<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
SYSCO CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[SYSCO LOGO]
SYSCO CORPORATION
1390 ENCLAVE PARKWAY
HOUSTON, TEXAS 77077-2099
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 3, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Sysco
Corporation, a Delaware corporation (the "Company"), will be held November 3,
1995, at 10:00 A.M., at the Four Seasons Hotel Houston located at 1300 Lamar
Street, Houston, Texas, for the following purposes:
A. To elect five directors for terms of office as shown in the attached
Proxy Statement.
B. To approve the Sysco Corporation 1995 Management Incentive Plan as
set forth in the attached Proxy Statement.
C. To approve the Sysco Corporation Non-Employee Directors Stock Option
Plan as set forth in the attached Proxy Statement.
D. To approve the reservation of 8,000,000 additional shares of Sysco
Corporation Common Stock under the Sysco Corporation 1991 Stock
Option Plan as set forth in the attached Proxy Statement.
E. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only Common Stockholders of record on the books of the Company at the close
of business on September 8, 1995, will be entitled to vote at the meeting.
We hope you will be able to attend the meeting in person but if you cannot
be present, it is important that you sign, date and promptly return the enclosed
proxy in order that your vote may be cast at the meeting.
JOHN F. WOODHOUSE
Chairman of the Board
Dated: September 29, 1995
Enclosure:
A copy of the Annual Report of Sysco Corporation for the fiscal year ended
July 1, 1995, containing financial statements, is enclosed herewith.
<PAGE> 3
SYSCO CORPORATION
1390 ENCLAVE PARKWAY
HOUSTON, TEXAS 77077-2099
1995 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
September 29, 1995
The following information is furnished in connection with the solicitation
of proxies for the 1995 Annual Meeting of Sysco Corporation (hereinafter called
the "Company").
A form of proxy for use at the meeting is enclosed. Any stockholder who
executes and delivers a proxy has the right to revoke the same at any time
before it is voted. The solicitation of proxies is made by and on behalf of the
management of the Company.
The cost of solicitation of proxies will be borne by the Company. The
Company will authorize banks, brokerage houses and other custodians, nominees or
fiduciaries to forward copies of proxy material to the beneficial owners of
shares or to request authority for the execution of the proxies and will
reimburse such banks, brokerage houses and other custodians, nominees or
fiduciaries for their out-of-pocket expenses incurred in connection therewith.
The Company has retained Kissel-Blake, Inc. to assist in the solicitation of
proxies from such nominees and certain individual stockholders, in writing or by
telephone, at an estimated fee of $9,000 plus reimbursement for reasonable
out-of-pocket expenses. This Proxy Statement and form of proxy were first mailed
to stockholders on or about September 29, 1995.
As of September 8, 1995, the record date, there were outstanding
182,778,021 shares of the Company's Common Stock, $1 par value ("Common Stock").
The holders of Common Stock vote as a single class and are entitled to one vote
per share, noncumulative. As of September 8, 1995, no person or group was known
to the Company to own more than five percent of the Company's Common Stock. All
directors and executive officers of the Company as a group (22 persons) owned
beneficially 3,965,836 shares (constituting approximately 2.17%) of the
Company's outstanding Common Stock as of September 8, 1995. As stated in the
Notice of Annual Meeting of Stockholders attached hereto, only holders of Common
Stock of record at the close of business on September 8, 1995 will be entitled
to notice of and to vote at the meeting or any adjournment thereof. The stock
transfer book will not be closed.
ELECTION OF DIRECTORS
Five directors are to be elected. The Company's bylaws provide for the
election of directors for staggered terms, with each director serving a
three-year term. The Board of Directors has renominated five directors, Colin G.
Campbell, Frank A. Godchaux III, Donald J. Keller, Frank H. Richardson and John
F. Woodhouse for three-year terms of office. The proxyholders intend to vote for
the first five persons named below as directors. The remaining ten persons named
in the table set forth on page 3 will continue in office for the terms which
expire at the Annual Meeting of Stockholders in the year opposite their
respective names.
