Exhibit 10.46
EXECUTION COPY
TRANSITION AND EARLY RETIREMENT AGREEMENT
THIS TRANSITION AND EARLY RETIREMENT
AGREEMENT (the “ Agreemen t”) is entered into by
and between SYSCO Corporation, a Delaware corporation (the “
Company ”) and LARRY J. ACCARDI, a resident of the
state of Texas (“ Executive ’’), as of the
Effective Date of the Agreement, as defined below.
W I T N E S S E T H :
WHEREAS, Executive and Company are
parties to that certain Executive Severance Agreement dated
August 18, 2004, as amended by that certain First Amendment to
Executive Severance Agreement dated September 3, 2004 (as
amended, the “ Severance Agreement ”), a copy of
which is attached hereto;
WHEREAS, Executive has indicated his
intention to retire from his employment with the Company as of the
close of business on December 31, 2007 (the “
Retirement Date ”);
WHEREAS, the parties hereby wish to
memorialize their agreement with respect to Executive’s
retirement and to clarify his duties until his retirement;
and
NOW, THEREFORE, in consideration of
the foregoing and the mutual promises contained herein and for
other good and valuable consideration, the receipt, adequacy and
sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Executive’s Duties
and Early Retirement .
(a) Subject
to Section 1(d) below, Executive shall continue to serve in the
positions of Executive Vice President, Contract Sales, and
President, Specialty Distribution Companies through June 30,
2007.
(b) Subject
to Section 1(d) below, during the period from July 1, 2007
through the Retirement Date, Executive shall serve in the position
of Executive Vice President, Sales and shall report directly to the
Chief Executive Officer of the Company. In this position, Executive
shall perform such tasks as may be requested by the Company’s
Chief Executive Officer and the Company’s Board of Directors.
Executive shall continue to receive his base salary and all other
benefits as are in effect as of the date of the execution of this
Agreement and shall remain a participant in the Company’s
Management Incentive Plan (“ MIP ”) through the
Retirement Date, specifically including eligibility for bonuses and
equity awards payable under the MIP on the same basis as similarly
situated executives of the Company.
(c) Subject
to Section 1(d) below, Executive shall be deemed to have resigned
as of the close of business on the Retirement Date without any
further action required by Executive or the Company.
Executive’s resignation shall be deemed to be a retirement in
good standing for all purposes, including, without limitation, for
the purpose of determining Executive’s rights under the
Company’s benefit plans.
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(d) Notwithstanding
anything herein to the contrary, Executive may be terminated by the
Company for “cause” at any time before the close of
business on the Retirement Date. For the purpose of this Agreement,
“ cause ” is defined as any of the following
events: (1) a material breach by Executive of
Executive’s duties and/or responsibilities to the Company or
of any written policies or directives of the Company (other than as
a result of incapacity due to physical or mental illness), which
breach is (a) willful or involves gross negligence and
(b) not remedied within 15 days after receipt of written
notice from the Company which specifically identifies the manner in
which such breach has occurred; (2) the commission by
Executive of any felony or misdemeanor involving willful misconduct
(other than minor violations such as traffic violations) that
causes damage to the property, business or reputation of the
Company; (3) any fraudulent or dishonest act or omission by
Executive; (4) Executive’s engaging in habitual
insobriety or Executive’s use of illegal drugs or substances;
or (5) any breach by Executive of his fiduciary duties and/or
duty of loyalty owed to the Company. Any “cause” event
shall be determined in the good faith discretion of the
Compensation Committee of the Board of Directors of the Company and
shall be described in writing to Executive in reasonable detail. In
the event that Executive is terminated for “cause”,
Executive shall not be entitled to receive the enhanced
consideration provided in Sections 1, 2(a) and 3(a) of
Exhibit A to this Agreement.
2. Termination of the
Severance Agreement .
Company and Executive hereby agree
that the Severance Agreement (including all rights and obligations
contained therein) is hereby terminated as of the Effective
Date.
3. Allocation of Specific
Consideration .
