Exhibit 10.1
[Letter to CEO, CFO, and EVPs
Under the Sysco Corporation 2008 Cash Performance Unit Plan]
November 11, 2010
PERSONAL AND CONFIDENTIAL
[Name]
[Street Address]
[City, State, Zip]
Dear [Grantee]:
In recognition of your long-term commitment to Sysco and its customers and of
your expected future contributions to our corporate financial objectives, you
have been granted [_____] “performance units” under the Sysco Corporation 2008
Cash Performance Unit Plan, as amended and restated (the “Plan”). The value
assigned to each of your performance units is $1.00.
Subject to the terms and conditions of the Plan, these performance units
represent your right to receive a cash bonus of up to 150% of the total value of
your units, consisting of two components. Any bonus payable will equal the sum
of:

    (A) up to 75% of the total value of your units, if and to the extent that
Sysco attains certain increases in fully diluted net earnings per share during
the “performance period” (July 4, 2010 through June 29, 2013), set by the
Compensation Committee of Sysco’s Board of Directors; plus

    (B) up to 75% of the total value of your units, if and to the extent that
Sysco attains certain increases in sales during the performance period, set by
the Compensation Committee.

Several changes made to the cash bonus under the Plan for last year will
continue to apply to the performance units discussed above:

  1.   If you retire in good standing from Sysco during the performance period,
the units awarded to you for the performance period will be reduced on a
pro-rata basis based on the number of years during which you were actively
employed during the performance period prior to your retirement. You will get
credit for a year if you were actively employed by Sysco at any time during the
year.     2.   Your payment amount for your units following a change of control
of Sysco will be determined assuming that Sysco achieved the target level of
performance (100% of the total value of your units) with respect to each
performance goal for the performance period. Previously, the Plan provided that
the payment amount following a change of control would be paid assuming
achievement of maximum performance levels (150% of the total value of your
units).     3.   On May 15, 2009 the Board of Directors of Sysco adopted an
incentive payment clawback policy which gives the Compensation Committee the
right to recoup all or a portion of your payment amount with respect to the
units awarded for the performance period if there is a restatement of the
financial results (other than a restatement resulting from a change in
accounting policy) used to determine your payment amount within thirty-six
(36) months of a payment (a “restatement”) and

 1     

 

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      such restatement would have resulted in a lower payment amount had it been
determined based on such restated financial results.

Enclosed for your review are copies of the Plan document, a beneficiary
designation form, instructions for completing the beneficiary designation form
and other explanatory materials. All of the enclosed documents are important
legal documents that should be reviewed carefully and kept in a safe place. If
you are a new participant or would like to change your designated beneficiary
under the Plan, please complete the enclosed beneficiary designation form as
soon as possible, and return it to Connie Brooks. If you completed the
beneficiary designation form last year, you do not have to complete it again
this year unless you want to change your designated beneficiary.
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 performance unit grant or the Plan, please contact Mark
Wisnoski or Mike Nichols.
Sincerely,
[William J. DeLaney OR Michael C. Nichols]
[President and Chief Executive Officer OR
Sr. Vice President and General Counsel]
Enclosures

 

