERISA Affiliate with respect to a PBGC Plan and in either event the failure to comply or the application or grant of waiver is with respect to a material amount; and (v) promptly and in any event within five Business Days after receipt thereof by the Company or any ERISA Affiliate from a Multiemployer Plan sponsor, a copy of each notice received by the Company or any ERISA Affiliate concerning the imposition and the amount of withdrawal liability upon the -4- 5 Company or an ERISA Affiliate by a Multiemployer Plan pursuant to Section 4202 of ERISA. The Company will comply in all material respects with all applicable provisions of ERISA, the violation of which would, in the reasonable judgment of the Majority Banks, give rise to a material liability of the Company, and notice of which violation has been given by the Agent to the Company. For purposes of this Section 5.01(i)(iii), an obligation or liability shall be considered material if it equals or exceeds $4,000,000;". SECTION 4. Amendment to Section 5.02(a)(xi) of the Credit Agreement. Section 5.02(a)(xi) of the Credit Agreement is hereby amended in its entirety to read as follows: "(xi) a Lien on the Company's headquarters building located at 1390 Enclave Parkway, Houston, Texas to secure Indebtedness;". SECTION 5. Amendments to Section 6.01 of the Credit Agreement. Section 6.01 of the Credit Agreement is hereby amended (a) by amending paragraph (e) thereof in its entirety to read as follows: "(e) The Company or any Subsidiary shall (i) default in the payment of any Indebtedness (excluding Indebtedness evidenced by the Notes) of the Company or such Subsidiary (as the case may be), or any interest or premium thereon, when due whether by acceleration or otherwise, beyond any period of grace provided with respect thereto, or (ii) default in the performance or observance of any obligation or condition with respect to such other Indebtedness if the effect of such default results in the holder of such other Indebtedness accelerating the maturity of such other Indebtedness and the Company or such Subsidiary fails to pay such Indebtedness within five Business Days after such acceleration, if, in the case of any defaults described in clauses (i) and (ii) of this Section 6.01(e), the -5- 6 aggregate principal amount of all such Indebtedness for which all such defaults shall have occurred and be continuing exceeds $25,000,000; or"; (b) by amending paragraph (j) thereof in its entirety to read as follows: "(j) A final judgment or judgments for the payment of money shall be rendered by a court or courts against the Company or any Significant Subsidiary in excess of $25,000,000 in the aggregate and the same shall not be discharged (or provision shall not be made for such discharge), or a stay of execution thereof shall not be procured, within 30 days from the date of entry thereof and the Company or such Significant Subsidiary, as the case may be, shall not, within said period of 30 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; or"; and (c) by amending paragraph (k) thereof in its entirety to read as follows: "(k) (i) The Company or any ERISA Affiliate or any of its agents or representatives shall engage in any `prohibited transaction' (as defined in Section 406 of ERISA or Section 4975 of the Code) which can be expected to result in a material liability to the Company or any ERISA Affiliate, (ii) any material `accumulated funding deficiency' (as defined in Section 302 of ERISA or Section 412 of the Code), whether or not waived, shall exist with respect to any PBGC Plan, if in the reasonable judgment of the Majority Banks, such accumulated funding deficiency would give rise to a material liability of the Company or any ERISA Affiliate, (iii) the Company or any ERISA Affiliate shall apply for or be granted a funding waiver under Section 302 of ERISA or Section 412 of the Code, which waiver or request for waiver is for a material amount, (iv) a `reportable event' (other -6- 7 than a reportable event not subject to the provision for thirty-day notice to the PBGC under applicable PBGC regulations) shall occur with respect to any PBGC Plan, which reportable event is, in the reasonable opinion of the Majority Banks, likely to result in the termination of such PBGC Plan for purposes of Title IV of ERISA and to give rise to a material liability of the Company or any ERISA Affiliate, (v) proceedings shall commence to have a trustee appointed or a trustee shall be appointed to terminate or administer a PBGC Plan under Section 4042(b) of ERISA which proceeding is, in the reasonable opinion of the Majority Banks, likely to result in the termination of such PBGC Plan and to give rise to a material liability of the Company or any ERISA Affiliate with respect to such termination, (vi) a notice of intent to terminate a PBGC Plan under Section 4041(c) is filed with the PBGC if such termination would give rise to a material liability of the Company or any ERISA Affiliate, (vii) any Multiemployer Plan is in reorganization or is insolvent and the circumstances are such that, in the reasonable opinion of the Majority Banks, there could be a material liability incurred by or imposed upon the Company or any ERISA Affiliate, (viii) there is a complete or partial withdrawal from a Multiemployer Plan under circumstances that, in the reasonable opinion of the Majority Banks, would likely subject the Company or any ERISA Affiliate to a material liability, or (ix) any event or condition described in (i) through (viii) above (determined without regard to whether the event or condition taken alone would or could result in a material liability) shall occur or exist with respect to a PBGC Plan or Multiemployer Plan which individually or in combination with one or more of any events described in (i) through (viii) above (determined without regard to whether the event or condition taken alone would or could result in a material liability), if any, in the -7- 8 reasonable opinion of the Majority Banks would likely, subject the Company or any ERISA Affiliate to any material tax, penalty or other liability (for purposes of this Section 6.01(k) , an obligation or liability shall be considered material if it equals or exceeds $20,000,000);". SECTION 6. Conditions of Effectiveness. This Amendment shall become effective when, and only when, the following conditions shall have been fulfilled: (a) the Company, the Agent, the Auction Administration Agent and Banks together constituting the Majority Banks shall have executed a counterpart hereof and delivered the same to the Agent or, in the case of any such Bank as to which an executed counterpart hereof shall not have been so delivered, the Agent shall have received written confirmation by telecopy or other similar writing from such Bank of execution of a counterpart hereof by such Bank; and (b) the Agent shall have received from the Company a certificate of the Secretary or Assistant Secretary of the Company certifying that attached thereto is (i) a true and complete copy of the general borrowing resolutions of the Board of Directors of the Company authorizing the execution, delivery and performance of the Credit Agreement, as amended hereby, and (ii) the incumbency and specimen signature of each officer of the Company executing this Amendment. SECTION 7. Representations and Warranties True; No Default or Event of Default. The Company hereby represents and warrants to the Agent, the Auction Administration Agent and the Banks that after giving effect to the execution and delivery of this Amendment (a) the representations and warranties set forth in the Credit Agreement (as modified hereby) are true and correct on the date hereof as though made on and as of such date; provided, however, that for purposes of this clause (a), Schedule II as used in Section 4.02 of the Credit Agreement shall -8- 9 be deemed to include any supplements to such Schedule delivered to the Agent and the Banks by the Company prior to the date of this Amendment and (b) neither any Default nor Event of Default has occurred and is continuing as of the date hereof. SECTION 8. Reference to the Credit Agreement and Effect on the Notes and Other Documents Executed Pursuant to the Credit Agreement. (a) Upon the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement," "hereunder," "herein," "hereof" or words of like import shall mean and be a reference to the Credit Agreement, as amended hereby. (b) Upon the effectiveness of this Amendment, each reference in the Notes and the other documents and agreements delivered or to be delivered pursuant to the Credit Agreement shall mean and be a reference to the Credit Agreement, as amended hereby. (c) The Credit Agreement and the Notes and other documents and agreements delivered pursuant to the Credit Agreement, and modified by the amendments referred to above, shall remain in full force and effect and are hereby ratified and confirmed. SECTION 9. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. SECTION 10. GOVERNING LAW; BINDING EFFECT. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW AND SHALL BE BINDING UPON THE COMPANY, THE AGENT, THE AUCTION ADMINISTRATION AGENT AND THE BANKS AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. -9- 10 SECTION 11. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. SECTION 12. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED HEREBY, THE NOTES AND THE LETTER AGREEMENTS REFERRED TO IN SECTIONS 2.05(b) AND 2.05(c) OF THE CREDIT AGREEMENT CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. -10- 11 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed effective as of the date first stated herein, by their respective officers thereunto duly authorized. SYSCO CORPORATION By: /s/ DIANE DAY SANDERS -------------------------------------- Name: Diane Day Sanders Title: Vice President & Treasurer CHASE BANK OF TEXAS, NATIONAL ASSOCIATION (FORMERLY KNOWN AS TEXAS COMMERCE BANK NATIONAL ASSOCIATION), INDIVIDUALLY AND AS AGENT By: /s/ MICHAEL ONDRUCH -------------------------------------- Name: Michael Ondruch Title: Vice President -11- 12 THE CHASE MANHATTAN BANK (SUCCESSOR TO CHEMICAL BANK), AS AUCTION ADMINISTRATION AGENT By: /s/ CHRISTOPHER CONSOMER -------------------------------------- Name: Christopher Consomer Title: Assistant Vice President -12- 13 BANK OF AMERICA, NATIONAL ASSOCIATION (FORMERLY KNOWN AS CONTINENTAL BANK N.A.) By: /s/ LYNN DERNING -------------------------------------- Name: Lynn Derning Title: Principal -13- 14 FIRST UNION NATIONAL BANK By: /s/ WILLIAM F. FOX -------------------------------------- Name: William F. Fox Title: Vice President -14- 15 WACHOVIA BANK OF GEORGIA, NATIONAL ASSOCIATION By: /s/ JESSICA S. WRIGHT -------------------------------------- Name: Jessica S. Wright Title: Vice President -15- 16 THE TORONTO-DOMINION BANK By: -------------------------------------- Name: Title: -16- 17 UBS AG, STAMFORD BRANCH By: /s/ WILFRED SAINT -------------------------------------- Name: Wilfred Saint Title: Associate Director Loan Portfolio Support, US By: /s/ ROBERT H. RILEY III -------------------------------------- Name: Robert H. Riley III Title: Executive Director -17- 18 WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION By: /s/ SUSAN HAUFSCHILD -------------------------------------- Name: Susan Haufschild Title: Vice President -18- EX-10.M 4 SPLIT DOLLAR LIFE INSURANCE PLAN 1 EXHIBIT 10(m) SYSCO CORPORATION SPLIT DOLLAR LIFE INSURANCE PLAN 2 TABLE OF CONTENTS
ARTICLE I - Purposes, Definitions and Duration Purpose.........................................................................................................1.1 Definitions.....................................................................................................1.2 Term............................................................................................................1.3 ARTICLE II - Administration Powers of the Committee.........................................................................................2.1 Committee Organization and Voting...............................................................................2.2 Reimbursement of Expenses.......................................................................................2.3 Resignation or Removal..........................................................................................2.4 ARTICLE III -- Participation Eligibility of Employees........................................................................................3.1 Designation of Eligible Employees...............................................................................3.2 Election to Participate.........................................................................................3.3 ARTICLE IV - Benefits Death Benefit...................................................................................................4.1 Contributions and Funding.......................................................................................4.2 Responsibility for Payments and Withholding of Taxes............................................................4.3 Termination of Benefits for a Participant.......................................................................4.4 Assignment of Death Benefits....................................................................................4.5 ARTICLE V - Rights of Participants Limitation of Rights............................................................................................5.1 Prerequisites to Benefits.......................................................................................5.2 ARTICLE VI - Miscellaneous Amendment or Termination of Plan................................................................................6.1 Claims Procedure................................................................................................6.2 Plan Year.......................................................................................................6.3 Agent for Process...............................................................................................6.4 Governing Law...................................................................................................6.5 Severability....................................................................................................6.6 Reliance Upon Information.......................................................................................6.7 Notice..........................................................................................................6.8 Continuance Permitted Upon Merger, Consolidation or Transfer of Assets..........................................6.9 Plan May Use Rabbi Trust.......................................................................................6.10 ARTICLE VII - ERISA Provisions Named Fiduciary.................................................................................................7.1 Funding.........................................................................................................7.2 Payments........................................................................................................7.3
-i- 3 SYSCO CORPORATION SPLIT DOLLAR LIFE INSURANCE PLAN ARTICLE I Purposes, Definitions and Duration 1.1 Purpose. This Plan is established by Sysco Corporation for the purpose of providing life insurance protection for the family of certain employees. 1.2 Definitions. Each term below shall have the meaning assigned thereto for all purposes of this Plan unless the context requires a different construction. (a) "Board" means the board of directors of Sysco. (b) "Committee" means the members (and their successors) of the Compensation and Stock Option Committee of the Board. (c) "Employee" means any person who at the time such person is designated a Participant hereunder, is employed by Sysco in a position to contribute materially to the continued growth and development and to the future financial success of Sysco. (d) "Participant" means an Employee who has been designated by the Committee to participate in the Plan and who has entered into a Split Dollar Life Insurance Agreement with Sysco. (e) "Plan" means the Sysco Corporation Split Dollar Life Insurance Plan, as may be amended from time to time. (f) "Split Dollar Life Insurance Agreement" means the agreement entered into between the Participant and the Employer providing for life insurance protection for the family of certain Employees (g) "Sysco" means Sysco Corporation 1.3 Term. The effective date of the Plan is July 4, 1999. The Plan shall continue until terminated by Sysco. The Committee in its sole discretion, may or may not designate eligible Participants during the term of the Plan. -1- 4 ARTICLE II Administration 2.1 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 such 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 which are not inconsistent with the terms and provisions hereof, provided such rules and regulations are evidenced in writing; (b) to construe all terms, provisions, conditions and limitations of the Plan and its construction thereof made in good faith and without discrimination in favor of or against any Participant shall be final and conclusive on all parties at interest; (c) to correct any defect, supply any omission, or reconcile any inconsistency which may appear in the Plan in such manner and to such extent as it shall deem expedient to carry the Plan into effect for the greatest benefit of all parties at interest, and its judgment in such matters shall be final and conclusive as to all parties at interest; (d) to determine which Employees shall be eligible to become Participants; (e) to determine all controversies relating to the administration of the Plan, including but not limited to: (1) differences of opinion arising between Sysco and any Participant; and (2) any questions 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 determine within the limits specified by the Plan, the amount of insurance coverage and premium payments and the division between Sysco and the Employee of the insurance coverage, premium payments and cash surrender value for insurance policies on the life of a particular Participant; (g) to delegate by written notice such of the clerical and recordation duties of the Committee under the Plan as the Committee may deem necessary or advisable for the proper and efficient administration of the Plan; and (h) to modify from time to time the terms of the sample Split Dollar Life Insurance Agreement attached as Exhibit A or of a Split Dollar Life Insurance Agreement to be executed by a certain Participant; provided, however, that such modification shall not be made to a Split Dollar Life Insurance Agreement after it has been executed by Sysco and a Participant without the consent of both parties. The Committee, in exercising any of the rights, powers, and authorities set out in this Section and all other sections of the Plan, shall perform or refrain from performing those acts using its sole -2- 5 discretion and judgment. Any decision made by the Committee or any refraining to act or any act taken by the Committee in good faith shall be final, conclusive and binding on all parties. The Committee's decision shall never be subject to de novo review. 