TRANSITION AND RETIREMENT
AGREEMENT
This TRANSITION
AND RETIREMENT AGREEMENT (this “ Agreement ”) is
entered into by and between Sysco Corporation, a Delaware
corporation (the “ Company ”), and RICHARD J.
SCHNIEDERS, a resident of the state of Texas (“
Executive ”), as of the Effective Date of the
Agreement, as defined below.
WHEREAS, Executive
and Company are parties to that certain First Amended and Restated
Executive Severance Agreement dated November 24, 2008 (the
“ Severance Agreement ”), a copy of which is
attached hereto;
WHEREAS, Executive
and Company, are parties to that certain Sysco Corporation Fiscal
Year 2009 Management Incentive Plan Bonus Agreement, effective as
of June 27, 2008 (the “ MIP Bonus Agreement
”) pursuant to which Executive is entitled to a bonus if the
Company meets certain pre-established performance criteria (the
“ MIP Bonus ”);
WHEREAS, Executive
has indicated his intention to retire from his position as Chief
Executive Officer of the Company effective as of the close of
business on March 31, 2009, and from his employment with the
Company effective as of the close of business on June 27, 2009
(the “ Retirement Date ”); and
WHEREAS, the
parties hereby wish to memorialize their agreement with respect to
Executive’s retirement and to clarify his duties through the
Retirement Date.
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; Compensation and Retirement from the
Company .
(a) Executive
shall continue to serve in the positions of Chairman of the Board
and Chief Executive Officer of the Company through March 31,
2009 at Executive’s base salary in effect as of the Effective
Date of this Agreement.
(b) During
the period from April 1, 2009 through the Retirement Date (the
“ Transition Period ”), Executive shall continue
to serve in the positions of Chairman of the Board and an employee
of the Company. In his position as an employee of the Company,
Executive shall perform such tasks as may be requested by the
Company’s Chief Executive Officer and the Company’s
Board of Directors (the “ Board ”). During the
Transition Period, Executive shall receive a monthly base salary of
NINETY-THREE THOUSAND DOLLARS and 00/100 cents ($93,000.00) and
shall continue to be eligible for all other benefits as are in
effect as of the Effective Date of this Agreement, including
without limitation, eligibility for a MIP Bonus under
Executive’s MIP Bonus Agreement, as modified by
Section 3 of this Agreement. Notwithstanding the foregoing,
the Board shall have the right to terminate
Executive’s
employment at
any time prior to the Retirement Date for any reason, in its sole
discretion. In addition, at any time during the Transition Period
or at any time thereafter, Executive agrees to resign from his
position as Chairman of the Board of the Company and as a Director
of the Company within ten (10) days of receipt of the
Board’s written request that he do so. If Executive’s
employment is terminated prior to the end of the Transition Period
for any reason, Executive shall continue to receive the monthly
base salary set forth in this Section 1(b) through the Retirement
Date.
(c) Executive
shall be entitled to (i) an office and secretarial and other
assistance at the Company’s headquarters in Houston, Texas
through the end of the Transition Period; (ii) reimbursement of all
reasonable expenses incurred by the Executive through the end of
the Transition Period in connection with Executive’s duties
under this Agreement in accordance with the general policies,
practices and procedures of the Company; and (iii) use of the
Company plane for one round trip between Santa Fe, New Mexico and
Houston, Texas, per month from the date hereof until the end of the
Transition Period.
(d) Unless
otherwise terminated earlier by the Board, Executive shall be
deemed to have resigned as an employee of the Company as of the
close of business on the Retirement Date without any further action
required by Executive or the Company. Executive’s resignation
pursuant to this Section 1(d) or termination of employment by the
Company pursuant to Section 1(b) 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.
2.
Termination of the Severance Agreement; Waiver of Good Reason
Termination .
(a) Company
and Executive hereby agree that the Severance Agreement (including
all rights and obligations contained therein) is hereby terminated
effective as of the close of business on March 31, 2009 (the
“ Severance Termination Date ”).
(b) Executive
hereby acknowledges and agrees that Executive’s execution of
this Agreement constitutes Executive’s written consent to the
actions of the Company as contemplated by this Agreement for
purposes of Section 1(d) of the Severance Agreement and Executive
hereby waives any right to terminate his employment for Good Reason
(as defined in the Severance Agreement) under Section 5 of the
Severance Agreement prior to the Severance Termination Date with
respect to the actions of the Company contemplated by this
Agreement.
3. Fiscal
Year 2009 Management Incentive Plan Bonus .
(a) Company
shall pay Executive an MIP Bonus for fiscal year 2009, to the
extent the criteria for payment of a fiscal 2009 MIP Bonus are
satisfied and subject to the terms and conditions of the MIP Bonus
Agreement, equal to seventy-five percent (75%) of the MIP Bonus
payable to Executive if Executive’s MIP Bonus were calculated
using Executive’s base salary in effect on March 31,
2009. Executive shall be entitled to a payment pursuant to this
Section 3(a) regardless of whether or not Executive is employed by
the Company on the Retirement Date. The cash bonus payable to
Executive pursuant to this Section 3(a) shall be reduced by all
applicable withholdings and deductions, including amounts, if any,
deferred by
2
Executive under
the Company’s Executive Deferred Compensation Plan (“
EDCP ”), and shall be paid at such time as
Executive’s MIP Bonus would otherwise be payable under the
terms of the Management Incentive Plan (the “ MIP
”) and the MIP Bonus Agreement. Executive’s 2009 MIP
Bonus, as adjusted pursuant to this Section 3(a), if any,
shall be used for purposes of calculating (i) the amount
deferred by Executive, if any, and any company match under the
EDCP; and (ii) Executive’s accrued benefit under the
Company’s Supplemental Executive Retirement Plan (“
SERP ”), if applicable.
(b) Executive
hereby waives any and all rights that Executive may have to a MIP
Bonus under the MIP Bonus Agreement in excess of the cash bonus
payable to Executive pursuant to Section 3(a) of this Agreement
(without taking into account amounts deferred, if any, by Executive
under the EDCP) and the Company hereby waives any right to deny
Executive the MIP Bonus for fiscal year 2009 as set forth in
Section 3(a) above, either by amending the performance criteria or
by terminating the MIP Bonus Agreement pursuant to its authority
under Section 11 of the MIP Bonus Agreement unless such
amendment or termination of the MIP Bonus Agreement is in
connection with an amendment or termination of the fiscal 2009
Management Incentive Program or other such arrangements applicable
to all MIP participants.
4.
Certain Other Activities of Executive .
(a)
Service on Boards of Directors of Suppliers and Customers .
The Company understands that Executive has indicated a desire to
serve on the boards of directors of suppliers and customers of the
Company or any of its subsidiaries following his retirement from
the Company and from his service as Chairman of the Board and as a
Director of the Company. The Company hereby agrees that
Executive’s service on such boards of directors will not be
considered a violation of any of Executive’s restrictive
covenant obligations contained in the EDCP, the SERP, any stock
option grant agreements, and any other applicable benefit plan of
the Company; provided that , (A) Executive obtains the prior
written consent of the Presiding Director or Chairman of the Board
of the Company (other than Executive), whose consent shall not be
unreasonably withheld; and (B) Executive agrees that he will not
(i) use his contacts at the C
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