EXHIBIT 10(qq)
SYSCO CORPORATION
1991 STOCK OPTION PLAN
1996 STOCK OPTION AGREEMENT
CORPORATE
Under the terms and conditions of the Sysco Corporation 1991 Stock
Option Plan (the "Plan"), a copy of which is incorporated into this Agreement by
reference, Sysco Corporation (the "Corporation") grants to {{Name}} (the
"Optionee") the option to purchase {{Amount}} shares of the Corporation's Common
Stock, $1.00 par value, at the price of $31.875 per share, subject to adjustment
as provided in the Plan (the "Option").
This Option shall be for a term of ten years commencing on this date
and ending September 4, 2006, and shall be subject to the Terms and Conditions
of Stock Option set forth on the reverse side and incorporated in this Agreement
by reference.
When exercised, all or a portion of this Option may be an incentive
stock option, governed by Section 422 of the Internal Revenue Code of 1986, as
amended. This option is granted without Stock Appreciation Rights.
The Optionee in accepting this Option accepts and agrees to be bound by
all the terms and conditions of the Plan and the Terms and Conditions of Stock
Option which pertain to stock options granted under the Plan and acknowledges
receipt of the Corporation's initial disclosure document dated September 4,
1992, as supplemented by the 1991 Stock Option Plan Amendments and Supplemental
Disclosure dated November 12, 1996.
Granted as of September 5, 1996.
SYSCO CORPORATION
Xxxx X. Xxxxxx, President
ACCEPTED:
---------------------------
Optionee
---------------------------
Date
(PLEASE RETURN A SIGNED COPY TO XXXXXX X. XXXXXX AND
RETAIN A COPY FOR YOUR FILES.)
TERMS AND CONDITIONS OF STOCK OPTION
CORPORATE
1. Please carefully review all the provisions of the Sysco Corporation 1991
Stock Option Plan (the "Plan"). In addition to the conditions set out in the
Plan, the exercise of your option is contingent upon satisfying the provisions
of this document, certain of which are applicable during the period beginning
September 5, 1996, and ending September 4, 2001 (the "Vesting Period").
2. Fiscal year 1996 is the base year for determining if vesting
requirements have been met. One-third of the total number of shares covered by
your option shall vest at the conclusion of each of the next three fiscal years
of Sysco Corporation (the "Corporation") (i.e., June 28, 1997, June 27, 1998,
and July 3, 1999) provided that the pretax earnings of the Corporation increased
at least 20% in each fiscal year over the Corporation's pretax earnings for the
prior year. If pretax earnings of the Corporation should increase less than 20%
in any one fiscal year over the prior fiscal year, the option will vest at the
conclusion of any fiscal year within the five year Vesting Period in which
pretax earnings of the Corporation for the fiscal years after fiscal year 1996
have grown at a minimum rate of 15% compounded annually, with one-third of the
total number of shares covered by your option to vest for each fiscal year after
fiscal year 1996 included in the calculation of the 15% compounded minimum
growth rate.
3. If neither of the vesting requirements set out in the paragraph
immediately above are met, your option may still vest, in part or in whole, when
the following criteria are attained:
(a) For ANY fiscal year within the five-year Vesting Period in which the
Corporation's annual return on shareholders' equity equals or exceeds
17.5% and the increase in pretax earnings of the Corporation over the
prior fiscal year equals or exceeds 15%, one-third of the option will
vest.
(b) If the Corporation's AVERAGE annual return on shareholders' equity for
the five fiscal years ending within the five-year Vesting Period
equals or exceeds 17.5% and the increase in pretax earnings of the
Corporation over the five fiscal years equals or exceeds 10%
compounded annually, your option will fully vest.
4. If none of the vesting requirements set out above are met within the
Vesting Period as to any portion of an option, such option (or portion thereof)
will nonetheless vest and become exercisable ("Supplemental Vesting") six months
prior to the expiration thereof (the "Supplemental Vesting Date") provided that
you continue in the active employment of the Corporation or one of its
affiliates on the Supplemental Vesting Date. Supplemental Vesting shall not
apply if you have retired or become disabled (within the meaning of the
Corporation's Retirement Plan) or you are otherwise not actively employed by a
SYSCO company.
5. The vested portion of your option may be exercised at any time following
the conclusion of the fiscal year in which it vests, provided that at the time
of the exercise all of the conditions set forth in the Plan and in this document
have been met. No portion of your option may be exercised prior to September 6,
1997. For your information, the Corporation's fiscal year ends on the Saturday
closest to June 30. The committee of the Corporation's Board of Directors which
administers the Plan (the "Committee") retains the right to modify any of the
vesting requirements set forth in these Terms and Conditions of Stock Option for
option holders who are (a) transferred from one operating subsidiary or division
of the Corporation ("Operating Company") to another (b) from the corporate
office to an Operating Company or (c) from any Operating Company to the
corporate office.
6. Please note that your option is nontransferable and may be exercised in
part or in whole only if the conditions set forth in the Plan and herein have
been fulfilled. Your stock option is in all respects limited and conditioned as
provided in the Plan, including, but not limited to, the following:
(a) Your option will normally terminate on the earlier of the date of the
expiration of the option or upon severance of your employment
relationship with the Corporation for any reason, for or without
cause. Whether an authorized leave of absence, or an absence for
military or government service, constitutes severance of your
employment relationship with the Corporation will be determined by the
Committee at the time of the event. However, if before the expiration
of your option, you retire in good standing from the employ of the
Corporation for reasons of age or disability under the established
rules of the Corporation then in effect, your option will remain in
effect, vest and be exercisable in accordance with its terms as if you
remained an employee of the Corporation except that Supplemental
Vesting will not occur after your retirement or disability. Generally,
under current tax law, if you exercise your option more than three
months after retirement for age or more than one year after retirement
for disability, the tax treatment accorded incentive stock options
will not apply.
(b) In the event of your death while you are an employee, or while you are
retired for age or disability as described in (a) above, your option
may be exercised by your estate, or by the person to whom such right
devolves from you by reason of your death, to the extent your right to
exercise such option has vested at the time of your death, at any time
within one year after the date of your death or ten years after the
date of grant, whichever date occurs first.
7. At the time or times when you wish to exercise your option, in whole or
in part, please refer to the provisions of the Plan dealing with methods and
formalities of exercising your option. If there is any variance or contradiction
between the provisions of the Plan and the terms and conditions above, the
provisions of the Plan will prevail.
