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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): FEBRUARY 16, 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.
Supplemental Performance-Based Bonus Agreement with CEO
On November 11, 2004, in connection with its continuous re-evaluation of SYSCO's
pay-for-performance compensation strategy, the Compensation and Stock Option
Committee (the "Committee") approved a Supplemental Performance-Based Bonus Plan
(the "Supplemental Plan") for Richard J. Schnieders, Chief Executive Officer and
Chairman of SYSCO's Board of Directors, as previously reported in a Form 8-K
filed with the Securities and Exchange Commission on November 17, 2004, the
contents of which are incorporated herein by reference. On February 16, 2005,
the Committee approved the form of Supplemental Performance-Based Bonus
Agreement to be entered into under the Supplemental Plan, and on February 22,
2005, SYSCO and Mr. Schnieders entered into the agreement.
Increase in Management Incentive Plan ("MIP") Bonus. As previously disclosed in
SYSCO's Current Report on Form 8-K filed on November 17, 2004, if the Committee
determines that Mr. Schnieders' annual performance for fiscal 2005 has exceeded
expectations, as determined by the Committee based on their annual review of Mr.
Schnieders against the criteria set forth in the Supplemental Plan and specified
in the agreement, Mr. Schnieders will be entitled to an additional bonus equal
to up to 25% of any bonus to which he may be entitled under the MIP with respect
fiscal 2005, 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 and Additional Cash Bonus, as those terms are defined
in the MIP, awarded to Mr. Schnieders under the MIP shall be determined without
regard to any additional bonus under the Supplemental Plan. Mr. Schnieders will
not receive any payment under the Supplemental Plan if he does not also earn a
bonus under the MIP.
In addition to those provisions of the Supplemental Plan previously described in
the Form 8-K filed on November 17, 2004, the agreement contains the following
material provisions:
Reduction in MIP Bonus. Mr. Schnieders has agreed that if his performance for
fiscal 2005 is below expectations, as determined by the Committee based on their
annual review of Mr. Schnieders against the criteria set forth in the
Supplemental Plan and specified in the agreement, his MIP bonus for fiscal 2005
shall be reduced by up to 25% of his Total 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 and Additional Cash Bonus, as
those terms are defined in the MIP, awarded to Mr. Schnieders under the MIP
shall be determined after reducing the MIP bonus by any forfeited amount.
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Total MIP Bonus. The term "TOTAL MIP BONUS" means the bonus earned by Mr.
Schnieders under the MIP for fiscal 2005, without regard to any additional
amounts he may be entitled to receive under the MIP as a result of elections
made by him. By way of example, the Total MIP Bonus will not include any
"Additional Shares" or "Additional Cash Bonus" (as such terms are defined in the
MIP) Mr. Schnieders may be entitled to receive pursuant to Sections 6(A) and
6(B) of the MIP as a result of electing to receive a portion of his MIP bonus in
SYSCO stock. The Total 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 deferral plan.
Termination of Employment. If Mr. Schnieders' employment with SYSCO terminates
for any reason prior to the end of fiscal 2005, 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 2005 exceeds expectations,
as determined by the Committee based on a review of Mr. Schnieders against the
criteria set forth in the Supplemental Plan and specified 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 MIP Bonus. In no event, however, if Mr. Schnieders'
employment with SYSCO terminates prior to the end of fiscal 2005 may his MIP
bonus be reduced pursuant to the terms of the Supplemental Plan.
Payment and Deferral. Any performance bonus earned under the Supplemental Plan
will be paid in cash as soon as administratively feasible following the
Committee's determination of Mr. Schnieders' entitlement thereto; provided
however, that the performance bonus must be paid before the later of (i) the
date that is 2 1/2 months from the end of Mr. Schnieders' first taxable year in
which the performance bonus is no longer subject to a substantial risk of
forfeiture or (ii) the date that is 2 1/2 months from the end of SYSCO's first
taxable year in which the amount is no longer subject to a substantial risk of
forfeiture. In no event will Mr. Schnieders be permitted to defer any portion of
the performance bonus under any deferred compensation plan or arrangement
sponsored by SYSCO. In addition, in no event will the performance bonus increase
the amount of compensation earned by Mr. Schnieders under the MIP (by way of
example, the performance bonus will not increase either the "Additional Shares"
or the "Additional Cash Bonus" (as such terms are defined in the MIP) pursuant
to Sections 6(A) and 6(B) of the MIP).
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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: February 23, 2005 By: /s/ Michael C. Nichols
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Michael C. Nichols
Vice President, General Counsel
and Corporate Secretary
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