Management recommends that the five nominees named below be elected to the
Board of Directors for the above-referenced terms of office. The five nominees
have consented to being named in the Proxy Statement and to serve if elected.
Unless otherwise directed in the proxy form, the proxyholders intend to vote in
favor of electing Messrs. Campbell, Godchaux, Keller, Richardson, and Woodhouse
as directors for three-year terms of office and until their respective
successors are elected and shall qualify.
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The following information has been furnished to the Company by the five
members of the Board of Directors who are nominees for reelection at the 1995
Annual Meeting:
COLIN G. CAMPBELL, 59, has served as a director of the Company since
1989. Mr. Campbell is the President of Rockefeller Brothers Fund, a private
philanthropic foundation, and also serves as a director of Pitney-Bowes
Inc., Hartford Steam Boiler Inspection and Insurance Company and
Rockefeller Financial Services, Inc.
FRANK A. GODCHAUX III, 68, has served as a director of the Company
since 1987. Mr. Godchaux is the Chairman of the Board of Directors of
Riviana Foods Inc., a food manufacturer.
DONALD J. KELLER, 63, has served as a director of the Company since
1986. Mr. Keller served as the President, Chief Operating Officer and a
director of West Point Pepperell, a textile manufacturer, from January,
1986 through April, 1989 and currently serves as a director of Air Express
International, Inc. Mr. Keller is a member of the Executive Committee of
the Board of Directors of the Company.
FRANK H. RICHARDSON, 62, has served as a director of the Company since
1993. Mr. Richardson served as President and Chief Executive Officer of
Shell Oil Company until his retirement in 1992.
JOHN F. WOODHOUSE, 64, has served as a director and officer of the
Company since its formation in 1969. Mr. Woodhouse is Chairman of the Board
of Directors of the Company. From 1985 until November, 1994, Mr. Woodhouse
served as Chairman and Chief Executive Officer of the Company. Mr.
Woodhouse also serves as a director of Shell Oil Company. Mr. Woodhouse is
Chairman of the Executive Committee of the Board of Directors of the
Company.
The following information has been furnished to the Company by the ten
members of the Board of Directors of the Company whose terms of office extend
beyond the 1995 Annual Meeting:
JOHN W. ANDERSON, 63, has served as a director of the Company since
1981. Mr. Anderson is retired, having formerly served as the Vice-President
Customer Services of Southwestern Bell Telephone Company.
JOHN F. BAUGH, 79, has served as a director and officer of the Company
since its formation in 1969. Mr. Baugh currently serves as Senior Chairman
of the Board of Directors of the Company and is a member of the Executive
Committee of the Board of Directors of the Company.
CHARLES H. COTROS, 58, has served as a director of the Company since
1985. Mr. Cotros serves as Executive Vice President and Chief Operating
Officer of the Company and is a member of the Executive Committee of the
Board of Directors of the Company.
JONATHAN GOLDEN, 58, has served as a director of the Company since
1984. Mr. Golden is a partner of Arnall Golden & Gregory, counsel to the
Company, and is a member of the Executive Committee of the Board of
Directors of the Company.
BILL M. LINDIG, 58, has served as a director of the Company since
1983. Mr. Lindig is the President and Chief Executive Officer of the
Company and is a member of the Executive Committee of the Board of
Directors of the Company. He also serves as a director of Santa Fe Pacific
Corporation.
RICHARD G. MERRILL, 64, has served as a director of the Company since
1983. Currently retired, he formerly served as Executive Vice President of
The Prudential Insurance Company of America. Mr. Merrill is also a director
of W.R. Berkley Corporation. Mr. Merrill is a member of the Executive
Committee of the Board of Directors of the Company.
DONALD H. PEGLER, JR., 68, has served as a director of the Company
since 1987. Mr. Pegler is Chairman of the Board of Directors of
Pegler-Sysco Food Services Company. He also serves as a director of the
National Bank of Commerce and Lincoln Telecommunications Co.