2.2 Committee Organization and Voting. The Committee shall select from among its members a chairman, who shall preside at all of its meetings, and shall select a secretary, without regard as to whether that person is a member of the Committee, who shall keep all records, documents and data pertaining to its supervision of the administration of the Plan. A majority of the members of the Committee constitutes a quorum for the transaction of business, and the vote of majority of the members present at any meeting will decide any question brought before that meeting. In addition, the Committee may decide any question by a vote, taken without a meeting of a majority of its members. A member of the Committee who is also a Participant shall not vote or act upon any matter relating solely to himself or herself. 2.3 Reimbursement of Expenses. The members of the Committee shall serve without compensation for their services, but shall be reimbursed by Sysco for all expenses properly and actually incurred in performance of their duties under the plan. 2.4 Resignation or Removal. Members of the Committee shall serve until they resign or are removed by the Board. Any member of the Committee may resign by giving at least 30 days written notice to the Board. The Board may remove any member of the Committee by written notice, which removal shall be effective as of the date specified in the notice. The Board is not required to give any advance notice of such removal. ARTICLE III Participation 3.1 Eligibility of Employees. An Employee must be in a position to contribute materially to the continued growth and development and to the future financial success of Sysco in order to be eligible to participate in the Plan. An Employee shall be ineligible to participate in the Plan if the proposed insured(s) (e.g., the Employee and the Employee's spouse, if any) is declined for insurance coverage. The Committee from time to time may establish additional eligibility requirements for participation in the Plan. 3.2 Designation of Eligible Employees. The Committee shall designate and notify in writing the Employees who are eligible to participate in the Plan. Any copy of such notification shall be given to Sysco. If a designated Employee is classified as a substandard or impaired risk by insurance carriers, the Committee has the discretion to declare the Employee ineligible to participate in the Plan or to enter into a Split Dollar Insurance Agreement with the Employee modified to make allowance for his or her substandard rating. 3.3 Election to Participate. After the Employee has been notified by the Committee that he or she is eligible to participate in the Plan, such Employee must, in order to participate in the Plan, enter into a Split Dollar Life Insurance Agreement with Sysco in the format of the sample agreement attached as Exhibit A. At the option of the Employee, the trustee of a trust or a family member of -3- 6 the Employee may enter into the Split Dollar Life Insurance Agreement and such trustee or family member shall possess all of the rights and obligations otherwise given to the Participant under this Plan and the Split Dollar Life Insurance Agreement. The obligation of Sysco to pay benefits under this Plan shall be effective upon the execution of the Split Dollar Life Insurance Agreement by the Participant and Sysco. The Split Dollar Life Insurance Agreement must be executed within 180 days after the date on which Sysco is notified that the Employee is eligible to participate in the Plan but Sysco shall not unduly delay its signature of the Split Dollar Life Insurance Agreement. If the Split Dollar Life Insurance Agreement is not signed within said 180 days, the Employee shall no longer be eligible to participate in the Plan but the Committee, in its sole discretion, shall have the authority to select said Employee again at a future time, in accordance with the provisions of Section 3.2, to be eligible to participate in the Plan. ARTICLE IV Benefits 4.1 Death Benefit. The basic benefit provided under the Plan is a death benefit payable to the beneficiary designated by the Participant in an amount specified in the Split Dollar Life Insurance Agreement with the Participant subject to any limitations imposed by the life insurance policy. The amount of insurance on each Participant, and/or the Participant's spouse, is determined by the Committee and is not necessarily the same for all Participants. 4.2 Contributions and Funding. The death benefit of each Participant is entirely funded with life insurance policies insuring the life of the Participant or the Participant's spouse or the joint lives of the Participant and the Participant's spouse. The Employer shall pay the required premium on each insurance policy although the Split Dollar Life Insurance Agreement may require the Participant to reimburse the Employer part of the premium payment. 4.3 Responsibility for Payments and Withholding of Taxes. Sysco shall make the payments and calculate the deductions for such payments of any taxes required to be withheld by federal or any state or local government with respect to any economic benefit the Participant may realize from the Plan. The Committee shall furnish Sysco information concerning the amount of economic benefits under the Plan for each Participant. 4.4 Termination of Benefits for a Participant. The benefits under the Plan for a Participant may be terminated as specified in Section 5.1 of the sample Split Dollar Life Insurance Agreement attached as Exhibit A, as it may be modified by the Committee with respect to a particular Participant. 4.5 Assignment of Death Benefits. Each Participant has the power to assign all rights and obligations of the Participant in the insurance policies and under the Split Dollar Life Insurance Agreement and under this Plan to an assignee of the Participant's choice and thereafter such designee shall possess all of the rights and obligations of the Participant under this Plan and the Split Dollar Life Insurance Agreement. -4- 7 ARTICLE V Rights of the Participants 5.1 Limitation of Rights. Nothing in the Plan shall be construed: (a) to give any Employee of Sysco any right to be designated a Participant in the Plan other than at the sole discretion of the Committee; (b) to limit in any way the right of Sysco to terminate the Participant's employment with Sysco at any time; (c) to be evidence of any agreement or understanding, expressed or implied, that Sysco will employ Participant in any particular position or at any particular rate or remuneration; (d) to give the Employee or his or her beneficiary any interest or rights to the Employer's investment in the insurance policy on the Employee's life. 5.2 Prerequisites to Benefits. No Participant, nor any person claiming through a Participant, shall have any right or interest in the Plan, or any benefits hereunder, unless and until all of the terms, conditions and provisions of the Plan which affect such Participant or such other person shall have been complied with as specified herein. ARTICLE VI Miscellaneous 6.1 Amendment or Termination of Plan. The Board of Sysco may modify or terminate this Plan by a written instrument. Any modification or termination will then be binding upon all persons ever to become entitled to payments under this Plan. No amendment or termination, however, will affect a Split Dollar Life Insurance Agreement after it has been executed by Sysco and the Participant unless it is mutually agreed to by the Participant and Sysco. 6.2 Claims Procedure. When a benefit is due, a Participant or other person entitled thereto should submit his or her claim in accordance with the claim procedure specified in the Split Dollar Life Insurance Agreement. 6.3 Plan Year. The Plan Year for reporting to governmental agencies and employees will coincide with the fiscal year of Sysco. Sysco has a 52/53 week fiscal year beginning on the Sunday next following the Saturday closest to the June 30th of each calendar year. 6.4 Agent for Process. Legal process may be served on the Committee at 1390 Enclave Parkway, Houston, Texas 77077. 6.5 Governing Law. The Plan shall be construed, administered, and governed in all respects by the laws of the State of Texas, except as may be preempted by federal law. -5- 8 6.6 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. 6.7 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 such decision or action taken by the Committee in reliance upon any information supplied to it by any officer of Sysco, Sysco's legal counsel or Sysco's independent accountants in connection with the administration of this Plan shall be deemed to have been taken in good faith. 6.8 Notice. Any notice or filing required or permitted to be given to the Committee or a Participant under this Plan shall be sufficient if in writing and hand delivered, facsimile transmitted, or sent by registered or certified mail to the principal office of Sysco or to the residential mailing address of the Participant. Such notice shall be deemed given as of the date of the delivery or, if delivery is made by mail, as of the date shown on the postmark on the envelope. 6.9 Continuance Permitted Upon Merger, Consolidation or Transfer of Assets. Sysco's participation in this Plan shall not automatically terminate if it consolidates or merges and is not the surviving corporation, sells substantially all of its assets, is a party to a reorganization and its employees and substantially all of its assets are transferred to another entity, liquidates, or dissolves, if there is a successor organization. Instead, the successor may assume and continue this Plan by executing a direction, entering into a contractual commitment or adopting a resolution providing for the continuance of the Plan. Only upon the successor's rejection of this Plan or its failure to respond to the Employer's request that it affirm its assumption of this Plan within 90 days of the request shall this Plan automatically terminate; provided, however, that termination of the Plan shall not affect any Split Dollar Life Insurance Agreement after it has been executed unless agreed to by the Participant who is a party to such Split Dollar Life Insurance Agreement. 6.10 Plan May Use Rabbi Trust. It is specifically recognized by both Sysco and the Participants that some or all of the Split Dollar Life Insurance Agreements may use Sysco Corporation Split Dollar Life Insurance Trust or other such Rabbi trusts to possess the insurance policy subject to such Split Dollar Life Insurance Agreements, to execute any collateral assignments and to carry out the obligations of Sysco under this Plan and such Split Dollar Life Insurance Agreements. However, under all circumstances, the rights of the Participants to the assets held in such trust will be no greater than the rights expressed in this Plan and the applicable Split Dollar Life Insurance Agreement. Nothing contained in the trust agreement will constitute a guarantee by Sysco that assets of Sysco transferred to the trust will be sufficient to pay any benefits under this plan or the applicable Split Dollar Life Insurance Agreement or would place the Participant in a secured position ahead of general creditors should Sysco become insolvent or bankrupt. The Rabbi trust designed to carry out Sysco's obligations under this Plan or the applicable Split Dollar Life Insurance Agreements must specifically set out these principles so it is clear in the Rabbi trust that the Participants are only unsecured general creditors of Sysco in relation to their benefits under this Plan and the applicable Split Dollar Life Insurance Agreements. -6- 9 ARTICLE VII ERISA Provisions 7.1 Sysco is the named fiduciary of the Plan for purposes of the Employee Retirement Income Security Act of 1974 and shall have the authority to control and manage the operation and administration of the Plan. 7.2 The funding policy of the Plan will be through premium payments to the insurer issuing the insurance policy. 7.3 The basis of payments from the Plan will consist of payments by the insurer in accordance with the insurance policy. IN WITNESS WHEREOF, the Employer has executed this instrument as of this 21st day of October, 1999. SYSCO CORPORATION By /s/ MICHAEL C. NICHOLS --------------------------------------- -7- 10 EXHIBIT A SYSCO CORPORATION SPLIT DOLLAR LIFE INSURANCE AGREEMENT This Agreement made and entered into between Sysco Corporation, (the "Employer") and _______________________________________ (the "Employee"). W I T N E S S E T H WHEREAS, Sysco has adopted the Sysco Corporation Split Dollar Life Insurance Plan (the "Plan") which is designed to encourage certain employees to continue in the service of Sysco by offering such employees assistance in providing life insurance protection for the employees' family; and WHEREAS, a Committee (the "Committee") has been established by the Plan to administer the Plan and to designate employees of Sysco who are eligible to participate in the Plan; and WHEREAS, the Committee has selected the Employee to be a participant under the Plan because the services of the Employee, the Employee's experience and knowledge of the affairs of Sysco, and the Employee's reputation and contacts in the industry are extremely valuable to Sysco; and WHEREAS, Sysco desires that the Employee remain in its service and wishes to receive the benefit of the Employee's knowledge, experience, reputation and contacts; and WHEREAS, Sysco is willing to encourage the Employee's continued service to Sysco by joining with the Employee for the mutual benefit of the parties hereto in an investment of life insurance on the life of the Employee, the life of the Employee's spouse, or the joint lives of the Employee and the Employee's spouse so as to provide life insurance protection for the Employee's family; and 11 WHEREAS, the Employee will be the owner of the Insurance Policies acquired pursuant to the terms of the Agreement, and Sysco's Investment in the Insurance Policies will be represented by an assignment from the Employee to Sysco of limited ownership rights in the Insurance Policies; and WHEREAS, this plan is intended to qualify as a life insurance employee benefit plan as described in Revenue Ruling 64-328. NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, Sysco and the Employee agree as follows: ARTICLE 1 Definitions 1.1 "Agreement" means this agreement, as it may be amended from time to time. 1.2 "Change of Control" is defined in section 3.5. 1.3 "Committee" means the administrative committee under the Plan. 1.4 "Employee" means ____________. 1.5 "Insurance Policies" means the policies or policy shown on the attached Schedule 1, together with any other policies that may be added to the Agreement. 1.6 "Insurer" means an insurance company issuing Insurance Policies subject to this Agreement. 1.7 "Plan" means the Sysco Corporation Split Dollar Life Insurance Plan. 1.8 "Rabbi Trust" means the Sysco Corporation Split Dollar Life Insurance Trust. 1.9 "Sysco" means Sysco Corporation. 1.10 "Sysco's Investment" means the interest of Sysco in the Insurance Policy as defined in Section 4.1 of the Agreement. -2- 12 ARTICLE 2 Insurance Policies The Employee has purchased insurance on the life of the Employee, the life of the Employee's spouse or the joint lives of the Employee and the Employee's spouse for the benefit and protection of the Employee's family under the Insurance Policy or Insurance Policies shown on the attached Schedule 1 in the face amounts as shown on such schedule. ARTICLE 3 Premium Payments 3.1 Sysco shall pay the required premium specified on Schedule 1 for each Insurance Policy on or before the due date. 3.2 Any dividends attributable to each Insurance Policy shall be applied as Sysco and the Employee agree by an instrument in writing. 3.3 The Employee shall pay to Sysco during each year the Insurance Policy is subject to this Agreement and during which Sysco makes a premium payment under section 3.1, an amount equal to the one-year term cost of the insurance protection to which the Employee is entitled under such Insurance Policy pursuant to the terms of this Agreement, including any term insurance rider and any insurance purchased by dividends, and such cost is to be determined under the principles established by applicable U.S. Treasury Department pronouncements, rulings and regulations in effect for determining such costs for insurance protection. The Employee shall reimburse Sysco for such one-year term cost within a reasonable time after payment of the required premium to the Insurer by Sysco on each Insurance Policy under section 3.1. (a) Until changed by U.S. Treasury Department pronouncements, rulings or regulations, the one-year term cost of insurance protection on a second to die -3- 13 policy on the joint lives of the Employee and the Employee's spouse shall be the lesser of the following: (i) the current published one-year term rates available to all standard risks of the Insurer issuing such insurance protection, or (ii) U.S. Life Table 38. (b) Until changed by U.S. Treasury Department pronouncements, rulings or regulations, the one-year term cost of insurance protection on the single life of the Employee or the Employee's spouse (including the single life of the survivor after the death of the first of the Employee and the Employee's spouse to die if the Insurance Policy covers their joint lives), shall be the lesser of the following: (i) the current published one-year term rates of the Insurer issuing such insurance coverage, pursuant to the guidelines set forth in Rev. Rul. 66-110 and Rev. Rul. 67-154, or (ii) an amount determined in accordance with the tables set forth in Rev. Rul. 55-747 (called the "PS 58 costs"). 3.4 Upon a Change of Control, Sysco shall, as soon as possible, but in no event longer than ninety days following the Change of Control, as defined herein, make an irrevocable contribution to the Rabbi Trust in an amount equal to the present value, using a 5% interest factor, of the remaining aggregate premiums required to be paid by Sysco on Schedule 1 for each Insurance Policy. The trustee of the Rabbi Trust shall pay future premiums for such Insurance Policy from such contributions and the appreciation and earnings thereon; provided, however, that, should such contributions and appreciation and earnings thereon prove insufficient to pay all of the premiums -4- 14 required by Schedule 1 for such Insurance Policy, Sysco shall remain liable to make such remaining premium payments. 