(a) In
express exchange for the enhanced consideration provided in
Sections 1, 2(a) and 3(a) of Exhibit A to this
Agreement, Executive is providing the specific covenants and
agreements contained in Sections 11 through 15 of this
Agreement. These covenants and agreements are in addition to, and
are not in lieu of, any similar covenants and agreements provided
by Executive as a result of his participation in any benefit plan
or program maintained by the Company, including, without
limitation, the Company’s Supplemental Executive Retirement
Plan (“ SERP ”), Executive Deferred Compensation
Plan (“ EDCP ”) and any Stock Option Plan of the
Company (“ Stock Option Plan ”).
(b) In
exchange for all other consideration set forth in this Agreement,
the parties have agreed to the transition of Executive’s
duties as set forth in Section 1 above, to cancel all rights
and obligations contained in the Severance Agreement, and to
provide the releases set forth in Sections 5 and 6
below.
4. Acknowledgment of OWBPA
Rights .
Executive acknowledges that he has
thoroughly discussed all aspects of this Agreement with his
attorney, that he has carefully read and fully understands all of
the provisions of this Agreement, and that he is voluntarily
entering into this Agreement. Executive shall have twenty-one
(21) days to review and consider this Agreement before
executing it, but may waive this
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twenty-one (21) day period at his own voluntary election.
Executive acknowledges and understands that he shall have seven
(7) days after signing this Agreement during which he may
revoke this Agreement by providing written notice to Company within
seven (7) days following its execution. Any notice of
revocation of this Agreement shall not be effective unless given in
writing and received by Company within the seven-day revocation
period via personal delivery, overnight courier, or certified U.S.
mail, return receipt requested, to SYSCO Corporation, 1390 Enclave
Parkway, Houston, TX 77077-2099, Attention: General Counsel. THIS
AGREEMENT SHALL NOT BECOME EFFECTIVE AND ENFORCEABLE UNTIL SUCH
SEVEN (7) DAY PERIOD HAS EXPIRED. IF EMPLOYEE REVOKES THIS
AGREEMENT WITHIN SUCH SEVEN (7) DAY PERIOD, EMPLOYEE WILL NOT
BE ENTITLED TO RECEIVE ANY OF THE RIGHTS AND BENEFITS DESCRIBED
HEREIN.
5. Release of Claims by
Executive; Release of Company Claims by Company .
In exchange for the consideration
referenced in Section 3(b) above, the receipt and sufficiency of
which is hereby acknowledged, Executive, on his behalf and on
behalf of his heirs, devisees, legatees, executors, administrators,
personal and legal representatives, assigns and successors in
interest (collectively, the “ Derivative Claimants
” and each a “ Derivative Claimant ”),
hereby IRREVOCABLY, UNCONDITIONALLY AND GENERALLY RELEASES,
ACQUITS, AND FOREVER DISCHARGES, to the fullest extent permitted by
law, Company and each of Company’s directors, officers,
employees, representatives, stockholders, predecessors, successors,
assigns, agents, attorneys, divisions, subsidiaries and affiliates
(and agents, directors, officers, employees, representatives and
attorneys of such stockholders, predecessors, successors, assigns,
divisions, subsidiaries and affiliates), and all persons acting by,
through, under or in concert with any of them (collectively, the
“ Releasees ” and each a “ Releasee
”), or any of them, from any and all charges, complaints,
claims, damages, actions, causes of action, suits, rights, demands,
grievances, costs, losses, debts, and expenses (including
attorneys’ fees and costs incurred), of any nature
whatsoever, known or unknown, that Executive now has, owns, or
holds, or claims to have, own, or hold, or which Executive at any
time heretofore had, owned, or held, or claimed to have, own, or
held from the beginning of time to the date that Executive signs
this Agreement, including, but not limited to, those claims arising
out of or relating to (i) any agreement, commitment, contract,
mortgage, deed of trust, bond, indenture, lease, license, note,
franchise, certificate, option, warrant, right or other instrument,
document, obligation or arrangement, whether written or oral, or
any other relationship, involving Executive and/or any Releasee,
(ii) breach of any express or implied contract, breach of
implied covenant of good faith and fair dealing, misrepresentation,
interference with contractual or business relations, personal
injury, slander, libel, assault, battery, negligence, negligent or
intentional infliction of emotional distress or mental suffering,
false imprisonment, wrongful termination, wrongful demotion,
wrongful failure to promote, wrongful deprivation of a career
opportunity, discrimination (including disparate treatment and
