SYSCO CORP FILES (8-K) Disclosing Change in Directors or Principal Officers

Edgar Glimpses |

ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

Retirement of Principal Executive Officer and Director (Item 5.02(b))

Mr. William J. DeLaney, Chief Executive Officer of Sysco Corporation ("Sysco" or the "Company"), notified the Sysco Board of Directors (the "Board") on , that he intends to retire from his service as an officer of the Company and as a member of the Board, in each case effective on (the "Transition Date"). Following the Transition Date, through (the "Separation Date"), Mr. DeLaney will remain employed by the Company on a full-time basis as an advisor and mentor to the Company's successor Chief Executive Officer.

Appointment of Successor President and Chief Executive Officer and Director (Item 5.02(c)&(d))

On , the Board appointed Thomas L. Bené, currently Sysco's President and Chief Operating Officer, as the Company's President and Chief Executive Officer and as a member of the Board, effective on . Mr. Bené has served as Sysco's President and Chief Operating Officer since . Previously, he served as Executive Vice President and President, Foodservice Operations from to , Executive Vice President and Chief Commercial Officer from to and as Executive Vice President, Chief Merchandising Officer from to . Prior to joining Sysco, Mr. Bené held a variety of positions of increasing responsibility in marketing, sales, operations, franchise development and general management during a 23-year career at PepsiCo, culminating with his role as president of PepsiCo Foodservice, in which he served from 2011 until 2013.

On , the Compensation Committee of the Board (the "Committee") approved the compensation for Mr. Bené in connection with his appointment as President and Chief Executive Officer, effective .

In recognition of his additional responsibilities in connection with the transition to President and Chief Executive Officer:



        •    Mr. Bené's annual base salary will be increased from $800,000 to
             $900,000, effective for the period from  to
             ;




        •    The targeted aggregate dollar value of Mr. Bené's annual long-term
             incentive awards under the Company's long-term incentive plans will be
             increased from 3.75x to 4.75x his annual base salary, effective for
             the period from  to ; and




        •    Mr. Bené's target annual incentive opportunity for fiscal 2018 under
             the Company's management incentive program will remain at 125% of his
             annual base salary, effective for the period from  through
             .

Effective , in recognition of Mr. Bené's additional responsibilities in connection with his promotion to President and Chief Executive Officer:



        •    Mr. Bené's annual base salary will be increased from $900,000 to $1.1
             million;




        •    The targeted aggregate dollar value of Mr. Bené's annual long-term
             incentive awards under the Company's long-term incentive plans will be
             increased from 4.75x to 5.75x his annual base salary;




        •    Mr. Bené's target annual incentive opportunity for fiscal 2018 under
             the Company's management incentive program will be increased from 125%
             to 150% of his annual base salary, effective for the period from
              through the end of fiscal 2018, resulting in a
             pro-rated annual incentive award opportunity; and




        •    Mr. Bené will receive in , a one-time, promotional
             long-term incentive award valued at $1.1 million, which shall consist
             of restricted stock units.

There are no arrangements or understandings between Mr. Bené and any other person pursuant to which he was selected as an officer. Mr. Bené does not have any family relationship with any director or other executive officer of Sysco or any person nominated or chosen by Sysco to become a director or executive officer, and there are no transactions in which Mr. Bené has an interest requiring disclosure under Item 404(a) of Regulation S-K.





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Transition and Retirement Agreement with Mr. DeLaney (Item 5.02(e))



On , in connection with Mr. DeLaney's retirement and in furtherance of a smooth and orderly transition, the Committee approved, and the Company entered into, a Transition and Retirement Agreement with Mr. DeLaney (the "Agreement"), which provides for, among other things, the following terms and conditions:



     •   Pre-Transition Period: during the period from the date hereof through the
         Transition Date, Mr. DeLaney will be entitled to:




  •   A base annual salary no less than that received in fiscal year 2017;




        •    100% of the actually earned annual incentive for fiscal year 2017
             under the Management Incentive Program;




        •    Equity awards that are no less in value than those granted for fiscal
             year 2017, which awards are (i) granted in recognition of
             Mr. DeLaney's continued service as CEO through the Transition Date,
             and his service as an advisor and mentor to Mr. Bené through the
             Separation Date, and (ii) expected to be made in ; provided
             that, with regard to the performance share unit component of the
             equity awards, assuming Mr. DeLaney works through the Separation Date,
             he will only be eligible to receive 50% of the applicable award
             because he will have worked for one half of the three year performance
             period;




        •    Continued participation in all Sysco retirement, health and welfare
             plans, including all employer matching contributions; and




        •    Eligibility for a fiscal year 2018 annual incentive targeted at 150%
             of base salary.




     •   Transition Period: during the period from the Transition Date through the
         Separation Date, and in exchange for his execution of a customary waiver
         and release of claims in favor of the Company and his continued service to
         the Company, Mr. DeLaney will be entitled to:




  •   A base salary at the annual rate in effect on the Transition Date;




        •    Payment of the annual incentive for fiscal year 2018 under the
             Management Incentive Program, with the amount based on the Company's
             actual financial performance, with performance under the strategic
             bonus objectives deemed to be at 100% of target;




        •    Continued vesting of Mr. DeLaney's outstanding stock options,
             restricted stock units, performance share units and cash performance
             units, in each case in accordance with the terms and conditions of the
             applicable award agreements; and




        •    Continued participation in all Sysco retirement, health and welfare
             plans, including all employer matching contributions.




     •   Post-Separation: Mr. DeLaney's employment with the Company will terminate
         and his retirement will be effective on the Separation Date, after which
         he will be entitled to receive earned but unpaid salary, payment for any
         accrued but unused vacation days, reimbursement for unreimbursed business
         expenses and vested amounts payable pursuant to the Company's retirement,
         deferred compensation and benefit plans, in accordance with the terms
         thereof. In addition, subject to his execution of an additional waiver and
         release of claims in favor of the Company, Mr. DeLaney will be entitled
         to:




        •    A payment in the amount of 75% of Mr. DeLaney's 2018 annual base
             salary, which is equivalent to one half the value of his current
             target bonus opportunity for the six months for which he is expected
             to be employed in fiscal 2019; and




        •    Continuation of Mr. DeLaney's (and his dependents') health, dental and
             vision benefits for a period ending in , including through
             reimbursement for the amounts of any premiums or other fees paid to
             maintain such benefits under the Company's group health plans or
             otherwise.

The Agreement also provides for the benefits provided to Mr. DeLaney in the event that his employment with the Company is terminated prior to the Separation Date due to death or for "Cause" (as defined in the Agreement). The treatment of Mr. DeLaney's outstanding stock options, restricted stock units, performance share units and cash performance units following his retirement will be determined by the terms and conditions set forth in the applicable award agreements.

News Release

The news release issued by the Company on , announcing the matters described above, is filed herewith as Exhibit 99.1, and is incorporated herein by reference.




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SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

Not applicable.

(b) Pro Forma Financial Information.

Not applicable.

(c) Shell Company Transactions.


Not applicable.

(d) Exhibits.



                Exhibit Number   Description

                99.1             News Release dated 




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