<PAGE> 1
United States
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 1, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------- ---------
Commission file number 1-6544
SYSCO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 74-1648137
(State or other jurisdiction of (IRS employer
incorporation or organization) identification number)
1390 Enclave Parkway
Houston, Texas 77077-2099
(Address of principal executive offices)
(Zip code)
Registrant's telephone number, including area code: (281) 584-1390
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
330,007,564 shares of common stock were outstanding as of January 28, 2000.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The following consolidated financial statements have been prepared by
the Company, without audit, with the exception of the July 3, 1999,
consolidated balance sheet which was taken from the audited financial
statements included in the Company's Fiscal 1999 Annual Report on Form
10-K. The financial statements include consolidated balance sheets,
consolidated results of operations and consolidated cash flows. In the
opinion of management, all adjustments, which consist of normal
recurring adjustments, necessary to present fairly the financial
position, results of operations and cash flows for all periods
presented, have been made.
These financial statements should be read in conjunction with the
audited financial statements and notes thereto included in the
Company's Fiscal 1999 Annual Report on Form 10-K.
A review of the financial information herein has been made by Arthur
Andersen LLP, independent public accountants, in accordance with
established professional standards and procedures for such a review. A
letter from Arthur Andersen LLP concerning their review is included as
Exhibit 15.
2
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SYSCO CORPORATION and its Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In Thousands Except for Share Data)
<TABLE>
<CAPTION>
Jan. 1, 2000 July 3, 1999 Dec. 26, 1998
------------ ------------ -------------
(Unaudited) (Audited) (Unaudited)
<S> <C> <C> <C>
ASSETS
Current assets
Cash $ 95,851 $ 149,303 $ 109,246
Accounts and notes receivable, less
allowances of $38,903, $21,095 and $35,539 1,444,083 1,334,371 1,310,972
Inventories 961,846 851,965 888,088
Deferred taxes 43,243 43,353 34,757
Prepaid expenses 31,075 29,775 27,934
---------- ---------- ----------
Total current assets 2,576,098 2,408,767 2,370,997
Plant and equipment at cost, less depreciation 1,265,320 1,227,669 1,196,871
Goodwill and intangibles, less amortization 403,621 302,100 306,931
Other 173,424 158,046 156,330
---------- ---------- ----------
Total other assets 577,045 460,146 463,261
---------- ---------- ----------
Total assets $4,418,463 $4,096,582 $4,031,129
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 13,273 $ 13,377 $ 10,812
Accounts payable 1,060,440 1,013,302 1,001,364
Accrued expenses 456,820 374,271 279,951
Accrued income taxes 3,422 6,103 5,274
Current maturities of long-term debt 20,833 20,487 115,387
---------- ---------- ----------
Total current liabilities 1,554,788 1,427,540 1,412,788
Long-term debt 1,132,976 997,717 975,496
Deferred taxes 229,247 244,129 224,548
Shareholders' equity
Preferred stock, par value $1 per share
Authorized 1,500,000 shares, issued none - - -
Common stock, par value $1 per share
Authorized 1,000,000,000 shares, issued
382,587,450 shares 382,587 382,587 382,587
Paid-in capital 35,255 872 1,524
Retained earnings 2,165,683 2,032,068 1,909,068
---------- ---------- ----------
2,583,525 2,415,527 2,293,179
Less cost of treasury stock, 53,032,124,
52,915,065 and 49,271,826 shares 1,082,073 988,331 874,882
---------- ---------- ----------
Total shareholders' equity 1,501,452 1,427,196 1,418,297
---------- ---------- ----------
Total liabilities and shareholders' equity $4,418,463 $4,096,582 $4,031,129
========== ========== ==========
</TABLE>
Note: The July 3, 1999 consolidated balance sheet has been taken from the
audited financial statements at that date.
3
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SYSCO CORPORATION and its Consolidated Subsidiaries
CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)
(In Thousands Except for Share Data)
<TABLE>
<CAPTION>
26-Week Period Ended 13-Week Period Ended
---------------------------------- ---------------------------------
Jan. 1, 2000 Dec. 26, 1998 Jan. 1, 2000 Dec. 26, 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Sales $ 9,308,569 $ 8,439,305 $ 4,651,535 $ 4,246,675
Costs and expenses
Cost of sales 7,565,198 6,895,541 3,771,998 3,469,496
Operating expenses 1,369,662 1,224,711 695,418 616,899
Interest expense 34,624 35,328 16,680 18,397
Other, net 1,565 415 1,754 245
-------------- -------------- -------------- --------------
Total costs and expenses 8,971,049 8,155,995 4,485,850 4,105,037
-------------- -------------- -------------- --------------
Earnings before income taxes 337,520 283,310 165,685 141,638
Income taxes 129,945 110,491 63,789 55,239
-------------- -------------- -------------- --------------
Net earnings before cumulative
effect of accounting change 207,575 172,819 101,896 86,399
Cumulative effect of accounting
change (8,041) -- -- --
-------------- -------------- -------------- --------------
Net earnings $ 199,534 $ 172,819 $ 101,896 $ 86,399
============== ============== ============== ==============
Earnings before accounting change:
Basic earnings per share $ 0.63 $ 0.52 $ 0.31 $ 0.26
============== ============== ============== ==============
Diluted earnings per share $ 0.62 $ 0.51 $ 0.31 $ 0.26
============== ============== ============== ==============
Cumulative effect of accounting change:
Basic earnings per share $ (0.02) $ -- $ -- $ --
============== ============== ============== ==============
Diluted earnings per share $ (0.02) $ -- $ -- $ --
============== ============== ============== ==============
Net earnings:
Basic earnings per share $ 0.61 $ 0.52 $ 0.31 $ 0.26
============== ============== ============== ==============
Diluted earnings per share $ 0.60 $ 0.51 $ 0.31 $ 0.26
============== ============== ============== ==============
Average number of shares outstanding 328,701,719 334,367,309 328,478,205 333,885,574
============== ============== ============== ==============
Diluted average number of
shares outstanding 333,686,134 338,039,496 333,544,018 337,894,965
============== ============== ============== ==============
Dividends paid per common share $ 0.20 $ 0.18 $ 0.10 $ 0.09
============== ============== ============== ==============
</TABLE>
4
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SYSCO CORPORATION and its Consolidated Subsidiaries
CONSOLIDATED CASH FLOWS (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
26 - Week Period Ended
-------------------------------
Jan. 1, 2000 Dec. 26, 1998
------------ -------------
<S> <C> <C>
Operating activities:
Net earnings $ 199,534 $ 172,819
Add non-cash items:
Cumulative effect of accounting change 8,041 --
Depreciation and amortization 106,932 98,093
Deferred (tax benefit) (14,538) (5,329)
Provision for losses on accounts receivable 13,052 11,893
Additional investment in certain assets and liabilities,
net of effect of businesses acquired:
(Increase) in receivables (93,478) (107,255)
(Increase) in inventories (95,694) (97,587)
(Increase) in prepaid expenses (961) (1,339)
Increase in accounts payable 31,037 152,205
Increase (decrease) in accrued expenses 79,605 (12,304)
Increase (decrease) in accrued income taxes 1,762 (20,249)
(Increase) in other assets (29,708) (21,063)
------------ ------------
Net cash provided by operating activities 205,584 169,884
------------ ------------
Investing activities:
Additions to plant and equipment (126,319) (147,589)
Sales and retirements of plant and equipment 6,727 10,549
Acquisition of businesses, net of cash acquired (69,218) --
------------ ------------
Net cash used for investing activities (188,810) (137,040)
------------ ------------
Financing activities:
Bank and commercial paper borrowings (repayments) 135,219 (142,366)
Other debt (repayments) borrowings (281) 219,791
Common stock reissued from treasury 31,277 22,175
Treasury stock purchases (170,522) (73,247)
Dividends paid (65,919) (60,239)
------------ ------------
Net cash used for financing activities (70,226) (33,886)
------------ ------------
Net (decrease) in cash (53,452) (1,042)
Cash at beginning of period 149,303 110,288
------------ ------------
Cash at end of period $ 95,851 $ 109,246
============ ============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 34,556 $ 29,331
Income taxes, net of refund 129,051 130,244
</TABLE>
5
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
The liquidity and capital resources discussion included in
Management's Discussion and Analysis of Financial Condition and
Results of Operations of the Company's Fiscal 1999 Annual Report on
Form 10-K remains applicable, other than the items described below.
In Fiscal 1992, the Company began a common stock repurchase program
which continued into the second quarter of Fiscal 2000, resulting in
the cumulative repurchase of 80,000,000 shares of common stock.
The Board of Directors authorized the repurchase of an additional
8,000,000 shares in July 1999. Under this latest authorization,
3,805,400 shares were purchased for $124,984,000 through January 1,
2000. The increase in treasury stock purchases in the period ended
January 1, 2000 primarily reflects shares repurchased for
acquisitions.
As of January 1, 2000, SYSCO's borrowings under its commercial paper
program were $349,115,000. During the 26 weeks ended January 1, 2000,
commercial paper and short-term bank borrowings ranged from
approximately $199,028,000 to $545,407,000.
Long-term debt to capitalization ratio was 43% at January 1, 2000,
exceeding the 35% to 40% target ratio due to the shares repurchased
and cash paid for acquisitions. SYSCO may exceed this target ratio
periodically to take advantage of acquisition and internal growth
opportunities.
The increase in paid-in capital at January 1, 2000 related primarily
to shares issued from treasury in conjunction with acquisitions.
On February 10, 2000, the Company filed with the Securities and
Exchange Commission a shelf registration covering 2,850,000 shares of
common stock to be offered from time to time in connection with
acquisitions.
Results of Operations
For the period ended October 2, 1999, the Company recorded a one-time,
after-tax, non-cash charge of $8,000,000 to comply with the required
adoption of AICPA Statement of Position 98-5 (SOP 98-5), "Reporting on
the Costs of Start-up Activities." SOP 98-5 required the write-off of
any unamortized costs of start-up activities and organization costs.
Going forward such costs have been expensed as incurred.
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Sales increased 10.3% during the 26 weeks and 9.5% in the second
quarter of Fiscal 2000 over comparable periods of the prior year. Cost
of sales also increased 9.7% during the 26 weeks and 8.7% in the
second quarter of Fiscal 2000. Real sales growth for the 26 weeks of
Fiscal 2000 was 8.9% after eliminating the effects of 1.8% due to
acquisitions and a 0.4% deflation in food costs, due primarily to
lower costs for dairy and poultry products. Real sales growth for the
quarter was 7.7% after adjusting for a 2.4% increase due to
acquisitions and a 0.6% for food cost deflation.
Operating expenses for the current periods presented were above the
prior periods due primarily to expenses related to the closing of a
facility and one-time non-recurring costs associated with the
completion of the SYSCO Uniform Systems implementation. There was also
a charge to other non-operating expenses in connection with the
facility closing. The costs described above were approximately
$13,000,000.
Interest expense in Fiscal 2000 is lower than the prior periods due to
interest income received in the amount of $3,000,000 related to a
Federal income tax refund on an amended return. Without this income,
interest expense would have been above last year due to higher
borrowings.
Income taxes for the periods presented reflect an effective rate of
38.5% this year compared to 39% last year.
Pretax earnings and net earnings for the 26 weeks, before the
accounting change, increased 19.1% and 20.1%, respectively, over the
prior year. Pretax earnings and net earnings for the 13 weeks
increased 17.0% and 17.9%, respectively, over the prior year. The
increases were due to the factors discussed above as well as the
Company's success in its continued efforts to increase sales to the
Company's higher margin territorial street customers and increasingly
higher sales of SYSCO brand products.
Basic and diluted earnings per share increased 21.2% and 21.5%,
respectively, for the 26 weeks, before the accounting change, and
19.2% for the quarter. The increases were caused by the factors
discussed above, along with the decrease in average shares outstanding
for the periods presented, reflecting purchases of shares made through
the Company's share repurchase program.
A reconciliation of basic and diluted earnings per share follows.
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The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
26-Week Period Ended 13-Week Period Ended
--------------------------------- ---------------------------------
Jan. 1, 2000 Dec. 26, 1998 Jan. 1, 2000 Dec. 26, 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Numerator:
Numerator for basic earnings per share --
income available to common shareholders $ 199,534,000 $ 172,819,000 $ 101,896,000 $ 86,399,000
============== ============== ============== ==============
Denominator:
Denominator for basic earnings per share --
weighted-average shares 328,701,719 334,367,309 328,478,205 333,885,574
Effect of dilutive securities:
Employee and director stock options 4,984,415 3,672,187 5,065,813 4,009,391
-------------- -------------- -------------- --------------
Denominator for diluted earnings per share --
adjusted for weighted-average shares 333,686,134 338,039,496 333,544,018 337,894,965
============== ============== ============== ==============
Basic earnings per share $ 0.61 $ 0.52 $ 0.31 $ 0.26
============== ============== ============== ==============
Diluted earnings per share $ 0.60 $ 0.51 $ 0.31 $ 0.26
============== ============== ============== ==============
</TABLE>
8
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Acquisitions
In July 1999, SYSCO acquired Newport Meat Co. Inc., a southern
California based distributor of fresh aged beef and other meats,
seafood and poultry products. In August 1999, the company acquired
Doughtie's Foods, Inc., a food distributor located in Virginia and
bought substantially all of the assets of Buckhead Beef Company, Inc.,
a distributor located in Georgia of custom-cut fresh steaks and other
meats, seafood and poultry products. In November 1999, SYSCO acquired
Malcolm Meats, an Ohio based distributor of custom-cut fresh steaks
and other meat and poultry products.
The transactions were accounted for using the purchase method of
accounting and the financial statements for the 26 weeks and 13 weeks
ended January 1, 2000 include the results of the acquired companies
from the respective dates they joined SYSCO. There was no material
effect, individually or in the aggregate, on SYSCO's operating results
or financial position from these transactions.
Subsequent Events
On January 6, 2000, SYSCO entered into a letter of intent to acquire
by merger FreshPoint Holdings, Inc., located in Dallas, Texas.
FreshPoint is primarily a wholesale produce distributor in North
America.
On January 26, 2000, SYSCO acquired Watson Foodservice, Inc., a
broadline foodservice distributor located in Lubbock, Texas.
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Year 2000
SYSCO is not aware of any significant failures of its systems,
software, hardware or those of its suppliers or customers as a result
of the occurrence of the Year 2000 date change. The total costs
incurred by SYSCO in its Year 2000 readiness effort did not have a
material impact on the financial statements of the Company. While
SYSCO continues to monitor the Year 2000 issue, it does not believe
there will be a material adverse effect to its consolidated results of
operations or financial position as a result of the Year 2000 issue.
Item 3. Quantitative and Qualitative Disclosures about Market Risks
SYSCO does not utilize financial instruments for trading purposes and
holds no derivative financial instruments which could expose the
Company to significant market risk. SYSCO's exposure to market risk
for changes in interest rates relates primarily to its long-term
obligations. At January 1, 2000 the Company had outstanding
$349,115,000 of commercial paper with maturities through February 22,
2000. The Company's remaining long-term debt obligations of
$783,861,000 were primarily at fixed rates of interest. SYSCO has no
significant cash flow exposure due to interest rate changes for
long-term debt obligations.
-----------------------------
Statements made herein regarding continuation of the share repurchase
program, the impact of Year 2000 and SYSCO's market risks are forward-looking
statements under the Private Securities Litigation Reform Act of 1995. These
statements involve risks and uncertainties and are based on current
expectations and management's estimates; actual results may differ
materially. Share repurchases could be affected by market prices of the
Company's stock as well as management's decision to utilize its capital for
other purposes. The effect of market risks could be impacted by future
borrowing levels and certain economic factors, such as interest rates. Those
risks and uncertainties that could impact these statements include the risks
relating to the foodservice industry's relatively low profit margins and
sensitivity to economic conditions, SYSCO's leverage and debt risks and other
risks detailed in the Company's Fiscal 1999 Annual Report on Form 10-K.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
SYSCO is engaged in various legal proceedings which have arisen but
have not been fully adjudicated. These proceedings, in the opinion of
management, will not have a material adverse effect upon the
consolidated financial position or results of operations of the
company when ultimately concluded.
Item 2. Changes in Securities and Use of Proceeds.
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on November 5,
1999 ("1999 Annual Meeting"). At the 1999 Annual Meeting the following
persons were elected to serve as directors of the Company for
three-year terms: John W. Anderson, Judith B. Craven, Bill M. Lindig,
Richard G. Merrill and Phyllis S. Sewell.
The terms of the following persons as directors of the Company
continued after the 1999 Annual Meeting: Gordon M. Bethune, Colin G.
Campbell, Charles H. Cotros, Frank A. Godchaux III, Jonathan Golden,
Frank H. Richardson, Richard J. Schnieders, Arthur J. Swenka, Thomas
B. Walker and John F. Woodhouse.
At the 1999 Annual Meeting, the stockholders voted upon the directors
as noted above, and on the approval of SYSCO Corporation's proposal to
increase the number of authorized shares to one billion
(1,000,000,000) shares.
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The results of such votes were as follows:
<TABLE>
<CAPTION>
NUMBER OF VOTES CAST
-----------------------------------------------------------------------
Withheld & Broker
Matter Voted Upon For Against Abstained Non-votes
- ---------------------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Election as Director:
John W. Anderson 280,020,105 N/A 2,396,678 None
Judith B. Craven 230,614,683 N/A 51,802,100 None
Bill M. Lindig 280,022,619 N/A 2,394,164 None
Richard G. Merrill 280,020,980 N/A 2,395,803 None
Phyllis S. Sewell 280,050,492 N/A 2,366,291 None
Approval of proposal to increase
authorized shares to 1,000,000,000 264,931,181 16,159,101 1,326,501 None
</TABLE>
Item 5. Other Information
On February 9, 2000, the Board of Directors announced a regular
quarterly cash dividend of $0.12 per common share.
On February 14, 2000 the Company issued a press release announcing a
shelf registration covering 2,850,000 shares of common stock. The
press release is filed herewith as Exhibit 99.1.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3(a) Restated Certificate of Incorporation incorporated by
reference to Exhibit 3(a) to Form 10-K for the year
ended June 28, 1997 (File No. 1-6544).
3(b) Bylaws, as amended, incorporated by reference to
Exhibit 3(a) to Form 10-K for the year ended July 3,
1999 (File No. 1-6544).
3(c) Form of Amended Certificate of Designation
Preferences and Rights of Series A Junior
Participating Preferred Stock, incorporated by
reference to Exhibit 3(c) to Form 10-K for the year
ended June 29, 1996 (File No. 1-6544).
3(d)# Certificate of Amendment of Certificate of
Incorporation of SYSCO Corporation to increase
authorized shares.
4(a) Sixth Amendment and Restatement of Competitive
Advance and Revolving Credit Facility Agreement dated
May 31, 1996, incorporated by reference to Exhibit
4(a) to Form 10-K in the year ended June 27, 1996
(File No. 1-6544).
4(b) Agreement and Seventh Amendment to Competitive
Advance and Revolving Credit Facility Agreement dated
as of June 27, 1997 incorporated by reference to
Exhibit 4(a) to Form 10-K for the year ended June 28,
1997 (File No. 1-6544).
4(c) Agreement and Eighth Amendment to Competitive Advance
and Revolving Credit Facility Agreement dated as of
June 22, 1998, incorporated by reference to Exhibit
4(c) to Form 10-K for the year ended July 3, 1999
(File No. 1-6544).
4(d) Senior Debt, dated as of June 15, 1995, between Sysco
Corporation and First Union National Bank of North
Carolina, Trustee, incorporated by reference to
Exhibit 4(a) to Registration Statement on Form S-3
filed June 6, 1995 (File No. 33-60023).
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<PAGE> 14
4(e) First Supplemental Indenture, dated June 27, 1995,
between Sysco Corporation and First Union Bank of
North Carolina, Trustee as amended, incorporated by
reference to Exhibit 4(e) to Form 10-K for the year
ended June 29, 1996 (File No. 1-6544).
4(f) Second Supplemental Indenture, dated as of May 1,
1996, between Sysco Corporation and First Union Bank
of North Carolina, Trustee as amended, incorporated
by reference to Exhibit 4(f) to Form 10-K for the
year ended June 29, 1996 (File No. 1-6544).
4(g) Third Supplemental Indenture, dated as of April 25,
1997, between Sysco Corporation and First Union
National Bank of North Carolina, Trustee incorporated
by reference to Exhibit 4(g) to Form 10-K for the
year ended June 28, 1997 (File No. 1-6544).
4(h) Fourth Supplemental Indenture, dated as of April 25,
1997, between Sysco Corporation and First Union
National Bank of North Carolina, Trustee incorporated
by reference to Exhibit 4(h) to Form 10-K for the
year ended June 28,1997 (File No. 1-6544).
