AMENDED AND RESTATED SYSCO CORPORATION EXECUTIVE DEFERRED COMPENSATION PLAN
Exhibit 10.11
AMENDED AND RESTATED
SYSCO CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
WHEREAS, Sysco Corporation (“Sysco”) sponsors and maintains the Seventh Amended and Restated Sysco Corporation Executive Deferred Compensation Plan, effective as of December 31, 2012 (the “Current Plan”) to provide a select group of management and highly compensated employees within the meaning of Sections 201, 301 and 401 of ERISA (and therefore exempt from the requirements of Parts 2, 3 and 4 of Title I of ERISA as a “top hat” plan and eligible for the alternative method for reporting and disclosure which is available for such plans) the opportunity to defer a portion of their annual compensation from Sysco;
WHEREAS, Section 9.1 of the Current Plan authorizes the Compensation Committee of the Board of Directors of Sysco (the “Compensation Committee”) to amend the Current Plan; and
WHEREAS, Compensation Committee has determined that it is in the best interests of Sysco and its stockholders to amend and restate the Current Plan to (i) limit the application of the non-competition provision in Section 6.8 of the Plan to (x) the one-year period following termination of a participant’s employment and (y) the period of time following termination of a participant’s employment and the commencement of distributions under the Plan or receipt of all distributions such participant is entitled to receive under this Plan and (ii) delete the word “Seventh” from the title of the Plan.
NOW, THEREFORE, Sysco hereby adopts the Amended and Restated Sysco Corporation Executive Deferred Compensation Plan, effective June 29, 2013 (the “Plan”), as follows:
ARTICLE I
DEFINITIONS
Account. “Account” means a Participant’s account in the Deferred Compensation Ledger maintained by the Administrative Committee which reflects the entire interest of the Participant in the Plan, as adjusted herein for deemed Investment earnings and losses and credited interest. A Participant’s Account shall be comprised of, if applicable, such Participant’s Termination/Retirement Account and In-Service Account(s).
Active Participant. “Active Participant” means a Participant in the employ of Sysco or a Subsidiary as of December 31, 2012.
Administrative Committee. “Administrative Committee” means the persons who are from time to time serving as members of the committee administering this Plan.
Affiliate. “Affiliate” means any entity with respect to which Sysco beneficially owns, directly or indirectly, at least 50% of the total voting power of the interests of such entity and at least 50% of the total value of the interests of such entity.
Beneficiary. “Beneficiary” means a person or entity designated by the Participant under the terms of this Plan to receive any amounts distributed under the Plan upon the death of the Participant.
Board of Directors. “Board of Directors” means the Board of Directors of Sysco.
Bonus Deferral. “Bonus Deferral” means a “Bonus Deferral” as such term is defined under the Current Plan.
Bonus Deferral Election. “Bonus Deferral Election” means a “Bonus Deferral Election” as such term is defined under the Current Plan.
Business Day. “Business Day” means during regular business hours of any day on which the New York Stock Exchange is open for trading.
Change of Control. “Change of Control” means the occurrence of one or more of the following events:
(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d‑3 promulgated under the Securities Act) of 20% or more of either (i) the then-outstanding shares of Sysco common stock (the “Outstanding Sysco Common Stock”) or (ii) the combined
voting power of the then-outstanding voting securities of Sysco entitled to vote generally in the election of directors (the “Outstanding Sysco Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change of Control: (1) any acquisition directly from Sysco, (2) any acquisition by Sysco, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Sysco or any Affiliate, or (4) any acquisition by any corporation pursuant to a transaction that complies with subparagraphs (c)(i), (c)(ii) and (c)(iii) of this definition;
(b) Individuals who, as of July 1, 2012, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to July 1, 2012 whose election, or nomination for election by Sysco’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors;
(c) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving Sysco or any of its Affiliates, a sale or other disposition of all or substantially all of the assets of Sysco, or the acquisition of assets or stock of another entity by Sysco or any of its Affiliates (each, a “Business Combination”), in each case unless, following such Business Combination, (i) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Sysco Common Stock and the Outstanding Sysco Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns Sysco or all or substantially all of Sysco’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Sysco Common Stock and the Outstanding Sysco Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of Sysco or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board of Directors providing for such Business Combination; or
(d) Approval by the stockholders of Sysco of a complete liquidation or dissolution of Sysco.
Change of Control Period. “Change of Control Period” shall have the meaning set forth in Section 6.7(d).
Claimant. “Claimant” shall have the meaning set forth in Section 7.7.
Code. “Code” means the Internal Revenue Code of 1986, as amended from time to time.
Company. “Company” means Sysco and any Subsidiary that has adopted the Plan with the approval of the Administrative Committee, pursuant to Section 8.1.
Company Match. “Company Match” means a “Company Match” (as such term is defined in the Current Plan) credited to a Participant’s Account with respect to Bonus Deferral Elections made before January 1, 2013.
Compensation Committee. “Compensation Committee” means the Compensation Committee of the Board of Directors of Sysco.
Current Plan. “Current Plan” shall have the meaning set forth in the Recitals.
Default Distribution Option. “Default Distribution Option” shall have the meaning set forth in Section 6.6(c)(iv).
Default Investment. “Default Investment” means a hypothetical investment with a per annum investment return equal to Moody’s determined as of October 31st of the calendar year prior to the calendar year for which such rate shall be effective, or such other Investment designated by the Administrative Committee as the “Default Investment” on Exhibit “A” attached hereto. The investment return of the Default Investment shall be re-determined annually as of November 1st of the calendar year prior to the calendar year for which such rate shall be effective. The investment return, once established, shall be effective as of January 1st of the calendar year following the calendar year in which such investment return is calculated and shall remain in effect for the entire calendar year.
Deferrals. “Deferrals” shall mean a Bonus Deferral, a Salary Deferral, or both.
Deferral Election. “Deferral Election” shall mean a Bonus Deferral Election, a Salary Deferral Election or both.
Deferred Compensation Ledger. “Deferred Compensation Ledger” means the ledger maintained by the Administrative Committee for each Participant which reflects the amount of the Participant’s Deferrals, Company Match, credits and debits for deemed Investment earnings and losses and interest credited pursuant to Article IV, and cash distributed to the Participant or the Participant’s Beneficiaries pursuant to Article VI.
Disability. “Disability” means that a Participant has been determined by the Social Security Administration to be totally disabled.
Executive Officer. “Executive Officer” means each of Sysco’s Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, Executive Vice Presidents, Senior Vice Presidents or any other officers designated as “officers” for purposes of Section 16 of the Securities Act.
Executive Retirement Plans. “Executive Retirement Plans” means, collectively, the Plan, the Sysco Corporation Supplemental Executive Retirement Plan, the Sysco Corporation MIP Retirement Program, the Sysco Corporation Management Savings Plan, and the Sysco Corporation Canadian Executive Capital Accumulation Plan, and such other non-qualified deferred compensation arrangements sponsored by Sysco or a Subsidiary as determined by the Compensation Committee.
Fair Market Value. “Fair Market Value” means, with respect to any Investment, the closing price on the date of reference, or if there were no sales on such date, then the closing price on the nearest preceding day on which there were such sales, and in the case of an unlisted security, the mean between the bid and asked prices on the date of reference, or if no such prices are available for such date, then the mean between the bid and asked prices on the nearest preceding day for which such prices are available. With respect to any Investment which reports “net asset values” or similar measures of the value of an ownership interest in the Investment, Fair Market Value shall mean such closing net asset value on the date of reference, or if no net asset value was reported on such date, then the net asset value on the nearest preceding day on which such net asset value was reported. For any Investment not described in the preceding sentences, Fair Market Value shall mean the value of the Investment as determined by the Administrative Committee in its reasonable judgment on a consistent basis, based upon such available and relevant information as the Administrative Committee determines to be appropriate.
In-Service Account. “In-Service Account” means a separate recordkeeping account under a Participant’s Account that is created when a Participant elects a new In-Service Distribution Date with respect to amounts deferred hereunder.
In-Service Distribution. “In-Service Distribution” means a payment to the Participant following the occurrence of an In-Service Distribution Date of the amount represented by the balance in the In-Service Account with respect to such In-Service Distribution Date.
In-Service Distribution Date. “In-Service Distribution Date” means the date on which the Participant’s applicable In-Service Account shall be paid under the Current Plan; provided, however, that for Subsequent Elections made by Participants pursuant to Section 6.6(b) after November 13, 2012, “In-Service Distribution Date” shall mean March 10th of the calendar year selected by the Participant during which the Participant’s applicable In-Service Account shall be paid.