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<PAGE> 5
PHYLLIS S. SEWELL, 64, has served as a director of the Company since
1991. Mrs. Sewell, currently retired, formerly served as Senior Vice
President of Federated Department Stores, Inc. Mrs. Sewell is also a
director of Pitney-Bowes Inc., U.S. Shoe Corp. and Lee Enterprises, Inc.
ARTHUR J. SWENKA, 58, has served as a director of the Company since
1994. Mr. Swenka was elected Senior Vice President, Operations of the
Company in December, 1994. Previously, Mr. Swenka had served since 1984 as
President and Chief Executive Officer of Nobel/Sysco Food Services Company.
THOMAS B. WALKER, JR., 71, has served as a director of the Company
since 1970. Mr. Walker is a limited partner of The Goldman Sachs Group,
L.P. and is a director of A. H. Belo Corporation, Riviana Foods Inc. and
NCH Corp. Mr. Walker is a member of the Executive Committee of the Board of
Directors of the Company.
Unless otherwise noted, the persons named above have been engaged in the
principal occupations shown for the past five years or longer.
Although management does not contemplate the possibility, in the event any
nominee is not a candidate or is unable to serve as a director at the time of
the election, the proxies will be voted for any nominee who shall be designated
by the present Board of Directors to fill such vacancy.
The name of each nominee, the term of office for which he is proposed to be
elected, the number of shares of Common Stock beneficially owned directly or
indirectly by each nominee as of the close of business on September 8, 1995
(according to information received by the Company) and the percentage of
outstanding shares of Common Stock such ownership represented at September 8,
1995, are set out below. Similar information is also provided for those
directors whose terms expire in future years.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY
OWNED AS OF PERCENT OF
TERM SEPTEMBER 8, OUTSTANDING
NAME EXPIRES 1995(1)(2) SHARES
---- ------- ------------ -----------
<S> <C> <C> <C>
Directors Standing for
Election for Three-Year
Terms of Office
- --------------------------
Colin G. Campbell........................................ 1995 1,000 .001%
Frank A. Godchaux III.................................... 1995 27,000(3) .015%
Donald J. Keller......................................... 1995 6,200 .003%
Frank H. Richardson ..................................... 1995 4,000 .002%
John F. Woodhouse........................................ 1995 677,175 .370%
Directors with
Continuing Terms
- --------------------
John F. Baugh............................................ 1997 803,555 .440%
Charles H. Cotros........................................ 1997 189,411 .104%
Jonathan Golden.......................................... 1997 24,000(4) .013%
Arthur J. Swenka......................................... 1997 99,591(5) .055%
Thomas B. Walker, Jr..................................... 1997 136,000 .074%
John W. Anderson......................................... 1996 11,383 .006%
Bill M. Lindig........................................... 1996 412,726(6) .226%
Richard G. Merrill....................................... 1996 11,590 .006%
Donald H. Pegler, Jr..................................... 1996 1,205,898(7) .660%
Phyllis S. Sewell........................................ 1996 5,000 .003%
All Executive Officers and Directors as a Group
(22 persons)(8)(9)..................................... 3,965,836 2.17%
</TABLE>
(Footnotes on following page)
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- ---------------
(1) Includes shares of Common Stock owned by the wives and/or dependent children
of each of the following named individuals: John F. Baugh, 251,456 shares;
Colin G. Campbell, 500 shares; Frank A. Godchaux III, 6,000 shares; Donald
J. Keller, 200 shares; Donald H. Pegler, Jr., 5,216 shares; and Arthur J.
Swenka, 519 shares. Includes 39,189 shares owned by the wives and/or
dependent children of other current executive officers and directors.
(2) Includes shares of Common Stock subject to currently exercisable options as
follows: John F. Baugh, 10,916 shares; Charles H. Cotros, 1,320 shares; and
Arthur J. Swenka, 6,251 shares.
(3) Includes 10,000 shares held by Riviana Foods Inc. of which Mr. Godchaux and
his wife are affiliates.