3.5 For purposes of this Agreement, Change of Control shall mean the occurrence of one or more of the following events: (a) Any "person," including a "syndication" or "group" as those terms are used in Section 13(d)(3) of the Securities Act, is or becomes the beneficial owner, directly or indirectly, of securities of Sysco representing 20% or more of the combined voting power of Sysco's then outstanding "Voting Securities" which is any security which ordinarily possesses the power to vote in the election of the Board of Directors of Sysco without the happening of any precondition or contingency; (b) Sysco is merged or consolidated with another corporation and immediately after giving effect to the merger or consolidation either (i) less than 80% of the outstanding Voting Securities of the surviving or resulting entity are then beneficially owned in the aggregate by (x) the stockholders of Sysco immediately prior to such merger or consolidation, or (y) if a record date has been set to determine the stockholders of Sysco entitled to vote on such merger or consolidation, the stockholders of Sysco as of such record date, or (ii) the Board of Directors, or similar governing body, of the surviving or resulting entity does not have as a majority of its members the persons specified in subparagraph (c)(i) and (ii) below; (c) If at any time the following do not constitute a majority of the Board of Directors of Sysco (or any successor entity referred to in subparagraph (b) above): i. Persons who are directors of Sysco on July 4, 1999; -5- 15 ii. persons who, prior to their election as a director of Sysco (or successor entity if applicable) were nominated, recommended or endorsed by a formal resolution of the Board of Directors of Sysco; (d) If at any time during a calendar year a majority of the directors of Sysco are not persons who were directors at the beginning of the calendar year; and (e) Sysco transfers substantially all of its assets to another corporation which is a less than 80% owned subsidiary of Sysco. ARTICLE 4 Sysco's Investment 4.1 Sysco's Investment in each Insurance Policy shall be: (a) except as provided in subsection (b) below, the lesser of (1) the cash surrender value of the Insurance Policy and (2) the amounts paid by Sysco as premiums on such Insurance Policy under the provisions of section 3.1 with both (1) and (2) reduced by the amount of any indebtedness which may exist against such Insurance Policy and any unpaid interest on such indebtedness if said indebtedness was incurred after such Insurance Policy becomes subject to the Agreement and with (2) only reduced by the premiums paid by the Employee with respect to such Insurance Policy under the provisions of section 3.3; (b) at any time upon the death of the last insured, the amounts paid by Sysco as premiums on such Insurance Policy under the provisions of section 3.1 less (1) the amount of any indebtedness which may exist against such Insurance Policy and any unpaid interest on such indebtedness if said indebtedness was incurred after -6- 16 such Insurance Policy becomes subject to this Agreement, and (2) the premiums paid by the Employee with respect to such Insurance Policy under the provisions of section 3.3. 4.2 The Employee will collaterally assign the Insurance Policies acquired pursuant to the terms of this Agreement to the Rabbi Trust as evidence of Sysco's Investment. The collateral assignment shall not be altered or changed without the written consent of Sysco. The Rabbi Trust shall have possession of the Insurance Policy during the term of this Agreement; provided, however, that the possessor of the Insurance Policy shall make such Insurance Policy available to the Insurer when it shall be necessary to endorse changes of beneficiary thereon in accordance with the Employee's right to appoint beneficiaries as provided in this Agreement or to exercise any other rights of the Employee to such Insurance Policy. 4.3 The rights of Sysco and the Rabbi Trust under the collateral assignment are restricted to (a) assigning Sysco's Investment in the Insurance Policy to the Employee or the Employee's designee upon payment of Sysco's Investment, (b) upon the death of the last insured, obtaining that portion of the Insurance Policy death proceeds in an amount equal to Sysco's Investment at such insured's death, and (c) upon surrender of the Insurance Policy, obtaining that portion of the surrender proceeds not in excess of Sysco's Investment. 4.4 Sysco and the Rabbi Trust are prohibited from taking any action that would endanger either the interest of the Employee or the payment of the proceeds in excess of Sysco's Investment to the beneficiary designated by the Employee upon the last insured's death. Prior to the termination of this Agreement, Sysco and the Rabbi Trust will not exercise the right to pledge the Insurance Policies, to surrender the Insurance Policies or paid up additions for cancellation or to partially surrender the Insurance Policies, to assign its rights to anyone other than the Employee or the -7- 17 Employee's designee, and to borrow against the Insurance Policies even for the purpose of paying premiums unless there has been a default by the Employee under this Agreement. 4.5 The Employee has the power to assign all rights of the Employee in the Insurance Policies and under this Agreement, change the beneficiary designation on each Insurance Policy and exercise settlement options. In the event of an assignment, the assignee shall possess all of the rights and obligations of the Employee under such Insurance Policy and this Agreement. The Employee has all rights to the Insurance Policies, not specifically granted to Sysco by this Agreement; provided, however, that the Employee may not exercise any rights in a manner which would endanger Sysco's Investment. 4.6 Sysco and the Employee recognize that the investment of Sysco in the Insurance Policies and other assets held in the Rabbi Trust is also subject to the general creditors of Sysco as set forth in the Rabbi Trust. The Employee shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Rabbi Trust. Any rights created under the Plan or this Agreement shall be mere unsecured contractual rights of the Employee against Sysco. Any assets held by the Rabbi Trust will be subject to the claims of Sysco's general creditors under Federal and state law as specified in the Rabbi Trust. 4.7 Any payments of Sysco's Investment in the Insurance Policy pursuant to the collateral assignment shall be first made from Insurance Policy cash values attributable to paid up additional life insurance and purchased by Insurance Policy dividends, if any. The Employee shall have no interest in paid up additional life insurance protection, if any, except to the extent the death benefit or cash value thereof exceeds Sysco's Investment. -8- 18 ARTICLE 5 Termination This Agreement shall terminate on the happening of any one or more of the following events: (a) Mutual agreement of the parties; (b) Adjudication of Sysco as a bankrupt or a general assignment by Sysco to or for the benefit of creditors or dissolution of Sysco; (c) Surrender of all the Insurance Policies; (d) Payment in full to Sysco at any time of Sysco's Investment, at which time Sysco shall release the collateral assignment; (e) Cessation of Sysco's business; (f) The Employee ceases to be employed by Sysco for any reason except death. Additionally, Sysco, in its sole discretion, may terminate this Agreement upon any failure of the Employee to pay premiums to Sysco as provided in section 3.3. ARTICLE 6 Termination of Sysco's Investment 6.1 Upon the death of the last insured, Sysco shall receive from the proceeds of all Insurance Policies payable upon such insured's death the full amount of Sysco's Investment in the death benefits in all such Insurance Policies. The balance of the proceeds of such Insurance Policies shall be paid (a) to the beneficiary designated by the Employee or (b) if no such beneficiary has been designated, to the Employee's executor or administrator for administration as part of the Employee's estate. -9- 19 6.2 In the event of the termination of this Agreement under Article 5 (except as provided in Section (d) of Article 5), the Employee or the designee of the Employee shall have ninety days in which to pay Sysco in an amount equal to Sysco's Investment in each Insurance Policy. Upon the payment of such an amount, Sysco and the Rabbi Trust shall release the collateral assignment of the Insurance Policies. If the Employee or the designee of the Employee does not make such payment to Sysco within such ninety day period, the Employee may either (a) surrender the Insurance Policy as provided in the collateral assignment, or (b) transfer ownership of such Insurance Policy to Sysco, thereby discharging the obligation of the Employee to purchase Sysco's Investment in such Insurance Policy and relinquishing all rights of the Employee to such Insurance Policy under this Agreement. 6.3 Upon the surrender or partial surrender of any Insurance Policy covered by this Agreement or should the Employee borrow against any Insurance Policy covered by this Agreement, the proceeds received upon such surrender, partial surrender or loan shall be used first to pay Sysco in an amount equal to Sysco's Investment in such Insurance Policy and any excess proceeds shall be paid to the Employee. -10- 20 ARTICLE 7 Insurers The Insurer(s) issuing the Insurance Polices shall not be deemed to be a party to this Agreement for any purpose, nor is the Insurer in any way responsible for its validity or its enforcement. The Insurer shall not be obligated to inquire as to the distribution or application of any monies, payable or paid by the Insurer under the Insurance Policies, if the Insurer makes appropriate payment or otherwise performs its contractual obligations in accordance with the terms of the Insurance Policies. The Insurer shall be bound only by the provisions of the Insurance Policies or an endorsement thereto. Any payments made or actions taken by the Insurer in accordance with such Insurance Policies shall fully discharge the Insurer from liability. ARTICLE 8 Amendments and Miscellaneous 8.1 This Agreement shall not be modified or amended except by a written instrument signed by Sysco and the Employee. This Agreement shall be binding upon the administrators, assigns and successors of the parties to this Agreement. 8.2 The provisions of this Agreement shall be construed and enforced according to the laws of the State of Texas, except to the extent preempted by federal law. 8.3 This Agreement and the Plan contain the entire contract between the parties and constitute a complete integration of the representations, covenants and promises of the Employee and Sysco. In case of a conflict, express or implied, between the terms of the Plan and this Agreement, the terms of the Plan will govern. 8.4 This Agreement is not the basic employment contract between Sysco and the Employee and Sysco reserves the unqualified and unrestricted right to terminate the services of the Employee on exactly the same basis as if this Agreement had never been entered into. -11- 21 8.5 The Employee shall have no interest or rights in Sysco's Investment in any Insurance Policy. ARTICLE 9 ERISA Provisions 9.1 Sysco is the named fiduciary of the Plan for purposes of the Employee Retirement Income Security Act of 1974 and shall have the authority to control and manage the operation and administration of the Plan. 9.2 The funding policy of this Plan will be through premium payments to the Insurer as specified in this Agreement. 9.3 The basis of payments from the Plan will consist of payments by the Insurer in accordance with the Insurance Policies. 9.4 Claims for death benefits are established under the Insurance Policy by the Insurer. If for any reason a claim for benefits under the Plan other than death benefits is denied, Sysco shall deliver to the claimant a written explanation setting forth the specific reasons for the denial, pertinent references to the Plan section on which the denial was based, such other data as may be pertinent and information on procedures to be followed by the claimant in obtaining a review of his or her claim, all written in a manner calculated to be understood by the claimant. For this purpose: (a) The claimant's claim shall be deemed filed when presented orally or in writing to Sysco. (b) Sysco's explanation shall be in writing and delivered to the claimant within ninety days of the date the claim is filed. -12- 22 The claimant shall have sixty days following his or her receipt of the denial of the claim to file with Sysco a written request for review of the denial. For such review, the claimant or his or her representative may submit pertinent documents and written issues and comments. Sysco shall decide the issue on review and furnish the claimant with a copy within sixty days of receipt of the claimant's request for review of his or her claim. The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent plan provisions on which the decision is based. If a copy of the decision is not so furnished to the claimant within such sixty days, the claim shall be deemed denied on review. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this _____ day of ________________, ______. SYSCO CORPORATION, EMPLOYER By --------------------------------------- ----------------------------------------- _____________________, Employee -13- 23 SCHEDULE 1 The Insurance Policy or Insurance Policies covered by the foregoing Split Dollar Life Insurance Agreement between Sysco Corporation and the Employee include the following: 1. Insurer: ________________________________ 2. Policy No. ______________________________ 3. Initial Face Amount: ______________________ 4. Insured(s): ______________________________ 5. Sysco Premium: $_________ annually from __________ through __________ 6. Employee section 3.3 Reimbursement: from __________ through __________ EXECUTED this _____ day of ___________________, __________. SYSCO CORPORATION, EMPLOYER By --------------------------------------- ------------------------------------------ ______________________, Employee -14- EX-10.N 5 EXECUTIVE COMPENSATION ADJUSTMENT AGRMT - LINDIG 1 EXHIBIT 10(n) EXECUTIVE COMPENSATION ADJUSTMENT AGREEMENT This Executive Compensation Adjustment Agreement ("Agreement") made and entered into between Sysco Corporation ("Sysco") and Bill M. Lindig ("Officer") W I T N E S S E T H WHEREAS, the Officer is currently the Chairman and Chief Executive Officer of Sysco and his experience and knowledge of the affairs of Sysco, his reputation and contacts in the industry are all extremely valuable to Sysco; and WHEREAS, the Officer is currently a participant in the Sysco Corporation Executive Deferred Compensation Plan ("EDCP") and the Sysco Corporation Supplemental Executive Retirement Plan ("SERP"); and WHEREAS, Sysco has adopted the Sysco Corporation Split Dollar Life Insurance Plan ("the Split Dollar Plan") which is designed to encourage certain employees to continue in the service of Sysco by offering such employees assistance in providing life insurance protection for the employees' families; and WHEREAS, Sysco wishes to offer split dollar life insurance coverage for the Officer's family as an alternative to part of the benefits provided under the EDCP and the SERP; and WHEREAS, the Officer wishes to take advantage of the split dollar life insurance coverage offered by Sysco as an alternative to some of the Officer's benefits provided under the EDCP and the SERP; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, Sysco and the Officer agree as follows: 1. Split Dollar Plan. Contemporaneously with the execution of this Agreement, the Compensation and Stock Option Committee of the Sysco Board of Directors appointed under the Split Dollar Plan will designate the Officer as a participant in the Split Dollar Plan and Sysco and David Brett Lindig and Mark Bradley Lindig, co-trustees (as the Officer's designee), of the Lindig 1999 Family Trusts ("Trust"), created by that certain instrument dated September 30, 1999, shall execute the Split Dollar Life Insurance Agreement ("Split Dollar Agreement") attached hereto as Exhibit A and incorporated herein for all purposes. 2. Partial Waiver of EDCP Benefits. Subject to the conditions of paragraph 4, as a requirement for participation in the Split Dollar Plan, Officer hereby irrevocably waives, renounces, and forfeits any and all rights to the Officer's benefits credited to his Account in the Deferred Compensation Ledger maintained by the EDCP plan Committee under the EDCP as of 10-14, 1999; provided, however, this waiver, renunciation, and forfeiture does not apply to amounts which may be credited to the Officer's said Account in the special Deferred Compensation Ledger under the EDCP from and after said date; provided -1- 2 further any interest credited to the Officer's said Account under the EDCP will apply only to Officer deferrals and Sysco's Company Matches (as defined in the EDCP) from and after said date. 3. Partial Waiver of SERP Benefits. Subject to the conditions of paragraph 4, as a requirement for participation in the Split Dollar Plan, Officer hereby irrevocably waives, renounces, and forfeits $13,487.50 of the monthly SERP retirement benefit for the Officer in the form of an age 65, 5 year certain and life annuity as calculated under Article 4.1 of the SERP prior to the adjustment for vesting. After such reduction and the application of vesting, the resulting amount will be adjusted for the form and time of payment as specified under Article 4.2 of the SERP. In calculating the death benefit under Article 5 of the SERP, the commuted lump sum values referenced in Article 5 will be reduced by the commuted lump sum value of the monthly retirement benefit forfeited above. 4. Conditions on Waiver. The partial waivers, renunciations, and forfeitures contained in paragraphs 2 and 3 are conditioned upon each of the two insurance policies initially covered by the Split Dollar Agreement not being set aside for material misrepresentations in its application and the death proceeds of each such policy not being limited to premiums paid because an insured dies by suicide. Such conditions will lapse with regard to each such policy two years after the date of issue of such policy. Should only one of such policies fail to meet the conditions of this paragraph, the partial waiver, renunciation and forfeiture of EDCP and SERP benefits in paragraphs 2 and 3 shall be reduced by 67.2% if the John Hancock Mutual Life Insurance Company policy fails to meet said conditions or by 33.8% if the Pacific Life Insurance Company policy fails to meet said conditions. If both of the insurance policies initially covered by the Split Dollar Agreement fail to meet either of the conditions of this paragraph, the partial waiver, renunciation, and forfeiture of EDCP and SERP benefits in paragraphs 2 and 3 shall be null and void and this Agreement shall terminate. 