TRANSITION AND RETIREMENT AGREEMENT
Exhibit 10.1
EXECUTION VERSION
This TRANSITION AND RETIREMENT AGREEMENT (this “Agreement”) is entered into by and
between Sysco Corporation, a Delaware corporation (the “Company”), and XXXXXXX X.
XXXXXXXXXX, a resident of the state of Texas (“Executive”), as of the Effective Date of the
Agreement, as defined below.
WITNESSETH:
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
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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 Company or any of its subsidiaries
to, or otherwise attempt to influence any business transactions between any such entity and the
Company or any of its subsidiaries, or (ii) disclose any trade secrets or confidential information
of the Company or any of its subsidiaries to any such entity.
(b) International Consulting Services.
(i) The Company further understands that Executive has indicated his desire to provide
consulting services to companies or other business entities in countries other than the United
States or Canada following his retirement from the Company and from his service as the Chairman of
the Board and a Director of the Company. The Company hereby agrees that Executive’s provision of
such consulting or other similar services to such companies or other business entities 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 Executive obtains the prior written consent of the Presiding Director or
Chairman of the Board of the Company (other than
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Executive), whose consent shall not be unreasonably withheld. Executive shall provide written
notice to the Company at least thirty (30) days prior to the date Executive expects to commence
providing any such services, which such notice shall include the name of the company or other
business entity for which Executive will provide such services, the country or countries in which
such company or other business entity distributes or otherwise sells its products, and the date
upon which Executive expects to commence providing such services.
(ii) In the event the Company or any of its subsidiaries commences the distribution of
products either (A) through the acquisition or formation of one or more subsidiaries, joint
ventures or other business operations; or (B) by entering into an arrangement to distribute or
otherwise sell the Company’s or any of its subsidiaries’ products, whether in the form of a
franchising arrangement, licensing arrangement, sub-distribution arrangement, or other similar
arrangement, in which Executive is then providing consulting or other similar services, the Company
shall provide written notice to Executive of the Company’s or any of its subsidiaries’ commencement
of distribution or sale of product into such country or countries, and Executive shall have six (6)
months from the date of receipt of such notice to cease such consulting or similar services in the
country or countries set forth in such notice. In the event Executive fails to cease providing
consulting or other similar services before the end of such six (6) month period, Executive’s
benefits under the SERP, the EDCP, any stock option grant agreements or other benefit plans may be
subject to forfeiture pursuant to the terms of such plans.
5. 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 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, 0000 Xxxxxxx Xxxxxxx, Xxxxxxx, XX 00000-0000,
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.
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6. Severability.
If any one or more of the provisions of this Agreement shall be held invalid, illegal or
unenforceable in any respect, such provision shall be deemed modified to most closely resemble the
original intent of the parties, without invalidating the remainder of this Agreement; and such
shall not affect any other independent provision of this Agreement and each other independent
provision of this Agreement shall be enforced to the full extent permitted by law.
7. Resolution of Disputes.
(a) If a legally cognizable dispute arises out of or relates to any aspect of this Agreement
or the breach, termination, or validity thereof, the parties agree to resolve the dispute by
binding arbitration before the American Arbitration Association (“AAA”). Disputes subject
to binding arbitration include, without limitation, (1) all tort and contract claims; (2) claims
brought under all applicable federal, state or local statutes, laws, regulations or ordinances,
including but not limited to, Title VII of the Civil Rights Act of 1964, as amended, the Family and
Medical Leave Act; the Americans with Disabilities Act; the Rehabilitation Act of 1973, as amended;
the Fair Labor Standards Act of 1938, as amended; the Age Discrimination in Employment Act, as
amended; the Equal Pay Act; the Civil Rights Act of 1866, as amended, and the Employee Retirement
Income Security Act of 1974; and (3) claims against the Company’s subsidiaries, affiliated and
successor companies, and claims against the Company that include claims against the Company’s
agents and employees, whether in their capacity as such or otherwise.
(b) Arbitration proceedings shall be held in Houston, Texas, or at such other place as may be
selected by the mutual agreement of the parties. The arbitration shall proceed in accordance with
the Employment Dispute Resolution Rules of the AAA in effect on the date of this Agreement, and
judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
(c) The arbitration award shall be in writing and shall specify the factual and legal bases
for the award. In rendering the award, the arbitrator shall determine the respective rights and
obligations of the parties according to the laws of the State of Delaware or, if applicable,
federal law, and without regard to conflict or choice of law principles. The arbitrator shall have
the authority to award any remedy or relief that a federal or state court within the State of
Delaware could order or grant, including without limitation, specific performance of any obligation
created under this Agreement; an award of punitive, exemplary, statutory, or compensatory damages;
the issuance of an injunction or other provisional relief; the a declaration of the forfeiture of
amounts due or claimed to be due; or the imposition of sanctions for abuse or frustration of the
arbitration process.
