UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_________________________
FORM
8-K
_________________________
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 10, 2007
_________________________
SYSCO
CORPORATION
(Exact
name of registrant as specified in its charter)
_________________________
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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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[__]
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[__]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[__]
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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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[__]
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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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ITEM
5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF
DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY
ARRANGEMENTS
OF CERTAIN OFFICERS.
(c) Appointment
of William J. Delaney as Chief Financial Officer
On
May
11, 2007, the Board of Directors of SYSCO Corporation (“SYSCO” or the “Company”)
appointed William J. DeLaney as the Company’s Executive Vice President and Chief
Financial Officer, effective July 1, 2007. In connection with his appointment
as
Chief Financial Officer, the Compensation Committee set his fiscal year 2008
base salary at $530,000.
Mr.
DeLaney, 51, began his SYSCO career in 1987 as Assistant Treasurer at the
Company’s corporate headquarters. He was promoted to Treasurer in 1991, and in
1993 he was named a Vice President of the Company, continuing in those
responsibilities until 1994. Mr. DeLaney joined SYSCO Food Services of Syracuse
in 1996 as Chief Financial Officer, progressed to Senior Vice President in
1998
and Executive Vice President in 2002. In 2004, Mr. DeLaney was appointed
President and Chief Executive Officer of SYSCO Food Services of Charlotte.
In
January 2007, Mr. DeLaney was named Senior Vice President, Financial Reporting,
of SYSCO.
(e) Approval
of Fiscal 2008 Bonus Awards under the 2005 Management Incentive
Plan
On
May
10, 2007, the Compensation Committee of SYSCO’s Board of Directors approved
fiscal 2008 bonus awards (the “Fiscal 2008 Awards”) for certain officers of the
Company, including certain executive officers, under the Company’s 2005
Management Incentive Plan.
Messrs.
Schnieders, Spitler, Delaney and Pulliam
Richard
J. Schnieders, Chairman of the Board of Directors, Chief Executive Officer
and
President, Kenneth F. Spitler, Executive Vice President and President, North
American Foodservice Operations, William J. Delaney, III, Senior Vice President,
Financial Reporting, and Larry G. Pulliam, Executive Vice President,
Merchandising Services (the “Named Executive Officers”), each received the same
Fiscal 2008 Award, which provides for a potential bonus with two components.
The
first component is based on the performance of the Company as a whole and
the
second is based on the performance of the Company’s operating divisions or
subsidiaries.
The
first
component of the bonus is awarded to the Named Executive Officers only if
the
Company achieves specified earnings per share increases over fiscal 2007
and
also achieves certain return on equity targets. This portion of the bonus
is
calculated by multiplying 70% of the Named Executive Officer’s base salary by a
percentage determined based upon the levels of earnings per share increases
and
return on equity achieved by the Company as a whole. Return on equity is
computed as net after-tax earnings for fiscal 2008 divided by the Company’s
average stockholders’ equity for fiscal 2008, computed by dividing 5 into the
sum of the Company’s stockholders’ equity at the beginning of the year and at
the end of each quarter during the year.
The
second component of the bonus is awarded to the Named Executive Officers
only if
at least 20 operating divisions and/or subsidiaries achieve certain return
on
capital targets and all operating divisions and subsidiaries that achieve
the
target return on capital employ at least half of the aggregate total capital
of
all Company operating divisions or subsidiaries. This portion of the bonus
is
calculated by multiplying the Named Executive Officer’s base salary by 9.0% with
respect to the first 20 operating divisions or subsidiaries that achieve
the
target return on capital and by an additional 1.5% for each additional operating
division or subsidiary that achieves the target return on capital.
Messrs.
Smith and Lankford
Stephen
F. Smith and James E. Lankford, each a Senior Vice President of Operations,
each
received a Fiscal 2008 Award that provides for a potential bonus with three
components. The first component is based on the performance of the Company
as a
whole, the second is based on the performance of the executive’s supervised
operations as if such supervised operations were a single operating company
(the
“Supervised Operations Performance Bonus”), and the third is based on the
performance of the Company’s operating divisions or subsidiaries.