Installment Distribution Option. “Installment Distribution Option” shall have the meaning set forth in Section 6.6(c)(i).
Investment. “Investment” means the options set forth in Exhibit “A” attached hereto, including interest credited at the investment return of the Default Investment, as the same may be amended from time to time by the Administrative Committee in its sole and absolute discretion.
Lump Sum Distribution Option. “Lump Sum Distribution Option” shall have the meaning set forth in Section 6.6(c)(ii).
Management Incentive Plan. “Management Incentive Plan” means the Sysco Corporation 2009 Management Incentive Plan, as it may be amended from time to time, any successor or predecessor plan, and, at the discretion of the Compensation Committee, any other management incentive plan of Sysco.
MIP Bonus. “MIP Bonus” means a bonus awarded or to be awarded to the Participant under the Management Incentive Plan, or any bonus awarded or to be awarded to a Participant as a substitute for or in lieu of such Participant’s MIP Bonus for a Plan Year (including any amounts paid as a substitute for or in lieu of such MIP Bonus pursuant to a severance agreement or other arrangement providing for post-retirement benefits), or such other annual incentive bonus determined by the Compensation Committee in its sole discretion.
MIP Participation. “MIP Participation” means full years of participation in the Management Incentive Plan determined on an elapsed time basis. MIP Participation shall include the time a Participant was not eligible to participate in the Management Incentive Plan if, the Participant (i) was previously eligible to participate in the Management Incentive Plan; (ii) remains employed by Sysco or a Subsidiary while such Participant was ineligible to participate in the Management Incentive Plan; and (iii) later becomes eligible to again participate in the Management Incentive Plan.
Moody’s. “Moody’s” means, as of any specified date, the monthly average of the Moody’s Average Corporate Bond Yield (determined by dividing the sum of the Corporate Bond Yield Averages for each month, as published in Moody’s Bond Survey, by the number of months in the applicable calculation period) for either the (i) six-month period ending on the specified date or (ii) the twelve-month period ending on the specified date whichever produces the higher rate.
Participant. “Participant” means an employee of a Company who becomes eligible for or is participating in the Plan, and any other current or former employee of Sysco or a Subsidiary who has an Account in the Deferred Compensation Ledger.
Plan. “Plan” means the Amended and Restated Sysco Corporation Executive Deferred Compensation Plan, as set forth in this document and amended from time to time.
Plan Year. “Plan Year” means a one-year period that coincides with the fiscal year of Sysco. Sysco has a 52/53 week fiscal year beginning on the Sunday next following the Saturday closest to June 30th of each calendar year.
Retirement. “Retirement” means any Separation from Service by a Participant from Sysco and its Subsidiaries for any reason other than death or Disability on or after the earlier of (A) the date the Participant attains age sixty (60), (B) the date that the Participant has attained age fifty-five (55) and has at least fifteen (15) years of MIP Participation, or (C) the date that the Participant has attained age fifty-five (55) and has at least ten (10) years of Sysco Service.
Salary Deferral. “Salary Deferral” means a “Salary Deferral” as such term is defined under the Current Plan.
Salary Deferral Election. “Salary Deferral Election” means a “Salary Deferral Election” as such term is defined under the Current Plan.
Section 409A. “Section 409A” means Section 409A of the Code. References herein to “Section 409A” shall also include any regulatory and other interpretive guidance promulgated by the Treasury Department, including the Treasury Regulations, or the Internal Revenue Service under Section 409A of the Code.
Securities Act. “Securities Act” means the Securities Exchange Act of 1934, as amended from time to time.
Separation from Service. “Separation from Service” means a “separation from service” within the meaning of Section 409A. A Participant shall be presumed to have experienced a “separation from service” as a result of a termination of employment if the level of bona fide services performed by the Participant for Sysco or a Subsidiary decreases to a level equal to twenty-five percent (25%) or less of the average level of services performed by the Participant during the immediately preceding thirty-six (36) month period, taking into account any periods of performance excluded by the Treasury Regulations.
Specified Employee. “Specified Employee” means a “specified employee” as defined in Section 409A(a)(2)(B)(i) of the Code. By way of clarification, “specified employee” means a “key employee” (as
defined in Section 416(i) of the Code, disregarding Section 416(i)(5) of the Code) of the Company. A Participant shall be treated as a key employee if the Participant meets the requirements of Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the Treasury Regulations thereunder and disregarding Section 416(i)(5) of the Code) at any time during the twelve (12) month period ending on an Identification Date. If a Participant is a key employee as of an Identification Date, the Participant shall be treated as a Specified Employee for the twelve (12) month period beginning on the first day of the fourth month following such Identification Date. For purposes of any “Specified Employee” determination hereunder, the “Identification Date” shall mean the last day of the calendar year. The Administrative Committee may in its discretion amend the Plan to change the Identification Date, provided that any change to the Plan’s Identification Date shall not take effect for at least twelve (12) months after the date of the Plan amendment authorizing such change.
Subsidiary. “Subsidiary” means (a) any corporation which is a member of a “controlled group of corporations” which includes Sysco, as defined in Code Section 414(b), (b) any trade or business under “common control” with Sysco, as defined in Code Section 414(c), (c) any organization which is a member of an “affiliated service group” which includes Sysco, as defined in Code Section 414(m), (d) any other entity required to be aggregated with Sysco pursuant to Code Section 414(o), and (e) any other organization or employment location designated as a “Subsidiary” by resolution of the Board of Directors or by the Administrative Committee for purposes of this Plan.
Sysco. “Sysco” means Sysco Corporation, the sponsor of this Plan.
Sysco Service. “Sysco Service” means service with Sysco or a Subsidiary for which the Participant is awarded “credited service” under the Pension Plan for vesting purposes or would be awarded “credited service” under the Pension Plan for vesting purposes if the Participant was covered under the Pension Plan. For purposes of this definition, “Pension Plan” means the Sysco Corporation Retirement Plan, a defined benefit plan qualified under Section 401(a) of the Code, and any U.S. qualified defined benefit pension plan successor thereto.
Termination. “Termination” means Separation from Service from Sysco and its Subsidiaries, voluntarily or involuntarily, for any reason other than Retirement, death or Disability.
Termination/Retirement Account. “Termination/Retirement Account” means that portion of a Participant’s Account that has not been allocated to In-Service Accounts.
Treasury Regulations. “Treasury Regulations” means the Federal Income Tax Regulations, and to the extent applicable any Temporary or Proposed Regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
Trust. “Trust” shall mean the trust established pursuant to the Trust Agreement.
Trust Agreement. “Trust Agreement” shall mean the Third Amended and Restated Grantor Trust under the Amended and Restated Sysco Corporation Executive Deferred Compensation Plan, as may be further amended and/or restated from time to time.
Trustee. “Trustee” shall mean the trustee as defined in the Trust Agreement.
Total Payments. Total Payments” means all payments or benefits, including any accelerated vesting or payment of such benefits, received or to be received by a Participant in connection with a “change of control” (within the meaning of Section 280G of the Code) of Sysco under the terms of the Executive Retirement Plans or any other non-qualified deferred compensation arrangement sponsored by Sysco or any Subsidiary (or any company for which the Participant worked that was acquired by Sysco or a Subsidiary) and in connection with a change of control of Sysco under the terms of any stock incentive plan, mid-term or long-term incentive cash plan, or any other plan, arrangement or agreement with the Company, its successors, any person whose actions result in a change of control or any person affiliated with the Company or who, as a result of the completion of transactions causing a change of control, become affiliated with the Company within the meaning of Section 1504 of the Code, taken collectively.
Unforeseeable Emergency. “Unforeseeable Emergency” shall have the meaning set forth in Section 6.9.
ARTICLE II
ELIGIBILITY
2.1 Eligibility. Only those individuals who were Participants in the Plan as of December 31, 2012 shall be eligible to participate in the Plan.
ARTICLE III
PARTICIPANT DEFERRALS AND COMPANY CONTRIBUTIONS
3.1 Deferral Elections. No further Deferral Elections will be permitted under this Plan for calendar years and Plan Years commencing after December 31, 2012. Any Deferral Elections made by a Participant for calendar years or Plan Years commencing before January 1, 2013, shall remain in full force and effect, and such Participants shall remain eligible for the Company Match, if any, on any Bonus Deferral Elections made with respect to such Plan Years, pursuant to the terms of the Current Plan. Any Deferrals or Company Matches with respect to such calendar years or Plan Years, as applicable, shall be credited to the Participant’s Account at the times set forth in Sections 4.2 and 4.3 of the Current Plan.