4(i) Fifth Supplemental Indenture, dated as of July 27,
1998 between Sysco Corporation and First Union
National Bank, Trustee incorporated by reference to
Exhibit 4 (h) to Form 10-K for the year ended June
27, 1998 (File No. 1-6554).
4(j)# Agreement and Ninth Amendment to Competitive Advance
and Revolving Credit Facility Agreement dated as of
December 1, 1999.
10(m)+# Sysco Corporation Split Dollar Life Insurance Plan.
10(n)+# Executive Compensation Adjustment Agreement - Bill M.
Lindig.
10(o)+# Executive Compensation Adjustment Agreement - Charles
H. Cotros.
10(p)+# First Amendment to Fifth Amended and Restated Sysco
Corporation Supplemental Executive Retirement Plan
dated effective June 29, 1997.
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<PAGE> 15
10(q)+# First Amendment to Amended and Restated Sysco
Corporation Executive Deferred Compensation Plan
dated effective June 29, 1997.
10(r)+# First Amendment to Sysco Corporation 1995
Management Incentive Plan dated effective June 29,
1997.
15# Letter from Arthur Andersen LLP dated February 10,
2000, re: unaudited interim consolidated financial
statements.
27# Financial Data Schedule
99.1# Press release dated February 14, 2000.
+ Executive Compensation Arrangement pursuant to 601(b)(10)
(iii)(A) of Regulation S-K.
# Filed Herewith
(b) Reports on Form 8-K:
On October 21, 1999, the Company filed a Form 8-K to
attach a press release dated October 20, 1999 announcing
results of operations for the first quarter ended October
2, 1999 (File No. 1-6544).
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SYSCO CORPORATION
(Registrant)
By /s/ JOHN K. STUBBLEFIELD JR.
------------------------------
John K. Stubblefield Jr.
Executive Vice President,
Finance and Administration
Date: February 10, 2000
16
<PAGE> 17
EXHIBIT INDEX
NO. DESCRIPTION
- -------- -----------------------------------------------------------------------
3(a) Restated Certificate of Incorporation incorporated by reference to
Exhibit 3(a) to Form 10-K for the year ended June 28, 1997 (File No.
1-6544).
3(b) Bylaws, as amended, incorporated by reference to Exhibit 3(a) to Form
10-K for the year ended July 3, 1999 (File No. 1-6544).
3(c) Form of Amended Certificate of Designation Preferences and Rights of
Series A Junior Participating Preferred Stock, incorporated by
reference to Exhibit 3(c) to Form 10-K for the year ended June 29, 1996
(File No. 1-6544).
3(d)# Certificate of Amendment of Certificate of Incorporation of SYSCO
Corporation to increase authorized shares.
4(a) Sixth Amendment and Restatement of Competitive Advance and Revolving
Credit Facility Agreement dated May 31, 1996, incorporated by reference
to Exhibit 4(a) to Form 10-K in the year ended June 27, 1996 (File No.
1-6544).
4(b) Agreement and Seventh Amendment to Competitive Advance and Revolving
Credit Facility Agreement dated as of June 27, 1997 incorporated by
reference to Exhibit 4(a) to Form 10-K for the year ended June 28, 1997
(File No. 1-6544).
4(c) Agreement and Eighth Amendment to Competitive Advance and Revolving
Credit Facility Agreement dated as of June 22, 1998, incorporated by
reference to Exhibit 4(c) to Form 10-K for the year ended July 3, 1999
(File No. 1-6544).
4(d) Senior Debt, dated as of June 15, 1995, between Sysco Corporation and
First Union National Bank of North Carolina, Trustee, incorporated by
reference to Exhibit 4(a) to Registration Statement on Form S-3 filed
June 6, 1995 (File No. 33-60023).
4(e) First Supplemental Indenture, dated June 27, 1995, between Sysco
Corporation and First Union Bank of North Carolina, Trustee as amended,
incorporated by reference to Exhibit 4(e) to Form 10-K for the year
ended June 29, 1996 (File No. 1-6544).
<PAGE> 18
NO. DESCRIPTION
- -------- -----------------------------------------------------------------------
4(f) Second Supplemental Indenture, dated as of May 1, 1996, between Sysco
Corporation and First Union Bank of North Carolina, Trustee as amended,
incorporated by reference to Exhibit 4(f) to Form 10-K for the year
ended June 29, 1996 (File No. 1-6544).
4(g) Third Supplemental Indenture, dated as of April 25, 1997, between Sysco
Corporation and First Union National Bank of North Carolina, Trustee
incorporated by reference to Exhibit 4(g) to Form 10-K for the year
ended June 28, 1997 (File No. 1-6544).
4(h) Fourth Supplemental Indenture, dated as of April 25, 1997, between
Sysco Corporation and First Union National Bank of North Carolina,
Trustee incorporated by reference to Exhibit 4(h) to Form 10-K for the
year ended June 28,1997 (File No. 1-6544).
4(i) Fifth Supplemental Indenture, dated as of July 27, 1998 between Sysco
Corporation and First Union National Bank, Trustee incorporated by
reference to Exhibit 4 (h) to Form 10-K for the year ended June 27,
1998 (File No. 1-6554).
4(j)# Agreement and Ninth Amendment to Competitive Advance and Revolving
Credit Facility Agreement dated as of December 1, 1999.
10(m)+# Sysco Corporation Split Dollar Life Insurance Plan.
10(n)+# Executive Compensation Adjustment Agreement - Bill M. Lindig.
10(o)+# Executive Compensation Adjustment Agreement - Charles H. Cotros.
10(p)+# First Amendment to Fifth Amended and Restated Sysco Corporation
Supplemental Executive Retirement Plan dated effective June 29, 1997.
10(q)+# First Amendment to Amended and Restated Sysco Corporation Executive
Deferred Compensation Plan dated effective June 29, 1997.
<PAGE> 19
10(r)+# First Amendment to Sysco Corporation 1995 Management Incentive Plan
dated effective June 29, 1997.
15# Letter from Arthur Andersen LLP dated February 10, 2000, re: unaudited
interim consolidated financial statements.
27# Financial Data Schedule
99.1# Press release dated February 14, 2000.
+ Executive Compensation Arrangement pursuant to 601(b)(10)(iii)(A) of
Regulation S-K.
# Filed Herewith
<PAGE> 1
EXHIBIT 3(d)
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION OF
SYSCO CORPORATION
IT IS HEREBY CERTIFIED THAT:
1. The name of the corporation (hereinafter referred to as the
"Corporation") adopting the amendment specified below is:
Sysco Corporation.
2. The Certificate of Incorporation of the Corporation is hereby amended
by striking out Article FOURTH, Section A, and substituting in lieu of said
Article the following new Article:
"FOURTH: A. The total number of shares of stock which the corporation
shall have authority to issue is One Billion One Million Five Hundred
Thousand (1,001,500,000) shares, consisting of One Million Five Hundred
Thousand (1,500,000) shares of Preferred Stock with a par value of One
Dollar ($1.00) each and One Billion (1,000,000,000) shares of Common Stock
with a par value of One Dollar ($1.00) each. The corporation may issue
fractional shares of stock, which shall be entitled to proportionate
dividends, voting and liquidation rights."
3. The amendment of the Certificate of Incorporation herein certified has
been duly adopted effective November 5, 1999 by all of the stockholders entitled
to vote in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
Signed and attested to be effective as of the 9th day of November, 1999.
SYSCO CORPORATION
/s/ MICHAEL C. NICHOLS
------------------------------------
Michael C. Nichols
Vice President, General Counsel, and
Assistant Secretary
Attest:
/s/ KENT R. BERKE
- ---------------------------------
Kent R. Berke, Assistant Vice President
Assistant Secretary
<PAGE> 2
STATE OF TEXAS
COUNTY OF HARRIS
BE IT REMEMBERED, that on the 9th day of November 1999, before me, a Notary
Public duly authorized by law to take acknowledgement of deeds, personally came
Michael C. Nichols, Vice President, General Counsel and Assistant Secretary of
Sysco Corporation, who duly signed the foregoing instrument before me and
acknowledged that such signing is his act and deed, that such instrument as
executed is the act and deed of said corporation, and that the facts stated
therein are true.
GIVEN under my hand and seal on the 9th day of November, 1999.
/s/ LINDA F. HARTDEGEN
-------------------------------
Linda F. Hartdegen
Notary Public in and for the
State of Texas
<PAGE> 1
EXHIBIT 4(j)
AGREEMENT AND NINTH AMENDMENT
TO
COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT
THIS AGREEMENT AND NINTH AMENDMENT TO COMPETITIVE ADVANCE AND REVOLVING
CREDIT FACILITY AGREEMENT (this "Amendment") dated as of December 1, 1999 is
among SYSCO CORPORATION, a Delaware corporation (the "Company"), the banks
listed on the signature pages hereof (the "Banks"), CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION (formerly known as Texas Commerce Bank National
Association), a national banking association, as agent for the Banks (in such
capacity, the "Agent"), and THE CHASE MANHATTAN BANK, a New York banking
corporation (successor to Chemical Bank), as auction administration agent (in
such capacity, the "Auction Administration Agent").
PRELIMINARY STATEMENT
The Company, the Banks, certain other banks, the Agent and the Auction
Administration Agent have entered into a Competitive Advance and Revolving
Credit Facility Agreement dated as of July 27, 1988, as modified by an Agreement
and First Amendment to Competitive Advance and Revolving Credit Facility
Agreement dated as of February 14, 1989, by an Agreement and Second Amendment to
Competitive Advance and Revolving Credit Facility Agreement and Modification of
Notes dated as of May 1, 1989, by an Agreement and Third Amendment to
Competitive Advance and Revolving Credit Facility Agreement and Modification of
Notes dated as of January 2, 1990, by an Agreement and Fourth Amendment to
Competitive Advance and Revolving Credit Facility Agreement dated as of January
31, 1994, and by an
<PAGE> 2
Agreement and Fifth Amendment to Competitive Advance and Revolving Credit
Facility Agreement dated as of November 15, 1994, as amended and restated by a
Sixth Amendment and Restatement of Competitive Advance and Revolving Credit
Facility Agreement dated as of May 31, 1996, as further modified by an Agreement
and Seventh Amendment to Competitive Advance and Revolving Credit Facility
Agreement dated as of June 27, 1997, and as further modified by an Agreement and
Eighth Amendment to Competitive Advance and Revolving Credit Facility Agreement
dated as of June 22, 1998 (said Competitive Advance and Revolving Credit
Facility Agreement as so modified, amended and restated and further modified
being the "Credit Agreement"). All capitalized terms defined in the Credit
Agreement and not otherwise defined herein shall have the same meanings herein
as in the Credit Agreement. The Company, the Banks, the Agent and the Auction
Administration Agent have agreed, upon the terms and conditions specified
herein, to amend the Credit Agreement as hereinafter set forth:
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the Company, the Banks, the Agent and the Auction
Administration Agent hereby agree as follows:
SECTION 1. Amendments to Section 1.01 of the Credit Agreement. Certain
definitions contained in Section 1.01 of the Credit Agreement are hereby amended
as follows:
(a) The definition of the term"Subsidiary" is amended in its
entirety to read as follows:
"`Subsidiary' means, with respect to any Person (the `parent') at
any date, any corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership
interests representing more than 50% of
-2-
<PAGE> 3
the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that
is, as of such date, otherwise controlled, by the parent or one or
more Subsidiaries of the parent or by the parent and one or more
Subsidiaries of the parent. In the foregoing sentence the term
`controlled' refers to the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies
of a Person, whether through the ability to exercise voting power, by
contract or otherwise.".
(b) The definition of the term "Wholly-Owned Consolidated
Subsidiary" is hereby amended in its entirety to read as follows:
"`Wholly-Owned Consolidated Subsidiary' means a Consolidated
Subsidiary, all of the outstanding capital stock, member interests,
partner interests or other ownership interests in which, other than
directors' qualifying shares, are at the time owned by the Company, by
any one or more other Wholly-Owned Consolidated Subsidiaries, or by
the Company and any one or more Wholly-Owned Consolidated
Subsidiaries.".
SECTION 2. Amendments to Section 4.18(c) of the Credit Agreement.
Section 4.18(c) of the Credit Agreement is hereby amended in its entirety to
read as follows:
"(c) Neither the Company nor any ERISA Affiliate has incurred, or is
reasonably expected to incur, any Withdrawal Liability to any Multiemployer
Plan which would exceed in the aggregate 4% of Net Worth.".
-3-
<PAGE> 4
SECTION 3. Amendments to Section 5.01(i)(iii) of the Credit Agreement.
Section 5.01(i)(iii) of the Credit Agreement is hereby amended in its entirety
to read as follows:
"(iii) The Company will furnish to the Agent (i) if requested by any
Bank through the Agent, promptly after the filing thereof with the Internal
Revenue Service copies of each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) with respect to each PBGC Plan; (ii)
promptly after becoming aware of the occurrence of any material Termination
Event in connection with any PBGC Plan, a written notice signed by the
President or Financial Officer of the Company specifying the nature thereof
and any action the Company or appropriate ERISA Affiliate proposes to take
with respect thereto; (iii) promptly and in any event within five Business
Days after receipt thereof by the Company or any of its ERISA Affiliates
from the PBGC, copies of each notice received by the Company or any such
ERISA Affiliate of the PBGC's intention to terminate any PBGC Plan or to
have a trustee appointed under Section 4042(b) of ERISA to administer any
PBGC Plan; (iv) promptly a written notice in the event there is either a
failure of the Company or an ERISA Affiliate to comply with the minimum
funding requirements of Section 412 of the Code or Section 302 of ERISA or
an application for a waiver from either or both of such standards is
requested or received by the Company or an ERISA Affiliate with respect to
a PBGC Plan and in either event the failure to comply or the application or
grant of waiver is with respect to a material amount; and (v) promptly and
in any event within five Business Days after receipt thereof by the Company
or any ERISA Affiliate from a Multiemployer Plan sponsor, a copy of each
notice received by the Company or any ERISA Affiliate concerning the
imposition and the amount of withdrawal liability upon the
-4-
<PAGE> 5
Company or an ERISA Affiliate by a Multiemployer Plan pursuant to Section
4202 of ERISA. The Company will comply in all material respects with all
applicable provisions of ERISA, the violation of which would, in the
reasonable judgment of the Majority Banks, give rise to a material
liability of the Company, and notice of which violation has been given by
the Agent to the Company. For purposes of this Section 5.01(i)(iii), an
obligation or liability shall be considered material if it equals or
exceeds $4,000,000;".
SECTION 4. Amendment to Section 5.02(a)(xi) of the Credit Agreement.
Section 5.02(a)(xi) of the Credit Agreement is hereby amended in its entirety to
read as follows:
"(xi) a Lien on the Company's headquarters building located at 1390
Enclave Parkway, Houston, Texas to secure Indebtedness;".
SECTION 5. Amendments to Section 6.01 of the Credit Agreement. Section
6.01 of the Credit Agreement is hereby amended
(a) by amending paragraph (e) thereof in its entirety to read as
follows:
"(e) The Company or any Subsidiary shall (i) default in the payment of
any Indebtedness (excluding Indebtedness evidenced by the Notes) of the
Company or such Subsidiary (as the case may be), or any interest or premium
thereon, when due whether by acceleration or otherwise, beyond any period
of grace provided with respect thereto, or (ii) default in the performance
or observance of any obligation or condition with respect to such other
Indebtedness if the effect of such default results in the holder of such
other Indebtedness accelerating the maturity of such other Indebtedness and
the Company or such Subsidiary fails to pay such Indebtedness within five
Business Days after such acceleration, if, in the case of any defaults
described in clauses (i) and (ii) of this Section 6.01(e), the
-5-
<PAGE> 6
aggregate principal amount of all such Indebtedness for which all such
defaults shall have occurred and be continuing exceeds $25,000,000; or";
(b) by amending paragraph (j) thereof in its entirety to read as
follows:
"(j) A final judgment or judgments for the payment of money shall be
rendered by a court or courts against the Company or any Significant
Subsidiary in excess of $25,000,000 in the aggregate and the same shall not
be discharged (or provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within 30 days from the
date of entry thereof and the Company or such Significant Subsidiary, as
the case may be, shall not, within said period of 30 days, or such longer
period during which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal;
or"; and
(c) by amending paragraph (k) thereof in its entirety to read as
follows:
"(k) (i) The Company or any ERISA Affiliate or any of its agents or
representatives shall engage in any `prohibited transaction' (as defined in
Section 406 of ERISA or Section 4975 of the Code) which can be expected to
result in a material liability to the Company or any ERISA Affiliate, (ii)
any material `accumulated funding deficiency' (as defined in Section 302 of
ERISA or Section 412 of the Code), whether or not waived, shall exist with
respect to any PBGC Plan, if in the reasonable judgment of the Majority
Banks, such accumulated funding deficiency would give rise to a material
liability of the Company or any ERISA Affiliate, (iii) the Company or any
ERISA Affiliate shall apply for or be granted a funding waiver under
Section 302 of ERISA or Section 412 of the Code, which waiver or request
for waiver is for a material amount, (iv) a `reportable event' (other
-6-
<PAGE> 7
than a reportable event not subject to the provision for thirty-day notice
to the PBGC under applicable PBGC regulations) shall occur with respect to
any PBGC Plan, which reportable event is, in the reasonable opinion of the
Majority Banks, likely to result in the termination of such PBGC Plan for
purposes of Title IV of ERISA and to give rise to a material liability of
the Company or any ERISA Affiliate, (v) proceedings shall commence to have
a trustee appointed or a trustee shall be appointed to terminate or
administer a PBGC Plan under Section 4042(b) of ERISA which proceeding is,
in the reasonable opinion of the Majority Banks, likely to result in the
termination of such PBGC Plan and to give rise to a material liability of
the Company or any ERISA Affiliate with respect to such termination, (vi) a
notice of intent to terminate a PBGC Plan under Section 4041(c) is filed
with the PBGC if such termination would give rise to a material liability
of the Company or any ERISA Affiliate, (vii) any Multiemployer Plan is in
reorganization or is insolvent and the circumstances are such that, in the
reasonable opinion of the Majority Banks, there could be a material
liability incurred by or imposed upon the Company or any ERISA Affiliate,
(viii) there is a complete or partial withdrawal from a Multiemployer Plan
under circumstances that, in the reasonable opinion of the Majority Banks,
would likely subject the Company or any ERISA Affiliate to a material
liability, or (ix) any event or condition described in (i) through (viii)
above (determined without regard to whether the event or condition taken
alone would or could result in a material liability) shall occur or exist
with respect to a PBGC Plan or Multiemployer Plan which individually or in
combination with one or more of any events described in (i) through (viii)
above (determined without regard to whether the event or condition taken
alone would or could result in a material liability), if any, in the
-7-
<PAGE> 8
reasonable opinion of the Majority Banks would likely, subject the Company
or any ERISA Affiliate to any material tax, penalty or other liability (for
purposes of this Section 6.01(k) , an obligation or liability shall be
considered material if it equals or exceeds $20,000,000);".
SECTION 6. Conditions of Effectiveness. This Amendment shall become
effective when, and only when, the following conditions shall have been
fulfilled:
(a) the Company, the Agent, the Auction Administration Agent and
Banks together constituting the Majority Banks shall have executed a counterpart
hereof and delivered the same to the Agent or, in the case of any such Bank as
to which an executed counterpart hereof shall not have been so delivered, the
Agent shall have received written confirmation by telecopy or other similar
writing from such Bank of execution of a counterpart hereof by such Bank; and
(b) the Agent shall have received from the Company a certificate of
the Secretary or Assistant Secretary of the Company certifying that attached
thereto is (i) a true and complete copy of the general borrowing resolutions of
the Board of Directors of the Company authorizing the execution, delivery and
performance of the Credit Agreement, as amended hereby, and (ii) the incumbency
and specimen signature of each officer of the Company executing this Amendment.
SECTION 7. Representations and Warranties True; No Default or Event of
Default. The Company hereby represents and warrants to the Agent, the Auction
Administration Agent and the Banks that after giving effect to the execution and
delivery of this Amendment (a) the representations and warranties set forth in
the Credit Agreement (as modified hereby) are true and correct on the date
hereof as though made on and as of such date; provided, however, that for
purposes of this clause (a), Schedule II as used in Section 4.02 of the Credit
Agreement shall
-8-
<PAGE> 9
be deemed to include any supplements to such Schedule delivered to the Agent and
the Banks by the Company prior to the date of this Amendment and (b) neither any
Default nor Event of Default has occurred and is continuing as of the date
hereof.