The
first
component of the bonus is awarded only if the Company achieves specified
earnings per share increases over fiscal 2007 and also achieves certain return
on equity targets. This portion of the bonus is calculated by taking the
sum of
the following (i) the product of 50% of the officer’s base salary and 70% of a
percentage determined based upon the levels of earnings per share increases
and
return on equity achieved by the Company as a whole; and (ii) the product
of the
officer’s base salary and 20% of a percentage determined based upon the levels
of earnings per share increases and return on equity achieved by the Company
as
a whole. The executive will not be entitled to the bonus resulting from the
calculation in clause (ii) unless the executive receives a Supervised Operations
Performance Bonus. Return on equity is computed in the same manner as for
the
Named Executive Officers above.
The
second component of the bonus awarded to the officers, the Supervised Operations
Performance Bonus, will be the product of (i) the sum of 70% of a percentage
determined based upon the levels of operating pretax increases and return
on
capital of the executive’s supervised operations and 30% of a percentage based
upon the levels of pretax earnings and return on capital of executive’s
supervised operations; and (ii) 70% of the officer’s base salary.
The
third
component of the bonus is awarded to the officers only if at least 20 operating
divisions and/or subsidiaries of SYSCO achieve certain return on capital
targets
and all operating divisions and subsidiaries that achieve the target return
on
capital employ at least half of the aggregate total capital of all Company
operating divisions or subsidiaries. This portion of the bonus is calculated
by
multiplying the officer’s base salary by 9.0% with respect to the first 20
operating divisions or subsidiaries that achieve the target return on capital
and by an additional 1.5% for each additional operating division or subsidiary
that achieves the target return on capital.
Terms
of Fiscal 2008 Awards Applicable to Named Executive Officers and Messrs.
Smith
and Lankford
For
purposes of computing the operating division, subsidiary portion or supervised
operations portion of the bonus, return on capital is computed by dividing
the
operating division’s or subsidiary’s pretax earnings (excluding any gain on the
sale of fixed assets and intercompany interest income, and subject to adjustment
to include taxes that would have been included but for the timing of any
tax
deferrals so that results are consistent with the prior year) by the operating
division’s or subsidiary’s total capital. Total capital is computed as the sum
of (a) average stockholder’s equity, (b) average long-term debt,
(c) average net intercompany borrowings, (d) average patronage
dividends receivable and (e) certain specified adjustments (amounts allocated
to
capital with respect to (i) fixed rate intercompany loans,
(ii) capitalized leases, (iii) below market plant and equipment costs,
and (iv) other adjustments affecting capital approved by the Committee).
No
bonus
is paid unless the Company meets certain minimum targets with respect to
each
relevant performance measure. There is no maximum on the amount of bonus
that
may be earned, except that none of the Named Executive Officers or Messrs.
Smith
or Lankford are entitled to receive an annual bonus amount in excess of 1%
of
the Company’s earnings before income taxes, as publicly disclosed in the
“Consolidated Results of Operations” section of the Company’s Form 10-K for
fiscal 2008 to be filed with the Securities and Exchange Commission.
If,
during fiscal 2008, the Company sells or exchanges an operating division
or
subsidiary of the Company, and such sale or exchange results in the Company
recognizing a net-after tax gain (an “Extraordinary Gain”), the Committee has
the discretion to reduce the portion of the bonus payable with respect to
overall Company performance to any participant under the Fiscal 2008 Awards,
provided however, that the Committee may not reduce the portion of the bonus
payable with respect to overall Company performance to an amount less than
the
bonus payable with respect to overall Company performance if the Company
did not
take into account the Extraordinary Gain in calculating such amount.
In
determining whether or not the results of operations of the Company or an
operating division or subsidiary of the Company result in a bonus under the
Fiscal 2008 Awards, Company accounting practice and generally accepted
accounting principles with respect to fiscal 2008 shall be applied on a basis
consistent with fiscal 2007, and such determination shall be based on the
calculations made by the Company, approved by the Committee, which determination
shall be binding on each participant. Notwithstanding the foregoing, if there
is
any material change in the generally accepted accounting principles applied
by
the Company during fiscal 2008 relative to fiscal 2007 that results in a
material change in accounting, the bonus for fiscal 2008 shall be calculated
as
if such change had not occurred during fiscal 2008.
The
Committee must approve the payment of any bonus under the Fiscal 2008 Awards
within 90 days following the end of fiscal 2008. All bonuses under the
Fiscal 2008 Awards are subject to the provisions of the 2005 Management
Incentive Plan, a copy of which has been filed with the Securities and Exchange
Commission.