3.2 Discretionary Company Contributions. Notwithstanding anything to the contrary contained herein, if authorized by the Compensation Committee, the Company, may, pursuant to a written agreement approved by the Compensation Committee, cause the Company to make additional contributions to a Participant’s Account. Any discretionary Company contributions made pursuant to this Section 3.3 shall be credited to a Participant’s Termination/Retirement Account and shall be paid at the earliest to occur of a Participant’s death, Disability, Retirement or Termination. Unless otherwise expressly provided in such written agreement, such discretionary contributions by the Company shall be 100% vested at all times.
3.3 Cancellation of Deferral Elections upon the Occurrence of an Unforeseeable Emergency. Notwithstanding anything to the contrary contained herein, if a Participant requests a hardship withdrawal pursuant to Section 6.9, and the Administrative Committee determines that such Participant has suffered an Unforeseeable Emergency, the Participant may elect to cancel such Participant’s Deferral Elections in effect for such calendar year. Such election shall be made in writing by the Participant in such form as the Administrative Committee determines from time to time. In addition, if a Participant receives a hardship distribution under a 401(k) plan sponsored by the Company, all Deferral Elections in effect for the calendar year or Plan Year, as the case may be, in which such hardship distribution is made shall be cancelled, and such Participant may not make additional Deferral Elections for at least six (6) months following the receipt of such hardship distribution.
ARTICLE IV
ACCOUNT
4.1 Establishing a Participant’s Account. The Administrative Committee shall establish an Account for each Participant in the Deferred Compensation Ledger which shall be maintained by the Company. Each Account shall reflect the entire interest of the Participant in the Plan.
4.2 Deemed Investment of Deferrals and Company Matches. The credit balance of Deferrals and Company Matches in the Participant’s Account shall be deemed invested and reinvested from time to time in such Investments as shall be designated by the Participant in accordance with this Section 4.2; provided, however, the designation of investment provisions set forth in this Section 4.2 shall not be available for Company Matches until January 1, 2014. Until such time, interest shall be credited on the portion of the Participant’s Account attributable to Company Matches in accordance with Section 4.4, and, after such time, interest shall continue to be credited on the portion of the Participant’s Account attributable to Company Matches in accordance with Section 4.4 unless and until the Participant changes his Investments with respect to such Company Matches pursuant to this Section 4.2.
(a) Each Participant may make a designation of the Investments in which the Deferrals in such Participant’s Account will be deemed invested. The Investments designated by a Participant shall be deemed to have been purchased on the date on which the Deferrals are credited to the Participant’s Account, or if such day is not a Business Day, on the first Business Day following such date. If a Participant has not made a designation of Investments in which such Participant’s Deferrals will be deemed invested, the credit balance of the Deferrals in the Participant’s Account shall be deemed to be invested in the Default Investment.
(b) At such times and under such procedures as the Administrative Committee shall designate, each Participant shall have the right to (i) change the existing Investments in which the Deferrals and Company Matches (subject to the first sentence of Section 4.2) in such Participant’s Account are deemed invested by treating a portion of such Investments as having been sold and the new Investments purchased (i.e., an investment transfer), and (ii) change the Investments which are deemed purchased with future Deferrals and Company Matches credited to the Participant’s Account.
(c) In the case of any deemed purchase of an Investment, the Participant’s Account shall be decreased by a dollar amount equal to the number of units of such Investment treated as purchased multiplied by the per unit net asset value of such Investment as of such date or, if such date is not a Business Day, on the first Business Day following such date, and shall be increased by the number of units of such Investment treated as purchased. In the case of any deemed sale of an Investment, the Participant’s Account shall be decreased by the number of units of such Investment treated as sold, and shall be increased by a dollar
amount equal to the number of units of such Investment treated as sold multiplied by the net asset value of such Investment as of such date or, if such date is not a Business Day, on the first Business Day following such date.
(d) In no event shall the Company be under any obligation, as a result of any designation of Investments made by Participants, to acquire any Investment assets, it being intended that the designation of any Investment shall only affect the determination of the amounts ultimately paid to a Participant.
(e) In determining the amounts of all debits and credits to the Participant’s Account, the Administrative Committee shall exercise its reasonable best judgment, and all such determinations (in the absence of bad faith) shall be binding upon all Participants and their Beneficiaries. If an error is discovered in the Participant’s Account, the Administrative Committee, in its sole and absolute discretion, shall cause appropriate, equitable adjustments to be made as soon as administratively practicable following the discovery of such error or omission.
4.3 Crediting of Earnings on Deferrals Invested in the Default Investment. Earnings will be credited on the portion of the Participant’s Account attributable to Deferrals invested (or deemed invested) by a Participant in the Default Investment in accordance with this Section 4.3. For the portion of the Participant’s Account attributable to Deferrals invested (or deemed invested) in the Default Investment as of the close of business on July 1, 2008 (including a Participant’s Bonus Deferral for the fiscal year 2008 MIP Bonus), earnings credited to a Participant’s Account on or after July 2, 2008 with respect to such amounts will be credited at a per annum investment return equal to the sum of (a) the investment return of the Default Investment, plus (b) one percent (1%). For Deferrals credited to a Participant’s Account on or after July 2, 2008 and invested in the Default Investment, and investment transfers into the Default Investment on or after July 2, 2008, earnings credited to a Participant’s Account on or after July 2, 2008 with respect to such amounts will be credited at a per annum investment return equal to the investment return of the Default Investment.
4.4 Crediting of Interest on Company Match. Subject to Section 4.2, interest will be credited on the portion of the Participant’s Account attributable to Company Matches in accordance with this Section 4.4. For Company Matches credited to a Participant’s Account prior to July 2, 2008 (including the Company Match attributable to a Participant’s Bonus Deferral for the fiscal year 2008 MIP Bonus), interest credited to a Participant’s Account on or after July 2, 2008 with respect to such amounts will be credited at a per annum interest rate equal to the sum of (a) the investment return of the Default Investment, plus (b) one percent (1%). For Company Matches credited to a Participant’s Account on or after July 2, 2008, interest credited to a Participant’s Account on or after July 2, 2008 with respect to such amounts will be credited at a per annum interest rate equal to the investment return of the Default Investment. Interest on each Company Match shall be compounded annually, but credited on a daily basis.
4.5 Procedure to Credit or Debit Interest, Earnings or Losses Upon an Event of Distribution.
(a) Crediting of Interest or Deemed Investment Earnings or Losses Prior to Commencement of Distributions. The Participant’s Account shall continue to be credited or debited with Investment earnings or losses until (i) with respect to distribution events other than In-Service Distributions, the later to occur of (x) the date of the event giving rise to the distribution; or (y) the last day of the month preceding the month in which distributions will commence; and (ii) with respect to an In-Service Distribution, the date that is three (3) weeks prior to the In-Service Distribution Date with respect to such In-Service Distribution (the “Conversion Date”), at which time the deemed Investments of the portion of the Participant’s Account attributable to Deferrals, other than amounts invested in the Default Investment, shall be treated as sold and credited with a dollar value in accordance with Section 4.2(c) and invested in the Default Investment. For the period beginning on the Conversion Date and ending on the date on which distributions commence, the portion of the Participant’s Account attributable to Deferrals shall be credited with earnings as provided in Section 4.3. For purposes of this Section 4.5(a), for the period prior to the commencement of distributions, the portion of the Participant’s Account attributable to Company Matches shall be credited with interest as provided in Section 4.4 or deemed Investment earnings or losses as provided in Section 4.2, if applicable. As of the close of business on the date distributions are to commence, interest and Investment earnings shall no longer be credited to a Participant’s Account pursuant to this Section 4.5(a) and interest shall be credited to the Participant’s Account as provided in Section 4.5(b).
(b) Crediting of Interest After Commencement of Installment Distributions. If any portion of a Participant’s Account is to be paid pursuant to the Installment Distribution Option, interest shall be credited to the declining balance of the portion of the Participant’s Account subject to this Section 4.5(b), beginning on the day after the date on which distributions commence and continuing through the scheduled date of the final installment. The interest crediting rate for purposes of this Section 4.5(b) shall be the per annum interest rate equal to Moody’s as of the last day of the month that is two (2) months prior to the month during which distributions are to commence.