(4) Includes 20,000 shares held by a trust created under the estate of Sol I.
Golden, of which Mr. Golden is a co-trustee.
(5) Includes 12,264 shares held by a trust of which Mr. Swenka is a trustee.
(6) Includes 46,300 shares held by trusts of which Mr. Lindig's wife is trustee.
(7) Includes 24,000 shares held by the Pegler Family Foundation, of which Mr.
Pegler is a trustee.
(8) Includes 78,365 shares subject to currently exercisable options held by
current executive officers and directors.
(9) As of September 8, 1995, Gregory K. Marshall, Senior Vice President,
Multi-Unit Sales and an executive named in the Summary Compensation Table on
page 9 hereof, beneficially owned 21,729 shares of Common Stock,
constituting .012% of the outstanding shares of Company Common Stock. Mr.
Marshall's ownership includes currently exercisable options to purchase
4,316 shares.
DIRECTOR COMPENSATION
Directors whose principal occupation is other than employment with the
Company are compensated at the rate of $32,400 per year plus reimbursement of
expenses for all services as a director, including committee participation or
special assignments. Such directors are given the opportunity to defer their
annual compensation until their retirement from the Board or until the
occurrence of certain other events. Such deferred compensation accrues interest
at a rate equal to a long-term index (the index utilized is the monthly average
for the previous calendar year of the highest of the 20-year Treasury Bond,
10-year Treasury Note and Moody's Corporate Bond Yield Indices) plus 1%. The
current rate of interest in effect is 9.25% per annum. Messrs. Godchaux, Golden,
Merrill and Walker and Mrs. Sewell elected to defer their annual compensation
for 1995.
Subject to approval of the Non-Employee Directors Stock Option Plan at the
1995 Annual Meeting, the non-employee directors also receive a grant of options
to purchase 2,000 shares of Company Common Stock each November if the earnings
per share of the Company for the preceding fiscal year increased by 10% or more
over the earnings per share of the Company for the last prior year. In addition
to requiring a 10% increase in earnings per share before options are issued to
non-employee directors, rigorous performance goals generally must be met before
such options will vest and the grantee may exercise such option. The non-
employee directors received the first such option grant, which was effective
December 12, 1994, subject to stockholder approval at the 1995 Annual Meeting.
See "Proposal to Approve Non-Employee Directors Stock Option Plan" below.
No other remuneration was paid for services as a director during the fiscal
year ended July 1, 1995.
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EXECUTIVE COMPENSATION
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE ON EXECUTIVE COMPENSATION
This report of the Compensation and Stock Option Committee of the Company
documents the components of the Company's compensation programs for its
executive officers and describes the basis on which fiscal 1995 compensation
determinations were made with respect to the executive officers of the Company,
including Mr. Lindig, the Chief Executive Officer. All compensation decisions
are made by the Company's Compensation and Stock Option Committee (the
"Committee").
OVERALL EXECUTIVE COMPENSATION PHILOSOPHY
Since it became a publicly held corporation in 1970, the Company has always
directly linked the compensation of its executive officers to the performance of
the Company. Specifically, the Company has tied the level of its executive
compensation to increases in the Company's earnings and return on shareholders'
equity. This has been accomplished through the following means:
o A "pay-for-performance" orientation based upon Company performance for
corporate officers and a combination of operating company and corporate
performance for operating company senior management;
o Competitive base salaries;
o Potentially significant annual incentive bonuses under the Company's
management incentive plan;
o The issuance of performance-based stock options; and
o Customary benefits, including a supplemental retirement plan.
The factors and criteria upon which the determination of the fiscal 1995
compensation of Mr. Lindig, the Chief Executive Officer of the Company, was
based were the same as those discussed below with respect to all executive
officers named in the Summary Compensation Table.
