EXHIBIT 10(vv)
[date]
PERSONAL AND CONFIDENTIAL
[Name]
[Street Address]
[City, State Zip]
     RE: Fiscal 2006 Bonus
Dear [Grantee]:
     In recognition of your long-term commitment to Sysco Corporation (“SYSCO”)
and its customers and of your expected future contributions to our corporate
financial objectives, you have been granted an opportunity to earn a performance
bonus for fiscal year 2006 under the SYSCO Corporation 2000 Management Incentive
Plan (the “Plan”). You will not receive any bonus unless SYSCO achieves an
Increase in Earnings Per Share of at least ___% (“Target A”) and achieves a
Return on Stockholders’ Equity of at least ___% (“Target B”). If Target A and
Target B have been met, then subject to the further adjustments and additions
provided for elsewhere in the Plan and this Agreement, a portion of your bonus
(“Part A”) will depend upon the results of the Operations of SYSCO as shown on
Table A attached hereto, and the balance of your bonus (“Part B”) will depend on
the number of Subsidiaries obtaining or exceeding ___% Return on Capital
(“Target C”).
Part A Bonus Calculation
Part A of any bonus you may earn will be equal to the product of:
(i) 70% of your annual base salary in effect at the fiscal year end (“Base
Salary”); and
(ii) the appropriate percentage shown on Table A which coincides with the
appropriate Increase in Earnings per Share and Return on Stockholder’s Equity
for SYSCO as a whole.
Part B Bonus Calculation
     Subject to the further adjustments and additions provided for in this
Agreement, Part B of any bonus you may earn will be calculated by determining
the number of Subsidiaries of SYSCO that have attained or exceeded Target C. If
a minimum of 15 Subsidiaries have obtained or exceeded Target C, and all
Subsidiaries which have obtained or exceeded Target C employ at least 50% or
more of the aggregate of the Total Capital of all Subsidiaries, then you will be
entitled to receive an additional bonus equal to:
(i) 9% of your Base Salary for the first 15 Subsidiaries which obtain or exceed
such a Return on Capital; plus

 

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[date]
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(ii) an additional 11/2% of your Base Salary for each additional Subsidiary
which obtains or exceeds Target C.
By way of example, if 23 Subsidiaries (which, in the aggregate, employ 51% of
the Total Capital of all Subsidiaries) obtain or exceed Target C, you will
receive a bonus equal to the product of (i) your Salary Percentage and (ii) 21%
of your Base Salary (9% for the performance of the first 15 Subsidiaries in the
group, and 12% for the performance of the additional eight Subsidiaries in the
group).
Maximum Bonus Amounts
     Although Table A has only been calculated to 370%, the “grid” 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, your bonus amount for fiscal 2006 (including, if applicable, the value
of any Additional Shares and Additional Cash Bonus) cannot exceed 1% of SYSCO’s
earnings before income taxes as publicly disclosed in the “Consolidated Results
of Operations” section of SYSCO’s annual report to the Securities and Exchange
Commission on Form 10-K for fiscal year 2006.
General Rules Regarding Bonus Calculation
     In determining whether or not the results of operations of a Subsidiary or
SYSCO result in a bonus, SYSCO’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 SYSCO,
approved by the Compensation and Stock Option Committee of SYSCO’s Board of
Directors (“Plan Compensation Committee”) and binding on you.
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 SYSCO (as described in the “Summary of Accounting Policies” section of
SYSCO’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 SYSCO for fiscal 2006 shall be made as if such rate change had not occurred
during 2006.
Payment
     Within 90 days following the end of each fiscal year, SYSCO shall determine
and the Plan Compensation Committee shall approve the amount of any bonus earned
by you under this Agreement. Such bonus shall be payable in the manner, at the
times and in the amounts provided in the Plan.
Definitions
     The capitalized terms in this document have the meaning ascribed to them in
the Glossary attached hereto. Any capitalized terms not included in the Glossary
have the meanings ascribed to them in the Plan.

 

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[date]
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Additional Documents
     Enclosed for your review are copies of the Plan document and other
explanatory materials. All of the enclosed documents are important legal
documents that should be reviewed carefully and kept in a safe place. Please
complete the enclosed forms as soon as possible, and return them to Connie
Brooks.
     Thank you for your hard work and service. Your efforts, which are an
integral part of SYSCO’s growth and progress, are deeply appreciated. If you
should have any questions about your bonus opportunity or the Plan, please
contact Mike Nichols.

            Sincerely,
            Richard J. Schnieders      Chairman, CEO and President     

     
Enclosures
cc:

   
 
 

   
Accepted and Agreed:
   
 
   
 
         
Name

   
 
   
 
         
Date
   

 

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GLOSSARY
     1. Total Capital — for any Subsidiary, the sum of the following components:
(a) Stockholders’ equity — the average of the amounts outstanding for such
Subsidiary 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 such
Subsidiary 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.
     2. Return on Capital — the Return on Capital for any Subsidiary is
expressed as a percentage and is computed by dividing the Subsidiary’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 2005) by the Subsidiary’s Total Capital.
     3. Return on Stockholders’ Equity — expressed as a percentage and computed
by dividing the Company’s net after-tax earnings for fiscal 2006 by the
Company’s average stockholders’ equity at the end of each quarter during the
year.
     4. Increase in Earnings Per Share — expressed as a percentage increase of
the net after-tax earnings per share for fiscal 2006 over the net after-tax
earnings per share for fiscal 2005.
     5. 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.
Capitalized terms used but not otherwise defined herein shall have the meaning
ascribed to them in the Plan.

 

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TABLE A

                                                                               
                                                                               
                                        PERCENTAGE INCREASE IN EARNINGS PER
SHARE: Return on                                                                
                                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