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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): SEPTEMBER 8, 2005
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SYSCO CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE 1-06544 74-1648137
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
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)
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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):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Option Grants
On September 8, 2005, the Compensation and Stock Option Committee (the
"Committee") of SYSCO Corporation (the "Company") approved the grant of options
to purchase Company common stock to certain key employees, including the
executive officers who will be named in the Summary Compensation Table in the
proxy statement for the Company's upcoming Annual Meeting of Stockholders (other
than Thomas Lankford, who resigned from his executive officer position effective
July 2, 2005) (the "Named Executive Officers"). The options will vest 20% per
year beginning September 8, 2006. The exercise price is $33.01 per share, and
the expiration date is September 7, 2012. The form of option grant agreement is
filed with this Form 8-K as Exhibit 99.1 and incorporated by reference herein.
The options were granted to the Named Executive Officers in the following
amounts:
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NUMBER OF SHARES UNDERLYING
NAME AND TITLE TITLE OPTIONS
=============================== ========================================================= ================================
Richard J. Schnieders Chairman of the Board, Chief Executive Officer and 140,000
President
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John K. Stubblefield, Jr. Executive Vice President, Finance and Chief Financial 73,000
Officer
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Larry J. Accardi Executive Vice President, Contract Sales; and 73,000
President, Specialty Distribution Companies
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Kenneth F. Spitler Executive Vice President; and President of North 73,000
American Foodservice Operations
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Grant of Units Under 2004 Long-Term Incentive Cash Plan
On September 8, 2005, performance units were granted to the Named Executive
Officers under the 2004 Long-Term Incentive Cash Plan (the "Long-Term Plan") for
the performance period commencing July 3, 2005 and ending June 28, 2008.
Participants under the Long-Term Plan will not be entitled to any bonus pursuant
to these awards unless certain performance criteria are met. The bonus
opportunities for the fiscal 2006-2008 performance period are composed of two
components: one based on achievement of specified increases in net after-tax
earnings per share ("Component A"), and one based on achievement of specified
increases in sales, defined as GAAP sales less product cost inflation, or plus
product cost deflation, as measured by SYSCO's change in cost of goods
("Component B").
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A. Earnings Growth Component (Component A). If the Company achieves certain net
after-tax earnings increases, award recipients will earn a bonus under this
component without regard to whether a bonus was earned under Component B. The
amount of any bonus earned under Component A will be calculated according to the
following formula:
------------------- ------ ------------- ------ -----------------------
Number of X Unit Value X Applicable Percentage A
Performance Units
Granted to
Participant
------------------- ------ ------------- ------ -----------------------
B. Sales Growth Component (Component B). If the Company achieves certain
increases in sales, defined as GAAP sales less product cost inflation, or plus
product cost deflation, as measured by SYSCO's change in cost of goods, award
recipients will earn a bonus under this component without regard to whether a
bonus was earned under Component A. The amount of any bonus earned under
Component B will be calculated according to the following formula:
------------------- ------ ------------- ------ -----------------------
Number of X Unit Value X Applicable Percentage B
Performance Units
Granted to
Participant
------------------- ------ ------------- ------ -----------------------
The "Unit Value" for the September 8, 2005 grants was set at $35. "Applicable
Percentage A" ranges from 25% to 75%, depending upon the amount of the increase
in net after-tax earnings, if any. "Applicable Percentage B" ranges from 25% to
75%, depending upon the amount of the increase in sales, as defined above, if
any.
Set forth below are the number of performance units awarded to each of the Named
Executive Officers:
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NAME AND TITLE TITLE NUMBER OF PERFORMANCE UNITS
=============================== ========================================================= ================================
Richard J. Schnieders Chairman of the Board, Chief Executive Officer and 112,000
President
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John K. Stubblefield, Jr. Executive Vice President, Finance and Chief Financial 10,500
Officer
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Larry J. Accardi Executive Vice President, Contract Sales; and 10,500
President, Specialty Distribution Companies
------------------------------- --------------------------------------------------------- --------------------------------
Kenneth F. Spitler Executive Vice President; and President of North 10,500
American Foodservice Operations
------------------------------- --------------------------------------------------------- --------------------------------
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Material Relationships
None of the Named Executive Officers has any material relationship with SYSCO or
its affiliates except in respect of their employment relationships, ownership of
SYSCO securities, and as otherwise disclosed in SYSCO's most recently filed
proxy statement and subsequent periodic reports filed with the Securities and
Exchange Commission.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
(b) Pro Forma Financial Information.
(c) Exhibits.
Exhibit Number Description
99.1 Form of Stock Option Grant Agreement issued to
executive officers on September 8, 2005 under the
2004 Stock Option Plan
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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.
SYSCO CORPORATION
Date: September 14, 2005 By: /s/ Michael C. Nichols
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Michael C. Nichols
Vice President, General Counsel
and Corporate Secretary
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