Form of Fiscal year 2007 Bonus Award - SVP of Operations

EX-10.45 4 h39408exv10w45.htm FORM OF FISCAL YEAR 2007 BONUS AWARD - SVP OF OPERATIONS exv10w45

Exhibit 10.45

[Form Agreement for Senior Vice Presidents of Operations]

FISCAL YEAR 2007
2005 MANAGEMENT INCENTIVE PLAN
BONUS AGREEMENT

This SYSCO CORPORATION FISCAL YEAR 2007 MANAGEMENT INCENTIVE PLAN BONUS AGREEMENT (this “Agreement”) was adopted by the Plan Committee pursuant to the Sysco Corporation 2005 Management Incentive Plan (the “Plan”) (a copy of which is attached as Exhibit 1) and agreed to by the Company and __________(“Executive”) effective __________, 2006. This Agreement is effective for the fiscal year ending June 30, 2007 (the “Plan Year”). Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Plan.

1. Calculation of Bonus. Subject to the further adjustments, limitations and additions provided for in the Plan and this Agreement, Executive’s bonus under the Plan for the Plan Year shall be based on a combination of the performance of (a) the Company as a whole (a “Company Performance Bonus”); (b) aggregate performance of the Operating Companies supervised by Executive (“Supervised Operations”) (a “Supervised Operations Performance Bonus”), and (c) one or more Operating Companies as designated by the Plan Committee (an “OpCo Performance Bonus”). Executive’s bonus under this Agreement shall be equal to the sum of Executive’s Company Performance Bonus, Supervised Operations Performance Bonus and OpCo Performance Bonus calculated as follows:

(a) Calculation of Company Performance Bonus. Subject to the further adjustments and additions provided for in the Plan and this Agreement Executive’s Company Performance Bonus for the 2007 fiscal year shall be equal to the sum of the following: (i) the product of: (A) 50% of Executive’s annual base salary in effect at the fiscal year end; and (B) 70% of the Table B Percentage; and (ii) the product of: (A) Executive’s MIP Salary; and (B) 20% of the Table B Percentage; provided that Executive will not be entitled to the portion of Executive’s Company Performance Bonus calculated as provided in clause (ii) above unless Executive receives a Supervised Operations Performance Bonus calculated as provided in Section 1(b); provided further that Executive will not be entitled to a Company Performance Bonus (calculated under either clause (i) or (ii) above) unless the Company achieves an Increase in Earnings Per Share of at least ___% and a Return on Stockholder’s Equity of at least ___%.

(b) Calculation of Supervised Operations Performance Bonus. Subject to the further adjustments and additions provided for in the Plan and this Agreement Executive’s Supervised Operations Performance Bonus shall be calculated based on the aggregate performance of Executive’s Supervised Operations as if such Supervised Operations were a single Operating Company which has achieved such aggregated financial results. Executive’s Supervised Operations Performance Bonus shall equal the product of: (i) the sum of: (A) 70% of the Table A Operating Pretax Earnings Percentage with respect to the Supervised Operations; and (B) 30% of the Table A Pretax Earnings Percentage with respect to the Supervised Operations; and (ii) 70% of Executive’s MIP Salary. Notwithstanding the foregoing, Executive will be entitled to a Supervised Operations Performance Bonus only if Executive’s Supervised Operations achieves (on an aggregate basis) a Return on Capital of at least 20% and either (i) an Increase in Operating Pretax Earnings of at least ___% or (ii) an Increase in Pretax Earnings of at least ___%.