SECTION 8. Reference to the Credit Agreement and Effect on the Notes
and Other Documents Executed Pursuant to the Credit Agreement.
(a) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this Agreement," "hereunder," "herein," "hereof" or words
of like import shall mean and be a reference to the Credit Agreement, as amended
hereby.
(b) Upon the effectiveness of this Amendment, each reference in the
Notes and the other documents and agreements delivered or to be delivered
pursuant to the Credit Agreement shall mean and be a reference to the Credit
Agreement, as amended hereby.
(c) The Credit Agreement and the Notes and other documents and
agreements delivered pursuant to the Credit Agreement, and modified by the
amendments referred to above, shall remain in full force and effect and are
hereby ratified and confirmed.
SECTION 9. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
SECTION 10. GOVERNING LAW; BINDING EFFECT. THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND
APPLICABLE FEDERAL LAW AND SHALL BE BINDING UPON THE COMPANY, THE AGENT, THE
AUCTION ADMINISTRATION AGENT AND THE BANKS AND THEIR RESPECTIVE SUCCESSORS AND
ASSIGNS.
-9-
<PAGE> 10
SECTION 11. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
SECTION 12. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED HEREBY,
THE NOTES AND THE LETTER AGREEMENTS REFERRED TO IN SECTIONS 2.05(b) AND 2.05(c)
OF THE CREDIT AGREEMENT CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION
26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
-10-
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed effective as of the date first stated herein, by their respective
officers thereunto duly authorized.
SYSCO CORPORATION
By: /s/ DIANE DAY SANDERS
--------------------------------------
Name: Diane Day Sanders
Title: Vice President & Treasurer
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
(FORMERLY KNOWN AS TEXAS COMMERCE BANK
NATIONAL ASSOCIATION),
INDIVIDUALLY AND AS AGENT
By: /s/ MICHAEL ONDRUCH
--------------------------------------
Name: Michael Ondruch
Title: Vice President
-11-
<PAGE> 12
THE CHASE MANHATTAN BANK
(SUCCESSOR TO CHEMICAL BANK), AS AUCTION
ADMINISTRATION AGENT
By: /s/ CHRISTOPHER CONSOMER
--------------------------------------
Name: Christopher Consomer
Title: Assistant Vice President
-12-
<PAGE> 13
BANK OF AMERICA, NATIONAL
ASSOCIATION
(FORMERLY KNOWN AS CONTINENTAL BANK N.A.)
By: /s/ LYNN DERNING
--------------------------------------
Name: Lynn Derning
Title: Principal
-13-
<PAGE> 14
FIRST UNION NATIONAL BANK
By: /s/ WILLIAM F. FOX
--------------------------------------
Name: William F. Fox
Title: Vice President
-14-
<PAGE> 15
WACHOVIA BANK OF GEORGIA,
NATIONAL ASSOCIATION
By: /s/ JESSICA S. WRIGHT
--------------------------------------
Name: Jessica S. Wright
Title: Vice President
-15-
<PAGE> 16
THE TORONTO-DOMINION BANK
By:
--------------------------------------
Name:
Title:
-16-
<PAGE> 17
UBS AG, STAMFORD BRANCH
By: /s/ WILFRED SAINT
--------------------------------------
Name: Wilfred Saint
Title: Associate Director
Loan Portfolio Support, US
By: /s/ ROBERT H. RILEY III
--------------------------------------
Name: Robert H. Riley III
Title: Executive Director
-17-
<PAGE> 18
WELLS FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
By: /s/ SUSAN HAUFSCHILD
--------------------------------------
Name: Susan Haufschild
Title: Vice President
-18-
<PAGE> 1
EXHIBIT 10(m)
SYSCO CORPORATION
SPLIT DOLLAR LIFE INSURANCE PLAN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I - Purposes, Definitions and Duration
Purpose.........................................................................................................1.1
Definitions.....................................................................................................1.2
Term............................................................................................................1.3
ARTICLE II - Administration
Powers of the Committee.........................................................................................2.1
Committee Organization and Voting...............................................................................2.2
Reimbursement of Expenses.......................................................................................2.3
Resignation or Removal..........................................................................................2.4
ARTICLE III -- Participation
Eligibility of Employees........................................................................................3.1
Designation of Eligible Employees...............................................................................3.2
Election to Participate.........................................................................................3.3
ARTICLE IV - Benefits
Death Benefit...................................................................................................4.1
Contributions and Funding.......................................................................................4.2
Responsibility for Payments and Withholding of Taxes............................................................4.3
Termination of Benefits for a Participant.......................................................................4.4
Assignment of Death Benefits....................................................................................4.5
ARTICLE V - Rights of Participants
Limitation of Rights............................................................................................5.1
Prerequisites to Benefits.......................................................................................5.2
ARTICLE VI - Miscellaneous
Amendment or Termination of Plan................................................................................6.1
Claims Procedure................................................................................................6.2
Plan Year.......................................................................................................6.3
Agent for Process...............................................................................................6.4
Governing Law...................................................................................................6.5
Severability....................................................................................................6.6
Reliance Upon Information.......................................................................................6.7
Notice..........................................................................................................6.8
Continuance Permitted Upon Merger, Consolidation or Transfer of Assets..........................................6.9
Plan May Use Rabbi Trust.......................................................................................6.10
ARTICLE VII - ERISA Provisions
Named Fiduciary.................................................................................................7.1
Funding.........................................................................................................7.2
Payments........................................................................................................7.3
</TABLE>
-i-
<PAGE> 3
SYSCO CORPORATION
SPLIT DOLLAR LIFE INSURANCE PLAN
ARTICLE I
Purposes, Definitions and Duration
1.1 Purpose. This Plan is established by Sysco Corporation for the purpose
of providing life insurance protection for the family of certain employees.
1.2 Definitions. Each term below shall have the meaning assigned thereto
for all purposes of this Plan unless the context requires a different
construction.
(a) "Board" means the board of directors of Sysco.
(b) "Committee" means the members (and their successors) of the
Compensation and Stock Option Committee of the Board.
(c) "Employee" means any person who at the time such person is
designated a Participant hereunder, is employed by Sysco in a position to
contribute materially to the continued growth and development and to the
future financial success of Sysco.
(d) "Participant" means an Employee who has been designated by the
Committee to participate in the Plan and who has entered into a Split
Dollar Life Insurance Agreement with Sysco.
(e) "Plan" means the Sysco Corporation Split Dollar Life Insurance
Plan, as may be amended from time to time.
(f) "Split Dollar Life Insurance Agreement" means the agreement
entered into between the Participant and the Employer providing for life
insurance protection for the family of certain Employees
(g) "Sysco" means Sysco Corporation
1.3 Term. The effective date of the Plan is July 4, 1999. The Plan shall
continue until terminated by Sysco. The Committee in its sole discretion, may or
may not designate eligible Participants during the term of the Plan.
-1-
<PAGE> 4
ARTICLE II
Administration
2.1 Powers of the Committee. The 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 such 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
which are not inconsistent with the terms and provisions hereof, provided
such rules and regulations are evidenced in writing;
(b) to construe all terms, provisions, conditions and limitations of
the Plan and its construction thereof made in good faith and without
discrimination in favor of or against any Participant shall be final and
conclusive on all parties at interest;
(c) to correct any defect, supply any omission, or reconcile any
inconsistency which may appear in the Plan in such manner and to such
extent as it shall deem expedient to carry the Plan into effect for the
greatest benefit of all parties at interest, and its judgment in such
matters shall be final and conclusive as to all parties at interest;
(d) to determine which Employees shall be eligible to become
Participants;
(e) to determine all controversies relating to the administration of
the Plan, including but not limited to: (1) differences of opinion arising
between Sysco and any Participant; and (2) any questions it deems advisable
to determine in order to promote the uniform administration of the Plan for
the benefit of all parties at interest;
(f) to determine within the limits specified by the Plan, the amount
of insurance coverage and premium payments and the division between Sysco
and the Employee of the insurance coverage, premium payments and cash
surrender value for insurance policies on the life of a particular
Participant;
(g) to delegate by written notice such of the clerical and recordation
duties of the Committee under the Plan as the Committee may deem necessary
or advisable for the proper and efficient administration of the Plan; and
(h) to modify from time to time the terms of the sample Split Dollar
Life Insurance Agreement attached as Exhibit A or of a Split Dollar Life
Insurance Agreement to be executed by a certain Participant; provided,
however, that such modification shall not be made to a Split Dollar Life
Insurance Agreement after it has been executed by Sysco and a Participant
without the consent of both parties.
The Committee, in exercising any of the rights, powers, and authorities set
out in this Section and all other sections of the Plan, shall perform or refrain
from performing those acts using its sole
-2-
<PAGE> 5
discretion and judgment. Any decision made by the Committee or any refraining to
act or any act taken by the Committee in good faith shall be final, conclusive
and binding on all parties. The Committee's decision shall never be subject to
de novo review.
2.2 Committee Organization and Voting. The Committee shall select from
among its members a chairman, who shall preside at all of its meetings, and
shall select a secretary, without regard as to whether that person is a member
of the Committee, who shall keep all records, documents and data pertaining to
its supervision of the administration of the Plan. A majority of the members of
the Committee constitutes a quorum for the transaction of business, and the vote
of majority of the members present at any meeting will decide any question
brought before that meeting. In addition, the Committee may decide any question
by a vote, taken without a meeting of a majority of its members. A member of the
Committee who is also a Participant shall not vote or act upon any matter
relating solely to himself or herself.
2.3 Reimbursement of Expenses. The members of the Committee shall serve
without compensation for their services, but shall be reimbursed by Sysco for
all expenses properly and actually incurred in performance of their duties under
the plan.
2.4 Resignation or Removal. Members of the Committee shall serve until they
resign or are removed by the Board. Any member of the Committee may resign by
giving at least 30 days written notice to the Board. The Board may remove any
member of the Committee by written notice, which removal shall be effective as
of the date specified in the notice. The Board is not required to give any
advance notice of such removal.
ARTICLE III
Participation
3.1 Eligibility of Employees. An Employee must be in a position to
contribute materially to the continued growth and development and to the future
financial success of Sysco in order to be eligible to participate in the Plan.
An Employee shall be ineligible to participate in the Plan if the proposed
insured(s) (e.g., the Employee and the Employee's spouse, if any) is declined
for insurance coverage. The Committee from time to time may establish additional
eligibility requirements for participation in the Plan.
3.2 Designation of Eligible Employees. The Committee shall designate and
notify in writing the Employees who are eligible to participate in the Plan. Any
copy of such notification shall be given to Sysco. If a designated Employee is
classified as a substandard or impaired risk by insurance carriers, the
Committee has the discretion to declare the Employee ineligible to participate
in the Plan or to enter into a Split Dollar Insurance Agreement with the
Employee modified to make allowance for his or her substandard rating.
3.3 Election to Participate. After the Employee has been notified by the
Committee that he or she is eligible to participate in the Plan, such Employee
must, in order to participate in the Plan, enter into a Split Dollar Life
Insurance Agreement with Sysco in the format of the sample agreement attached as
Exhibit A. At the option of the Employee, the trustee of a trust or a family
member of
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<PAGE> 6
the Employee may enter into the Split Dollar Life Insurance Agreement and such
trustee or family member shall possess all of the rights and obligations
otherwise given to the Participant under this Plan and the Split Dollar Life
Insurance Agreement. The obligation of Sysco to pay benefits under this Plan
shall be effective upon the execution of the Split Dollar Life Insurance
Agreement by the Participant and Sysco. The Split Dollar Life Insurance
Agreement must be executed within 180 days after the date on which Sysco is
notified that the Employee is eligible to participate in the Plan but Sysco
shall not unduly delay its signature of the Split Dollar Life Insurance
Agreement. If the Split Dollar Life Insurance Agreement is not signed within
said 180 days, the Employee shall no longer be eligible to participate in the
Plan but the Committee, in its sole discretion, shall have the authority to
select said Employee again at a future time, in accordance with the provisions
of Section 3.2, to be eligible to participate in the Plan.
ARTICLE IV
Benefits
4.1 Death Benefit. The basic benefit provided under the Plan is a death
benefit payable to the beneficiary designated by the Participant in an amount
specified in the Split Dollar Life Insurance Agreement with the Participant
subject to any limitations imposed by the life insurance policy. The amount of
insurance on each Participant, and/or the Participant's spouse, is determined by
the Committee and is not necessarily the same for all Participants.
4.2 Contributions and Funding. The death benefit of each Participant is
entirely funded with life insurance policies insuring the life of the
Participant or the Participant's spouse or the joint lives of the Participant
and the Participant's spouse. The Employer shall pay the required premium on
each insurance policy although the Split Dollar Life Insurance Agreement may
require the Participant to reimburse the Employer part of the premium payment.
4.3 Responsibility for Payments and Withholding of Taxes. Sysco shall make
the payments and calculate the deductions for such payments of any taxes
required to be withheld by federal or any state or local government with respect
to any economic benefit the Participant may realize from the Plan. The Committee
shall furnish Sysco information concerning the amount of economic benefits under
the Plan for each Participant.
4.4 Termination of Benefits for a Participant. The benefits under the Plan
for a Participant may be terminated as specified in Section 5.1 of the sample
Split Dollar Life Insurance Agreement attached as Exhibit A, as it may be
modified by the Committee with respect to a particular Participant.
4.5 Assignment of Death Benefits. Each Participant has the power to assign
all rights and obligations of the Participant in the insurance policies and
under the Split Dollar Life Insurance Agreement and under this Plan to an
assignee of the Participant's choice and thereafter such designee shall possess
all of the rights and obligations of the Participant under this Plan and the
Split Dollar Life Insurance Agreement.
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<PAGE> 7
ARTICLE V
Rights of the Participants
5.1 Limitation of Rights. Nothing in the Plan shall be construed:
(a) to give any Employee of Sysco any right to be designated a
Participant in the Plan other than at the sole discretion of the Committee;
(b) to limit in any way the right of Sysco to terminate the
Participant's employment with Sysco at any time;
(c) to be evidence of any agreement or understanding, expressed or
implied, that Sysco will employ Participant in any particular position or
at any particular rate or remuneration;
(d) to give the Employee or his or her beneficiary any interest or
rights to the Employer's investment in the insurance policy on the
Employee's life.
5.2 Prerequisites to Benefits. No Participant, nor any person claiming
through a Participant, shall have any right or interest in the Plan, or any
benefits hereunder, unless and until all of the terms, conditions and provisions
of the Plan which affect such Participant or such other person shall have been
complied with as specified herein.
ARTICLE VI
Miscellaneous
6.1 Amendment or Termination of Plan. The Board of Sysco may modify or
terminate this Plan by a written instrument. Any modification or termination
will then be binding upon all persons ever to become entitled to payments under
this Plan. No amendment or termination, however, will affect a Split Dollar Life
Insurance Agreement after it has been executed by Sysco and the Participant
unless it is mutually agreed to by the Participant and Sysco.
6.2 Claims Procedure. When a benefit is due, a Participant or other person
entitled thereto should submit his or her claim in accordance with the claim
procedure specified in the Split Dollar Life Insurance Agreement.
6.3 Plan Year. The Plan Year for reporting to governmental agencies and
employees will coincide with the fiscal year of Sysco. Sysco has a 52/53 week
fiscal year beginning on the Sunday next following the Saturday closest to the
June 30th of each calendar year.
6.4 Agent for Process. Legal process may be served on the Committee at 1390
Enclave Parkway, Houston, Texas 77077.
6.5 Governing Law. The Plan shall be construed, administered, and governed
in all respects by the laws of the State of Texas, except as may be preempted by
federal law.
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<PAGE> 8
6.6 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.
6.7 Reliance Upon Information. The Committee shall not 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 such decision
or action taken by the Committee in reliance upon any information supplied to it
by any officer of Sysco, Sysco's legal counsel or Sysco's independent
accountants in connection with the administration of this Plan shall be deemed
to have been taken in good faith.
6.8 Notice. Any notice or filing required or permitted to be given to the
Committee or a Participant under this Plan shall be sufficient if in writing and
hand delivered, facsimile transmitted, or sent by registered or certified mail
to the principal office of Sysco or to the residential mailing address of the
Participant. Such notice shall be deemed given as of the date of the delivery
or, if delivery is made by mail, as of the date shown on the postmark on the
envelope.
6.9 Continuance Permitted Upon Merger, Consolidation or Transfer of Assets.
Sysco's participation in this Plan shall not automatically terminate if it
consolidates or merges and is not the surviving corporation, sells substantially
all of its assets, is a party to a reorganization and its employees and
substantially all of its assets are transferred to another entity, liquidates,
or dissolves, if there is a successor organization. Instead, the successor may
assume and continue this Plan by executing a direction, entering into a
contractual commitment or adopting a resolution providing for the continuance of
the Plan. Only upon the successor's rejection of this Plan or its failure to
respond to the Employer's request that it affirm its assumption of this Plan
within 90 days of the request shall this Plan automatically terminate; provided,
however, that termination of the Plan shall not affect any Split Dollar Life
Insurance Agreement after it has been executed unless agreed to by the
Participant who is a party to such Split Dollar Life Insurance Agreement.
6.10 Plan May Use Rabbi Trust. It is specifically recognized by both Sysco
and the Participants that some or all of the Split Dollar Life Insurance
Agreements may use Sysco Corporation Split Dollar Life Insurance Trust or other
such Rabbi trusts to possess the insurance policy subject to such Split Dollar
Life Insurance Agreements, to execute any collateral assignments and to carry
out the obligations of Sysco under this Plan and such Split Dollar Life
Insurance Agreements. However, under all circumstances, the rights of the
Participants to the assets held in such trust will be no greater than the rights
expressed in this Plan and the applicable Split Dollar Life Insurance Agreement.
Nothing contained in the trust agreement will constitute a guarantee by Sysco
that assets of Sysco transferred to the trust will be sufficient to pay any
benefits under this plan or the applicable Split Dollar Life Insurance Agreement
or would place the Participant in a secured position ahead of general creditors
should Sysco become insolvent or bankrupt. The Rabbi trust designed to carry out
Sysco's obligations under this Plan or the applicable Split Dollar Life
Insurance Agreements must specifically set out these principles so it is clear
in the Rabbi trust that the Participants are only unsecured general creditors of
Sysco in relation to their benefits under this Plan and the applicable Split
Dollar Life Insurance Agreements.
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<PAGE> 9
ARTICLE VII
ERISA Provisions
7.1 Sysco is the named fiduciary of the Plan for purposes of the Employee
Retirement Income Security Act of 1974 and shall have the authority to control
and manage the operation and administration of the Plan.
7.2 The funding policy of the Plan will be through premium payments to the
insurer issuing the insurance policy.
7.3 The basis of payments from the Plan will consist of payments by the
insurer in accordance with the insurance policy.
IN WITNESS WHEREOF, the Employer has executed this instrument as of this
21st day of October, 1999.
SYSCO CORPORATION
By /s/ MICHAEL C. NICHOLS
---------------------------------------
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<PAGE> 10
EXHIBIT A
SYSCO CORPORATION
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
This Agreement made and entered into between Sysco Corporation, (the
"Employer") and _______________________________________ (the "Employee").
W I T N E S S E T H
WHEREAS, Sysco has adopted the Sysco Corporation Split Dollar Life
Insurance Plan (the "Plan") which is designed to encourage certain employees to
continue in the service of Sysco by offering such employees assistance in
providing life insurance protection for the employees' family; and
WHEREAS, a Committee (the "Committee") has been established by the Plan to
administer the Plan and to designate employees of Sysco who are eligible to
participate in the Plan; and
WHEREAS, the Committee has selected the Employee to be a participant under
the Plan because the services of the Employee, the Employee's experience and
knowledge of the affairs of Sysco, and the Employee's reputation and contacts in
the industry are extremely valuable to Sysco; and
WHEREAS, Sysco desires that the Employee remain in its service and wishes
to receive the benefit of the Employee's knowledge, experience, reputation and
contacts; and
WHEREAS, Sysco is willing to encourage the Employee's continued service to
Sysco by joining with the Employee for the mutual benefit of the parties hereto
in an investment of life insurance on the life of the Employee, the life of the
Employee's spouse, or the joint lives of the Employee and the Employee's spouse
so as to provide life insurance protection for the Employee's family; and
<PAGE> 11
WHEREAS, the Employee will be the owner of the Insurance Policies acquired
pursuant to the terms of the Agreement, and Sysco's Investment in the Insurance
Policies will be represented by an assignment from the Employee to Sysco of
limited ownership rights in the Insurance Policies; and
WHEREAS, this plan is intended to qualify as a life insurance employee
benefit plan as described in Revenue Ruling 64-328.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, Sysco and the Employee agree as follows:
ARTICLE 1
Definitions
1.1 "Agreement" means this agreement, as it may be amended from time to
time.
