Form 10-K SYSCO CORP For: Jun 29
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E-mailEXHIBIT 4.5
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
As of August 23, 2019, Sysco Corporation has two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): (1) our common stock and (2) our 1.25% Senior Notes due June 2023.
Description of Common Stock
We may issue, from time to time, shares of our common stock, the general terms and provisions of which are summarized below. This summary does not purport to be complete and is subject to, and is qualified in its entirety by express reference to, the provisions of our Certificate of Incorporation and Bylaws.
Authorized Shares
Under our Certificate of Incorporation, we have the authority to issue an aggregate of 2,000,000,000 shares of common stock. As of August 9, 2019, 513,176,946 shares of our common stock were issued and outstanding and 50,790,165 shares of our common stock were reserved for issuance pursuant to our currently active stock plans. We have also granted options, restricted stock units and performance share units representing the right to purchase or receive shares of our common stock under previous equity incentive plans, which derivative securities remain outstanding.
Dividends
Subject to the rights of the holders of any preferred stock that may be outstanding, each holder of common stock is entitled to receive any dividends our Board of Directors declares out of funds legally available to pay dividends. The payment of dividends on the common stock will be a business decision to be made by our Board of Directors from time to time based upon results of our operations and our financial condition and any other factors as our Board of Directors considers relevant.
Voting Rights
Each holder of common stock is entitled to one vote per share, and is entitled to vote on all matters presented to a vote of stockholders, including the election of directors. Holders of common stock have no cumulative voting rights. As a result, under the Delaware General Corporation Law (the “DGCL”), the holders of more than one-half of the outstanding shares of common stock generally will be able to elect all of our directors then standing for election and holders of the remaining shares will not be able to elect any director, subject to any voting rights held by holders of our preferred stock.
Liquidation Rights
If we liquidate our business, holders of common stock are entitled to share equally in any distribution of our assets after we pay our liabilities and the liquidation preference of any outstanding preferred stock.
Absence of Other Rights
Holders of common stock have no preemptive rights to purchase or subscribe for any stock or other securities. In addition, there are no conversion rights or redemption or sinking fund provisions.
Miscellaneous
All outstanding shares of common stock are fully paid and non-assessable. Our Certificate of Incorporation contains no restrictions on the alienability of the common stock. Our common stock is traded on the New York Stock Exchange under the symbol “SYY.”
Transfer Agent and Registrar
The transfer agent and registrar for the common stock is Broadridge Financial Solutions, Inc.
Certain Anti-takeover Effects
General. Certain provisions of our Certificate of Incorporation, our Bylaws and the DGCL could make it more difficult to consummate an acquisition of control of us by means of a tender offer, a proxy fight, open market purchases or otherwise in a transaction not approved by our Board of Directors, regardless of whether our stockholders support the transaction. The summary of the provisions set forth below does not purport to be complete and is qualified in its entirety by reference to our Certificate of Incorporation, our Bylaws and the DGCL.
Business Combinations. Section 203 of the DGCL restricts a wide range of transactions (“business combinations”) between a corporation and an interested stockholder. An “interested stockholder” is, generally, any person who beneficially owns, directly or indirectly, 15% or more of the corporation’s outstanding voting stock. Business combinations are broadly defined to include (i) mergers or consolidations with, (ii) sales or other dispositions of more than 10% of the corporation’s assets to, (iii) certain transactions resulting in the issuance or transfer of any stock of the corporation or any subsidiary to, (iv) certain transactions resulting in an increase in the proportionate share of stock of the corporation or any subsidiary owned by, or (v) receipt of the benefit (other than proportionately as a stockholder) of any loans, advances or other financial benefits by, an interested stockholder. Section 203 provides that an interested stockholder may not engage in a business combination with the corporation for a period of three years from the time of becoming an interested stockholder unless (a) the Board of Directors approved either the business combination or the transaction which resulted in the person becoming an interested stockholder prior to the time that person became an interested stockholder; (b) upon consummation of the transaction which resulted in the person becoming an interested stockholder, that person owned at least 85% of the corporation’s voting stock (excluding, for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, shares owned by persons who are directors and also officers and shares owned by certain employee stock plans); or (c) the business combination is approved by the Board of Directors and authorized by the affirmative vote of at least 66 2/3% of the outstanding voting stock not owned by the interested stockholder. The restrictions on business combinations with interested stockholders contained in Section 203 of the DGCL do not apply to a corporation whose certificate of incorporation or bylaws contains a provision expressly electing not to be governed by the statute; however, neither our Certificate of Incorporation nor our Bylaws contains a provision electing to “opt-out” of Section 203.
Supermajority Requirement for Business Combinations. In addition to the requirements of Section 203 of the DGCL, our Certificate of Incorporation provides that the affirmative vote of 80% of our outstanding stock entitled to vote shall be required for certain business combinations not approved by a majority of our Directors who are not affiliated with the interested party in the potential transaction, except in certain circumstances. This provision of our Certificate of Incorporation may only be amended by the affirmative vote of 80% of our outstanding stock entitled to vote.
Advance Notice Provisions. Stockholders seeking to nominate candidates to be elected as directors at an annual meeting or to bring business before an annual meeting must comply with an advance written procedure. Only persons who are nominated by or at the direction of our board, or by a stockholder who has given timely written notice to our Secretary before the meeting to elect directors, will be eligible for election as directors.
At any stockholders’ meeting the business to be conducted is limited to business brought before the meeting by or at the direction of the board of directors, or a stockholder who has given timely written notice to our Secretary
of its intention to bring business before an annual meeting. A stockholder must give notice that is received at our principal executive offices in writing not less than 90 days nor more than 130 days prior to the date of the anniversary of the previous year’s annual meeting. However, if the annual meeting is scheduled to be held on a date more than 30 days prior to or delayed by more than 60 days after the anniversary date, notice by the stockholder in order to be timely must be received not later than the later of the close of business 90 days prior to the annual meeting or the tenth day following the day on which the notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was first made by Sysco. In the case of a special meeting of stockholders called for the purpose of electing directors, a stockholder must give notice to nominate a director not later than the close of business on the tenth day following the day notice of the special meeting was mailed to stockholders or public disclosure of the date of the meeting was first made by Sysco. A stockholder’s notice must also contain certain information specified in the Bylaws. These provisions may preclude or deter some stockholders from bringing matters before, or making nominations for directors at, an annual meeting. The Certificate of Incorporation and Bylaws of Sysco provide that 35% of the shares entitled to vote at a meeting shall constitute a quorum except as otherwise required by law.
In addition, holders who have “owned” (as defined in the Bylaws) at least 3% of Sysco’s outstanding Common Stock continuously for a period of 3 years may nominate a number of director nominees equal to 20% of the total number of directors constituting the Board (rounded down), subject to a two nominee aggregate minimum, which nominees will be included in the Company’s proxy statement for the corresponding annual meeting of stockholders if the nominating stockholder(s) and the respective nominee(s) (each, a “Proxy Access Nominee”) comply with the additional eligibility, procedural and disclosure requirements set forth in the Bylaws, including the following:
• | A limit of 20 on the number of stockholders that may aggregate their ownership for purposes of satisfying the 3% threshold referenced above; |
• | Procedures for nominating stockholders to submit timely written notice of their proxy access nominations; |
• | Eligibility requirements for each Proxy Access Nominee; |
• | Disclosures, agreements and representations required to be submitted to the Company by each nominating stockholder and each Proxy Access Nominee; and |
• | Circumstances in which (i) the maximum number of Proxy Access Nominees shall be reduced or (ii) the Board will not be required to include any Proxy Access Nominees in the Company’s proxy statement for a particular annual meeting of stockholders. |
Special Meetings. Only our Board, our Chairman of the Board or our Chief Executive Officer, in each case with the concurrence of the majority of the Board, or our Secretary, at the written request of stockholders of record who own at least 25% of our outstanding common shares and comply with certain procedural requirements, may call a special meeting of stockholders. These provisions may make it more difficult for stockholders to take action opposed by our Board.
Additional Authorized Shares of Capital Stock. The additional shares of authorized common stock and preferred stock available for issuance under our Certificate of Incorporation could be issued at such times, under such circumstances and with such terms and conditions as to impede a change in control.
Limitation of Liability; Indemnification
Our Certificate of Incorporation contains certain provisions permitted under the DGCL relating to the liability of directors. These provisions eliminate a director’s personal liability to us or our stockholders for monetary damages resulting from a breach of fiduciary duty, except in circumstances involving certain wrongful acts, such as:
• | breach of the director’s duty of loyalty to us or our stockholders; |
• | acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; |
• | the unlawful payment of dividends or unlawful stock repurchases or redemptions; and |
• | any transaction from which the director derives an improper personal benefit. |
These provisions may have the effect of reducing the likelihood of derivative litigation against directors and may discourage or deter stockholders or Sysco from bringing a lawsuit against our directors. However, these provisions do not limit or eliminate our rights or those of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s fiduciary duty. Also, these provisions will not alter a director’s liability under federal securities laws.
Our Certificate of Incorporation and Bylaws also provide that we must indemnify our directors and officers to the fullest extent permitted by Delaware law, and our Bylaws provide that we must advance expenses, as incurred, to our directors and officers in connection with a legal proceeding to the fullest extent permitted by Delaware law, subject to very limited exceptions. These rights are deemed to have fully vested at the time the indemnitee assumes his or her position with Sysco and shall continue as to an indemnitee who has ceased to be a director or officer and shall inure to the benefit of the indemnitee’s heirs, executors and administrators.
Description of 1.250% Senior Notes due 2023
The following description of certain material terms of our 1.25% Senior Notes due June 2023 and the guarantees does not purport to be complete. The following description is subject to, and is qualified in its entirety by reference to, the indenture (the “base indenture”) dated June 15, 1995 between Sysco and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the “trustee”), as supplemented by the Thirteenth Supplemental Indenture dated as of February 17, 2012 among Sysco, the trustee and the subsidiary guarantors, and the Thirtieth Supplemental Indenture dated as of June 23, 2016 among Sysco, the trustee and the subsidiary guarantors (we refer to each supplemental indenture, together with the base indenture, as the “indenture”).
Certain capitalized terms used in the following description are defined in the indenture. As used in the following description, the terms “Sysco,” “we,” “us” and “our” refer to Sysco Corporation, and not any of its subsidiaries, unless the context requires otherwise.
We urge you to read the indenture (including definitions of terms used therein) for additional information.
General
The 1.250% Senior Notes due 2023 (the “notes”), initially limited to €500 million aggregate principal amount, were issued under the indenture. The trustee acts as registrar, paying agent and authenticating agent and performs administrative duties for us, such as sending out interest payments and notices under the indenture.
The notes bear interest at a fixed rate per year of 1.250%, starting on June 23, 2016 and ending on their maturity date, which is June 23, 2023. Interest on the notes will be payable annually in arrears on June 23 of each year, beginning on June 23, 2017. All payments of interest on the notes will be made to the persons in whose names the notes are registered on the June 8, whether or not a Business Day, next preceding the applicable interest payment date.
Interest on the notes is computed on the basis of the actual number of days in the period for which interest is being calculated and the actual number of days from and including the last date on which interest was paid on the notes (or June 23, 2016 if no interest has been paid on the notes), to but excluding the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.
The notes were issued only in fully registered form without coupons, in denominations of €100,000 and integral multiples of €1,000 above that amount. The notes are unsecured obligations of Sysco and rank equally in right of payment with all our other unsecured senior indebtedness, whether currently existing or incurred in the future.
The subsidiary guarantees are unsecured obligations of the respective subsidiary guarantors and rank equally in right of payment with all other unsecured senior indebtedness, whether currently existing or incurred in the future, of the respective subsidiary guarantors.
The notes and the subsidiary guarantees effectively rank junior to any future secured indebtedness of Sysco and the subsidiary guarantors, respectively, to the extent of the value of the assets securing such indebtedness.
The notes are structurally subordinated to all liabilities (excluding intercompany loans) of Sysco’s existing and future subsidiaries that are not guaranteeing or do not guarantee the notes.
The notes are represented by one or more global notes. Each global note has been deposited with, or on behalf of, a common depositary, and registered in the name of the nominee of the common depositary for the accounts of Clearstream Banking, société anonyme, or its successor (“Clearstream”) and Euroclear Bank, S.A./N.V.
or its successor (“Euroclear”). Except as described under “—Book-Entry, Delivery and Settlement—Certificated Notes,” the notes are not be issuable in certificated form.
Payments of principal of and interest on the notes issued in book-entry form will be made as described below under “—Book-Entry, Delivery and Settlement—Global Notes.”
If either a date for payment of principal or interest on the notes or the maturity date of the notes falls on a day that is not a Business Day, the related payment of principal or interest will be made on the next succeeding Business Day as if made on the date the payment was due. In that case, no interest will accrue on or be payable for the period from and after the original payment date to such next succeeding Business Day. For these purposes, “Business Day” means any day, other than a Saturday or Sunday, which is not a day on which banking institutions in New York, New York or London, England are authorized or required by law, regulation or executive order to close.
An event of default for the notes under the indenture will not necessarily constitute an event of default for any other debt securities under the base indenture.
Issuance in Euro; Payment on the Notes
Initial holders were required to pay for the notes in euro, and all payments of principal of, the redemption price (if any), and interest and additional amounts (as defined below, if any), on the notes, will be payable in euro, provided, that if the euro is unavailable to us due to the imposition of exchange controls or other circumstances beyond our control or if the euro is no longer being used by the then member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments in respect of the notes will be made in U.S. dollars until the euro is again available to us or so used. The amount payable on any date in euro will be converted into U.S. dollars at the rate mandated by the U.S. Federal Reserve Board as of the close of business on the second Business Day prior to the relevant payment date or, in the event the U.S. Federal Reserve Board has not mandated a rate of conversion, on the basis of the most recent U.S. dollar/euro exchange rate published in The Wall Street Journal on or prior to the second Business Day prior to the relevant payment date. Any payment in respect of the notes so made in U.S. dollars will not constitute an event of default under the notes or the indenture governing the notes. Neither the trustee nor any paying agent shall have any responsibility for any calculation or conversion in connection with the foregoing.
Guarantees
The subsidiary guarantors jointly and severally, fully and unconditionally, guarantee, on an unsecured, senior basis, the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of the principal of, premium, if any, and interest on the notes, when and as the same shall become due and payable according to the terms of the notes, and any other amounts payable under the indenture. The obligations of each subsidiary guarantor under its guarantee are limited as necessary to prevent that guarantee from constituting a fraudulent transfer or conveyance under applicable law.
The subsidiary guarantors consist of our direct and indirect wholly owned domestic subsidiaries that guarantee our payment obligations under the other senior notes issued under the base indenture or any of our other indebtedness, which are certain of our U.S. broadline subsidiaries. We will cause any of our other existing or future domestic subsidiaries that guarantees our payment obligations under such other senior notes or such other indebtedness to execute and deliver to the trustee supplemental indentures in a form satisfactory to the trustee pursuant to which such subsidiary guarantees our payment obligations with respect to the notes on the terms provided for in the indenture. Brakes Group and its subsidiaries are international subsidiaries of Sysco and, therefore, are not subsidiary guarantors of the notes.
The guarantee of any subsidiary guarantor may be released under certain circumstances. If we exercise our defeasance option with respect to the notes as described below under “—Defeasance,” then any subsidiary guarantor effectively will be released. Further, each subsidiary guarantee will remain in full force and effect until the earliest to occur of the date, if any, on which (1) the applicable guarantor shall consolidate with or merge into Sysco or any
successor of Sysco and (2) Sysco or any successor of Sysco consolidates with or merges into the applicable guarantor.
Optional Redemption
We may redeem some or all of the notes at any time.
At any time before April 23, 2023 (the date that is two months prior to the maturity date), the notes will be redeemable as a whole or in part, at our option, at a redemption price equal to the greater of (1) 100% of the principal amount of the notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed that would be due if the notes matured on April 23, 2023 (not including any portion of such interest accrued as of the redemption date) discounted to April 23, 2023 annually (ACTUAL/ACTUAL (ICMA)) at the Comparable Government Bond Rate (as defined below) plus 25 basis points, plus in either case any accrued and unpaid interest on the notes to be redeemed to the date of redemption.
At any time on or after April 23, 2023 (the date that is two months prior to the maturity date), the notes will be redeemable as a whole or in part, at our option, at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest on the notes to be redeemed to the date of redemption.
Installments of interest on notes being redeemed that are due and payable on interest payment dates falling on or prior to a redemption date shall be payable on the interest payment date to the holders as of the close of business on the relevant regular record date according to the notes and the indenture.
If we choose to redeem any notes, we will give a notice of redemption not less than 15 days and not more than 45 days before the redemption date to each holder of the notes to be redeemed, or as otherwise provided in accordance with Euroclear and Clearstream procedures. If we are redeeming less than all of the notes, the trustee will select the particular notes or portions of notes to be redeemed by lot or pro rata or by another method the trustee deems fair and appropriate (in each case, to the extent such notes are held in global form, subject to the procedures of Euroclear and Clearstream); provided, however, that no notes of a principal amount of €100,000 or less shall be redeemed in part. Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the notes or portions of notes called for redemption.
For purposes of calculating the redemption price in connection with the redemption of the notes on any redemption date, the following terms have the meanings set forth below:
“Business Day” means any day, other than a Saturday or Sunday, (1) which is not a day on which banking institutions in The City of New York or London are authorized or required by law, regulation or executive order to close and (2) on which the Trans-European Automated Real-time Gross Settlement Express Transfer system (the TARGET2 system), or any successor thereto, is open.
“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation, at the discretion of the Quotation Agent, a German government bond whose maturity is closest to the maturity of the notes being redeemed, or if the Quotation Agent in its discretion determines that such similar bond is not in issue, such other German government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, German government bonds selected by us, determine to be appropriate for determining the Comparable Government Bond Rate.
“Comparable Government Bond Rate” means the price, expressed as a percentage (rounded to three decimal places, with 0.0005 being rounded upwards), at which the gross redemption yield on the notes, if they were to be purchased at such price on the third Business Day prior to the date fixed for redemption, would be equal to the gross redemption yield on such Business Day of the Comparable Government Bond on the basis of the middle market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such Business Day as determined by the Quotation Agent.
“Quotation Agent” means Deutsche Bank AG, London Branch or its successor.
All determinations made by the Quotation Agent with respect to determining the redemption price will be final and binding on all parties, absent manifest error.
Payments of Additional Amounts
All payments of principal, premium (if any) and interest in respect of the notes or the guarantees will be made free and clear of, and without withholding or deduction for, any present or future taxes, assessments, duties or governmental charges of whatever nature imposed, levied or collected by the United States (or any political subdivision or taxing authority thereof or therein having power to tax), unless such withholding or deduction is required by law or the official interpretation or administration thereof.
In addition, for so long as the notes are outstanding, we undertake that, to the extent permitted by law, we will maintain a paying agent in a jurisdiction that will not require withholding or deduction of tax pursuant to any law implementing European Council Directive 2003/48/EC on the taxation of savings income (the “Directive”) or any other directive implementing the conclusions of the ECOFIN Council meeting of November 26 and 27, 2000 on the taxation of savings income, or any law implementing or complying with or introduced in order to conform to, such directives.
We or the relevant subsidiary guarantor, as applicable, will, subject to the exceptions and limitations set forth below, pay in respect of the notes or the guarantees such additional amounts as are necessary in order that the net payment by us of principal, premium (if any) and interest in respect of the notes or the guarantees (including payments of additional amounts with respect to such amounts) received by a beneficial owner who is not a United States person (as defined below), after withholding or deduction for any present or future tax, assessment, duties or other governmental charge imposed by the United States (or any political subdivision or taxing authority thereof or therein having power to tax), will not be less than the amount provided in the notes to be then due and payable; provided, however, that the foregoing obligation to pay additional amounts shall not apply:
(1) | to the extent any tax, assessment or other governmental charge is imposed by reason of the holder (or the beneficial owner for whose benefit such holder holds such note), or a fiduciary, settlor, beneficiary, member or shareholder of the holder if the holder is an estate, trust, partnership or corporation, or a person holding a power over an estate or trust administered by a fiduciary holder, being considered as: |
a. | being or having been engaged in a trade or business in the United States or having or having had a permanent establishment in the United States; |
b. | having a current or former connection with the United States (other than a connection arising solely as a result of the ownership of the notes, the receipt of any payment with respect thereto or the enforcement of any rights hereunder), including being or having been a citizen or resident of the United States; |
c. | being or having been a personal holding company, a passive foreign investment company or a controlled foreign corporation for U.S. federal income tax purposes or a corporation that has accumulated earnings to avoid U.S. federal income tax; |
d. | being or having been a “10-percent shareholder” of Sysco as defined in Section 871(h)(3) of the United States Internal Revenue Code of 1986, as amended (the “Code”) or any successor provision; or |
e. | being a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business, as described in Section 881(c)(3)(A) of the Code or any successor provision; |
(2) | to any holder that is not the sole beneficial owner of the notes, or a portion of the notes, or that is a fiduciary, partnership or limited liability company, but only to the extent that a beneficial owner with respect to the holder, a beneficiary or settlor with respect to the fiduciary, or a beneficial owner or member of the partnership or limited liability company would not have been entitled to the payment of an additional amount had the beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive share of the payment; |
(3) | to the extent any tax, assessment or other governmental charge that would not have been imposed but for the failure of the holder or any other person to comply with certification, identification or information reporting requirements concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner of the notes, if compliance is required by statute, by regulation of the United States or any taxing authority therein or by an applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax, assessment or other governmental charge; |
(4) | to any tax, assessment or other governmental charge that is imposed otherwise than by withholding by us or a paying agent from the payment; |
(5) | to any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of or interest on any notes, if such payment can be made without such withholding by any other paying agent; |
(6) | to any estate, inheritance, gift, sales, transfer, wealth, capital gains or personal property tax or similar tax, assessment or other governmental charge, or excise tax imposed on the transfer of the notes; |
(7) | to any withholding or deduction that is imposed on a payment to an individual and that is required to be made pursuant to the Directive or any other directive implementing the conclusions of the ECOFIN Council meeting of November 26 and 27, 2000 on the taxation of savings income, or any law implementing or complying with or introduced in order to conform to, such directive; |
(8) | to any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of or interest on any note as a result of the presentation of any note for payment (where presentation is required) by or on behalf of a holder of notes, if such payment could have been made without such withholding by presenting the relevant note to at least one other paying agent in a member state of the European Union; |
(9) | to the extent any tax, assessment or other governmental charge would not have been imposed but for the presentation by the holder of any note, where presentation is required, for payment on a date more than 30 days after the date on which payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later, except to the extent that the beneficiary or holder thereof would have been entitled to the payment of additional amounts had such note been presented for payment on any day during such 30-day period; |
(10) | to any tax, assessment or other governmental charge imposed under Sections 1471 through 1474 of the Code (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code; or |
(11) | in the case of any combination of the above items. |
We or the relevant subsidiary guarantor, as the case may be, will make all withholdings and deductions required by law and will remit the full amount deducted to or withheld to the relevant tax authority in accordance with applicable law. Upon request, we or the relevant subsidiary guarantor, as the case may be, will provide to the trustee an official receipt or, if official receipts are not obtainable, other documentation reasonably satisfactory to the trustee evidencing the payment of any taxes so deducted or withheld. Upon request, copies of those receipts or other documentation, as the case may be, will be made available by the trustee to the holders of the notes. If we are required to pay additional amounts with respect to the notes, we will notify the trustee and paying agents pursuant to an officers’ certificate that specifies the additional amounts payable and when the additional amounts are payable. If the trustee and the paying agents do not receive such an officers’ certificate from us, the trustee and paying agents may rely on the absence of such an officers’ certificate in assuming that no such additional amounts are payable.
The notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation applicable to the notes. Except as specifically provided under this heading “—Payments of Additional Amounts,” we will not be required to make any payment for any tax, assessment or other governmental charge imposed by any government or a political subdivision or taxing authority of or in any government or political subdivision.
As used under this heading “—Payments of Additional Amounts” and under the heading “—Optional Redemption for Tax Reasons,” the term “United States” means the United States of America, the states of the United States, and the District of Columbia, and the term “United States person” means any individual who is a citizen or resident of the United States for U.S. federal income tax purposes, a corporation, partnership or other entity created or organized in or under the laws of the United States, any state of the United States or the District of Columbia, or any estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.
Optional Redemption for Tax Reasons
If, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated under the laws) of the United States (or any political subdivision or taxing authority of or in the United States), or any change in, or amendment to, an official position regarding the application or interpretation of such laws, regulations or rulings, which change or amendment is announced or becomes effective on or after the date of this prospectus supplement, we become or, based upon a written opinion of independent counsel selected by us, will become obligated to pay additional amounts as described herein under the heading “—Payments of Additional Amounts” with respect to the notes, then we may at our option redeem, in whole, but not in part, the notes on not less than 15 nor more than 45 days’ prior notice, at a redemption price equal to 100% of their principal amount, together with interest accrued but unpaid on those notes to the date fixed for redemption.
Prior to giving of any notice of redemption to the holders of the notes pursuant to the preceding paragraph, we will deliver to the trustee (1) an officers’ certificate and (2) an opinion of independent counsel selected by us, each stating that we will become obligated to pay such additional amounts.
Sinking Fund
The notes will not be subject to a sinking fund.
Certain Covenants
The covenants described below apply to the notes:
Limitations on Liens. We covenant in the indenture that we will not (nor will we permit any Subsidiary to) issue, incur, create, assume or guarantee any debt for borrowed money (including all obligations evidenced by bonds, debentures, notes or similar instruments) secured by a mortgage, security interest, pledge, lien, charge or other encumbrance (“mortgage”) upon any Principal Property or upon any shares of stock or indebtedness of any Subsidiary that owns or leases a Principal Property (whether such Principal Property, shares or indebtedness are now existing or owed or hereafter created or acquired) without in any such case effectively providing concurrently with
the issuance, incurrence, creation, assumption or guaranty of any such secured debt, or the grant of such mortgage, that the senior debt securities (together with, if we shall so determine, any other indebtedness of or guarantee by us or such Subsidiary ranking equally with the senior debt securities) shall be secured equally and ratably with (or, at our option, prior to) such secured debt. The foregoing restriction, however, will not apply to each of the following: (a) mortgages on property, shares of stock or indebtedness or other assets of any corporation existing at the time such corporation becomes a Subsidiary, provided that such mortgages or liens are not incurred in anticipation of such corporation’s becoming a Subsidiary; (b) mortgages on property, shares of stock or indebtedness or other assets existing at the time of acquisition thereof by us or a Subsidiary, or mortgages thereon to secure the payment of all or any part of the purchase price thereof, or mortgages on property, shares of stock or indebtedness or other assets to secure any debt incurred prior to, at the time of, or within 180 days after, the latest of the acquisition thereof or, in the case of property, the completion of construction, the completion of improvements or the commencement of substantial commercial operation of such property for the purpose of financing all or any part of the purchase price thereof, such construction or the making of such improvements; (c) mortgages to secure indebtedness owing to us or to a Subsidiary; (d) mortgages existing at the date of the initial issuance of any senior debt securities then outstanding; (e) mortgages on property of a person existing at the time such person is merged into or consolidated with Sysco or a Subsidiary or at the time of a sale, lease or other disposition of the properties of a person as an entirety or substantially as an entirety to us or a Subsidiary, provided that such mortgage was not incurred in anticipation of such merger or consolidation or sale, lease or other disposition; (f) mortgages in favor of the United States of America or any state, territory or possession thereof (or the District of Columbia), or any department, agency, instrumentality or political subdivision of the United States of America or any state, territory or possession thereof (or the District of Columbia), to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or the cost of constructing or improving the property subject to such mortgages; or (g) extensions, renewals or replacements of any mortgage referred to in the foregoing clauses (a), (b), (d), (e) or (f); provided, however, that the principal amount of indebtedness secured thereby shall not exceed the principal amount of indebtedness so secured at the time of such extension, renewal or replacement. Any mortgages permitted by any of the foregoing clauses (a) through (g) shall not extend to or cover any other Principal Property of ours or of one of our Subsidiaries, or any shares of stock or indebtedness of any such Subsidiary, subject to the foregoing limitations, other than the property, including improvements thereto, stock or indebtedness specified in such clauses.
Notwithstanding the restrictions in the preceding paragraph, we or any Subsidiary of ours may issue, incur, create, assume or guarantee debt secured by a mortgage which would otherwise be subject to such restrictions, without equally and ratably securing the senior debt securities, provided that after giving effect thereto, the aggregate amount of all debt so secured by mortgages (not including mortgages permitted under clauses (a) through (g) above) does not exceed 20% of Sysco’s Consolidated Net Tangible Assets.
Limitations on Sale and Lease-Back Transactions. We also covenant in the indenture that we will not, nor will we permit any Subsidiary to, enter into any Sale and Lease-Back Transaction with respect to any Principal Property, other than any such transaction involving a lease for a term of not more than three years or any such transaction between us and one of our Subsidiaries, or between Subsidiaries, unless: (a) we or such Subsidiary would be entitled to incur indebtedness secured by a mortgage on the Principal Property involved in such transaction at least equal in amount to the Attributable Debt with respect to such Sale and Lease-Back Transaction, without equally and ratably securing the senior debt securities, pursuant to the limitation on liens described above; or (b) the proceeds of such transaction are at least equal to the fair market value of the affected Principal Property (as determined in good faith by our Board of Directors) and we apply an amount equal to the greater of the net proceeds of such sale or the Attributable Debt with respect to such Sale and Lease-Back Transaction within 180 days of such sale to either (or a combination of) (i) the retirement (other than any mandatory retirement, mandatory prepayment or sinking fund payment or by payment at maturity) of debt for borrowed money of Sysco or a Subsidiary (other than debt that is subordinated to the senior debt securities or debt to us or a Subsidiary) that matures more than 12 months after its creation or (ii) the purchase, construction or development of other comparable property.
Certain Definitions
As used in the indenture and this description, the following definitions apply:
“Attributable Debt” with regard to a Sale and Lease-Back Transaction with respect to any property is defined in the indenture to mean, at the time of determination, the lesser of: (a) the fair market value of such property (as determined in good faith by our Board of Directors); or (b) the present value of the total net amount of rent required to be paid under such lease during the remaining term thereof (including any period for which such lease has been extended), discounted at the rate of interest set forth or implicit in the terms of such lease (or, if not practicable to determine such rate, the weighted average interest rate per annum borne by the securities then outstanding under the indenture) compounded semi-annually. In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall be the lesser of the net amount determined assuming termination upon the first date such lease may be terminated (in which case the net amount shall also include the amount of the penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated) or the net amount determined assuming no such termination.
“Consolidated Net Tangible Assets” is defined in the indenture to mean, as of any particular time, the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom: (a) all current liabilities, except for current maturities of long-term debt and of obligations under capital leases; and (b) intangible assets, to the extent included in said aggregate amount of assets, all as set forth on our most recent consolidated balance sheet and computed in accordance with generally accepted accounting principles.
“Principal Property” is defined in the indenture to mean the land, improvements, buildings and fixtures (including any leasehold interest therein) constituting the principal corporate office, any manufacturing plant, any manufacturing, distribution or research facility or any self-serve center (in each case, whether now owned or hereafter acquired) which is owned or leased by us or any Subsidiary and is located within the United States of America or Canada unless our Board of Directors has determined in good faith that such office, plant facility or center is not of material importance to the total business conducted by us and our Subsidiaries taken as a whole. With respect to any Sale and Lease-Back Transaction or series of related Sale and Lease-Back Transactions, the determination of whether any property is a Principal Property shall be determined by reference to all properties affected by such transaction or series of transactions.
“Sale and Lease-Back Transaction” is defined in the indenture to mean any arrangement with any person providing for the leasing by us or any Subsidiary of any Principal Property which property has been or is to be sold or transferred by us or such Subsidiary to such person.
“Subsidiary” is defined in the indenture to mean any corporation in which we and/or one or more of our Subsidiaries together own voting stock having the power to elect a majority of the board of directors of such corporation, directly or indirectly. For the purposes of this definition, “voting stock” means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.
Change of Control Repurchase Event
If a Change of Control Repurchase Event (as defined below) occurs, unless we have exercised our right to redeem the notes as described above or have defeased the notes as described below under the caption “Defeasance,” we will be required to make an irrevocable offer to each holder of notes to repurchase all or any part (equal to or in excess of €100,000 and in integral multiples of €1,000 above that amount) of that holder’s notes at a repurchase price in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest, if any, on the notes repurchased to, but not including, the date of repurchase. Within 30 days following a Change of Control Repurchase Event or, at our option, prior to a Change of Control (as defined below), but in either case, after the public announcement of the Change of Control, we will give, or shall cause to be given, a notice to each holder, with a copy to the trustee, describing the transaction or transactions that constitute or may constitute the Change of Control Repurchase Event, offering to repurchase notes on the payment date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is given (the “Change of Control Payment Date”), disclosing that any note not tendered for repurchase will continue to accrue interest, and specifying the procedures for tendering notes. The notice shall, if given prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on a Change of Control Repurchase Event occurring on or
prior to the payment date specified in the notice. We will comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control Repurchase Event provisions of the notes, we will comply with the applicable securities laws and regulations and will not be deemed to have breached our obligations under the Change of Control Repurchase Event provisions of the notes by virtue of such conflict.
On the Business Day immediately preceding the repurchase date following a Change of Control Repurchase Event, we will, to the extent lawful, deposit with a paying agent an amount equal to the aggregate purchase price in respect of all notes or portions of notes properly tendered.
On the repurchase date following a Change of Control Repurchase Event, we will, to the extent lawful:
• | accept for payment all notes or portions of notes properly tendered pursuant to our offer; and |
• | deliver or cause to be delivered to the trustee the notes properly accepted, together with an officers’ certificate stating the aggregate principal amount of notes being purchased by us. |
The applicable paying agent will promptly distribute to each holder of notes properly tendered the purchase price for the notes deposited by us. We will execute, and the trustee (or an authenticating agent) will promptly authenticate and deliver (or cause to be transferred by book-entry) to each holder, a new note equal in principal amount to any unpurchased portion of any notes surrendered provided that each new note will be in a principal amount of an integral multiple of €1,000. We will not be required to make an offer to repurchase the notes upon a Change of Control Repurchase Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by us and such third party purchases all notes properly tendered and not withdrawn under its offer. The definition of Change of Control includes the direct or indirect sale, transfer, conveyance or other disposition of “all or substantially all” of our properties or assets, taken as whole with our subsidiaries. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require us to repurchase the notes as a result of a sale, transfer, conveyance or other disposition of less than all of the properties or assets of us and our subsidiaries taken as a whole to another person or group may be uncertain.
For purposes of the foregoing discussion of a repurchase at the option of holders, the following terms have the meanings set forth below:
“Below Investment Grade Ratings Event” means, with respect to the notes, that on any day during the period (the “Trigger Period”) commencing 60 days prior to the first public announcement by us of any Change of Control (or pending Change of Control) and ending 60 days following consummation of such Change of Control (which Trigger Period will be extended following consummation of a Change of Control for up to an additional 60 days for so long as any of the Rating Agencies (as defined below) has publicly announced that it is considering a possible ratings change), the notes cease to be rated Investment Grade (as defined below) by at least two of the three Rating Agencies. Unless at least two of the three Rating Agencies are providing a rating for the notes at the commencement of any Trigger Period, the notes will be deemed to have ceased to be rated Investment Grade by at least two of the three Rating Agencies during that Trigger Period.
“Change of Control” means the occurrence of any of the following: (1) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than us or one of our subsidiaries) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of our Voting Stock (as defined below) or other Voting Stock into which our Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares; (2) Sysco consolidates with, or merges with or into, any Person (as defined in the base indenture), or any Person consolidates with, or merges with or into, Sysco, in any such event pursuant to a transaction in which any of the outstanding
Voting Stock of Sysco or such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of the Voting Stock of Sysco outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving Person immediately after giving effect to such transaction; (3) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or more series of related transactions, of all or substantially all of our consolidated assets, including the assets of our subsidiaries, taken as a whole, to one or more Persons (other than us or one of our subsidiaries); (4) the first day on which a majority of the members of our Board of Directors is composed of members who are not Continuing Directors; or (5) the adoption of a plan relating to the liquidation or dissolution of Sysco. Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) we become a direct or indirect wholly owned subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of our Voting Stock immediately prior to that transaction or (B) immediately following that transaction no person (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company.
“Change of Control Repurchase Event” means, with respect to the notes, the occurrence of both a Change of Control and a Below Investment Grade Ratings Event for the notes. Notwithstanding the foregoing, no Change of Control Repurchase Event will be deemed to have occurred in connection with any particular Change of Control unless and until such Change of Control has actually been consummated.
“Continuing Directors” means, as of any date of determination, any member of our Board of Directors who (1) was a member of our Board of Directors on the date the notes were issued or (2) was nominated for election, elected or appointed to our Board of Directors with the approval of a majority of the Continuing Directors who were members of our Board of Directors at the time of such nomination, election or appointment (either by a specific vote or by approval of our proxy statement in which such member was named as a nominee for election as a director, without objection to such nomination).
“Fitch” means Fitch Inc., a subsidiary of Fimalac, S.A., and its successors.
“Investment Grade” means a rating of Baa3 or higher by Moody’s (or its equivalent under any successor rating categories of Moody’s); a rating of BBB- or higher by S&P (or its equivalent under any successor rating categories of S&P); and a rating of BBB- or higher by Fitch (or its equivalent under any successor rating categories of Fitch).
“Moody’s” means Moody’s Investors Service, Inc., and its successors.
“Rating Agency” means each of Moody’s, S&P and Fitch; provided, that if any of Moody’s, S&P and Fitch ceases to provide rating services to issuers or investors, Sysco may appoint a replacement for such Rating Agency that is reasonably acceptable to the trustee under the indenture.
“S&P” means Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc., and its successors.
“Voting Stock” of any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date means the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.
Book-Entry, Delivery and Settlement
Global Notes
The notes will be issued in registered, global form in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof. The notes will be issued on the issue date therefor only against payment in immediately available funds.
The notes were issued in the form of one or more global certificates, in definitive, fully registered form without interest coupons, each of which we refer to as a “global note.” Each such global note was deposited with The Bank of New York Mellon, London Branch, as the common depositary (the “Common Depositary”) or nominee thereof and registered in the name of the Common Depositary or its nominee. We will not issue certificated notes, except in the limited circumstances described below.
Beneficial interests in the global notes will be represented, and transfers of such beneficial interest will be effected, through accounts of financial institutions acting on behalf of beneficial owners as direct or indirect participants in Clearstream or Euroclear. Investors may hold beneficial interests in securities directly through Clearstream or Euroclear, if they are participants in such systems, or indirectly through organizations that are participants in such systems. The address of Clearstream is 42 Avenue JF Kennedy, L-1855 Luxembourg, Luxembourg, and the address of Euroclear is 1 Boulevard Roi Albert II, B-1210 Brussels, Belgium. We and the trustee for the notes and our respective agents have no responsibility for any aspect of the records kept by Clearstream or Euroclear or any of their direct or indirect participants. We and the trustee for the notes also do not supervise these systems in any way.
Beneficial interests in the global notes will be shown on, and transfers of beneficial interests in the global notes will be made only through, records maintained by Clearstream or Euroclear and their participants. When you purchase notes through the Clearstream or Euroclear systems, the purchases must be made by or through a direct or indirect participant in the Clearstream or Euroclear system, as the case may be. The participant will receive credit for the notes that you purchase on Clearstream’s or Euroclear’s records, and, upon its receipt of such credit, you will become the beneficial owner of those notes. Your ownership interest will be recorded only on the records of the direct or indirect participant in Clearstream or Euroclear, as the case may be, through which you purchase the notes and not on Clearstream’s or Euroclear’s records. Neither Clearstream nor Euroclear, as the case may be, will have any knowledge of your beneficial ownership of the notes. Clearstream’s or Euroclear’s records will show only the identity of the direct participants and the amount of the notes held by or through those direct participants. You will not receive a written confirmation of your purchase or sale or any periodic account statement directly from Clearstream or Euroclear. You should instead receive those documents from the direct or indirect participant in Clearstream or Euroclear through which you purchase the notes. As a result, the direct or indirect participants are responsible for keeping accurate account of the holdings of their customers. The London paying agent will wire payments on the notes to the Common Depositary as the holder of the global notes. The trustee, the paying agents and we will treat the Common Depositary or any nominee of the Common Depositary as the owner of the global notes for all purposes. Accordingly, the trustee, the paying agents and we will have no direct responsibility or liability to pay amounts due with respect to the global notes to you or any other beneficial owners in the global notes. Any redemption or other notices with respect to the notes will be sent by us directly to Clearstream or Euroclear, which will, in turn, inform the direct participants (or the indirect participants), which will then contact you as a beneficial holder, all in accordance with the rules of Clearstream or Euroclear, as the case may be, and the internal procedures of the direct participant (or the indirect participant) through which you hold your beneficial interest in the notes. Clearstream or Euroclear will credit payments to the cash accounts of Clearstream customers or Euroclear participants in accordance with the relevant system’s rules and procedures, to the extent received by its depositary. Clearstream and Euroclear have established their procedures in order to facilitate transfers of the notes among participants of Clearstream and Euroclear. However, they are under no obligation to perform or continue to perform those procedures, and they may discontinue or change those procedures at any time. The registered holder of the notes will be The Bank of New York Depository (Nominees) Limited, as nominee of the Common Depositary.
Initial Settlement
Investors will follow the settlement procedures applicable to conventional eurobonds in registered form. It is intended that notes will be credited to the securities custody accounts of Clearstream and Euroclear holders on the settlement date on a delivery against payment basis. None of the notes may be held through, no trades of the notes will be settled through, and no payments with respect to the notes will be made through, The Depository Trust Company in the United States.
Secondary Market Trading
Any secondary market trading of book-entry interests in the notes takes place through participants in Clearstream and Euroclear in accordance with the normal rules and operating procedures of Clearstream and Euroclear and will be settled using the procedures applicable to conventional eurobonds in registered form.
It is important to establish at the time of trading of any notes where both the purchaser’s and seller’s accounts are located to ensure that settlement can be made on the desired value date.
You should be aware that investors will only be able to make and receive deliveries, payments and other communications involving the notes through Clearstream and Euroclear on days when those systems are open for business. Those systems may not be open for business on days when banks, brokers and other institutions are open for business in the United States.
In addition, because of time-zone differences, there may be problems with completing transactions involving Clearstream and Euroclear on the same Business Day as in the United States. U.S. investors who wish to transfer their interests in the notes, or to make or receive a payment or delivery of the notes, on a particular day, may find that the transactions will not be performed until the next business day in Luxembourg or Brussels, depending on whether Clearstream or Euroclear is used.
Clearstream and Euroclear
We have obtained the information in this section concerning Clearstream and Euroclear, and the book-entry system and procedures, from sources that we believe to be reliable, but we take no responsibility for the accuracy of this information.
Clearstream has advised us that it is a limited liability company organized under Luxembourg law. Clearstream holds securities for its participating organizations and facilitates the clearance and settlement of securities transactions between Clearstream participants through electronic book-entry changes in accounts of Clearstream participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to Clearstream participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic markets in several countries. Clearstream is registered as a bank in Luxembourg, and as such is subject to regulation by the Luxembourg Commission de Surveillance du Secteur Financier. Clearstream participants are recognized financial institutions around the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and other organizations and may include the underwriters. Indirect access to Clearstream is available to other institutions that clear through or maintain a custodial relationship with a Clearstream participant.
Euroclear has advised us that it was created in 1968 to hold securities for participants of Euroclear and to clear and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Euroclear provides various other services, including securities lending and borrowing and interfaces with domestic markets in several countries.
Euroclear is operated by Euroclear Bank S.A./N.V. (the “Euroclear Operator”), under contract with Euroclear Clearance Systems S.C., a Belgian cooperative corporation (the “Cooperative”). All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator, not the Cooperative. The Cooperative establishes policy for Euroclear on behalf of Euroclear participants. Euroclear participants include banks, securities brokers and dealers and other professional financial intermediaries and may include the underwriters. Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.
The Euroclear Operator is regulated and examined by the Belgian Banking and Finance Commission. Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable Belgian law (collectively, the “Terms and Conditions”). The Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear participants, and has no record of or relationship with persons holding securities through Euroclear participants.
Under Belgian law, the Euroclear Operator is required to pass on the benefits of ownership in any interests in securities on deposit with it, such as dividends, voting rights and other entitlements, to any person credited with such interests in securities on its records.