Approval
of Fiscal Year 2008 Supplemental Bonus Agreement with CEO under the 2006
Supplemental Performance-Based Bonus Plan
On
May
10, 2007, the Committee approved the form of Fiscal Year 2008 CEO Supplemental
Bonus Agreement to be entered into under the 2006 Supplemental Performance-Based
Bonus Plan (the “Supplemental Plan”). SYSCO and Mr. Schnieders are expected
to enter into the agreement no later than June 30, 2007.
In
addition to those provisions of the Supplemental Plan previously described
in
the Company’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on June 15, 2006, the agreement contains the following material
provisions:
Increase
in Management Incentive Plan (“MIP”) Bonus.
If the
Committee determines that Mr. Schnieders’ annual performance for fiscal
2008 has exceeded expectations, as determined by the Committee based on their
annual review of Mr. Schnieders against the criteria specified in the
agreement, Mr. Schnieders will be entitled to an additional bonus equal to
up to 25% of his Total Cash MIP Bonus (as defined below) with respect fiscal
2008, as determined by the Committee in its sole discretion. Any such bonus
would be paid solely under the Supplemental Plan, not the MIP, and would
be
included in the calculation of that portion of Mr. Schnieders’ compensation
that is subject to the $1 million dollar cap placed on certain compensation
deductions allowed to be taken by SYSCO under Section 162(m) of the Internal
Revenue Code. This means that based on Mr. Schnieders’ overall compensation
package, it is likely that any such bonuses would not be deductible. The
amount
of any Additional Shares, as that term is defined in the MIP, issued to
Mr. Schnieders under the MIP shall be determined without regard to any
additional bonus under the Supplemental Plan. The amount of any supplemental
bonus will be included in the calculation of Mr. Schnieders’ final average
compensation under the Company’s Supplemental Executive Retirement Plan (“SERP”)
but will not be included in calculating his protected final average compensation
under the SERP. Mr. Schnieders will not receive any payment under the
Supplemental Plan if he does not also earn a bonus under the MIP.
Pursuant
to the agreement, the Committee will evaluate Mr. Schnieders’ fiscal 2008
performance based on the following performance goals:
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long-term
strategy:
o integrate
strategy in day-to-day operations while maintaining focus on
transformation;
o continue
to build on long-term relationships with all constituencies;
o position
SYSCO as a sustainable corporation;
financial
performance:
o increase
street sales by a specified percentage;
o achieve
return on equity of a specified percentage;
o achieve
return on assets of a specified percentage;
o increase
corporate multi-unit sales by more than a specified
percentage;
o achieve
sales through acquisitions of at least a specified
percentage;
o reduce
overall cost per case by a certain number cents;
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corporate
governance:
o assure
compliance with all applicable regulations and corporate governance
guidelines;
o focus
on shareholder issues;
o enhance
appropriate level of transparency;
human
capital:
o create
individual development plans for selected individuals;
o promote
long-term benefit cost reduction;
o clearly
define “learning organization” for SYSCO; and
o improve
communications within the organization.
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Reduction
in MIP Bonus.
Mr. Schnieders will agree that if his performance for fiscal 2008 is below
expectations, as determined by the Committee based on their annual review
of Mr.
Schnieders against the criteria set forth in the agreement, his MIP bonus
for
fiscal 2008 shall be reduced by up to 25% of his Total Cash MIP Bonus (as
defined below), the amount of such reduction to be determined by the Committee
in its sole discretion. The amount of any Additional Shares, as that term
is
defined in the MIP, issued to Mr. Schnieders under the MIP shall be
determined after reducing the MIP bonus by any forfeited amount.
Total
Cash MIP Bonus.
For a
given executive, the term “Total Cash MIP Bonus” means the cash bonus earned by
the executive under the MIP for fiscal 2008, exclusive of any portion of
the MIP
bonus that is paid in SYSCO common stock. The Total Cash MIP Bonus will not
include any SYSCO matching contributions resulting from the deferral of all
or a
portion of the MIP bonus under any SYSCO executive deferral plan.
Termination
of Employment.
