sysco8k51409.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): May 14,
2009
_______________________
Sysco
Corporation
(Exact
name of registrant as specified in its charter)
_________________________
Delaware
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1-06544
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74-1648137
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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1390
Enclave Parkway, Houston, TX 77077-2099
(Address
of principal executive office) (zip code)
Registrant’s
telephone number, including area code: (281) 584-1390
N/A
(Former
name or former address, if changed since last report)
_________________________
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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SECTION
5 - CORPORATE GOVERNANCE AND MANAGEMENT
ITEM
5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
On May
14, 2009, the Compensation Committee (the “Committee”) of the Board of Directors
of Sysco Corporation (“Sysco” or the “Company”) approved fiscal 2010 bonus
awards (the “2010 Awards”) for certain officers of the Company. These
2010 Awards relate to the fiscal year beginning June 28, 2009 and ending July 3,
2010. Awards for the 2009 fiscal year ending June 27, 2009 were
previously made in May of 2008.
The 2010
Awards were made under the Company’s First Amended and Restated 2005 Management
Incentive Plan (the “Plan”). Among the officers receiving the 2010
Awards were William J. DeLaney, the Company’s Chief Executive Officer and Chief
Financial Officer, Kenneth F. Spitler, the Company’s Vice Chairman, President
and Chief Operating Officer and Larry G. Pulliam, the Company’s Executive Vice
President, Global Sourcing and Supply Chain. A more detailed
description of the 2010 Awards is set forth below under “Approval of Fiscal 2010
Bonus Awards under the First Amended and Restated 2005 Management Incentive
Plan”. The last paragraph of such description relates to new clawback
provisions contained in the 2010 Awards, which provisions were not included in
similar awards for prior fiscal years.
For
fiscal 2009, the Company entered into Supplemental Bonus Agreements with Richard
J. Schnieders, who was at that time the Company’s Chairman of the Board and
Chief Executive Officer, and Mr. Spitler, that provided that the fiscal 2009
bonus under the Plan could be increased or decreased by up to 25%, depending
upon whether the Committee concluded that the executives’ performance “exceeded
expectations” or was “below expectations”. However, the Company is
not planning to enter into Supplemental Bonus Agreements for fiscal 2010 with
any of its executive officers.
Approval
of Fiscal 2010 Bonus Awards under the First Amended and Restated 2005 Management
Incentive Plan
Messrs.
DeLaney, Spitler and Pulliam each received the same 2010 Award, which provides
for a potential bonus based on two components of Company performance—increase in
fully diluted earnings per share in fiscal 2010 as compared to fiscal 2009, and
three-year average return on capital for the fiscal years 2008, 2009 and 2010.
Return on capital for any given fiscal year is computed by dividing the
Company’s net after-tax earnings for the year by the Company’s total capital for
that year. Total capital for any given fiscal year is computed as the sum of
stockholders’ equity (computed as the sum of stockholders’ equity at the
beginning and end of the year and at the end of each of the first three
quarters, divided by five) and long-term debt (computed as the sum of long-term
debt at the beginning and end of the year and at the end of each of the first
three quarters, divided by five).
Messrs.
DeLaney, Spitler and Pulliam will only earn a bonus under the 2010 Awards if the
increase in fully diluted earnings per share is at least 4% and the three-year
average return on capital is at least 10%. This minimum level of performance
would earn each officer a bonus equal to 20% of his base salary. The maximum
bonus under the 2010 Awards is earned if the increase in fully diluted earnings
per share is 20% or more and the three-year
average return on capital is 25% or more. This maximum level of performance
would earn each officer a bonus equal to 330% of his base salary. Varying levels
of performance in between these minimum and maximum levels will earn varying
levels of bonus between 20% and 330% of base salary. The target bonus level is
200% of base salary, which is earned at varying levels of performance, including
at 13% increase in fully diluted earnings per share and 17% three-year
average return on capital.
If there
is any material change in generally accepted accounting principles (“GAAP”)
during fiscal 2010 that results in a material change in accounting for Sysco’s
revenues or expenses, the bonus calculations shall be made as if such change had
not occurred. If the change in GAAP occurs with respect to a year
prior to fiscal 2010, the increase in earnings per share shall be made after
taking into account such a change in GAAP that occurs with respect to fiscal
2009 and the three-year average return on capital shall be made as if the change
in GAAP had been in effect for the entire calculation period, if the change
occurs with respect to fiscal 2009 or 2008.
If the
Internal Revenue Code is amended during fiscal 2010 and, as a result of such
amendment, the effective tax rate applicable to Sysco’s earnings changes during
that year, the bonus calculations shall be made as if the rate change had not
occurred. If the change in the effective tax rate occurs with respect
to a year prior to fiscal 2010, the increase in earnings per share shall be made
after taking into account the rate change that occurs with respect to fiscal
2009 and the three-year average return on capital shall be made as if the new
rate had been in effect for the entire calculation period, if the change occurs
with respect to fiscal 2009 or 2008.
The
agreements provide the Committee with discretion to reduce any portion of the
bonus related to extraordinary income arising from the sale or exchange of an
operating division or subsidiary. The Committee must approve the payment of any
bonus under the 2010 Awards within 90 days following the end of fiscal
2010. All bonuses under the 2010 Awards are subject to the provisions of the
Plan.
The 2010
Awards are subject to clawback provisions that provide that, subject to
applicable governing law, all or a portion of the bonus paid pursuant to the
2010 Awards may be recovered by Sysco if there is a restatement of the Company’s
financial results (other than a restatement due to a change in accounting
policy) within 36 months of the payment of the bonus and the restatement would
result in the payment of a reduced bonus if the bonus was recalculated using the
restated financial results. The Committee has the sole discretion to
determine the form and timing of the repayment.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, Sysco Corporation
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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Sysco
Corporation
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By:
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/s/
Michael C. Nichols |
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Michael
C. Nichols
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Senior
Vice President, General Counsel and Corporate Secretary
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