BASE SALARIES
The Company has established base salaries of the executive officers of the
Company in the range of compensation payable to executive officers of United
States industrial corporations without reference to specific Company performance
criteria. This range of compensation is generally reexamined from time to time
through a survey of compensation practices across a broad cross section of U.S.
industrial corporations. The survey sample does not necessarily include those
companies in the peer group included in the performance graphs on page 13 due to
the differing size, management responsibilities and organizational structures of
those corporations relative to the Company. The most recent survey conducted for
the use of the Committee and Company management (the "Survey") was performed by
an independent compensation consultant in October 1994. Base salaries for all of
the executive officers were last reviewed on November 3, 1994, and adjustments
were made in compensation which became effective January 1, 1995. At that time,
Mr. Lindig's base salary was increased approximately 14.3% to reflect the
increased responsibilities of Mr. Lindig, who was named Chief Executive Officer
effective on that date, in addition to his responsibilities as President of the
Company. It has been the consistent practice of the Company to maintain the
chief executive officer's base salary at or below the median of the range of
base salaries payable to chief executive officers of the surveyed industrial
corporations which have chief executive officers with job content and/or
responsibilities comparable to those of the Company's chief executive officer.
These base salaries along with the incentive compensation described below are
intended to provide an appropriate financial reward to the Company's executive
officers.
ANNUAL INCENTIVE COMPENSATION
The Committee provides annual incentive compensation to all executive
officers of the Company through the Company's Amended and Restated Management
Incentive Plan ("MIP"). The MIP was originally adopted by the Board of Directors
and approved by the shareholders in 1974. Although the incentive criteria have
been modified from time to time since 1974, the plan itself has remained
substantially the same since
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<PAGE> 8
that time. The MIP was amended in 1994 to permit the Company to continue to
deduct compensation in excess of $1 million and to provide increased flexibility
in compensation arrangements. During fiscal 1995 it has become apparent that the
MIP, as amended, lacks the desired flexibility and accordingly a new incentive
plan is proposed for adoption. See "Proposal to Approve the Sysco Corporation
1995 Management Incentive Plan" below.
The MIP, both in its current form and in the form proposed for adoption, is
designed to offer opportunities for compensation which is directly tied to
Company performance. In addition, the MIP is designed to foster significant
equity ownership in the Company by the executive officers and all other
participants in the MIP. The MIP is available not only to Mr. Lindig and the
other executive officers, but to approximately 100 others who are members of the
Company's corporate management or are managing officers of each of the Company's
operating subsidiaries and divisions. The same compensation criteria were
utilized under the MIP during fiscal 1995 with respect to all executives while
serving as executive officers.
For executive officers, fiscal 1995 incentive bonuses under the MIP were
calculated in two parts. The first part was based on the overall performance of
the Company and was based upon the interplay between the percentage increase in
earnings per share and the return on shareholders' equity. The MIP utilized a
matrix based on these two factors to determine a percentage number which is
applied to 70% of the participant's base salary. With respect to the
determination of whether or not there has been an increase in earnings per share
for a fiscal year during which the federal income tax rate has changed, such
determination is made as if federal income tax rates had not changed during such
fiscal year. The percentage determined by the matrix in fiscal 1995 was 90%,
resulting in an award of 63% of base salary to each executive officer
participating in this portion of the MIP, including Mr. Lindig, who was awarded
$378,000.
The second portion of the fiscal 1995 incentive bonus for executive
officers under the MIP was based upon the number of Sysco operating companies
which achieve a target return on capital. For the first ten operating companies
achieving this goal, the participant earned 9% of the participant's base salary.
This portion of the incentive bonus is only paid when the operating companies
achieving the goals, in the aggregate, employ at least 50% of the total capital
of all of the Company's operating companies, which was the case during fiscal
1995. For each additional operating company achieving this goal, the participant
earns 1.5% of the participant's base salary. In fiscal 1995, forty-one (41)
Sysco operating companies met this goal, resulting in an award of 55.5% of base
salary to each executive officer participating in this portion of the MIP,
including Mr. Lindig, who was awarded $333,000.