Certificated Notes
We will issue certificated notes to each person that Euroclear or Clearstream identifies as the beneficial owner of the notes represented by the global notes upon surrender by the Common Depositary of the global notes if:
• | Euroclear or Clearstream notifies us that it is no longer willing or able to act as a depositary for the global notes or ceases to be a clearing agency registered under the Exchange Act, and we have not appointed a successor depositary within 90 days of that notice or becoming aware that Euroclear or Clearstream is no longer so registered; |
• | an event of default has occurred and is continuing, and Euroclear or Clearstream requests the issuance of certificated notes; or |
• | we determine not to have the notes represented by global notes. |
Neither we nor the trustee will be liable for any delay by Euroclear or Clearstream, its nominee or any direct or indirect participant in identifying the beneficial owners of the related notes. We and the trustee may conclusively rely on, and will be protected in relying on, instructions from Euroclear or Clearstream for all purposes, including with respect to the registration, delivery and principal amount of the certificated notes to be issued.
Notices
Any notices required to be given to the holders of the notes will be given to Euroclear or Clearstream, as applicable, as the registered holder of the global notes. If a global note is exchanged for notes in certificated form, notices to holders of the notes will be made by first-class mail, postage prepaid, to the addresses that appear on the register of noteholders maintained by the registrar.
The Trustee
The trustee’s current address is The Bank of New York Mellon Trust Company, N.A., 601 Travis, 16th Floor, Houston, Texas 77002, Attn: Corporate Trust Administration. The trustee is one of a number of banks with which we maintain ordinary banking relationships.
The indenture provides that, except during the continuance of an event of default, the trustee will perform only such duties as are specifically set forth in the indenture. During the existence of an event of default, the trustee must exercise such rights and powers vested in it as a prudent person would exercise under the circumstances in the conduct of such person’s own affairs.
The indenture and provisions of the Trust Indenture Act incorporated by reference in the indenture contain limitations on the rights of the trustee, should it become our creditor, to obtain payment of claims in certain cases or
to liquidate certain property received by it in respect of any such claim as security or otherwise. The trustee is permitted to engage in other transactions with us or any of our affiliates. If the trustee acquires any conflicting interest (as defined in the indenture or in the Trust Indenture Act), it must eliminate that conflict or resign.
London Paying Agent and Transfer Agent
The Bank of New York Mellon, London Branch will initially act as paying agent and transfer agent in London for the notes. Upon notice to the trustee, we may change any paying agent or transfer agent.
Governing Law
The indenture, the notes and the guarantees will be governed by and construed in accordance with the laws of the State of New York.
Base Indenture Provisions:
Merger or Consolidation
The indenture provides that we may merge or consolidate with any other person or persons (whether or not affiliated with us), and we may sell, convey, transfer or lease all or substantially all of our property to any other person or persons (whether or not affiliated with us), so long as we meet the following conditions:
1. | Either (a) the transaction is a merger or consolidation, and Sysco is the surviving entity; or (b) the successor person (or the person which acquires by sale, conveyance, transfer or lease substantially all of our property) is a corporation organized under the laws of the United States or any state thereof and expressly assumes, by supplemental indenture satisfactory to the Trustee, all of our obligations under the indenture and the relevant debt securities and coupons; and |
2. | Immediately after giving effect to the transaction, no Event of Default (and no event or condition which, after notice or lapse of time or both, would become an Event of Default) shall have occurred and be continuing with respect to any series of debt security outstanding under the indenture. |
In the event of any of the above transactions, if there is a successor person as described in paragraph (1)(b) immediately above, then the successor will expressly assume all of our obligations under the indenture and automatically be substituted for us in the indenture and as issuer of the notes. Further, if the transaction is in the form of a sale or conveyance, after any such transfer (except in the case of a lease), Sysco will be discharged from all obligations and covenants under the indenture and all debt securities issued thereunder and may be liquidated and dissolved.
Events of Default
An Event of Default is defined under the indenture with respect to debt securities of any series issued under the indenture as being: (a) default in payment of any principal of or premium, if any, on the debt securities of such series, either at maturity, upon any redemption, by declaration or otherwise (including a default in the deposit of any sinking fund payment with respect to the debt securities of such series when and as due); (b) default for 30 days in payment of any interest on any debt securities of such series; (c) default for 90 days after written notice (given by the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding securities of all series affected by the default) in the observance or performance of any other covenant or agreement in respect of the debt securities of such series or the indenture other than a covenant or agreement which is not applicable to the debt securities of such series, or a covenant or agreement with respect to which more particular provision is made; (d) certain events of bankruptcy, insolvency or reorganization; or (e) any other Event of Default provided in the supplemental indenture under which such series of debt securities is issued, or in the form of debt security for such series.
Under the indenture, if an Event of Default occurs and is continuing with respect to a series, then either the Trustee or the holders of 25% or more in principal amount of the outstanding debt securities of the affected series (voting as a single class) may declare the principal (or such portion thereof as may be specified in the terms thereof) of all debt securities of all affected series (plus any interest accrued thereon) to be due and payable immediately (unless the principal of such series has already become due and payable). However, upon certain conditions, such declarations may be annulled and past defaults may be waived (except a continuing default in payment of principal of (or premium, if any) or interest on such debt securities) by the holders of a majority in principal amount of the outstanding debt securities of all such affected series (treated as one class). If an Event of Default due to certain events of bankruptcy, insolvency or reorganization shall occur, the principal (or such portion thereof as may be specified in the terms thereof) of and interest accrued on all debt securities then outstanding shall become due and payable immediately, without action by the Trustees or the holders of any such debt securities.
The indenture requires the Trustee to give notice, within 90 days after the occurrence of default with respect to the securities of any series, of all defaults with respect to that series known to the Trustee (i) if any unregistered securities of that series are then outstanding, to the holders thereof, by publication at least once in a newspaper in New York and London and (ii) to all holders of registered securities of such series by way of mail, unless in each case such defaults have been cured before mailing or publication. Except in the case of default in the payment of the principal of or interest on any of the securities of such series, or in the payment of any sinking fund installment on such series, the Trustee will be protected in withholding such notice if and so long as the Trustee’s board of directors, the Trustee’s executive committee or a trust committee of directors or trustees and/or responsible officers of the Trustee in good faith determines that the withholding of such notice is in the best interests of the holders of such series.
The indenture entitles the Trustee, subject to the duty of the Trustee during a default to act with the required standard of care, to be indemnified by the holders of debt securities issued under the indenture before proceeding to exercise any right or power under the indenture at the request of such holders. Subject to such indemnification and certain other limitations, the holders of a majority in principal amount of the outstanding debt securities of each affected series issued under the indenture (treated as one class) may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such series. The indenture does not require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there are reasonable grounds for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it.
The indenture provides that no holder of debt securities of any series or of any coupon issued under the indenture may institute any action against Sysco under the indenture (except actions for payment of overdue principal, premium, if any, or interest) unless (1) such holder previously shall have given to the Trustee written notice of default and continuance thereof, (2) the holders of not less than 25% in aggregate principal amount of the outstanding debt securities of each affected series issued under the indenture (treated as one class) shall have requested the Trustee to institute such action and shall have offered the Trustee reasonable indemnity, (3) the Trustee shall not have instituted such action within 60 days of such request, and (4) the Trustee shall not have received direction inconsistent with such written request by the holders of a majority in principal amount of the outstanding debt securities of each affected series issued under the indenture (treated as one class).
The indenture contains a covenant that we will file annually with the Trustee a certificate stating whether or not we are in compliance (without regard to grace periods or notice requirements) with all conditions and covenants of the indenture and, if we are not in compliance, describing the nature and status of the non-compliance.
Defeasance
The indenture provides that we may defease and be discharged from any and all obligations (except as described below) with respect to the debt securities of any series which have not already been delivered to the Trustee for cancellation and which have either become due and payable or are by their terms due and payable within one year (or scheduled for redemption within one year) by irrevocably depositing with the Trustee, as trust funds,
money or, in the case of debt securities payable only in U.S. dollars, U.S. Government Obligations (as defined) which through the payment of principal and interest in accordance with their terms will provide money, in an amount certified to be sufficient to pay at maturity (or upon redemption) the principal of (and premium, if any) and interest on such debt securities. Such defeasance does not apply to obligations related to the following (the “Surviving Obligations”):
• | registration of the transfer or exchange of the debt securities of such series and of coupons appertaining thereto; |
• | Issuer’s right to optional redemption, if any; |
• | substitution of mutilated, destroyed, lost or stolen debt securities of such series or coupons appertaining thereto; |
• | maintenance of an office or agency in respect of the debt securities of such series; |
• | receipt of payment of principal and interest on the stated due dates (but any rights of holders to force redemption of the debt securities does not survive); |
• | rights, obligations, duties and immunities of the Trustee; and |
• | rights of Holders as beneficiaries of any trust created as described above for purposes of the defeasance. |
In addition, the indenture provides that with respect to each series of debt securities issued under the indenture, even if the debt securities will not become due and payable within one year, we may elect either (a) to defease and be discharged from all obligations with respect to the debt securities of such series (except for the Surviving Obligations) or (b) to be released from only the restrictions described under “—Certain Covenants,” if applicable, and “—Merger or Consolidation” and, to the extent specified in connection with the issuance of such series of debt securities, other covenants applicable to such series of debt securities, by meeting certain conditions. Those conditions include depositing with the Trustee (or other qualifying trustee), in trust for such purpose, money (or, in the case of debt securities payable only in U.S. dollars, U.S. Government Obligations which through the payment of principal and interest in accordance with their terms will provide money) in an amount certified to be sufficient to pay at maturity (or upon redemption) the principal of (and premium, if any) and interest on the debt securities of such series. Such a trust may only be established if, among other things, we have delivered to the Trustee an opinion of counsel (as specified in the indenture) to the effect that the holders of the debt securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred. Such opinion, in the case of a defeasance under clause (a) above, must refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable Federal income tax law occurring after the date of the indenture.
EXHIBIT 10.41
STOCK OPTION AGREEMENT
Pursuant to the Sysco Corporation 2018 Omnibus Incentive Plan
Under the terms and conditions of the Sysco Corporation 2018 Omnibus Incentive Plan, (the “Plan”), the terms of which are hereby incorporated into this Stock Option Agreement (this “Agreement”) by reference, Sysco Corporation (the “Company” or “Sysco”) grants to you (the “Optionee”) an option to purchase shares of the Company’s Common Stock, $1.00 par value, (“Stock”) subject to adjustment as provided in the Plan (the “Option”). The Option is offered in accordance with and subject to the terms, conditions and restrictions of this Agreement, including any country-specific provisions for the Optionee’s country in Appendix A attached hereto. The number of shares of Stock subject to this Agreement, the exercise price of the Option, and the date of grant (the “Grant Date”) are set forth in the records of the Company and have been made available to the Optionee either (1) directly to the Optionee by the Company, or (2) electronically by the Company to the Optionee through the website of a third party administrator engaged by the Company, and by accepting this Option, the Optionee acknowledges and agrees that he or she has received and/or accessed such information and that such information forms a material part of this Agreement.
Unless terminated earlier in accordance with the terms of the Agreement, this Option shall terminate and expire at the close of business on the final trading day immediately prior to the tenth anniversary of the Grant Date and shall be subject to the Terms and Conditions of Stock Option attached hereto and incorporated in this Agreement by reference.
By accepting this Option, the Optionee accepts and agrees to be bound by all of the terms and conditions of the Plan and Terms and Conditions of Stock Option, and the Optionee acknowledges receipt of the Plan. In the event of any conflict between the terms of this Agreement and the Plan, the Plan will prevail.
The Option and this Agreement are not effective or enforceable until the Optionee properly acknowledges acceptance of the Option by completing the electronic receipt as soon as possible, but in no event later than 90 days from the Grant Date. If the Optionee does not properly acknowledge acceptance of the Option and the terms of this Agreement on or within 90 days from the Grant Date, this Option will be forfeited.
SYSCO CORPORATION
TERMS AND CONDITIONS OF STOCK OPTION
1. | General Conditions. Please carefully review all of the provisions of the Plan. In addition to the conditions set forth in the Plan, the Option is contingent upon satisfying the terms and conditions set forth in this Agreement. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Plan. |
2. | Vesting. The Option will vest in three equal tranches over a period of three years (one-third on each of the first, second, and third anniversaries of the Grant Date), subject to any acceleration provisions contained in the Plan or otherwise set forth in this Agreement and the Optionee’s continuous employment or service with the Company or any of its Subsidiaries from the Grant Date through the applicable vesting date (each date on which a portion of the Option will vest pursuant to this Agreement, a “Vesting Date”). |
3. | Maximum Term. Unless terminated earlier in accordance with the terms of this Agreement, this Option will expire at the close of business on the final trading day immediately prior to the tenth anniversary of the Grant Date. |
4. | Exercise Restrictions. Subject to any country-specific variations, the vested portion of the Option may be exercised at any time after its applicable Vesting Date and prior to the expiration of the Option, provided that at the time of the exercise all of the conditions set forth in the Plan and in this Agreement have been met. No portion of the Option may be exercised prior to the first anniversary of the Grant Date or after the expiration of the maximum term set forth in Section 3, above. |
5. | Accelerated Vesting Events. The Option awarded pursuant to this Agreement will vest according to the schedule set forth in Section 2 of this Agreement, subject to the Optionee’s continuous service with the Company or one of its Subsidiaries through each applicable Vesting Date. Notwithstanding the foregoing, provided that the Optionee has been in continuous service with the Company or one of its Subsidiaries since the Grant Date through the date of termination of his or her employment or service, (a) the Option shall remain in effect and continue to vest according to the vesting schedule set forth in Section 2 of this Agreement, irrespective of the continuous service limitations set forth in the first sentence of this Section 5, upon the occurrence of (i) the Optionee’s termination of employment by reason of Retirement in Good Standing (as defined in Section 19, below) or (ii) the Optionee’s termination of employment or service by reason of Disability (as defined in Section 19, below), and (b) the Option shall immediately vest upon the occurrence of (i) a “Change in Control Termination” (as defined in Section 19, below) in accordance with Section 4.2(h)(ii) of the Plan or (ii) the Optionee’s termination of employment or service by reason of death. |
6. | Exercise Period. The Option will normally terminate on the earlier of (i) the date of the expiration of the Option set forth in Section 3 of this Agreement or (ii) the 90th day after severance of the Optionee’s employment relationship with the Company or any Subsidiary, for any reason, for or without Cause. Whether an authorized leave of absence, or an absence for military or government service, constitutes severance of the Optionee’s employment or service relationship with the Company or a Subsidiary will be determined by the Committee administering the Plan at the time of the event. However, if before the expiration of the Option, the Optionee’s employment relationship with the Company or a Subsidiary terminates as a result of Retirement in Good Standing, Change in Control Termination, or Disability, the Option will remain exercisable in accordance with its terms as if Optionee remained in the employment or service of the Company or a Subsidiary, and in the event of the Optionee’s death while employed by or providing service to the Company or any Subsidiary, the Option may be exercised by the executors or administrators of the Optionee’s estate for up to |
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three years following the date of the Optionee’s death, but in no event later than the last day of the maximum term of the Option set forth in Section 3.
7. | Method of Exercise. At the time or times when the Optionee wishes to exercise the Option, the Optionee shall be required to follow the procedures established for doing so, which the Committee may revise from time to time. Notice of exercise of the Option must be accompanied by a payment equal to the applicable Option exercise price plus all Tax-Related Items (as defined below) required to be withheld, collected or accounted for, if any, such amount to be paid in cash or by tendering, either by actual delivery of shares of Stock or by attestation, shares of Stock that are acceptable to the Committee, such shares to be valued at Fair Market Value as of the day the shares are tendered, or paid in any combination of cash and shares, as determined by the Committee. To the extent permitted by applicable law and the policies adopted from time to time by the Committee, the Optionee may elect to pay the exercise price through the contemporaneous sale by a third party broker of shares of Stock acquired upon exercise yielding net sales proceeds equal to the exercise price and any withholding Tax-Related Items required to be withheld, collected or account for and the remission of those sale proceeds to the Company. |
Notwithstanding the foregoing, the Committee may require payment in a particular or different method of exercise than those specified in this Section 7, may allow the Optionee to exercise the Option only by means of a cashless exercise (either a cashless “sell all” exercise or a cashless “sell-to-cover” exercise) as it shall determine in its sole discretion, or may require the Optionee to sell any shares of Stock the Optionee acquired under the Plan immediately or within a specified period following the Optionee’s termination of employment (in which case, this Agreement shall give the Company the authority to issue sales instructions on the Optionee’s behalf).
8. | No Assignment. No right or interest of the Optionee in the Option may be pledged, encumbered, or hypothecated or be made subject to any lien, obligation or liability of the Optionee other than as provided in this Section 8. The Option may not be sold, assigned, transferred or otherwise disposed of by the Optionee other than by will or the laws of descent and distribution. |
9. | Nature of Option. In accepting the Option, the Optionee acknowledges, understands and agrees that: |
a. | the Plan is established voluntarily by the Company, it is discretionary in nature and the Company can amend, modify, suspend, cancel or terminate it at any time, to the extent permitted under the Plan; |
b. | this Option and any other awards under the Plan are voluntary and occasional and do not create any contractual or other right to receive future options, awards or benefits in lieu of any options or awards, even if similar options or awards have been granted repeatedly in the past; |
c. | all determinations with respect to any future options or awards, including, but not limited to, the times when options or awards are made, the amount of the options or awards and other conditions attached to the options or awards, will be at the sole discretion of the Company and/or the Committee; |
d. | participation in this Plan or program is voluntary; |
e. | the Option and any shares of Stock acquired under the Plan upon exercise of the Option are extraordinary items and do not constitute compensation of any kind (and do not give a right of claim of any kind) for services of any kind rendered to the Company or any of its Subsidiaries (including, as applicable, the entity employing the Optionee or to which the Optionee provides services, (the “Employer”) and which are outside the scope of the Optionee’s employment or service contract, if any; |
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f. | this Option, and any income derived therefrom, are not paid in lieu of, and are not intended to replace, any pension rights or compensation and are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any termination, severance, resignation, redundancy, dismissal, end of service payments, bonuses, long-service awards, life or accident insurance benefits, pension or retirement or welfare benefits or similar payments; |
g. | for the purposes of the Option, unless otherwise specified by the Company or any Affiliated Company, the Optionee’s employment or service will be considered terminated as of the date the Optionee is no longer actively providing services to the Company or any Subsidiary (regardless of the reason for such termination and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where the Optionee is employed or the terms of the Optionee’s employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by the Company, the Optionee’s right to vest in the Option under the Plan, if any, will terminate as of such date and will not be extended by any notice period or period during with the Optionee is in receipt of pay in lieu of such notice or severance pay (e.g., the Optionee’s period of service would not include any contractual, statutory or common law notice period or period during which the Optionee is in the receipt of pay in lieu of such notice or severance pay or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where the Optionee is employed or the terms of the Optionee’s employment agreement, if any); the Committee shall have the exclusive discretion to determine when the Optionee is no longer actively providing services for the purposes of the Option (including whether the Optionee may still be considered to be providing services while on a leave of absence); |
h. | the future value of the underlying Stock is unknown, indeterminable and cannot be predicted with certainty. If the shares of Stock subject to the Option do not increase in value following the Grant Date, the Option will have no value. If the Optionee exercises the Option and obtains the shares of Stock, the value of those shares of Stock acquired upon exercise may increase or decrease in value, even below the Option exercise price; |
i. | no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from the termination of the Optionee’s employment or other service relationship (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Optionee is employed or the terms of the Optionee’s employment agreement, if any), and in consideration of the grant of the Option to which the Optionee is otherwise not entitled, the Optionee irrevocably agrees never to institute any claim against the Company, the Employer, any Subsidiary or any Affiliated Company; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Optionee shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim; |
j. | the Option and the Optionee’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or services contract with the Company, the Employer, any Subsidiary or any Affiliated Company and shall not interfere with the ability of the Company, the Employer, any Subsidiary or any Affiliated Company, as applicable, to terminate the Optionee’s employment or service relationship (if any). The right of the Company or Employer to terminate at will the Optionee’s employment or service at any time for any reason is specifically reserved; |
k. | if the Optionee is providing services outside the United States, the Optionee acknowledges and agrees that neither the Company, the Employer, any Subsidiary nor any Affiliated |
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Company shall be liable for any foreign exchange rate fluctuation between the Optionee’s local currency and the United States Dollar that may affect the value of the Option or of any amounts due to the Optionee pursuant to the exercise of the Option or the subsequent sale of any Stock acquired upon exercise; and
l. | in the event of any conflict between communications to the Optionee by the Company of the terms of this Agreement or the records of any third party administrator and the Plan, the Plan will prevail. |
10. | Responsibility for Taxes. |
a. | Irrespective of any action taken by the Company or the Employer, the Optionee hereby acknowledges and agrees that the ultimate liability for all income tax, social insurance, social security, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Optionee’s participation in the Plan and legally applicable to the Optionee (“Tax-Related Items”), is and remains the responsibility of the Optionee or the Optionee’s estate (as applicable) and may exceed the amount actually withheld by the Company or the Employer. The Optionee acknowledges and understands that the requirements with respect to the Tax-Related Items may change from time to time as applicable laws or interpretations change. |
b. | Prior to any relevant taxable or tax withholding event, as applicable, the Optionee agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, the Optionee authorizes the Company, the Employer, and their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items withholding obligations by one or a combination of the following: |
i. | withholding from the Optionee’s wages or other cash compensation paid to the Optionee by the Company and/or the Employer, or any other payment of any kind otherwise due to the Optionee by the Company and/or the Employer; or |
ii. | withholding from proceeds of the sale of shares of Stock acquired upon exercise of the Option, either through a voluntary sale or through a mandatory sale arranged by the Company (on the Optionee’s behalf pursuant to this authorization without further consent); or |
iii. | retention of or withholding in shares of Stock to be issued upon exercise of the Option having a Fair Market Value that is sufficient to satisfy the Tax-Related Items. |
The Company and/or the Employer may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates.
c. | Notwithstanding the foregoing in Section 10(b) of the Agreement, if the Optionee is subject to Section 16 of the Exchange Act pursuant to Rule 16a-2 promulgated thereunder, the Company will withhold in shares of Stock unless the use of such withholding method is problematic under applicable law or has materially adverse accounting or tax consequences, in which case, the withholding obligation may be satisfied by one or a combination of methods set forth in Section 10(b)(i) and (ii) above. |
d. | If the obligation for Tax-Related Items is satisfied by withholding in shares of Stock, for tax purposes, the Optionee is deemed to have been issued the full amount of Stock subject |
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to the Option, notwithstanding that an amount of Stock was retained solely for the purpose of paying the Tax-Related Items.