(c) Calculation of OpCo Performance Bonus. Subject to the further adjustments and additions provided for in the Plan and this Agreement Executive’s OpCo Performance Bonus will be calculated by determining the number of Operating Companies of the Company that have attained a Return on Capital of at least ___% (the “ROC Target”). If at least 20 Operating Companies have attained or exceeded the ROC Target, and all Operating Companies which have obtained or exceeded the ROC Target employ at least 50% or more of the aggregate of the Total Capital of all Operating Companies, then Executive will be entitled to receive an OpCo Performance Bonus equal to the product of: (i) the sum of (A) 9% for the first 20 Operating Companies which obtain or exceed the ROC Target; and (B) 1¹/2% of for each additional Operating Company which obtains or exceeds the ROC Target; and (ii) 50% of Executive’s annual base salary in effect at the fiscal year end. By way of example, if 23 Operating Companies (which, in the aggregate, employ 51% of the Total Capital of all Operating Companies) obtain or exceed the ROC Target, Executive will receive an OpCo Performance Bonus equal to the product of (i) 50% of Executive’s base salary in effect at the fiscal year end and (ii) 13.5 % (the sum of 9% for the first 20 Operating Companies obtaining or exceeding the ROC Target, and 4.5% for the performance of the additional three

Operating Companies in excess of 20 obtaining or exceeding the ROC Target). Notwithstanding the foregoing, Executive will be entitled to an OpCo Performance Bonus only if the Company achieves a minimum Increase in Earnings Per Share of ___% and a minimum Return on Stockholder’s Equity of ___%.

(d) General Rules Regarding Bonus Calculation.

(i) Consistent Accounting. In determining whether or not Executive is entitled to a bonus under this Agreement, the Company’s accounting practice and generally accepted accounting principles shall be applied on a basis consistent with prior periods, and such determination shall be based on the calculations made by the Company, approved by the Plan Compensation Committee and binding on Executive. Notwithstanding the foregoing, if there is any material change in GAAP during the Plan Year that results in a material change in accounting for the revenues or expenses of the Company the calculations of the Table A and Table B Percentages for the Plan Year (the “GAAP Change Year”) shall be made as if such change in GAAP had not occurred during the GAAP Change Year. In determining the Table A and Table B Percentages for Executive in the year following the GAAP Change Year, the calculation shall be made after taking into account such change in GAAP.

(ii) No Limit on Bonus. Except as otherwise provided in this Section 1(d)(ii), there is no limit to the bonus that can be obtained under the Plan or this Agreement. Although Tables A and B have only been calculated to 370% and 172%, respectively, the “grids” shall be deemed to continue to increase in the same ratios as set forth. However, notwithstanding the foregoing and any other provision in this Agreement to the contrary, Executive’s bonus amount for the Plan Year including, if applicable, the value of any Additional Shares and Additional Cash Bonus) cannot exceed 1% of the Company’s earnings before income taxes as publicly disclosed in the “Consolidated Results of Operations” section of the Company’s annual report to the Securities and Exchange Commission on Form 10-K for the Plan Year.

(iii) Tax Law Changes. If the Internal Revenue Code is amended during the fiscal year and, as a result of such amendment(s), the effective tax rate applicable to the earnings of the Company (as described in the “Summary of Accounting Policies” section of the Company’s annual report to the Securities and Exchange Commission on Form 10-K) changes during the year, the calculation of the net after-tax earnings per share of the Company for the Plan Year shall be made as if such rate change had not occurred during the Plan Year.

2. Extraordinary Events. If, during the Plan Year, the Company experiences an Extraordinary Event or Events that results in the Company recognizing a net-after tax gain with respect to such Extraordinary Event or Events (an “Extraordinary Gain”), the Plan Committee may reduce the Company Performance Bonus payable to Executive under this Agreement in its sole and absolute discretion; provided however, that the Plan Committee may not reduce the Company Performance Bonus payable to Executive to an amount less than the Company Performance Bonus Executive would have earned if the Company did not include the Extraordinary Gain in the calculation of the Company Performance Bonus for the Plan Year.

3. Payment. Within 90 days following the end of each fiscal year, the Company shall determine and the Plan Committee shall approve the amount of any bonus earned by Executive under this Agreement. Such bonus shall be payable in the manner, at the times and in the amounts provided in the Plan.

4. Definitions

(a) For Calculations Regarding Table A (attached hereto as Exhibit 2)

(i) Total Capital — with respect to an Operating Company (including Supervised Operations), the sum of the following components:

(A) Stockholders’ equity — the average of the amounts outstanding for the Supervised Operations at the end of each quarter for which the computation is being made (quarterly average basis).