In order to encourage significant equity ownership in the Company by its
executive officers and the management of its operating companies, both the
current MIP and the 1995 Management Incentive Plan submitted to the stockholders
for approval as provided herein provide that participants may elect to receive
up to 40% of their annual incentive bonus in the form of Sysco Common Stock,
based on a per share price equal to the closing price on the New York Stock
Exchange of Sysco Common Stock on the last day of the fiscal year for which the
MIP bonus is calculated. If the participant makes such election, the participant
is awarded one additional share for each two shares received in accordance with
the foregoing calculation. Although such stock is owned by the participant, who
receives dividends on the shares, for the first two years following the date of
issue, certain additional restrictions apply to the shares. In addition,
participants who elect to receive Common Stock are also entitled to receive an
additional cash bonus ("Supplemental Bonus") equal to the product of (i) the
value of such matching shares received by the participant (which is equal to the
closing price of such shares on the last trading day of the fiscal year), and
(ii) the effective tax rate applicable to the Company as described in the
"Income Taxes" footnote to financial statements contained in the Company's
Annual Report to Stockholders. In fiscal 1995, Mr. Lindig elected to receive 40%
of his bonus in Sysco Common Stock. The stock portion of the bonus awarded Mr.
Lindig under the MIP consisted of 14,461 shares valued at $426,600; he has also
received a Supplemental Bonus of $56,880.
Finally, MIP participants are entitled to defer under the Company's
Deferred Compensation Plan up to 40% of their annual incentive bonus (without
considering any election to receive a portion of the bonus in stock). For
deferrals of up to 20% of the annual incentive bonus, the MIP provides for the
Company to make a
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<PAGE> 9
payment equal to 50% of the amount deferred. This matching payment vests upon
the earliest to occur of (i) the tenth anniversary of the date the matching
payment is made, (ii) the participant's reaching age sixty, (iii) the death or
permanent disability of the participant, or (iv) a change in control of the
Company. In fiscal 1995, Mr. Lindig deferred 20% of his MIP bonus.
As determined by the Committee, based upon the foregoing criteria, over
half of fiscal 1995 aggregate compensation (other than options, which are
discussed under "1991 Employee Stock Option Plan" in this Report below) for the
executive officers named in the Summary Compensation Table, including Mr.
Lindig, was in the form of bonuses and therefore directly dependent upon Company
performance.
BENEFITS
Executives also participate in the Company's regular employee benefit
programs, which include a pension program, a retirement savings plan, group
medical and dental coverage, group life insurance and other group benefit plans.
In addition, executives are provided with a supplemental retirement plan which
is designed, generally, to provide annual payments equal to 50% of the
participant's final average annual compensation (i.e., the average compensation
over the five consecutive fiscal years out of the ten fiscal years preceding
retirement that provide the highest average annual compensation), less all
Company and other retirement plan benefits and Social Security payments
available to the participant upon retirement. Further details with respect to
the Company's qualified pension plan are provided on pages 11 to 12. All
decisions with respect to such benefits are made on a group basis; therefore, no
individual decisions were made with respect to the executives named in the
Summary Compensation Table.
1991 STOCK OPTION PLAN
In fiscal 1995, the Company granted options to purchase shares of Company
Common Stock to 657 key employees, including the Company's executive officers,
pursuant to its 1991 Stock Option Plan (the "Plan"). Under the Plan, the Company
is permitted to issue stock options which are qualified as incentive stock
options under the Internal Revenue Code of 1986, as amended (the "Code"),
options which are not so qualified and stock appreciation rights. To date, the
Company has issued only stock options under the Plan and has no current plans to
issue stock appreciation rights. All fiscal 1995 grants were made in September
1994.
The Plan is administered by the Committee. In general, it is the practice
of the Committee to consider issuing options under the Plan only when
participants in the Management Incentive Plan are entitled to receive an annual
incentive bonus thereunder. In other words, option grants generally are
considered only in years when the Company achieves certain earnings per share
and return on shareholders' equity targets. See "Annual Incentive Compensation"
above. It is the current intention of the Committee to continue this practice,
although it is not required to do so by the terms of the Plan.