(c) Variable Investment Option. For Participants whose Retirement occurred prior to July 2, 2008, and who elected the Variable Investment Option (as defined in the Fifth Amended and Restated Sysco Corporation Executive Deferred Compensation Plan), the determination of the amount of each installment distribution and the crediting of Investment earnings and losses during the period in which the Participant is receiving distributions shall be governed by the terms of the Fifth Amended and Restated Sysco Corporation Executive Deferred Compensation Plan, except that for purposes of determining the amount of Investment earnings and losses credited to such Participant’s Account the terms of the Plan shall govern.
ARTICLE V
VESTING
5.1 Deferrals. The amount credited to a Participant’s Account attributable to Deferrals, adjusted for deemed Investment earnings and losses pursuant to Sections 4.2 and 4.3, shall be 100% vested at all times, except that deemed Investment earnings attributable to Deferrals shall be subject to forfeiture under Sections 6.7 and 6.8.
5.2 Company Match. Effective on and after December 31, 2012, the amount credited to an Active Participant’s Account attributable to Company Matches, together with interest accumulated on those Company Matches pursuant to Section 4.4 or deemed Investment earnings or losses as provided in Section 4.2, shall be 100% vested, except that such amounts shall be subject to forfeiture under Sections 6.7 and 6.8, and any applicable reduction caused by the restrictions set forth in Section 6.11.
ARTICLE VI
DISTRIBUTIONS
6.1 Death. Upon the death of a Participant, the Participant’s Beneficiary or Beneficiaries shall be paid the balance of the Participant’s Account in the Deferred Compensation Ledger pursuant to the distribution option selected by the Participant under Section 6.6(c).
Each Participant, upon making his initial deferral election, shall file with the Administrative Committee a designation of one or more Beneficiaries to whom distributions otherwise due the Participant shall be made in the event of the Participant’s death prior to the complete distribution of the amount credited to his Account in the Deferred Compensation Ledger. The designation shall be effective upon receipt by the Administrative Committee of a properly executed form approved by the Administrative Committee for that purpose. The Participant may from time to time revoke or change any designation of Beneficiary by filing another approved Beneficiary designation form with the Administrative Committee. If there is no valid designation of Beneficiary on file with the Administrative Committee at the time of the Participant’s death, or if all of the Beneficiaries designated in the last Beneficiary designation have predeceased the Participant or, in the case of an entity, otherwise ceased to exist, the Beneficiary shall be the Participant’s spouse, if the spouse survives the Participant, or otherwise the Participant’s estate. A Beneficiary who is an individual shall be deemed to have predeceased the Participant if the Beneficiary dies within 30 days of the date of the Participant’s death. If any Beneficiary survives the Participant but dies or, in the case of an entity, otherwise ceases to exist before receiving all amounts due the Beneficiary from the Participant’s Account, the balance of the amount which would have been paid to that Beneficiary shall, unless the Participant’s designation provides otherwise, be distributed to the individual deceased Beneficiary’s estate or, in the case of an entity, to the Participant’s spouse, if the spouse survives the Participant, or otherwise to the Participant’s estate. Any Beneficiary designation which designates any person or entity other than the Participant’s spouse must be consented to in writing by the Participant’s spouse in a form acceptable to the Administrative Committee in order to be effective.
6.2 Disability. Upon the Disability of a Participant, the Participant shall be paid the balance of the Participant’s Account in the Deferred Compensation Ledger pursuant to the distribution option selected by the Participant under Section 6.6(c).
6.3 Retirement. Upon the Retirement of a Participant, the Participant shall be paid the vested portion of such Participant’s Account in the Deferred Compensation Ledger pursuant to the Distribution option selected by the Participant under Section 6.6(c). Any amounts not vested at the time of such Participant’s Retirement shall be forfeited.
6.4 Distributions Upon Termination. Upon a Participant’s Termination, the Participant shall be paid the vested portion of such Participant’s Account in the Deferred Compensation Ledger pursuant to the Lump Sum Distribution Option. Any amounts not vested at the time of such Participant’s Termination shall be forfeited.
6.5 In-Service Distributions. Each In-Service Distribution shall be paid in a lump sum on the In-Service Distribution Date, or as soon as administratively practicable thereafter. Notwithstanding a Participant’s election to receive an In-Service Distribution of some or all of the Participant’s Account, if the Participant’s Retirement, Disability, death or Termination, as applicable, occurs prior to any In-Service Distribution Date(s), the Participant’s remaining In-Service Account balance(s) (after making any In-Service Distributions with respect to In-Service Distribution Date(s) occurring prior to such Participant’s Retirement, death, Disability or Termination but not otherwise paid) shall be distributed pursuant to the Plan’s provisions regarding distributions upon Retirement, Disability, death or Termination, as applicable.
6.6 Distribution Elections for Deferrals. Each Participant shall have the right to elect, to revoke, or to change any prior election of the timing of payment or the form of distribution at the time and under the rules established by the Administrative Committee, which rules shall include and shall be limited by the provisions of this Section 6.6.
(a) Initial Distribution Elections. A Participant may elect different forms of distribution, as specified in Section 6.6(c), with respect to the distribution events described in Sections 6.1 (upon death), 6.2 (upon Disability) and 6.3 (upon Retirement). The initial election of form of distribution with respect to a particular distribution event, if received by the Administrative Committee in proper form prior to or concurrent with the time a Participant first makes an affirmative Deferral Election under this Plan, shall be effective upon receipt, and shall become irrevocable at the time a Participant first makes an affirmative Deferral Election under this Plan. All elections of form of distribution, with respect to such distribution events, made after the time a Participant first makes an affirmative Deferral Election under this Plan must comply with the rules of Section 6.6(b).
(b) Subsequent Elections. Any election, revocation, or change of election of form of distribution with respect to distributions upon death, Disability and Retirement that a Participant makes after he first makes an affirmative Deferral Election under this Plan; or change of election of time of payment with respect to In-Service Distributions (such elections, revocations and changes are referred to collectively herein as a, “Subsequent Election”) shall be effective only if the requirements of this Section 6.6(b) are met. Subsequent Elections may be submitted to the Administrative Committee from time to time in the form determined by the Administrative Committee and shall be effective on the date that is twelve (12) months after the date on which such Subsequent Election is received by the Administrative Committee. If an event giving rise to a distribution occurs during the one-year period after a Subsequent Election is made, or if such Subsequent Election does not meet the requirements of this Section 6.6(b),
distributions under this Plan shall be made pursuant to the Participant’s last effective election, revocation, or change with respect to the event giving rise to the distribution. With respect to payments upon Retirement or upon the occurrence of an In-Service Distribution Date, (i) the Subsequent Election must be received by the Administrative Committee in proper form at least one year prior to such Participant’s Retirement or the occurrence of an In-Service Distribution Date; and (ii) the first payment pursuant to such Subsequent Election may not be made within the five-year period commencing on the date such payment would have been made or commenced under the last effective election, revocation, or change made by the Participant.
(c) Distribution Options. The distribution options that may be selected by Participants pursuant to this Section 6.6 are as follows:
(i) Installment Distribution Option. If a Participant selects the “Installment Distribution Option”, with respect to all or a portion of a Participant’s Account, except as otherwise provided in this Section 6.6(c)(i), the Participant or the Participant’s Beneficiaries shall be paid the portion of the Participant’s Account in the Deferred Compensation Ledger to which this section applies in equal quarterly or annual (as selected by the Participant) installments of principal and interest for a period of up to 20 years (as selected by the Participant). Notwithstanding the foregoing, if the Participant forfeits all or a portion of his Account pursuant to Section 6.7 (forfeiture for cause) or Section 6.8 (forfeiture for competition), the amount of the installment shall be recalculated as of the date of any such forfeiture taking into account the remaining amount due to the Participant and the remaining period over which such Participant was to receive installment payments pursuant to this Section 6.6(c)(i), with no further interest credited on the declining balance following such forfeiture. Amounts distributed pursuant to the Installment Distribution Option shall be treated as a single payment for purposes of the subsequent deferral election rules of Section 409A.