e. | In addition, the Optionee shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of the Optionee’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the shares of Stock or the proceeds of the sale of shares of Stock, if the Optionee fails to comply with the Optionee’s obligations in connection with the Tax-Related Items. |
f. | The Optionee further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the issuance of Stock upon exercise of the Option, the subsequent sale of Stock acquired pursuant to such exercise and the receipt of any dividends and/or dividend equivalents following the issuance of Stock upon the exercise of the Option; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate the Optionee’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Optionee is subject to tax in more than one jurisdiction, the Optionee acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. |
11. | Prohibited Activities; Post-Employment Covenants; Additional Remedies of Clawback and Recoupment. |
a. | Notwithstanding any other term of the Agreement or any prior agreement to the contrary, in order to be eligible to benefit from any portion of the Option, the Optionee must have entered into an agreement containing restrictive covenants concerning limitations of the Optionee’s behavior both during employment or service and following termination of employment or service that is satisfactory to the Company or one of its Subsidiaries. In the event the Optionee engages in any action that violates any such restrictive covenants at any time during the term of the Agreement, the Option shall be forfeited. The Optionee further agrees that to the extent permitted by applicable law, upon demand by the Company or one of its Subsidiaries, the Optionee will forfeit, return or repay the “Benefits and Proceeds” (as defined below) in the event the Optionee breaches any post-employment or post-service covenant with the Company and/or any of its Subsidiaries. |
b. | For the purposes of this Agreement, “Benefits and Proceeds” means: |
i. | to the extent the Optionee has received any Stock in satisfaction of this Option and the Optionee continues to hold those shares of Stock, the shares of Stock so acquired; |
ii. | to the extent the Optionee has received any Stock in satisfaction of this Option and no longer owns the shares of Stock so acquired, cash in an amount equal to the Fair Market Value of such shares of Stock on the date such payment is demanded by the Company (which, unless otherwise determined by the Committee, shall be equal to the closing sale price during regular trading hours of the shares of Stock as reported by the New York Stock Exchange on such date); and |
iii. | to the extent the Optionee has not received any Stock in satisfaction of this Option, all of the Optionee’s remaining rights, title or interest in the Option. |
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12. | Electronic Delivery and Acceptance. The Optionee consents and agrees to electronic delivery of any Plan documents, proxy materials, annual reports or other related documents, and to the electronic review, confirmation and acceptance procedures governing this Option. The Optionee consents and agrees that any such electronic procedures may be effected by a third party engaged by the Company to provide administrative services related to the Plan, including any program adopted under the Plan. The Optionee further agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature. The Optionee acknowledges and agrees that the Company may provide personal information regarding the Optionee and any award of Options under the Plan, included but not limited to this Option, to any third party engaged by the Company to provide administrative or brokerage services related to the Plan. |
13. | Data Privacy. |
a. | To the extent consent is required, the Optionee hereby consents to the collection, use and transfer, in electronic or other form, of the Optionee’s personal data as described in this Agreement and any other Option materials by and among, as applicable, the Employer, the Company any Subsidiary and any Affiliated Company for the purpose of implementing, administering and managing the Optionee’s participation in the Plan. The Employer and the Company will be joint data controllers in relation to the Optionee’s personal data. |
b. | The Optionee understands that the Employer, the Company, any Subsidiary and any Affiliated Company may hold certain personal information about the Optionee, including but not limited to his or her name, home address, email address, telephone number, date of birth, social security number, passport number or other identification number, salary, nationality, job title, any shares of Stock or directorships held in the Company and details of all Options or any other entitlements to shares of Stock awarded, cancelled, vested, unvested, or outstanding in the Optionee’s favor (“Data”), for the purpose of implementing, administering or managing the Plan. Certain Data may also constitute “sensitive personal data” within the meaning of applicable local law. Such Data include, but are not limited to, the information provided above and any changes thereto and other appropriate personal and financial data about the Optionee. The Optionee hereby provides explicit consent to the Company, the Employer, any Subsidiary and any Affiliated Company to process any such Data to the extent it is necessary for the purposes of implementing, administering and managing the Optionee’s participation in the Plan. |
c. | The Optionee understands that Data will be transferred, for the purposes of implementing, administering and managing the Optionee’s participation in the Plan, to such equity plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. The Optionee understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have data privacy laws and protections which provide standards of protection that are different to or lower than the standards provided by the data privacy laws in the Optionee’s country. The Optionee understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Optionee authorizes the Company, the Company’s equity service plan provider and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan. The Optionee understands that Data will be held only as long |
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as is necessary to implement, administer and manage the Optionee’s participation in the Plan. The Optionee understands if he or she resides outside the United States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to or deletion of Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, the Optionee understands that he or she is providing the consents herein on a purely voluntary basis. If the Optionee does not consent, or if the Optionee later seeks to revoke his or her consent, his or her employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing the Optionee’s consent is that the Company would not be able to grant the Optionee Options or other equity awards or administer or maintain such awards. Therefore, the Optionee understands that refusing or withdrawing his or her consent may affect the Optionee’s ability to participate in the Plan. For more information on the consequences of the Optionee’s refusal to consent or withdrawal of consent, the Optionee understands that he or she may contact his or her local human resources representative.
14. | Notices. Each notice relating to this Option shall be in writing. All notices to the Company shall be addressed to the Corporate Secretary, Sysco Corporation, 1390 Enclave Parkway, Houston, Texas 77077. All notices to the Optionee shall be addressed to the address of the Optionee on file with the Company or the Employer. Either the Company or the Optionee may designate a different address by written notice to the other. Written notice to said addresses shall be effective to bind the Company, the Optionee and the Optionee’s representatives and beneficiaries. |
15. | Committee. The Optionee hereby agrees that any change, interpretation, determination or modification of this Agreement by the Committee shall be final and conclusive for all purposes and on all persons including the Company and the Optionee; provided, however, that with respect to any amendment or modification of the Plan which affects the Option made hereby, the Committee shall have determined that such amendment or modification is in the best interests of the Optionee of such Option. |
16. | Modification of Agreement. If any of the terms of this Agreement may, in the opinion of the Company, conflict or be inconsistent with any applicable law or regulation of any governmental agency having jurisdiction, the Company reserves the right to modify this Agreement to be consistent with applicable laws or regulations. If all or any part or application of the provisions of this Agreement are held or determined to be invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction in an action between Optionee and the Company, each and all of the other provisions of this Agreement shall remain in full force and effect. No change or modification of this Agreement shall be valid unless it is in writing and signed by the party against with enforcement is sought, except where specifically provided to the contrary herein. |
17. | No Advice Regarding Grant. None of the Company, any Subsidiary or any Affiliated Company is providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Optionee’s participation in the Plan, or the Optionee’s acquisition or sale of the underlying Stock. The Optionee is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan. |
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18. | Entire Agreement; Severability. The Plan and this Agreement set forth the entire understanding between the Optionee, the Employer, the Company and any Subsidiary regarding the acquisition of the Stock and supersedes all prior oral and written agreements pertaining to this Option. If all or any part of the provisions of this Agreement are held or determined to be invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction in an action between the Optionee and the Company, each and all of the other provisions of the Agreement shall remain in full force and effect. |
19. | Definitions. For purposes of this Agreement: |
a. | “Retirement in Good Standing” means: |
i. | in the United States and Canada, termination of employment after the date the Optionee reaches (A) age 55 and the Optionee has 10 or more years of service with the Company and its Subsidiaries, or (B) age 65, regardless of years of service with the Company and its Subsidiaries; and |
ii. | in all other jurisdictions, retirement, as determined by the Committee in its sole discretion. |
b. | “Disability” means: |
i. | in the United States, that the Optionee has been determined by the Social Security Administration to be totally disabled; and |
ii. | in all other jurisdictions, disability, as determined pursuant to the Employer’s long-term disability policy. |
c. | “Change in Control Termination” means the occurrence of both: (A) a Change in Control and (B) during the period commencing 12 months prior to the first occurrence of the Change in Control and ending 24 months after such Change in Control, the Company or one of its Subsidiaries involuntarily terminates the Optionee’s employment or Service without Cause or the Optionee terminates employment for Good Reason. |
20. | Compliance with Law. Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Stock, the Company shall not be required to deliver any Stock issuable upon exercise of the Option prior to the completion of any registration or qualification of the Stock under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. The Optionee understands that the Company is under no obligation to register or qualify the Stock with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Stock. Further, the Optionee agrees that the Company shall have unilateral authority to amend the Plan and the Agreement without the Optionee’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Stock. |
21. | Language. If the Optionee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control. |
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22. | Appendix A. The Option shall be subject to any special terms and conditions for the Optionee’s country set forth in Appendix A. Moreover, if the Optionee relocates to one of the countries included in Appendix A, the special terms and conditions for such country will apply to the Optionee, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendix A constitutes part of this Agreement. |
23. | Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Optionee’s participation in the Plan, on the Option and on any Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Optionee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
24. | Insider Trading Restrictions/Market Abuse Laws. The Optionee acknowledges that, depending on the Optionee’s country of residence, the Optionee may be subject to insider trading restrictions and/or market abuse laws, which may affect the Optionee’s ability to acquire or sell shares of Stock or rights to shares of Stock (e.g., Options) under the Plan during such times as the Optionee is considered to have “inside information” regarding the Company (as defined by the laws in the Optionee’s country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Company’s insider trading policy. The Optionee acknowledges that it is his or her responsibility to comply with any applicable restrictions, and the Optionee is advised to speak to his or her personal advisor on this matter. |
25. | Waiver. The Optionee acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or acceptance of any subsequent breach by the Optionee or any other person claiming rights with respect to the Option. |
26. | Governing Law and Venue. This Option has been granted and this Agreement has been made in and shall be governed by, construed under and in accordance with the laws of the State of Texas, without regard to the conflict of law provisions, as provided in the Plan. Any and all disputes relating to, concerning or arising from this Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Option or this Agreement, shall be brought and heard exclusively in the United States District Court for the Southern District of Texas or Harris County, Texas. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum. |
27. | Mobility. If, during the course of the Optionee’s employment with the Company or any of its Subsidiaries or during the provision of services to the Company or any of its Subsidiaries, the Optionee relocates to another jurisdiction, the Company reserves the right to modify the terms of this Agreement and/or impose other requirements on the Optionee’s participation in the Plan, on the Option and on any shares of Stock acquired under the Plan, to the extent the Company or any of its Subsidiaries determine it is necessary or advisable to comply with local law, rules and/or regulations or to facilitate the operation and administration of the Option and the Plan, and to require the Optionee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. The Optionee agrees to take any and all actions, and consents to any and all actions taken by the Company and its Subsidiaries, as may be required to allow the Company and its Subsidiaries to comply with local laws, rules and regulations in the Optionee’s country of residence (or employment, if different). |
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APPENDIX A
STOCK OPTION AGREEMENT
Pursuant to the Sysco Corporation 2018 Omnibus Incentive Plan
Terms and Conditions
This Appendix includes additional terms and conditions that govern the Option granted to the Optionee under the Plan if the Optionee works in one of the countries listed below. If the Optionee is a citizen or resident of a country other than the one in which the Optionee is currently working, is considered a resident of another country for local law purposes or if the Optionee transfers employment and/or residency between countries after the Grant Date, the Company will, in its discretion, determine the extent to which the terms and conditions herein will be applicable to the Optionee.
Certain capitalized terms used but not defined in this Appendix have the same meanings set forth in the Plan and/or the Agreement, as applicable.
Notifications
This Appendix also includes information regarding securities, exchange control and certain other tax or legal issues of which the Optionee should be aware with respect to the Optionee’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of July 2019 . Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Optionee not rely on the information in this Appendix as the only source of information relating to the consequences of the Optionee’s participation in the Plan because the information may be out of date when the Option vests, Stock are issued to the Optionee and/or the Optionee sells Stock acquired under the Plan.
In addition, the information contained herein is general in nature and may not apply to the Optionee’s particular situation and the Company is not in a position to assure the Optionee of a particular result. Accordingly, the Optionee is advised to seek appropriate professional advice as to how the relevant laws in the Optionee’s country may apply to his or her situation. Furthermore, additional privacy laws may apply in the Optionee’s country.
Finally, if the Optionee is a citizen or resident of a country other than the one in which the Optionee is currently working, is considered a resident of another country for local law purposes or if the Optionee transfers employment and/or residency between countries after the Option Date, the information contained herein may not be applicable to the Optionee in the same manner.
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UNITED STATES OF AMERICA
Terms and Conditions
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.
By accepting this Option, Optionee further acknowledges receipt of the Plan Prospectus, which contains important information, including a discussion of federal tax consequences.
BELGIUM
Terms and Conditions
Nature of Option
Section 9(f) shall be replaced with the following:
‘this Option and any income derived therefrom, are not paid in lieu of, and are not intended to replace, any pension rights or compensation and are not part of compensation or salary for the purposes of calculating any bonuses, long-service awards, life or accident insurance benefits, pension or retirement welfare benefits or similar payments;’
Section 9(g) shall be replaced with the following:
‘for the purposes of the Option, the Optionee’s employment or service relationship will be considered terminated as of the last day of employment with the Company or any Affiliated Company (regardless of the reason for termination and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where the Optionee is employed or the terms of the Optionee’s employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by the Company, the Optionee’s right to vest in the Option under the Plan, if any, will terminate as of such date;’
Offer Document
The Optionee must accept the Option in writing either (i) within 60 days of the offer (for tax at offer), or (ii) after 60 days of the offer (for tax at exercise) by completing the below Belgium Offer Document. The Optionee should consult a personal tax advisor with respect to completing the Offer Document.
Notifications
Foreign Asset/Account Reporting Information
The Optionee is required to report any taxable income attributable to the Option on his or her annual tax return. Additionally, Belgian residents are required to report any security or bank accounts (including brokerage accounts) maintained outside of Belgium on their annual tax return. In a separate report, they will be required to provide the National Bank of Belgium with certain details regarding such foreign accounts.
Tax Information
This section is intended to advise the Optionee of potential tax impact of certain actions or inactions under Belgian law. This section is applicable to any Optionee who is subject to income tax in Belgium, including residents. The
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Optionee is urged to consult their personal tax advisers when considering all matters regarding the Option grant set forth in the Agreement.
Options accepted in writing within 60 days following the offer date
At grant: Options that are accepted in writing within 60 days following the offer date are taxable on the 60th day following the date of the offer. The taxable benefit will be calculated as a percentage of the closing market price of the underlying shares on the last trading day preceding the date of offer, plus any excess of the closing market price over the exercise price. The Optionee acknowledges that these taxes are required to be paid even if the Option is later forfeited for any reason, including without limitation termination of employment, and/or the Optionee is not actually able to realize value from the Option. The tax paid may not be refunded by the Belgian revenue agency. The Belgian Employer will report the taxable amount for the year in which the 60th day after the offer date occurs, and will withhold income tax and social security, if any, on the taxable amount.
At exercise: Generally, no taxation. However, if a written undertaking was made at the time of the offer not to exercise the Option prior to the end of the third calendar year following the calendar year of the offer date and the Optionee breaches the written undertaking, additional tax will be due at exercise. Further, if shares of Stock are immediately sold upon exercise to cover the exercise price, a stock exchange tax may be payable (see below).
At sale: Generally, the Optionee will not be subject to capital gains taxation at the time of sale of the shares of Stock. However, the sale proceeds will likely be subject to a stock exchange tax. If the Optionee’s shares of Stock are held by a Belgian financial intermediary at the time of sale, that intermediary may withhold the stock exchange tax. If the stock exchange tax is not withheld, the Optionee will be responsible for filing a stock exchange tax return and paying the stock exchange tax.
Social security: The Option should not be subject to social security contributions, unless the Option is “in the money” as of the offer date.
Options accepted after the 60th day following the offer date
At grant: In principle, under current guidance from the Belgian tax authorities, no Belgian tax consequences.
At exercise: According to current guidance from the Belgian Minister of Finance, Options that are accepted after the 60th day following the offer date are not subject to taxation at grant, but to taxation at exercise. The taxable benefit is the difference between the actual value of the shares of Stock at exercise less the exercise price. The Belgian Employer will report the taxable benefit and withhold income tax and social insurance contributions at the time of exercise. The Optionee will also need to report the income and pay any taxes that are due. Further, if shares of Stock are immediately sold upon exercise to cover the exercise price, a stock exchange tax may be due (see below).
At sale: Generally, the Optionee will not be subject to capital gains taxation at the time of sale of the shares of Stock. However, the sale proceeds will likely be subject to a stock exchange tax. If the Optionee’s shares of Stock are held by a Belgian financial intermediary at the time of sale, that intermediary may withhold the stock exchange tax. If the stock exchange tax is not withheld, the Optionee will be responsible for filing a stock exchange tax return and paying the applicable stock exchange tax.
Social security: Social security contributions will be due on the Option income at the time of exercise.
Declining Options
If the Optionee declines the Option, no tax will be owed at any time, but the Option will be declared null and void.
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Special note for international service associates
Individuals resident in Belgium who are on international assignment under a Company or an Affiliated Company program are requested to accept the Option after 60 days of the date of offer. Should an international assignee accept the Option prior to 60 days from the date of offer, any taxes due on the grant of the Option shall be the international assignee’s personal responsibility and shall not be covered by a tax equalization policy, if any.
Belgium Offer Document
Sign here to accept or decline the grant:
Check one of the following three lines:
1. _____________ Accept within 60-day period
I hereby accept within the 60-day period (before [date – 60 days after Option Offer Date]). By accepting the Option within 60 days of the date of the offer, the Option will be taxed at the time of grant (more specifically, on the 60th day after the offer date).
If you have selected Option 1, please select one of the following:
_______ ACCEPT ALL: I hereby accept 100% of the Option granted in accordance with and subject to the terms and conditions of this Agreement and the Plan, acknowledge that I have read this Agreement and the Plan, and agree to be bound by this Agreement, the Plan and the actions of the Committee.
_______ ACCEPT PART: I hereby accept part of the Option granted in accordance with and subject to the terms and conditions of this Agreement and Plan. I ACCEPT ONLY ____ SHARES UNDERLYING THE OPTION GRANT. I acknowledge that I have read this Agreement and the Plan, and agree to be bound by this Agreement, the Plan and the actions of the Committee. I decline the remaining number of shares underlying the Option grant.
Three-year undertaking: If you are accepting the Option in writing within the 60-day period and wish to have the Option subject to a lower valuation for Belgium tax purposes pursuant to article 43, §6 of the Belgian law of 26 March 1999, you may agree and undertake to (a) not exercise the Option before the end of the third calendar year following the calendar year in which the offer date falls, and (b) not transfer the Option under any circumstances (except in the event of your death). If you wish to take this undertaking, you must sign below.
Optionee’s Signature ___________________
Optionee’s Printed Name ___________________
3. _____________ Accept after the 60-day period
I accept after the 60-day period (a date no less than the 61st date following the offer date). By accepting the Option at least 60 days after the date of the offer, under current guidance from the Belgian tax authorities, the Option will be taxed at the time Option is exercised. The taxable benefit is the difference between the actual value of the shares of Stock at exercise less the exercise price. The Company and its Affiliated Companies make no guarantee of any tax consequences to the Optionee, as laws and guidance may change.
3. _____________ DECLINE ALL: I hereby decline all of the Option granted.
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Optionee Signature ___________________
Date of Signature ___________________
Warning: If the Optionee does not accept all or part of the grant by checking the first or second line, signing above, and returning this Agreement prior to the date that is 90-days following the Grant Date, then the Company may declare the Option grant null and void. Also, in the unfortunate event that death occurs before this Agreement has been so accepted then this Option grant will be voided, which means the Option cannot be transferred to the Optionee’s heirs pursuant to the Optionee’s will or the laws of descent and distribution.
INSTRUCTIONS FOR RETURNING SIGNED GRANT AGREEMENT:
Deliver to: Vice-President, Total Rewards, Sysco Corporation. Attention: Stock Plan Administration, 1390 Enclave Parkway, Houston, Texas 77077, USA.
CANADA
Terms and Conditions
Termination of Employment
The following provision supplements Section 9(g) of the Agreement:
In the event of the Optionee’s termination of employment for any reason (whether or not later found invalid or in breach of local employment laws or the terms of the Optionee’s employment agreement, if any), any unvested portion of the Option shall be immediately forfeited without consideration. For purposes of the preceding sentence, the Optionee’s right to vest in the Option will terminate effective as of the earlier of the following dates: (i) the date on which the Optionee’s employment is terminated; (ii) the date the Optionee receives written notice of termination of employment from the Company or one of its Subsidiaries; or (iii) the date the Optionee is no longer actively providing services to the Company or one of its Subsidiaries. The right to vest in and exercise the Option (as discussed above) will not be extended by any notice period (e.g., active service would not include any contractual, statutory or common law notice period or period during which the Optionee is in receipt of pay in lieu of such notice or severance pay, or any period of “garden leave” or similar period mandated under Canadian laws or the terms of the Optionee’s employment or service agreement, if any). The Committee shall have the exclusive discretion to determine when the Optionee is no longer actively providing services for purposes of the Optionee (including whether the Optionee may still be considered to be providing services while on a leave of absence).
Data Privacy
The following provision supplements Section 13 of the Agreement:
The Optionee hereby authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. The Optionee further authorizes the Company, any Affiliated Companies and any stock plan service provider that may be selected by the Company to assist with the Plan to disclose and discuss the Plan with their respective advisors. The Optionee further authorizes the Company and any Affiliated Companies to record such information and to keep such information in the Optionee’s employee file.
Language Consent
The following terms and conditions apply to the Optionee if resident in Quebec:
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The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices, and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.
Consentement relatif à la langue utilisée
Les parties reconnaissent avoir exigé que cette convention («Agreement») soit rédigée en anglais, ainsi que tous les documents, avis et procédures judiciaires, éxécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à la présente.
Payment of Exercise Price and Taxes
Notwithstanding anything to the contrary in the Plan or in Sections 7 or 10 of this Agreement, no Tax-Related Items may be paid by delivery of shares of Stock or by having the Company withhold or retain shares of Stock otherwise issuable upon exercise of the Option.
Notwithstanding anything to the contrary in the Plan or in Section 7 of this Agreement, the exercise price of the Option may not be paid by delivery of shares of Stock or by having the Company withhold or retain shares of Stock otherwise issuable upon exercise of the Option.
