Sysco Corporation Non-Employee Directors Stock Election Policy
EX-10.1 2 exhibit101nedirstockel.htm EXHIBIT 10.1 Exhibit
NON-EMPLOYEE DIRECTORS STOCK ELECTION POLICY
This Non-Employee Directors Stock Election Policy (the “Policy”) is established pursuant to the Sysco Corporation 2018 Omnibus Incentive Plan, and any stockholder approved successor plan thereto (the “Plan”), to attract, retain and compensate for service as members of the Board of Directors (the “Board”) highly qualified individuals who are not current employees of Sysco Corporation (the “Corporation”) and to enable them to increase their ownership in the Corporation’s common stock. This Policy will be beneficial to the Corporation and its stockholders, since it will allow these Directors to have a greater personal financial stake in the Corporation through the ownership of the Corporation’s common stock, in addition to underscoring their common interest with stockholders in increasing the value of the Corporation over the longer term.
SECTION 1.1 Definitions. Capitalized terms used in the Policy, in addition to the other definitions contained herein, shall be defined as set forth below:
Common Stock. The term “Common Stock” means the Corporation’s Common Stock, $1.00 par value per share.
Fair Market Value. The term “Fair Market Value” means, as of a particular date, the last closing price of the Common Stock on the first business day prior to that date on the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock Exchange, on any other exchange or quotation system on which the Common Stock is listed or quoted.
Election to Receive Common Stock
SECTION 2.1 Eligibility.
(a) A Non-Employee Director who is otherwise eligible to receive cash payment for services provided as a Director may elect to receive up to 100% of his or her annual retainer fee (excluding (i) any additional retainer fee paid for serving as a committee chairman (a “Committee Chairman”), (ii) any fees or other amounts payable for attendance at the meetings of the Board or for service on any committee thereof and (iii) any additional retainer fee paid to a Non-Executive Chairman of the Board (a “Board Chairman” or an independent Lead Director for his or her service in such capacity), in 10% increments, in the form of Common Stock (a “Stock Election”), subject to the following terms of this Article 2.
(b) In addition to the Stock Election, a Board Chairman, Lead Director or Committee Chairman who is otherwise eligible to receive an additional cash payment for his or her service in such capacity (the “Additional Fee”) may elect to receive up to 100% of such Additional Fee, in 10% increments, in the form of Common Stock (an “Additional Stock Election”), subject to the following terms of this Article 2.
(c) The amount of the fee which a Non-Employee Director, Board Chairman, Lead Director or Committee Chairman elects to receive in Common Stock is referred to herein as the “Elected Amount.” The Elected Amount shall be deducted ratably from the quarterly cash payments of the annual retainer fee payable to such Non-Employer Director, Board Chairman, Lead Director or Committee Chairman in that calendar year in which the Elected Amount would have been paid, but for the Stock Election.
SECTION 2.2 Common Stock.
(a) Any Non-Employee Director, Board Chairman, Lead Director or Committee Chairman who makes a Stock Election or Additional Stock Election pursuant to Section 2.1 (an “Electing Director”) shall have an account created on the books of the Corporation to which shares of Common Stock shall be credited and debited as provided in this Article 2 (the “Stock Account”).
(b) Each Electing Director who makes a Stock Election pursuant to Section 2.1(a) shall have credited to his or her Stock Account on the date of issuance of each quarterly payment of the annual retainer fee (the “Quarterly Payment Date”) that number of shares of Common Stock determined by dividing his or her Elected Amount attributable to a Stock Election made pursuant to Section 2.1(a) by the Fair Market Value on such Quarterly Payment Date (such shares are referred to as “Elected Shares”).
(c) Any Board Chairman, Lead Director or Committee Chairman who makes an Additional Stock Election pursuant to Section 2.1(b) shall have credited to his or her Stock Account on the Quarterly Payment Date that number of shares of Common Stock determined by dividing his or her Elected Amount attributable to an Additional Stock Election made pursuant to Section 2.1(b) by the Fair Market Value on such Quarterly Payment Date (such shares are referred to as “Additional Elected Shares”). For purposes of this Policy, all references to “Elected Shares” shall be deemed to include the Additional Elected Shares.