(B) Long-term debt — the average of the long-term portion of debt of the Supervised Operations outstanding at the end of each quarter for which the computation is being made (quarterly average basis).

(C) Intercompany borrowings — the average of the amount outstanding at the end of each day during the period for which the computation is being made (daily average basis).

(D) Average patronage dividend receivable — the average of the amount outstanding at the end of each period for which the computation is being made (monthly average basis).

(E) Adjustments — amounts allocated to capital with respect to (i) fixed rate intercompany loans, (ii) capitalized leases, and (iii) below market plant and equipment costs.

(ii). Return on Capital — the Return on Capital for an Operating Company (including Supervised Operations) is expressed as a percentage and is computed by dividing the Operating Company’s pretax earnings (the calculation of which does not include gain on the sale of fixed assets and intercompany interest income and is subject to adjustment to include taxes that would have been included but for the timing of any tax deferrals so that results are consistent with fiscal 2006) by the Operating Company’s Total Capital.

(iii) Increase in Pretax Earnings — the Increase in Pretax Earnings is expressed as a percentage increase of the Supervised Operations’ pretax earnings for the Plan Year (the calculation of which does not include gain on the sale of fixed assets) compared to the greater of (a) the Supervised Operations’ actual pretax earnings for fiscal 2006 or (b) those pretax earnings which would have been required to have been earned by the Supervised Operations in fiscal 2006 in order to have achieved the ROC Target.

(iv). Increase in Operating Pretax Earnings — the Increase in Operating Pretax Earnings is expressed as a percentage increase of the Supervised Operations’ operating pretax earnings for the Plan Year (the calculation of which does not include gain on the sale of fixed assets) compared to the Supervised Operations’ operating pretax earnings for fiscal 2006.

(v) Table A Operating Pretax Earnings Percentage — the percentage determined from Table AB, attached hereto as Exhibit 2, which coincides with the Increase in Operating Pretax Earnings and the Return on Capital of the Supervised Operations for the Plan Year.

(vi) Table A Pretax Earnings Percentage — the percentage determined from Table A, attached hereto as Exhibit 2, which coincides with the Increase in Pretax Earnings and Return on Capital of the Supervised Operations for the Plan Year.

(b) For Calculations Regarding Table B (attached hereto as Exhibit 3):

(i) Return on Stockholders’ Equity — expressed as a percentage and computed by dividing the Company’s net after-tax earnings for the Plan Year by the Company’s average stockholders’ equity at the end of each quarter during the year.

(ii) Increase in Earnings Per Share — expressed as a percentage increase of the net after-tax earnings per share for the Plan Year over the net after-tax earnings per share for fiscal 2006.

(iii) Table B Percentage — the percentage determined from Table B, attached hereto as Exhibit 1, which coincides with the Return on Stockholder’s Equity and Increase in Earnings Per Share for the Plan Year for the Company as a whole.

(d) Method of Calculating Quarterly Averages — In determining the average amount outstanding of stockholders’ equity, long-term debt and adjustments above, and the quarterly average stockholders’ equity, such averages shall be determined by dividing five (5) into the sum of the amounts outstanding of the relevant category at the end of each of the four quarters of the fiscal year plus the amount outstanding of the relevant category at the beginning of the fiscal year.

(e) MIP Percentage — the percentage of Executive’s base salary (as of the end of the Plan Year) that shall be used to calculate such Executive’s bonus for the Plan Year. For purposes of this Agreement, Executive’s MIP Percentage for the Plan Year shall be 100%.

(f) MIP Salary — Executive’s base salary (as of the end of the Plan Year) multiplied by Executive’s MIP Percentage.

(g) Operating Company — an operating division or a subsidiary of the Company.

5. Term of Agreement. This Agreement shall be effective only for the Plan Year (i.e., the fiscal year ending June 30, 2007).