(ii) Lump Sum Distribution Option. If the Participant selects the “Lump Sum Distribution Option”, with respect to all or a portion of the Participant’s Account, the Participant or the Participant’s Beneficiaries shall be paid the portion of the Participant’s Account in the Deferred Compensation Ledger to which this Section 6.6(c)(ii) applies, in a lump sum.
(iii) Combination Lump Sum and Installment Distribution Option. Participants may also elect to have their Accounts distributed in part pursuant to the Lump Sum Distribution Option, and the balance distributed pursuant to the Installment Distribution Option, by making the appropriate designation on the form which the Administrative Committee has approved for this purpose. If a Participant elects to have his Account distributed pursuant to this Section 6.6(c)(iii), the lump sum payment shall be made at the time provided under Section 6.6(d) and the installment payments shall commence upon the next applicable payment date (i.e., either quarterly or annually).
(iv) Default Distribution Option. If a Participant does not have an effective election as to the form of distribution on file with the Administrative Committee at the time distributions to such Participant are to commence, the Participant shall be conclusively deemed to have elected to receive the vested balance of such Participant’s Account pursuant to the Installment Distribution Option annually over a period of fifteen (15) years (the “Default Distribution Option”).
(d) Commencement of Distributions. Distributions pursuant to this Section 6.6 shall commence as soon as administratively feasible after the event giving rise to the distribution, but not later than 90 days after the event giving rise to the distribution; provided, however, that in the case of the death of the Participant, distributions shall not commence within the thirty (30) day period following the Participant’s death; provided further, that, in the case of a Participant who has made a Subsequent Election with respect to distributions upon Retirement or the occurrence of an In-Service Distribution Date, distributions upon Retirement or the occurrence of an In-Service Distribution Date shall not commence earlier than the time prescribed by Section 6.6(b); provided further, that distributions to a Specified Employee that result from such Participant’s Retirement or Termination shall not commence earlier than the date that is six (6) months after such Specified Employee’s Retirement or Termination from the Company if such earlier commencement would result in the imposition of tax under Section 409A. If distributions to a Participant are delayed because of the six-month distribution delay described in the immediately preceding sentence, such distributions shall commence as soon as administratively feasible following the end of such six-month period, but not later than thirty (30) days after the end of such six-month period.
6.7 Forfeiture For Cause.
Forfeiture on Account of Discharge. If the Administrative Committee finds, after full consideration of the facts presented on behalf of both Sysco (or as applicable, a Subsidiary) and a Participant, that the Participant was discharged by Sysco (or as applicable, a Subsidiary) for: (i) fraud, (ii) embezzlement, (iii) theft, (iv) commission of a felony, (v) proven dishonesty in the course of his employment by Sysco (or as applicable, a Subsidiary) which damaged Sysco and/or any of its Subsidiaries, or (vi) disclosing trade secrets of Sysco and/or any of its Subsidiaries ((i) through (vi) individually and collectively referred to as “Forfeiture Event”), the entire amount credited to the Participant’s Account in the Deferred Compensation Ledger as of the date of discharge, exclusive of the lesser of (a) the credit balance of the Participant’s Account attributable to Deferrals of the Participant, without any adjustments for deemed Investment earnings and losses pursuant to Sections 4.2, 4.3 and 4.5, or (b) the credit balance of the Participant’s Account attributable to Deferrals, taking into account the adjustments for deemed Investment earnings and losses pursuant to Sections 4.2, 4.3 and 4.5, shall be forfeited even though it may have been previously vested under Article V.
Forfeiture after Commencement of Distributions. If the Administrative Committee finds, after full consideration of the facts presented on behalf of both Sysco (or as applicable, a Subsidiary) and the Participant, that a Participant who has begun receiving distributions under this Plan (other than In-Service Distributions) or has received all distributions such Participant is entitled to receive under this Plan engaged in a Forfeiture Event during his employment with Sysco (or as applicable, a Subsidiary) (even though the Participant was not discharged from Sysco or a Subsidiary for such a Forfeiture Event), the Participant and/or Participant’s Beneficiaries shall, to the extent determined by the Administrative Committee, in its sole discretion, (i) forfeit the entire amount credited to the Participant’s Account exclusive of the lesser of (A) the credit balance of the Participant’s Account attributable to Deferrals of the Participant, without any adjustments for deemed Investment earnings and losses pursuant to Sections 4.2, 4.3 and 4.5, or (B) the credit balance of the Participant’s Account attributable to Deferrals, taking into account the adjustments for deemed Investment earnings and losses pursuant to Sections 4.2, 4.3 and 4.5, and/or (ii) repay to the Company (at such times as determined by the Administrative Committee) amounts previously distributed to the Participant under this Plan exclusive of amounts attributable to Deferrals (without any adjustments for deemed Investment earnings and losses pursuant to Sections 4.2, 4.3 and 4.5) under this Plan, even though such amounts may have been previously vested under Article V. For purposes of determining the portion of the Participant’s Account attributable to Deferrals, any distributions made to a Participant before the date of determination (including any In-Service Distributions) shall be applied first to reduce the credit balance of the Participant’s Account attributable to Deferrals (exclusive of any associated Investment earnings).
Administrative Committee Discretion. The decision of the Administrative Committee as to the existence of a Forfeiture Event shall be final. No decision of the Administrative Committee shall affect the finality of the discharge of the Participant by Sysco or a Subsidiary in any manner.
Special Rule for Change of Control. Notwithstanding the above, the forfeiture created by Sections 6.7(a) and 6.7(b), respectively, shall not apply to a Participant who: (i) is discharged during the Plan Year in which a Change of Control occurs, or during the next three (3) succeeding Plan Years following the Plan Year in which a Change of Controls occurs (the “Change of Control Period”) or (ii) during the Change of Control Period is determined by the Administrative Committee to have engaged in a Forfeiture Event, unless a court reviewing the Administrative Committee’s findings agrees with the Administrative Committee’s determination to apply the forfeiture.
6.8 Forfeiture for Competition.
(a) Participant hereby recognizes that the Company would not be providing the valuable benefits conferred by this Plan but for Participant’s willingness to provide certain post-employment covenants designed to protect Sysco and its Subsidiaries’ valuable confidential information,
trade secrets and goodwill, including, without limitation, its valuable customer and supplier relationships. By accepting the benefits provided by this Plan, Participant acknowledges that Participant is engaging in an arms-length transaction of parties with equal bargaining power, recognizing that Participant may refuse to accept the benefits provided by this Plan and accordingly refuse to provide the covenants contained in this Section 6.8 without any impact on Participant’s continued employment with Sysco (or, as applicable, any Subsidiary).
(b) To the extent determined by the Administrative Committee, in its sole discretion, Participant and/or Participant’s Beneficiaries shall (i) forfeit the entire amount credited to the Participant’s Account exclusive of the lesser of (A) the credit balance of the Participant’s Account attributable to Deferrals of the Participant, without any adjustments for deemed Investment earnings and losses pursuant to Sections 4.2, 4.3 and 4.5, or (B) the credit balance of the Participant’s Account attributable to Deferrals, taking into account the adjustments for deemed Investment earnings and losses pursuant to Sections 4.2, 4.3 and 4.5, and/or (ii) repay to the Company (at such times as determined by the Administrative Committee) amounts previously distributed to the Participant under this Plan exclusive of amounts attributable to Deferrals (without any adjustments for deemed Investment earnings and losses pursuant to Sections 4.2, 4.3 and 4.5) under this Plan, if the Administrative Committee finds, after full consideration of the facts, that Participant, at any time (I) (x) within one (1) year following the Participant’s last day of employment or (y) following the Participant’s last day of employment and after the date that a Participant has begun receiving distributions under this Plan or has received all distributions such Participant is entitled to receive under this Plan, and (y) without written consent of Sysco’s Chief Executive Officer or General Counsel, directly or indirectly engages in any of the following acts: (1) provides services (regardless of whether as a director, officer, employee, consultant or independent contractor) that are substantially the same as provided to Sysco (or as applicable, any Subsidiary) to any business that competes with the business of Sysco (or, if applicable, any Subsidiary if Participant worked for a Subsidiary as of Participant’s last day of employment) in any county where Sysco (or as applicable, any Subsidiary) that employed Participant sold product as of the date of this Plan, provided that Participant also worked in or had responsibility over such county or counties at any time during the last twenty-four (24) months of Participant’s employment with Sysco (or, as applicable, any Subsidiary); (2) solicits, entices or recruits for any business that competes with the business of Sysco (or, if applicable, any Subsidiary if Participant worked for a Subsidiary as of Participant’s last day of employment) any actual or prospective customer of Sysco (or as applicable, any Subsidiary) with whom Participant had contact at any time during Participant’s employment; (3) solicits, entices or recruits any employee of Sysco or any Subsidiary to leave such employment to join a competing business; or (4) discloses any trade secret or item of confidential information of Sysco and/or any Subsidiary to a competing business. For purposes of determining the portion of the Participant’s Account attributable to Deferrals, any distributions made to a Participant before the date of determination shall be applied first to reduce the credit balance of the Participant’s Account attributable to Deferrals (exclusive of any associated Investment earnings).