5. Reimbursement Bonuses. Sysco agrees to pay the following reimbursement bonuses to the Officer or his affiliate within a reasonable time after certification to Sysco of the amount subject to reimbursement: a. Sysco shall bonus to the Officer or his affiliate an amount equal to the term premium payment required of the trustee of the Trust pursuant to section 3.3 of the Split Dollar Agreement. b. Sysco shall bonus an amount equal to any Federal gift taxes paid by the Officer or his affiliate because of contributions, whether direct, indirect or deemed, to the Trust to cover the portion of the premium required to be paid by the Trust under section 3.3 of the Split Dollar Agreement or because of any economic benefit attributable to the cost of current life insurance protection to -2- 3 which the Trust is entitled under the Split Dollar Agreement which constitutes a gift to the Trust by the Officer or his affiliate. As an administrative convenience, said premium contribution or said current life insurance benefit will be deemed to be a gift by the Officer or his affiliate at highest marginal Federal gift tax bracket regardless of whether the Officer or his affiliate pay any or a lesser amount of gift tax. The bonus will be paid to the Officer or his affiliate upon certification to Sysco of the amount of said premium contribution or current life insurance protection benefit for the taxable year of the Officer or his affiliate. No bonus is required for any other gift or any generation-skipping transfer, direct, indirect or deemed, from the Officer or his affiliate to the Trust caused under the Split Dollar Agreement except for gifts of said premium contribution or for said current life insurance protection benefit to which the Trust is entitled. c. Sysco shall bonus annually to the Officer or his affiliate a fixed dollar amount to offset fees paid to a tax return preparer by the Officer or his affiliate for any state or Federal gift tax or generation-skipping transfer tax return which includes a gift or generation-skipping transfer which results from this Agreement or the Split Dollar Agreement regardless of whether such a return was filed and regardless of the amount of tax return preparer fees paid by the Officer or his affiliate. The fixed dollar amount in 2000 will be a total of $5,000. For 2001, the fixed dollar amount will be $1,000 for each gift tax return. For each year beginning in 2002, the fixed dollar amount for each gift tax return will be the fixed dollar amount for the previous year increased by 5%. d. Should a dispute with the Internal Revenue Service or a state tax authority develop between the Officer or his affiliate concerning the income, gift or generation-skipping transfer tax results attributable to this Agreement, the waiver of the Officer's accrued benefit under the EDCP or the SERP, or the Split Dollar Agreement, Sysco agrees to pay the Officer's or his affiliate's reasonable accounting and legal fees and court and other costs incurred in any administrative proceedings or litigation concerning assessment or proposed assessment of additional taxes involving their state or Federal gift tax, income tax, or generation-skipping transfer tax returns based upon such tax results including, litigation of a notice of tax deficiency, filing a refund claim or suing for a refund in court which concerns said dispute of income, gift or generation-skipping transfer tax results. Sysco shall have no liability to pay for any state or Federal income, gift or generation-skipping transfer tax liability, including penalties or interest thereon, unless expressly authorized elsewhere in this Agreement. Sysco -3- 4 will pay such fees or costs directly to the provider upon being furnished by the Officer or his affiliate with a statement or other evidence of the fee or cost payable in a format acceptable to Sysco. 6. Federal Income Tax Bonuses. Sysco agrees to pay the following supplemental bonuses within a reasonable time after the close of the calendar year during which the subject reimbursement bonuses were paid: a. Sysco shall make a supplemental bonus to the Officer or his affiliate to cover any Federal income tax liability resulting from a reimbursement to the Officer or his affiliate pursuant to subparagraphs a, b and c of paragraph 5 above. The amount of the supplemental bonus shall be the difference between (i) an amount determined by dividing the amount of the reimbursement by one minus the highest Federal individual marginal income tax bracket for the year of such reimbursement under subparagraphs a, b and c of paragraph 5 above expressed as a decimal, and (ii) the amount of said reimbursement. b. With regard to any payment of the Officer's or his affiliate's reasonable accounting and legal fees or court or other costs pursuant to subparagraph d of paragraph 5 above, Sysco shall make a supplemental bonus to the Officer or his affiliate to cover any Federal income tax liability resulting from such payment. The parties acknowledge that the determination of such Federal income tax liability is made complicated because of the potential deductibility by the Officer or his affiliate of such accounting and legal fees and court and other costs on his or her Federal income tax return. The parties hereby agree that the supplemental bonus required by this subparagraph shall be calculated in the following two steps: i. The Federal income tax caused by such payment shall be determined by the difference, if any, between (a) all Federal income taxes payable for the year of reimbursement by the Officer or affiliate calculated by including the subparagraph d of paragraph 5 payment in gross income reduced by the deduction allowable for the expenditure covered by such payment, if any, (whether or not the deduction is taken by the Officer or affiliate on the Federal income tax return for the taxable year of the reimbursement) and (b) all Federal income taxes payable for the year of payment by the Officer or affiliate calculated by excluding -4- 5 the subparagraph d of paragraph 5 reimbursement from gross income without any deduction for the expenditure covered by such reimbursement. ii. The amount of supplemental bonus required by this subparagraph shall be the difference between (a) an amount determined by dividing the Federal income tax difference determined by subparagraph bi of paragraph 6 above by one minus the highest Federal individual marginal income tax bracket for the year of such payment under subparagraph d of paragraph 5 above expressed as a decimal, and (b) the Federal income tax difference determined by subparagraph bi of paragraph 6 above. Should the Internal Revenue Service finally determine with regard to a Federal income tax return for the Officer or his affiliate that any of the assumptions pursuant to subparagraph bi(a) of paragraph 6 concerning inclusion of the payment in gross income or the deductibility of all or part of the expenditure covered by the payment is incorrect, the calculations in subparagraph bi(a) of paragraph 6 above shall be adjusted to reflect such final determination and the amount of supplemental bonus by this subparagraph b of paragraph 6 shall be recalculated and Sysco shall pay, without interest, to the Officer or his affiliate any increase in such supplemental bonus caused by the recalculation and the Officer or his affiliate shall return to Sysco that part of any supplemental bonus received in excess of such recalculation. c. For years during which there are no premium reimbursements by Sysco pursuant to subparagraph a of paragraph 5 above but the Officer or his affiliate realizes an economic benefit equal to the cost of current life insurance protection (calculated as specified in section 3.3 of the Split Dollar Agreement) to which the Trust is entitled under the Split Dollar Agreement, Sysco shall bonus the Officer or his affiliate an amount to cover Federal income tax liability resulting from the realized economic benefit equal to the cost of current life insurance protection to which the Trust is entitled under the Split Dollar Agreement. The amount of the bonus shall be the difference between (i) an amount determined by dividing the amount of said economic benefit by one minus the highest Federal individual marginal income tax bracket for the year said economic benefit is realized expressed as a decimal, and (ii) the amount of said economic benefit. No bonus is required for any economic benefit realized by the Officer or his affiliate under the Split Dollar Agreement except for the cost of current life insurance protection to which the Trust is entitled. -5- 6 7. Ceiling on Reimbursement and Federal Income Tax Bonuses. The bonuses specified in paragraphs 5 and 6 above, in the aggregate, shall not exceed $3,898.202. 8. Payment of Taxes and Withholding. The Officer or his affiliate will be required to pay his share of any Federal or state income, social security or other taxes that are required to be paid due to the bonuses specified in paragraphs 5 and 6 above and Sysco will withhold such taxes to the extent required by applicable law and regulations. 9. Special Deduction Bonus. The parties do not anticipate that there will be any additional income tax consequences to the Officer or his affiliate from this Agreement, the waiver of his accrued benefit under the EDCP or the SERP, and the Split Dollar Agreement other than that attributable to the benefit from the cost of current life insurance protection to which the Trust is entitled and the bonuses discussed in paragraphs 5 and 6. However, should additional income be realized by the Officer or his affiliate because of this Agreement, the waiver of his accrued benefit under the EDCP or the SERP, or the Split Dollar Agreement and should Sysco be entitled to a Federal income tax deduction against its gross income for such other income realized by the Officer or his affiliate, then Sysco agrees to bonus to the Officer or his affiliate who realized such other income pursuant to this Agreement, the waiver of the Officer's benefit under the EDCP or the SERP or the Split Dollar Agreement an amount equal to the difference between (i) an amount determined by dividing the amount of said deduction by one minus the highest Federal corporate marginal income tax bracket for the year such deduction is available to Sysco expressed as a decimal, and (ii) the amount of said deduction. 10. Dispute Resolution. Sysco and the Officer have entered into this Agreement in good faith and in belief that it is mutually advantageous to them. It is with the same spirit of cooperation that they pledge to attempt to resolve any dispute amicably without the necessity of litigation. Accordingly, they agree that if any dispute arises between them relating to this Agreement or the Split Dollar Agreement (a "Dispute"), they will first utilize the mediation procedures specified in this paragraph prior to any arbitration. a. Initiation of Mediation. The party seeking to initiate mediation (the "Initiating Party") shall give written notice to the other party, describing in general terms the nature of the Dispute, and the Initiating Party's claim for relief. Sysco and the Officer or the Officer's affiliate shall have thirty business days from the date of notice to select a mutually agreeable mediator. In consultation with the mediator selected, the parties shall promptly designate a mutually convenient time and place for mediation, and unless circumstances require otherwise, such time to be not later than forty-five days after the selection of the mediator. -6- 7 b. Conduct of Mediation. In the mediation, each party shall be represented by one or more individuals with authority to settle the Dispute and may be represented by counsel. In addition, each party may, with permission of the mediator, bring such additional persons as needed to respond to questions, contribute information, and participate in the negotiations. The parties agree to sign a document that provides that the mediator shall be governed by the provisions of Chapter 154 of the Texas Civil Practice and Remedies Code or such other rules as the mediator shall prescribe. The parties commit to participate in the proceedings in good faith and with the intention of resolving the Dispute if at all possible. c. Termination of Procedure. The parties agree to participate in the mediation procedure to its conclusion. The mediation shall be terminated (i) by the execution of a settlement agreement by the parties, (ii) by a declaration of the mediator that mediation is terminated, or (iii) by a written declaration by one of the parties to the effect that the mediation process is terminated at the conclusion of one full day's mediation session. d. Arbitration. The parties agree to participate in good faith in the mediation to its conclusion. If the parties are not successful in resolving the Dispute through mediation, then the parties agree that the Dispute shall be settled by arbitration in accordance with the provisions of the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) shall be final and may be entered in any court having jurisdiction. The parties further agree that the award rendered by the arbitrator(s) may include an award of attorneys' fees and costs related to the arbitration. e. Fees of Mediation; Disqualification. The fees and expenses of the mediator shall be shared equally by the parties. The mediator shall be disqualified as a witness, consultant, expert or counsel by any party with respect to the Dispute and any related matters. f. Confidentiality. The entire mediation process is confidential, and no stenographic, visual or audio records shall be made. All conduct, statements, promises, offers, views and opinions, whether oral or written, made in the course of mediation by any party, agent, employee, representative, or other invitee and by the mediator are confidential and shall, in addition and where appropriate, be deemed privileged. Such conduct, statements, promises, offers, views and opinions shall not be disclosed to anyone, not an agent, employee, expert, witness, or representative of any of the parties. -7- 8 11. Officer's Affiliate. References to an affiliate of the Officer include such persons and entities who are the successors of the Officer (e.g., administrator or executor of his estate, his assigns, or his heirs, legatees, or devisees) or who are related to the Officer in connection with this Agreement or the Split Dollar Agreement (e.g., the Officer's wife, the Trust, or the trustee of the Trust and their heirs or successors). 12. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Officer and Sysco, their successors, assigns, heirs, executors, administrators, and other beneficiaries. 13. Amendment. No amendment or variations of the terms of this Agreement shall be valid, unless made in writing and signed by Sysco and the Officer. 14. Not Employment Contract. This Agreement is not the basic employment contract between Sysco and the Officer nor is it evidence of any agreement or understanding, express or implied, that Sysco will employ the Officer in any particular position or at any particular rate of remuneration. Sysco reserves the unqualified and unrestricted right to terminate the services of the Officer on exactly the same basis as if this Agreement had never been entered into although any rights or obligations of Sysco and the Officer under this Agreement shall survive such termination of employment. 15. Governing Law. The provisions of this Agreement shall be construed and enforced according to the laws of the State of Texas. 16. Entire Agreement. This Agreement contains the entire contract between Sysco and the Officer and constitutes a complete integration of the representations, covenants and promises of Sysco and the Officer. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this 25th day of October, 1999. SYSCO CORPORATION By: /s/ MICHAEL C. NICHOLS ----------------------------------- MICHAEL C. NICHOLS, Vice President /s/ BILL M. LINDIG ---------------------------------- BILL M. LINDIG, Officer -8- 9 The Officer's wife is fully aware, understands, and fully consents and agrees to the provisions of this Agreement including its binding effect upon any community property interest she may have in the EDCP and SERP benefits irrevocably waived, renounced, and forfeited by the Officer and any economic benefits realized under the Split Dollar Agreement. Such awareness, understanding, consent and agreement is evidenced by signing this Agreement. /s/ BOBETTA C. LINDIG ---------------------------------------- BOBETTA C. LINDIG -9- EX-10.O 6 EXECUTIVE COMPENSATION ADJUSTMENT AGRMT - COTROS 1 EXHIBIT 10(o) EXECUTIVE COMPENSATION ADJUSTMENT AGREEMENT This Executive Compensation Adjustment Agreement ("Agreement") made and entered into between Sysco Corporation ("Sysco") and Charles H. Cotros ("Officer") W I T N E S S E T H WHEREAS, the Officer is currently the President and Chief Operating Officer of Sysco and his experience and knowledge of the affairs of Sysco, his reputation and contacts in the industry are all extremely valuable to Sysco; and WHEREAS, the Officer is currently a participant in the Sysco Corporation Executive Deferred Compensation Plan ("EDCP") and the Sysco Corporation Supplemental Executive Retirement Plan ("SERP"); and WHEREAS, Sysco has adopted the Sysco Corporation Split Dollar Life Insurance Plan ("the Split Dollar Plan") which is designed to encourage certain employees to continue in the service of Sysco by offering such employees assistance in providing life insurance protection for the employees' families; and WHEREAS, Sysco wishes to offer split dollar life insurance coverage for the Officer's family as an alternative to part of the benefits provided under the EDCP and the SERP; and WHEREAS, the Officer wishes to take advantage of the split dollar life insurance coverage offered by Sysco as an alternative to some of the Officer's benefits provided under the EDCP and the SERP; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, Sysco and the Officer agree as follows: 1. Split Dollar Plan. Contemporaneously with the execution of this Agreement, the Compensation and Stock Option Committee of the Sysco Board of Directors appointed under the Split Dollar Plan will designate the Officer as a participant in the Split Dollar Plan and Sysco and Harry Charles Cotros, trustee (as the Officer's designee), of the Cotros 1999 Family Trust ("Trust"), created by that certain instrument dated September 13, 1999, shall execute the Split Dollar Life Insurance Agreement ("Split Dollar Agreement") attached hereto as Exhibit A and incorporated herein for all purposes. 