If the threshold earnings level for the grant of options is met, the
Committee will determine whether or not to grant options to purchase Common
Stock to the Chief Executive Officer and the other executive officers of the
Company, along with certain managing officers of the Company's significant
operating subsidiaries and divisions. In addition, the Committee, with the
advice of Company senior management based upon input from the managing officers
of the respective operating companies, will determine whether or not to grant
options to certain key employees of those operating companies which have met the
earnings requirements for option grants. Finally, the Committee, with the advice
of Company senior management, determines several other levels of option grants
which will be made available to corporate management employees of the Company
who have made significant contributions to the Company over the prior fiscal
year.
In addition to requiring that certain performance goals must be met before
options are issued to any Plan participant, it has been the consistent practice
of the Committee to impose rigorous performance goals which must be met before
the options will vest and participants may exercise their options. Therefore,
all stock options previously issued contain vesting requirements which, in the
case of corporate employees, are based upon increases in Company pretax earnings
and return on shareholders' equity. These vesting requirements must be met in
the first five fiscal years after the options are granted. In effect, therefore,
there have been two different sets of performance goals, one for the grant of
the option and one for the exercise of the option. The
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Committee currently anticipates continuing this practice (although it does
intend to modify the vesting requirement beginning with options granted in
fiscal 1996 as noted below). The options granted under the Plan expire ten years
after the date of grant, although the options must vest within the five-year
vesting period or they will expire at the end of such five-year period. The
Committee currently anticipates continuing the use of a five-year vesting period
but currently intends that future grants of options which have not vested during
this period will vest at the end of their ten-year life provided the holder
remains in the active employment of the Company or one of its operating
companies at that time.
During fiscal 1995, Mr. Lindig received one (1) grant of 10,000 options at
an exercise price of $25.50 per share. These options contain vesting
requirements which are identical to those discussed above for options granted
prior to fiscal 1996.
REVIEW OF POTENTIAL EFFECT OF SECTION 162(M)
Section 162(m) of the Code ("Section 162(m)") generally sets a limit of $1
million on the amount of compensation (other than certain types of compensation,
including "performance-related" compensation that complies with the requirements
of Section 162(m)) that the Company can deduct for federal income tax purposes
in any given year with respect to the compensation of each of the executive
officers named in the Summary Compensation Table in the proxy statement with
respect to such year for taxable years beginning on or after January 1, 1994.
During fiscal 1994, the Committee and the Board determined, after reviewing the
effect of Section 162(m), that their policy will be to structure the
performance-based compensation arrangements for such named executive officers,
to the extent feasible and taking into account all relevant considerations, so
as to satisfy Section 162(m)'s conditions for deductibility. The proposal
submitted to the stockholders for approval of the 1995 Management Incentive Plan
is intended to continue the Company's ability to qualify such compensation for
the performance-based compensation exemption from the general limitation imposed
by Section 162(m) on the Company's ability to deduct compensation paid to such
named executive officers. See "Proposal to Approve the 1995 Management Incentive
Plan," below.
