[Form Agreement for Senior
Vice Presidents of Operations]
FISCAL YEAR 2007
2005 MANAGEMENT INCENTIVE PLAN
BONUS AGREEMENT
This SYSCO
CORPORATION FISCAL YEAR 2007 MANAGEMENT INCENTIVE PLAN BONUS
AGREEMENT (this “ Agreement ”) was
adopted by the Plan Committee pursuant to the Sysco Corporation
2005 Management Incentive Plan (the “ Plan
”) (a copy of which is attached as
Exhibit 1 ) and agreed to by the Company and
__________(“ Executive ”) effective
__________, 2006. This Agreement is effective for the fiscal year
ending June 30, 2007 (the “ Plan Year
”). Capitalized terms used but not otherwise defined herein
shall have the meanings given them in the Plan.
1.
Calculation of Bonus . Subject to the further
adjustments, limitations and additions provided for in the Plan and
this Agreement, Executive’s bonus under the Plan for the Plan
Year shall be based on a combination of the performance of
(a) the Company as a whole (a “ Company
Performance Bonus ”); (b) aggregate performance
of the Operating Companies supervised by Executive (“
Supervised Operations ”) (a “
Supervised Operations Performance Bonus ”), and
(c) one or more Operating Companies as designated by the Plan
Committee (an “ OpCo Performance Bonus
”). Executive’s bonus under this Agreement shall be
equal to the sum of Executive’s Company Performance Bonus,
Supervised Operations Performance Bonus and OpCo Performance Bonus
calculated as follows:
(a)
Calculation of Company Performance Bonus . Subject to the
further adjustments and additions provided for in the Plan and this
Agreement Executive’s Company Performance Bonus for the 2007
fiscal year shall be equal to the sum of the following:
(i) the product of: (A) 50% of Executive’s annual
base salary in effect at the fiscal year end; and (B) 70% of
the Table B Percentage; and (ii) the product of:
(A) Executive’s MIP Salary; and (B) 20% of the
Table B Percentage; provided that Executive will not be entitled to
the portion of Executive’s Company Performance Bonus
calculated as provided in clause (ii) above unless Executive
receives a Supervised Operations Performance Bonus calculated as
provided in Section 1(b); provided further that Executive will
not be entitled to a Company Performance Bonus (calculated under
either clause (i) or (ii) above) unless the Company
achieves an Increase in Earnings Per Share of at least ___% and a
Return on Stockholder’s Equity of at least ___%.
(b)
Calculation of Supervised Operations Performance Bonus .
Subject to the further adjustments and additions provided for in
the Plan and this Agreement Executive’s Supervised Operations
Performance Bonus shall be calculated based on the aggregate
performance of Executive’s Supervised Operations as if such
Supervised Operations were a single Operating Company which has
achieved such aggregated financial results. Executive’s
Supervised Operations Performance Bonus shall equal the product of:
