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EXHIBIT 10(c)
EMPLOYEE INCENTIVE STOCK OPTION PLAN
SYSCO CORPORATION
1. PURPOSE.
This Employee Incentive Stock Option Plan (the "Plan") is intended as
an incentive and to encourage stock ownership by certain officers and other key
executive employees of Sysco Corporation (the "Corporation"), or of its
subsidiary corporations as that term is defined in Section 425(f) of the
Internal Revenue Code of 1954 (the "Subsidiary" or "Subsidiaries"), or of its
Operating Divisions as that term is defined in Subdivision (C) of Section
6(e)(2)(X) below (subsidiaries and Operating Divisions are herein collectively
called "Subsidiaries") so that they may acquire or increase their proprietary
interest in the Corporation, and to reward them properly for meritorious or
profit producing services to the Corporation or the Subsidiaries. It is further
intended that options issued pursuant to this Plan shall constitute incentive
stock options within the meaning of Sec. 422A of the Internal Revenue Code of
1954, as amended by the Economic Recovery Act of 1951.
2. ADMINISTRATION.
The Plan shall be administered by a committee appointed by the Board of
Directors of the Corporation (the "Committee"). The Committee shall consist of
not less than three members of the Corporation's Board of Directors. The Board
of Directors may from time to time remove members from or add members to the
Committee. Vacancies on the Committee, however caused, shall be filled by the
Board of Directors. The Committee shall select one of its members as Chairman
and shall hold meetings at such times and places as it may determine. The action
of a majority of the Committee at which a quorum is present, or acts reduced to
or approved in writing by a majority of the members of the Committee, shall be
the valid acts of the Committee. Each Director while a member of the Committee
shall meet the definition of "disinterested person" contained in Rule 16b-3 of
the Securities Exchange Commission. The Committee shall from time to time at its
discretion designate the key executive employees who shall be granted options
and the number of shares to be optioned to each.
The interpretation and construction by the Committee of any provisions
of the Plan or of any option granted under it shall be final. No member of the
Board of Directors or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
under it.
3. ELIGIBILITY.
The persons who shall be eligible to receive options shall be such key
executive employees (including officers, whether or not they are Directors) of
the Corporation or its Subsidiaries as the Committee shall select from time to
time ("Optionee" or "Optionees"). An
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Optionee may hold more than one option, but only on the terms and subject to the
restrictions hereafter set forth.
4. STOCK.
The stock subject to the options shall be shares of the Corporation's
authorized and unissued or reacquired $1 par value common stock (the term
"shares" as used herein shall refer to the said $1 par value common voting
shares of the Corporation, and the term "Shares" shall refer to shares which are
subject to an option granted under the Plan). The aggregate number of shares
which may be issued under options pursuant to the Plan shall not exceed 600,000
shares. The limitations established by each of the preceding sentences shall be
subject to adjustment as provided in Section 660 of the Plan.
In the event that any outstanding option under the Plan for any reason
expires or is terminated, the Shares allocable to the unexercised portion of
such option may again be subjected to an option under the Plan.
5. ANNUAL LIMITATION.
No Optionee shall be granted in any calendar year, options to purchase
shares having an aggregate fair market value (determined at the date of grant of
such options) in excess of (i) $100,000 plus (ii) with respect to each of the
three preceding calendar years one-half of the difference between the aggregate
fair market value determined (at the date of grant of the options) of the Shares
for which the Optionee was granted options pursuant to this Plan in such year
and $100,000; provided that any amount for any such year taken into account in
determining the aggregate fair market value of Shares for which options are
granted in a subsequent calendar year (the "First Carryover Year") shall not
again be taken into account in a year subsequent to the First Carryover Year.
6. TERMS AND CONDITIONS OF OPTION.
Options granted pursuant to the Plan shall be authorized by the
Committee and shall be evidenced by agreements in such form as the Committee
shall from time to time approve which agreements shall contain specifically or
be subject to the following terms and conditions:
(a) Optionee's Agreement. Each Optionee shall agree to remain in
the employ of and to render to the Corporation or its Subsidiaries, his
services for a period of two years from the date of grant of the
option, but such agreement shall not impose upon the Corporation or its
Subsidiaries any obligation to retain the Optionee in its employ for
any period.