(c) Notwithstanding the foregoing, the forfeiture or repayment obligations created by this Section 6.8 shall not apply to any Participant whose termination of employment from Sysco or a Subsidiary occurs during the Change of Control Period.
6.9 Hardship Withdrawals. Any Participant may request a hardship withdrawal to satisfy an “Unforeseeable Emergency.” No hardship withdrawal can exceed the lesser of (i) the amount of Deferrals credited to the Participant’s Account, or (ii) the amount reasonably necessary to satisfy the Unforeseeable Emergency. Whether an Unforeseeable Emergency exists and the amount reasonably needed to satisfy such need shall be determined by the Administrative Committee based upon the evidence presented by the Participant and the rules established in this Section 6.9. If a hardship withdrawal under this Section 6.9 is approved by the Administrative Committee, it shall be paid within ten (10) days of the Administrative Committee’s determination. For purposes of this Plan, an “Unforeseeable Emergency” means either: (i) a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse or of a dependent (as defined in Section 152(a) of the Code) of the Participant, (ii) loss of the Participant’s property due to casualty, or (iii) other similar extraordinary and unforeseeable circumstance arising as a result of events beyond the control of the Participant, provided that in each case the circumstances qualify as an “unforeseeable emergency” for purposes of Section 409A. The circumstances that constitute a hardship shall depend upon the facts of each case, but, in any case, amounts distributed with respect to an Unforeseeable Emergency shall not exceed the amount necessary to satisfy such need plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such need is or may be relieved: (a) through reimbursement or compensation by insurance or otherwise (other than compensation that would otherwise be available to the Participant from either a tax-qualified plan or another non-qualified deferred compensation plan (irrespective of whether such non-qualified deferred compensation plan is subject to Section 409A of the Code)), (b) by liquidation of the Participant’s assets, to the extent the liquidation of such assets will not itself cause severe financial hardship, or (c) additional compensation that may be available to such Participant by reason of a cancellation of deferrals under Section 3.5 of this Plan. Foreseeable needs for funds, such as the need to send a Participant’s child to college or the desire to purchase a home, shall not be considered to be an Unforeseeable Emergency.
6.10 Payments Upon Income Inclusion Under Section 409A. It is intended that the provisions of this Plan shall comply fully with the requirements of Section 409A. In the event that it is determined that some or all of the provisions of this Plan do not comply with the requirements of Section 409A and a Participant is required to include in income amounts otherwise deferred under this Plan as a result of non-compliance with Section 409A, the Participant shall be entitled, upon request, to receive a distribution from such Participant’s Account not to exceed the lesser of (i) the vested portion of the Participant’s Account, or (ii) the amount required to be included in income as a result of the failure of the Plan to comply with the requirements of Section 409A. Amounts distributable pursuant to this Section 6.10 shall be distributed as
soon as administratively feasible but no later than ninety (90) days after the date of the determination that such provisions of the Plan do not comply with the requirements of Section 409A.
6.11 Restrictions on any Portion of Total Payments Determined to be Excess Parachute Payments. If any payment or benefit received or to be received by a Participant in connection with a “change of control” (as defined in Section 280G of the Code and the Treasury Regulations thereunder) of Sysco would either (i) result in such payment or benefit not being deductible, whether in whole or in part, by Sysco or any Subsidiary, as a result of Section 280G of the Code, and/or (ii) result in the Participant being subject to the excise tax imposed under Section 4999 of the Code, then the benefits payable to the Participant under the Executive Retirement Plans shall be reduced until no portion of the Total Payments is not deductible as a result of Section 280G of the Code (and/or not subject to the excise tax imposed under Section 4999 of the Code) or the benefits payable under the Executive Retirement Plans that are treated as “parachute payments” (within the meaning of Section 280G(b)(2) of the Code) have been reduced to zero. If a Participant is entitled to a benefit under more than one (1) of the Executive Retirement Plans, then the reduction shall be applied in the order determined by the Administrative Committee in its sole discretion. In determining the amount of the reduction, if any, under this Plan: (a) no portion of the Total Payments which the Participant has waived in writing prior to the date of the payment of benefits under this Plan will be taken into account, (b) no portion of the Total Payments which tax counsel, selected by Sysco’s independent auditors and acceptable to the Participant and reasonably acceptable to Sysco (“Tax Counsel”), determines not to constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code will be taken into account (including, without limitation, amounts not treated as a “parachute payment” as a result of the application of Section 280G(d)(4)(A)), (c) no portion of the Total Payments which Tax Counsel, determines to be reasonable compensation for services rendered within the meaning of Section 280G(d)(4)(B) of the Code will be treated as an “excess parachute payment” in the manner provided by Section 280G(d)(4)(B), and (d) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by Sysco’s independent auditors in accordance with Sections 280G(b)(3) and (4) of the Code. Notwithstanding anything herein or otherwise to the contrary, the Compensation Committee, may, within its sole discretion and pursuant to an agreement approved by the Compensation Committee, waive application of this Section 6.11, when it determines that specific situations warrant such action.
6.12 Responsibility for Distributions and Withholding of Taxes. The Administrative Committee shall furnish information, to the Company last employing the Participant, concerning the amount and form of distribution to any Participant entitled to a distribution so that the Company may make or cause the Trust to make the distribution required. It shall also calculate the deductions from the amount of the benefit paid under the Plan for any taxes required to be withheld by federal, state or local government and will cause them to be withheld.
ARTICLE VII
ADMINISTRATION
7.1 Administrative Committee Appointment. The Administrative Committee shall be appointed by the Compensation Committee. Each Administrative Committee member shall serve until his or her resignation or removal. The Compensation Committee or its designee shall have the sole discretion to remove any one or more Administrative Committee members and to appoint one or more replacement or additional Administrative Committee members from time to time.
7.2 Administrative Committee Organization and Voting. The organizational structure and voting responsibilities of the Administrative Committee shall be as set forth in the bylaws of the Administrative Committee.
7.3 Powers of the Administrative Committee. Except as provided under Section 7.8 or unless otherwise reserved to the Compensation Committee, the Administrative Committee shall have the exclusive responsibility for the general administration of the Plan according to the terms and provisions of the Plan and shall have all powers necessary to accomplish those purposes, including but not by way of limitation the right, power and authority:
(a) to make rules and regulations for the administration of the Plan;
(b) to construe, interpret and apply all terms, provisions, conditions and limitations of the Plan;
(c) to correct any defect, supply any omission or reconcile any inconsistency that may appear in the Plan in the manner and to the extent it deems expedient to carry the Plan into effect for the greatest benefit of all parties at interest;
(d) to designate the persons eligible to become Participants and to establish the maximum and minimum amounts that may be elected to be deferred;
(e) to determine all controversies relating to the administration of the Plan, including but not limited to:
(i) differences of opinion arising between the Company and a Participant in accordance with Section 7.7, except when the difference of opinion relates to the entitlement to, the amount of or the method or timing of payment of a benefit affected by a Change of Control, in which event, such difference of opinion shall be decided by judicial action; and
(ii) any question it deems advisable to determine in order to promote the uniform administration of the Plan for the benefits of all parties at interest;
(f) to delegate by written notice any plan administration duties of the Administrative Committee to such individual members of the Administrative Committee, individual employees of the Company, or groups of employees of the Company, as the Administrative Committee determines to be necessary or advisable to properly administer the Plan; and
(g) to designate the investment options treated as Investments for purposes of this Plan.