(d) Each party shall pay for its own fees and expenses of arbitration including the expense of
its own counsel, experts, witnesses and preparation and presentation of evidence, except that the
cost of the arbitrator and any filing fee exceeding the applicable filing fee in federal court
shall be paid by the Company; provided, however, that all reasonable costs and fees necessarily
incurred by any party shall be subject to reimbursement from the other party as part of any award
of the arbitrator.
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(e) By initialing below, Executive and the Company acknowledge that each has read the
provisions of this Section 7 and agree to arbitration as provided herein. (A duly authorized
officer of the Company shall provide his or her initials on behalf of the Company.)
/s/ RJS Executive’s Initials /s/ MCN Company Officer’s Initials
8. Tax Matters and Section 409A Compliance.
(a) The Company shall withhold all applicable taxes from amounts paid to you hereunder and
shall pay such withheld taxes over to the proper taxing authorities.
(b) This Agreement is intended to comply with, or otherwise be exempt from Section 409A of the
Internal Revenue Code of 1986, as amended, and any regulations and Treasury guidance promulgated
thereunder (“Section 409A”).
(c) The Company and Executive agree that they will execute any and all amendments to this
Agreement as they mutually agree in good faith may be necessary to ensure compliance with the
provisions of Section 409A.
9. Notice.
For purposes of this Agreement, all notices and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given when delivered or five
(5) days after deposit in the United States mail, certified and return receipt requested, postage
prepaid, addressed as follows:
| If to the Executive: | At the last known address shown in the Company’s personnel records. | ||
| If to the Company: | Sysco Corporation 0000 Xxxxxxx Xxxxxxx Xxxxxxx, XX 00000-0000 Attention: General Counsel |
or to such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.
10. General Provisions.
(a) This Agreement and the covenants, representations, warranties and releases contained
herein shall inure to the benefit of and be binding upon Executive and Company and each of their
respective successors, heirs, assigns, agents, affiliates, parents, subsidiaries and
representatives.
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(b) Each party acknowledges that no one has made any representation whatsoever not contained
herein concerning the subject matter hereof in order to induce the execution of this Agreement.
(c) Except in the event that Company publicly files this Agreement or otherwise publicly
discloses its terms and conditions, Executive agrees that the terms and conditions of this
Agreement, including the consideration hereunder shall not be disclosed to anyone and shall remain
confidential and not be disseminated to any person or entity not a party to this Agreement except
to family members, legal counsel, an accountant for purposes of securing tax advice, the Internal
Revenue Service, or state taxing agencies.
(d) The “Effective Date” of this Agreement shall be the eighth (8th) day after the
execution of the Agreement by Executive.
(e) This Agreement does not constitute an admission of any liability.
(f) Neither this Agreement nor any provision hereof may be modified or waived in any way
except by an agreement in writing signed by each of the parties hereto consenting to such
modification or waiver.
(g) This Agreement shall in all respects be interpreted, enforced and governed under the
internal laws (and not the conflicts of laws and rules) of Delaware.
(h) Each of the parties represents and warrants that he or it is legally viable and competent
to enter into this Agreement, is relying on independent judgment and the advice of legal counsel
and has not been influenced, pressured, or coerced to any extent whatsoever in making this
Agreement by any representations or statements made by any party, and/or any person or persons
representing any party, and that the individuals executing this Agreement on his or its behalf are
authorized to do so.
(i) This Agreement expressly supersedes all other prior agreements or other arrangements by
and between Company and Executive with respect to the compensation and benefits payable by Company
to Executive, including all of Company’s payment obligations for compensation set forth in any
employment agreement between the parties, whether or not in writing, and that such prior agreements
or arrangements with respect to compensation and benefits payable by Company to Executive shall
upon the Effective Date be null and void and of no force and effect whatsoever. Notwithstanding the
foregoing, (A) except as expressly modified herein, the terms and conditions of the Severance
Agreement shall remain in full force and effect as to Executive through the Severance Termination
Date, and thereafter shall become null and void and of no force or effect whatsoever, and (B) the
terms and conditions of all benefit plans and programs maintained by the Company, including without
limitation the MIP Bonus Agreement, shall remain in full force and effect as to Executive except as
expressly modified by this Agreement.
[Signatures on Following Page]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the dates set forth
below.
EXECUTED THIS 19th DAY OF JANUARY, 2009.
| EXECUTIVE: | /s/ Xxxxxxx X. Xxxxxxxxxx | |||
| Print Name: Xxxxxxx X. Xxxxxxxxxx | ||||
EXECUTED THIS 19th DAY OF JANUARY, 2009.
COMPANY: Sysco Corporation
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Xxxxxxx X. Xxxxxxx | ||||
| Xx. Vice President, General Counsel and Corporate Secretary | ||||
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