(i) the sum of: (A) 70% of the Table A Operating Pretax
Earnings Percentage with respect to the Supervised Operations; and
(B) 30% of the Table A Pretax Earnings Percentage with respect
to the Supervised Operations; and (ii) 70% of
Executive’s MIP Salary. Notwithstanding the foregoing,
Executive will be entitled to a Supervised Operations Performance
Bonus only if Executive’s Supervised Operations achieves (on
an aggregate basis) a Return on Capital of at least 20% and either
(i) an Increase in Operating Pretax Earnings of at least ___%
or (ii) an Increase in Pretax Earnings of at least
___%.
(c)
Calculation of OpCo Performance Bonus . Subject to the
further adjustments and additions provided for in the Plan and this
Agreement Executive’s OpCo Performance Bonus will be
calculated by determining the number of Operating Companies of the
Company that have attained a Return on Capital of at least ___%
(the “ ROC Target ”). If at least 20
Operating Companies have attained or exceeded the ROC Target, and
all Operating Companies which have obtained or exceeded the ROC
Target employ at least 50% or more of the aggregate of the Total
Capital of all Operating Companies, then Executive will be entitled
to receive an OpCo Performance Bonus equal to the product of:
(i) the sum of (A) 9% for the first 20 Operating
Companies which obtain or exceed the ROC Target; and
(B) 1 1
/ 2 % of for
each additional Operating Company which obtains or exceeds the ROC
Target; and (ii) 50% of Executive’s annual base salary
in effect at the fiscal year end. By way of example, if 23
Operating Companies (which, in the aggregate, employ 51% of the
Total Capital of all Operating Companies) obtain or exceed the ROC
Target, Executive will receive an OpCo Performance Bonus equal to
the product of (i) 50% of Executive’s base salary in
effect at the fiscal year end and (ii) 13.5 % (the sum of 9%
for the first 20 Operating Companies obtaining or exceeding the ROC
Target, and 4.5% for the performance of the additional
three
Operating
Companies in excess of 20 obtaining or exceeding the ROC Target).
Notwithstanding the foregoing, Executive will be entitled to an
OpCo Performance Bonus only if the Company achieves a minimum
Increase in Earnings Per Share of ___% and a minimum Return on
Stockholder’s Equity of ___%.
(d)
General Rules Regarding Bonus Calculation .
(i)
Consistent Accounting . In determining whether or not
Executive is entitled to a bonus under this Agreement, the
Company’s accounting practice and generally accepted
accounting principles shall be applied on a basis consistent with
prior periods, and such determination shall be based on the
calculations made by the Company, approved by the Plan Compensation
Committee and binding on Executive. Notwithstanding the foregoing,
if there is any material change in GAAP during the Plan Year that
results in a material change in accounting for the revenues or
expenses of the Company the calculations of the Table A and Table B
Percentages for the Plan Year (the “ GAAP Change
Year ”) shall be made as if such change in GAAP had
not occurred during the GAAP Change Year. In determining the Table
A and Table B Percentages for Executive in the year following the
GAAP Change Year, the calculation shall be made after taking into
account such change in GAAP.
(ii)
No Limit on Bonus . Except as otherwise provided in this
Section 1(d)(ii), there is no limit to the bonus that can be
obtained under the Plan or this Agreement. Although Tables A and B
have only been calculated to 370% and 172%, respectively, the
“grids” shall be deemed to continue to increase in the
same ratios as set forth. However, notwithstanding the foregoing
and any other provision in this Agreement to the contrary,
Executive’s bonus amount for the Plan Year including, if
applicable, the value of any Additional Shares and Additional Cash
Bonus) cannot exceed 1% of the Company’s earnings before
income taxes as publicly disclosed in the “Consolidated
Results of Operations” section of the Company’s annual
report to the Securities and Exchange Commission on Form 10-K for
the Plan Year.
(iii)
Tax Law Changes . If the Internal Revenue Code is amended
during the fiscal year and, as a result of such amendment(s), the
effective tax rate applicable to the earnings of the Company (as
described in the “Summary of Accounting Policies”
section of the Company’s annual report to the Securities and
Exchange Commission on Form 10-K) changes during the year, the
calculation of the net after-tax earnings per share of the Company
for the Plan Year shall be made as if such rate change had not
occurred during the Plan Year.
2.
Extraordinary Events . If, during the Plan Year, the Company
experiences an Extraordinary Event or Events that results in the
Company recognizing a net-after tax gain with respect to such
Extraordinary Event or Events (an “ Extraordinary
Gain ”), the Plan Committee may reduce the Company
Performance Bonus payable to Executive under this Agreement in its
sole and absolute discretion; provided however, that the Plan
Committee may not reduce the Company Performance Bonus payable to
Executive to an amount less than the Company Performance Bonus
Executive would have earned if the Company did not include the
Extraordinary Gain in the calculation of the Company Performance
Bonus for the Plan Year.
3.
Payment . Within 90 days following the end of each
fiscal year, the Company shall determine and the Pl
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