disparate impact), hostile work environment, sexual harassment,
retaliation, any request to submit to a drug or polygraph test,
and/or whistleblowing, whether said claim(s) are brought pursuant
to Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, 42 U.S.C. § 1981, the Employee Retirement Income
Security Act, the Equal Pay Act, the National Labor Relations Act,
the Pregnancy Discrimination Act, the Fair Labor Standards Act, the
Age Discrimination in Employment Act, the Older Workers’
Benefits Protection Act, the Vocational Rehabilitation Act, the
Americans
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with
Disabilities Act, the Family and Medical Leave Act and/or the Fair
Credit Reporting Act or any other constitutional, federal,
regulatory, state or local law, or under the common law or in
equity, and (iii) any other matter (each of which is referred
to herein as a “ Claim ”). Notwithstanding the
foregoing, nothing contained herein shall operate to release any
obligations of Company, its successors or assigns: (i) that
relates to amounts or benefits set forth on Exhibit A ,
(ii) any amounts or benefits payable under any benefit plan
that are otherwise payable without regard to this Agreement
(subject to the terms and conditions of such plans), or
(iii) to defend and indemnify Executive to the maximum extent
that directors and officers of corporations are required to be
indemnified under Delaware law and the Company’s Certificate
of Incorporation and Bylaws for all costs of litigation and any
judgment or settlement amount paid.
In consideration of the covenants
from Executive to Company as set forth herein, the receipt and
sufficiency of which is hereby acknowledged, the Company, its
assigns and successors in interest, hereby IRREVOCABLY,
UNCONDITIONALLY AND GENERALLY RELEASES, ACQUITS, AND FOREVER
DISCHARGES, to the fullest extent permitted by law, Executive, his
heirs, devisees, legatees, executors, administrators, personal and
legal representatives, or any of them, from any and all charges,
complaints, claims, damages, actions, causes of action, suits,
rights, demands, grievances, costs, losses, debts and expenses
(including attorneys’ fees and costs incurred), of any nature
whatsoever (a “ Company Claim ”), arising prior
to the Effective Date out of events, occurrences or omissions
actually known by the Chief Executive Officer and/or the General
Counsel of the Company on the Effective Date.
6. Release of Unknown Claims
by Executive .
Executive recognizes that he may have
some claim, demand, or cause of action against the Releasees
relating to any Claim of which he is totally unaware and
unsuspecting and which is given up by the execution of this
Agreement. It is Executive’s intention in executing this
Agreement, having received the advice of legal counsel, that this
Agreement will deprive him of any such Claim and prevent Executive
or any Derivative Claimant from asserting the same. The provisions
of any local, state, federal, or foreign law, statute, or judicial
decision providing in substance that this Agreement shall not
extend to such unknown or unsuspecting claims, demands, or damages,
are hereby expressly waived.
7. No Assignment .
Executive represents and warrants
that he has not assigned or transferred, or purported to assign or
transfer, to any person, entity, or individual whatsoever, any of
the Claims released herein. Executive agrees to indemnify and hold
harmless the Releasees against any losses, settlements, judgments,
defense costs or other amounts incurred in response to any Claim,
based on, arising out of, or due to any such assignment or
transfer. With respect to any Claim that is subject to
indemnification, the Releasees retain the right to control the
defense of any Claim and to resolve any such Claim upon securing
Executive’s written consent to the proposed resolution, which
consent shall not unreasonably be withheld.
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8. Hold Harmless .
In furtherance of the foregoing,
Executive agrees on behalf of himself and the Derivative Claimants
not to sue or prosecute any matter against any Releasee with
respect to any Claim and agrees to hold each Releasee harmless with
respect to any such suit or prosecution in contravention of this
Section 8. The Company agrees on behalf of itself and its
successors and assigns not to sue or prosecute any matter against
Executive with respect to any Company Claim arising prior to the
Effective Date out of events, occurrences or omissions actually
known to the Chief Executive Officer and/or the General Counsel of
the Company on the Effective Date and agrees to hold Executive
harmless with respect to any such suit or prosecution in
contravention of this Section 8.