2. Partial Waiver of EDCP Benefits. Subject to the conditions of paragraph 4, as a requirement for participation in the Split Dollar Plan, Officer hereby irrevocably waives, renounces, 2 and forfeits 35% of the Officer's benefits credited to his Account in the Deferred Compensation Ledger maintained by the EDCP plan Committee under the EDCP as of October 14, 1999; provided, however, this waiver, renunciation, and forfeiture does not apply to the Officer's benefits credited to the Officer's said Account as of such date in excess of 35% and amounts which may be credited to the Officer's said Account in the special Deferred Compensation Ledger under the EDCP from and after said date; provided further any interest credited to the Officer's said Account after said date under the EDCP will apply only to the Officer's benefits credited to Officer's said Account as of such date and to Officer deferrals and Sysco's Company Matches (as defined in the EDCP) from and after said date. 3. Partial Waiver of SERP Benefits. Subject to the conditions of paragraph 4, as a requirement for participation in the Split Dollar Plan, Officer hereby irrevocably waives, renounces, and forfeits $18,658.88 of the monthly SERP retirement benefit for the Officer in the form of an age 65, 5 year certain and life annuity as calculated under Article 4.1 of the SERP prior to the adjustment for vesting. After such reduction and the application of vesting, the resulting amount will be adjusted for the form and time of payment as specified under Article 4.2 of the SERP. In calculating the death benefit under Article 5 of the SERP, the commuted lump sum values referenced in Article 5 will be reduced by the commuted lump sum value of the monthly retirement benefit forfeited above. 4. Conditions on Waiver. The partial waivers, renunciations, and forfeitures contained in paragraphs 2 and 3 are conditioned upon each of the two insurance policies initially covered by the Split Dollar Agreement not being set aside for material misrepresentations in its application and the death proceeds of each such policy not being limited to premiums paid because an insured dies by suicide. Such conditions will lapse with regard to each such policy two years after the date of issue of such policy. Should only one of such policies fail to meet the conditions of this paragraph, the partial waiver, renunciation and forfeiture of EDCP and SERP benefits in paragraphs 2 and 3 shall be reduced by 36.5% if the John Hancock Mutual Life Insurance Company policy fails to meet said conditions or by 63.5% if the Pacific Life Insurance Company policy fails to meet said conditions. If both of the insurance policies initially covered by the Split Dollar Agreement fail to meet either of the conditions of this paragraph, the partial waiver, renunciation, and forfeiture of EDCP and SERP benefits in paragraphs 2 and 3 shall be null and void and this Agreement shall terminate. -2- 3 5. Reimbursement Bonuses. Sysco agrees to pay the following reimbursement bonuses to the Officer or his affiliate within a reasonable time after certification to Sysco of the amount subject to reimbursement: a. Sysco shall bonus to the Officer or his affiliate an amount equal to the term premium payment required of the trustee of the Trust pursuant to section 3.3 of the Split Dollar Agreement. b. Sysco shall bonus an amount equal to any Federal gift taxes paid by the Officer or his affiliate because of contributions, whether direct, indirect or deemed, to the Trust to cover the portion of the premium required to be paid by the Trust under section 3.3 of the Split Dollar Agreement or because of any economic benefit attributable to the cost of current life insurance protection to which the Trust is entitled under the Split Dollar Agreement which constitutes a gift to the Trust by the Officer or his affiliate. As an administrative convenience, said premium contribution or said current life insurance benefit will be deemed to be a gift by the Officer or his affiliate at the highest marginal Federal gift tax bracket regardless of whether the Officer or his affiliate paid any or a lesser amount of gift tax. The bonus will be paid to the Officer or his affiliate upon certification to Sysco of the amount of said premium contribution or current life insurance protection benefit for the taxable year of the Officer or his affiliate. No bonus is required for any other gift or any generation-skipping transfer, direct, indirect or deemed, from the Officer or his affiliate to the Trust caused under the Split Dollar Agreement except for gifts of said premium contribution or for said current life insurance protection benefit to which the Trust is entitled. c. Sysco shall bonus annually to the Officer or his affiliate a fixed dollar amount to offset fees paid to a tax return preparer by the Officer or his affiliate for any state or Federal gift tax or generation-skipping transfer tax return which includes a gift or generation-skipping transfer which results from this Agreement or the Split Dollar Agreement regardless of whether such a return was filed and regardless of the amount of tax return preparer fees paid by the Officer or his affiliate. The fixed dollar amount in 2000 will be a total of $5,000. For 2001, the fixed dollar amount will be $1,000 for each gift tax return. For each year beginning in 2002, the fixed -3- 4 dollar amount for each gift tax return will be the fixed dollar amount for the previous year increased by 5%. d. Should a dispute with the Internal Revenue Service or a state tax authority develop between the Officer or his affiliate concerning the income, gift or generation-skipping transfer tax results attributable to this Agreement, the waiver of the Officer's accrued benefit under the EDCP or the SERP, or the Split Dollar Agreement, Sysco agrees to pay the Officer's or his affiliate's reasonable accounting and legal fees and court and other costs incurred in any administrative proceedings or litigation concerning assessment or proposed assessment of additional taxes involving their state or Federal gift tax, income tax, or generation-skipping transfer tax returns based upon such tax results including, litigation of a notice of tax deficiency, filing a refund claim or suing for a refund in court which concerns said dispute of income, gift or generation-skipping transfer tax results. Sysco shall have no liability to pay for any state or Federal income, gift or generation-skipping transfer tax liability, including penalties or interest thereon, unless expressly authorized elsewhere in this Agreement. Sysco will pay such fees or costs directly to the provider upon being furnished by the Officer or his affiliate with a statement or other evidence of the fee or cost payable in a format acceptable to Sysco. 6. Federal Income Tax Bonuses. Sysco agrees to pay the following supplemental bonuses within a reasonable time after the close of the calendar year during which the subject reimbursement bonuses were paid: a. Sysco shall make a supplemental bonus to the Officer or his affiliate to cover any Federal income tax liability resulting from a reimbursement to the Officer or his affiliate pursuant to subparagraphs a, b and c of paragraph 5 above. The amount of the supplemental bonus shall be the difference between (i) an amount determined by dividing the amount of the reimbursement by one minus the highest Federal individual marginal income tax bracket for the year of such reimbursement under subparagraphs a, b and c of paragraph 5 above expressed as a decimal, and (ii) the amount of said reimbursement. b. With regard to any payment of the Officer's or his affiliate's reasonable accounting and legal fees or court or other costs pursuant to -4- 5 subparagraph d of paragraph 5 above, Sysco shall make a supplemental bonus to the Officer or his affiliate to cover any Federal income tax liability resulting from such payment. The parties acknowledge that the determination of such Federal income tax liability is made complicated because of the potential deductibility by the Officer or his affiliate of such accounting and legal fees and court and other costs on his or her Federal income tax return. The parties hereby agree that the supplemental bonus required by this subparagraph shall be calculated in the following two steps: i. The Federal income tax caused by such payment shall be determined by the difference, if any, between (a) all Federal income taxes payable for the year of reimbursement by the Officer or affiliate calculated by including the subparagraph d of paragraph 5 payment in gross income reduced by the deduction allowable for the expenditure covered by such payment, if any, (whether or not the deduction is taken by the Officer or affiliate on the Federal income tax return for the taxable year of the reimbursement) and (b) all Federal income taxes payable for the year of payment by the Officer or affiliate calculated by excluding the subparagraph d of paragraph 5 payment from gross income without any deduction for the expenditure covered by such reimbursement. ii. The amount of supplemental bonus required by this subparagraph shall be the difference between (a) an amount determined by dividing the Federal income tax difference determined by subparagraph bi of paragraph 6 above by one minus the highest Federal individual marginal income tax bracket for the year of such payment under subparagraph d of paragraph 5 above expressed as a decimal, and (b) the Federal income tax difference determined by subparagraph bi of paragraph 6 above. Should the Internal Revenue Service finally determine with regard to a Federal income tax return for the Officer or his affiliate that any of the assumptions pursuant to subparagraph bi(a) of paragraph 6 concerning inclusion of the payment in gross income or the deductibility of all or part of the expenditure covered by the payment -5- 6 is incorrect, the calculations in subparagraph bi(a) of paragraph 6 above shall be adjusted to reflect such final determination and the amount of supplemental bonus by this subparagraph b of paragraph 6 shall be recalculated and Sysco shall pay, without interest, to the Officer or his affiliate any increase in such supplemental bonus caused by the recalculation and the Officer or his affiliate shall return to Sysco that part of any supplemental bonus received in excess of such recalculation. c. For years during which there are no premium reimbursements by Sysco pursuant to subparagraph a of paragraph 5 above but the Officer or his affiliate realizes an economic benefit equal to the cost of current life insurance protection (calculated as specified in section 3.3 of the Split Dollar Agreement) to which the Trust is entitled under the Split Dollar Agreement, Sysco shall bonus the Officer or his affiliate an amount to cover Federal income tax liability resulting from the realized economic benefit equal to the cost of current life insurance protection to which the Trust is entitled under the Split Dollar Agreement. The amount of the bonus shall be the difference between (i) an amount determined by dividing the amount of said economic benefit by one minus the highest Federal individual marginal income tax bracket for the year said economic benefit is realized expressed as a decimal, and (ii) the amount of said economic benefit. No bonus is required for any economic benefit realized by the Officer or his affiliate under the Split Dollar Agreement except for the cost of current life insurance protection to which the Trust is entitled. 7. Ceiling on Reimbursement and Federal Income Tax Bonuses. The bonuses specified in paragraphs 5 and 6 above, in the aggregate, shall not exceed $2,882,652. 8. Payment of Taxes and Withholding. The Officer or his affiliate will be required to pay his share of any Federal or state income, social security or other taxes that are required to be paid due to the bonuses specified in paragraphs 5 and 6 above and Sysco will withhold such taxes to the extent required by applicable law and regulations. 9. Special Deduction Bonus. The parties do not anticipate that there will be any additional income tax consequences to the Officer or his affiliate from this Agreement, the waiver of his accrued benefit under the EDCP or the SERP, and the Split Dollar Agreement other than that attributable to the benefit from the cost of current life insurance protection to which the Trust is -6- 7 entitled and the bonuses discussed in paragraphs 5 and 6. However, should additional income be realized by the Officer or his affiliate because of this Agreement, the waiver of his accrued benefit under the EDCP or the SERP, or the Split Dollar Agreement and should Sysco be entitled to a Federal income tax deduction against its gross income for such other income realized by the Officer or his affiliate, then Sysco agrees to bonus to the Officer or his affiliate who realized such other income pursuant to this Agreement, the waiver of the Officer's benefit under the EDCP or the SERP or the Split Dollar Agreement an amount equal to the difference between (i) an amount determined by dividing the amount of said deduction by one minus the highest Federal corporate marginal income tax bracket for the year such deduction is available to Sysco expressed as a decimal, and (ii) the amount of said deduction. 10. Dispute Resolution. Sysco and the Officer have entered into this Agreement in good faith and in belief that it is mutually advantageous to them. It is with the same spirit of cooperation that they pledge to attempt to resolve any dispute amicably without the necessity of litigation. Accordingly, they agree that if any dispute arises between them relating to this Agreement or the Split Dollar Agreement (a "Dispute"), they will first utilize the mediation procedures specified in this paragraph prior to any arbitration. a. Initiation of Mediation. The party seeking to initiate mediation (the "Initiating Party") shall give written notice to the other party, describing in general terms the nature of the Dispute, and the Initiating Party's claim for relief. Sysco and the Officer or the Officer's affiliate shall have thirty business days from the date of notice to select a mutually agreeable mediator. In consultation with the mediator selected, the parties shall promptly designate a mutually convenient time and place for mediation, and unless circumstances require otherwise, such time to be not later than forty-five days after the selection of the mediator. b. Conduct of Mediation. In the mediation, each party shall be represented by one or more individuals with authority to settle the Dispute and may be represented by counsel. In addition, each party may, with permission of the mediator, bring such additional persons as needed to respond to questions, contribute information, and participate in the negotiations. The parties agree to sign a document that provides that the mediator shall be governed by the provisions of Chapter 154 of the Texas Civil Practice and Remedies Code or such other rules as the mediator -7- 8 shall prescribe. The parties commit to participate in the proceedings in good faith and with the intention of resolving the Dispute if at all possible. c. Termination of Procedure. The parties agree to participate in the mediation procedure to its conclusion. The mediation shall be terminated (i) by the execution of a settlement agreement by the parties, (ii) by a declaration of the mediator that mediation is terminated, or (iii) by a written declaration by one of the parties to the effect that the mediation process is terminated at the conclusion of one full day's mediation session. d. Arbitration. The parties agree to participate in good faith in the mediation to its conclusion. If the parties are not successful in resolving the Dispute through mediation, then the parties agree that the Dispute shall be settled by arbitration in accordance with the provisions of the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) shall be final and may be entered in any court having jurisdiction. The parties further agree that the award rendered by the arbitrator(s) may include an award of attorneys' fees and costs related to the arbitration. e. Fees of Mediation; Disqualification. The fees and expenses of the mediator shall be shared equally by the parties. The mediator shall be disqualified as a witness, consultant, expert or counsel by any party with respect to the Dispute and any related matters. f. Confidentiality. The entire mediation process is confidential, and no stenographic, visual or audio records shall be made. All conduct, statements, promises, offers, views and opinions, whether oral or written, made in the course of mediation by any party, agent, employee, representative, or other invitee and by the mediator are confidential and shall, in addition and where appropriate, be deemed privileged. Such conduct, statements, promises, offers, views and opinions shall not be disclosed to anyone, not an agent, employee, expert, witness, or representative of any of the parties. 11. Officer's Affiliate. References to an affiliate of the Officer include such persons and entities who are the successors of the Officer (e.g., administrator or executor of his estate, his assigns, or his heirs, legatees, or devisees) or who are related to the Officer in connection with this -8- 9 Agreement or the Split Dollar Agreement (e.g., the Officer's wife, the Trust, or the trustee of the Trust and their heirs or successors). 12. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Officer and Sysco, their successors, assigns, heirs, executors, administrators, and other beneficiaries. 13. Amendment. No amendment or variations of the terms of this Agreement shall be valid, unless made in writing and signed by Sysco and the Officer. 14. Not Employment Contract. This Agreement is not the basic employment contract between Sysco and the Officer nor is it evidence of any agreement or understanding, express or implied, that Sysco will employ the Officer in any particular position or at any particular rate of remuneration. Sysco reserves the unqualified and unrestricted right to terminate the services of the Officer on exactly the same basis as if this Agreement had never been entered into although any rights or obligations of Sysco and the Officer under this Agreement shall survive such termination of employment. 15. Governing Law. The provisions of this Agreement shall be construed and enforced according to the laws of the State of Texas. 16. Entire Agreement. This Agreement contains the entire contract between Sysco and the Officer and constitutes a complete integration of the representations, covenants and promises of Sysco and the Officer. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this 21st day of October, 1999. SYSCO CORPORATION By /s/ MICHAEL C. NICHOLS ---------------------------------------- MICHAEL C. NICHOLS, Vice President /s/ CHARLES H. COTROS ---------------------------------------- CHARLES H. COTROS, Officer The Officer's wife is fully aware, understands, and fully consents and agrees to the provisions of this Agreement including its binding effect upon any community property interest she -9- 10 may have in the EDCP and SERP benefits irrevocably waived, renounced, and forfeited by the Officer and any economic benefits realized under the Split Dollar Agreement. Such awareness, understanding, consent and agreement is evidenced by signing this Agreement. /s/ CONSTANCE COTROS ------------------------------------------ CONSTANCE COTROS -10- 11 EXHIBIT A SYSCO CORPORATION SPLIT DOLLAR LIFE INSURANCE AGREEMENT This Agreement made and entered into between Sysco Corporation, (the "Employer") and Harry Charles Cotros, Trustee of the Cotros 1999 Family Trust. W I T N E S S E T H WHEREAS, Sysco has adopted the Sysco Corporation Split Dollar Life Insurance Plan (the "Plan") which is designed to encourage certain employees to continue in the service of Sysco by offering such employees assistance in providing life insurance protection for the employees' family; and WHEREAS, a Committee (the "Committee") has been established by the Plan to administer the Plan and to designate employees of Sysco who are eligible to participate in the Plan; and WHEREAS, the Committee has selected Charles H. Cotros (the "Employee") to be a participant under the Plan because the services of the Employee, the Employee's experience and knowledge of the affairs of Sysco, and the Employee's reputation and contacts in the industry are extremely valuable to Sysco; and WHEREAS, Sysco desires that the Employee remain in its service and wishes to receive the benefit of the Employee's knowledge, experience, reputation and contacts; and WHEREAS, Sysco is willing to encourage the Employee's continued service to Sysco by joining with the Trustee for the mutual benefit of the parties hereto in an investment of life insurance on the joint lives of the Employee and Constance P. Cotros, (the "Employee's spouse") so as to provide life insurance protection for the Employee's family; and 12 WHEREAS, the Trustee will be the owner of the Insurance Policies acquired pursuant to the terms of the Agreement, and Sysco's Investment in the Insurance Policies will be represented by an assignment from the Trustee to Sysco of limited ownership rights in the Insurance Policies; and WHEREAS, this plan is intended to qualify as a life insurance employee benefit plan as described in Revenue Ruling 64-328. NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, Sysco and the Trustee agree as follows: ARTICLE 1 Definitions 1.1 "Agreement" means this agreement, as it may be amended from time to time. 1.2 "Change of Control" is defined in section 3.5. 1.3 "Committee" means the administrative committee under the Plan. 1.4 "Employee" means Charles H. Cotros. 1.5 "Employee's Spouse" means Constance P. Cotros. 1.6 "Insurance Policies" means the policies or policy shown on the attached Schedule 1, together with any other policies that may be added to the Agreement. 1.7 "Insurer" means an insurance company issuing an Insurance Policy subject to this Agreement. 1.8 "Plan" means the Sysco Corporation Split Dollar Life Insurance Plan. 1.9 "Rabbi Trust" means the Sysco Corporation Split Dollar Life Insurance Trust. 1.10 "Sysco" means Sysco Corporation. 1.11 "Sysco's Investment" means the interest of Sysco in the Insurance Policy as defined in Section 4.1 of the Agreement. -2- 13 1.12 "Trust" means the Cotros 1999 Family Trust created by that certain instrument dated September 13, 1999, between Charles H. Cotros and Constance P. Cotros, as grantors and Harry Charles Cotros, as trustee. 1.13 "Trustee" means Harry Charles Cotros or his successor in office as trustee of the Trust. ARTICLE 2 Insurance Policies The Trustee has purchased on behalf of the Trust insurance on the joint lives of the Employee and the Employee's spouse for the benefit and protection of the Employee's family under the Insurance Policy or Insurance Policies shown on the attached Schedule 1 in the face amounts as shown on such schedule. ARTICLE 3 Premium Payments 3.1 Sysco shall pay the required premium specified on Schedule 1 for each Insurance Policy on or before the due date. 3.2 Any dividends attributable to each Insurance Policy shall be applied as Sysco and the Trustee agree by an instrument in writing. 3.3 The Trustee shall pay to Sysco during each year the Insurance Policy is subject to this Agreement and during which Sysco makes a premium payment under section 3.1, an amount equal to the one-year term cost of the insurance protection to which the Trust is entitled under such Insurance Policy pursuant to the terms of this Agreement, including any term insurance rider and any insurance purchased by dividends, and such cost is to be determined under the principles established by applicable U.S. Treasury Department pronouncements, rulings and regulations in effect for -3- 14 determining such costs for insurance protection. The Trustee shall reimburse Sysco for such one-year term cost within a reasonable time after payment of the required premium to the Insurer by Sysco on each Insurance Policy under section 3.1. (a) Until changed by U.S. Treasury Department pronouncements, rulings or regulations, the one-year term cost of insurance protection on a second to die policy on the joint lives of the Employee and the Employee's spouse shall be: (i) With regard to the Pacific Life Insurance Company Policy listed on Schedule 1, the lesser of the following: (y) the current published one-year term rates available to all standard risks of the Insurer issuing such insurance protection, or (z) U.S. Life Table 38. (ii) With regard to the John Hancock Mutual Life Insurance Company Policy listed on Schedule 1, U.S. Life Table 38. (b) Until changed by U.S. Treasury Department pronouncements, rulings or regulations, the one-year term cost of insurance protection on the single life of the Employee or the Employee's spouse (including the single life of the survivor after the death of the first of the Employee and the Employee's spouse to die if the Insurance Policy covers their joint lives), shall be the lesser of the following: (i) the current published one-year term rates of the Insurer issuing such insurance coverage, pursuant to the guidelines set forth in Rev. Rul. 66-110 and Rev. Rul. 67-154, or -4- 15 (ii) an amount determined in accordance with the tables set forth in Rev. Rul. 55-747 (called the "PS 58 costs"). 3.4 Upon a Change of Control, Sysco shall, as soon as possible, but in no event longer than ninety days following the Change of Control, as defined herein, make an irrevocable contribution to the Rabbi Trust in an amount equal to the present value, using a 5% interest factor, of the remaining aggregate premiums required to be paid by Sysco on Schedule 1 for each Insurance Policy. The trustee of the Rabbi Trust shall pay future premiums for such Insurance Policy from such contributions and the appreciation and earnings thereon; provided, however, that, should such contributions and appreciation and earnings thereon prove insufficient to pay all of the premiums required by Schedule 1 for such Insurance Policy, Sysco shall remain liable to make such remaining premium payments. 3.5 For purposes of this Agreement, Change of Control shall mean the occurrence of one or more of the following events: (a) Any "person," including a "syndication" or "group" as those terms are used in Section 13(d)(3) of the Securities Act, is or becomes the beneficial owner, directly or indirectly, of securities of Sysco representing 20% or more of the combined voting power of Sysco's then outstanding "Voting Securities" which is any security which ordinarily possesses the power to vote in the election of the Board of Directors of Sysco without the happening of any precondition or contingency; (b) Sysco is merged or consolidated with another corporation and immediately after giving effect to the merger or consolidation either (i) less than 80% of the outstanding Voting Securities of the surviving or resulting entity are then beneficially owned in the aggregate by (x) the stockholders of Sysco immediately -5- 16 prior to such merger or consolidation, or (y) if a record date has been set to determine the stockholders of Sysco entitled to vote on such merger or consolidation, the stockholders of Sysco as of such record date, or (ii) the Board of Directors, or similar governing body, of the surviving or resulting entity does not have as a majority of its members the persons specified in subparagraph (c)(i) and (ii) below; (c) If at any time the following do not constitute a majority of the Board of Directors of Sysco (or any successor entity referred to in subparagraph (b) above): (i) Persons who are directors of Sysco on July 4, 1999; (ii) persons who, prior to their election as a director of Sysco (or successor entity if applicable) were nominated, recommended or endorsed by a formal resolution of the Board of Directors of Sysco; (d) If at any time during a calendar year a majority of the directors of Sysco are not persons who were directors at the beginning of the calendar year; and (e) Sysco transfers substantially all of its assets to another corporation which is a less than 80% owned subsidiary of Sysco. ARTICLE 4 Sysco's Investment 4.1 Sysco's Investment in each Insurance Policy shall be: (a) except as provided in subsection (b) below, the lesser of (1) the cash surrender value of the Insurance Policy and (2) the amounts paid by Sysco as premiums on such Insurance Policy under the provisions of section 3.1 with both (1) and (2) reduced by the amount of any indebtedness which may exist against such -6- 17 Insurance Policy and any unpaid interest on such indebtedness if said indebtedness was incurred after such Insurance Policy becomes subject to the Agreement and with (2) only reduced by the premiums paid by the Trustee with respect to such Insurance Policy under the provisions of section 3.3; (b) at any time upon the death of the last insured, the amounts paid by Sysco as premiums on such Insurance Policy under the provisions of section 3.1 less (1) the amount of any indebtedness which may exist against such Insurance Policy and any unpaid interest on such indebtedness if said indebtedness was incurred after such Insurance Policy becomes subject to this Agreement, and (2) the premiums paid by the Trustee with respect to such Insurance Policy under the provisions of section 3.3. 4.2 The Trustee will collaterally assign the Insurance Policies acquired pursuant to the terms of this Agreement to the Rabbi Trust as evidence of Sysco's Investment. The collateral assignment shall not be altered or changed without the written consent of Sysco. The Rabbi Trust shall have possession of the Insurance Policy during the term of this Agreement; provided, however, that the possessor of the Insurance Policy shall make such Insurance Policy available to the Insurer when it shall be necessary to endorse changes of beneficiary thereon in accordance with the Trustee's right to appoint beneficiaries as provided in this Agreement or to exercise any other rights of the Trustee to such Insurance Policy. 4.3 The rights of Sysco and the Rabbi Trust under the collateral assignment are restricted to (a) assigning Sysco's Investment in the Insurance Policy to the Trustee or the Trustee's designee upon payment of Sysco's Investment, (b) upon the death of the last insured, obtaining that portion of the Insurance Policy death proceeds in an amount equal to Sysco's Investment at such insured's -7- 18 death, and (c) upon surrender of the Insurance Policy, obtaining that portion of the surrender proceeds not in excess of Sysco's Investment. 4.4 Sysco and the Rabbi Trust are prohibited from taking any action that would endanger either the interest of the Trustee or the payment of the proceeds in excess of Sysco's Investment to the beneficiary designated by the Trustee upon the last insured's death. Prior to the termination of this Agreement, Sysco and the Rabbi Trust will not exercise the right to pledge the Insurance Policies, to surrender the Insurance Policies or paid up additions for cancellation or to partially surrender the Insurance Policies, to assign its rights to anyone other than the Trustee or the Trustee's designee, and to borrow against the Insurance Policies even for the purpose of paying premiums unless there has been a default by the Trustee under this Agreement. 4.5 The Trustee has the power to assign all rights of the Trustee in the Insurance Policies and under this Agreement, change the beneficiary designation on each Insurance Policy and exercise settlement options. In the event of an assignment, the assignee shall possess all of the rights and obligations of the Trustee under such Insurance Policy and this Agreement. The Trustee has all rights to the Insurance Policies, not specifically granted to Sysco by this Agreement; provided, however, that the Trustee may not exercise any rights in a manner which would endanger Sysco's Investment. 4.6 Sysco and the Trustee recognize that the investment of Sysco in the Insurance Policies and other assets held in the Rabbi Trust is also subject to the general creditors of Sysco as set forth in the Rabbi Trust. The Trustee and the beneficiaries of the Trust shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Rabbi Trust. Any rights created under the Plan or this Agreement shall be mere unsecured contractual rights of the Trustee and the -8- 19 beneficiaries of the Trust against Sysco. Any assets held by the Rabbi Trust will be subject to the claims of Sysco's general creditors under Federal and state law as specified in the Rabbi trust. 4.7 Any payments of Sysco's Investment in the Insurance Policy pursuant to the collateral assignment shall be first made from Insurance Policy cash values attributable to paid up additional life insurance and purchased by Insurance Policy dividends, if any. The Trustee shall have no interest in paid up additional life insurance protection, if any, except to the extent the death benefit or cash value thereof exceeds Sysco's Investment. ARTICLE 5 Termination This Agreement shall terminate on the happening of any one or more of the following events: (a) Mutual agreement of the parties; (b) Adjudication of Sysco as a bankrupt or a general assignment by Sysco to or for the benefit of creditors or dissolution of Sysco; (c) Surrender of all the Insurance Policies; (d) Payment in full to Sysco at any time of Sysco's Investment, at which time Sysco shall release the collateral assignment; (e) Cessation of Sysco's business; Additionally, Sysco, in its sole discretion, may terminate this Agreement upon any failure of the Trustee to pay premiums to Sysco as provided in section 3.3. With regard to each Insurance Policy, the Agreement shall terminate upon the expiration of the number of years specified on Schedule 1 for such Insurance Policy unless the agreement is otherwise terminated at an earlier date. -9- 20 The termination of employment with Sysco by the Employee for any reason, including the Employee's death, will not terminate this Agreement. ARTICLE 6 Termination of Sysco's Investment 6.1 Upon the death of the last insured, Sysco shall receive from the proceeds of all Insurance Policies payable upon such insured's death the full amount of Sysco's Investment in the death benefits in all such Insurance Policies. The balance of the proceeds of such Insurance Policies shall be paid (a) to the beneficiary designated by the Trustee or (b) if no such beneficiary has been designated, to the Trust. 6.2 In the event of the termination of this Agreement under Article 5 (except as provided in Section (d) of Article 5), the Trustee or the designee of the Trustee shall have ninety days in which to pay Sysco in an amount equal to Sysco's Investment in each affected Insurance Policy. Upon the payment of such an amount, Sysco and the Rabbi Trust shall release the collateral assignment of such Insurance Policies. If the Trustee or the designee of the Trustee does not make such payment to Sysco within such ninety day period, the Trustee may either (a) surrender such Insurance Policy as provided in the collateral assignment, or (b) transfer ownership of such Insurance Policy to Sysco, thereby discharging the obligation of the Trustee to purchase Sysco's Investment in such Insurance Policy and relinquishing all rights of the Trustee to such Insurance Policy under this Agreement. 6.3 Upon the surrender or partial surrender of any Insurance Policy covered by this Agreement or should the Trustee borrow against any Insurance Policy covered by this Agreement, the proceeds received upon such surrender, partial surrender or loan shall be used first to pay Sysco in an amount equal to Sysco's Investment in such Insurance Policy and any excess proceeds shall be paid to the Trust. -10- 21 ARTICLE 7 Insurers The Insurer(s) issuing the Insurance Polices shall not be deemed to be a party to this Agreement for any purpose, nor is the Insurer in any way responsible for its validity or its enforcement. The Insurer shall not be obligated to inquire as to the distribution or application of any monies, payable or paid by the Insurer under the Insurance Policies, if the Insurer makes appropriate payment or otherwise performs its contractual obligations in accordance with the terms of the Insurance Policies. The Insurer shall be bound only by the provisions of the Insurance Policies or an endorsement thereto. Any payments made or actions taken by the Insurer in accordance with such Insurance Policies shall fully discharge the Insurer from liability. ARTICLE 8 Amendments and Miscellaneous 8.1 This Agreement shall not be modified or amended except by a written instrument signed by Sysco and the Trustee. This Agreement shall be binding upon the administrators, assigns and successors of the parties to this Agreement. 8.2 The provisions of this Agreement shall be construed and enforced according to the laws of the State of Texas, except to the extent preempted by federal law. 8.3 This Agreement and the Plan contain the entire contract between the parties and constitute a complete integration of the representations, covenants and promises of the Employee and Sysco. In case of a conflict, express or implied, between the terms of the Plan and this Agreement, the terms of the Plan will govern. -11- 22 8.4 This Agreement is not the basic employment contract between Sysco and the Employee and Sysco reserves the unqualified and unrestricted right to terminate the services of the Employee on exactly the same basis as if this Agreement had never been entered into. 8.5 The Trustee shall have no interest or rights in Sysco's Investment in any Insurance Policy. ARTICLE 9 ERISA Provisions 9.1 Sysco is the named fiduciary of the Plan for purposes of the Employee Retirement Income Security Act of 1974 and shall have the authority to control and manage the operation and administration of the Plan. 9.2 The funding policy of this Plan will be through premium payments to the Insurer as specified in this Agreement. 