(b) Number of Shares. Each option shall state the number of
Shares to which it pertains.
(c) Option Price. Each option shall state the option price which
shall be not less than 100% of the fair market value of the Shares
subject to the option. Fair market value shall be determined by taking
the mean between the highest and lowest quoted selling prices on the
New York Stock Exchange on the date of grant for shares of the
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Corporation of the same class as the Shares subject to the option, or,
if there were no sales on such date on such Exchange, the value
determined under Treasury Regulations 20.2031-2. Subject to the
foregoing, the Committee, in fixing the option price, shall have full
authority and discretion and be fully protected in doing so.
(d) Medium and Time of Payment. The option price shall be payable
on the exercise of the option and may be paid (i) in United States
Dollars in cash or by check or (ii) by transferring a number of shares,
valued as provided in Section 6(c) above, as of the date of transfer
having a value equal the option price or (iii) by part payment in cash
or by check as provided in (i) above and by payment of the balance by
transferring shares to the Corporation as provided in (ii) above.
(e) Conditions to Exercise of Options.
(1) No option granted pursuant to this Plan shall be exercised in
whole or in part more than ten years after it is granted and such
option shall be subject to such further terms and conditions as to the
time of its exercise as the Committee may prescribe.
Notwithstanding anything to the contrary contained in this Plan
or any limitations prescribed by the Committee as to the exercise of an
option, all options previously granted under this Plan shall become
immediately exercisable if a person or persons who are acting together
for the purpose of acquiring shares of the Corporation to acquire
beneficial ownership (as defined in Rule 13d-3 of the Securities
Exchange Act of 1934) of 25% or more of the outstanding shares of the
Corporation.
(2) In order to exercise an option granted hereunder, in whole or
in part, all of the following conditions must be fulfilled at the time
of exercise:
(X) The Optionee must be in the employ of the Corporation or
one of its Subsidiaries. However, any Optionee who is totally and
permanently disabled at the time of exercise of an option and who
has ceased to work for the Corporation or one of its Subsidiaries
as a result of which disability shall not be required to be
employed by the Corporation at the time he exercises such option
as long as he was employed by the Corporation or one of its
Subsidiaries within one year prior to the date of exercise of
such option. Permanent and total disability for such purposes
shall mean that such Optionee, at the time he ceased his
employment by the Corporation, was unable to engage in any
substantial gainful activity by reason of a medically
determinable physical or mental impairment which could be
expected to result in death or which at such time could be
expected to last for a continuous period of not less than twelve
(12) months. Such Optionee shall furnish proof of his disability
in form and substance satisfactory to the Committee.
For all purposes of this Incentive Stock Option Plan: (A) an
employee of an Operating Division (as hereinafter defined) shall
be deemed to be an employee of a Subsidiary; (B) in the event of
the liquidation or merger of a Subsidiary into the Corporation,
employees of the merged or liquidated Subsidiary who continue
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to be employed by an Operating Division of the corporation shall
be deemed to be employees of a Subsidiary, and (C) an "Operating
Division," of the Corporation is hereby defined as any separate,
unincorporated business unit, section or component of the
Corporation which has been designated as an "Operating Division"
by the Directors or the Committee at the time of the grant of an
option.
Neither the transfer of an employee from employment by one of
the Corporation's Subsidiaries to another Subsidiary, nor the
transfer of an employee from the employment by one of the
Subsidiaries to the Corporation or by the Corporation to one of
its Subsidiaries shall be deemed the termination of the
employment of the employee by the Corporation or any of its
Subsidiaries.