Notifications
Securities Law Information
The Optionee is permitted to sell Shares acquired through the Plan through the designated broker appointed by the Company, provided the resale of Shares acquired under the Plan takes place outside of Canada through the facilities of a stock exchange on which the Shares are listed (i.e., New York Stock Exchange).
Foreign Asset/Account Reporting Information
Canadian residents are required to report any foreign property (e.g., Shares acquired under the Plan and possibly unvested Options) on form T1135 (Foreign Income Verification Statement) if the total cost of their foreign property exceeds C$100,000 at any time in the year. It is the Optionee’s responsibility to comply with these reporting obligations, and the Optionee should consult his or her own personal tax advisor in this regard.
COSTA RICA
There are no country-specific provisions.
FRANCE
Terms and Conditions
Option Not Qualified
The Option is not granted under the French specific regime provided by Articles L225-177-1 and seq. of the French commercial code.
Language Consent
By accepting the Option, the Optionee confirms having read and understood the documents relating to this grant (the Plan and the Agreement) which were provided in English language. The Optionee accepts the terms of those documents accordingly. The Optionee confirms that the Optionee has a good knowledge of the English language.
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En acceptant l’Option, le Titulaire de l’Option confirme avoir lu et compris les documents relatifs à cette Option (le Plan et ce Contrat) qui ont été fournis en langue anglaise. Le Titulaire de l’Option accepte les termes de ces documents en connaissance de cause. Etant précisé que le Titulaire de l’Option a une bonne maîtrise de la langue anglaise
Notifications
Foreign Asset/Account Information
The Optionee may hold shares of Stock acquired upon exercise of the Option, any proceeds resulting from the sale of shares of Stock or any dividends paid on such shares of Stock outside of France, provided the Optionee declares all foreign bank and brokerage accounts (including any accounts that were opened or closed during the tax year) with his or her annual income tax return. Failure to complete this reporting may trigger penalties for the resident.
IRELAND
Exercise Period
The following provisions shall supplement Section 6 of the Agreement:
‘Solely for the purposes of this Agreement, and not withstanding anything to the contrary in the Plan, the Optionee’s employment or service will be deemed to terminate, and severance of Optionee’s employment relationship will be deemed to occur, on the date that the Optionee ceases to be actively employed by or actively provide services to the Company or any of its Subsidiaries. Accordingly, in the event of termination of the Optionee’s employment or service, the Option shall cease to vest, and the exercise period following severance of the Optionee’s employment relationship shall be measured from, the date of cessation of active employment or service and shall not be extended by any notice period mandated or implied under local law, contract or otherwise during which the Optionee is not actually actively employed or providing services or during or for which the Optionee receives pay in lieu of notice or severance pay or is on garden leave or similar leave. The Company shall have the sole discretion to determine when the Optionee is no longer actively employed or actively providing services for purposes of this Agreement, without reference to any other agreement, written or oral, including the Optionee’s contract of employment or service.’
Responsibility for Tax
The following provisions shall supplement Section 10 of the Agreement:
‘Regardless of any action the Company (or any Subsidiary) takes with respect to any or all Taxes, the Optionee acknowledges that the ultimate liability for all Taxes is and remains the Optionee’s responsibility and may exceed the amount actually withheld by the Company (or any Subsidiary). the Optionee further acknowledges that the Company and its Subsidiaries (including the Optionee’s employer) (i) make no representations or undertakings regarding the treatment of any Taxes in connection with any aspect of the Option, including the grant, vesting or exercise of the Option or the subsequent sale of any shares of common stock acquired at exercise; and (ii) do not commit to, and are under no obligation to, structure the terms of the grant or any aspect of the Option to reduce or eliminate the Optionee’s liability for Taxes or achieve any particular tax result. Further, if the Optionee is subject to taxation in more than one jurisdiction between the Grant Date and the date of any relevant taxable or tax withholding event, as applicable, the Optionee acknowledges that the Company and/or its Subsidiaries (including the Optionee’s employer or former employer, as applicable) may be required to withhold or account for Taxes in more than one jurisdiction.’
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Terms and Conditions
Definitions
The following provision shall be inserted as Section 19(c) of the Agreement:
‘“Taxes” means any income tax or national contributions or any other payroll or statutory taxes or payment on account of obligations or other payments which the Committee determines must be withheld, collected or accounted for.’
PANAMA
Notifications
Securities Disclaimer
The Option and any shares of Stock that the Optionee may acquire at the exercise of the Option do not constitute a public offering of securities, as they are available only to eligible employees of the Company and its Subsidiaries.
SPAIN
Terms and Conditions
When exercised, all or a portion of this Option may trigger Spanish taxation laws, including the potential application of specific tax benefits, which will be determined on a case by case basis.
Discretionary Nature of the Plan
By accepting the Option grant, the Optionee consents to participation in the Plan and acknowledges receipt of a copy of the Plan.
The Optionee understands that the Company has unilaterally, gratuitously and in its sole discretion granted Options under the Plan to individuals who may be employees of the Company or its Subsidiaries throughout the world. The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind the Company or any of its Subsidiaries on an ongoing basis. Consequently, the Optionee understands that the Option is granted on the assumption and condition that the Option and the shares of Stock acquired upon exercise of the Option shall not become a part of any employment contract (either with the Company or any of its Subsidiaries) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever. In addition, the Optionee understands that this grant would not be made to the Optionee but for the assumptions and conditions referenced above; thus, the Optionee acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, the Option grant shall be null and void.
The Optionee understands and agrees that, as a condition of the Option grant, unless otherwise provided in the Agreement, any unvested Option as of the date the Optionee ceases active employment, and any vested portion of the Option not exercised within the post-termination exercise period set out in the Agreement, will be forfeited without entitlement to the underlying shares of Stock or to any amount of indemnification in the event of termination of the Optionee’s employment with the Company or any of its Subsidiaries. The Optionee acknowledges that the Optionee has read and specifically accepts the conditions referred to in the Agreement regarding the impact of a termination of employment on the Option.
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Termination for Cause
Notwithstanding anything to the contrary in the Plan or the Agreement, “Cause” shall be defined as set forth in the Plan, regardless of whether a termination of employment is considered a fair termination (i.e., “despido procedente”) under Spanish legislation.
Language Consent
By accepting the Option, the Optionee confirms having read and understood the documents relating to this grant (the Plan and the Agreement) which were provided in English language. The Optionee accepts the terms of those documents accordingly. The Optionee confirms that the Optionee has a good knowledge of the English language.
Con la aceptación del Incentivo, el Beneficiario confirma haber leído y entendido el documento relativo a la concesión de incentivos (el Plan y el Contrato) que le han sido entregados en inglés. El Beneficiario acepta los términos de los documentos y confirma que tiene buen conocimiento de la lengua inglesa.
SWEDEN
Terms and Conditions
Electronic Delivery and Acceptance
In Section 12 of the Agreement, the following sentence shall be deleted:
‘The Optionee acknowledges and agrees that the Company may provide personal information regarding the Optionee and any award of Options under the Plan, included but not limited to this Option, to any third party engaged by the Company to provide administrative or brokerage services related to the Plan.’
UNITED KINGDOM
Terms and Conditions
Exercise Period
The following provisions shall supplement Section 6 of the Agreement:
‘Solely for the purposes of this Agreement, and not withstanding anything to the contrary in the Plan, the Optionee’s employment or service will be deemed to terminate, and severance of the Optionee’s employment relationship will be deemed to occur, on the date that the Optionee ceases to be actively employed by or actively provide services to the Company or any of its Subsidiaries. Accordingly, in the event of termination of the Optionee’s employment or service, the Option shall cease to vest, and the exercise period following severance of the Optionee’s employment relationship shall be measured from, the date of cessation of active employment or service and shall not be extended by any notice period mandated or implied under local law, contract or otherwise during which the Optionee is not actually actively employed or providing services or during or for which the Optionee receives pay in lieu of notice or severance pay or is on garden leave or similar leave. The Company shall have the sole discretion to determine when the Optionee is no longer actively employed or actively providing services for purposes of this Agreement, without reference to any other agreement, written or oral, including the Optionee’s contract of employment or service.’
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Responsibility for Taxes
The following provisions shall supplement Section 10 of the Agreement:
At the request of the Company at any time before the exercise of an Option, the Optionee must elect, to the extent permitted by law, and using a form approved by Her Majesty’s Revenue and Customs (“HMRC”), that the whole or any part of the liability for national insurance contributions (“NICs”) arising as a result of a taxable event attributable to the Option or the Optionee’s participation in the plan shall be transferred to the Optionee.
The Optionee hereby agrees that the Optionee is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or (if different) the Employer or by HMRC (or any other tax authority or any other relevant authority). The Optionee also hereby agrees to indemnify and keep indemnified the Company and (if different) the Employer against any Tax-Related Items that they are required to pay or withhold on the Employee’s behalf or have paid or will pay to HMRC (or any other tax authority or any other relevant authority).
Definitions
The following provision shall be inserted as Section 19(c) of the Agreement:
‘“Taxes” means any income tax or national contributions or any other payroll or statutory taxes or payment on account of obligations or other payments which the Committee determines must be withheld, collected or accounted for.’
Notifications
Securities Disclosure
This Agreement is not an approved prospectus for the purposes of section 85(1) of the Financial Services and Markets Act 2000 (“FSMA”) and no offer of transferable securities to the public (for the purposes of section 102B of FSMA) is being made in connection with the Plan. The Plan and Options are exclusively available in the UK to bona fide employees and former employees and any other Company UK Subsidiary
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EXHIBIT 10.42
PERFORMANCE SHARE UNIT AGREEMENT
Pursuant to the Sysco Corporation 2018 Omnibus Incentive Plan
For Performance Period FY2020 - FY2022
Sysco Corporation (the “Company”) hereby agrees to award to you (the “Grantee”) performance-based Restricted Stock Units (“PSUs”) in accordance with and subject to the terms, conditions and restrictions of this Performance Share Unit Agreement, including any country-specific provisions for the Grantee’s country in Appendix A attached hereto (“Appendix A”, together with Appendix B and the Performance Share Unit Agreement, the “Agreement”). Except as otherwise provided in Section 3 below in the event of the Grantee’s death, the PSUs hereby awarded (the “Award”) shall be settled in the form of shares of Stock with each PSU earned being settled for one share of Stock, but until such settlement, the Award will be denominated in PSUs. Any PSUs earned will be settled, and the corresponding shares of Stock will be issued to the Grantee, on the date set forth below (“Payment Date”) if the conditions described in this Agreement are satisfied. The number of PSUs subject to this Agreement is expressed as a Target Award, subject to modification based on actual performance. The number of PSUs subject to the Target Award is set forth in the records of the Company and has been communicated to the Grantee either (1) directly to the Grantee by the Company, or (2) electronically by the Company to the Grantee through the website of a third party administrator engaged by the Company. This Award is made under the terms of the Sysco Corporation 2018 Omnibus Incentive Plan (the “Plan”), the terms of which are incorporated into this Agreement.
By accepting this Award, the Grantee confirms consent to the terms of the post-employment covenants communicated to the Grantee as a condition precedent to this Award, including the associated limitations on the Grantee’s behavior following termination of employment. The Grantee further acknowledges receipt of the Plan and the Plan Prospectus.
The following dates and defined terms are applicable for this Award:
Performance Period | June 30, 2019 to July 2, 2022 |
Performance Certification Date | The date of the first Compensation Committee meeting following the completion of final financial statements for the Performance Period. |
Payment Date | The first day of the month following the Performance Certification Date, currently anticipated to be September 1, 2022, or as soon as administratively possible thereafter, but no later than September 30, 2022. |
Performance Criteria: The performance criteria shown in Appendix B (“Performance Criteria”) must be met for any Stock to be issued pursuant to an Award under this Agreement. There may be different performance criteria for different business, geographic or other organizational units that is not shown on Appendix B. The performance criteria that apply originally shall be based on the business, geographic or other organizational unit in which a Grantee is employed on the date the Award is granted. Should the Grantee move to a different business, geographic or organizational unit, or to an Affiliated Company, during the Performance Period, proration or adjustments shall be made pursuant to guidelines established by the Company from time to time. The number of shares of Stock that may be issued on the Payment Date shall be determined based upon the Target Award and the schedule shown in Appendix B, subject to Sections 1 and 3, and in the case of transfer, to the above-mentioned guidelines.
TERMS AND CONDITIONS OF THIS AGREEMENT
(1) | General Conditions. This Award is in the form of PSUs that settle in Stock on the Payment Date, except as otherwise provided in Section 3 below in the event of the Grantee’s death. If the conditions set forth in this Agreement are satisfied, the number of shares of Stock earned based on actual performance achieved will be calculated as of the Certification Date and issued to the Grantee on the Payment Date. If these conditions are |
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not satisfied, the Award shall be forfeited. Capitalized terms in this Agreement refer to defined terms in the Plan, except as otherwise defined herein.
(a) Continuous Employment. Except as provided in Section 3 or in Appendix A, the Stock shall be issued on the Payment Date only if the Grantee is continuously employed by the Company, or if different, the Grantee’s employer (the “Employer”), or an Affiliated Company from the award date until the end of the Performance Period.
(b) Performance Conditions. The Stock shall be issuable only if (and to the extent) that the Performance Criteria, set forth herein, are satisfied during the Performance Period. The Compensation Committee of the Board shall certify whether, and to what extent, the Performance Criteria have been achieved with respect to the Performance Period. If actual performance does not meet the levels associated with the minimum performance necessary for any PSUs to be earned (“Threshold”, as set forth in Appendix B), no Stock shall be issued and the Award shall be forfeited. If actual performance achieved exceeds the levels associated with maximum performance target(s) (“Maximum” as set forth in Appendix B), no additional PSUs may be earned over the Maximum. Straight-line interpolation will be applied to determine the resulting amount of PSUs earned if actual performance falls between multiple payment amounts corresponding to alternative performance levels specified in Appendix B.
(2) Stock, Dividends and Voting Rights.
(a) Issuance of Stock and Voting Rights. On the Payment Date, or as otherwise provided in Section 3 below in the event of the Grantee’s death, the number of shares of Stock equal to the number of PSUs earned based on the Performance Criteria shall be issued to the Grantee, provided all conditions set forth in Section 1 above are satisfied. Except as provided herein and in Section 3 below in the event of the Grantee’s death, the Award shall be settled in shares of Stock. Notwithstanding the foregoing, if the Grantee works or resides outside the United States, the Company may, in its sole discretion, settle the PSUs in the form of a cash payment to the extent settlement in shares of Stock: (i) is prohibited under local law, (ii) would require the Grantee, the Company or any of its Subsidiaries to obtain the approval of any governmental and/or regulatory body in the Grantee’s country, or (iii) is administratively burdensome. Alternatively, the Company may, in its sole discretion, settle the PSUs in shares of Stock but require the Grantee to sell such shares of Stock immediately or within a specified period following the Grantee’s termination of employment (in which case, this Agreement shall give the Company the authority to issue sales instructions on the Grantee’s behalf). Prior to the Payment Date, the Grantee shall have no rights with respect to the shares of Stock, including but not limited to rights to sell, vote, exchange, transfer, pledge, hypothecate or otherwise dispose of the Stock. In addition, prior to the Payment Date, the Grantee shall not be entitled to receive dividends and shall not have any other rights with respect to the Stock.
(b) Dividend Equivalents. Subject to Appendix A, to the extent the Grantee holds PSUs under this Award the Grantee will be credited with a dividend equivalent payment on each PSU upon the payment by the Company of any cash dividend on a share of Stock equal to the amount of such dividend per share of Stock, which dividend equivalent payment shall be payable in cash (or if elected by the Committee in its sole discretion, in Shares having a Fair Market Value as of the Certification Date equal to the amount of such dividends) on the Payment Date to the extent the underlying PSUs are earned. If and to the extent any PSUs subject to this Award are forfeited, any related dividend equivalent payment shall also be forfeited and no dividend equivalent payment shall be paid in respect of that portion of the Award which is forfeited and is not earned based on the achievement of the Performance Criteria applicable to the Award or the failure to satisfy the conditions set forth in Section 1 above.
(3) Employment Events.
(a) Subject to the attached Appendix A, if any of the employment events listed below occur prior to the end of the Performance Period, the terms of this subparagraph shall apply. The following table describes the result depending on the nature of the Grantee’s termination of employment, or other employment event, and
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the timing of the same. In the event of the Grantee’s termination of employment prior to the end of the Performance Period for reasons other than those set forth below, the Award shall be forfeited.
Event | Following commencement of Performance Period and prior to the end of the Performance Period |
Employment with the Company or an Affiliated Company terminates because of Disability (as defined in Section 14, below). | • The Grantee shall be entitled to earn a number of PSUs subject to the Award as if active employment continued for the entire Performance Period, taking into account the actual performance of the Company for the Performance Period. • After the Performance Criteria are certified, shares of Stock equal to the number of PSUs earned will be issued on the Payment Date. |
Employment with the Company or an Affiliated Company terminates as a result of a Retirement in Good Standing (as defined in Section 14, below). | • If the Grantee incurs a Retirement in Good Standing before the end of the first fiscal year of the Company since the start of the Performance Period, the Award is forfeited. • If the Grantee incurs a Retirement in Good Standing on or after the complete fiscal year of the Company from start of the Performance Period, such recipient shall be entitled to retain a prorated number of PSUs subject to the Award if such PSUs have been earned. The PSUs will be prorated based on the number of complete calendar months of employment during the Performance Period through the date of termination of employment. • After the Performance Criteria are certified, shares of Stock equal to the pro-rated number of PSUs earned will be issued on the Payment Date. |
Employment with the Company or an Affiliated Company terminates because of death. | • The Grantee’s estate shall be paid a cash amount equal to the value of the Target Award. The value shall be determined based on the closing price of the Stock on the date of the Grantee’s death and shall be paid within 75 days after the Grantee’s death. |
Employment with the Company or an Affiliated Company involuntarily terminates, for reasons other than for Cause and meets the requirements of a Change in Control Termination (as defined in Section 14, below). | • Award shall be treated as described in Section 4.2(h)(ii) of the Plan, with immediate vesting and performance-criteria deemed to have been met at Target performance levels. |
US military leave or other leave to the extent required by applicable law | • For this purpose, employment is deemed to continue during the Performance Period. • After the Performance Criteria are certified, shares of Stock equal to the number of PSUs earned will be issued on the Payment Date. |
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Event | Following commencement of Performance Period and prior to the end of the Performance Period |
Unpaid leave of absence pursuant to published Company policy of 12 months or less (other than leaves described above) 1 | • If less than a complete fiscal year of the Company has passed since the start of the Performance Period before the commencement of such an unpaid leave, the Grantee shall be entitled to retain a prorated number of PSUs subject to the Award. The PSUs earned with respect to such a Grantee will be prorated based on the number of complete calendar months of active employment during the Performance Period, divided by 36. • After the Performance Criteria are certified, the shares of Stock equal to the pro-rated number of PSUs earned will be issued on the Payment Date. |
1 In the case of other leaves of absence not specified above, including any leaves that extend beyond 12 months, the Grantee will be deemed to have terminated employment on the date that the leave commences (so that the Award will be forfeited as of such date), unless the Committee identifies a valid business interest in doing otherwise, in which case it may specify what provisions it deems appropriate at its sole discretion; provided that the Committee shall have no obligation to consider any such matters.
(4) | Acceptance of Agreement. The Grantee shall indicate his or her acceptance of this Agreement, in the method directed by the Company. |
(5) | Notices. Each notice relating to this Award shall be in writing. All notices to the Company shall be addressed to the Corporate Secretary, Sysco Corporation, 1390 Enclave Parkway, Houston, Texas 77077. All notices to the Grantee shall be addressed to the address of the Grantee on file with the Company or the Employer. Either the Company or the Grantee may designate a different address by written notice to the other. Written notice to said addresses shall be effective to bind the Company, the Grantee and the Grantee’s representatives and beneficiaries. |
(6) Responsibility for Taxes.
(a) Irrespective of any action taken by the Company or the Employer, the Grantee hereby acknowledges and agrees that the ultimate liability for all income tax, social insurance, social security, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Grantee’s participation in the Plan and legally applicable to the Grantee (“Tax-Related Items”), is and remains the responsibility of the Grantee or the Grantee’s estate (as applicable) and may exceed the amount actually withheld by the Company or the Employer. The Grantee acknowledges and understands that the requirements with respect to the Tax-Related Items may change from time to time as applicable laws or interpretations change.
(b) Prior to any relevant taxable or tax withholding event, as applicable, the Grantee agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, the Grantee authorizes the Company, the Employer, and their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items withholding obligations by one or a combination of the following:
(1) | withholding from the Grantees’ wages or other cash compensation paid to the Grantee by the Company and/or the Employer, or any other payment of any kind otherwise due to the Grantee by the Company and/or the Employer; or |
(2) | withholding from proceeds of the sale of shares of Stock acquired upon settlement of the Award, either through a voluntary sale or through a mandatory sale arranged by the Company (on the Grantee’s behalf pursuant to this authorization without further consent); or |
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(3) | retention of or withholding in shares of Stock to be issued upon settlement of the Award having a Fair Market Value that is sufficient to satisfy the Tax-Related Items. |
The Company and/or the Employer may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates.
(c) Notwithstanding the foregoing in Section 6(b) of the Agreement, the Company, the Employer or their respective agents, as applicable, intend to withhold shares of Stock to be issued upon settlement of the Award having a Fair Market Value that is sufficient to satisfy the Tax-Related Items, unless the Grantee pays the applicable withholding amount in cash prior to any relevant taxable or tax withholding event, in accordance with procedures established by the Company, the Employer or their respective agents, as applicable. Further, if the Grantee is subject to Section 16 of the Exchange Act pursuant to Rule 16a-2 promulgated thereunder, the Company will withhold in shares of Stock unless the use of such withholding method is problematic under applicable law or has materially adverse accounting or tax consequences, in which case, the withholding obligation may be satisfied by one or a combination of methods set forth in Section 6(b)(1) and (2) above.
(d) If the obligation for Tax-Related Items is satisfied by withholding in shares of Stock, for tax purposes, the Grantee is deemed to have been issued the full amount of Stock subject to the Award, notwithstanding that an amount of Stock are retained solely for the purpose of paying the Tax-Related Items.
(e) In addition, the Grantee shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of the Grantee’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Stock or the proceeds of the sale of Stock, if the Grantee fails to comply with the Grantee’s obligations in connection with the Tax-Related Items.