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FISCAL YEAR 2011
CASH PERFORMANCE UNIT PROGRAM
[Performance Period Fiscal 2011-2013]
Adopted Effective August 26, 2010
     This Fiscal Year 2011 Cash Performance Unit Program (the “Program”) was
adopted pursuant to the First Amended and Restated Sysco Corporation 2008 Cash
Performance Unit Plan (the “Plan”) by the Committee (as defined in the Plan) of
Sysco Corporation (the “Company”) effective August 26, 2010. This Program is for
the Performance Period commencing July 4, 2010, and ending June 29, 2013 (the
“Performance Period”). Capitalized terms used but not otherwise defined herein
shall have the meanings given them in the Plan.
     1. Participants. The participants (“Participants”) in the Program are as
follows:
           Subsidiary Participants. Persons determined by the Chief Executive
Officer, President or any Executive Vice President of Foodservice Operations of
the Company (individually, a “Senior Officer”) who also serve as an officer of
an operating division or subsidiary of the Company (individually, a
“Subsidiary”) regardless of whether such Participant is employed by a Subsidiary
or the Company. The Payment Amount for a Subsidiary Participant shall be
determined using Table A, as is more fully described in Section 3 hereof.
          Corporate Participants. Those persons on the attached list and other
persons designated by a Senior Officer who (i) serve as an officer of the
Company and (ii) are also employees of the Company or a Subsidiary. The Payment
Amount for a Corporate Participant shall be determined using Table B, as is more
fully described in Section 3 hereof.
          Designated Participants. Persons other than Subsidiary Participants or
Corporate Participants who are employed by a Subsidiary or by the corporate
office of the Company who are designated by the Committee. The Payment Amount
for a Designated Participant shall be determined using Table A if the Committee
determines that such Designated Participant’s Performance Goals are to be
measured by the performance of one or more Subsidiaries, or Table B if the
Committee determines that such Designated Participant’s Performance Goals are to
be measured by the performance of the Company, in each case as is more fully
described in Section 3 hereof.
     2. Definitions.
          (a) For Calculations Regarding Table A attached hereto:
               (i) Increase in Operating Pretax Earnings. Except as provided in
Section 2(a)(ii), the Increase in Operating Pretax Earnings (“OPTE”) for the
Performance Period is equal to the average of the percentage change in OPTE
calculated for each Fiscal Year ending during the Performance Period. The
percentage change in OPTE for each Fiscal Year is computed by comparing the
Subsidiary’s OPTE for the relevant Fiscal Year (the calculation of which does
not include gain on the sale of fixed assets and is subject to other adjustments
determined by the Committee) to the Subsidiary’s OPTE for the prior Fiscal Year;
provided, however, that no more than a thirty-percent (30%) increase in the OPTE
for any Fiscal Year

 

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during a Performance Period shall be taken into account in determining the
Increase in OPTE for such Performance Period.
               (ii) Increase in OPTE for Performance Periods with Negative
Growth Year. Notwithstanding Section 2(a)(i), in the event that a Subsidiary’s
OPTE for any Fiscal Year during the Performance Period is less than the
Subsidiary’s OPTE for the immediately preceeding Fiscal Year (such Fiscal Year
with the lower OPTE is hereinafter referred to as (a “Negative Growth Year”)),
the Increase in the OPTE for the Performance Period containing the Negative
Growth Year shall be calculated as the ratio of (A) divided by (B), where (A) is
the average of the sum of the actual amount of the increase(s) or decrease(s) in
the OPTE for the Fiscal Years in such Performance Period and (B) is the OPTE for
the Fiscal Year immediately prior to the first Fiscal Year of the applicable
Performance Period. The calculation of the OPTE for any Fiscal Year does not
include gain on the sale of fixed assets and is subject to other adjustments
determined by the Committee.
               (iii) Foldout Companies. For purposes of calculating the increase
in OPTE with respect to a foldout company (“Foldout”) under 2(a)(i) and 2(a)(ii)
above, the OPTE of the Foldout for its first Fiscal Year shall be ignored, and
the Performance Period shall be deemed to contain two Fiscal Years.
               (iv) Percentage Change in Sales. Shall equal the average of the
percentage change in sales (whether positive or negative for any Fiscal Year of
the Subsidiary) calculated for each Fiscal Year ending during the Performance
Period. The percentage change in sales for each Fiscal Year is computed by
comparing the Subsidiary’s sales for the relevant Fiscal Year to the
Subsidiary’s sales for the prior Fiscal Year. Sales shall be determined in
accordance with U.S. generally accepted accounting principles (GAAP).
     (b) For Calculations Regarding Table B attached hereto:
               (i) Increase in Fully-Diluted Net Earnings Per Share. The
Increase in Fully-Diluted Net Earnings Per Share (“EPS”) for the Performance
Period is equal to the average change in EPS calculated for each Fiscal Year
ending during the Performance Period. The change in EPS for each Fiscal Year is
computed by comparing EPS for the relevant Fiscal Year to the Company’s EPS for
the prior Fiscal Year.
               (ii) Percentage Change in Sales. Shall equal the average of the
percentage change in sales (whether positive or negative for any Fiscal Year of
the Company) calculated for each Fiscal Year ending during the Performance
Period. The percentage change in sales for each Fiscal Year is computed by
comparing the Company’s sales for the relevant Fiscal Year to the Company’s
sales for the prior Fiscal Year. Sales shall be determined in accordance with
U.S. generally accepted accounting principles (GAAP).
     (c) Fiscal Years. For purposes of this Performance Period, Fiscal Years
shall mean the fiscal years of the Company; provided, however, that for purposes
of measuring performance for any Fiscal Year that is greater than 52 weeks
(including the Fiscal Year preceding the Performance Period) (any such year, a
“Long Fiscal Year”) the relevant results of the Company and/or its Subsidiaries
for the Long Fiscal Year shall be adjusted as follows: the relevant results for
the Long Fiscal Year shall be reduced by the amount determined by multiplying
(i) the relevant results for the last quarter of the Long Fiscal Year by
(ii) 1/14th. For