1.2 "Change of Control" is defined in section 3.5.
1.3 "Committee" means the administrative committee under the Plan.
1.4 "Employee" means ____________.
1.5 "Insurance Policies" means the policies or policy shown on the
attached Schedule 1, together with any other policies that may be added to
the Agreement.
1.6 "Insurer" means an insurance company issuing Insurance Policies
subject to this Agreement.
1.7 "Plan" means the Sysco Corporation Split Dollar Life Insurance
Plan.
1.8 "Rabbi Trust" means the Sysco Corporation Split Dollar Life
Insurance Trust.
1.9 "Sysco" means Sysco Corporation.
1.10 "Sysco's Investment" means the interest of Sysco in the Insurance
Policy as defined in Section 4.1 of the Agreement.
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<PAGE> 12
ARTICLE 2
Insurance Policies
The Employee has purchased insurance on the life of the Employee, the
life of the Employee's spouse or the joint lives of the Employee and the
Employee's spouse for the benefit and protection of the Employee's family under
the Insurance Policy or Insurance Policies shown on the attached Schedule 1 in
the face amounts as shown on such schedule.
ARTICLE 3
Premium Payments
3.1 Sysco shall pay the required premium specified on Schedule 1 for each
Insurance Policy on or before the due date.
3.2 Any dividends attributable to each Insurance Policy shall be applied as
Sysco and the Employee agree by an instrument in writing.
3.3 The Employee shall pay to Sysco during each year the Insurance Policy
is subject to this Agreement and during which Sysco makes a premium payment
under section 3.1, an amount equal to the one-year term cost of the insurance
protection to which the Employee is entitled under such Insurance Policy
pursuant to the terms of this Agreement, including any term insurance rider and
any insurance purchased by dividends, and such cost is to be determined under
the principles established by applicable U.S. Treasury Department
pronouncements, rulings and regulations in effect for determining such costs for
insurance protection. The Employee shall reimburse Sysco for such one-year term
cost within a reasonable time after payment of the required premium to the
Insurer by Sysco on each Insurance Policy under section 3.1.
(a) Until changed by U.S. Treasury Department pronouncements, rulings
or regulations, the one-year term cost of insurance protection on a second
to die
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<PAGE> 13
policy on the joint lives of the Employee and the Employee's spouse
shall be the lesser of the following:
(i) the current published one-year term rates available to
all standard risks of the Insurer issuing such insurance
protection, or
(ii) U.S. Life Table 38.
(b) Until changed by U.S. Treasury Department pronouncements, rulings
or regulations, the one-year term cost of insurance protection on the
single life of the Employee or the Employee's spouse (including the single
life of the survivor after the death of the first of the Employee and the
Employee's spouse to die if the Insurance Policy covers their joint lives),
shall be the lesser of the following:
(i) the current published one-year term rates of the Insurer
issuing such insurance coverage, pursuant to the guidelines set
forth in Rev. Rul. 66-110 and Rev. Rul. 67-154, or
(ii) an amount determined in accordance with the tables set
forth in Rev. Rul. 55-747 (called the "PS 58 costs").
3.4 Upon a Change of Control, Sysco shall, as soon as possible, but in no
event longer than ninety days following the Change of Control, as defined
herein, make an irrevocable contribution to the Rabbi Trust in an amount equal
to the present value, using a 5% interest factor, of the remaining aggregate
premiums required to be paid by Sysco on Schedule 1 for each Insurance Policy.
The trustee of the Rabbi Trust shall pay future premiums for such Insurance
Policy from such contributions and the appreciation and earnings thereon;
provided, however, that, should such contributions and appreciation and earnings
thereon prove insufficient to pay all of the premiums
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<PAGE> 14
required by Schedule 1 for such Insurance Policy, Sysco shall remain liable to
make such remaining premium payments.
3.5 For purposes of this Agreement, Change of Control shall mean the
occurrence of one or more of the following events:
(a) Any "person," including a "syndication" or "group" as those terms
are used in Section 13(d)(3) of the Securities Act, is or becomes the
beneficial owner, directly or indirectly, of securities of Sysco
representing 20% or more of the combined voting power of Sysco's then
outstanding "Voting Securities" which is any security which ordinarily
possesses the power to vote in the election of the Board of Directors of
Sysco without the happening of any precondition or contingency;
(b) Sysco is merged or consolidated with another corporation and
immediately after giving effect to the merger or consolidation either (i)
less than 80% of the outstanding Voting Securities of the surviving or
resulting entity are then beneficially owned in the aggregate by (x) the
stockholders of Sysco immediately prior to such merger or consolidation, or
(y) if a record date has been set to determine the stockholders of Sysco
entitled to vote on such merger or consolidation, the stockholders of Sysco
as of such record date, or (ii) the Board of Directors, or similar
governing body, of the surviving or resulting entity does not have as a
majority of its members the persons specified in subparagraph (c)(i) and
(ii) below;
(c) If at any time the following do not constitute a majority of the
Board of Directors of Sysco (or any successor entity referred to in
subparagraph (b) above):
i. Persons who are directors of Sysco on July 4, 1999;
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<PAGE> 15
ii. persons who, prior to their election as a director of Sysco
(or successor entity if applicable) were nominated, recommended or
endorsed by a formal resolution of the Board of Directors of Sysco;
(d) If at any time during a calendar year a majority of the directors
of Sysco are not persons who were directors at the beginning of the
calendar year; and
(e) Sysco transfers substantially all of its assets to another
corporation which is a less than 80% owned subsidiary of Sysco.
ARTICLE 4
Sysco's Investment
4.1 Sysco's Investment in each Insurance Policy shall be:
(a) except as provided in subsection (b) below, the lesser of (1) the
cash surrender value of the Insurance Policy and (2) the amounts paid by
Sysco as premiums on such Insurance Policy under the provisions of section
3.1 with both (1) and (2) reduced by the amount of any indebtedness which
may exist against such Insurance Policy and any unpaid interest on such
indebtedness if said indebtedness was incurred after such Insurance Policy
becomes subject to the Agreement and with (2) only reduced by the premiums
paid by the Employee with respect to such Insurance Policy under the
provisions of section 3.3;
(b) at any time upon the death of the last insured, the amounts paid
by Sysco as premiums on such Insurance Policy under the provisions of
section 3.1 less (1) the amount of any indebtedness which may exist against
such Insurance Policy and any unpaid interest on such indebtedness if said
indebtedness was incurred after
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<PAGE> 16
such Insurance Policy becomes subject to this Agreement, and (2) the
premiums paid by the Employee with respect to such Insurance Policy under
the provisions of section 3.3.
4.2 The Employee will collaterally assign the Insurance Policies acquired
pursuant to the terms of this Agreement to the Rabbi Trust as evidence of
Sysco's Investment. The collateral assignment shall not be altered or changed
without the written consent of Sysco. The Rabbi Trust shall have possession of
the Insurance Policy during the term of this Agreement; provided, however, that
the possessor of the Insurance Policy shall make such Insurance Policy available
to the Insurer when it shall be necessary to endorse changes of beneficiary
thereon in accordance with the Employee's right to appoint beneficiaries as
provided in this Agreement or to exercise any other rights of the Employee to
such Insurance Policy.
4.3 The rights of Sysco and the Rabbi Trust under the collateral assignment
are restricted to (a) assigning Sysco's Investment in the Insurance Policy to
the Employee or the Employee's designee upon payment of Sysco's Investment, (b)
upon the death of the last insured, obtaining that portion of the Insurance
Policy death proceeds in an amount equal to Sysco's Investment at such insured's
death, and (c) upon surrender of the Insurance Policy, obtaining that portion of
the surrender proceeds not in excess of Sysco's Investment.
4.4 Sysco and the Rabbi Trust are prohibited from taking any action that
would endanger either the interest of the Employee or the payment of the
proceeds in excess of Sysco's Investment to the beneficiary designated by the
Employee upon the last insured's death. Prior to the termination of this
Agreement, Sysco and the Rabbi Trust will not exercise the right to pledge the
Insurance Policies, to surrender the Insurance Policies or paid up additions for
cancellation or to partially surrender the Insurance Policies, to assign its
rights to anyone other than the Employee or the
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<PAGE> 17
Employee's designee, and to borrow against the Insurance Policies even for the
purpose of paying premiums unless there has been a default by the Employee under
this Agreement.
4.5 The Employee has the power to assign all rights of the Employee in the
Insurance Policies and under this Agreement, change the beneficiary designation
on each Insurance Policy and exercise settlement options. In the event of an
assignment, the assignee shall possess all of the rights and obligations of the
Employee under such Insurance Policy and this Agreement. The Employee has all
rights to the Insurance Policies, not specifically granted to Sysco by this
Agreement; provided, however, that the Employee may not exercise any rights in a
manner which would endanger Sysco's Investment.
4.6 Sysco and the Employee recognize that the investment of Sysco in the
Insurance Policies and other assets held in the Rabbi Trust is also subject to
the general creditors of Sysco as set forth in the Rabbi Trust. The Employee
shall have no preferred claim on, or any beneficial ownership interest in, any
assets of the Rabbi Trust. Any rights created under the Plan or this Agreement
shall be mere unsecured contractual rights of the Employee against Sysco. Any
assets held by the Rabbi Trust will be subject to the claims of Sysco's general
creditors under Federal and state law as specified in the Rabbi Trust.
4.7 Any payments of Sysco's Investment in the Insurance Policy pursuant to
the collateral assignment shall be first made from Insurance Policy cash values
attributable to paid up additional life insurance and purchased by Insurance
Policy dividends, if any. The Employee shall have no interest in paid up
additional life insurance protection, if any, except to the extent the death
benefit or cash value thereof exceeds Sysco's Investment.
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<PAGE> 18
ARTICLE 5
Termination
This Agreement shall terminate on the happening of any one or more of
the following events:
(a) Mutual agreement of the parties;
(b) Adjudication of Sysco as a bankrupt or a general assignment by
Sysco to or for the benefit of creditors or dissolution of Sysco;
(c) Surrender of all the Insurance Policies;
(d) Payment in full to Sysco at any time of Sysco's Investment, at
which time Sysco shall release the collateral assignment;
(e) Cessation of Sysco's business;
(f) The Employee ceases to be employed by Sysco for any reason except
death. Additionally, Sysco, in its sole discretion, may terminate this
Agreement upon any failure of the Employee to pay premiums to Sysco as
provided in section 3.3.
ARTICLE 6
Termination of Sysco's Investment
6.1 Upon the death of the last insured, Sysco shall receive from the
proceeds of all Insurance Policies payable upon such insured's death the full
amount of Sysco's Investment in the death benefits in all such Insurance
Policies. The balance of the proceeds of such Insurance Policies shall be paid
(a) to the beneficiary designated by the Employee or (b) if no such beneficiary
has been designated, to the Employee's executor or administrator for
administration as part of the Employee's estate.
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<PAGE> 19
6.2 In the event of the termination of this Agreement under Article 5
(except as provided in Section (d) of Article 5), the Employee or the designee
of the Employee shall have ninety days in which to pay Sysco in an amount equal
to Sysco's Investment in each Insurance Policy. Upon the payment of such an
amount, Sysco and the Rabbi Trust shall release the collateral assignment of the
Insurance Policies. If the Employee or the designee of the Employee does not
make such payment to Sysco within such ninety day period, the Employee may
either (a) surrender the Insurance Policy as provided in the collateral
assignment, or (b) transfer ownership of such Insurance Policy to Sysco, thereby
discharging the obligation of the Employee to purchase Sysco's Investment in
such Insurance Policy and relinquishing all rights of the Employee to such
Insurance Policy under this Agreement.
6.3 Upon the surrender or partial surrender of any Insurance Policy covered
by this Agreement or should the Employee borrow against any Insurance Policy
covered by this Agreement, the proceeds received upon such surrender, partial
surrender or loan shall be used first to pay Sysco in an amount equal to Sysco's
Investment in such Insurance Policy and any excess proceeds shall be paid to the
Employee.
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<PAGE> 20
ARTICLE 7
Insurers
The Insurer(s) issuing the Insurance Polices shall not be deemed to be a
party to this Agreement for any purpose, nor is the Insurer in any way
responsible for its validity or its enforcement. The Insurer shall not be
obligated to inquire as to the distribution or application of any monies,
payable or paid by the Insurer under the Insurance Policies, if the Insurer
makes appropriate payment or otherwise performs its contractual obligations in
accordance with the terms of the Insurance Policies. The Insurer shall be bound
only by the provisions of the Insurance Policies or an endorsement thereto. Any
payments made or actions taken by the Insurer in accordance with such Insurance
Policies shall fully discharge the Insurer from liability.
ARTICLE 8
Amendments and Miscellaneous
8.1 This Agreement shall not be modified or amended except by a written
instrument signed by Sysco and the Employee. This Agreement shall be binding
upon the administrators, assigns and successors of the parties to this
Agreement.
8.2 The provisions of this Agreement shall be construed and enforced
according to the laws of the State of Texas, except to the extent preempted by
federal law.
8.3 This Agreement and the Plan contain the entire contract between the
parties and constitute a complete integration of the representations, covenants
and promises of the Employee and Sysco. In case of a conflict, express or
implied, between the terms of the Plan and this Agreement, the terms of the Plan
will govern.
8.4 This Agreement is not the basic employment contract between Sysco and
the Employee and Sysco reserves the unqualified and unrestricted right to
terminate the services of the Employee on exactly the same basis as if this
Agreement had never been entered into.
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<PAGE> 21
8.5 The Employee shall have no interest or rights in Sysco's Investment in
any Insurance Policy.
ARTICLE 9
ERISA Provisions
9.1 Sysco is the named fiduciary of the Plan for purposes of the Employee
Retirement Income Security Act of 1974 and shall have the authority to control
and manage the operation and administration of the Plan.
9.2 The funding policy of this Plan will be through premium payments to the
Insurer as specified in this Agreement.
9.3 The basis of payments from the Plan will consist of payments by the
Insurer in accordance with the Insurance Policies.
9.4 Claims for death benefits are established under the Insurance Policy by
the Insurer. If for any reason a claim for benefits under the Plan other than
death benefits is denied, Sysco shall deliver to the claimant a written
explanation setting forth the specific reasons for the denial, pertinent
references to the Plan section on which the denial was based, such other data as
may be pertinent and information on procedures to be followed by the claimant in
obtaining a review of his or her claim, all written in a manner calculated to be
understood by the claimant. For this purpose:
(a) The claimant's claim shall be deemed filed when presented orally
or in writing to Sysco.
(b) Sysco's explanation shall be in writing and delivered to the
claimant within ninety days of the date the claim is filed.
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<PAGE> 22
The claimant shall have sixty days following his or her receipt of the
denial of the claim to file with Sysco a written request for review of the
denial. For such review, the claimant or his or her representative may submit
pertinent documents and written issues and comments.
Sysco shall decide the issue on review and furnish the claimant with a copy
within sixty days of receipt of the claimant's request for review of his or her
claim. The decision on review shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be understood by the
claimant, as well as specific references to the pertinent plan provisions on
which the decision is based. If a copy of the decision is not so furnished to
the claimant within such sixty days, the claim shall be deemed denied on review.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this
_____ day of ________________, ______.
SYSCO CORPORATION, EMPLOYER
By
---------------------------------------
-----------------------------------------
_____________________, Employee
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<PAGE> 23
SCHEDULE 1
The Insurance Policy or Insurance Policies covered by the foregoing Split
Dollar Life Insurance Agreement between Sysco Corporation and the Employee
include the following:
1. Insurer: ________________________________
2. Policy No. ______________________________
3. Initial Face Amount: ______________________
4. Insured(s): ______________________________
5. Sysco Premium: $_________ annually from __________ through __________
6. Employee section 3.3 Reimbursement: from __________ through __________
EXECUTED this _____ day of ___________________, __________.
SYSCO CORPORATION, EMPLOYER
By
---------------------------------------
------------------------------------------
______________________, Employee
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<PAGE> 1
EXHIBIT 10(n)
EXECUTIVE COMPENSATION ADJUSTMENT AGREEMENT
This Executive Compensation Adjustment Agreement ("Agreement") made and
entered into between Sysco Corporation ("Sysco") and Bill M. Lindig ("Officer")
W I T N E S S E T H
WHEREAS, the Officer is currently the Chairman and Chief Executive Officer
of Sysco and his experience and knowledge of the affairs of Sysco, his
reputation and contacts in the industry are all extremely valuable to Sysco; and
WHEREAS, the Officer is currently a participant in the Sysco Corporation
Executive Deferred Compensation Plan ("EDCP") and the Sysco Corporation
Supplemental Executive Retirement Plan ("SERP"); and
WHEREAS, Sysco has adopted the Sysco Corporation Split Dollar Life
Insurance Plan ("the Split Dollar Plan") which is designed to encourage certain
employees to continue in the service of Sysco by offering such employees
assistance in providing life insurance protection for the employees' families;
and
WHEREAS, Sysco wishes to offer split dollar life insurance coverage for the
Officer's family as an alternative to part of the benefits provided under the
EDCP and the SERP; and
WHEREAS, the Officer wishes to take advantage of the split dollar life
insurance coverage offered by Sysco as an alternative to some of the Officer's
benefits provided under the EDCP and the SERP;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, Sysco and the Officer agree as follows:
1. Split Dollar Plan. Contemporaneously with the execution of this
Agreement, the Compensation and Stock Option Committee of the Sysco Board of
Directors appointed under the Split Dollar Plan will designate the Officer as a
participant in the Split Dollar Plan and Sysco and David Brett Lindig and Mark
Bradley Lindig, co-trustees (as the Officer's designee), of the Lindig 1999
Family Trusts ("Trust"), created by that certain instrument dated September 30,
1999, shall execute the Split Dollar Life Insurance Agreement ("Split Dollar
Agreement") attached hereto as Exhibit A and incorporated herein for all
purposes.
2. Partial Waiver of EDCP Benefits. Subject to the conditions of paragraph
4, as a requirement for participation in the Split Dollar Plan, Officer hereby
irrevocably waives, renounces, and forfeits any and all rights to the Officer's
benefits credited to his Account in the Deferred Compensation Ledger maintained
by the EDCP plan Committee under the EDCP as of 10-14, 1999; provided, however,
this waiver, renunciation, and forfeiture does not apply to amounts which may be
credited to the Officer's said Account in the special Deferred Compensation
Ledger under the EDCP from and after said date; provided
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<PAGE> 2
further any interest credited to the Officer's said Account under the EDCP will
apply only to Officer deferrals and Sysco's Company Matches (as defined in the
EDCP) from and after said date.
3. Partial Waiver of SERP Benefits. Subject to the conditions of paragraph
4, as a requirement for participation in the Split Dollar Plan, Officer hereby
irrevocably waives, renounces, and forfeits $13,487.50 of the monthly SERP
retirement benefit for the Officer in the form of an age 65, 5 year certain and
life annuity as calculated under Article 4.1 of the SERP prior to the adjustment
for vesting. After such reduction and the application of vesting, the resulting
amount will be adjusted for the form and time of payment as specified under
Article 4.2 of the SERP. In calculating the death benefit under Article 5 of the
SERP, the commuted lump sum values referenced in Article 5 will be reduced by
the commuted lump sum value of the monthly retirement benefit forfeited above.
4. Conditions on Waiver. The partial waivers, renunciations, and
forfeitures contained in paragraphs 2 and 3 are conditioned upon each of the two
insurance policies initially covered by the Split Dollar Agreement not being set
aside for material misrepresentations in its application and the death proceeds
of each such policy not being limited to premiums paid because an insured dies
by suicide. Such conditions will lapse with regard to each such policy two years
after the date of issue of such policy. Should only one of such policies fail to
meet the conditions of this paragraph, the partial waiver, renunciation and
forfeiture of EDCP and SERP benefits in paragraphs 2 and 3 shall be reduced by
67.2% if the John Hancock Mutual Life Insurance Company policy fails to meet
said conditions or by 33.8% if the Pacific Life Insurance Company policy fails
to meet said conditions. If both of the insurance policies initially covered by
the Split Dollar Agreement fail to meet either of the conditions of this
paragraph, the partial waiver, renunciation, and forfeiture of EDCP and SERP
benefits in paragraphs 2 and 3 shall be null and void and this Agreement shall
terminate.