6. No Employment Arrangement Implied. Nothing in this Agreement or the Plan shall imply any right of employment for Executive, and except as set forth in Section 9 of the Plan with respect to a Change of Control or as otherwise determined by the Committee, in its discretion, if Executive is terminated, voluntarily or involuntarily, with or without cause, prior to the end of the Plan Year, Executive shall not be entitled to any bonus for the Plan Year regardless of whether or not such bonus had been or would have been earned in whole or in part, but any unpaid bonus earned with respect to a prior fiscal year shall not be affected.

7. Plan Provisions shall Govern. This Agreement is subject to and governed by the Plan and in the case of any conflict between the terms of this Agreement and the contents of the Plan, the terms of the Plan will control.

8. Governing Law. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware without regard to the principle of conflict of laws.

9. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

10. Severability. Provided the other provisions of this Agreement do not frustrate the purpose and intent of the law, in the event that any portion of this Agreement shall be determined to be invalid or unenforceable to any extent, the same shall to that extent be deemed severable from this Agreement, and the invalidity or unenforceability thereof shall not affect the validity and enforceability of the remaining portion of this Agreement.

11. Amendment and Termination. The Company may amend this Agreement at any time up to and until the day that is ninety (90) days after the beginning of the Plan Year without the approval of Executive. No amendments may be made to this Agreement after the date that is ninety (90) days after the beginning of the Plan Year. Notwithstanding anything to the contrary contained in this Agreement, the Company may terminate this Agreement at any time during the Plan Year and Executive shall not be entitled to any bonus under this Agreement for the Plan Year regardless of when during the Plan Year this Agreement is terminated.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company and Executive has executed this Agreement as of the day and year first written above.



SYSCO CORPORATION		EXECUTIVE

By:

	Title:

EXHIBIT 1

“PLAN”

EXHIBIT 2

TABLE A
PERFORMANCE OF SUPERVISED OPERATIONS


PERCENT
RETURN
ON	PERCENTAGE INCREASE IN OPERATING PRETAX EARNINGS AND PRETAX EARNINGS
CAPITAL	__%	__%	__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%
___%	10	12		15		20		30		32		35		37		40		42		45		47		50		52		55		57		60		61		63		65		67		70
___%	15	17		20		25		40		42		45		47		50		52		55		57		60		62		65		67		70		71		73		75		77		80
___%	20	22		25		30		50		52		55		57		60		62		65		67		70		72		75		77		80		81		83		85		87		90
___%	25	27		30		35		60		62		65		67		70		72		75		77		80		82		85		87		90		91		93		95		97		100
___%	30	32		35		45		70		72		75		77		80		82		85		87		90		92		95		97		100		101		102		103		104		105
___%	35	37		40		50		80		82		85		87		90		92		95		97		100		101		102		103		105		106		107		108		109		110
___%	40	42		45		55		90		92		95		97		100		101		102		103		105		106		107		108		110		111		112		113		114		115
___%	45	47		50		65		100		101		102		103		105		106		107		108		110		111		112		113		115		116		117		118		119		120
___%	50	52		55		70		105		106		107		108		110		111		112		113		115		116		117		118		120		121		122		123		124		125
___%	52	55		60		75		110		111		112		113		115		116		117		118		120		121		122		123		125		126		127		128		129		130
___%	52	60		65		80		115		116		117		118		120		121		122		123		125		126		127		128		130		131		132		133		134		135
___%	54	62		70		85		120		121		122		123		125		126		127		128		130		131		132		133		135		136		137		138		139		140
___%	54	62		70		85		125		126		127		128		130		131		132		133		135		136		137		138		140		141		142		143		144		145
___%	56	64		75		90		130		131		132		133		135		136		137		138		140		141		142		143		145		146		147		148		149		150