 

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purposes of the preceding sentence, the relevant results shall mean OPTE and
sales for purposes of the Table A calculations, and EPS and sales for purposes
of the Table B calculations.
     3. Method of Operation.
          (a) In General. Subject to the discretion of the Committee to
formulate different Performance Goals as to any Participant other than Covered
Employees, the Payment Amount which a Participant can earn with respect to
Performance Units under the Plan is based on (i) the performance of the Company
as a whole, (ii) the performance of the Subsidiary which employs such
Participant, (iii) the performance of the Subsidiary designated by the Committee
as the Subsidiary by reference to which the bonus is to be determined (as to
Subsidiary Participants and Designated Participants), or (iv) the performance of
a select group of Subsidiaries (as to Corporate Participants and possibly
Designated Participants). Except as otherwise provided in the Plan, the Payment
Amount is calculated with respect to the entire Performance Period. If earned,
the Payment Amount shall be paid in accordance with the Plan.
          (b) Payment Amount.
               (i) Subsidiary Participant. Subject to Section 3(i), for each
Subsidiary Participant, the Payment Amount is the sum of (A) the Earnings Growth
Payment Amount and (B) the Sales Growth Payment Amount, determined as follows:
Earnings Growth Payment Amount

                                     
Number of
Performance
Units Granted
to Participant
  X   Unit
Value   X   Applicable Percentage Determined
Under Part I of
Table A   X     50 %   =   Earnings Growth
Payment Amount
Sales Growth Payment Amount
 
Number of
Performance
Units Granted
to Participant
  X   Unit
Value   X   Applicable Percentage Determined
Under Part II of
Table A   X     50 %   =   Sales Growth
Payment Amount

 

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               (ii) Corporate Participant. For each Corporate Participant, the
Payment Amount is the sum of (A) the Earnings Growth Payment Amount and (B) the
Sales Growth Payment Amount, determined as follows:
Earnings Growth Payment Amount

                                     
Number of
Performance
Units Granted
to Participant
  X   Unit
Value   X   Applicable
Percentage
Determined
Under Part I of
Table B   X     50 %   =   Earnings Growth
Payment Amount

Sales Growth Payment Amount

                                     
Number of
Performance
Units Granted
to Participant
  X   Unit
Value   X   Applicable
Percentage
Determined
Under Part II of
Table B   X     50 %   =   Sales Growth
Payment Amount