5. Reimbursement Bonuses. Sysco agrees to pay the following reimbursement
bonuses to the Officer or his affiliate within a reasonable time after
certification to Sysco of the amount subject to reimbursement:
a. Sysco shall bonus to the Officer or his affiliate an amount equal
to the term premium payment required of the trustee of the Trust pursuant
to section 3.3 of the Split Dollar Agreement.
b. Sysco shall bonus an amount equal to any Federal gift taxes paid by
the Officer or his affiliate because of contributions, whether direct,
indirect or deemed, to the Trust to cover the portion of the premium
required to be paid by the Trust under section 3.3 of the Split Dollar
Agreement or because of any economic benefit attributable to the cost of
current life insurance protection to
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<PAGE> 3
which the Trust is entitled under the Split Dollar Agreement which
constitutes a gift to the Trust by the Officer or his affiliate. As an
administrative convenience, said premium contribution or said current life
insurance benefit will be deemed to be a gift by the Officer or his
affiliate at highest marginal Federal gift tax bracket regardless of
whether the Officer or his affiliate pay any or a lesser amount of gift
tax. The bonus will be paid to the Officer or his affiliate upon
certification to Sysco of the amount of said premium contribution or
current life insurance protection benefit for the taxable year of the
Officer or his affiliate. No bonus is required for any other gift or any
generation-skipping transfer, direct, indirect or deemed, from the Officer
or his affiliate to the Trust caused under the Split Dollar Agreement
except for gifts of said premium contribution or for said current life
insurance protection benefit to which the Trust is entitled.
c. Sysco shall bonus annually to the Officer or his affiliate a fixed
dollar amount to offset fees paid to a tax return preparer by the Officer
or his affiliate for any state or Federal gift tax or generation-skipping
transfer tax return which includes a gift or generation-skipping transfer
which results from this Agreement or the Split Dollar Agreement regardless
of whether such a return was filed and regardless of the amount of tax
return preparer fees paid by the Officer or his affiliate. The fixed dollar
amount in 2000 will be a total of $5,000. For 2001, the fixed dollar amount
will be $1,000 for each gift tax return. For each year beginning in 2002,
the fixed dollar amount for each gift tax return will be the fixed dollar
amount for the previous year increased by 5%.
d. Should a dispute with the Internal Revenue Service or a state tax
authority develop between the Officer or his affiliate concerning the
income, gift or generation-skipping transfer tax results attributable to
this Agreement, the waiver of the Officer's accrued benefit under the EDCP
or the SERP, or the Split Dollar Agreement, Sysco agrees to pay the
Officer's or his affiliate's reasonable accounting and legal fees and court
and other costs incurred in any administrative proceedings or litigation
concerning assessment or proposed assessment of additional taxes involving
their state or Federal gift tax, income tax, or generation-skipping
transfer tax returns based upon such tax results including, litigation of a
notice of tax deficiency, filing a refund claim or suing for a refund in
court which concerns said dispute of income, gift or generation-skipping
transfer tax results. Sysco shall have no liability to pay for any state or
Federal income, gift or generation-skipping transfer tax liability,
including penalties or interest thereon, unless expressly authorized
elsewhere in this Agreement. Sysco
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<PAGE> 4
will pay such fees or costs directly to the provider upon being furnished
by the Officer or his affiliate with a statement or other evidence of the
fee or cost payable in a format acceptable to Sysco.
6. Federal Income Tax Bonuses. Sysco agrees to pay the following
supplemental bonuses within a reasonable time after the close of the calendar
year during which the subject reimbursement bonuses were paid:
a. Sysco shall make a supplemental bonus to the Officer or his
affiliate to cover any Federal income tax liability resulting from a
reimbursement to the Officer or his affiliate pursuant to subparagraphs a,
b and c of paragraph 5 above. The amount of the supplemental bonus shall be
the difference between (i) an amount determined by dividing the amount of
the reimbursement by one minus the highest Federal individual marginal
income tax bracket for the year of such reimbursement under subparagraphs
a, b and c of paragraph 5 above expressed as a decimal, and (ii) the amount
of said reimbursement.
b. With regard to any payment of the Officer's or his affiliate's
reasonable accounting and legal fees or court or other costs pursuant to
subparagraph d of paragraph 5 above, Sysco shall make a supplemental bonus
to the Officer or his affiliate to cover any Federal income tax liability
resulting from such payment. The parties acknowledge that the determination
of such Federal income tax liability is made complicated because of the
potential deductibility by the Officer or his affiliate of such accounting
and legal fees and court and other costs on his or her Federal income tax
return. The parties hereby agree that the supplemental bonus required by
this subparagraph shall be calculated in the following two steps:
i. The Federal income tax caused by such payment shall be
determined by the difference, if any, between (a) all Federal income
taxes payable for the year of reimbursement by the Officer or
affiliate calculated by including the subparagraph d of paragraph 5
payment in gross income reduced by the deduction allowable for the
expenditure covered by such payment, if any, (whether or not the
deduction is taken by the Officer or affiliate on the Federal income
tax return for the taxable year of the reimbursement) and (b) all
Federal income taxes payable for the year of payment by the Officer or
affiliate calculated by excluding
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<PAGE> 5
the subparagraph d of paragraph 5 reimbursement from gross income
without any deduction for the expenditure covered by such
reimbursement.
ii. The amount of supplemental bonus required by this
subparagraph shall be the difference between (a) an amount determined
by dividing the Federal income tax difference determined by
subparagraph bi of paragraph 6 above by one minus the highest Federal
individual marginal income tax bracket for the year of such payment
under subparagraph d of paragraph 5 above expressed as a decimal, and
(b) the Federal income tax difference determined by subparagraph bi of
paragraph 6 above.
Should the Internal Revenue Service finally determine with regard to a
Federal income tax return for the Officer or his affiliate that any of the
assumptions pursuant to subparagraph bi(a) of paragraph 6 concerning
inclusion of the payment in gross income or the deductibility of all or
part of the expenditure covered by the payment is incorrect, the
calculations in subparagraph bi(a) of paragraph 6 above shall be adjusted
to reflect such final determination and the amount of supplemental bonus by
this subparagraph b of paragraph 6 shall be recalculated and Sysco shall
pay, without interest, to the Officer or his affiliate any increase in such
supplemental bonus caused by the recalculation and the Officer or his
affiliate shall return to Sysco that part of any supplemental bonus
received in excess of such recalculation.
c. For years during which there are no premium reimbursements by Sysco
pursuant to subparagraph a of paragraph 5 above but the Officer or his
affiliate realizes an economic benefit equal to the cost of current life
insurance protection (calculated as specified in section 3.3 of the Split
Dollar Agreement) to which the Trust is entitled under the Split Dollar
Agreement, Sysco shall bonus the Officer or his affiliate an amount to
cover Federal income tax liability resulting from the realized economic
benefit equal to the cost of current life insurance protection to which the
Trust is entitled under the Split Dollar Agreement. The amount of the bonus
shall be the difference between (i) an amount determined by dividing the
amount of said economic benefit by one minus the highest Federal individual
marginal income tax bracket for the year said economic benefit is realized
expressed as a decimal, and (ii) the amount of said economic benefit. No
bonus is required for any economic benefit realized by the Officer or his
affiliate under the Split Dollar Agreement except for the cost of current
life insurance protection to which the Trust is entitled.
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<PAGE> 6
7. Ceiling on Reimbursement and Federal Income Tax Bonuses. The bonuses
specified in paragraphs 5 and 6 above, in the aggregate, shall not exceed
$3,898.202.
8. Payment of Taxes and Withholding. The Officer or his affiliate will be
required to pay his share of any Federal or state income, social security or
other taxes that are required to be paid due to the bonuses specified in
paragraphs 5 and 6 above and Sysco will withhold such taxes to the extent
required by applicable law and regulations.
9. Special Deduction Bonus. The parties do not anticipate that there will
be any additional income tax consequences to the Officer or his affiliate from
this Agreement, the waiver of his accrued benefit under the EDCP or the SERP,
and the Split Dollar Agreement other than that attributable to the benefit from
the cost of current life insurance protection to which the Trust is entitled and
the bonuses discussed in paragraphs 5 and 6. However, should additional income
be realized by the Officer or his affiliate because of this Agreement, the
waiver of his accrued benefit under the EDCP or the SERP, or the Split Dollar
Agreement and should Sysco be entitled to a Federal income tax deduction against
its gross income for such other income realized by the Officer or his affiliate,
then Sysco agrees to bonus to the Officer or his affiliate who realized such
other income pursuant to this Agreement, the waiver of the Officer's benefit
under the EDCP or the SERP or the Split Dollar Agreement an amount equal to the
difference between (i) an amount determined by dividing the amount of said
deduction by one minus the highest Federal corporate marginal income tax bracket
for the year such deduction is available to Sysco expressed as a decimal, and
(ii) the amount of said deduction.
10. Dispute Resolution. Sysco and the Officer have entered into this
Agreement in good faith and in belief that it is mutually advantageous to them.
It is with the same spirit of cooperation that they pledge to attempt to resolve
any dispute amicably without the necessity of litigation. Accordingly, they
agree that if any dispute arises between them relating to this Agreement or the
Split Dollar Agreement (a "Dispute"), they will first utilize the mediation
procedures specified in this paragraph prior to any arbitration.
a. Initiation of Mediation. The party seeking to initiate mediation
(the "Initiating Party") shall give written notice to the other party,
describing in general terms the nature of the Dispute, and the Initiating
Party's claim for relief. Sysco and the Officer or the Officer's affiliate
shall have thirty business days from the date of notice to select a
mutually agreeable mediator. In consultation with the mediator selected,
the parties shall promptly designate a mutually convenient time and place
for mediation, and unless circumstances require otherwise, such time to be
not later than forty-five days after the selection of the mediator.
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<PAGE> 7
b. Conduct of Mediation. In the mediation, each party shall be
represented by one or more individuals with authority to settle the Dispute
and may be represented by counsel. In addition, each party may, with
permission of the mediator, bring such additional persons as needed to
respond to questions, contribute information, and participate in the
negotiations. The parties agree to sign a document that provides that the
mediator shall be governed by the provisions of Chapter 154 of the Texas
Civil Practice and Remedies Code or such other rules as the mediator shall
prescribe. The parties commit to participate in the proceedings in good
faith and with the intention of resolving the Dispute if at all possible.
c. Termination of Procedure. The parties agree to participate in the
mediation procedure to its conclusion. The mediation shall be terminated
(i) by the execution of a settlement agreement by the parties, (ii) by a
declaration of the mediator that mediation is terminated, or (iii) by a
written declaration by one of the parties to the effect that the mediation
process is terminated at the conclusion of one full day's mediation
session.
d. Arbitration. The parties agree to participate in good faith in the
mediation to its conclusion. If the parties are not successful in resolving
the Dispute through mediation, then the parties agree that the Dispute
shall be settled by arbitration in accordance with the provisions of the
Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) shall be final and
may be entered in any court having jurisdiction. The parties further agree
that the award rendered by the arbitrator(s) may include an award of
attorneys' fees and costs related to the arbitration.
e. Fees of Mediation; Disqualification. The fees and expenses of the
mediator shall be shared equally by the parties. The mediator shall be
disqualified as a witness, consultant, expert or counsel by any party with
respect to the Dispute and any related matters.
f. Confidentiality. The entire mediation process is confidential, and
no stenographic, visual or audio records shall be made. All conduct,
statements, promises, offers, views and opinions, whether oral or written,
made in the course of mediation by any party, agent, employee,
representative, or other invitee and by the mediator are confidential and
shall, in addition and where appropriate, be deemed privileged. Such
conduct, statements, promises, offers, views and opinions shall not be
disclosed to anyone, not an agent, employee, expert, witness, or
representative of any of the parties.
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<PAGE> 8
11. Officer's Affiliate. References to an affiliate of the Officer include
such persons and entities who are the successors of the Officer (e.g.,
administrator or executor of his estate, his assigns, or his heirs, legatees, or
devisees) or who are related to the Officer in connection with this Agreement or
the Split Dollar Agreement (e.g., the Officer's wife, the Trust, or the trustee
of the Trust and their heirs or successors).
12. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Officer and Sysco, their successors, assigns, heirs, executors,
administrators, and other beneficiaries.
13. Amendment. No amendment or variations of the terms of this Agreement
shall be valid, unless made in writing and signed by Sysco and the Officer.
14. Not Employment Contract. This Agreement is not the basic employment
contract between Sysco and the Officer nor is it evidence of any agreement or
understanding, express or implied, that Sysco will employ the Officer in any
particular position or at any particular rate of remuneration. Sysco reserves
the unqualified and unrestricted right to terminate the services of the Officer
on exactly the same basis as if this Agreement had never been entered into
although any rights or obligations of Sysco and the Officer under this Agreement
shall survive such termination of employment.
15. Governing Law. The provisions of this Agreement shall be construed and
enforced according to the laws of the State of Texas.
16. Entire Agreement. This Agreement contains the entire contract between
Sysco and the Officer and constitutes a complete integration of the
representations, covenants and promises of Sysco and the Officer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this
25th day of October, 1999.
SYSCO CORPORATION
By: /s/ MICHAEL C. NICHOLS
-----------------------------------
MICHAEL C. NICHOLS, Vice President
/s/ BILL M. LINDIG
----------------------------------
BILL M. LINDIG, Officer
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<PAGE> 9
The Officer's wife is fully aware, understands, and fully consents and
agrees to the provisions of this Agreement including its binding effect upon any
community property interest she may have in the EDCP and SERP benefits
irrevocably waived, renounced, and forfeited by the Officer and any economic
benefits realized under the Split Dollar Agreement. Such awareness,
understanding, consent and agreement is evidenced by signing this Agreement.
/s/ BOBETTA C. LINDIG
----------------------------------------
BOBETTA C. LINDIG
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<PAGE> 1
EXHIBIT 10(o)
EXECUTIVE COMPENSATION ADJUSTMENT AGREEMENT
This Executive Compensation Adjustment Agreement ("Agreement") made and
entered into between Sysco Corporation ("Sysco") and Charles H. Cotros
("Officer")
W I T N E S S E T H
WHEREAS, the Officer is currently the President and Chief Operating Officer
of Sysco and his experience and knowledge of the affairs of Sysco, his
reputation and contacts in the industry are all extremely valuable to Sysco; and
WHEREAS, the Officer is currently a participant in the Sysco Corporation
Executive Deferred Compensation Plan ("EDCP") and the Sysco Corporation
Supplemental Executive Retirement Plan ("SERP"); and
WHEREAS, Sysco has adopted the Sysco Corporation Split Dollar Life
Insurance Plan ("the Split Dollar Plan") which is designed to encourage certain
employees to continue in the service of Sysco by offering such employees
assistance in providing life insurance protection for the employees' families;
and
WHEREAS, Sysco wishes to offer split dollar life insurance coverage for the
Officer's family as an alternative to part of the benefits provided under the
EDCP and the SERP; and
WHEREAS, the Officer wishes to take advantage of the split dollar life
insurance coverage offered by Sysco as an alternative to some of the Officer's
benefits provided under the EDCP and the SERP;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, Sysco and the Officer agree as follows:
1. Split Dollar Plan. Contemporaneously with the execution of this
Agreement, the Compensation and Stock Option Committee of the Sysco Board of
Directors appointed under the Split Dollar Plan will designate the Officer as a
participant in the Split Dollar Plan and Sysco and Harry Charles Cotros, trustee
(as the Officer's designee), of the Cotros 1999 Family Trust ("Trust"), created
by that certain instrument dated September 13, 1999, shall execute the Split
Dollar Life Insurance Agreement ("Split Dollar Agreement") attached hereto as
Exhibit A and incorporated herein for all purposes.
2. Partial Waiver of EDCP Benefits. Subject to the conditions of paragraph
4, as a requirement for participation in the Split Dollar Plan, Officer hereby
irrevocably waives, renounces,
<PAGE> 2
and forfeits 35% of the Officer's benefits credited to his Account in the
Deferred Compensation Ledger maintained by the EDCP plan Committee under the
EDCP as of October 14, 1999; provided, however, this waiver, renunciation, and
forfeiture does not apply to the Officer's benefits credited to the Officer's
said Account as of such date in excess of 35% and amounts which may be credited
to the Officer's said Account in the special Deferred Compensation Ledger under
the EDCP from and after said date; provided further any interest credited to the
Officer's said Account after said date under the EDCP will apply only to the
Officer's benefits credited to Officer's said Account as of such date and to
Officer deferrals and Sysco's Company Matches (as defined in the EDCP) from and
after said date.
3. Partial Waiver of SERP Benefits. Subject to the conditions of paragraph
4, as a requirement for participation in the Split Dollar Plan, Officer hereby
irrevocably waives, renounces, and forfeits $18,658.88 of the monthly SERP
retirement benefit for the Officer in the form of an age 65, 5 year certain and
life annuity as calculated under Article 4.1 of the SERP prior to the adjustment
for vesting. After such reduction and the application of vesting, the resulting
amount will be adjusted for the form and time of payment as specified under
Article 4.2 of the SERP. In calculating the death benefit under Article 5 of the
SERP, the commuted lump sum values referenced in Article 5 will be reduced by
the commuted lump sum value of the monthly retirement benefit forfeited above.
4. Conditions on Waiver. The partial waivers, renunciations, and
forfeitures contained in paragraphs 2 and 3 are conditioned upon each of the two
insurance policies initially covered by the Split Dollar Agreement not being set
aside for material misrepresentations in its application and the death proceeds
of each such policy not being limited to premiums paid because an insured dies
by suicide. Such conditions will lapse with regard to each such policy two years
after the date of issue of such policy. Should only one of such policies fail to
meet the conditions of this paragraph, the partial waiver, renunciation and
forfeiture of EDCP and SERP benefits in paragraphs 2 and 3 shall be reduced by
36.5% if the John Hancock Mutual Life Insurance Company policy fails to meet
said conditions or by 63.5% if the Pacific Life Insurance Company policy fails
to meet said conditions. If both of the insurance policies initially covered by
the Split Dollar Agreement fail to meet either of the conditions of this
paragraph, the partial waiver, renunciation, and forfeiture of EDCP and SERP
benefits in paragraphs 2 and 3 shall be null and void and this Agreement shall
terminate.
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<PAGE> 3
5. Reimbursement Bonuses. Sysco agrees to pay the following reimbursement
bonuses to the Officer or his affiliate within a reasonable time after
certification to Sysco of the amount subject to reimbursement:
a. Sysco shall bonus to the Officer or his affiliate an amount equal to
the term premium payment required of the trustee of the Trust pursuant to
section 3.3 of the Split Dollar Agreement.
b. Sysco shall bonus an amount equal to any Federal gift taxes paid by
the Officer or his affiliate because of contributions, whether direct,
indirect or deemed, to the Trust to cover the portion of the premium
required to be paid by the Trust under section 3.3 of the Split Dollar
Agreement or because of any economic benefit attributable to the cost of
current life insurance protection to which the Trust is entitled under the
Split Dollar Agreement which constitutes a gift to the Trust by the Officer
or his affiliate. As an administrative convenience, said premium
contribution or said current life insurance benefit will be deemed to be a
gift by the Officer or his affiliate at the highest marginal Federal gift
tax bracket regardless of whether the Officer or his affiliate paid any or
a lesser amount of gift tax. The bonus will be paid to the Officer or his
affiliate upon certification to Sysco of the amount of said premium
contribution or current life insurance protection benefit for the taxable
year of the Officer or his affiliate. No bonus is required for any other
gift or any generation-skipping transfer, direct, indirect or deemed, from
the Officer or his affiliate to the Trust caused under the Split Dollar
Agreement except for gifts of said premium contribution or for said current
life insurance protection benefit to which the Trust is entitled.
c. Sysco shall bonus annually to the Officer or his affiliate a fixed
dollar amount to offset fees paid to a tax return preparer by the Officer
or his affiliate for any state or Federal gift tax or generation-skipping
transfer tax return which includes a gift or generation-skipping transfer
which results from this Agreement or the Split Dollar Agreement regardless
of whether such a return was filed and regardless of the amount of tax
return preparer fees paid by the Officer or his affiliate. The fixed dollar
amount in 2000 will be a total of $5,000. For 2001, the fixed dollar amount
will be $1,000 for each gift tax return. For each year beginning in 2002,
the fixed
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<PAGE> 4
dollar amount for each gift tax return will be the fixed dollar amount for
the previous year increased by 5%.
d. Should a dispute with the Internal Revenue Service or a state tax
authority develop between the Officer or his affiliate concerning the
income, gift or generation-skipping transfer tax results attributable to
this Agreement, the waiver of the Officer's accrued benefit under the EDCP
or the SERP, or the Split Dollar Agreement, Sysco agrees to pay the
Officer's or his affiliate's reasonable accounting and legal fees and court
and other costs incurred in any administrative proceedings or litigation
concerning assessment or proposed assessment of additional taxes involving
their state or Federal gift tax, income tax, or generation-skipping
transfer tax returns based upon such tax results including, litigation of a
notice of tax deficiency, filing a refund claim or suing for a refund in
court which concerns said dispute of income, gift or generation-skipping
transfer tax results. Sysco shall have no liability to pay for any state or
Federal income, gift or generation-skipping transfer tax liability,
including penalties or interest thereon, unless expressly authorized
elsewhere in this Agreement. Sysco will pay such fees or costs directly to
the provider upon being furnished by the Officer or his affiliate with a
statement or other evidence of the fee or cost payable in a format
acceptable to Sysco.