(f) The Grantee further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including, but not limited to, the grant, vesting or settlement of the Award, the issuance of Stock upon settlement of the Award, the subsequent sale of Stock acquired pursuant to such settlement and the receipt of any dividends and/or dividend equivalents; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Award to reduce or eliminate the Grantee’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Grantee is subject to tax in more than one jurisdiction, the Grantee acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
(7) | Compensation Committee. The Grantee hereby agrees that any change, interpretation, determination or modification of this Agreement by the Committee shall be final and conclusive for all purposes and on all persons including the Company and the Grantee; provided, however, that with respect to any amendment or modification of the Plan which affects the Award made hereby, the Committee shall have determined that such amendment or modification is in the best interests of the Grantee of such Award. |
(8) | Prohibited Activities; Post-Employment Covenants; Additional Remedies of Clawback and Recoupment. |
(a) Notwithstanding any other term of the Agreement or any prior agreement to the contrary, in order to be eligible to earn any portion of the Award, the Grantee must have entered into an agreement containing restrictive covenants concerning limitations of the Grantee’s behavior both during employment and following termination of employment that is satisfactory to the Company or one of its Affiliated Companies. In the event the Grantee engages in any action that violates any such restrictive covenants at any time during the term of the Agreement, the Award shall be forfeited. The Grantee further agrees that to the extent permitted by applicable law, upon demand by the Company or one of its Affiliated Companies, the Grantee will forfeit,
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return or repay the “Benefits and Proceeds” (as defined below) in the event the Grantee breaches any post-employment covenant with the Company and/or any of its Subsidiaries.
(b) For purposes of this Agreement, “Benefits and Proceeds” means:
(i) | to the extent the Grantee has received any Stock in satisfaction of this Award and the Grantee continues to hold those shares of Stock, the shares of Stock so acquired; |
(ii) | to the extent the Grantee has received any Stock in satisfaction of this Award and no longer owns the shares of Stock so acquired, cash in an amount equal to the Fair Market Value of such shares of Stock on the date such payment is demanded by the Company (which, unless otherwise determined by the Committee, shall be equal to the closing sale price during regular trading hours of the shares of Stock as reported by the New York Stock Exchange on such date); and |
(iii) | to the extent the Grantee has not received any Stock in satisfaction of this Award, all of the Grantee’s remaining rights, title or interest in the Award. |
(9) | Modification of Agreement. If any of the terms of this Agreement may, in the opinion of the Company, conflict or be inconsistent with any applicable law or regulation of any governmental agency having jurisdiction, the Company reserves the right to modify this Agreement to be consistent with applicable laws or regulations. No change or modification of this Agreement shall be valid unless it is in writing and signed by the party against which enforcement is sought, except where specifically provided to the contrary herein. |
(10) | Data Privacy. To the extent that consent is required, the Grantee hereby consents to the collection, use and transfer, in electronic or other form, of the Grantee’s personal data as described in this Agreement and any other Award materials by and among, as applicable, the Employer, the Company and any Affiliated Company for the purpose of implementing, administering and managing the Grantee’s participation in the Plan. |
The Grantee understands that the Employer, the Company and any Affiliated Companies may hold certain personal information about the Grantee, including but not limited to his or her name, home address, email address, telephone number, date of birth, social security number, passport number or other identification number, salary, nationality, job title, any shares of Stock or directorships held in the Company and details of all Awards or any other entitlements to shares of Stock awarded, cancelled, vested, unvested, or outstanding in the Grantee’s favor (“Data”), for the purpose of implementing, administering or managing the Plan. Certain Data may also constitute “sensitive personal data” within the meaning of applicable local law. Such Data includes, but is not limited to, the information provided above and any changes thereto and other appropriate personal and financial data about the Grantee. The Grantee hereby provides explicit consent to the Company, the Employer and any Affiliated Companies to process any such Data to the extent it is necessary for the purposes of implementing, administering and managing the Grantee’s participation in the Plan.
The Grantee understands that Data will be transferred, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan, to such equity plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. The Grantee understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have data privacy laws and protections which provide standards of protection that are different to, or lower than, the standards provided by the data privacy laws in the Grantee’s country. The Grantee understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources
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representative. The Grantee authorizes the Company, the Company’s equity service plan provider and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan. The Grantee understands that Data will be held only as long as is necessary to implement, administer and manage the Grantee’s participation in the Plan. The Grantee understands if he or she resides outside the United States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, the Grantee understands that he or she is providing the consents herein on a purely voluntary basis. If the Grantee does not consent, or if the Grantee later seeks to revoke his or her consent, his or her employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing the Grantee’s consent is that the Company would not be able to grant the Grantee Awards or other equity awards or administer or maintain such awards. Therefore, the Grantee understands that refusing or withdrawing his or her consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of the Grantee’s refusal to consent or withdrawal of consent, the Grantee understands that he or she may contact his or her local human resources representative.
(11) | Nature of Award. In accepting the Award, the Grantee acknowledges, understands and agrees that to the maximum extent permitted by law: |
(a) the Plan is established voluntarily by the Company, it is discretionary in nature and the Company can amend, modify, suspend, cancel or terminate it at any time, to the extent permitted under the Plan;
(b) this Award and any other awards under the Plan are voluntary and occasional and do not create any contractual or other right to receive future awards or benefits in lieu of any awards, even if similar awards have been granted repeatedly in the past;
(c) all determinations with respect to any future awards, including, but not limited to, the times when awards are made, the amount of Stock, and the performance and other conditions attached to the awards, will be at the sole discretion of the Company and/or the Committee;
(d) participation in this Plan or program is voluntary;
(e) this Award and the underlying Stock, and any income derived therefrom, are not paid in lieu of, and are not intended to replace, any pension rights or compensation and are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any termination, severance, resignation, redundancy, dismissal, end of service payments, bonuses, long-service awards, life or accident insurance benefits, pension or retirement or welfare benefits or similar payments;
(f) the Award and any shares of Stock acquired under the Plan are extraordinary, discretionary items that do not constitute compensation of any kind (and do not give a right of claim of any kind) for services of any kind rendered to the Company or its Affiliated Companies (including, as applicable, the Grantee’s Employer) and which are outside the scope of the Grantee’s employment contract, if any;
(g) for the purposes of the Award, unless otherwise specified by the Company or any Affiliated Company, the Grantee’s employment will be considered terminated as of the date the Grantee is no longer actively providing services to the Company or any Affiliated Companies (regardless of the reason for such termination and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where the Grantee is employed or the terms of the Grantee’s employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by the Company, the Grantee’s right to earn any portion of the Award under the Plan, if any, will terminate as of such date and will not be extended by any notice
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period (e.g., the Grantee’s period of service would not include any contractual, statutory or common law notice period or period during with the Grantee is in receipt of pay in lieu of such notice or severance pay, or any period of “garden leave”, or similar period mandated under employment laws in the jurisdiction where the Grantee is employed or the terms of the Grantee’s employment agreement, if any); the Committee shall have the exclusive discretion to determine when the Grantee is no longer actively employed for purposes of the Award (including whether the Grantee may still be considered to be employed while on a leave of absence);
(h) the future value of the underlying Stock is unknown, indeterminable and cannot be predicted with certainty;
(i) no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from the termination of the Grantee’s employment or other service relationship (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Grantee is employed or the terms of the Grantee’s employment agreement, if any), and in consideration of the grant of the Award to which the Grantee is otherwise not entitled, the Grantee irrevocably agrees never to institute any claim against the Company, the Employer or any Affiliated Company; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Grantee shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim;
(j) the PSUs and the Grantee’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or services contract with the Company, the Employer, any Subsidiary or any Affiliated Company and shall not interfere with the ability of the Company, the Employer, any Subsidiary or any Affiliated Company, as applicable, to terminate the Grantee’s employment or service relationship (if any). The right of the Company or the Employer to terminate at will the Grantee’s employment or service at any time for any reason is specifically reserved;
(k) if the Grantee is providing services outside the United States, the Grantee acknowledges and agrees that neither the Company, the Employer nor any Affiliated Company shall be liable for any foreign exchange rate fluctuation between the Grantee’s local currency and the United States Dollar that may affect the value of the Award or of any amounts due to the Grantee pursuant to the settlement of the Award or the subsequent sale of any Stock acquired upon settlement; and
(l) in the event of any conflict between communications to the Grantee by the Company of the terms of this Agreement or the records of any third party administrator and the Plan, the Plan will control.
(12) | No Advice Regarding Grant. Neither the Company nor any Affiliated Company is providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Grantee’s participation in the Plan, or the Grantee’s acquisition or sale of the underlying Stock. The Grantee is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan. |
(13) | Entire Agreement; Severability. The Plan and this Agreement set forth the entire understanding between the Grantee, the Employer, the Company, and any Affiliated Company regarding the acquisition of the Stock and supersedes all prior oral and written agreements pertaining to this Award. If all or any part or application of the provisions of this Agreement are held or determined to be invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction in an action between the Grantee and the Company, each and all of the other provisions of this Agreement shall remain in full force and effect. |
(14) Definitions. For purposes of this Agreement:
(a) “Retirement in Good Standing” means:
(i) | in the United States and Canada, termination of employment after the date the Grantee reaches (A) age 55 and the Grantee has 10 or more years of service with the Company and |
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its Subsidiaries, or (B) age 65, regardless of years of service with the Company and its Subsidiaries; and
(ii) | in all other jurisdictions, retirement, as determined by the Committee in its sole discretion. |
(b) “Disability” means:
(i) | in the United States, that the Grantee has been determined by the Social Security Administration to be totally disabled; and |
(ii) | in all other jurisdictions, disability, as determined pursuant to the Employer’s long-term disability policy. |
(c) “Change in Control Termination” means the occurrence of both: (A) a Change in Control and (B) during the period commencing 12 months prior to the first occurrence of the Change in Control and ending 24 months after such Change in Control, the Company or one of its Subsidiaries involuntarily terminates the Grantee’s employment without Cause or the Grantee terminates employment for Good Reason.
(15) | Compliance with Law. Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Stock, the Company shall not be required to deliver any Stock issuable upon settlement of the Award prior to the completion of any registration or qualification of the Stock under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. The Grantee understands that the Company is under no obligation to register or qualify the Stock with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Stock. Further, the Grantee agrees that the Company shall have unilateral authority to amend the Plan and the Agreement without the Grantee’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Stock. |
(16) | Language. If the Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control. |
(17) | Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. |
(18) | Appendix A. The Award shall be subject to any special terms and conditions for the Grantee’s country set forth in Appendix A. Moreover, if the Grantee relocates to one of the countries included in Appendix A, the special terms and conditions for such country will apply to the Grantee, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendix A constitutes part of this Agreement. |
(19) | Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Grantee’s participation in the Plan, on the Award and on any Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
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(20) Waiver. The Grantee acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the Grantee or any other Grantee.
(21) | Insider Trading Restrictions/Market Abuse Laws. The Grantee acknowledges that, depending on the Grantee’s country of residence, the Grantee may be subject to insider trading restrictions and/or market abuse laws, which may affect the Grantee’s ability to acquire or sell shares of Stock or rights to shares of Stock (e.g., Awards) under the Plan during such times as the Grantee is considered to have “inside information” regarding the Company (as defined by the laws in the Grantee’s country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Company’s insider trading policy. The Grantee acknowledges that it is his or her responsibility to comply with any applicable restrictions, and the Grantee is advised to speak to his or her personal advisor on this matter. |
(22) | Mobility. If, during the course of the Grantee’s employment with the Company or any of its Subsidiaries or during the provision of services to the Company or any of its Subsidiaries, the Grantee relocates to another jurisdiction, the Company reserves the right to modify the terms of this Agreement and/or impose other requirements on the Grantee’s participation in the Plan, on the PSUs and on any shares of Stock acquired under the Plan, to the extent the Company or any of its Subsidiaries determine it is necessary or advisable to comply with local law, rules and/or regulations or to facilitate the operation and administration of the PSU and the Plan, and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. The Grantee agrees to take any and all actions, and consents to any and all actions taken by the Company and its Subsidiaries, as may be required to allow the Company and its Subsidiaries to comply with local laws, rules and regulations in the Grantee’s country of residence (or employment, if different). |
(23) | Governing Law and Venue. This Award and this Agreement has been made in and shall be governed by, construed under and in accordance with the laws of the State of Texas, without regard to the conflict of law provisions, as provided in the Plan. Any and all disputes relating to, concerning or arising from this Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Award or this Agreement, shall be brought and heard exclusively in the United States District Court for the Southern District of Texas or Harris County, Texas. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum. |
Sysco Corporation
Using the electronic acceptance tool, the Grantee must accept the above Award in accordance with and subject to the terms and conditions of this Agreement and the Plan, acknowledge that he or she has read this Agreement and the Plan, and agrees to be bound by this Agreement, the Plan and the actions of the Committee. If he or she does not do so prior to 90 days from the award date, then the Company may declare the Award null and void at any time. Also, in the unfortunate event that death occurs before this Agreement has been accepted, this Award will be voided, which means the Award will terminate automatically and cannot be transferred to the Grantee’s heirs pursuant to the Grantee’s will or the laws of descent and distribution.
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APPENDIX A
PERFORMANCE SHARE UNIT AGREEMENT
Pursuant to the Sysco Corporation 2018 Omnibus Incentive Plan
For Performance Period FY2020 - FY2022
Terms and Conditions
This Appendix includes additional terms and conditions that govern the Award granted to the Grantee under the Plan if the Grantee works in one of the countries listed below. If the Grantee is a citizen or resident of a country other than the one in which the Grantee is currently working, is considered a resident of another country for local law purposes or if the Grantee transfers employment and/or residency between countries after the award date, the Company will, in its discretion, determine the extent to which the terms and conditions herein will be applicable to the Grantee.
Certain capitalized terms used but not defined in this Appendix have the same meanings set forth in the Plan and/or the Agreement, as applicable.
Notifications
This Appendix also includes information regarding securities, exchange control and certain other tax or legal issues of which the Grantee should be aware with respect to the Grantee’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of July 2019. Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Grantee not rely on the information in this Appendix as the only source of information relating to the consequences of the Grantee’s participation in the Plan because the information may be out of date when the Award vests, Stock are issued to the Grantee and/or the Grantee sells Stock acquired under the Plan.
In addition, the information contained herein is general in nature and may not apply to the Grantee’s particular situation and the Company is not in a position to assure the Grantee of a particular result. Accordingly, the Grantee is advised to seek appropriate professional advice as to how the relevant laws in the Grantee’s country may apply to his or her situation. Furthermore, additional privacy laws may apply in the Grantee’s country.
Finally, if the Grantee is a citizen or resident of a country other than the one in which the Grantee is currently working, is considered a resident of another country for local law purposes or if the Grantee transfers employment and/or residency between countries after the award date, the information contained herein may not be applicable to the Grantee in the same manner.
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UNITED STATES OF AMERICA
Terms and Conditions
Section 409A
This Agreement, including the right to receive Stock upon achievement of the Performance Criteria and satisfaction of the conditions in Section 1 above, is intended to be exempt from the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) pursuant to the short-term deferral exemption thereunder, and this Agreement, including the right to receive Stock upon the achievement of the Performance Criteria and satisfaction of the conditions in Section 1 above, shall be interpreted on a basis consistent with such intent. Notwithstanding any provision in this Agreement to the contrary, if the Grantee is a “specified employee” (as defined in section 409A of the Code) and it is necessary to postpone the commencement of any payments otherwise payable under this Agreement to prevent any accelerated or additional tax under section 409A of the Code, then the Company will postpone the payment until five days after the end of the six-month period following the Grantee’s “separation from service” (as defined under section 409A of the Code). If the Grantee dies during the postponement period prior to the payment of postponed amount, the amounts withheld on account of section 409A of the Code shall be paid to the personal representative of the Grantee’s estate within 60 days after the date of the Grantee’s death. The determination of who is a specified employee, including the number and identity of persons considered specified employees and the identification date, shall be made by the Committee in accordance with the provisions of sections 416(i) and 409A of the Code. In no event shall the Grantee, directly or indirectly, designate the calendar year of payment. For purposes of section 409A of the Code, each payment under this Agreement shall be treated as a separate payment. This Agreement may be amended without the consent of the Grantee in any respect deemed by the Committee to be necessary in order to preserve compliance with section 409A of the Code or other applicable law.
BELGIUM
Terms and Conditions
Stock, Dividends and Voting Rights
Section 2(a) of the Agreement shall be replaced with the following:
‘As soon as administratively practicable following the Payment Date, or as otherwise provided in Section 3 below, the amount of Stock determined based on the Performance Criteria shall be issued to the Grantee, provided all conditions set forth in Section 1 above are satisfied. Except as provided in Section 3 below, all Awards shall be settled in Stock. Prior to the Payment Date, the Grantee shall have no rights with respect to the Stock, including but not limited to rights to sell, vote, exchange, transfer, pledge, hypothecate or otherwise dispose of the Stock. In addition, prior to the Payment Date, the Grantee shall be not entitled to receive dividends or dividend equivalent payments and shall not have any other rights with respect to the Stock.’
Nature of Award
Section 11(e) of the Agreement shall be replaced with the following:
‘this Award and the underlying Stock, and any income derived therefrom, are not paid in lieu of, and are not intended to replace, any pension rights or compensation and are not part of compensation or salary for the purposes of calculating any bonuses, long-service awards, life or accident insurance benefits, pension or retirement or welfare benefits or similar payments;’
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Section 11(g) of the Agreement shall be replaced with the following:
‘for the purposes of the Award, the Grantee’s employment or service relationship will be considered terminated as of the last day of employment with the Company or any Affiliated Company (regardless of the reason for termination and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where the Grantee is employed or the terms of the Grantee’s employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by the Company, the Grantee’s right to vest in the Award under the Plan, if any, will terminate as of such date;’
CANADA
Terms and Conditions
Stock, Dividends and Voting Rights
The following provisions supplement Section 2(a) of the Agreement:
Notwithstanding any provisions herein to the contrary, the PSUs shall be settled only in shares of Stock (and may not be settled in cash).
The following provisions supplement Section 2(b) of the Agreement:
Notwithstanding any provisions herein to the contrary, Participants in Canada shall not be awarded, and shall not be eligible to receive, any dividend equivalents pursuant to Section 2(b) of this Agreement.
Share Withholding
The following provision supplements Section 6(c) of the Agreement:
The Company, the Employer or their respective agents, as applicable, shall satisfy the applicable withholding obligation for Tax-Related Items by withholding shares of Stock that are to be issued upon settlement of the Award having a Fair Market Value that is sufficient to satisfy the Tax-Related Items, only if the Grantee has not paid such withholding amount in cash by the date specified by the Company, the Employer or their respective agents, as applicable.
Termination of Employment
The following provision supplements Section 11(g) of the Agreement:
In the event of the Grantee’s termination of employment for any reason (whether or not later found invalid or in breach of local employment laws or the terms of the Grantee’s employment agreement, if any), any unvested portion of the Award shall be immediately forfeited without consideration. For purposes of the preceding sentence, the Grantee’s right to vest in the Award will terminate effective as of the earlier of the following dates: (i) the date on which the Grantee’s employment is terminated; (ii) the date the Grantee receives written notice of termination of employment from the Company or one of the Affiliated Companies; or (iii) the date the Grantee is no longer actively providing services to the Company or one of the Affiliated Companies. The right to vest in and exercise the Award (as discussed above) will not be extended by any notice period (e.g., active service would not include any contractual, statutory or common law notice period or period during which the Grantee is in receipt of pay in lieu of such notice or severance pay, or any period of “garden leave” or similar period mandated under Canadian laws or the terms of the Grantee’s employment or service agreement, if any). The Committee shall have the exclusive discretion to determine when the Grantee is no longer actively providing services for purposes of the Grantee’s Award (including whether the Grantee may still be considered to be providing services while on a leave of absence).
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Data Privacy
The following provision supplements Section 10 of the Agreement:
The Grantee hereby authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. The Grantee further authorizes the Company, any Affiliated Company and any stock plan service provider that may be selected by the Company to assist with the Plan to disclose and discuss the Plan with their respective advisors. The Grantee further authorizes the Company and any Affiliated Company to record such information and to keep such information in the Grantee’s employee file.
Language Consent
The following terms and conditions apply to the Grantees resident in Quebec:
The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices, and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.
Consentement relatif à la langue utilisée
Les parties reconnaissent avoir exigé que cette convention («Agreement») soit rédigée en anglais, ainsi que tous les documents, avis et procédures judiciaires, éxécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à la présente.
Notifications
Securities Law Information
The Grantee is permitted to sell Shares acquired through the Plan through the designated broker appointed by the Company, provided the resale of Shares acquired under the Plan takes place outside of Canada through the facilities of a stock exchange on which the Shares are listed (i.e., New York Stock Exchange).
Foreign Asset/Account Reporting Information
Canadian residents are required to report any foreign property (e.g., Shares acquired under the Plan and possibly unvested Awards) on form T1135 (Foreign Income Verification Statement) if the total cost of their foreign property exceeds C$100,000 at any time in the year. It is the Grantee’s responsibility to comply with these reporting obligations, and the Grantee should consult his or her own personal tax advisor in this regard.
COSTA RICA
There are no country-specific provisions.
FRANCE
Terms and Conditions
PSUs Not Qualified
The PSUs are not granted under the French specific regime provided by Articles L-225-197-1 and seq. of the French commercial code.
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Language Consent
By accepting the French Award, the Grantee confirms having read and understood the documents relating to this grant (the Plan and the Agreement) which were provided in English language. The Grantee accepts the terms of those documents accordingly. The Grantee confirms that the Grantee has a good knowledge of the English language.
En acceptant l’Attribution, le Bénéficiaire confirme avoir lu et compris les documents relatifs à cette attribution (le Plan et ce Contrat) qui ont été fournis en langue anglaise. Le Bénéficiaire accepte les dispositions de ces documents en connaissance de cause. Etant précisé que le Titulaire a une bonne maîtrise de la langue anglaise.
Notifications
Foreign Asset/Account Information
The Grantee may hold Shares acquired upon vesting/settlement of the Award, any proceeds resulting from the sale of Shares or any dividends paid on such Shares outside of France, provided the Grantee declares all foreign bank and brokerage accounts (including any accounts that were opened or closed during the tax year) with his or her annual income tax return. Failure to complete this reporting may trigger penalties for the resident.
IRELAND
There are no country-specific provisions.
PANAMA
Notifications
Securities Disclaimer
The PSUs and any shares of Stock that the Grantee may acquire upon settlement of the PSUs do not constitute a public offering of securities, as they are available only to eligible employees of the Company and its Subsidiaries.