(Y) The Optionee shall have met any additional specific
conditions imposed by the Committee at the time of the granting
of the option. Such specific conditions may be in the form of
achievement goals for the individual Optionee based upon
predetermined minimum increases over a specified period or
periods of time, in sales, gross profits, pre-tax earnings,
productivity, or other goals or standards. The imposition of such
achievement goals and conditions shall be in the sole discretion
of the Committee, and such goals and conditions may differ
between individual employees of the Corporation and/or its
Subsidiaries; and between classes of employees of the Corporation
and/or any Subsidiary, and between the employees of the
Corporation, as a class, and the employees of the Subsidiaries as
a class.
(f) Prior Outstanding Option. No option (for purposes of this
Section 6(f) called "New Option") shall be exercisable while there is
outstanding any Incentive Stock Option (as defined in Section 422A of
the Internal Revenue Code of 1954), which Incentive Stock Option was
granted, before the granting of the New Option to the person to whom
the New Option is granted, to purchase shares of the Corporation or in
a corporation which at the time the New Option is granted, is a patent
or subsidiary corporation (as those terms are defined in Section 425 of
the Internal Revenue Code of 1954) of the Corporation, or is a
predecessor corporation of the Corporation or such parent or subsidiary
corporation. An incentive stock option shall be treated as outstanding
until such option is exercised in full or expires by reason of a lapse
of time.
(g) Termination of Employment Except by Death. In the event that
an Optionee shall cease to be employed by the Corporation or any of its
Subsidiaries for any reason other than his death or disability as
defined in Section 6(e)(2)(X) and shall be no longer in the employ of
any of them, such Optionee shall not have the right to exercise the
unexercised portion of the option and such portion of the option shall
become null and void after such termination of employment. Whether
authorized leave of absence or absence for military or governmental
service shall constitute termination of employment, for the purposes of
the Plan, shall be determined by the Committee, whose determination
shall be final and conclusive.
(h) Death of Optionee and Transfer of Option. If the Optionee
shall die while in the employ of the Corporation or a Subsidiary and
shall not have fully exercised the
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option, the option may be exercised subject to the condition that no
option shall be exercisable after the expiration of ten years from the
date it is granted, to the extent that the Optionee's right to exercise
such option had accrued pursuant to this Section 6 of the Plan at the
time of his death and had not previously been exercised at any time
within six months after the Optionee's death by the executors or
administrators of the Optionee or by any person or persons who shall
have acquired the option directly from the Optionee by request or
inheritance.
No option shall be transferable by the Optionee otherwise than by
will or under the laws of descent and distribution.
(i) Recapitalization. Subject to any required action by the
stockholders, the number of shares covered by each outstanding option,
and the price per Share thereof in each such option, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of the Corporation resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but only on
the shares) or any other increase or decrease in the number of such
shares effected without receipt of consideration by the Corporation.
Subject to any required action by the stockholders, if the
Corporation shall be the surviving corporation in any merger or
consolidation, each outstanding option shall pertain to and apply to
the securities to which a holder of the number of shares subject to the
option would have been entitled. A dissolution or liquidation of the
Corporation or a merger or consolidation in which the Corporation is
not the surviving corporation, shall cause each outstanding option to
terminate, provided that each Optionee shall, in such event, if a
period of two years from the date of grant the option shall have
expired, have the right immediately prior to such dissolution or
liquidation or merger or consolidation in which the Corporation is not
the surviving corporation, to exercise his option in whole or in part
subject to the provisions of this Section 6 of the Plan.
In the event of a change in the shares of the Corporation as
presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from any
such change shall be deemed to be the shares within the meaning of the
Plan.
To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the
Committee whose determination in that respect shall be final, binding
and conclusive, provided that each option granted pursuant to this Plan
shall not be adjusted in a manner that causes the option to fail to
continue to qualify as an incentive stock option within the meaning of
Sec. 422A of the Internal Revenue code of 1954.
Except as hereinbefore expressly provided in this Section 6, the
Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of
shares of stock of any class or by reason of any dissolution,
liquidation, merger or consolidation or spinoff of assets or stock of
another corporation, and any issue
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by the Corporation of shares of stock of any class, shall not affect
and, no adjustment by reason thereof shall be made with respect to the
number or price of Shares subject to the option.