6. Federal Income Tax Bonuses. Sysco agrees to pay the following
supplemental bonuses within a reasonable time after the close of the calendar
year during which the subject reimbursement bonuses were paid:
a. Sysco shall make a supplemental bonus to the Officer or his
affiliate to cover any Federal income tax liability resulting from a
reimbursement to the Officer or his affiliate pursuant to subparagraphs a,
b and c of paragraph 5 above. The amount of the supplemental bonus shall be
the difference between (i) an amount determined by dividing the amount of
the reimbursement by one minus the highest Federal individual marginal
income tax bracket for the year of such reimbursement under subparagraphs
a, b and c of paragraph 5 above expressed as a decimal, and (ii) the amount
of said reimbursement.
b. With regard to any payment of the Officer's or his affiliate's
reasonable accounting and legal fees or court or other costs pursuant to
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<PAGE> 5
subparagraph d of paragraph 5 above, Sysco shall make a supplemental bonus
to the Officer or his affiliate to cover any Federal income tax liability
resulting from such payment. The parties acknowledge that the determination
of such Federal income tax liability is made complicated because of the
potential deductibility by the Officer or his affiliate of such accounting
and legal fees and court and other costs on his or her Federal income tax
return. The parties hereby agree that the supplemental bonus required by
this subparagraph shall be calculated in the following two steps:
i. The Federal income tax caused by such payment shall be
determined by the difference, if any, between (a) all Federal
income taxes payable for the year of reimbursement by the Officer
or affiliate calculated by including the subparagraph d of
paragraph 5 payment in gross income reduced by the deduction
allowable for the expenditure covered by such payment, if any,
(whether or not the deduction is taken by the Officer or
affiliate on the Federal income tax return for the taxable year
of the reimbursement) and (b) all Federal income taxes payable
for the year of payment by the Officer or affiliate calculated by
excluding the subparagraph d of paragraph 5 payment from gross
income without any deduction for the expenditure covered by such
reimbursement.
ii. The amount of supplemental bonus required by this
subparagraph shall be the difference between (a) an amount
determined by dividing the Federal income tax difference
determined by subparagraph bi of paragraph 6 above by one minus
the highest Federal individual marginal income tax bracket for
the year of such payment under subparagraph d of paragraph 5
above expressed as a decimal, and (b) the Federal income tax
difference determined by subparagraph bi of paragraph 6 above.
Should the Internal Revenue Service finally determine with regard to a
Federal income tax return for the Officer or his affiliate that any of the
assumptions pursuant to subparagraph bi(a) of paragraph 6 concerning
inclusion of the payment in gross income or the deductibility of all or
part of the expenditure covered by the payment
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<PAGE> 6
is incorrect, the calculations in subparagraph bi(a) of paragraph 6 above
shall be adjusted to reflect such final determination and the amount of
supplemental bonus by this subparagraph b of paragraph 6 shall be
recalculated and Sysco shall pay, without interest, to the Officer or his
affiliate any increase in such supplemental bonus caused by the
recalculation and the Officer or his affiliate shall return to Sysco that
part of any supplemental bonus received in excess of such recalculation.
c. For years during which there are no premium reimbursements by Sysco
pursuant to subparagraph a of paragraph 5 above but the Officer or his
affiliate realizes an economic benefit equal to the cost of current life
insurance protection (calculated as specified in section 3.3 of the Split
Dollar Agreement) to which the Trust is entitled under the Split Dollar
Agreement, Sysco shall bonus the Officer or his affiliate an amount to
cover Federal income tax liability resulting from the realized economic
benefit equal to the cost of current life insurance protection to which the
Trust is entitled under the Split Dollar Agreement. The amount of the bonus
shall be the difference between (i) an amount determined by dividing the
amount of said economic benefit by one minus the highest Federal individual
marginal income tax bracket for the year said economic benefit is realized
expressed as a decimal, and (ii) the amount of said economic benefit. No
bonus is required for any economic benefit realized by the Officer or his
affiliate under the Split Dollar Agreement except for the cost of current
life insurance protection to which the Trust is entitled.
7. Ceiling on Reimbursement and Federal Income Tax Bonuses. The bonuses
specified in paragraphs 5 and 6 above, in the aggregate, shall not exceed
$2,882,652.
8. Payment of Taxes and Withholding. The Officer or his affiliate will be
required to pay his share of any Federal or state income, social security or
other taxes that are required to be paid due to the bonuses specified in
paragraphs 5 and 6 above and Sysco will withhold such taxes to the extent
required by applicable law and regulations.
9. Special Deduction Bonus. The parties do not anticipate that there will
be any additional income tax consequences to the Officer or his affiliate from
this Agreement, the waiver of his accrued benefit under the EDCP or the SERP,
and the Split Dollar Agreement other than that attributable to the benefit from
the cost of current life insurance protection to which the Trust is
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<PAGE> 7
entitled and the bonuses discussed in paragraphs 5 and 6. However, should
additional income be realized by the Officer or his affiliate because of this
Agreement, the waiver of his accrued benefit under the EDCP or the SERP, or the
Split Dollar Agreement and should Sysco be entitled to a Federal income tax
deduction against its gross income for such other income realized by the Officer
or his affiliate, then Sysco agrees to bonus to the Officer or his affiliate who
realized such other income pursuant to this Agreement, the waiver of the
Officer's benefit under the EDCP or the SERP or the Split Dollar Agreement an
amount equal to the difference between (i) an amount determined by dividing the
amount of said deduction by one minus the highest Federal corporate marginal
income tax bracket for the year such deduction is available to Sysco expressed
as a decimal, and (ii) the amount of said deduction.
10. Dispute Resolution. Sysco and the Officer have entered into this
Agreement in good faith and in belief that it is mutually advantageous to them.
It is with the same spirit of cooperation that they pledge to attempt to resolve
any dispute amicably without the necessity of litigation. Accordingly, they
agree that if any dispute arises between them relating to this Agreement or the
Split Dollar Agreement (a "Dispute"), they will first utilize the mediation
procedures specified in this paragraph prior to any arbitration.
a. Initiation of Mediation. The party seeking to initiate mediation
(the "Initiating Party") shall give written notice to the other party,
describing in general terms the nature of the Dispute, and the Initiating
Party's claim for relief. Sysco and the Officer or the Officer's affiliate
shall have thirty business days from the date of notice to select a
mutually agreeable mediator. In consultation with the mediator selected,
the parties shall promptly designate a mutually convenient time and place
for mediation, and unless circumstances require otherwise, such time to be
not later than forty-five days after the selection of the mediator.
b. Conduct of Mediation. In the mediation, each party shall be
represented by one or more individuals with authority to settle the Dispute
and may be represented by counsel. In addition, each party may, with
permission of the mediator, bring such additional persons as needed to
respond to questions, contribute information, and participate in the
negotiations. The parties agree to sign a document that provides that the
mediator shall be governed by the provisions of Chapter 154 of the Texas
Civil Practice and Remedies Code or such other rules as the mediator
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<PAGE> 8
shall prescribe. The parties commit to participate in the proceedings in
good faith and with the intention of resolving the Dispute if at all
possible.
c. Termination of Procedure. The parties agree to participate in the
mediation procedure to its conclusion. The mediation shall be terminated
(i) by the execution of a settlement agreement by the parties, (ii) by a
declaration of the mediator that mediation is terminated, or (iii) by a
written declaration by one of the parties to the effect that the mediation
process is terminated at the conclusion of one full day's mediation
session.
d. Arbitration. The parties agree to participate in good faith in the
mediation to its conclusion. If the parties are not successful in resolving
the Dispute through mediation, then the parties agree that the Dispute
shall be settled by arbitration in accordance with the provisions of the
Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) shall be final and
may be entered in any court having jurisdiction. The parties further agree
that the award rendered by the arbitrator(s) may include an award of
attorneys' fees and costs related to the arbitration.
e. Fees of Mediation; Disqualification. The fees and expenses of the
mediator shall be shared equally by the parties. The mediator shall be
disqualified as a witness, consultant, expert or counsel by any party with
respect to the Dispute and any related matters.
f. Confidentiality. The entire mediation process is confidential, and
no stenographic, visual or audio records shall be made. All conduct,
statements, promises, offers, views and opinions, whether oral or written,
made in the course of mediation by any party, agent, employee,
representative, or other invitee and by the mediator are confidential and
shall, in addition and where appropriate, be deemed privileged. Such
conduct, statements, promises, offers, views and opinions shall not be
disclosed to anyone, not an agent, employee, expert, witness, or
representative of any of the parties.
11. Officer's Affiliate. References to an affiliate of the Officer include
such persons and entities who are the successors of the Officer (e.g.,
administrator or executor of his estate, his assigns, or his heirs, legatees, or
devisees) or who are related to the Officer in connection with this
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<PAGE> 9
Agreement or the Split Dollar Agreement (e.g., the Officer's wife, the Trust, or
the trustee of the Trust and their heirs or successors).
12. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Officer and Sysco, their successors, assigns, heirs, executors,
administrators, and other beneficiaries.
13. Amendment. No amendment or variations of the terms of this Agreement
shall be valid, unless made in writing and signed by Sysco and the Officer.
14. Not Employment Contract. This Agreement is not the basic employment
contract between Sysco and the Officer nor is it evidence of any agreement or
understanding, express or implied, that Sysco will employ the Officer in any
particular position or at any particular rate of remuneration. Sysco reserves
the unqualified and unrestricted right to terminate the services of the Officer
on exactly the same basis as if this Agreement had never been entered into
although any rights or obligations of Sysco and the Officer under this Agreement
shall survive such termination of employment.
15. Governing Law. The provisions of this Agreement shall be construed and
enforced according to the laws of the State of Texas.
16. Entire Agreement. This Agreement contains the entire contract between
Sysco and the Officer and constitutes a complete integration of the
representations, covenants and promises of Sysco and the Officer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this
21st day of October, 1999.
SYSCO CORPORATION
By /s/ MICHAEL C. NICHOLS
----------------------------------------
MICHAEL C. NICHOLS, Vice President
/s/ CHARLES H. COTROS
----------------------------------------
CHARLES H. COTROS, Officer
The Officer's wife is fully aware, understands, and fully consents and
agrees to the provisions of this Agreement including its binding effect upon any
community property interest she
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<PAGE> 10
may have in the EDCP and SERP benefits irrevocably waived, renounced, and
forfeited by the Officer and any economic benefits realized under the Split
Dollar Agreement. Such awareness, understanding, consent and agreement is
evidenced by signing this Agreement.
/s/ CONSTANCE COTROS
------------------------------------------
CONSTANCE COTROS
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<PAGE> 11
EXHIBIT A
SYSCO CORPORATION
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
This Agreement made and entered into between Sysco Corporation, (the
"Employer") and Harry Charles Cotros, Trustee of the Cotros 1999 Family Trust.
W I T N E S S E T H
WHEREAS, Sysco has adopted the Sysco Corporation Split Dollar Life
Insurance Plan (the "Plan") which is designed to encourage certain employees to
continue in the service of Sysco by offering such employees assistance in
providing life insurance protection for the employees' family; and
WHEREAS, a Committee (the "Committee") has been established by the Plan
to administer the Plan and to designate employees of Sysco who are eligible to
participate in the Plan; and
WHEREAS, the Committee has selected Charles H. Cotros (the "Employee")
to be a participant under the Plan because the services of the Employee, the
Employee's experience and knowledge of the affairs of Sysco, and the Employee's
reputation and contacts in the industry are extremely valuable to Sysco; and
WHEREAS, Sysco desires that the Employee remain in its service and
wishes to receive the benefit of the Employee's knowledge, experience,
reputation and contacts; and
WHEREAS, Sysco is willing to encourage the Employee's continued service
to Sysco by joining with the Trustee for the mutual benefit of the parties
hereto in an investment of life insurance on the joint lives of the Employee and
Constance P. Cotros, (the "Employee's spouse") so as to provide life insurance
protection for the Employee's family; and
<PAGE> 12
WHEREAS, the Trustee will be the owner of the Insurance Policies
acquired pursuant to the terms of the Agreement, and Sysco's Investment in the
Insurance Policies will be represented by an assignment from the Trustee to
Sysco of limited ownership rights in the Insurance Policies; and
WHEREAS, this plan is intended to qualify as a life insurance employee
benefit plan as described in Revenue Ruling 64-328.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, Sysco and the Trustee agree as
follows:
ARTICLE 1
Definitions
1.1 "Agreement" means this agreement, as it may be amended from time to
time.
1.2 "Change of Control" is defined in section 3.5.
1.3 "Committee" means the administrative committee under the Plan.
1.4 "Employee" means Charles H. Cotros.
1.5 "Employee's Spouse" means Constance P. Cotros.
1.6 "Insurance Policies" means the policies or policy shown on the
attached Schedule 1, together with any other policies that may be added to the
Agreement.
1.7 "Insurer" means an insurance company issuing an Insurance Policy
subject to this Agreement.
1.8 "Plan" means the Sysco Corporation Split Dollar Life Insurance Plan.
1.9 "Rabbi Trust" means the Sysco Corporation Split Dollar Life
Insurance Trust.
1.10 "Sysco" means Sysco Corporation.
1.11 "Sysco's Investment" means the interest of Sysco in the Insurance
Policy as defined in Section 4.1 of the Agreement.
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<PAGE> 13
1.12 "Trust" means the Cotros 1999 Family Trust created by that certain
instrument dated September 13, 1999, between Charles H. Cotros and Constance P.
Cotros, as grantors and Harry Charles Cotros, as trustee.
1.13 "Trustee" means Harry Charles Cotros or his successor in office as
trustee of the Trust.
ARTICLE 2
Insurance Policies
The Trustee has purchased on behalf of the Trust insurance on the joint
lives of the Employee and the Employee's spouse for the benefit and protection
of the Employee's family under the Insurance Policy or Insurance Policies shown
on the attached Schedule 1 in the face amounts as shown on such schedule.
ARTICLE 3
Premium Payments
3.1 Sysco shall pay the required premium specified on Schedule 1 for
each Insurance Policy on or before the due date.
3.2 Any dividends attributable to each Insurance Policy shall be applied
as Sysco and the Trustee agree by an instrument in writing.
3.3 The Trustee shall pay to Sysco during each year the Insurance Policy
is subject to this Agreement and during which Sysco makes a premium payment
under section 3.1, an amount equal to the one-year term cost of the insurance
protection to which the Trust is entitled under such Insurance Policy pursuant
to the terms of this Agreement, including any term insurance rider and any
insurance purchased by dividends, and such cost is to be determined under the
principles established by applicable U.S. Treasury Department pronouncements,
rulings and regulations in effect for
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<PAGE> 14
determining such costs for insurance protection. The Trustee shall reimburse
Sysco for such one-year term cost within a reasonable time after payment of the
required premium to the Insurer by Sysco on each Insurance Policy under section
3.1.
(a) Until changed by U.S. Treasury Department pronouncements,
rulings or regulations, the one-year term cost of insurance protection
on a second to die policy on the joint lives of the Employee and the
Employee's spouse shall be:
(i) With regard to the Pacific Life Insurance Company
Policy listed on Schedule 1, the lesser of the following:
(y) the current published one-year term
rates available to all standard risks of the
Insurer issuing such insurance protection, or
(z) U.S. Life Table 38.
(ii) With regard to the John Hancock Mutual Life
Insurance Company Policy listed on Schedule 1, U.S. Life Table
38.
(b) Until changed by U.S. Treasury Department pronouncements,
rulings or regulations, the one-year term cost of insurance protection
on the single life of the Employee or the Employee's spouse (including
the single life of the survivor after the death of the first of the
Employee and the Employee's spouse to die if the Insurance Policy covers
their joint lives), shall be the lesser of the following:
(i) the current published one-year term rates of the
Insurer issuing such insurance coverage, pursuant to the
guidelines set forth in Rev. Rul. 66-110 and Rev. Rul. 67-154,
or
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<PAGE> 15
(ii) an amount determined in accordance with the
tables set forth in Rev. Rul. 55-747 (called the "PS 58 costs").
3.4 Upon a Change of Control, Sysco shall, as soon as possible, but in
no event longer than ninety days following the Change of Control, as defined
herein, make an irrevocable contribution to the Rabbi Trust in an amount equal
to the present value, using a 5% interest factor, of the remaining aggregate
premiums required to be paid by Sysco on Schedule 1 for each Insurance Policy.
The trustee of the Rabbi Trust shall pay future premiums for such Insurance
Policy from such contributions and the appreciation and earnings thereon;
provided, however, that, should such contributions and appreciation and earnings
thereon prove insufficient to pay all of the premiums required by Schedule 1 for
such Insurance Policy, Sysco shall remain liable to make such remaining premium
payments.
3.5 For purposes of this Agreement, Change of Control shall mean the
occurrence of one or more of the following events:
(a) Any "person," including a "syndication" or "group" as those
terms are used in Section 13(d)(3) of the Securities Act, is or becomes
the beneficial owner, directly or indirectly, of securities of Sysco
representing 20% or more of the combined voting power of Sysco's then
outstanding "Voting Securities" which is any security which ordinarily
possesses the power to vote in the election of the Board of Directors of
Sysco without the happening of any precondition or contingency;
(b) Sysco is merged or consolidated with another corporation and
immediately after giving effect to the merger or consolidation either
(i) less than 80% of the outstanding Voting Securities of the surviving
or resulting entity are then beneficially owned in the aggregate by (x)
the stockholders of Sysco immediately
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<PAGE> 16
prior to such merger or consolidation, or (y) if a record date has been
set to determine the stockholders of Sysco entitled to vote on such
merger or consolidation, the stockholders of Sysco as of such record
date, or (ii) the Board of Directors, or similar governing body, of the
surviving or resulting entity does not have as a majority of its members
the persons specified in subparagraph (c)(i) and (ii) below;
(c) If at any time the following do not constitute a majority of
the Board of Directors of Sysco (or any successor entity referred to in
subparagraph (b) above):
(i) Persons who are directors of Sysco on July 4,
1999;
(ii) persons who, prior to their election as a director of
Sysco (or successor entity if applicable) were nominated,
recommended or endorsed by a formal resolution of the Board of
Directors of Sysco;
(d) If at any time during a calendar year a majority of the
directors of Sysco are not persons who were directors at the beginning
of the calendar year; and
(e) Sysco transfers substantially all of its assets to another
corporation which is a less than 80% owned subsidiary of Sysco.
ARTICLE 4
Sysco's Investment
4.1 Sysco's Investment in each Insurance Policy shall be:
(a) except as provided in subsection (b) below, the lesser of (1)
the cash surrender value of the Insurance Policy and (2) the amounts
paid by Sysco as premiums on such Insurance Policy under the provisions
of section 3.1 with both (1) and (2) reduced by the amount of any
indebtedness which may exist against such
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<PAGE> 17
Insurance Policy and any unpaid interest on such indebtedness if said
indebtedness was incurred after such Insurance Policy becomes subject
to the Agreement and with (2) only reduced by the premiums paid by the
Trustee with respect to such Insurance Policy under the provisions of
section 3.3;
(b) at any time upon the death of the last insured, the amounts
paid by Sysco as premiums on such Insurance Policy under the provisions
of section 3.1 less (1) the amount of any indebtedness which may exist
against such Insurance Policy and any unpaid interest on such
indebtedness if said indebtedness was incurred after such Insurance
Policy becomes subject to this Agreement, and (2) the premiums paid by
the Trustee with respect to such Insurance Policy under the provisions
of section 3.3.
4.2 The Trustee will collaterally assign the Insurance Policies acquired
pursuant to the terms of this Agreement to the Rabbi Trust as evidence of
Sysco's Investment. The collateral assignment shall not be altered or changed
without the written consent of Sysco. The Rabbi Trust shall have possession of
the Insurance Policy during the term of this Agreement; provided, however, that
the possessor of the Insurance Policy shall make such Insurance Policy available
to the Insurer when it shall be necessary to endorse changes of beneficiary
thereon in accordance with the Trustee's right to appoint beneficiaries as
provided in this Agreement or to exercise any other rights of the Trustee to
such Insurance Policy.
4.3 The rights of Sysco and the Rabbi Trust under the collateral
assignment are restricted to (a) assigning Sysco's Investment in the Insurance
Policy to the Trustee or the Trustee's designee upon payment of Sysco's
Investment, (b) upon the death of the last insured, obtaining that portion of
the Insurance Policy death proceeds in an amount equal to Sysco's Investment at
such insured's
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<PAGE> 18
death, and (c) upon surrender of the Insurance Policy, obtaining that portion of
the surrender proceeds not in excess of Sysco's Investment.