          (c) Performance Goals Measured by Performance of Subsidiaries. With
respect to each Participant whose Performance Goals are measured by the
performance of a Subsidiary, the Applicable Percentage shall be determined on
the basis of the results of the operations of that Subsidiary during the
Performance Period as shown on Table A attached hereto and made a part hereof.
          (d) Performance Goals Measured by Performance of the Company. With
respect to each Participant whose Performance Goals are measured by the
performance of the Company, the Applicable Percentage shall be determined on the
basis of the results of operations of the Company during the Performance Period
as shown on Table B attached hereto and made a part hereof.
          (e) Performance Goals for Transferred Participants. If a Participant
transfers employment between the Company and a Subsidiary or a Subsidiary and
another Subsidiary (a “Transferred Participant”), the Transferred Participant’s
Performance Goals shall be measured by the performance of the Company or
Subsidiary, as applicable, for which the Transferred Participant has been
employed for the greatest number of business days during the Performance Period.
          (f) Unit Value. The Unit Value for the Performance Period is $1.00.
          (g) General Rules Regarding Bonus Calculation. In determining whether
or not the results of operations of a Subsidiary (or group of Subsidiaries) or
the Company for the Performance Period satisfy the Performance Goals, except as
otherwise provided herein Company accounting practices 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 (in the case of Covered Employees) by the Committee and binding on each
Participant.

 

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          (h) Tax Law Changes. If the Code is amended during a 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 a Fiscal Year, the calculation of the EPS of the
Company for the Fiscal Year in which such rate change becomes effective (the
“Rate Change Year”) shall be made as if such rate change had not occurred during
the Rate Change Year. For the Fiscal Year following the Rate Change Year, the
calculation of the EPS of the Company shall be made after taking into account
such rate change, and shall be compared, for purposes of computing the
appropriate change in EPS for such Fiscal Year, with the EPS of the Company for
the Rate Change Year, computed after taking into account such rate change.
          (i) No Payment Amount for Certain Subsidiary Participants. In the
event that during any Fiscal Year a Subsidiary has an operating loss (a “Loss
Year”), then neither the President nor the Executive Vice President(s) who are
Subsidiary Participants with respect to such Subsidiary shall be entitled to a
Payment Amount for the Performance Period containing such Loss Year.
     4. Payment. Within 90 days after the end of the Performance Period, the
Company shall determine, and, in the case of Covered Employees, the Committee
shall approve, the Payment Amount to be made for Performance Units awarded under
the Plan and earned by each Participant pursuant to the provisions of Section 3
above. Such bonus shall be payable in cash as provided in the Plan, and shall be
paid no later than the last day of the fourth month following the end of the
Performance Period (the “Payment Date”), except in the case of the Retirement of
a Specified Employee during the Performance Period, in which case the Payment
Amount shall not be paid to the Participant until the later of six months
following the date of Retirement or the Payment Date, but only to the extent
that making such Payment Amount would result in a violation of Section 409A.
     5. Clawback of Payment Amount. In accordance with the Company’s incentive
payment clawback policy, in the event of a restatement of financial results
(other than a restatement due to a change in accounting policy) within
thirty-six (36) months after a Payment Date under the Plan, if the Committee
determines in its sole and absolute discretion, that a Payment Amount paid to a
Participant under the Plan would have been lower had it been calculated based on
such restated results (the “Adjusted Payment Amount”), then the Committee shall,
subject to applicable governing law, have the right to recoup from such
Participant, in such form and at such time as the Committee determines in its
sole and absolute discretion, the difference between the amount previously paid
to such Participant pursuant to the Plan (without regard to amounts deferred by
such Participant under the Company’s executive benefit plans, if applicable) and
the Adjusted Payment Amount.
     6. Maximum Units Granted to Participants under this Program. The Committee
has established the maximum number of Units that may be granted to a Participant
under this Program. Nothing in this Program shall be construed to give any
Participant the right to receive a number of Units for the Performance Period
equal to the maximum number of Units established by the Committee, and the
Committee shall have the right to grant a Participant a number of Units less
than the maximum established by the Committee.