If
Mr. Schnieders’ employment with SYSCO terminates for any reason prior to
the end of fiscal 2008, including, without limitation, as a result of death,
disability or following a change of control of SYSCO, and if his performance
through the date of termination in 2008 exceeds expectations, as determined
by
the Committee based on a review of Mr. Schnieders against the criteria set
forth
in the agreement, he may, in the discretion of the Committee, be awarded
a bonus
under the Supplemental Plan, but only if he is entitled to receive a bonus
under
the MIP pursuant to the terms of his severance agreement with SYSCO. In such
an
event, the Committee may exercise its discretion to award Mr. Schnieders
a bonus
equal to up to 25% of his Total Cash MIP Bonus. In no event, however, if
Mr.
Schnieders’ employment with SYSCO terminates prior to the end of fiscal 2008 may
his MIP bonus be reduced pursuant to the terms of the Supplemental Plan.
Payment
and Deferral.
Under
the Executive Deferred Compensation Plan (“EDCP”), Executive may elect to defer
up to 40% of his performance bonus. Any performance bonus earned under the
Supplemental Plan not otherwise deferred under the EDCP will be paid as soon
as
administratively feasible following the Committee’s determination of Mr.
Schnieders’ entitlement thereto.
Approval
of Fiscal Year 2008 Supplemental Bonus Agreement with Certain Corporate Officers
(other than the CEO) under the 2006 Supplemental Performance-Based Bonus
Plan
On
May
10, 2007, the Committee approved the form of Fiscal Year 2008 Supplemental
Bonus
Agreement to be entered into under the Supplemental Plan with certain of
its
officers other than the Chief Executive Officer, including Messrs. DeLaney,
Pulliam and Spitler, as well as Messrs. Smith and Lankford. SYSCO and each
such
executive (each an “Executive”) individually are expected to enter into the
agreements no later than June 30, 2007.
In
addition to those provisions of the Supplemental Plan previously described
in
the Company’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on June 15, 2006, and those of the agreement previously described
above, the agreements contain the following material provisions:
Increase
in Management Incentive Plan (“MIP”) Bonus.
Each
Executive will be evaluated, together with certain other designated participants
under the Supplemental Plan, as a group (the “Management Team”), based on the
Committee’s judgment of the Management Team’s alignment with (i) the
Company’s fiscal year goals; and (ii) the strategy initiatives of the
Company, based on the criteria discussed below. If the Committee determines
that
the Executive’s annual performance for fiscal 2008 has exceeded expectations, as
determined by the Committee based on its annual review of the Management
Team,
as a group, against the criteria specified in the agreement, the Executive
will
be entitled to an additional cash bonus of up to 25% of his Total Cash MIP
Bonus
with respect fiscal 2008, as determined by the Committee in its sole discretion.
Any such bonus would be paid solely under the Supplemental Plan, not the
MIP,
and would be included in the calculation of that portion of the Executive’s
compensation that is subject to the $1 million dollar cap placed on certain
compensation deductions allowed to be taken by SYSCO under Section 162(m)
of the
Internal Revenue Code. This means that based on the Executives’ overall
compensation package, it is likely that any such bonuses would not be
deductible. The amount of any Additional Shares, as that term is defined
in the
MIP, issued to the Executive under the MIP shall be determined without regard
to
any additional bonus under the Supplemental Plan. The amount of any supplemental
bonus will be included in the calculation of the Executive’s final average
compensation under the Company’s SERP but will not be included in the
calculation of his protected final average compensation, to the extent that
he
is a protected participant under the SERP. The Executive will not receive
any
payment under the Supplemental Plan if he or she does not also earn a bonus
under the MIP. Pursuant to the agreement, the Committee will evaluate the
Management Team’s fiscal 2008 performance based on the following performance
goals:
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achieve
positive results in enterprise-wide
goals:
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achieve
sales growth of greater than a specified
percentage;
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reduce
cost per case by more than a specified number of cents per
case;
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achieve
accident frequency of less than a certain number per 100
employees;
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achieve
a return on equity of at least a specified
percentage;
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develop
executive leadership for current and future
needs;
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improve
communications between our operating companies and between SYSCO’s
operating companies and SYSCO’s corporate office;
and
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contribute
to the development and execution of the Company’s strategy initiatives and
effectively implement them throughout
SYSCO.
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Reduction
in MIP Bonus.