9.3 The basis of payments from the Plan will consist of payments by the Insurer in accordance with the Insurance Policies. 9.4 Claims for death benefits are established under the Insurance Policy by the Insurer. If for any reason a claim for benefits under the Plan other than death benefits is denied, Sysco shall deliver to the claimant a written explanation setting forth the specific reasons for the denial, pertinent references to the Plan section on which the denial was based, such other data as may be pertinent and information on procedures to be followed by the claimant in obtaining a review of his or her claim, all written in a manner calculated to be understood by the claimant. For this purpose: (a) The claimant's claim shall be deemed filed when presented orally or in writing to Sysco. -12- 23 (b) Sysco's explanation shall be in writing and delivered to the claimant within ninety days of the date the claim is filed. The claimant shall have sixty days following his or her receipt of the denial of the claim to file with Sysco a written request for review of the denial. For such review, the claimant or his or her representative may submit pertinent documents and written issues and comments. Sysco shall decide the issue on review and furnish the claimant with a copy within sixty days of receipt of the claimant's request for review of his or her claim. The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent plan provisions on which the decision is based. If a copy of the decision is not so furnished to the claimant within such sixty days, the claim shall be deemed denied on review. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this _____ day of ________________________, _____. SYSCO CORPORATION, Employer By --------------------------------------- COTROS 1999 FAMILY TRUST, Trust By --------------------------------------- Harry Charles Cotros, Trustee -13- 24 SCHEDULE 1 The Insurance Policy or Insurance Policies covered by the foregoing Split Dollar Life Insurance Agreement between Sysco Corporation and the Employee include the following: 1. Insurer: John Hancock Mutual Life Insurance Company 2. Policy No. ______________________________ 3. Initial Face Amount: $5,000,000 4. Insured(s): Charles H. Cotros and Constance P. Cotros 5. Sysco Premium: $295,000 annually from 1999 through 2004 6. Trustee section 3.3 Reimbursement: from 1999 through 2004 7. Unless terminated earlier under the Agreement, the Agreement will terminate for this Policy on its anniversary date in 2018. 1. Insurer: Pacific Life Insurance Company 2. Policy No. ______________________________ 3. Initial Face Amount: $10,000,000 4. Insured(s): Charles H. Cotros and Constance P. Cotros 5. Sysco Premium: $615,504 annually from 1999 through 2003 6. Trustee section 3.3 Reimbursement: from 1999 through 2003 7. Unless terminated earlier under the Agreement, the Agreement will terminate for this Policy on its anniversary date in 2018. EXECUTED this _____ day of ___________________, __________. SYSCO CORPORATION, Employer By ---------------------------------------------- COTROS 1999 FAMILY TRUST, Trust By ---------------------------------------------- Harry Charles Cotros, Trustee -14- 25 EXHIBIT A SYSCO CORPORATION SPLIT DOLLAR LIFE INSURANCE AGREEMENT This Agreement made and entered into between Sysco Corporation, (the "Employer") and David Brett Lindig and Mark Bradley Lindig, Trustees of the Lindig 1999 Family Trusts. W I T N E S S E T H WHEREAS, Sysco has adopted the Sysco Corporation Split Dollar Life Insurance Plan (the "Plan") which is designed to encourage certain employees to continue in the service of Sysco by offering such employees assistance in providing life insurance protection for the employees' family; and WHEREAS, a Committee (the "Committee") has been established by the Plan to administer the Plan and to designate employees of Sysco who are eligible to participate in the Plan; and WHEREAS, the Committee has selected Bill M. Lindig (the "Employee") to be a participant under the Plan because the services of the Employee, the Employee's experience and knowledge of the affairs of Sysco, and the Employee's reputation and contacts in the industry are extremely valuable to Sysco; and WHEREAS, Sysco desires that the Employee remain in its service and wishes to receive the benefit of the Employee's knowledge, experience, reputation and contacts; and WHEREAS, Sysco is willing to encourage the Employee's continued service to Sysco by joining with the Trustee for the mutual benefit of the parties hereto in an investment of life insurance on the joint lives of the Employee and Bobetta C. Lindig, (the "Employee's spouse") so as to provide life insurance protection for the Employee's family; and 26 WHEREAS, the Trustee will be the owner of the Insurance Policies acquired pursuant to the terms of the Agreement, and Sysco's Investment in the Insurance Policies will be represented by an assignment from the Trustee to Sysco of limited ownership rights in the Insurance Policies; and WHEREAS, this plan is intended to qualify as a life insurance employee benefit plan as described in Revenue Ruling 64-328. NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, Sysco and the Trustee agree as follows: ARTICLE 1 Definitions 1.1 "Agreement" means this agreement, as it may be amended from time to time. 1.2 "Change of Control" is defined in section 3.5. 1.3 "Committee" means the administrative committee under the Plan. 1.4 "Employee" means Bill M. Lindig. 1.5 "Employee's spouse" means Bobetta C. Lindig. 1.6 "Insurance Policies" means the policies or policy shown on the attached Schedule 1, together with any other policies that may be added to the Agreement. 1.7 "Insurer" means an insurance company issuing an Insurance Policy subject to this Agreement. 1.8 "Plan" means the Sysco Corporation Split Dollar Life Insurance Plan. 1.9 "Rabbi Trust" means the Sysco Corporation Split Dollar Life Insurance Trust. 1.10 "Sysco" means Sysco Corporation. 1.11 "Sysco's Investment" means the interest of Sysco in the Insurance Policy as defined in Section 4.1 of the Agreement. -2- 27 1.12 "Trust" means the Lindig 1999 Family Trusts created by that certain instrument dated September 30, 1999, between Bill Milton Lindig and Bobetta Jane Clayton Lindig, as grantors and David Brett Lindig, Mark Bradley Lindig and Chase Manhattan Bank Delaware, as trustees. 1.13 "Trustee" means for the purposes of this Agreement, David Brett Lindig and Mark Bradley Lindig or their successors in office as individual trustees of the Trust. Pursuant to express provisions of the Trust, the individual trustees have the sole authority to execute this Agreement and Chase Manhattan Bank Delaware, the corporate co-trustee, has no such authority. ARTICLE 2 Insurance Policies The Trustee has purchased on behalf of the Trust insurance on the joint lives of the Employee and the Employee's spouse for the benefit and protection of the Employee's family under the Insurance Policy or Insurance Policies shown on the attached Schedule 1 in the face amounts as shown on such schedule. ARTICLE 3 Premium Payments 3.1 Sysco shall pay the required premium specified on Schedule 1 for each Insurance Policy on or before the due date. 3.2 Any dividends attributable to each Insurance Policy shall be applied as Sysco and the Trustee agree by an instrument in writing. 3.3 The Trustee shall pay to Sysco during each year the Insurance Policy is subject to this Agreement and during which Sysco makes a premium payment under section 3.1, an amount equal to the one-year term cost of the insurance protection to which the Trust is entitled under such Insurance Policy pursuant to the terms of this Agreement, including any term insurance rider and any -3- 28 insurance purchased by dividends, and such cost is to be determined under the principles established by applicable U.S. Treasury Department pronouncements, rulings and regulations in effect for determining such costs for insurance protection. The Trustee shall reimburse Sysco for such one-year term cost within a reasonable time after payment of the required premium to the Insurer by Sysco on each Insurance Policy under section 3.1. (a) Until changed by U.S. Treasury Department pronouncements, rulings or regulations, the one-year term cost of insurance protection on a second to die policy on the joint lives of the Employee and the Employee's spouse shall be: (i) With regard to the Pacific Life Insurance Company Policy listed on Schedule 1, the lesser of the following: (y) the current published one-year term rates available to all standard risks of the Insurer issuing such insurance protection, or (z) U.S. Life Table 38. (ii) With regard to the John Hancock Mutual Life Insurance Company Policy listed on Schedule 1, U.S. Life Table 38. (b) Until changed by U.S. Treasury Department pronouncements, rulings or regulations, the one-year term cost of insurance protection on the single life of the Employee or the Employee's spouse (including the single life of the survivor after the death of the first of the Employee and the Employee's spouse to die if the Insurance Policy covers their joint lives), shall be the lesser of the following: -4- 29 (i) the current published one-year term rates of the Insurer issuing such insurance coverage, pursuant to the guidelines set forth in Rev. Rul. 66-110 and Rev. Rul. 67-154, or (ii) an amount determined in accordance with the tables set forth in Rev. Rul. 55-747 (called the "PS 58 costs"). 3.4 Upon a Change of Control, Sysco shall, as soon as possible, but in no event longer than ninety days following the Change of Control, as defined herein, make an irrevocable contribution to the Rabbi Trust in an amount equal to the present value, using a 5% interest factor, of the remaining aggregate premiums required to be paid by Sysco on Schedule 1 for each Insurance Policy. The trustee of the Rabbi Trust shall pay future premiums for such Insurance Policy from such contributions and the appreciation and earnings thereon; provided, however, that, should such contributions and appreciation and earnings thereon prove insufficient to pay all of the premiums required by Schedule 1 for such Insurance Policy, Sysco shall remain liable to make such remaining premium payments. 3.5 For purposes of this Agreement, Change of Control shall mean the occurrence of one or more of the following events: (a) Any "person," including a "syndication" or "group" as those terms are used in Section 13(d)(3) of the Securities Act, is or becomes the beneficial owner, directly or indirectly, of securities of Sysco representing 20% or more of the combined voting power of Sysco's then outstanding "Voting Securities" which is any security which ordinarily possesses the power to vote in the election of the Board of Directors of Sysco without the happening of any precondition or contingency; -5- 30 (b) Sysco is merged or consolidated with another corporation and immediately after giving effect to the merger or consolidation either (i) less than 80% of the outstanding Voting Securities of the surviving or resulting entity are then beneficially owned in the aggregate by (x) the stockholders of Sysco immediately prior to such merger or consolidation, or (y) if a record date has been set to determine the stockholders of Sysco entitled to vote on such merger or consolidation, the stockholders of Sysco as of such record date, or (ii) the Board of Directors, or similar governing body, of the surviving or resulting entity does not have as a majority of its members the persons specified in subparagraph (c)(i) and (ii) below; (c) If at any time the following do not constitute a majority of the Board of Directors of Sysco (or any successor entity referred to in subparagraph (b) above): (i) Persons who are directors of Sysco on July 4, 1999; (ii) persons who, prior to their election as a director of Sysco (or successor entity if applicable) were nominated, recommended or endorsed by a formal resolution of the Board of Directors of Sysco; (d) If at any time during a calendar year a majority of the directors of Sysco are not persons who were directors at the beginning of the calendar year; and (e) Sysco transfers substantially all of its assets to another corporation which is a less than 80% owned subsidiary of Sysco. ARTICLE 4 Sysco's Investment 4.1 Sysco's Investment in each Insurance Policy shall be: -6- 31 (a) except as provided in subsection (b) below, the lesser of (1) the cash surrender value of the Insurance Policy and (2) the amounts paid by Sysco as premiums on such Insurance Policy under the provisions of section 3.1 with both (1) and (2) reduced by the amount of any indebtedness which may exist against such Insurance Policy and any unpaid interest on such indebtedness if said indebtedness was incurred after such Insurance Policy becomes subject to the Agreement and with (2) only reduced by the premiums paid by the Trustee with respect to such Insurance Policy under the provisions of section 3.3; (b) at any time upon the death of the last insured, the amounts paid by Sysco as premiums on such Insurance Policy under the provisions of section 3.1 less (1) the amount of any indebtedness which may exist against such Insurance Policy and any unpaid interest on such indebtedness if said indebtedness was incurred after such Insurance Policy becomes subject to this Agreement, and (2) the premiums paid by the Trustee with respect to such Insurance Policy under the provisions of section 3.3. 4.2 The Trustee will collaterally assign the Insurance Policies acquired pursuant to the terms of this Agreement to a Rabbi Trust established by Sysco as evidence of Sysco's Investment. The collateral assignment shall not be altered or changed without the written consent of Sysco. The Rabbi Trust shall have possession of the Insurance Policy during the term of this Agreement; provided, however, that the possessor of the Insurance Policy shall make such Insurance Policy available to the Insurer when it shall be necessary to endorse changes of beneficiary thereon in accordance with the Trustee's right to appoint beneficiaries as provided in this Agreement or to exercise any other rights of the Trustee to such Insurance Policy. -7- 32 4.3 The rights of Sysco and the Rabbi Trust under the collateral assignment are restricted to (a) assigning Sysco's Investment in the Insurance Policy to the Trustee or the Trustee's designee upon payment of Sysco's Investment, (b) upon the death of the last insured, obtaining that portion of the Insurance Policy death proceeds in an amount equal to Sysco's Investment at such insured's death, and (c) upon surrender of the Insurance Policy, obtaining that portion of the surrender proceeds not in excess of Sysco's Investment. 4.4 Sysco and the Rabbi Trust are prohibited from taking any action that would endanger either the interest of the Trustee or the payment of the proceeds in excess of Sysco's Investment to the beneficiary designated by the Trustee upon the last insured's death. Prior to the termination of this Agreement, Sysco and the Rabbi Trust will not exercise the right to pledge the Insurance Policies, to surrender the Insurance Policies or paid up additions for cancellation or to partially surrender the Insurance Policies, to assign its rights to anyone other than the Trustee or the Trustee's designee, and to borrow against the Insurance Policies even for the purpose of paying premiums unless there has been a default by the Trustee under this Agreement. 4.5 The Trustee has the power to assign all rights of the Trustee in the Insurance Policies and under this Agreement, change the beneficiary designation on each Insurance Policy and exercise settlement options. In the event of an assignment, the assignee shall possess all of the rights and obligations of the Trustee under such Insurance Policy and this Agreement. The Trustee has all rights to the Insurance Policies, not specifically granted to Sysco by this Agreement; provided, however, that the Trustee may not exercise any rights in a manner which would endanger Sysco's Investment. 4.6 Sysco and the Trustee recognize that the investment of Sysco in the Insurance Policies and other assets held in the Rabbi Trust is also subject to the general creditors of Sysco as -8- 33 set forth in the Rabbi Trust. The Trustee and the beneficiaries of the Trust shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Rabbi Trust. Any rights created under the Plan or this Agreement shall be mere unsecured contractual rights of the Trustee and the beneficiaries of the Trust against Sysco. Any assets held by the Rabbi Trust will be subject to the claims of Sysco's general creditors under Federal and state law as specified in the Rabbi trust. 4.7 Any payments of Sysco's Investment in the Insurance Policy pursuant to the collateral assignment shall be first made from Insurance Policy cash values attributable to paid up additional life insurance and purchased by Insurance Policy dividends, if any. The Trustee shall have no interest in paid up additional life insurance protection, if any, except to the extent the death benefit or cash value thereof exceeds Sysco's Investment. ARTICLE 5 Termination This Agreement shall terminate on the happening of any one or more of the following events: (a) Mutual agreement of the parties; (b) Adjudication of Sysco as a bankrupt or a general assignment by Sysco to or for the benefit of creditors or dissolution of Sysco; (c) Surrender of all the Insurance Policies; (d) Payment in full to Sysco at any time of Sysco's Investment, at which time Sysco shall release the collateral assignment; (e) Cessation of Sysco's business; Additionally, Sysco, in its sole discretion, may terminate this Agreement upon any failure of the Trustee to pay premiums to Sysco as provided in section 3.3. -9- 34 With regard to each Insurance Policy, the Agreement shall terminate upon the expiration of the number of years specified on Schedule 1 for such Insurance Policy unless the agreement is otherwise terminated at an earlier date. The termination of employment with Sysco by the Employee for any reason, including Employee's death, will not terminate this Agreement. ARTICLE 6 Termination of Sysco's Investment 6.1 Upon the death of the last insured, Sysco shall receive from the proceeds of all Insurance Policies payable upon such insured's death the full amount of Sysco's Investment in the death benefits in all such Insurance Policies. The balance of the proceeds of such Insurance Policies shall be paid (a) to the beneficiary designated by the Trustee or (b) if no such beneficiary has been designated, to the Trust. 