7.4 Committee Discretion. The Administrative Committee (or, as applicable, the Compensation Committee), in exercising any power or authority granted under this Plan, or in making any determination under this Plan shall perform or refrain from performing those acts pursuant to such authority using its sole discretion and judgment. By way of amplification and without limiting the foregoing, the Company specifically intends that the Administrative Committee (or, as applicable, the Compensation Committee) have the greatest possible discretionary authority to construe, interpret and apply the terms of the Plan and to determine all questions concerning eligibility, participation and benefits. Any decision made by the Administrative Committee (or, as applicable, the Compensation Committee) or any refraining to act or any act taken by the Administrative Committee (or, as applicable, the Compensation Committee) in good faith shall be final and binding on all parties, subject to the provisions of Sections 7.7(a) through 7.7(c). The Administrative Committee’s (or, as applicable, the Compensation Committee’s) decisions shall never be subject to de novo review. Notwithstanding the foregoing, the Administrative Committee’s (or, as applicable, the Compensation Committee’s) decisions, refraining to act or acting is to be subject to judicial review for those incidents occurring during the Plan Year in which a Change of Control occurs and during the next three (3) succeeding Plan Years.
7.5 Reimbursement of Expenses. The Administrative Committee shall serve without compensation for its services but shall be reimbursed by Sysco for all expenses properly and actually incurred in the performance of its duties under the Plan.
7.6 Indemnification. To the extent permitted by law, members of the Board of Directors, members of the Compensation Committee, members of the Administrative Committee, employees of the Company, and all agents and representatives of the Company shall be indemnified by the Company, and saved harmless against any claims resulting from any action or conduct relating to the administration of the Plan, except claims arising from gross negligence, willful neglect or willful misconduct.
7.7 Claims Procedure. Any person who believes that he or she is being denied a benefit to which he or she is entitled under the Plan (referred to hereinafter as a “Claimant”) must file a written
request for such benefit with the Administrative Committee; provided, however, that any claim involving entitlement to, the amount of or the method of or timing of payment of a benefit affected by a Change of Control shall be governed by Section 7.3(e)(i). Such written request must set forth the Claimant’s claim and must be addressed to the Administrative Committee at Sysco’s principal office.
(a) Initial Claims Decision. The Administrative Committee shall generally provide written notice to the Claimant of its decision within ninety (90) days (or forty-five (45) days for a Disability-based claim) after the claim is filed with the Administrative Committee; provided, however, that the Administrative Committee may have up to an additional ninety (90) days (or up to two (2) thirty (30) day periods for a Disability-based claim), to decide the claim, if the Administrative Committee determines that special circumstances require an extension of time to decide the claim, and the Administrative Committee advises the Claimant in writing of the need for an extension (including an explanation of the special circumstances requiring the extension) and the date on which it expects to decide the claim.
(b) Appeals. A Claimant may appeal the Administrative Committee’s decision by submitting a written request for review to the Administrative Committee within sixty (60) days (or one hundred eighty (180) days for a Disability-based claim) after the earlier of receiving the denial notice or after expiration of the initial review period. Such written request must be addressed to the Administrative Committee at Sysco’s principal office. In connection with such request, the Claimant (and his or her authorized representative, if any) may review any pertinent documents upon which the denial was based and may submit issues and comments in writing for consideration by the Administrative Committee. If the Claimant’s request for review is not received within the earlier of sixty (60) days (or one hundred eighty (180) days for a Disability-based claim) after receipt of the denial or after expiration of the initial review period, the denial shall be final, and the Claimant shall be barred and estopped from challenging the Administrative Committee’s determination.
(c) Decision Following Appeal. The Administrative Committee shall generally make its decision on the Claimant’s appeal in writing within sixty (60) days (or forty-five (45) days for a Disability-based claim) following its receipt of the Claimant’s request for appeal; provided, however, that the Administrative Committee may have up to an additional sixty (60) days (or forty-five (45) days for a Disability-based claim) to decide the claim, if the Administrative Committee determines that special circumstances require an extension of time to decide the claim and the Administrative Committee advises the Claimant in writing of the need for an extension (including an explanation of the special circumstances requiring the extension) and the date on which it expects to decide the claim. The Administrative Committee shall notify the Claimant of its decision on the Claimant’s appeal in writing, regardless of whether the decision is adverse.
(d) Decisions Final; Procedures Mandatory. A decision on appeal by the Administrative Committee shall be binding and conclusive upon all persons, and completion of the claims
procedures described in this Section 7.7 shall be a mandatory precondition to commencement of any court proceeding in connection with the Plan by a person claiming rights under the Plan or by another person claiming rights through such a person. The Administrative Committee may, in its sole discretion, waive the procedures described in this Section 7.7 as a mandatory precondition to such an action.
7.8 Compensation Committee Decisions. Notwithstanding anything in the Plan to the contrary, any determination made with respect to the benefits or rights of an Executive Officer under this Plan shall not be made by the Administrative Committee but shall instead be made by the Compensation Committee, and each provision of the Plan otherwise governing such a determination shall be interpreted and construed to substitute the Compensation Committee for the Administrative Committee in such provision.
ARTICLE VIII
ADOPTION BY SUBSIDIARIES
8.1 Procedure for and Status After Adoption. Any Subsidiary may, with the approval of the Administrative Committee, adopt this Plan by appropriate action of its board of directors. The terms of this Plan shall apply separately to each Subsidiary adopting this Plan and its Participants in the same manner as is expressly provided for Sysco and its Participants except that the powers of the Board of Directors, the Compensation Committee and the Administrative Committee under the Plan shall be exercised by the Board of Directors of Sysco, the Compensation Committee of the Board of Directors of Sysco or the Administrative Committee of Sysco, as applicable. Sysco and each Subsidiary adopting this Plan shall bear the cost of providing plan benefits for its own Participants. It is intended that the obligation of Sysco and each Subsidiary with respect to its Participants shall be the sole obligation of the Company that is employing the Participant and shall not bind any other Company.
8.2 Termination of Participation By Adopting Subsidiary. Any Subsidiary adopting this Plan may, by appropriate action of its board of directors, terminate its participation in this Plan. The Administrative Committee may, in its discretion, also terminate a Subsidiary’s participation in this Plan at any time. The termination of the participation in this Plan by any Subsidiary shall not, however, affect the rights of any Participant who is working or has worked for the Subsidiary as to amounts previously standing to his credit in his Account in the Deferred Compensation Ledger, including, without limitation, all of the Participant’s rights pursuant to Sections 4.2, 4.3 and 4.4 with respect to amounts deferred by him and matched by the Company and credited to his Account, prior to the distribution of those funds to the Participant, without his consent.
ARTICLE IX
AMENDMENT AND/OR TERMINATION
9.1 Amendment or Termination of the Plan. The Compensation Committee may amend or terminate this Plan at any time by an instrument in writing without the consent of any adopting Subsidiary.
9.2 No Retroactive Effect on Awarded Benefits. Absent a Participant’s prior consent, no amendment shall:
(a) affect the amounts then standing to his credit in his Account in the Deferred Compensation Ledger;
(b) change the rate of or method of calculating interest to accrue in the future on Company Matches credited to a Participant’s Account prior to July 2, 2008;
(c) change a Participant’s rights under any provision relating to a Change of Control after a Change of Control has occurred.
However, the Compensation Committee shall retain the right at any time to (i) change in any manner the method of calculating Investment earnings and losses effective from and after the date of the amendment on the Participant’s Deferrals, and (ii) change the rate of or method of calculating interest, effective from and after the date of the amendment, to accrue on Company Matches credited to a Participant’s Account on or after July 2, 2008, if in both cases the amendment has been announced to the Participants.
9.3 Effect of Termination. Upon termination of the Plan, the following provisions of this Section 9.3 shall apply:
(a) No additional amounts shall be credited to any Participant’s Account in the Deferred Compensation Ledger, to the extent such amounts relate to salaries or bonuses earned on or after the effective date of the Plan’s termination.
(b) The Compensation Committee may, in its sole discretion, authorize distributions of the vested balance of the Participants’ Accounts in the Deferred Compensation Ledger to Participants as a result of the Plan’s termination; provided that:
(i) All deferred compensation arrangements sponsored by the Company that would be aggregated with this Plan under Section 1.409A-1(c) of the Treasury Regulations, if the Participant participated in such arrangements are terminated;
(ii) No distributions other than distributions that would be payable under the terms of the Plan if the termination had not occurred are made within twelve (12) months of the termination of the Plan;
(iii) All distributions of amounts deferred under the Plan and any other vested amounts are paid within twenty-four (24) months of the termination of the Plan; and
(iv) The Company does not adopt a new deferred compensation arrangement at any time within three (3) years following the date of termination of the Plan that would be aggregated with this Plan under Section 1.409A-1(c) of the Treasury Regulations if the Participant participated in this Plan and the new arrangement.