SECTION 2.3 Vesting, Voting and Dividends.
(a) All Elected Shares shall be 100% vested as of the date they are credited to the Electing Director’s Stock Account. Elected Shares may not be sold or transferred prior to the date they are issued.
(b) During the period between (i) the date on which Elected Shares are credited to the Electing Director’s Stock Account and (ii) the date on which such Elected Shares are issued to the Electing Director, such Electing Director shall have no voting rights with respect to any such Elected Shares, but shall be entitled to receive cash dividends paid with respect to the underlying shares.
SECTION 2.4 Date of Issuance. The effective date of issuance of Common Stock issued pursuant to this Article 2 (the “Issue Date”) shall be December 31 for any year as to which a Non-Employee Director, Board Chairman, Lead Director or Committee Chairman has made a Stock Election or Additional Stock Election as described in Section 2.1 hereof, or if December 31 is not a business day for the Corporation’s transfer agent, the last business day of the Corporation’s transfer agent prior to December 31. On, or as soon as practicable after, the Issue Date, the total number of vested shares in his or her Stock Account on the Issue Date shall be issued in uncertificated form to such Electing Director subject to the other terms and conditions of this Policy, and at that time, the balance in such Electing Director’s Stock Account shall be debited by the number of shares issued. Notwithstanding the foregoing, if a Non-Employee Director, Board Chairman, Lead Director or Committee Chairman ceases to be a director for any reason when there are shares credited to such director’s Stock Account, such shares shall be issued in uncertificated form within 60 days of the date such Non-Employee Director, Board Chairman, Lead Director or Committee Chairman ceases to be a Director and the Issue Date of such shares shall be the date such Non-Employee Director ceased to be a director.
SECTION 2.5 Method of Election. A Non-Employee Director, Board Chairman, Lead Director or Committee Chairman who wishes to make a Stock Election or Additional Stock Election must deliver to the Secretary of the Corporation a written irrevocable election specifying the Elected Amount by December 31 of the calendar year immediately prior to the calendar year to which the Stock Election or Additional Stock Election relates (or at such other time required under rules established by the Board).
SECTION 3.1 Administration. This Policy shall be administered by the Board. This Policy may be terminated or amended by the Board as they deem advisable. The Board may delegate its authority hereunder to the Non-Employee Directors, or to any two or more thereof.
SECTION 3.2 No Other Rights. Except as provided in this Policy, no Non-Employee Director shall have any claim or right to be granted or issued Elected Shares under this Policy. Neither this Policy nor any actions hereunder shall be construed as giving any Director any right to be retained as a director of the Corporation.
SECTION 3.3 Regulations and Other Approvals.
(a) The obligation of the Corporation to deliver Common Stock with respect to any award of Elected Shares (each, an “Award”) granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board.
(b) Each Award is subject to the requirement that, if at any time the Board determines, in its absolute discretion, that the listing, registration or qualification of Common Stock issuable pursuant to the Policy is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Award or the issuance of Common Stock, no such Award shall be granted or payment made or Common Stock issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Board.
(c) In the event that the disposition of Common Stock acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act of 1933, as amended (the “Securities Act”), and is not otherwise exempt from such registration, such Common Stock shall be restricted against transfer to the extent required by the Securities Act, or regulations thereunder, and applicable state securities laws, and the Board may require a grantee receiving Common Stock pursuant to the Policy, as a condition precedent to receipt of such Common Stock, to represent to the Corporation in writing that the Common Stock acquired by such grantee is acquired for investment only and not with a view to distribution.
(d) With respect to persons subject to Section 16 of the Exchange Act, it is the intent of the Corporation that the Policy and all transactions under the Policy comply with all applicable provisions of Rule 16b-3, as promulgated under the Exchange Act.