4.4 Sysco and the Rabbi Trust are prohibited from taking any action that
would endanger either the interest of the Trustee or the payment of the proceeds
in excess of Sysco's Investment to the beneficiary designated by the Trustee
upon the last insured's death. Prior to the termination of this Agreement, Sysco
and the Rabbi Trust will not exercise the right to pledge the Insurance
Policies, to surrender the Insurance Policies or paid up additions for
cancellation or to partially surrender the Insurance Policies, to assign its
rights to anyone other than the Trustee or the Trustee's designee, and to borrow
against the Insurance Policies even for the purpose of paying premiums unless
there has been a default by the Trustee under this Agreement.
4.5 The Trustee has the power to assign all rights of the Trustee in the
Insurance Policies and under this Agreement, change the beneficiary designation
on each Insurance Policy and exercise settlement options. In the event of an
assignment, the assignee shall possess all of the rights and obligations of the
Trustee under such Insurance Policy and this Agreement. The Trustee has all
rights to the Insurance Policies, not specifically granted to Sysco by this
Agreement; provided, however, that the Trustee may not exercise any rights in a
manner which would endanger Sysco's Investment.
4.6 Sysco and the Trustee recognize that the investment of Sysco in the
Insurance Policies and other assets held in the Rabbi Trust is also subject to
the general creditors of Sysco as set forth in the Rabbi Trust. The Trustee and
the beneficiaries of the Trust shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Rabbi Trust. Any rights
created under the Plan or this Agreement shall be mere unsecured contractual
rights of the Trustee and the
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<PAGE> 19
beneficiaries of the Trust against Sysco. Any assets held by the Rabbi Trust
will be subject to the claims of Sysco's general creditors under Federal and
state law as specified in the Rabbi trust.
4.7 Any payments of Sysco's Investment in the Insurance Policy pursuant
to the collateral assignment shall be first made from Insurance Policy cash
values attributable to paid up additional life insurance and purchased by
Insurance Policy dividends, if any. The Trustee shall have no interest in paid
up additional life insurance protection, if any, except to the extent the death
benefit or cash value thereof exceeds Sysco's Investment.
ARTICLE 5
Termination
This Agreement shall terminate on the happening of any one or more of
the following events:
(a) Mutual agreement of the parties;
(b) Adjudication of Sysco as a bankrupt or a general
assignment by Sysco to or for the benefit of creditors or dissolution
of Sysco;
(c) Surrender of all the Insurance Policies;
(d) Payment in full to Sysco at any time of Sysco's
Investment, at which time Sysco shall release the collateral assignment;
(e) Cessation of Sysco's business;
Additionally, Sysco, in its sole discretion, may terminate this
Agreement upon any failure of the Trustee to pay premiums to Sysco as provided
in section 3.3.
With regard to each Insurance Policy, the Agreement shall terminate upon
the expiration of the number of years specified on Schedule 1 for such Insurance
Policy unless the agreement is otherwise terminated at an earlier date.
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<PAGE> 20
The termination of employment with Sysco by the Employee for any reason,
including the Employee's death, will not terminate this Agreement.
ARTICLE 6
Termination of Sysco's Investment
6.1 Upon the death of the last insured, Sysco shall receive from the
proceeds of all Insurance Policies payable upon such insured's death the full
amount of Sysco's Investment in the death benefits in all such Insurance
Policies. The balance of the proceeds of such Insurance Policies shall be paid
(a) to the beneficiary designated by the Trustee or (b) if no such beneficiary
has been designated, to the Trust.
6.2 In the event of the termination of this Agreement under Article 5
(except as provided in Section (d) of Article 5), the Trustee or the designee of
the Trustee shall have ninety days in which to pay Sysco in an amount equal to
Sysco's Investment in each affected Insurance Policy. Upon the payment of such
an amount, Sysco and the Rabbi Trust shall release the collateral assignment of
such Insurance Policies. If the Trustee or the designee of the Trustee does not
make such payment to Sysco within such ninety day period, the Trustee may either
(a) surrender such Insurance Policy as provided in the collateral assignment, or
(b) transfer ownership of such Insurance Policy to Sysco, thereby discharging
the obligation of the Trustee to purchase Sysco's Investment in such Insurance
Policy and relinquishing all rights of the Trustee to such Insurance Policy
under this Agreement.
6.3 Upon the surrender or partial surrender of any Insurance Policy
covered by this Agreement or should the Trustee borrow against any Insurance
Policy covered by this Agreement, the proceeds received upon such surrender,
partial surrender or loan shall be used first to pay Sysco in an amount equal to
Sysco's Investment in such Insurance Policy and any excess proceeds shall be
paid to the Trust.
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<PAGE> 21
ARTICLE 7
Insurers
The Insurer(s) issuing the Insurance Polices shall not be deemed to be a
party to this Agreement for any purpose, nor is the Insurer in any way
responsible for its validity or its enforcement. The Insurer shall not be
obligated to inquire as to the distribution or application of any monies,
payable or paid by the Insurer under the Insurance Policies, if the Insurer
makes appropriate payment or otherwise performs its contractual obligations in
accordance with the terms of the Insurance Policies. The Insurer shall be bound
only by the provisions of the Insurance Policies or an endorsement thereto. Any
payments made or actions taken by the Insurer in accordance with such Insurance
Policies shall fully discharge the Insurer from liability.
ARTICLE 8
Amendments and Miscellaneous
8.1 This Agreement shall not be modified or amended except by a written
instrument signed by Sysco and the Trustee. This Agreement shall be binding upon
the administrators, assigns and successors of the parties to this Agreement.
8.2 The provisions of this Agreement shall be construed and enforced
according to the laws of the State of Texas, except to the extent preempted by
federal law.
8.3 This Agreement and the Plan contain the entire contract between the
parties and constitute a complete integration of the representations, covenants
and promises of the Employee and Sysco. In case of a conflict, express or
implied, between the terms of the Plan and this Agreement, the terms of the Plan
will govern.
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<PAGE> 22
8.4 This Agreement is not the basic employment contract between Sysco
and the Employee and Sysco reserves the unqualified and unrestricted right to
terminate the services of the Employee on exactly the same basis as if this
Agreement had never been entered into.
8.5 The Trustee shall have no interest or rights in Sysco's Investment
in any Insurance Policy.
ARTICLE 9
ERISA Provisions
9.1 Sysco is the named fiduciary of the Plan for purposes of the
Employee Retirement Income Security Act of 1974 and shall have the authority to
control and manage the operation and administration of the Plan.
9.2 The funding policy of this Plan will be through premium payments to
the Insurer as specified in this Agreement.
9.3 The basis of payments from the Plan will consist of payments by the
Insurer in accordance with the Insurance Policies.
9.4 Claims for death benefits are established under the Insurance Policy
by the Insurer. If for any reason a claim for benefits under the Plan other than
death benefits is denied, Sysco shall deliver to the claimant a written
explanation setting forth the specific reasons for the denial, pertinent
references to the Plan section on which the denial was based, such other data as
may be pertinent and information on procedures to be followed by the claimant in
obtaining a review of his or her claim, all written in a manner calculated to be
understood by the claimant. For this purpose:
(a) The claimant's claim shall be deemed filed when presented
orally or in writing to Sysco.
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<PAGE> 23
(b) Sysco's explanation shall be in writing and delivered to
the claimant within ninety days of the date the claim is filed.
The claimant shall have sixty days following his or her receipt of the
denial of the claim to file with Sysco a written request for review of the
denial. For such review, the claimant or his or her representative may submit
pertinent documents and written issues and comments.
Sysco shall decide the issue on review and furnish the claimant with a
copy within sixty days of receipt of the claimant's request for review of his or
her claim. The decision on review shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be understood by the
claimant, as well as specific references to the pertinent plan provisions on
which the decision is based. If a copy of the decision is not so furnished to
the claimant within such sixty days, the claim shall be deemed denied on review.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
this _____ day of ________________________, _____.
SYSCO CORPORATION, Employer
By
---------------------------------------
COTROS 1999 FAMILY TRUST, Trust
By
---------------------------------------
Harry Charles Cotros, Trustee
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<PAGE> 24
SCHEDULE 1
The Insurance Policy or Insurance Policies covered by the foregoing
Split Dollar Life Insurance Agreement between Sysco Corporation and the Employee
include the following:
1. Insurer: John Hancock Mutual Life Insurance Company
2. Policy No. ______________________________
3. Initial Face Amount: $5,000,000
4. Insured(s): Charles H. Cotros and Constance P. Cotros
5. Sysco Premium: $295,000 annually from 1999 through 2004
6. Trustee section 3.3 Reimbursement: from 1999 through 2004
7. Unless terminated earlier under the Agreement, the Agreement
will terminate for this Policy on its anniversary date in
2018.
1. Insurer: Pacific Life Insurance Company
2. Policy No. ______________________________
3. Initial Face Amount: $10,000,000
4. Insured(s): Charles H. Cotros and Constance P. Cotros
5. Sysco Premium: $615,504 annually from 1999 through 2003
6. Trustee section 3.3 Reimbursement: from 1999 through 2003
7. Unless terminated earlier under the Agreement, the Agreement
will terminate for this Policy on its anniversary date in
2018.
EXECUTED this _____ day of ___________________, __________.
SYSCO CORPORATION, Employer
By
----------------------------------------------
COTROS 1999 FAMILY TRUST, Trust
By
----------------------------------------------
Harry Charles Cotros, Trustee
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<PAGE> 25
EXHIBIT A
SYSCO CORPORATION
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
This Agreement made and entered into between Sysco Corporation, (the
"Employer") and David Brett Lindig and Mark Bradley Lindig, Trustees of the
Lindig 1999 Family Trusts.
W I T N E S S E T H
WHEREAS, Sysco has adopted the Sysco Corporation Split Dollar Life
Insurance Plan (the "Plan") which is designed to encourage certain employees to
continue in the service of Sysco by offering such employees assistance in
providing life insurance protection for the employees' family; and
WHEREAS, a Committee (the "Committee") has been established by the Plan
to administer the Plan and to designate employees of Sysco who are eligible to
participate in the Plan; and
WHEREAS, the Committee has selected Bill M. Lindig (the "Employee") to
be a participant under the Plan because the services of the Employee, the
Employee's experience and knowledge of the affairs of Sysco, and the Employee's
reputation and contacts in the industry are extremely valuable to Sysco; and
WHEREAS, Sysco desires that the Employee remain in its service and
wishes to receive the benefit of the Employee's knowledge, experience,
reputation and contacts; and
WHEREAS, Sysco is willing to encourage the Employee's continued service
to Sysco by joining with the Trustee for the mutual benefit of the parties
hereto in an investment of life insurance on the joint lives of the Employee and
Bobetta C. Lindig, (the "Employee's spouse") so as to provide life insurance
protection for the Employee's family; and
<PAGE> 26
WHEREAS, the Trustee will be the owner of the Insurance Policies
acquired pursuant to the terms of the Agreement, and Sysco's Investment in the
Insurance Policies will be represented by an assignment from the Trustee to
Sysco of limited ownership rights in the Insurance Policies; and
WHEREAS, this plan is intended to qualify as a life insurance employee
benefit plan as described in Revenue Ruling 64-328.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, Sysco and the Trustee agree as
follows:
ARTICLE 1
Definitions
1.1 "Agreement" means this agreement, as it may be amended from time to
time.
1.2 "Change of Control" is defined in section 3.5.
1.3 "Committee" means the administrative committee under the Plan.
1.4 "Employee" means Bill M. Lindig.
1.5 "Employee's spouse" means Bobetta C. Lindig.
1.6 "Insurance Policies" means the policies or policy shown on the
attached Schedule 1, together with any other policies that may be added to the
Agreement.
1.7 "Insurer" means an insurance company issuing an Insurance Policy
subject to this Agreement.
1.8 "Plan" means the Sysco Corporation Split Dollar Life Insurance Plan.
1.9 "Rabbi Trust" means the Sysco Corporation Split Dollar Life
Insurance Trust.
1.10 "Sysco" means Sysco Corporation.
1.11 "Sysco's Investment" means the interest of Sysco in the Insurance
Policy as defined in Section 4.1 of the Agreement.
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<PAGE> 27
1.12 "Trust" means the Lindig 1999 Family Trusts created by that certain
instrument dated September 30, 1999, between Bill Milton Lindig and Bobetta Jane
Clayton Lindig, as grantors and David Brett Lindig, Mark Bradley Lindig and
Chase Manhattan Bank Delaware, as trustees.
1.13 "Trustee" means for the purposes of this Agreement, David Brett
Lindig and Mark Bradley Lindig or their successors in office as individual
trustees of the Trust. Pursuant to express provisions of the Trust, the
individual trustees have the sole authority to execute this Agreement and Chase
Manhattan Bank Delaware, the corporate co-trustee, has no such authority.
ARTICLE 2
Insurance Policies
The Trustee has purchased on behalf of the Trust insurance on the joint
lives of the Employee and the Employee's spouse for the benefit and protection
of the Employee's family under the Insurance Policy or Insurance Policies shown
on the attached Schedule 1 in the face amounts as shown on such schedule.
ARTICLE 3
Premium Payments
3.1 Sysco shall pay the required premium specified on Schedule 1 for
each Insurance Policy on or before the due date.
3.2 Any dividends attributable to each Insurance Policy shall be applied
as Sysco and the Trustee agree by an instrument in writing.
3.3 The Trustee shall pay to Sysco during each year the Insurance Policy
is subject to this Agreement and during which Sysco makes a premium payment
under section 3.1, an amount equal to the one-year term cost of the insurance
protection to which the Trust is entitled under such Insurance Policy pursuant
to the terms of this Agreement, including any term insurance rider and any
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<PAGE> 28
insurance purchased by dividends, and such cost is to be determined under the
principles established by applicable U.S. Treasury Department pronouncements,
rulings and regulations in effect for determining such costs for insurance
protection. The Trustee shall reimburse Sysco for such one-year term cost within
a reasonable time after payment of the required premium to the Insurer by Sysco
on each Insurance Policy under section 3.1.
(a) Until changed by U.S. Treasury Department pronouncements,
rulings or regulations, the one-year term cost of insurance protection
on a second to die policy on the joint lives of the Employee and the
Employee's spouse shall be:
(i) With regard to the Pacific Life Insurance Company
Policy listed on Schedule 1, the lesser of the following:
(y) the current published one-year term
rates available to all standard risks of the
Insurer issuing such insurance protection, or
(z) U.S. Life Table 38.
(ii) With regard to the John Hancock Mutual Life
Insurance Company Policy listed on Schedule 1, U.S. Life Table
38.
(b) Until changed by U.S. Treasury Department pronouncements,
rulings or regulations, the one-year term cost of insurance protection
on the single life of the Employee or the Employee's spouse (including
the single life of the survivor after the death of the first of the
Employee and the Employee's spouse to die if the Insurance Policy covers
their joint lives), shall be the lesser of the following:
-4-
<PAGE> 29
(i) the current published one-year term rates of the
Insurer issuing such insurance coverage, pursuant to the
guidelines set forth in Rev. Rul. 66-110 and Rev. Rul. 67-154,
or
(ii) an amount determined in accordance with the
tables set forth in Rev. Rul. 55-747 (called the "PS 58 costs").
3.4 Upon a Change of Control, Sysco shall, as soon as possible, but in
no event longer than ninety days following the Change of Control, as defined
herein, make an irrevocable contribution to the Rabbi Trust in an amount equal
to the present value, using a 5% interest factor, of the remaining aggregate
premiums required to be paid by Sysco on Schedule 1 for each Insurance Policy.
The trustee of the Rabbi Trust shall pay future premiums for such Insurance
Policy from such contributions and the appreciation and earnings thereon;
provided, however, that, should such contributions and appreciation and earnings
thereon prove insufficient to pay all of the premiums required by Schedule 1 for
such Insurance Policy, Sysco shall remain liable to make such remaining premium
payments.
3.5 For purposes of this Agreement, Change of Control shall mean the
occurrence of one or more of the following events:
(a) Any "person," including a "syndication" or "group" as those
terms are used in Section 13(d)(3) of the Securities Act, is or becomes
the beneficial owner, directly or indirectly, of securities of Sysco
representing 20% or more of the combined voting power of Sysco's then
outstanding "Voting Securities" which is any security which ordinarily
possesses the power to vote in the election of the Board of Directors of
Sysco without the happening of any precondition or contingency;
-5-
<PAGE> 30
(b) Sysco is merged or consolidated with another corporation and
immediately after giving effect to the merger or consolidation either
(i) less than 80% of the outstanding Voting Securities of the surviving
or resulting entity are then beneficially owned in the aggregate by (x)
the stockholders of Sysco immediately prior to such merger or
consolidation, or (y) if a record date has been set to determine the
stockholders of Sysco entitled to vote on such merger or consolidation,
the stockholders of Sysco as of such record date, or (ii) the Board of
Directors, or similar governing body, of the surviving or resulting
entity does not have as a majority of its members the persons specified
in subparagraph (c)(i) and (ii) below;
(c) If at any time the following do not constitute a majority of
the Board of Directors of Sysco (or any successor entity referred to in
subparagraph (b) above):
(i) Persons who are directors of Sysco on July 4,
1999;
(ii) persons who, prior to their election as a director of
Sysco (or successor entity if applicable) were nominated,
recommended or endorsed by a formal resolution of the Board of
Directors of Sysco;
(d) If at any time during a calendar year a majority of the
directors of Sysco are not persons who were directors at the beginning
of the calendar year; and
(e) Sysco transfers substantially all of its assets to another
corporation which is a less than 80% owned subsidiary of Sysco.
ARTICLE 4
Sysco's Investment
4.1 Sysco's Investment in each Insurance Policy shall be:
-6-
<PAGE> 31
(a) except as provided in subsection (b) below, the lesser of (1)
the cash surrender value of the Insurance Policy and (2) the amounts
paid by Sysco as premiums on such Insurance Policy under the provisions
of section 3.1 with both (1) and (2) reduced by the amount of any
indebtedness which may exist against such Insurance Policy and any
unpaid interest on such indebtedness if said indebtedness was incurred
after such Insurance Policy becomes subject to the Agreement and with
(2) only reduced by the premiums paid by the Trustee with respect to
such Insurance Policy under the provisions of section 3.3;
(b) at any time upon the death of the last insured, the amounts
paid by Sysco as premiums on such Insurance Policy under the provisions
of section 3.1 less (1) the amount of any indebtedness which may exist
against such Insurance Policy and any unpaid interest on such
indebtedness if said indebtedness was incurred after such Insurance
Policy becomes subject to this Agreement, and (2) the premiums paid by
the Trustee with respect to such Insurance Policy under the provisions
of section 3.3.
4.2 The Trustee will collaterally assign the Insurance Policies acquired
pursuant to the terms of this Agreement to a Rabbi Trust established by Sysco as
evidence of Sysco's Investment. The collateral assignment shall not be altered
or changed without the written consent of Sysco. The Rabbi Trust shall have
possession of the Insurance Policy during the term of this Agreement; provided,
however, that the possessor of the Insurance Policy shall make such Insurance
Policy available to the Insurer when it shall be necessary to endorse changes of
beneficiary thereon in accordance with the Trustee's right to appoint
beneficiaries as provided in this Agreement or to exercise any other rights of
the Trustee to such Insurance Policy.
-7-
<PAGE> 32
4.3 The rights of Sysco and the Rabbi Trust under the collateral
assignment are restricted to (a) assigning Sysco's Investment in the Insurance
Policy to the Trustee or the Trustee's designee upon payment of Sysco's
Investment, (b) upon the death of the last insured, obtaining that portion of
the Insurance Policy death proceeds in an amount equal to Sysco's Investment at
such insured's death, and (c) upon surrender of the Insurance Policy, obtaining
that portion of the surrender proceeds not in excess of Sysco's Investment.
4.4 Sysco and the Rabbi Trust are prohibited from taking any action that
would endanger either the interest of the Trustee or the payment of the proceeds
in excess of Sysco's Investment to the beneficiary designated by the Trustee
upon the last insured's death. Prior to the termination of this Agreement, Sysco
and the Rabbi Trust will not exercise the right to pledge the Insurance
Policies, to surrender the Insurance Policies or paid up additions for
cancellation or to partially surrender the Insurance Policies, to assign its
rights to anyone other than the Trustee or the Trustee's designee, and to borrow
against the Insurance Policies even for the purpose of paying premiums unless
there has been a default by the Trustee under this Agreement.