SPAIN
Terms and Conditions
Discretionary Nature of the Plan
By accepting the grant of PSUs, the Grantee consents to participation in the Plan and acknowledges receipt of a copy of the Plan.
The Grantee understands that the Company has unilaterally, gratuitously and in its sole discretion granted PSUs under the Plan to individuals who may be employees of the Company or its Subsidiaries throughout the world. The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind the Company or any of its Subsidiaries on an ongoing basis. Consequently, the Grantee understands that the PSUs are granted on the assumption and condition that the PSUs and the shares of Stock acquired upon settlement of the PSUs shall not become a part of any employment contract (either with the Company or any of its Subsidiaries) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever. In addition, the Grantee understands that this grant would not be made to the Grantee but for the assumptions and conditions referenced above; thus, the Grantee acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, the grant of PSUs shall be null and void.
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The Grantee understands and agrees that, as a condition of the grant of PSUs, unless otherwise provided in the Agreement, any unvested PSUs as of the date the Grantee ceases active employment, will be forfeited without entitlement to the underlying shares of Stock or to any amount of indemnification in the event of termination of the Grantee’s employment with the Company or any of its Subsidiaries. The Grantee acknowledges that the Grantee has read and specifically accepts the conditions referred to in the Agreement regarding the impact of a termination of employment on the PSUs.
Termination for Cause
Notwithstanding anything to the contrary in the Plan or the Agreement, “Cause” shall be defined as set forth in the Plan, regardless of whether a termination of employment is considered a fair termination (i.e., “despido procedente”) under Spanish legislation.
Language Consent
By accepting the Award, the Grantee confirms having read and understood the documents relating to this grant (the Plan and the Agreement) which were provided in English language. The Grantee accepts the terms of those documents accordingly. The Grantee confirms that the Grantee has a good knowledge of the English language.
Con la aceptación del Incentivo, el Beneficiario confirma haber leído y entendido el documento relativo a la concesión de incentivos (el Plan y el Contrato) que le han sido entregados en inglés. El Beneficiario acepta los términos de los documentos y confirma que tiene buen conocimiento de la lengua inglesa.
SWEDEN
There are no country-specific provisions.
UNITED KINGDOM
Terms and Conditions
Responsibility for Taxes
The following provisions shall supplement Section 6 of the Agreement:
‘At the request of the Company at any time before the vesting/settlement of the Award, the Grantee must elect, to the extent permitted by law, and using a form approved by Her Majesty’s Revenue and Customs (“HMRC”), that the whole or any part of the liability for national insurance contributions arising as a result of a taxable event attributable to the Award or the Grantee’s participation in the Plan shall be transferred to the Grantee.
The Grantee hereby agrees that the Grantee is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or (if different) the Employer or by HMRC (or any other tax authority or any other relevant authority). The Grantee also hereby agrees to indemnify and keep indemnified the Company and (if different) the Employer against any Tax-Related Items that they are required to pay or withhold on the Employee’s behalf or have paid or will pay to HMRC (or any other tax authority or any other relevant authority).
Notifications
Securities Disclosure
This Agreement is not an approved prospectus for the purposes of section 85(1) of the Financial Services and Markets Act 2000 (“FSMA”) and no offer of transferable securities to the public (for the purposes of section 102B of FSMA) is being made in connection with the Plan. The Plan and the Award are exclusively available in the UK to bona fide employees and former employees and any other UK Subsidiary of the Company.
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APPENDIX B
PERFORMANCE SHARE UNIT AGREEMENT
Pursuant to the Sysco Corporation 2018 Omnibus Incentive Plan
For Performance Period FY2020 - FY2022
THE PERFORMANCE TARGETS SET FORTH ON THIS TABLE CONSTITUTE “CONFIDENTIAL INFORMATION” AND ANY DISCLOSURE OF SUCH PERFORMANCE TARGETS BY A PARTICIPANT PRIOR TO THE TIME SUCH PERFORMANCE TARGETS BECOME PUBLIC INFORMATION WILL RESULT IN SUCH PARTICIPANT FORFEITING HIS OR HER RIGHTS UNDER THIS PROGRAM.
Exhibit 10.52
Summary of Current Compensation Arrangements with Non-Employee Directors
(As of August 23, 2019)
The following summarizes, as of August 23, 2019, the current cash compensation and benefits received by the Company’s non-employee directors. The following is a summary of existing arrangements, and does not provide any additional rights.
Retainer Fees
The Company pays each non-employee director a base retainer of $100,000 per year (the “Base Retainer”). Non-employee directors who serve as committee chairpersons receive annual additional amounts as follows:
Audit Committee Chair | $25,000 |
Compensation and Leadership Development Committee Chair | $20,000 |
Corporate Governance and Nominating Committee Chair | $20,000 |
Corporate Social Responsibility Committee Chair | $15,000 |
In addition to the compensation received by all non-employee directors, Edward D. Shirley receives an additional annual retainer of $50,000, paid quarterly, for his service as independent Lead Director.
Directors Deferred Compensation Plan
Non-employee directors may defer all or a portion of their annual retainer, including additional fees paid to committee chairpersons and any additional retainer fee paid to the non-executive Chairman of the Board and/or Lead Director (as applicable), under the Directors Deferred Compensation Plan. With respect to amounts deferred, non-employee directors may choose from a variety of investment options, including Moody’s Average Corporate Bond Yield plus 1% for amounts deferred or matched prior to July 2, 2008 and Moody’s Average Corporate Bond Yield without the additional 1% for amounts deferred or matched on or after July 2, 2008. Such deferred amounts will be credited with investment gains or losses until the non-employee director’s retirement from the Board or until the occurrence of certain other events.
Sysco Corporation 2018 Omnibus Incentive Plan
Under the 2018 Omnibus Incentive Plan (the “Plan”), non-employee directors may receive shares of Common Stock (“Elected Shares”) in lieu of all or a portion of the Base Retainer and any additional retainer fee paid to the non-executive Chairman of the Board and/or Lead Director (as applicable) for his or her service in such capacity and any fees paid to a committee chairman for his or her service in such capacity.
Restricted Stock. Under the Plan, the Board is authorized to issue equity-based awards, including restricted stock and restricted stock units, to non-employee directors on terms set forth in the Plan.
Elected Shares. Under the Plan, each non-employee director is permitted to elect to receive all or a portion of his or her annual retainer (including any additional retainer fee paid to the non-executive Chairman of the Board and/or Lead Director (as applicable) for his or her service in such capacity and any fees paid to a committee chairman for his or her service in such capacity) in Elected Shares.
The Board does not currently grant annual stock option or restricted stock unit awards to non-employee directors under this Plan.
2009 Board of Directors Stock Deferral Plan
A non-employee director may elect to defer receipt of all or any portion of any shares of common stock issued under the Plan, whether such shares are to be issued as a grant of restricted stock or elected shares. Generally, the receipt of stock may be deferred until the earliest to occur of the death of the non-employee director, the date on which the non-employee director ceases to be a director of Sysco, or a change of control of Sysco.
Reimbursement for Expenses
All non-employee directors are entitled to receive reimbursements of expenses for all services as a director, including committee participation or special assignments. This includes reimbursement for non-commercial air travel in connection with Sysco business, subject to specified maximums, provided that amounts related to the purchase price of an aircraft or fractional interest in an aircraft are not reimbursable and any portion of the reimbursement that relates to insurance, maintenance and other non-incremental costs is limited to a maximum annual amount.
The Directors Deferred Compensation Plan, the 2009 Board of Directors Stock Deferral Plan and the Plan have been filed as exhibits to the Company’s filings pursuant to the Securities Exchange Act of 1934, as amended. Additional information regarding these plans is included in the Company’s 2018 Proxy Statement.
EXHIBIT 10.54
Sysco Corporation
1390 Enclave Parkway
Houston, Texas 77077
Telephone: 281-584-1390
Personal & Confidential
January 29, 2019
Russell Libby
14706 Cindywood Drive
Houston, Texas 77079
Re: Employment with Sysco Corporation
Dear Russell:
I wanted to take this opportunity to summarize the benefits you will be eligible for upon your departure from the Company, subject to the terms of this letter agreement (the “Agreement”).
Timing of Your Departure: Your last date of employment will be June 29, 2019 (the “Separation Date”). During the period between February 1, 2019 and the Separation Date (referred to herein as the “Transition Period”), you will remain employed in an advisory capacity.
Effective February 1, 2019 you will no longer be an officer of Sysco Corporation or a participant in the Management Incentive Plan (MIP). Because you will no longer be an MIP participant, you will cease participation in the Disability Income Plan and any additional group life and accidental death and dismemberment benefits that have been in effect for you as a member of the plan. In addition, you will cease participation in the Management Savings Plan and any associated salary/incentive deferrals will end. During the period between February 1, 2019 and the Separation Date, you will remain eligible for your base pay and other non-MIP benefits.
You will remain eligible for a Fiscal Year 2019 (FY19) Annual Incentive, minus legally required federal and state payroll deductions (“Annual Incentive”) to the extent the criteria for payment of such Annual Incentive are satisfied. For purpose of any Strategic Bonus Objective component of the FY19 Annual Incentive, you will be considered to have achieved this component at 100% of the target. The FY19 Annual Incentive will
be calculated on the same basis and made payable at the same time as all other FY19 Annual Incentives.
Should you accept alternative employment during the Transition Period, your Separation Date will be accelerated to coincide with your acceptance of such employment. For clarity, the Transition Period will end the earlier of the Separation Date or upon your acceptance of alternative employment. Similarly, should Sysco determine that you have violated your obligations to the company under the Code of Conduct or other company policies, your Separation Date may be accelerated prior to June 29, 2019 in the Company’s sole discretion. Nothing herein shall alter the at-will nature of your employment during the Transition Period.
In order to be eligible for continued employment during the Transition Period, you must timely execute this Agreement and the enclosed General Release. The General Release will not become effective until you sign it and the applicable seven-day revocation period has expired. You will have until February 21, 2019 to execute this Agreement and the General Release and if you do not execute this Agreement and the General Release by February 21, 2019 (or if you revoke your signature on the General Release after signing), your employment will end without a Transition Period. You are advised to consult an attorney prior to executing the General Release.
Separation Benefits: Assuming a June 29, 2019 Separation Date, you will be eligible for the benefits described herein, contingent upon your compliance with the terms of this Agreement, including, but not limited to, your timely execution, without revocation, of an Additional Release (the “Additional Release”) which will be provided to you on or about the Separation Date:
Separation Payment: You will be eligible for a one-time lump sum severance payment in the amount of $364,583, less applicable taxes and deductions (the “Severance Payment”). The Severance Payment will not be considered compensation under any compensation or benefit plan sponsored or maintained by Sysco and will be in lieu of any payment to which you otherwise would have been entitled under any plan or program maintained by, or any agreement with, Sysco or any related or affiliated entity. You will not be eligible for any other severance payment except as described herein, and there will be no duplication of benefits. The Severance Payment will be made as soon as practicable but no later than thirty (30) days following the effective date of an executed Release.
Company-Subsidized Health Insurance Coverage: You will be eligible to receive Company-Subsidized Health Care Coverage, in accordance with the terms provided herein. Provided that your eligible dependents, if any, are participating in Sysco’s group health, dental and vision plans on the Separation Date and elect on a timely basis to continue that participation in some or all of the offered plans through the federal law commonly known as “COBRA,” Sysco will cover the entire premium cost for COBRA continuation (the “Company-Subsidized Health Coverage”). You shall continue to be eligible for the Company-Subsidized Health Coverage until the earlier to occur of (1) the date twelve (12) months after your active employee coverage ends; or (2) the date you are eligible to enroll in the health, dental and/or vision plans of another employer. Your continued access to the Company-Subsidized Health Care
Coverage is dependent on you and your dependents continuing to be eligible to participate in Sysco’s offered plans through COBRA. You agree to notify Sysco promptly if you are eligible to enroll in the plans of another employer or if you or any of your dependents cease to be eligible to continue participation in Company plans through COBRA. You will receive information under separate cover regarding the COBRA enrollment process.
In order to receive the Separation Payment and Company-Subsidized Health Coverage (the “Separation Benefits”), you must execute an Additional Release on a timely basis. You will have at least twenty-one (21) days following your Separation Date to consider the Additional Release. As described more fully in the Additional Release, you have seven days following the date you execute the Additional Release to revoke your signature by delivering a written revocation to Eve McFadden, Vice President & Associate General Counsel, Employment & Litigation at fax number (281) 584-2510. The Additional Release will not become effective until you sign it and the seven-day revocation period has passed without you having exercised your right to revoke your signature. You will have until July 31, 2019 to execute the Additional Release and if you do not execute the Additional Release or if you revoke the Additional Release after you execute it, this Agreement will be null and void. You are advised to consult an attorney prior to executing the Additional Release.
Your eligibility for continued employment during the Transition Period and for the Separation Benefits is contingent upon your compliance with all ongoing obligations to the Company during the Transition Period, including those regarding the use and protection of confidential information, restrictions on solicitation of employees and customers, assignment of inventions and intellectual property, restrictions on competitive activities and compliance with the Sysco Code of Conduct. In addition, you will no longer be eligible for the Separation Benefits described herein in the event you exit the company prior to the Separation Date.
Post-Employment Restrictions: Your receipt of the Separation Benefits is also contingent upon your adherence to your ongoing obligations to the Company regarding intellectual property, confidential information to which you had access by virtue of your employment, restrictions on competitive activities, and non-solicitation of employees and customers, including, but not limited to the restrictions contained in any existing noncompetition agreement with the Company. Failure to comply with restrictions on your post-employment activities entitles Sysco to cease any remaining benefits owed to you under this Agreement.
Career Transition Services: You are immediately eligible for executive outplacement services using a vendor of Sysco’s choice.
Other Compensation and Benefits: All other compensation and benefits will be governed by the terms of the applicable plans and programs. You will be paid for any earned but unused vacation at the time of your separation from employment, and you also will be reimbursed for eligible business expenses that you incurred during the course of your employment per Company policy. The automatic company contribution under the 401(k) plan will continue through your termination date, but you will not be eligible for the 50% company match for 2019 because you will not be employed
by Sysco at the end of calendar 2019. You are not eligible for a company match under the MSP for calendar year 2019. Distributions from your 401k and MSP balances will be governed by the terms of each plan and any applicable distribution elections you have made.
Long Term Incentive and Equity Awards: Vesting of any long-term incentives (including but not limited to stock options, restricted stock units (RSUs) and performance share units (PSUs)) will cease upon your separation from employment and any unvested long-term incentives are canceled immediately. Vested stock options must be exercised by the dates specified in the award agreements. Assuming a June 29, 2019 Separation Date, you will be eligible for any earned FY17 Performance Share Unit award. Your FY18 and FY19 PSU awards will be forfeited. Should you exit the company prior to June 29, 2019, your FY17 PSU aware will also be forfeited.
Please sign below and return an executed original of this Agreement to me by February 21, 2019 to acknowledge your understanding of the terms and conditions above.
Sincerely,
/s/Tom Bené
Tom Bené
Chairman, President & Chief Executive Officer
Enclosure
cc: | Paul Moskowitz – Executive Vice President, Human Resources |
Erin Packwood – Vice President, Total Rewards & Engagement
Scott Stone –Vice President, Financial Reporting
AGREED:
I have read, understand, and agree to the terms and conditions set forth in the letter agreement from Tom Bené dated January 29, 2019 (the “Agreement”).
/s/Russell Libby_____________
Russell Libby
2/21/19____________________
Date
EXHIBIT 10.55
Sysco Corporation
1390 Enclave Parkway
Houston, Texas 77077
Telephone: 281-584-1390
Personal & Confidential
January 29, 2019
Wayne Shurts
811 Town & Country Blvd. #400
Houston, Texas 77024
Re: Employment with Sysco Corporation
Dear Wayne:
I wanted to take this opportunity to summarize the benefits you will be eligible for upon your departure from the Company, subject to the terms outlined herein.
Timing of Your Departure: Your last date of employment will be June 29, 2019 (the “Separation Date”). During the period between February 1, 2019 and the Separation Date (referred to herein as the “Transition Period”), you will remain employed in an advisory capacity.
Effective February 1, 2019, you will no longer be an officer of Sysco Corporation or a participant in the Management Incentive Plan (MIP). Because you will no longer be an MIP participant, you will cease participation in the Disability Income Plan and any additional group life and accidental death and dismemberment benefits that have been in effect for you as a member of the plan. In addition, you will cease participation in the Management Savings Plan and any associated salary/incentive deferrals will end. During the period between February 1, 2019 and the Separation Date, you will remain eligible for your base pay and other non-MIP benefits.
You will remain eligible for a Fiscal Year 2019 (FY19) Annual Incentive, minus legally required federal and state payroll deductions (“Annual Incentive”) to the extent the criteria for payment of such Annual Incentive are satisfied. For purpose of any Strategic Bonus Objective component of the FY19 Annual Incentive, you will be considered to have achieved this component at 100% of the target. The FY19 Annual Incentive will
be calculated on the same basis and made payable at the same time as all other FY19 Annual Incentives.
Should you accept alternative employment during the Transition Period, your Separation Date will be accelerated to coincide with your acceptance of such employment. For clarity, the Transition Period will end the earlier of the Separation Date or upon your acceptance of alternative employment. Similarly, should Sysco determine that you have violated your obligations to the company under the Code of Conduct or other company policies, your Separation Date may be accelerated prior to June 29, 2019 in the Company’s sole discretion. Nothing herein shall alter the at-will nature of your employment during the Transition Period.
Separation Benefits: Assuming a June 29, 2019 Separation Date, you will be eligible for the benefits described herein, contingent upon your compliance with the terms outlined herein, including, but not limited to, your timely execution, without revocation, of General Release (the “Release”) which will be provided to you on or about the Separation Date:
Separation Payment: You will be eligible for a one-time lump sum severance payment in the amount of $379,167, less applicable taxes and deductions (the “Severance Payment”). The Severance Payment will not be considered compensation under any compensation or benefit plan sponsored or maintained by Sysco and will be in lieu of any payment to which you otherwise would have been entitled under any plan or program maintained by, or any agreement with, Sysco or any related or affiliated entity. You will not be eligible for any other severance payment except as described herein, and there will be no duplication of benefits. The Severance Payment will be made as soon as practicable but no later than thirty (30) days following the effective date of an executed Release.
Company-Subsidized Health Insurance Coverage: You will be eligible to receive Company-Subsidized Health Care Coverage, in accordance with the terms provided herein. Provided that your eligible dependents, if any, are participating in Sysco’s group health, dental and vision plans on the Separation Date and elect on a timely basis to continue that participation in some or all of the offered plans through the federal law commonly known as “COBRA,” Sysco will cover the entire premium cost for COBRA continuation (the “Company-Subsidized Health Coverage”). You shall continue to be eligible for the Company-Subsidized Health Coverage until the earlier to occur of (1) the date twelve (12) months after your active employee coverage ends; or (2) the date you are eligible to enroll in the health, dental and/or vision plans of another employer. Your continued access to the Company-Subsidized Health Care Coverage is dependent on you and your dependents continuing to be eligible to participate in Sysco’s offered plans through COBRA. You agree to notify Sysco promptly if you are eligible to enroll in the plans of another employer or if you or any of your dependents cease to be eligible to continue participation in Company plans through COBRA. You will receive information under separate cover regarding the COBRA enrollment process.
In order to receive the Separation Payment and Company-Subsidized Health Coverage (the “Separation Benefits”), you must execute an Additional Release on a timely basis.
You will have at least twenty-one (21) days following your Separation Date to consider the Release. As described more fully in the Release, you have seven days following the date you execute the Release to revoke your signature by delivering a written revocation to Eve McFadden, Vice President & Associate General Counsel, Employment & Litigation at fax number (281) 584-2510. The Release will not become effective until you sign it and the seven-day revocation period has passed without you having exercised your right to revoke your signature. You will have until July 31, 2019 to execute the Release and if you do not execute the Release or if you revoke the Release after you execute it, the Separation Benefits will no longer be available to you. You are advised to consult an attorney prior to executing the Release.
Your eligibility for continued employment during the Transition Period and for the Separation Benefits is contingent upon your compliance with all ongoing obligations to the Company during the Transition Period, including those regarding the use and protection of confidential information, restrictions on solicitation of employees and customers, assignment of inventions and intellectual property, restrictions on competitive activities and compliance with the Sysco Code of Conduct. In addition, you will no longer be eligible for the Separation Benefits described herein in the event you exit the company prior to the Separation Date.
Post-Employment Restrictions: Your receipt of the Separation Benefits is also contingent upon your adherence to your ongoing obligations to the Company regarding intellectual property, confidential information to which you had access by virtue of your employment, restrictions on competitive activities, and non-solicitation of employees and customers, including, but not limited to the restrictions contained in any existing noncompetition agreement with the Company. Failure to comply with restrictions on your post-employment activities entitles Sysco to cease any remaining Separation Benefits owed to you.
Career Transition Services: You are immediately eligible for executive outplacement services using a vendor of Sysco’s choice.
Other Compensation and Benefits: All other compensation and benefits will be governed by the terms of the applicable plans and programs. You will be paid for any earned but unused vacation at the time of your separation from employment, and you also will be reimbursed for eligible business expenses that you incurred during the course of your employment per Company policy. The automatic company contribution under the 401(k) plan will continue through your termination date, but you will not be eligible for the 50% company match for 2019 because you will not be employed by Sysco at the end of calendar 2019. You are not eligible for a company match under the MSP for calendar year 2019. Distributions from your 401k and MSP balances will be governed by the terms of each plan and any applicable distribution elections you have made.
Long Term Incentive and Equity Awards: Vesting of any long-term incentives (including but not limited to stock options, restricted stock units (RSUs) and performance share units (PSUs)) will cease upon your separation from employment and any unvested long-term incentives are canceled immediately. Vested stock options must be exercised by the dates specified in the award agreements. In the event of a
June 29, 2019 Separation Date, you will be eligible for any earned FY17 Performance Share Unit award. Your FY18 and FY19 PSU awards will be forfeited. Should you exit the company prior to June 29, 2019, your FY17 PSU award will also be forfeited.
Please sign below and return an executed original of this letter to me by February 4, 2019 to acknowledge your understanding of the terms and conditions above.