The
Executive will agree that if the Executive’s performance for fiscal 2008 is
below expectations, as determined by the Committee based on its annual review
of
the Management Team against the criteria set forth in the agreement, his
MIP
bonus for fiscal 2008 shall be reduced by up to 25% of his Total Cash MIP
Bonus,
the amount of such reduction to be determined by the Committee in its sole
discretion. The amount of any Additional Shares, as that term is defined
in the
MIP, awarded to the Executive under the MIP shall be determined after reducing
the MIP bonus by any forfeited amount.
Termination
of Employment.
Mr.
Spitler has entered into a severance agreement with SYSCO. With respect to
Executives who have entered into a severance agreement with SYSCO and whose
employment with SYSCO terminates for any reason prior to the end of fiscal
2008,
including, without limitation, as a result of death, disability or following
a
change of control of SYSCO, if the Executive’s performance through the date of
termination in 2008 exceeds expectations, as determined by the Committee
based
on a review of the Management Team against the criteria set forth in the
agreement, such Executive may, in the discretion of the Committee, be awarded
a
bonus under the Supplemental Plan, but only if he is entitled to receive
a bonus
under the MIP pursuant to the terms of his severance agreement with SYSCO.
In
such an event, the Committee may exercise its discretion to award the Executive
a bonus equal to up to 25% of his Total Cash MIP Bonus. In no event, however,
if
the Executive’s employment with SYSCO terminates prior to the end of fiscal
2008, may his MIP bonus be reduced pursuant to the terms of the Supplemental
Plan. If the Executive has not entered into a severance agreement with SYSCO
and
the Executive’s employment with SYSCO terminates for any reason prior to the end
of fiscal 2008, including, without limitation, as a result of death, disability
or following a change of control of SYSCO, the Executive shall not be entitled
to any supplemental bonus for such fiscal year.
Payment
and Deferral.
Under
the EDCP, Executive may elect to defer up to 40% of his performance bonus.
Any
performance bonus earned under the Supplemental Plan not otherwise deferred
under the EDCP will be paid as soon as administratively feasible following
the
Committee’s determination of the Executive’s entitlement thereto.
ITEM
5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE
IN FISCAL YEAR.
In
2006, the United Brotherhood of Carpenters and Joiners of America submitted
to
SYSCO a non-binding proposal asking that the Board of Directors initiate
the
appropriate process to amend SYSCO’s corporate governance documents to establish
a majority vote standard in uncontested director elections. The response
of the
Board of Directors in the Company’s 2006 proxy statement indicated that it had
directed the Corporate Governance and Nominating Committee to conduct a study
of
corporate governance best practices at publicly held U.S. corporations. Among
other things, the Board had requested the Corporate Governance and Nominating
Committee to recommend to the Board for adoption appropriate governance-related
amendments to the Company’s Bylaws and Corporate Governance Guidelines. The
actions described in this Item 5.03 and in Item 8.01 below are a result of
such
study.
(a) On
May
11, 2007, the Board amended the Company’s Amended and Restated Bylaws in several
respects, including many changes meant to modernize the Bylaws and to provide
clarity and consistency with Delaware corporate law. The primary and substantive
changes, including a number of changes to modernize the Bylaws, were as follows:
Election
of Directors by Majority Vote
Article
I, Section 6 was amended to adopt a majority vote standard whereby each director
to be elected will be elected by a majority of the votes cast when a quorum
is
present. However, if the number of nominees exceeds the number of directors
to
be elected at the meeting as of the meeting’s record date, then each director to
be elected shall be elected by a plurality of the votes cast. Previously,
directors were elected by a plurality of the votes cast.
Uncertificated
Shares
In
accordance with Section 158 of the Delaware General Corporate Law, Article
I,
Section 1, was amended to allow for shares of Company stock to be
represented either by certificates or in uncertificated form. Should
uncertificated shares be issued in the future, the issuance will not affect
shares already represented by certificates until such certificates are
surrendered to the Company.
Fractional
Shares
Article
I, Section 2, which related to fractional share interests, was eliminated.
Previously, this section provided that the Company would not issue fractions
of
a share but would either pay in cash the fair value of such fractional share
or
issue scrip or fractional warrants.
Record
Date for Action by Written Consent
Article
I, Section 4(b), was amended to add electronic transmission as permitted
by
Delaware General Corporation Law as a means by which a “written” consent of
stockholders may be taken. The Board’s response time to adopt a resolution
fixing the record date for an action by written consent, in response to a
stockholder request, was changed from ten business days to ten
days.