9. No Assistance .
Executive understands that if this
Agreement were not signed, he would have the right voluntarily to
assist other individuals or entities in bringing Claims against the
Releasees. Executive hereby waives that right and hereby agrees
that he will not voluntarily provide any such assistance absent
compulsion of law. To the extent that applicable law prohibits
Executive from waiving his right to bring and/or participate in the
investigation of a Claim, Executive nevertheless agrees that the
release provided in Section 5 above encompasses his right to
seek or accept any damages or relief in any such proceeding.
10. Restrictive
Covenants .
In express exchange for the
consideration provided in Sections 1, 2(a) and 3(a) of
Exhibit A to this Agreement, and following the negotiation
of parties with equal bargaining power, Executive is providing each
of the covenants and agreements contained in Sections 11
through 15 of this Agreement. With respect to these covenants and
agreements, the following definitions shall apply:
(a)
“Trade Secrets” shall mean information not generally
known about the Company Business which is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy
or confidentiality and from which the Company derives economic
value from the fact that the information is not generally known to
other persons who can obtain economic value from its disclosure or
use. Trade Secrets include, but are not limited to, technical or
non-technical data, compilations, programs and methods, techniques,
processes, financial data, lists of actual customers and potential
customers, customer route books or lists containing the names,
addresses, buying habits and business locations of past, present
and prospective customers, sales reports, price lists, product
formulae, methods and procedures relating to services.
(b)
“Confidential Information” means, to the extent not a
“Trade Secret,” other business information of the
Company not generally known to the public and which the Company
desires and makes reasonable efforts to keep confidential,
including without limitation the following: information regarding
customers, employees, contractors, and the industry not
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generally known to the public; strategies, methods, books, records,
and documents; technical information concerning products,
equipment, services, and processes; procurement procedures and
pricing techniques; the names of and other information concerning
customers, and business affiliates (such as contact name, service
provided, pricing for that customer, amount of services used,
credit and financial data, and/or other information relating to the
Company’s relationship with that customer); pricing
strategies and price curves; positions; plans and strategies for
expansion or acquisitions; budgets; customer, supplier and broker
lists; research; financial and sales data; trading methodologies
and terms; evaluations, opinions, and interpretations of
information and data; marketing and merchandising techniques and
strategies; prospective customers’ and suppliers’ names
and marks; grids and maps; electronic databases; models;
specifications; computer programs; internal business records;
contracts benefiting or obligating the Company; bids or proposals
submitted to any third party; technologies and methods; training
methods and training processes; organizational structure; salaries
of personnel; payment amounts or rates paid to consultants or other
service providers; and other such confidential or proprietary
information.
(c)
“Company” shall mean Sysco and all of its operating
company subsidiaries and divisions.
(d)
“Company Business” shall mean the manufacturing,
distribution and/or sale of the food or related nonfood products
(including, without limitation, paper products, such as disposable
napkins, plates and cups, tableware, such as china and silverware,
restaurant and kitchen equipment and supplies, medical and surgical
supplies, cleaning supplies, and personal care guest amenities,
housekeeping supplies, room accessories and hotel and motel
textiles) distributed by the Company and/or its operating companies
as of Executive’s execution of this Agreement to restaurants,
healthcare and educational facilities, lodging establishments or
other similar customers. The parties hereto agree that, by virtue
of his duties and responsibilities over Sysco and its operating
companies, including the duties set forth in Section 1 above,
Executive is fully familiar with the full range of that are
manufactured, distributed and/or sold as part of the Company
Business.
(e)
“Competing Business” shall mean any person, concern or
entity which is engaged in or conducts a business that is
substantially the same as the Company Business or any segment
thereof and only that portion of the business that is in
competition with the Company Business.
(f)
“Territory” shall mean: (1) a 100-mile radius
around each of the physical locations (determined by mailing
address) where the Company has a Specialty Distribution Company as
of Executive’s execution of this Agreement; and (2) all
counties in which any division or operating company of the Company
over which Executive has responsibility in his positions as
Executive Vice President, Contract Sales and President, Specialty
Distribution Companies has served customers at any time during the
twelve (12) month period prior to the date on which Executive
signs this Agreement. Executive hereby agrees that, by virtue of
his authority in these positions, he has had the opportunity, and
will continue to have the opportunity, to enjoy particular
advantages in all areas included within the Territory and that he
has been responsible for cultivating
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business
relationships throughout the Territory that provide unique
competitive advantage to the Company.