(c) Except as otherwise provided in Sections 9.3(a) and (b), on and after the effective date of the Plan’s termination, (i) the Plan shall continue to be administered as it was prior to the Plan’s termination until all Participant Account balances have been distributed pursuant to the terms of the Plan; (ii) a Participant shall continue to be entitled to a distribution of his Account only if he meets the distribution requirements set forth in Article 6 hereof; (iii) the forfeiture provisions of Sections 6.7 and 6.8, and the restrictions set out in Section 6.11 shall continue to apply; and (iv) no Participant shall be entitled to a distribution of the Participant’s Account solely as a result of the Plan’s termination in accordance with the terms of this Article IX.
ARTICLE X
FUNDING
10.1 Payments Under This Plan are the Obligation of the Company. The Company last employing a Participant shall pay the benefits due the Participant under this Plan; however, should it fail to do so when a benefit is due, then the benefit shall be paid by the Trust. In any event, if the Trust fails to pay for any reason, the Company still remains liable for the payment of all benefits provided by this Plan.
10.2 Plan May Be Funded Through the Trust. It is specifically recognized by both the Company and the Participants that the Company may, but is not required to, purchase life insurance so as to accumulate assets to fund the obligations of the Company under this Plan, and that the Company may, but is not required to contribute any policy or policies it may purchase and any amounts or other assets it finds desirable to the Trust. However, under all circumstances, the Participants shall have no rights to any of those policies or any other assets contributed to the Trust; and, likewise, under all circumstances, the rights of the Participants to the assets held in the Trust shall be no greater than the rights expressed in this Plan and the Trust Agreement. Nothing contained in the Trust Agreement shall constitute a guarantee by the Company that assets of the Company transferred to the Trust shall be sufficient to pay any benefits under this Plan or would place the Participant in a secured position ahead of general creditors should the Company become insolvent or bankrupt. The Trust Agreement must specify that Participants in this Plan are only unsecured general creditors of the Company in relation to their benefits under this Plan.
10.3 Reversion of Excess Assets. Sysco may, at any time, request the record keeper for the Plan to determine the present Account balances, assuming the Account balances to be fully vested and taking into account credits and debits arising from deemed Investment earnings and losses or interest credited pursuant to Article IV, as of the month end coincident with or next preceding the request, of all Participants and Beneficiaries of deceased Participants for which the Company is or will be obligated to make payments under this Plan. For periods prior to a Change of Control, if the fair market value of the assets held in the Trust, as determined by the Trustee as of that same date, exceeds the total of the Account balances of all Participants and Beneficiaries under this Plan, Sysco may direct the Trustee to return to Sysco the assets which are in excess of the Account balances under this Plan. For periods following a Change of Control, if the fair market value of the assets held in the Trust, as determined by the Trustee as of that same date, exceeds the total of the Account balances of all Participants and Beneficiaries under this Plan by 10%, Sysco may direct the Trustee to return to Sysco the assets which are in excess of 110% of the Account balances under this Plan. If there has been a Change of Control, to determine excess assets, all contributions made prior to the Change of Control shall be subtracted from the fair market value of the assets held in the Trust as of the determination date but before the determination is made.
10.4 Participants Must Rely Only on General Credit of the Company. The Company and the Participants recognize that this Plan is only a general corporate commitment, and that each Participant is merely an unsecured general creditor of the Company with respect to any of the Company’s obligations under this Plan.
ARTICLE XI
MISCELLANEOUS
11.1 Limitation of Rights. Nothing in this Plan shall be construed:
(a) to give any employee of any Company any right to be designated a Participant in the Plan;
(b) to give a Participant any right with respect to the compensation deferred, the Company Match, the deemed Investment earnings and losses, or the interest credited in the Deferred Compensation Ledger except in accordance with the terms of this Plan;
(c) to limit in any way the right of the Company to terminate a Participant’s employment with the Company at any time;
(d) to evidence any agreement or understanding, expressed or implied, that the Company shall employ a Participant in any particular position or for any particular remuneration; or
(e) to give a Participant or any other person claiming through him any interest or right under this Plan other than that of any unsecured general creditor of the Company.
11.2 Distributions to Incompetents or Minors. Should a Participant become incompetent or should a Participant designate a Beneficiary who is a minor or incompetent, the Administrative Committee is authorized to pay the funds due to the parent of the minor or to the guardian of the minor or incompetent or directly to the minor or to apply those funds for the benefit of the minor or incompetent in any manner the Administrative Committee determines in its sole discretion.
11.3 Non-alienation of Benefits. No right or benefit provided in this Plan shall be transferable by the Participant except, upon his death, to a named Beneficiary as provided in this Plan. No right or benefit under this Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge the same will be void. No right or benefit under this Plan shall in any manner be liable for or subject to any debts, contracts, liabilities or torts of the person entitled to such benefits. If any Participant or any Beneficiary becomes bankrupt or attempts to anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit under this Plan, that right or benefit shall, in the discretion of the Administrative Committee, cease. In that event, the Administrative Committee may have the Company hold or apply the right or benefit or any part of it to the benefit of the Participant or Beneficiary, his or her spouse, children or other dependents or any of them in any manner and in any proportion the Administrative Committee believes to be proper in its sole and absolute discretion, but is not required to do so.
11.4 Reliance Upon Information. No member of either the Administrative Committee or the Compensation Committee shall be liable for any decision or action taken in good faith in connection with the administration of this Plan. Without limiting the generality of the foregoing, any decision or action taken by the Administrative Committee or the Compensation Committee when it relies upon information supplied it by any officer of the Company, the Company’s legal counsel, the Company’s independent accountants or other advisors in connection with the administration of this Plan shall be deemed to have been taken in good faith.
11.5 Severability. If any term, provision, covenant or condition of the Plan is held to be invalid, void or otherwise unenforceable, the rest of the Plan shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
11.6 Notice. Any notice or filing required or permitted to be given to the Administrative Committee or a Participant shall be sufficient if submitted in writing and hand-delivered or sent by U.S. mail to the principal office of the Company or to the residential mailing address of the Participant. Notice shall be deemed to be given as of the date of hand-delivery or if delivery is by mail, as of the date shown on the postmark.
11.7 Gender and Number. If the context requires it, words of one gender when used in this Plan will include the other genders, and words used in the singular or plural will include the other.
11.8 Governing Law and Exclusive Jurisdiction. The Plan shall be governed by the laws of the State of Delaware, except to the extent such laws are preempted by federal law. Participant and the Company agree that the sole and exclusive jurisdiction for any dispute under this Plan shall lie in the United States District Court for the Southern District of Texas, and the parties hereby waive any jurisdictional or venue-related defense to litigating in this forum.
11.9 Effective Date. This Plan will be operative and effective on June 29, 2013.
11.10 Compliance with Section 409A. The Plan (i) is intended to comply with, (ii) shall be interpreted and its provisions shall be applied in a manner that is consistent with, and (iii) shall have any ambiguities therein interpreted, to the extent possible, in a manner that complies with Section 409A.
IN WITNESS WHEREOF, the Company has executed this document as of June 5, 2013, effective June 29, 2013.
|
| SYSCO CORPORATION | ||
|
|
|
| |
|
|
|
| |
|
| By: /s/ Russell T. Libby | ||
|
| Name: Russell T. Libby | ||
|
| Title: Senior Vice President, General Counsel | ||
EXHIBIT “A”
AMENDED AND RESTATED
SYSCO CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
INVESTMENT OPTIONS
The following are the “Investments” that are available under the Amended and Restated Sysco Corporation Executive Deferred Compensation Plan:
| Option | Sub-Advisor/Manager |
| Equity Income Trust | T. Rowe Price Associates, Inc. |
| 500 Index B Trust | MFC Global Invest. Management USA Ltd. |
| Mid-Value Trust | T. Rowe Price Associates, Inc. |
| JHT International Value | Templeton Global Advisors Limited |
| Small Cap Value Trust | Wellington Management Company LLC |
| Brandes International Equity Fund | Brandes Investment Partners, LP |
| Frontier Capital Appreciation | Frontier Capital Management, LLC |
| Bond Index B Trust | Declaration Management & Research LLC |
Default Investment
Moody’s Average Corporate Bond Yield calculated as described in the definition of Default Investment.