Stockholder
Meetings
Reference
to the Company’s first annual meeting was removed from Article I, Section 6, and
provision for holding the annual meeting by use of remote communications
was
added. The description of “annual meeting” was clarified to provide that such
meeting is “for the election of directors to succeed those who terms expire and
for the transaction of such other business as may properly come before the
meeting.”
The
section entitled “Place,” providing that meetings shall be held at such place as
the directors may, from time to time, fix, and that whenever the directors
shall
fail to fix such place, the meeting shall be held at the principal executive
office of the Company, was eliminated from Article I, Section 6.
Article
I, Section 6 was amended to provide that special meetings, other than those
required by statute, may be called at any time by the Board acting pursuant
to a
resolution adopted by a majority of the whole board. “Whole board” is stated to
mean the total number of directors that the Company would have if there were
no
vacancies. Previously this section stated that annual and special meetings
may
be called by the Chairman of the Board or by the directors or by any officer
instructed by the directors to call the meeting.
The
content of the notice of a stockholder meeting has been expanded to include
the
means of remote communication, if any, by which stockholders may be deemed
to be
present at the meeting. Pursuant to the amendment, notice may now be given
other
than by mail and shall be deemed given at the time prescribed in the Delaware
General Corporation Law. Notice is now deemed to be given to all stockholders
who share an address if notice is given in accordance with the “householding”
rules set forth in Rule 14a-3(e) under the Securities Exchange Act of 1934,
as
amended, and Section 233 of the Delaware General Corporation Law.
When
a
meeting is adjourned to another time or place, Article I, Section 6 now provides
that notice need not be given of the adjourned meeting if the time and place,
if
any, thereof, and the means of remote communications, if any, by which
stockholders and proxyholders may be deemed to be present in person and vote
at
the adjourned meeting are announced at the meeting at which the adjournment
is
taken. However, if the date of any adjourned meeting is more than 30 days
after
the date for which the meeting was originally noticed, or if a new record
date
is fixed for the adjourned meeting, Article I, Section 6 now requires that
notice of the place, if any, date, and time of the adjourned meeting and
the
means of remote communications, if any, by which stockholders and proxyholders
may be deemed to be present in person and vote at such adjourned meeting,
shall
be given in conformity with new Section 5 of the Bylaws. This is a change
from
the former provision that if a meeting was adjourned to another time and/or
to
another place, and if an announcement of the adjourned time and/or place
was
made at the meeting, it was not necessary to give notice of the adjourned
meeting unless the adjournment was for more than 30 days or the directors,
after
adjournment, fixed a new record date for the adjourned meeting. That provision
was eliminated in favor of the new requirement set forth above. Also,
stockholders may now submit a waiver of notice by electronic
communication.
Article
I, Section 6 regarding the examination of the stockholder list was amended
to
delete the requirement that the list would only be available at the time
and
place of the meeting to allow for the availability of the list during the
meeting in instances where the meeting is held by remote communication.
Revision
was made to Article I, Section 6 to include a person designated by the Board
of
Directors as the chairman who may preside over stockholder meetings in the
absence of the Chairman of the Board rather than a specified list of officers.
The powers and authority of the chairman of the stockholder meeting were
defined
to include determining the order of business and the procedure at the meeting,
including regulation of the manner of voting and the conduct of discussion.
Also, the chairman will have the power to adjourn the meeting to another
place,
if any, date and time.
Provision
was made in Article I, Section 6 for the Board of Directors to appoint an
inspector to fill a vacancy should a previously appointed inspector fail
to
appear or fail or refuse to act. If no such appointment is made, the chairman
of
the meeting will fill the vacancy at the meeting.
Effectiveness
of Written Consent
Article
I, Section 7(c) was revised to add that a telegram, cablegram or other
electronic transmission consenting to an action to be taken and transmitted
by a
stockholder or proxyholder, or person authorized by them, will be deemed
to be
written, signed and dated for the purposes of the bylaws, to the extent
permitted by law. Any such written consent will now be deemed delivered if
delivered in accordance with applicable law.
Advance
Notice Provisions for Election of Directors
Article
I, Section 8 was amended to define what constitutes a “public announcement” and
to require information regarding beneficial owners on whose behalf a director
nomination is made.