6.2 In the event of the termination of this Agreement under Article 5 (except as provided in Section (d) of Article 5), the Trustee or the designee of the Trustee shall have ninety days in which to pay Sysco in an amount equal to Sysco's Investment in each affected Insurance Policy. Upon the payment of such an amount, Sysco and the Rabbi Trust shall release the collateral assignment of such Insurance Policies. If the Trustee or the designee of the Trustee does not make such payment to Sysco within such ninety day period, the Trustee may either (a) surrender such Insurance Policy as provided in the collateral assignment, or (b) transfer ownership of such Insurance Policy to Sysco, thereby discharging the obligation of the Trustee to purchase Sysco's Investment in such Insurance Policy and relinquishing all rights of the Trustee to such Insurance Policy under this Agreement. 6.3 Upon the surrender or partial surrender of any Insurance Policy covered by this Agreement or should the Trustee borrow against any Insurance Policy covered by this Agreement, -10- 35 the proceeds received upon such surrender, partial surrender or loan shall be used first to pay Sysco in an amount equal to Sysco's Investment in such Insurance Policy and any excess proceeds shall be paid to the Trust. ARTICLE 7 Insurers The Insurer(s) issuing the Insurance Polices shall not be deemed to be a party to this Agreement for any purpose, nor is the Insurer in any way responsible for its validity or its enforcement. The Insurer shall not be obligated to inquire as to the distribution or application of any monies, payable or paid by the Insurer under the Insurance Policies, if the Insurer makes appropriate payment or otherwise performs its contractual obligations in accordance with the terms of the Insurance Policies. The Insurer shall be bound only by the provisions of the Insurance Policies or an endorsement thereto. Any payments made or actions taken by the Insurer in accordance with such Insurance Policies shall fully discharge the Insurer from liability. ARTICLE 8 Amendments and Miscellaneous 8.1 This Agreement shall not be modified or amended except by a written instrument signed by Sysco and the Trustee. This Agreement shall be binding upon the administrators, assigns and successors of the parties to this Agreement. 8.2 The provisions of this Agreement shall be construed and enforced according to the laws of the State of Texas, except to the extent preempted by federal law. 8.3 This Agreement and the Plan contain the entire contract between the parties and constitute a complete integration of the representations, covenants and promises of the Employee -11- 36 and Sysco. In case of a conflict, express or implied, between the terms of the Plan and this Agreement, the terms of the Plan will govern. 8.4 This Agreement is not the basic employment contract between Sysco and the Employee and Sysco reserves the unqualified and unrestricted right to terminate the services of the Employee on exactly the same basis as if this Agreement had never been entered into. 8.5 The Trustee shall have no interest or rights in Sysco's Investment in any Insurance Policy. ARTICLE 9 ERISA Provisions 9.1 Sysco is the named fiduciary of the Plan for purposes of the Employee Retirement Income Security Act of 1974 and shall have the authority to control and manage the operation and administration of the Plan. 9.2 The funding policy of this Plan will be through premium payments to the Insurer as specified in this Agreement. 9.3 The basis of payments from the Plan will consist of payments by the Insurer in accordance with the Insurance Policies. 9.4 Claims for death benefits are established under the Insurance Policy by the Insurer. If for any reason a claim for benefits under the Plan other than death benefits is denied, Sysco shall deliver to the claimant a written explanation setting forth the specific reasons for the denial, pertinent references to the Plan section on which the denial was based, such other data as may be pertinent and information on procedures to be followed by the claimant in obtaining a review of his or her claim, all written in a manner calculated to be understood by the claimant. For this purpose: -12- 37 (a) The claimant's claim shall be deemed filed when presented orally or in writing to Sysco. (b) Sysco's explanation shall be in writing and delivered to the claimant within ninety days of the date the claim is filed. The claimant shall have sixty days following his or her receipt of the denial of the claim to file with Sysco a written request for review of the denial. For such review, the claimant or his or her representative may submit pertinent documents and written issues and comments. Sysco shall decide the issue on review and furnish the claimant with a copy within sixty days of receipt of the claimant's request for review of his or her claim. The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent plan provisions on which the decision is based. If a copy of the decision is not so furnished to the claimant within such sixty days, the claim shall be deemed denied on review. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this _____ day of ________________________, _____. SYSCO CORPORATION, Employer By -------------------------------------- LINDIG 1999 FAMILY TRUSTS, Trust ---------------------------------------- David Brett Lindig, Co-Trustee ---------------------------------------- Mark Bradley Lindig, Co-Trustee -13- 38 SCHEDULE 1 The Insurance Policy or Insurance Policies covered by the foregoing Split Dollar Life Insurance Agreement between Sysco Corporation and the Employee include the following: 1. Insurer: John Hancock Mutual Life Insurance Company 2. Policy No. ______________________________ 3. Initial Face Amount: $13,145,000 4. Insured(s): Bill M. Lindig and Bobetta C. Lindig 5. Sysco Premium: $878,050 annually from 1999 through 2003 6. Trustee section 3.3 Reimbursement: from 1999 through 2003 7. Unless terminated earlier under the Agreement, the Agreement will terminate for this Policy on its anniversary date in 2016. 1. Insurer: Pacific Life Insurance Company 2. Policy No. ______________________________ 3. Initial Face Amount: $6,855,000 4. Insured(s): Bill M. Lindig and Bobetta C. Lindig 5. Sysco Premium: $535,240 annually from 1999 through 2002 6. Trustee section 3.3 Reimbursement: from 1999 through 2002 7. Unless terminated earlier under the Agreement, the Agreement will terminate for this Policy on its anniversary date in 2019. EXECUTED this _____ day of ___________________, __________. SYSCO CORPORATION, Employer By ---------------------------------------------------- LINDIG 1999 FAMILY TRUSTS, Trust ----------------------------------------------------- DAVID BRETT LINDIG, Co-Trustee ----------------------------------------------------- MARK BRADLEY LINDIG, Co-Trustee EX-10.P 7 1ST AMEND.TO 5TH AMENDED SUPP.EXEC.RETIREMENT PLAN 1 EXHIBIT 10(p) FIRST AMENDMENT TO FIFTH AMENDED AND RESTATED SYSCO CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN WHEREAS, by unanimous written consent of the Board of Directors of Sysco Corporation (the "Company"), the Company approved an amendment to the Fifth Amended and Restated Sysco Corporation Supplemental Executive Retirement Plan (the "Plan") as more particularly set forth below; NOW, THEREFORE, the Plan is hereby amended as follows: I. Defined Terms. Initially capitalized terms used in this Amendment which are not otherwise defined by this Amendment are used with the same meaning ascribed to such terms in the Plan. II. Amendment. Section 1.18 of the Plan is amended by deleting such Section 1.18 in its entirety and substituting the following in lieu thereof: "1.18 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." III. Effectiveness. This Amendment shall be effective as of June 29, 1997. IV. Ratification. Except as herein above amended and modified, the Plan shall remain in full force and effect without further modification or amendment. Ratification. 2 IN WITNESS WHEREOF, the Company has caused this First Amendment to be effective as of June 29, 1997 in accordance with Section 9.1 of the Plan and the authority provided by the Board of Directors. SYSCO CORPORATION By: /s/ MICHAEL C. NICHOLS ---------------------------------------- Name: Michael C. Nichols Title: Vice President -2- EX-10.Q 8 1ST AMEND.TO AMENDED EXEC.DEFERRED COMPENSATION 1 EXHIBIT 10(q) FIRST AMENDMENT TO AMENDED AND RESTATED SYSCO CORPORATION EXECUTIVE DEFERRED COMPENSATION PLAN WHEREAS, by unanimous written consent of the Board of Directors of Sysco Corporation (the "Company"), the Company approved an amendment to the Amended and Restated Sysco Corporation Executive Deferred Compensation Plan (the "Plan") as more particularly set forth below; NOW, THEREFORE, the Plan is hereby amended as follows: I. Defined Terms. Initially capitalized terms used in this Amendment which are not otherwise defined by this Amendment are used with the same meaning ascribed to such terms in the Plan. II. Amendment. Section 1.17 of the Plan is amended by deleting such Section 1.17 in its entirety and substituting the following in lieu thereof: "1.17 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." III. Effectiveness. This Amendment shall be effective as of June 29, 1997. IV. Ratification. Except as herein above amended and modified, the Plan shall remain in full force and effect without further modification or amendment. Ratification. 2 IN WITNESS WHEREOF, the Company has caused this First Amendment to be effective as of June 29, 1997 in accordance with Section 9.1 of the Plan and the authority provided by the Board of Directors. SYSCO CORPORATION By: /s/ MICHAEL C. NICHOLS ------------------------------------- Name: Michael C. Nichols Title: Vice President -2- EX-10.R 9 FIRST AMENDMENT TO 1995 MANAGEMENT INCENTIVE PLAN 1 EXHIBIT 10(r) FIRST AMENDMENT TO SYSCO CORPORATION 1995 MANAGEMENT INCENTIVE PLAN WHEREAS, by unanimous written consent of the Board of Directors of Sysco Corporation (the "Company"), the Company approved an amendment to the Sysco Corporation 1995 Management Incentive Plan (the "Plan") as more particularly set forth below; NOW, THEREFORE, the Plan is hereby amended as follows: I. Defined Terms. Initially capitalized terms used in this Amendment which are not otherwise defined by this Amendment are used with the same meaning ascribed to such terms in the Plan. II. Amendment. 1. Section 1 of the Plan is amended by deleting the first sentence of such Section 1 in its entirety and substituting the following in lieu thereof: "The purpose of the Plan is to reward (i) certain key management personnel for outstanding performance in the management of the divisions or Subsidiaries (as hereinafter defined) of the Company and (ii) certain corporate personnel for managing the operations of the Company as a whole and/or managing the operations of certain Subsidiaries (as hereinafter defined). For purposes of the Plan, the term "Subsidiary" means (a) any corporation which is a member of a "controlled group of corporations" which includes the Company, as defined in Code Section 414(b), (b) any trade or business under "common control" with the Company, as defined in Code Section 414(c), (c) any organization which is a member of an "affiliated service group" which includes the Company, as defined in Code Section 414(m), (d) any other entity required to be aggregated with the Company 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." 2. Section 4 of the Plan is amended by deleting the first sentence of such Section 4 and substituting the following in lieu thereof: 2 "The bonus which a Participant can earn is based (i) on the performance of the Company as a whole and (ii) (A) (as to Subsidiary Participants and possibly Designated Participants) either the performance of the Subsidiary which employs such Participant or the performance of the Subsidiary designated by the Plan Compensation Committee as the Subsidiary by reference to which the bonus is to be determined and (B) (as to Corporate and possibly Designated Participants) the performance of a select group of Subsidiaries, subject to the discretion of the Plan Compensation Committee to formulate a different bonus structure as to any Participant, other than Senior Executive Participants." 3. Paragraph (A) of Section 4 is amended by deleting the first paragraph of such Paragraph (A) of Section 4 and substituting the following in lieu thereof: "With respect to each Subsidiary Participant and each Senior Executive Participant who would be a Subsidiary Participant but for the application of the Executive Compensation Provisions, a portion of the bonus may depend upon the return on capital and/or increase in pretax earnings of the Subsidiary employing such Participant or the Subsidiary designated by the Plan Compensation Committee as the Subsidiary by reference to which the bonus is to be determined; a portion of the bonus may depend upon the return on stockholder's equity and increase in earnings per share of the Company as a whole; and a portion of the bonus may depend upon any one or more of the following performance factors: (i) sales of the Company and/or one or more Subsidiaries, (ii) pretax earnings of the Company, (iii) net earnings of the Company and/or one or more Subsidiaries, (iv) control of operating and/or nonoperating expenses of the Company and/or one or more Subsidiaries, (v) margins of the Company and/or one or more Subsidiaries, (vi) market price of the Company's securities, and (vii) other objectively measurable factors directly tied to the performance of the Company and/or one or more Subsidiaries. The relative weights of the factors considered and the percentages of the total bonus comprised by the portion of the bonus determined with respect to the Subsidiary employing the Participant or the Subsidiary designated by the Plan Compensation Committee as the Subsidiary by reference to which the bonus is to be -2- 3 determined and the portion of the bonus determined with respect to the Company shall be determined by the Plan Compensation Committee in its sole discretion. Notwithstanding the foregoing, the Plan Compensation Committee may alter the bonus formula with respect to any such Participant by changing the performance targets as determined in the sole discretion of the Committee." III. Effectiveness. This Amendment shall be effective as of June 29, 1997. IV. Ratification. Except as herein above amended and modified, the Plan shall remain in full force and effect without further modification or amendment. IN WITNESS WHEREOF, the Company has caused this First Amendment to be effective as of June 29, 1997 in accordance with Section 9 of the Plan and the authority provided by the Board of Directors. SYSCO CORPORATION By: /s/ MICHAEL C. NICHOLS ------------------------------------- Name: Michael C. Nichols Title: Vice President -3- EX-15 10 LETTER FROM ARTHUR ANDERSEN LLP 1 Exhibit 15 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors and Shareholders of Sysco Corporation: We have reviewed the consolidated balance sheets of Sysco Corporation (a Delaware corporation) and its subsidiaries as of January 1, 2000, and December 26, 1998 and the related consolidated results of operations for the twenty-six and thirteen week periods then ended and consolidated cash flows for the twenty-six week periods then ended included in the Company's Quarterly Report on Form 10-Q. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with generally accepted accounting principles. /s/ Arthur Andersen LLP Houston, Texas February 10, 2000 EX-27 11 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from Item 1. Financial Statements and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS JUL-1-2000 JAN-1-2000 $95,851 0 1,482,986 38,903 961,846 2,576,098 2,411,777 1,146,457 4,418,463 1,554,788 1,132,976 0 0 382,587 1,118,865 4,418,463 9,308,569 9,308,569 7,565,198 8,971,049 (1,565) 13,052 34,624 337,520 129,945 207,575 0 0 8,041 199,534 0.61 0.60
EX-99.1 12 PRESS RELEASE, DATED FEBRUARY 14, 2000 1 EXHIBIT 99.1 SYSCO [LOGO] - ------------------------------------------------------------------------------- SYSCO Corporation NEWS RELEASE 1390 Enclave Parkway Houston, Texas 77077-2099 (281) 584-1390 FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT: Toni R. Spigelmyer Assistant Vice President Investor and Media Relations SYSCO FILES SHELF REGISTRATION FOR 2,850,000 SHARES HOUSTON, FEBRUARY 14, 2000 - SYSCO Corporation (NYSE: SYY) announced today that it has filed with the Securities and Exchange Commission a shelf registration covering 2,850,000 shares of common stock to be offered from time to time in connection with acquisitions. Charles H. Cotros, president and chief executive officer of SYSCO Corporation, said, "SYSCO has closed or announced six acquisitions in fiscal 2000 for varying combinations of stock and cash. Since the company continues to seek attractive acquisition candidates, this filing will provide SYSCO with greater flexibility in structuring and closing future transactions." SYSCO is the largest foodservice marketing and distribution organization in North America, generating annualized sales in excess of $18.5 billion based on first half fiscal 2000 results. The company provides food and services to approximately 325,000 customers including restaurants, healthcare and educational institutions, lodging facilities and other foodservice operations. The SYSCO distribution network currently extends throughout the entire contiguous United States and Alaska as well as portions of Canada. For the first half of fiscal 2000, which ended January 1, 2000, the company reported sales of $9.3 billion and net earnings of $199.5 million. THIS INFORMATION WAS FURNISHED ON BEHALF OF SYSCO, ITS BOARD OF DIRECTORS AND MANAGEMENT. PLEASE READ SYSCO'S REGISTRATION STATEMENT ON FORM S-4 AND THE DOCUMENTS INCORPORATED BY REFERENCE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION SINCE THEY CONTAIN IMPORTANT INFORMATION CONCERNING SYSCO'S COMMON STOCK AND THE TERMS OF THE SHELF OFFERING. THE REGISTRATION STATEMENT AND RELATED DOCUMENTS ARE PUBLICLY AVAILABLE. YOU CAN READ A COPY OF SYSCO'S REGISTRATION STATEMENT AND ITS OTHER SEC FILINGS FOR FREE AT THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include statements regarding annualized sales and acquisitions. These statements involve risks and uncertainties and are based on current expectations and management's estimates; actual results may differ materially. Those risks and uncertainties that could impact these statements include the risks relating to the foodservice distribution industry's relatively low profit margins and sensitivity to economic conditions, SYSCO's leverage and debt risks, the risk of exposure to product liability claims, the risk of interruption of supplies due to lack of long-term contracts, work stoppages or otherwise, the inability to find or complete attractive acquisitions and other risk factors detailed in SYSCO's Form 10-K for the fiscal year ended July 3, 1999 filed with the Securities and Exchange Commission. # # # -----END PRIVACY-ENHANCED MESSAGE-----