TABLE A, Continued


PERCENT
RETURN
ON	PERCENTAGE INCREASE IN OPERATING PRETAX EARNINGS AND PRETAX EARNINGS
CAPITAL	__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%
___%		71		73		75		77		80		81		83		85		87		90		91		93		95		97		100		101		102		103		104		105		106		107
___%		81		83		85		87		90		91		93		95		97		100		101		102		103		104		105		106		107		108		109		110		111		112
___%		91		93		95		97		100		101		102		103		104		105		106		107		108		109		110		111		112		113		114		115		116		117
___%		101		102		103		104		105		106		107		108		109		110		111		112		113		114		115		116		117		118		119		120		121		122
___%		106		107		108		109		110		111		112		113		114		115		116		117		118		119		120		121		122		123		124		125		126		127
___%		111		112		113		114		115		116		117		118		119		120		121		122		123		124		125		126		127		128		129		130		131		132
___%		116		117		118		119		120		121		122		123		124		125		126		127		128		129		130		131		132		133		134		135		136		137
___%		121		122		123		124		125		126		127		128		129		130		131		132		133		134		135		136		137		138		139		140		141		142
___%		126		127		128		129		130		131		132		133		134		135		136		137		138		139		140		141		142		143		144		145		146		147
___%		131		132		133		134		135		136		137		138		139		140		141		142		143		144		145		146		147		148		149		150		151		152
___%		136		137		138		139		140		141		142		143		144		145		146		147		148		149		150		151		152		153		154		155		156		157
___%		141		142		143		144		145		146		147		148		149		150		151		152		153		154		155		156		157		158		159		160		161		162
___%		146		147		148		149		150		151		152		153		154		155		156		157		158		159		160		161		162		163		164		165		166		167
___%		151		152		153		154		155		156		157		158		159		160		161		162		163		164		165		166		167		168		169		170		171		172

EXHIBIT 3

TABLE B

OVERALL COMPANY PERFORMANCE


Return
on	PERCENTAGE INCREASE IN EARNINGS PER SHARE:
Equity:	__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%		__%
___%		20		24		28		45		50		55		60		65		70		75		80		85		90		100		110		120		130		140		150		160		170		180		190		200
___%		27		31		35		55		60		65		70		75		80		85		90		95		100		110		120		130		140		150		160		170		180		190		200		210
___%		34		38		42		65		70		75		80		85		90		95		100		105		110		120		130		140		150		160		170		180		190		200		210		220
___%		41		45		49		75		80		85		90		95		100		105		110		115		120		130		140		150		160		170		180		190		200		210		220		230
___%		48		52		56		85		90		95		100		105		110		115		120		125		130		140		150		160		170		180		190		200		210		220		230		240
___%		55		59		63		95		100		105		110		115		120		125		130		135		140		150		160		170		180		190		200		210		220		230		240		250
___%		62		66		70		105		110		115		120		125		130		135		140		145		150		160		170		180		190		200		210		220		230		240		250		260
___%		69		73		77		115		120		125		130		135		140		145		150		155		160		170		180		190		200		210		220		230		240		250		260		270
___%		76		80		84		125		130		135		140		145		150		155		160		165		170		180		190		200		210		220		230		240		250		260		270		280
___%		83		87		91		135		140		145		150		155		160		165		170		175		180		190		200		210		220		230		240		250		260		270		280		290
___%		90		94		98		145		150		155		160		165		170		175		180		185		190		200		210		220		230		240		250		260		270		280		290		300
___%		97		101		105		155		160		165		170		175		180		185		190		195		200		210		220		230		240		250		260		270		280		290		300		310
___%		104		108		112		165		170		175		180		185		190		195		200		205		210		220		230		240		250		260		270		280		290		300		310		320
___%		111		115		119		175		180		185		190		195		200		205		210		215		220		230		240		250		260		270		280		290		300		310		320		330
___%		118		122		126		185		190		195		200		205		210		215		220		225		230		240		250		260		270		280		290		300		310		320		330		340
___%		125		129		133		195		200		205		210		215		220		225		230		235		240		250		260		270		280		290		300		310		320		330		340		350
___%		132		136		140		205		210		215		220		225		230		235		240		245		250		260		270		280		290		300		310		320		330		340		350		360
___%		139		143		147		215		220		225		230		235		240		245		250		255		260		270		280		290		300		310		320		330		340		350		360		370