Stockholder
Proposals
Article
I, Section 9 was amended to require information regarding beneficial owners
on
whose behalf a proposal is made.
Directors
In
Article II, Section 2, the size range specified for the Board of Directors
was
changed to five to 15 directors. The previous range was from three to 15
directors. Further, certain historical provisions used to implement the
Company’s classified Board structure and to name the Company’s first Board that
are no longer necessary were deleted.
Certain
of the information previously contained under the headings “Time,” “Place,” and
“Call” was consolidated into the paragraph that immediately followed those
headings or was deleted.
The
Board
of Directors may no longer remove a director for cause.
The
Chairman of the Board will no longer be automatically classified as an officer
or an ex officio member of all standing Board committees.
Officers
Article
III was amended to remove the Chairman of Board and add the Chief Financial
Officer to the list of officers that the Board elects. The following language
was deleted:
The
Chairman of the Board shall be an ex officio member of all standing committees
unless otherwise provided in the resolution appointing such committees. The
Chairman of the Board shall have power to call meetings of the shareholders
and
directors of the Corporation and shall have the power to act as chairman
of such
meetings.
Electronic
transmission was added as a means by which officers may resign. The following
language was deleted:
The
Chairman, if any, of the Board of Directors shall preside, if present, at
all
meetings of stockholders and directors. Unless the Board specifies another
officer, the Chairman of the Board shall be the chief executive officer of
the
Corporation. During the absence or disability of the President, the Chairman
shall exercise all the powers and discharge all the duties of the
President.
The
President, in the absence of the Chairman of the Board, shall preside, if
present, at all meetings of stockholders and directors.
The
duties and officer responsibilities of the Chief Executive Officer and Chief
Financial Officer were added to Article III.
Indemnification
Changes
were made to provide greater specificity with respect to certain indemnification
rights, including the addition of a severability clause designed to preserve
the
remainder of the indemnification bylaw if part of it is deemed invalid or
unenforceable. Provisions were added for procedures for submission of
indemnification claims, for liability to indemnitees upon claim settlements
and
for subrogation of rights and claims.
The
Board
ordered the Bylaws as so amended to be restated. The foregoing summary of
the
Bylaw amendments is qualified in its entirety by reference to the text of
the
Company’s Bylaws, as amended and restated on May 11, 2007, a copy of which is
attached hereto as Exhibit 3.5 and is incorporated by reference.
ITEM
8.01 OTHER EVENTS.
As
described in Item 5.03 above, the actions described in this Item 8.01 are
the
result of the Corporate Governance and Nominating Committee’s study of corporate
governance best practices at publicly held U.S. corporations.
Amendments
to the Corporate Governance Guidelines
On
May
11, 2007, the Board also approved amendments to the Company’s Corporate
Governance Guidelines (the “Guidelines”), including the following:
Corporate
Governance Guidelines:
Director
Qualifications
| · |
to
provide that invitations to join the Board of Directors should be
made
jointly by the Board Chairman, the Chair of the Corporate Governance
and
Nominating Committee and the Presiding
Director.
|
Corporate
Governance Guidelines:
Voting
for Directors
| · |
to
provide that any incumbent director who is not re-elected in an election
in which majority voting applies shall tender his or her resignation
promptly following certification of the stockholders’ vote. The Corporate
Governance and Nominating Committee shall consider the tendered
resignation and recommend to the Board whether to accept or reject
the
resignation offer, or whether other action should be taken. The Board
shall act on the recommendation within 120 days following certification
of
the stockholders’ vote and shall promptly disclose (by press release,
filing of a Form 8-K and other public means of disclosure deemed
appropriate) its decision regarding whether to accept the director’s
resignation offer.
|
Corporate
Governance Guidelines:
Executive Committee
| · |
to
describe the purpose and responsibilities of the Executive Committee,
including that the Executive Committee acts in place of the Board
and
exercises the Board’s power and authority between Board meetings, subject
to the Company’s Certificate of Incorporation and Bylaws and applicable
laws, rules and regulations. All members of the Executive Committee
are
required to be independent directors except for the Chief Executive
Officer, if he is a member.
|
Corporate
Governance Guidelines:
Director
Access to Officers, Employees and Advisors
| · |
to
clarify that the Board of Directors and any of its Committees has
sole
authority to retain independent advisors.