The grant of any option pursuant to the Plan shall not affect in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business or
assets; provided, however, that if any such adjustment shall result in
a fractional share for any optionee under any option hereunder, such
fraction shall be completely disregarded and the optionee shall only be
entitled to the whole number of shares resulting from such adjustment.
(j) Rights as a Stockholder. An optionee or a transferee of an
option shall have no rights as a stockholder with respect to any Shares
covered by his option until the date of the issuance of a stock
certificate to him for such Shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record
date is prior to the date such stock certificate is issued, except as
provided in Section 6 hereof.
(k) Investment Purpose. The Company shall not be obligated to
sell or issue any shares pursuant to any option unless the Shares with
respect to which the option is being exercised are at that time
effectively registered or exempt from registration under the Securities
Act of 1933, as amended.
Notwithstanding anything in the Plan to the contrary, each option
under the Plan shall be granted on the condition that the purchases of
Shares thereunder shall be for investment purposes, and not with a view
to resale or distribution except that in the event the Shares subject
to such Option are registered under the Securities Act of 1933, as
amended, or in the event a resale of such Shares without such
registration would otherwise be permissible, such condition shall be
inoperative if in the opinion of counsel for the Corporation such
condition is not required under the Securities Act of 1933 or any other
applicable law, regulation, or rule of any governmental agency.
(l) Other Provisions. Options authorized under the Plan shall
contain such other provisions, including, without limitation,
restrictions upon the exercise of the option, as the Committee or the
Board of Directors of the Corporation shall deem advisable subject to
any limitation on the discretion of the Board of Directors required by
Rule 16b-3. Any such option agreement shall contain such limitations
and restrictions upon the exercise of the option as shall be necessary
in order that such Option will be an Incentive Stock Option as defined
in Sec. 422A of the Internal Revenue Code of 1954 or to conform to any
change in the law and shall not contain any provisions, restrictions or
limitations which shall prevent such option from being an Incentive
Stock Option as aforesaid.
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7. TERM OF PLAN.
Options may be granted pursuant to the Plan from time to time within a
period of ten years from the date the Plan is adopted or the date the Plan is
approved by the Stockholders, whichever is earlier.
8. INDEMNIFICATION OF COMMITTEE.
In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by the independent legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any such action, a
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such Committee member is liable
for negligence or misconduct in the performance of his duties; provided that
within sixty (60) days after institution of any such action, suit or proceeding
a Committee member shall in writing offer the Corporation the opportunity, at
its own expense, to handle and defend the same.
9. AMENDMENT TO THE PLAN.
The Board of Directors of the Corporation may, insofar as permitted by
law, from time to time, with respect to any shares at the time not subject to
options, suspend or discontinue the Plan or revise or amend it in any respect
whatsoever except that, without approval of the stockholders, no such revision
or amendment shall change the number of shares subject to the Plan, change the
designation of the class of employees eligible to receive options, decrease the
price at which Options may be granted, remove the administration of the Plan
from the Committee, or render any member of the Committee eligible to receive an
option under the Plan while serving thereon. Furthermore, the Plan may not,
without the approval of the stockholders, be amended in any manner that will
cause options issued under it to fail to meet the requirements of Incentive
stock options as defined in Sec. 422A of the 1954 Internal Revenue Code.
10. APPLICATION OF FUNDS.
The proceeds received by the Corporation from the sale of Shares
pursuant to options will be used for general corporate purposes.
11. NO OBLIGATION TO EXERCISE OPTION.
The granting of an option shall impose no obligation upon the Optionee
to exercise such option.
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12. APPROVAL OF STOCKHOLDERS.
The Plan shall not take effect until approved by the holders of a
majority of the outstanding shares which approval must occur within the period
beginning twelve months before and ending twelve months after the date the Plan
is adopted by the Board of Directors.
13. LIMITATIONS ON GRANT OF OPTION.
No option may be granted under this Plan to any person who owns, or
who, by reason of the exercise of such option will own more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Corporation, its parent or subsidiary, as provided in Section 422A(b)(6) of the
Internal Revenue Code of 1954.
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