4.5 The Trustee has the power to assign all rights of the Trustee in the
Insurance Policies and under this Agreement, change the beneficiary designation
on each Insurance Policy and exercise settlement options. In the event of an
assignment, the assignee shall possess all of the rights and obligations of the
Trustee under such Insurance Policy and this Agreement. The Trustee has all
rights to the Insurance Policies, not specifically granted to Sysco by this
Agreement; provided, however, that the Trustee may not exercise any rights in a
manner which would endanger Sysco's Investment.
4.6 Sysco and the Trustee recognize that the investment of Sysco in the
Insurance Policies and other assets held in the Rabbi Trust is also subject to
the general creditors of Sysco as
-8-
<PAGE> 33
set forth in the Rabbi Trust. The Trustee and the beneficiaries of the Trust
shall have no preferred claim on, or any beneficial ownership interest in,
any assets of the Rabbi Trust. Any rights created under the Plan or this
Agreement shall be mere unsecured contractual rights of the Trustee and the
beneficiaries of the Trust against Sysco. Any assets held by the Rabbi Trust
will be subject to the claims of Sysco's general creditors under Federal and
state law as specified in the Rabbi trust.
4.7 Any payments of Sysco's Investment in the Insurance Policy pursuant
to the collateral assignment shall be first made from Insurance Policy cash
values attributable to paid up additional life insurance and purchased by
Insurance Policy dividends, if any. The Trustee shall have no interest in paid
up additional life insurance protection, if any, except to the extent the death
benefit or cash value thereof exceeds Sysco's Investment.
ARTICLE 5
Termination
This Agreement shall terminate on the happening of any one or more of
the following events:
(a) Mutual agreement of the parties;
(b) Adjudication of Sysco as a bankrupt or a general assignment
by Sysco to or for the benefit of creditors or dissolution of Sysco;
(c) Surrender of all the Insurance Policies;
(d) Payment in full to Sysco at any time of Sysco's Investment, at
which time Sysco shall release the collateral assignment;
(e) Cessation of Sysco's business;
Additionally, Sysco, in its sole discretion, may terminate this
Agreement upon any failure of the Trustee to pay premiums to Sysco as provided
in section 3.3.
-9-
<PAGE> 34
With regard to each Insurance Policy, the Agreement shall terminate upon
the expiration of the number of years specified on Schedule 1 for such Insurance
Policy unless the agreement is otherwise terminated at an earlier date.
The termination of employment with Sysco by the Employee for any reason,
including Employee's death, will not terminate this Agreement.
ARTICLE 6
Termination of Sysco's Investment
6.1 Upon the death of the last insured, Sysco shall receive from the
proceeds of all Insurance Policies payable upon such insured's death the full
amount of Sysco's Investment in the death benefits in all such Insurance
Policies. The balance of the proceeds of such Insurance Policies shall be paid
(a) to the beneficiary designated by the Trustee or (b) if no such beneficiary
has been designated, to the Trust.
6.2 In the event of the termination of this Agreement under Article 5
(except as provided in Section (d) of Article 5), the Trustee or the designee of
the Trustee shall have ninety days in which to pay Sysco in an amount equal to
Sysco's Investment in each affected Insurance Policy. Upon the payment of such
an amount, Sysco and the Rabbi Trust shall release the collateral assignment of
such Insurance Policies. If the Trustee or the designee of the Trustee does not
make such payment to Sysco within such ninety day period, the Trustee may either
(a) surrender such Insurance Policy as provided in the collateral assignment, or
(b) transfer ownership of such Insurance Policy to Sysco, thereby discharging
the obligation of the Trustee to purchase Sysco's Investment in such Insurance
Policy and relinquishing all rights of the Trustee to such Insurance Policy
under this Agreement.
6.3 Upon the surrender or partial surrender of any Insurance Policy
covered by this Agreement or should the Trustee borrow against any Insurance
Policy covered by this Agreement,
-10-
<PAGE> 35
the proceeds received upon such surrender, partial surrender or loan shall be
used first to pay Sysco in an amount equal to Sysco's Investment in such
Insurance Policy and any excess proceeds shall be paid to the Trust.
ARTICLE 7
Insurers
The Insurer(s) issuing the Insurance Polices shall not be deemed to be a
party to this Agreement for any purpose, nor is the Insurer in any way
responsible for its validity or its enforcement. The Insurer shall not be
obligated to inquire as to the distribution or application of any monies,
payable or paid by the Insurer under the Insurance Policies, if the Insurer
makes appropriate payment or otherwise performs its contractual obligations in
accordance with the terms of the Insurance Policies. The Insurer shall be bound
only by the provisions of the Insurance Policies or an endorsement thereto. Any
payments made or actions taken by the Insurer in accordance with such Insurance
Policies shall fully discharge the Insurer from liability.
ARTICLE 8
Amendments and Miscellaneous
8.1 This Agreement shall not be modified or amended except by a written
instrument signed by Sysco and the Trustee. This Agreement shall be binding upon
the administrators, assigns and successors of the parties to this Agreement.
8.2 The provisions of this Agreement shall be construed and enforced
according to the laws of the State of Texas, except to the extent preempted by
federal law.
8.3 This Agreement and the Plan contain the entire contract between the
parties and constitute a complete integration of the representations, covenants
and promises of the Employee
-11-
<PAGE> 36
and Sysco. In case of a conflict, express or implied, between the terms of the
Plan and this Agreement, the terms of the Plan will govern.
8.4 This Agreement is not the basic employment contract between Sysco
and the Employee and Sysco reserves the unqualified and unrestricted right to
terminate the services of the Employee on exactly the same basis as if this
Agreement had never been entered into.
8.5 The Trustee shall have no interest or rights in Sysco's Investment
in any Insurance Policy.
ARTICLE 9
ERISA Provisions
9.1 Sysco is the named fiduciary of the Plan for purposes of the
Employee Retirement Income Security Act of 1974 and shall have the authority to
control and manage the operation and administration of the Plan.
9.2 The funding policy of this Plan will be through premium payments to
the Insurer as specified in this Agreement.
9.3 The basis of payments from the Plan will consist of payments by the
Insurer in accordance with the Insurance Policies.
9.4 Claims for death benefits are established under the Insurance Policy
by the Insurer. If for any reason a claim for benefits under the Plan other than
death benefits is denied, Sysco shall deliver to the claimant a written
explanation setting forth the specific reasons for the denial, pertinent
references to the Plan section on which the denial was based, such other data as
may be pertinent and information on procedures to be followed by the claimant in
obtaining a review of his or her claim, all written in a manner calculated to be
understood by the claimant. For this purpose:
-12-
<PAGE> 37
(a) The claimant's claim shall be deemed filed when presented
orally or in writing to Sysco.
(b) Sysco's explanation shall be in writing and delivered to
the claimant within ninety days of the date the claim is filed.
The claimant shall have sixty days following his or her receipt of the
denial of the claim to file with Sysco a written request for review of the
denial. For such review, the claimant or his or her representative may submit
pertinent documents and written issues and comments.
Sysco shall decide the issue on review and furnish the claimant with a
copy within sixty days of receipt of the claimant's request for review of his or
her claim. The decision on review shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be understood by the
claimant, as well as specific references to the pertinent plan provisions on
which the decision is based. If a copy of the decision is not so furnished to
the claimant within such sixty days, the claim shall be deemed denied on review.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
this _____ day of ________________________, _____.
SYSCO CORPORATION, Employer
By
--------------------------------------
LINDIG 1999 FAMILY TRUSTS, Trust
----------------------------------------
David Brett Lindig, Co-Trustee
----------------------------------------
Mark Bradley Lindig, Co-Trustee
-13-
<PAGE> 38
SCHEDULE 1
The Insurance Policy or Insurance Policies covered by the foregoing
Split Dollar Life Insurance Agreement between Sysco Corporation and the Employee
include the following:
1. Insurer: John Hancock Mutual Life Insurance Company
2. Policy No. ______________________________
3. Initial Face Amount: $13,145,000
4. Insured(s): Bill M. Lindig and Bobetta C. Lindig
5. Sysco Premium: $878,050 annually from 1999 through 2003
6. Trustee section 3.3 Reimbursement: from 1999 through 2003
7. Unless terminated earlier under the Agreement, the Agreement
will terminate for this Policy on its anniversary date in
2016.
1. Insurer: Pacific Life Insurance Company
2. Policy No. ______________________________
3. Initial Face Amount: $6,855,000
4. Insured(s): Bill M. Lindig and Bobetta C. Lindig
5. Sysco Premium: $535,240 annually from 1999 through 2002
6. Trustee section 3.3 Reimbursement: from 1999 through 2002
7. Unless terminated earlier under the Agreement, the Agreement
will terminate for this Policy on its anniversary date in
2019.
EXECUTED this _____ day of ___________________, __________.
SYSCO CORPORATION, Employer
By
----------------------------------------------------
LINDIG 1999 FAMILY TRUSTS, Trust
-----------------------------------------------------
DAVID BRETT LINDIG, Co-Trustee
-----------------------------------------------------
MARK BRADLEY LINDIG, Co-Trustee
<PAGE> 1
EXHIBIT 10(p)
FIRST AMENDMENT TO FIFTH AMENDED
AND RESTATED SYSCO CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
WHEREAS, by unanimous written consent of the Board of Directors of Sysco
Corporation (the "Company"), the Company approved an amendment to the Fifth
Amended and Restated Sysco Corporation Supplemental Executive Retirement Plan
(the "Plan") as more particularly set forth below;
NOW, THEREFORE, the Plan is hereby amended as follows:
I. Defined Terms. Initially capitalized terms used in this Amendment
which are not otherwise defined by this Amendment are used with the same meaning
ascribed to such terms in the Plan.
II. Amendment. Section 1.18 of the Plan is amended by deleting such
Section 1.18 in its entirety and substituting the following in lieu thereof:
"1.18 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."
III. Effectiveness. This Amendment shall be effective as of June 29, 1997.
IV. Ratification. Except as herein above amended and modified, the Plan
shall remain in full force and effect without further modification or amendment.
Ratification.
<PAGE> 2
IN WITNESS WHEREOF, the Company has caused this First Amendment to be
effective as of June 29, 1997 in accordance with Section 9.1 of the Plan and the
authority provided by the Board of Directors.
SYSCO CORPORATION
By: /s/ MICHAEL C. NICHOLS
----------------------------------------
Name: Michael C. Nichols
Title: Vice President
-2-
<PAGE> 1
EXHIBIT 10(q)
FIRST AMENDMENT TO AMENDED
AND RESTATED SYSCO CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
WHEREAS, by unanimous written consent of the Board of Directors of Sysco
Corporation (the "Company"), the Company approved an amendment to the Amended
and Restated Sysco Corporation Executive Deferred Compensation Plan (the "Plan")
as more particularly set forth below;
NOW, THEREFORE, the Plan is hereby amended as follows:
I. Defined Terms. Initially capitalized terms used in this Amendment
which are not otherwise defined by this Amendment are used with the same meaning
ascribed to such terms in the Plan.
II. Amendment.
Section 1.17 of the Plan is amended by deleting such Section 1.17 in
its entirety and substituting the following in lieu thereof:
"1.17 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."
III. Effectiveness. This Amendment shall be effective as of June 29, 1997.
IV. Ratification. Except as herein above amended and modified, the Plan
shall remain in full force and effect without further modification or amendment.
Ratification.
<PAGE> 2
IN WITNESS WHEREOF, the Company has caused this First Amendment to be
effective as of June 29, 1997 in accordance with Section 9.1 of the Plan and the
authority provided by the Board of Directors.
SYSCO CORPORATION
By: /s/ MICHAEL C. NICHOLS
-------------------------------------
Name: Michael C. Nichols
Title: Vice President
-2-
<PAGE> 1
EXHIBIT 10(r)
FIRST AMENDMENT TO
SYSCO CORPORATION
1995 MANAGEMENT INCENTIVE PLAN
WHEREAS, by unanimous written consent of the Board of Directors of Sysco
Corporation (the "Company"), the Company approved an amendment to the Sysco
Corporation 1995 Management Incentive Plan (the "Plan") as more particularly set
forth below;
NOW, THEREFORE, the Plan is hereby amended as follows:
I. Defined Terms. Initially capitalized terms used in this Amendment
which are not otherwise defined by this Amendment are used with the same meaning
ascribed to such terms in the Plan.
II. Amendment.
1. Section 1 of the Plan is amended by deleting the first
sentence of such Section 1 in its entirety and substituting the following in
lieu thereof:
"The purpose of the Plan is to reward (i) certain key management
personnel for outstanding performance in the management of the
divisions or Subsidiaries (as hereinafter defined) of the Company
and (ii) certain corporate personnel for managing the operations
of the Company as a whole and/or managing the operations of
certain Subsidiaries (as hereinafter defined). For purposes of
the Plan, the term "Subsidiary" means (a) any corporation which
is a member of a "controlled group of corporations" which
includes the Company, as defined in Code Section 414(b), (b) any
trade or business under "common control" with the Company, as
defined in Code Section 414(c), (c) any organization which is a
member of an "affiliated service group" which includes the
Company, as defined in Code Section 414(m), (d) any other entity
required to be aggregated with the Company 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."
2. Section 4 of the Plan is amended by deleting the first
sentence of such Section 4 and substituting the following in lieu thereof:
<PAGE> 2
"The bonus which a Participant can earn is based (i) on the
performance of the Company as a whole and (ii) (A) (as to
Subsidiary Participants and possibly Designated Participants)
either the performance of the Subsidiary which employs such
Participant or the performance of the Subsidiary designated by
the Plan Compensation Committee as the Subsidiary by reference to
which the bonus is to be determined and (B) (as to Corporate and
possibly Designated Participants) the performance of a select
group of Subsidiaries, subject to the discretion of the Plan
Compensation Committee to formulate a different bonus structure
as to any Participant, other than Senior Executive Participants."
3. Paragraph (A) of Section 4 is amended by deleting the first
paragraph of such Paragraph (A) of Section 4 and substituting the following in
lieu thereof:
"With respect to each Subsidiary Participant and each Senior
Executive Participant who would be a Subsidiary Participant but
for the application of the Executive Compensation Provisions, a
portion of the bonus may depend upon the return on capital and/or
increase in pretax earnings of the Subsidiary employing such
Participant or the Subsidiary designated by the Plan Compensation
Committee as the Subsidiary by reference to which the bonus is to
be determined; a portion of the bonus may depend upon the return
on stockholder's equity and increase in earnings per share of the
Company as a whole; and a portion of the bonus may depend upon
any one or more of the following performance factors: (i) sales
of the Company and/or one or more Subsidiaries, (ii) pretax
earnings of the Company, (iii) net earnings of the Company and/or
one or more Subsidiaries, (iv) control of operating and/or
nonoperating expenses of the Company and/or one or more
Subsidiaries, (v) margins of the Company and/or one or more
Subsidiaries, (vi) market price of the Company's securities, and
(vii) other objectively measurable factors directly tied to the
performance of the Company and/or one or more Subsidiaries. The
relative weights of the factors considered and the percentages of
the total bonus comprised by the portion of the bonus determined
with respect to the Subsidiary employing the Participant or the
Subsidiary designated by the Plan Compensation Committee as the
Subsidiary by reference to which the bonus is to be
-2-
<PAGE> 3
determined and the portion of the bonus determined with respect
to the Company shall be determined by the Plan Compensation
Committee in its sole discretion. Notwithstanding the foregoing,
the Plan Compensation Committee may alter the bonus formula with
respect to any such Participant by changing the performance
targets as determined in the sole discretion of the Committee."
III. Effectiveness. This Amendment shall be effective as of June 29, 1997.
IV. Ratification. Except as herein above amended and modified, the Plan
shall remain in full force and effect without further modification or amendment.
IN WITNESS WHEREOF, the Company has caused this First Amendment to be
effective as of June 29, 1997 in accordance with Section 9 of the Plan and the
authority provided by the Board of Directors.
SYSCO CORPORATION
By: /s/ MICHAEL C. NICHOLS
-------------------------------------
Name: Michael C. Nichols
Title: Vice President
-3-
<PAGE> 1
Exhibit 15
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
of Sysco Corporation:
We have reviewed the consolidated balance sheets of Sysco Corporation (a
Delaware corporation) and its subsidiaries as of January 1, 2000, and December
26, 1998 and the related consolidated results of operations for the twenty-six
and thirteen week periods then ended and consolidated cash flows for the
twenty-six week periods then ended included in the Company's Quarterly Report on
Form 10-Q. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Houston, Texas
February 10, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Item 1.
Financial Statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-1-2000
<PERIOD-END> JAN-1-2000
<CASH> $95,851
<SECURITIES> 0
<RECEIVABLES> 1,482,986
<ALLOWANCES> 38,903
<INVENTORY> 961,846
<CURRENT-ASSETS> 2,576,098
<PP&E> 2,411,777
<DEPRECIATION> 1,146,457
<TOTAL-ASSETS> 4,418,463
<CURRENT-LIABILITIES> 1,554,788
<BONDS> 1,132,976
0
0
<COMMON> 382,587
<OTHER-SE> 1,118,865
<TOTAL-LIABILITY-AND-EQUITY> 4,418,463
<SALES> 9,308,569
<TOTAL-REVENUES> 9,308,569
<CGS> 7,565,198
<TOTAL-COSTS> 8,971,049
<OTHER-EXPENSES> (1,565)
<LOSS-PROVISION> 13,052
<INTEREST-EXPENSE> 34,624
<INCOME-PRETAX> 337,520
<INCOME-TAX> 129,945
<INCOME-CONTINUING> 207,575
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 8,041
<NET-INCOME> 199,534
<EPS-BASIC> 0.61
<EPS-DILUTED> 0.60
</TABLE>
<PAGE> 1
EXHIBIT 99.1
SYSCO [LOGO]
- -------------------------------------------------------------------------------
SYSCO Corporation NEWS RELEASE
1390 Enclave Parkway
Houston, Texas 77077-2099
(281) 584-1390
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION
CONTACT: Toni R. Spigelmyer
Assistant Vice President
Investor and Media Relations
SYSCO FILES SHELF REGISTRATION FOR 2,850,000 SHARES
HOUSTON, FEBRUARY 14, 2000 - SYSCO Corporation (NYSE: SYY) announced
today that it has filed with the Securities and Exchange Commission a shelf
registration covering 2,850,000 shares of common stock to be offered from time
to time in connection with acquisitions.
Charles H. Cotros, president and chief executive officer of SYSCO
Corporation, said, "SYSCO has closed or announced six acquisitions in fiscal
2000 for varying combinations of stock and cash. Since the company continues to
seek attractive acquisition candidates, this filing will provide SYSCO with
greater flexibility in structuring and closing future transactions."
SYSCO is the largest foodservice marketing and distribution
organization in North America, generating annualized sales in excess of $18.5
billion based on first half fiscal 2000 results. The company provides food and
services to approximately 325,000 customers including restaurants, healthcare
and educational institutions, lodging facilities and other foodservice
operations. The SYSCO distribution network currently extends throughout the
entire contiguous United States and Alaska as well as portions of Canada. For
the first half of fiscal 2000, which ended January 1, 2000, the company reported
sales of $9.3 billion and net earnings of $199.5 million.
THIS INFORMATION WAS FURNISHED ON BEHALF OF SYSCO, ITS BOARD OF
DIRECTORS AND MANAGEMENT. PLEASE READ SYSCO'S REGISTRATION STATEMENT ON FORM S-4
AND THE DOCUMENTS INCORPORATED BY REFERENCE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION SINCE THEY CONTAIN IMPORTANT INFORMATION CONCERNING SYSCO'S
COMMON STOCK AND THE TERMS OF THE SHELF OFFERING. THE REGISTRATION STATEMENT AND
RELATED DOCUMENTS ARE PUBLICLY AVAILABLE. YOU CAN READ A COPY OF SYSCO'S
REGISTRATION STATEMENT AND ITS OTHER SEC FILINGS FOR FREE AT THE SEC'S WEB SITE
AT HTTP://WWW.SEC.GOV.
Certain statements made herein are forward-looking statements under the Private
Securities Litigation Reform Act of 1995. They include statements regarding
annualized sales and acquisitions. These statements involve risks and
uncertainties and are based on current expectations and management's estimates;
actual results may differ materially. Those risks and uncertainties that could
impact these statements include the risks relating to the foodservice
distribution industry's relatively low profit margins and sensitivity to
economic conditions, SYSCO's leverage and debt risks, the risk of exposure to
product liability claims, the risk of interruption of supplies due to lack of
long-term contracts, work stoppages or otherwise, the inability to find or
complete attractive acquisitions and other risk factors detailed in SYSCO's Form
10-K for the fiscal year ended July 3, 1999 filed with the Securities and
Exchange Commission.
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