|
Corporate
Governance Guidelines:
Stock
Ownership Requirement
| · |
to
require that each Company executive officer is expected to retain
25% of
the net shares acquired upon the exercise of stock options and 25%
of the
net shares acquired pursuant to the vesting of restricted stock and
restricted stock unit grants until the executive officer’s holdings of
Company stock equal or exceed the ownership guidelines applicable
to the
executive officer.
|
The
foregoing summary of the amendments to the Corporate Governance Guidelines
is
qualified in its entirety by reference to the text of the Company’s Corporate
Governance Guidelines, as amended on May 11, 2007, a copy of which is attached
hereto as 99.1 and is incorporated by reference.
Revision
of the Corporate Governance and Nominating Committee’s Procedures for
Stockholder Submission of Director Candidate Recommendations
On
May
10, 2007, the Corporate Governance and Nominating Committee approved revisions
to the procedures established by the Corporate Governance and Nominating
Committee for stockholders to submit the names of potential director candidates
to the Committee, as described annually in SYSCO’s proxy statement. These
revisions were implemented to institute a less formal process for stockholders
to recommend director candidates to the Committee.
Stockholders
can recommend candidates for consideration by the Corporate Governance and
Nominating Committee by writing to the Corporate Secretary, 1390 Enclave
Parkway, Houston, Texas 77077, and including the following information: (i)
the
name and address of the stockholder; (ii) the name and address of the person
to
be nominated; (iii) a representation that the stockholder is a holder of
the
Company’s stock entitled to vote at the meeting; (iv) a statement in support of
the stockholder’s recommendation, including a description of the candidate’s
qualifications; (v) information regarding the candidate as would be
required to be included in a proxy statement filed in accordance with the
rules
of the Securities and Exchange Commission; and (vi) the candidate’s written,
signed consent to serve if elected. The
Committee typically recommends director candidates to the Board in early
July of
each year. Director candidate recommendations received by May 1st will be
considered in connection with the Company’s next annual meeting of
stockholders.
Adoption
of Stock Option Grant Administration Guidelines
In
February 2007, the Compensation Committee adopted the SYSCO Corporation Stock
Option Grant Administrative Guidelines, which set the second Tuesday in
November, a date when the Company is typically in a trading “window” under its
Policy on Trading in Company Securities, as the date the Committee will grant
stock options each year. The guidelines also establish timelines for
granting stock options related to acquisitions or newly-hired key employees,
which require that the Committee generally make the grants within three months
of the event. The guidelines also establish procedures for the Committee’s
action in the event that any of these pre-established dates/time periods
conflict with an unanticipated trading blackout period related to material
non-public information. The guidelines provide that the Committee
should generally make option grants at a point in time when the Company has
publicly disseminated all material information likely to affect the trading
price of the Company’s common stock. The Committee will generally not make
grants during a period preceding an anticipated event which is likely to
cause a
substantial increase or a substantial decrease in the trading price of the
Company’s common stock, such as an earnings release. The Committee will
generally authorize and grant options during normal trading windows.
If the Company has scheduled grants to occur outside of a normal trading
window
or when the Company is in possession of material non-public information,
then:
| · |
management
must inform the Committee or the Board of Directors, as the case
may be,
of all material information in its possession regarding the Company;
and
|
| · |
if,
in the Committee’s or Board’s judgment, such information is reasonably
likely to affect the trading price of the Company’s common stock, then due
consideration should be given to the number and exercise price of
options
that may be granted in light of such material non-public information;
for
example, if the information is likely to increase the stock price,
then
the Committee or Board should consider granting fewer options or
setting
an exercise price that is higher than the current market
price.
|
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d)
Exhibits.
Exhibit
Number Description
3.5 Bylaws
of
SYSCO Corporation, as amended and restated on May
11,
2007
99.1 Corporate
Governance Guidelines of SYSCO Corporation, as amended
on May 11, 2007
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:
May 14, 2007
|
By: /s/
Michael C. Nichols
|
| |
Michael
C. Nichols
|
| |
Senior
Vice President, General Counsel
|
| |
and
Corporate Secretary
|
EXHIBITS
3.5
Bylaws
of
SYSCO Corporation, as amended and restated on May
11,
2007
99.1 Corporate
Governance Guidelines of SYSCO Corporation, as amended
on May 11, 2007