Sincerely,
/s/Tom Bené
Tom Bené
Chairman, President & Chief Executive Officer
Enclosure
cc: | Paul Moskowitz – Executive Vice President, Human Resources |
Erin Packwood – Vice President, Total Rewards & Engagement
Scott Stone –Vice President, Financial Reporting
AGREED:
I have read, understand, and agree to the terms and conditions set forth in the letter from Tom Bené dated January 31, 2019.
/s/ Wayne Shurts______________
Wayne Shurts
2/14/2019___________________
Date
Exhibit 21.1
SYSCO CORPORATION
DIRECT AND INDIRECT SUBSIDIARIES, DIVISIONS AND DBA's
DIRECT AND INDIRECT SUBSIDIARIES, DIVISIONS AND DBA's
(excludes certain direct and indirect subsidiaries that in the aggregate would not constitute a significant subsidiary)
Subsidiary Name | DBA Name | Jurisdiction |
A. M. Briggs, Inc. | Metropolitan, Meat, Seafood & Poultry | Delaware |
Almacén Fiscal Frionet Caldera, S.A. | Costa Rica | |
Almacén Fiscal Frionet Limón, S.A. | Costa Rica | |
Arnotts (Fruit) Limited | Ireland | |
Bahamas Food Holdings Limited | Bahamas | |
Bahamas Food Services Limited | Bahamas | |
Brake Bros Foodservice Ireland Limited | United Kingdom | |
Brake Bros. Foodservice Limited | United Kingdom | |
Brake Bros. Holding I Limited | United Kingdom | |
Brake Bros. Ltd. | United Kingdom | |
Brake France Developpement | France | |
Brakes Foodservice NI Limited | United Kingdom | |
Buckhead Meat & Seafood of Houston, Inc. | Buckhead Meat and Seafood - Houston | Delaware |
Buckhead Meats Houston | ||
Louisiana Seafood | ||
Buckhead Meat Company | Buckhead Meat and Seafood - Houston | Delaware |
Buckhead Meat New England | ||
Buckhead Meat of Atlanta | ||
Buckhead Meat of Florida | ||
Buckhead Meat of New England | ||
Buckhead Meat of New Jersey | ||
Buckhead Meat North Carolina | ||
Buckhead Meat Rhode Island | ||
North Star Seafood of Orlando | ||
Royalty Foods, a division of Buckhead Meat Company | ||
Trinity Seafood | ||
Buckhead Meat Midwest, Inc. | Buckhead Meat & Seafood of Chicago | Delaware |
Buckhead Meat & Seafood of Ohio | ||
Imperial Seafood & Shellfish Co. | ||
Buckhead Meat of Dallas, Inc. | Texas | |
Buckhead Meat of Denver, Inc. | Delaware | |
Buckhead Meat of San Antonio, LP | Texas | |
Buzztable, Inc. | Delaware | |
Cake Corporation | Cake Corporation of Delaware | Delaware |
Cake of Delaware | ||
Cake Sysco | ||
Cake Sysco Corporation | ||
Sysco Labs | ||
Sysco Labs Corporation | ||
Sysco Labs, Inc. | ||
Christys Wine & Spirits Limited | Ireland | |
Subsidiary Name | DBA Name | Jurisdiction |
Clafra Aktiebolag | Sweden | |
Corporacion Frionet Sociedad Anonima | Costa Rica | |
Crossgar Foodservice Limited | Ireland | |
Cucina Acquisitions (UK) Limited | United Kingdom | |
Cucina Finance (UK) Limited | United Kingdom | |
Cucina French Holdings Limited | United Kingdom | |
Cucina Fresh Finance Limited | United Kingdom | |
Cucina Fresh Investments Limited | United Kingdom | |
Cucina Lux Investments Limited | United Kingdom | |
Curleys Quality Foods Limited (Third Party) | Ireland | |
Davigel Belgilux S.A. | Belgium | |
Davigel Espana S.A. | Spain | |
Dust Bowl City, LLC | Texas | |
Eko Fågel Fisk o mittemellan AB | Sweden | |
EMPYR Incorporated | Delaware | |
Enclave Insurance Company | Texas | |
Enclave Parkway Association, Inc. | Texas | |
Enclave Properties, LLC | Sysco Enclave Properties | Delaware |
European Imports, Inc. | Delaware | |
Freedman Meats, Inc. | Delaware | |
Freedman-KB, Inc. | Delaware | |
Fresh Direct (UK) Limited | United Kingdom | |
Fresh Direct Group Limited | United Kingdom | |
Fresh Direct Limited | United Kingdom | |
Fresh Direct Local (Cambridgeshire) Limited | United Kingdom | |
Fresh Direct Local (London) Limited | United Kingdom | |
Fresh Direct Local (Scotland) Limited | United Kingdom | |
Fresh Holdings Limited | United Kingdom | |
Freshfayre Limited | United Kingdom | |
FreshPoint Arizona, Inc. | FreshPoint - Phoenix | Delaware |
FreshPoint Atlanta, Inc. | FreshPoint of Atlanta | Georgia |
Mitt Parker | ||
FreshPoint California, Inc. | Delaware | |
FreshPoint Central California, Inc. | Delaware | |
FreshPoint Central Florida, Inc. | FreshPoint - Pompano Beach | Florida |
FreshPoint Southwest Florida | ||
FreshPoint West Coast Florida | ||
Garden Gourmet Specialties | ||
Red's Market | ||
FreshPoint Connecticut, LLC | FreshPoint - Hartford | Delaware |
The Fowler & Huntting Company | ||
FreshPoint Dallas, Inc. | FreshPoint Value Added Services | Delaware |
FreshPoint Denver, Inc. | Colorado | |
FreshPoint Las Vegas, Inc. | Delaware | |
FreshPoint North Carolina, Inc. | FreshPoint Charlotte | Tennessee |
Subsidiary Name | DBA Name | Jurisdiction |
FreshPoint Raleigh | ||
FreshPoint of Raleigh | ||
FreshPoint North Florida, Inc. | East Coast Fruit Company | Florida |
FreshPoint Jacksonville | ||
FreshPoint Savannah | ||
FreshPoint Southern Georgia | ||
Movsovitz of Georgia | ||
FreshPoint Oklahoma City, LLC | FreshPoint Arkansas | Delaware |
FreshPoint Tulsa | ||
FreshPoint Pompano Real Estate, LLC | Delaware | |
FreshPoint Puerto Rico, LLC | Puerto Rico | |
FreshPoint San Francisco, Inc. | FreshPoint - San Francisco (CA) | California |
FreshPoint South Florida, Inc. | Florida | |
FreshPoint South Texas, Inc. | City Produce | Delaware |
FreshPoint - Harlingen | ||
FreshPoint - San Antonio | ||
FreshPoint Southern California, Inc. | G & G Produce Company (CA) | California |
FreshPoint Tomato, LLC | FreshPoint Nashville | Delaware |
FreshPoint Value Added | ||
Nashville Tomato | ||
FreshPoint Vancouver, Ltd. | FreshPoint - Nanaimo | Canada |
FreshPoint - Vancouver | ||
FreshPoint Foodservice | ||
FreshPoint Freshcuts | ||
FreshPoint, Inc. | Delaware | |
Fruktservice i Helsingborg AB | Sweden | |
G&S Real Estate, Inc. | Delaware | |
GHS Classic Drinks Limited | Ireland | |
Gilchrist & Soames Holdings Corporation | Delaware | |
Gilchrist & Soames UK Limited | England | |
Gilchrist & Soames, Inc. | Delaware | |
Grupo Enclave, S.A. | Costa Rica | |
Guest Packaging, LLC | Delaware | |
Guest Supply Asia, Limited | Hong Kong | |
Guest Supply Singapore Pte. Ltd. | Singapore | |
Isakssons Frukt & Grönt AB | Sweden | |
Keelings & Curleys Distribution Limited | Ireland | |
Kent Frozen Foods | United Kingdom | |
Les Ateliers Du Gout | France | |
Liquid Assets Limited | Bahamas | |
M&J Seafood Holdings Limited | United Kingdom | |
M&J Seafood Limited | United Kingdom | |
Manchester Mills, LLC | Delaware | |
Mayca Autoservicio S.A. | Costa Rica | |
Mayca Distribuidores, S.A. | Costa Rica | |
Subsidiary Name | DBA Name | Jurisdiction |
Menigo Foodservice AB | Sweden | |
Mitshim Etatu Supply LP | Canada | |
Newport Meat Northern California, Inc. | California | |
Newport Meat of Nevada, Inc. | Delaware | |
Newport Meat Pacific Northwest, Inc. | Delaware | |
Newport Meat Southern California, Inc. | Delaware | |
North Star Holding Corporation | Delaware | |
North Star Seafood Acquisition Corporation | Delaware | |
North Star Seafood, LLC | IncredibleFish | Florida |
North Star Seafood of Orlando | ||
Palisades Ranch, Inc. | California | |
Pallas Foods Farm Fresh Unlimited Company | Ireland | |
Pallas Foods Unlimited Company | Ireland | |
Pauleys Produce Limited | United Kingdom | |
PFS de Mexico, S.A. de C.V. | Mexico | |
Promotora del Servicios, S.A. de C.V. | Mexico | |
Restaurangakdemien AB | Sweden | |
Restaurant of Tomorrow, Inc. | Delaware | |
Rohan Viandes Elaboration | France | |
Roots of Oxford Limited | United Kingdom | |
SCI Bianchi Montegut | France | |
SCI de Boiseau | France | |
SCI de Garcelles | France | |
SCI Lanjouan | France | |
SCI Le Dauphin | France | |
Servicestyckarna I Johannes AB | Sweden | |
Servicios Ameriserve, S.A. de C.V. | Mexico | |
Shenzhen Guest Supply Trading Co., Limited | Hong Kong | |
SMS Bermuda Holdings | Bermuda | |
SMS Global Holdings S.á.r.l. | Luxembourg | |
SMS GPC International Limited | Hong Kong | |
SMS GPC International Resources Limited | Hong Kong | |
SMS International Resources Ireland Unlimited Company | Ireland | |
SMS Lux Holdings LLC | Delaware | |
SOTF, LLC | Supplies on the Fly | Delaware |
Specialty Meat Holdings, LLC | Delaware | |
Stockflag Limited | United Kingdom | |
Stockholms Fiskauktion AB | Sweden | |
Sysco Acquisition Sub, LLC | Delaware | |
Sysco Albany, LLC | Sysco Food Services of Albany, LLC | Delaware |
Sysco Asian Foods, Inc. | Asian Foods | Delaware |
Sysco Atlanta, LLC | Delaware | |
Sysco Baltimore, LLC | Delaware | |
Sysco Baraboo, LLC | Delaware | |
Subsidiary Name | DBA Name | Jurisdiction |
Sysco Bermuda Partners, L.P. | Bermuda | |
Sysco Boston, LLC | Delaware | |
Sysco Canada Holdings S.á.r.l. | Luxembourg | |
Sysco Canada, Inc. | Aliments Conan | Canada |
Allard Fruits Et Légumes | ||
Bedell's Foodservice | ||
Centre De Redistribution Sysco De Calgary | ||
Centre De Redistribution Sysco De Kingston | ||
Connexion Sysco | ||
Derma Meat Co. | ||
Distagro | ||
En Gros Pierre | ||
En Gros Pierre Poissons Et Fruits De Mer | ||
Fin's Seafood Distributors | ||
Frank & Dino | ||
Frank Et Dino Aliments | ||
Grand Vallée | ||
Honeyman's Beef Purveyors | ||
Importation Alimentaire Mega | ||
J.J. Derma Meats | ||
Martha's Garden | ||
Pronamic Distribution | ||
Service Alimentaire Bedell | ||
Services Alimentaires Sysco D'Edmonton | ||
Services Alimentaires Sysco De Regina | ||
Services Alimentaires Sysco De Vancouver | ||
Services Alimentaires Sysco Du Canada | ||
Services Alimentaires Sysco Du Canada Atlantique | ||
Sysco Calgary | ||
Sysco Calgary CRD | ||
Sysco Calgary Redistribution Centre | ||
Sysco Canada | ||
Sysco Central Ontario | ||
Sysco Connect | ||
Sysco Du Centre De L'Ontario | ||
Sysco Du Sud-Ouest De L'Ontario | ||
Sysco Edmonton | ||
Sysco Fine Meats of Toronto | ||
Sysco Fine Meats of Vancouver | ||
Sysco Food Services of Atlantic Canada | ||
Sysco Food Services of Canada | ||
Sysco Food Services of Edmonton | ||
Subsidiary Name | DBA Name | Jurisdiction |
Sysco Food Services of Regina | ||
Sysco Food Services of Vancouver | ||
Sysco Four Seasons | ||
Sysco Four Seasons Produce | ||
Sysco Freshcut Produce Toronto | ||
Sysco Freshcut Produce Vancouver | ||
Sysco Grand Montréal | ||
Sysco Halifax | ||
Sysco HRI Supply | ||
Sysco Kelowna | ||
Sysco Kingston | ||
Sysco Kingston Redistribution Centre | ||
Sysco Lakeside | ||
Sysco London | ||
Sysco Milton | ||
Sysco Moncton | ||
Sysco Montréal | ||
Sysco NASYS | ||
Sysco Québec | ||
Sysco Regina | ||
Sysco Southwestern Ontario | ||
Sysco St. Johns | ||
Sysco Sturgeon Falls | ||
Sysco Thunder Bay | ||
Sysco Toronto | ||
Sysco Vancouver | ||
Sysco Ventra | ||
Sysco Victoria | ||
Sysco Windsor | ||
Sysco Winnipeg | ||
Transport Dytran | ||
Trimpac Meat Distributors | ||
Trimpac Sysco | ||
Sysco Central Alabama, LLC | Delaware | |
Sysco Central California, Inc. | California | |
Sysco Central Florida, Inc. | Delaware | |
Sysco Central Illinois, Inc. | Waugh Foods | Delaware |
Sysco Central Pennsylvania, LLC | Delaware | |
Sysco Charlotte, LLC | Delaware | |
Sysco Chicago, Inc. | Delaware | |
Sysco Cincinnati, LLC | Delaware | |
Sysco Cleveland, Inc. | Ohio Farmers | Delaware |
Sysco Columbia, LLC | Delaware | |
Sysco Connecticut, LLC | Delaware | |
Sysco Corporation | Delaware | |
Subsidiary Name | DBA Name | Jurisdiction |
Sysco Corporation Good Government Committee, Inc. | Delaware | |
Sysco CRC Holdings, Sociedad De Responsibilidad Limitada | Costa Rica | |
Sysco Detroit, LLC | Delaware | |
Sysco Disaster Relief Foundation, Inc. | Texas | |
Sysco Eastern Maryland, LLC | Delaware | |
Sysco Eastern Wisconsin, LLC | Delaware | |
Sysco EU II S.á.r.l. | Luxembourg | |
Sysco EU III S.á.r.l. | Luxembourg | |
Sysco EU IV Capital Unlimited Company | Ireland | |
Sysco EU IV S.á.r.l. | Luxemoburg | |
Sysco Foundation, Inc. | Texas | |
Sysco France Holding SAS | France | |
Sysco France SAS | France | |
Sysco George Town II, LLC | Delaware | |
Sysco George Town Limited S.á.r.l. | Luxembourg | |
Sysco Global Holdings, B.V. | Netherlands | |
Sysco Global Resources, LLC | Delaware | |
Sysco Global Services, LLC | Delaware | |
Sysco Grand Cayman Company | Cayman Islands | |
Sysco Grand Cayman II Company | Cayman Islands | |
Sysco Grand Cayman III Company | Cayman Islands | |
Sysco Grand Rapids, LLC | Delaware | |
Sysco Guernsey Limited | Guernsey | |
Sysco Guest Supply Canada Inc. | Canada | |
Sysco Guest Supply Europe Limited | United Kingdom | |
Sysco Guest Supply Europe Goods Wholesalers LLC | UAE | |
Sysco Guest Supply, LLC | Guest Supply | Delaware |
Guest Supply – a Sysco Company | ||
Guest Worldwide | ||
Supply Guest Services | ||
Sysco Gulf Coast, LLC | FreshPoint Gulf Coast | Delaware |
Sysco Hampton Roads, Inc. | Delaware | |
Sysco Hawaii, Inc. | Foodservice in Paradise | Delaware |
HFM | ||
HFM First in Foods | ||
HFM Foodservice | ||
HFM Morrad Foodservice | ||
Sysco Holdings, LLC | Delaware | |
Sysco Holdings II, LLC | Delaware | |
Sysco Indianapolis, LLC | Delaware | |
Sysco International Food Group, Inc. | Florida | |
Sysco International, ULC | British Columbia, Canada | |
Sysco Iowa, Inc. | Delaware | |
Sysco Jackson, LLC | Delaware | |
Subsidiary Name | DBA Name | Jurisdiction |
Sysco Jacksonville, Inc. | Delaware | |
Sysco Kansas City, Inc. | Missouri | |
Sysco Knoxville, LLC | Delaware | |
Sysco Labs Europe Limited | Ireland | |
Sysco Labs Pvt. Ltd. | Sri Lanka | |
Sysco Leasing, LLC | Delaware | |
Sysco Lincoln Transportation Company, Inc. | Pegler-Sysco Transportation Co. | Nebraska |
Sysco Lincoln, Inc. | Nebraska | |
Sysco Long Island, LLC | Delaware | |
Sysco Los Angeles, Inc. | Delaware | |
Sysco Louisville, Inc. | Delaware | |
Sysco Memphis, LLC | Delaware | |
Sysco Merchandising and Supply Chain Services Canada, Inc. | Canada | |
Sysco Merchandising and Supply Chain Services, Inc. | Alfmark | Delaware |
Alfmark Transportation | ||
Sysco Imports | ||
Sysco Northeast Redistribution Center | ||
Sysco South Redistribution Center | ||
Sysco Metro New York, LLC | Delaware | |
Sysco Minnesota, Inc. | Delaware | |
Sysco Montana, Inc. | Delaware | |
Sysco Nashville, LLC | Delaware | |
Sysco Netherlands Partners, LLC | Delaware | |
Sysco North Central Florida, Inc. | Delaware | |
Sysco North Dakota, Inc. | Delaware | |
Sysco Northern New England, Inc. | Reed Distributors | Maine |
Sysco Philadelphia, LLC | Delaware | |
Sysco Pittsburgh, LLC | Delaware | |
Sysco Portland, Inc. | Delaware | |
Sysco Raleigh, LLC | Delaware | |
Sysco Resources Services, LLC | Sysco Business Services | Delaware |
Sysco Riverside, Inc. | Delaware | |
Sysco Sacramento, Inc. | Delaware | |
Sysco San Diego, Inc. | Delaware | |
Sysco San Francisco, Inc. | California | |
Sysco Seattle, Inc. | DiTomaso | Delaware |
DiTos | ||
Sysco Alaska | ||
Sysco South Florida, Inc. | Delaware | |
Sysco Southeast Florida, LLC | Delaware | |
Sysco Spain Holdings SLU | Spain | |
Sysco Spokane, Inc. | Sysco Food Services of Spokane | Delaware |
Sysco St. Louis, LLC | Delaware | |
Sysco Syracuse, LLC | Delaware | |
Subsidiary Name | DBA Name | Jurisdiction |
Sysco Technologies, LLC | Delaware | |
Sysco Technologies Cayman, Ltd. | Cayman Islands | |
Sysco UK Holdings Limited | England | |
Sysco UK Limited | England | |
Sysco UK Partners LLP | England | |
Sysco USA I, Inc. | Sysco Dallas | Delaware |
Sysco East Texas | ||
Sysco Idaho | ||
Sysco Intermountain | ||
Sysco North Texas | ||
Sysco West Texas | ||
Sysco USA II, LLC | Arrow Sysco Food Services | Delaware |
Doerle Food Service | ||
Sysco Arkansas | ||
Sysco Oklahoma | ||
Sysco USA III, LLC | Delaware | |
Sysco Ventura, Inc. | Delaware | |
Sysco Ventures, Inc. | Delaware | |
Sysco Virginia, LLC | Delaware | |
Sysco West Coast Florida, Inc. | Delaware | |
Sysco Western Minnesota, Inc. | Appert's Foodservice | Delaware |
Buckhead Meat of Minnesota | ||
SYY Netherlands C.V. | Netherlands | |
SYY Panama S. de R.L. | Panama | |
The SYGMA Network, Inc. | Delaware | |
Victua SAS | France | |
Walker Foods, Inc. | New York | |
Wild Harvest Limited | United Kingdom | |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference of our reports dated August 23, 2019, with respect to the consolidated financial statements and the effectiveness of internal control over financial reporting of Sysco Corporation and subsidiaries included in this Annual Report (Form 10-K) of Sysco Corporation for the year ended June 29, 2019, in the following registration statements and related prospectuses.
Sysco Corporation Form S-3 File No. 333-227056
Sysco Corporation Form S-3 File No. 333-126199
Sysco Corporation Form S-4 File No. 333-50842
Sysco Corporation Form S-8 File No. 333-163188
Sysco Corporation Form S-8 File No. 333-163189
Sysco Corporation Form S-8 File No. 333-170660
Sysco Corporation Form S-8 File No. 333-192353
Sysco Corporation Form S-8 File No. 333-201216
Sysco Corporation Form S-8 File No. 333-228424
/s/ Ernst & Young LLP
Houston, Texas
August 23, 2019
Exhibit 31.1
CERTIFICATION
I, Thomas L. Bené, certify that:
1. | I have reviewed this annual report on Form 10-K of Sysco Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 23, 2019
/s/ THOMAS L. BENÉ
Thomas L. Bené
Chairman of the Board, President and Chief Executive Officer
Exhibit 31.2
CERTIFICATION
I, Joel T. Grade, certify that:
1. | I have reviewed this annual report on Form 10-K of Sysco Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 23, 2019
/s/ JOEL T. GRADE
Joel T. Grade
Executive Vice President and Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
I, Thomas L. Bené, Chairman of the Board, President and Chief Executive Officer, of Sysco Corporation (the “company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
1. | The company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019 (“Annual Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
2. | All of the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the company. |
Date: August 23, 2019
/s/ THOMAS L. BENÉ
Thomas L. Bené
Chairman of the Board, President and Chief Executive Officer
Exhibit 32.2
CERTIFICATION PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
I, Joel T. Grade, Executive Vice President and Chief Financial Officer, of Sysco Corporation (the “company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
1. | The company’s Annual Report on Form 10-K for the fiscal year ended June 29, 2019 (“Annual Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
2. | All of the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the company. |
Date: August 23, 2019
/s/ JOEL T. GRADE
Joel T. Grade
Executive Vice President and Chief Financial Officer
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