11. Agreement to Protect
Confidential Information and Trade Secrets .
(a) Executive
covenants and agrees that he will not at any time, other than in
the performance of his duties for the Company, both during and
after his employment by the Company, communicate or disclose to any
person or entity, or use for his benefit or for the benefit of any
other person or entity, directly or indirectly, any of the
Company’s Trade Secrets and/or Confidential Information. For
the purposes of this Agreement, the prohibition against the
disclosure of Confidential Information only shall end three
(3) years after the termination, for any reason, of
Executive’s employment with the Company. The disclosure of
Trade Secrets by the Executive is prohibited for the life of the
Executive, or until the Trade Secret information becomes publicly
available through no fault of the Executive.
(b) Executive
moreover acknowledges and confirms that he has no right, claim or
interest to any property, invention, trade secret, information or
other asset used in the business of Company and that all such
property, inventions, trade secrets, information and other assets
used in the business of Company are owned by Company or its
affiliates or licensed to Company or its affiliates by third
parties not affiliated with Executive.
12. Agreement Not to Solicit
Customers and Suppliers .
Executive recognizes that developing
customers and suppliers on behalf of the Company takes substantial
time, money and personal contact. Executive further acknowledges
that Trade Secrets, Confidential Information and the
Company’s relationships with its customers and suppliers are
the foundation of the Company’s business. Executive covenants
and agrees that during his employment by the Company and for a
period of three (3) years after the termination, for any
reason, of Executive’s employment with the Company, he will
not, without the prior written consent of the Company, either
directly or indirectly, on his own behalf or in the service of or
on behalf of others, solicit, or attempt to divert or appropriate
to a Competing Business any customer or supplier with whom
Executive dealt on behalf of the Company at any time during the
last two (2) years of Executive’s employment with the
Company.
13. Agreement Not to
Compete .
Executive covenants and agrees that
during his employment by the Company and for a period of three
(3) years after the termination, for any reason, of
Executive’s employment with the Company, he will not, without
the prior written consent of the Company, either directly or
indirectly, within the Territory, on behalf of himself or any
Competing Business, engage in any business in which Executive
provides services which are the same or substantially similar to
Executive’s duties at any time during the last two
(2) years of Executive’s employment with the
Company.
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14. Agreement Not to Solicit
Employees .
Executive covenants and agrees that
during his employment by the Company and for a period of three
(3) years after the termination, for any reason, of
Executive’s employment with the Company, he will not, without
the prior written consent of the Company, either directly or
indirectly, solicit, divert or recruit any employee of the Company
to leave such employment to work for a Competing Business.
15. Agreement Not to
Disparage .
Executive and the Company agree that
neither shall make any disparaging comments or accusations
detrimental to the reputation, business, or business relationships
of the other except in connection with legal proceedings. In the
event that Executive becomes legally compelled to disclose
information that may be disparaging to the Company, or detrimental
to the business or business relationships of the Company, he shall
provide the Company with prompt notice so that the Company may seek
a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. In the event that
such protective order remedy is not obtained, or that the party
about whom the disclosure is to be made waives compliance with the
provisions of this Agreement, Executive will furnish only such
information that he is advised by written opinion of counsel of his
selection (with reasonable fees and expenses of such
counsel’s opinion to be paid by the Company) is legally
required and will exercise his best efforts to obtain a protective
order or other reliable assurance that confidential treatment will
be accorded any confidential information. This Section shall not
apply to disparaging comments or accusations made in testimony or
pleadings in connection with any claims asserted by Executive in a
court of law. Notwithstanding the foregoing, the parties agree that
nothing in this Agreement shall apply to or restrict in any way the
communication of information by the Company or the Executive to the
extent required by any state or federal law enforcement agency or
require notice to the Company or the Executive thereof.
16. Remedies.
Executive acknowledges and agrees
that by virtue of the duties and responsibilities attendant to
his
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