 

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     7. Overall Limitation Applicable to Covered Employees. Notwithstanding any
other provision in this Program to the contrary, in no event shall any Covered
Employee be entitled to a Payment Amount for any Performance Period in excess of
one percent (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
Fiscal Year ending in 2013.
     8. Delegation of Authority. Pursuant to Section 8.1 of the Plan, the
Committee hereby delegates discretionary authority granted to the Committee
under this Program as well as under the Plan to the Senior Officers and each of
them individually, except as to Covered Employees.

 

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Exhibit 1
TABLE A
FISCAL YEAR 2011
CASH PERFORMANCE UNIT PROGRAM
[Performance Period Fiscal 2011-2013]
OPERATIONS OF THE SUBSIDIARY
PART I: GROWTH IN OPERATING PRE-TAX EARNINGS

            Threshold   Target   Maximum

                                                                               
                                                         
Percentage Increase in Operating Pre-Tax Earnings
    6-6.37       6.38-6.74       6.75-7.12       7.13-7.49       7.50-7.87      
7.88-8.24       8.25-8.62       8.63-8.99       9-9.37       9.38-9.74      
9.75-10.12       10.13-10.49       10.50-10.87       10.88-11.24      
11.25-11.62       11.63-11.99       12 +
Applicable Percentage
    50 %     56.2 %     62.3 %     68.8 %     75 %     81.2 %     87.6 %    
93.8 %     100 %     106.2 %     112.6 %     118.8 %     125 %     131.2 %    
137.6 %     143.8 %     150.0 %

PART II: GROWTH IN SALES

            Threshold   Target   Maximum

                                                                               
                                                         
Percentage Change in Sales
    4-4.24       4.25-4.49       4.5-4.74       4.75-4.99       5-5.24      
5.25-5.49       5.50-5.74       5.75-5.99       6-6.24       6.25-6.49      
6.5-6.74       6.75-6.99       7-7.24       7.25-7.49       7.5-7.74      
7.75-7.99       8 +
Applicable Percentage
    50 %     56.2 %     62.3 %     68.8 %     75 %     81.2 %     87.6 %    
93.8 %     100 %     106.2 %     112.6 %     118.8 %     125 %     131.2 %    
137.6 %     143.8 %     150.0 %

 9 

 

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Exhibit 2
TABLE B
FISCAL YEAR 2011
CASH PERFORMANCE UNIT PROGRAM
[Performance Period Fiscal 2011-2013]
OPERATIONS OF THE COMPANY
PART I: GROWTH IN FULLY-DILUTED NET EARNINGS PER SHARE

            Threshold   Target   Maximum

                                                                               
                                                         
Percentage Increase in Fully-Diluted Net Earnings Per Share
    6-6.37       6.38-6.74       6.75-7.12       7.13-7.49       7.50-7.87      
7.88-8.24       8.25-8.62       8.63-8.99       9-9.37       9.38-9.74      
9.75-10.12       10.13-10.49       10.50-10.87       10.88-11.24      
11.25-11.62       11.63-11.99       12 +
Applicable Percentage
    50 %     56.2 %     62.3 %     68.8 %     75 %     81.2 %     87.6 %    
93.8 %     100 %     106.2 %     112.6 %     118.8 %     125 %     131.2 %    
137.6 %     143.8 %     150.0 %

PART II: GROWTH IN SALES

            Threshold   Target   Maximum

                                                                               
                                                         
Percentage Change in Sales
    4-4.24       4.25-4.49       4.5-4.74       4.75-4.99       5-5.24      
5.25-5.49       5.50-5.74       5.75-5.99       6-6.24       6.25-6.49      
6.5-6.74       6.75-6.99       7-7.24       7.25-7.49       7.5-7.74      
7.75-7.99       8 +
Applicable Percentage
    50 %     56.2 %     62.3 %     68.8 %     75 %     81.2 %     87.6 %    
93.8 %     100 %     106.2 %     112.6 %     118.8 %     125 %     131.2 %    
137.6 %     143.8 %     150.0 %