COMPENSATION AND STOCK OPTION
COMMITTEE:
Thomas B. Walker, Jr., Chairman
John W. Anderson
Colin G. Campbell
Frank A. Godchaux III
Jonathan Golden
Donald J. Keller
Richard G. Merrill
Phyllis S. Sewell
8
<PAGE> 11
The following tables set forth information with respect to the Chief
Executive Officer and the four most highly compensated executive officers of the
Company and its subsidiaries employed at the end of fiscal 1995 as to whom the
total annual salary and bonus for the fiscal year ended July 1, 1995, exceeded
$100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------- AWARDS(5)
(E) ----------------------- (I)
OTHER (F) (G) ALL
ANNUAL RESTRICTED SECURITIES OTHER
(C) (D) COMPEN- STOCK UNDERLYING COMPEN-
(A) (B) SALARY BONUS SATION AWARDS OPTIONS SATION
NAME AND PRINCIPAL POSITION YEAR ($) (1)(2)($) (3)($) (4)($) (#) (6)($)
- ---------------------------------------- ---- -------- -------- -------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
John F. Woodhouse....................... 1995 $607,500 $495,583 -- $437,249 10,000 $ 78,836
Chairman of the Board of Directors 1994 587,500 427,629 -- 376,185 3,700 65,999
1993 562,500 403,664 403,628 3,960 70,008
Bill M. Lindig.......................... 1995 $562,500 $483,480 -- $426,600 10,000 $ 77,058
President and Chief Executive 1994 512,500 374,163 -- 329,174 3,700 3,299
Officer and Director 1993 487,500 351,013 350,980 3,960 2,733
Charles H. Cotros....................... 1995 $440,000 $370,691 -- $327,037 10,000 $ 60,468
Executive Vice President and 1994 402,500 299,340 -- 263,330 3,700 47,118
Chief Operating Officer and Director 1993 367,500 270,277 -- 270,259 3,960 47,778
Gregory K. Marshall..................... 1995 $257,500 $213,565 -- $188,387 8,000 $ 3,724
Senior Vice President, 1994 245,000 178,195 $118,934 156,728 3,700 209,220
Multi-Unit Sales 1993 213,442 101,531 -- 101,505 3,960 2,183
Arthur M. Swenka........................ 1995 $232,500 $193,404 -- $170,628 -- $ 31,749
Senior Vice President, Operations 1994 225,000 15,039 -- 13,229 3,700 3,290
1993 210,000 148,521 -- 148,514 3,960 27,098
</TABLE>
- ---------------
(1) Includes amounts deferred pursuant to the Company's Executive Deferred
Compensation Plan.
(2) Does not include that portion of a participant's bonus which the participant
elected to receive in the form of restricted Common Stock of the Company.
See column (f).
(3) Does not include perquisites and other personal benefits, if any, the
aggregate of which in the case of each named individual does not exceed the
lesser of $50,000 or 10% of such individual's annual salary and bonus as
reported. The $118,934 paid to Mr. Marshall in fiscal 1994 represents
reimbursement for a portion of the tax liability resulting from the amount
paid to Mr. Marshall described in Note (6) below.
(4) The amount presented is determined by multiplying the number of shares
earned by the closing price of the Company's Common Stock on the New York
Stock Exchange on the date as of which the shares were earned, without
taking into consideration the following restrictions on the shares. The
shares are not transferable by the recipient for two years following receipt
thereof and are subject to certain repurchase rights on the part of the
Company in the event of termination of employment other than pursuant to
normal retirement or disability. The recipient receives dividends on the
shares during the restricted two-year period. During fiscal 1995, the number
of restricted shares received by the named individuals was as follows: Mr.
Woodhouse -- 14,822 shares; Mr. Lindig -- 14,461; Mr. Cotros -- 11,086
shares; Mr. Marshall -- 6,386 shares; and Mr. Swenka -- 5,784 shares. At the
end of fiscal 1995, the aggregate number and dollar amount (computed using
the closing price of the Company's Common Stock on July 1, 1995 as described
above) of restricted shares held by the named individuals were as follows:
Mr. Woodhouse -- 22,912 shares at $625,342; Mr. Lindig -- 21,540 shares at
$591,187; Mr. Cotros -- 16,749 shares at $458,702; Mr. Marshall -- 9,757
shares at $266,763; and Mr. Swenka -- 6,069 shares at $177,254.
(5) Column (h), Long Term Incentive Plan Payouts, is not included in the table
since no compensation required to be reported thereunder was paid to the
named individuals during the periods covered by the
(Footnotes continued on following page)
9
<PAGE> 12
table nor does the Company have any compensation plans which provide for the
payment of such compensation.
(6) With respect to Mr. Marshall, the amount for 1994 includes payments made by
the Company to Mr. Marshall of $182,905 to reimburse him for the loss on and
cost of the sale of his home in Denver, Colorado upon his relocation to
Houston, Texas and $23,196 in moving costs paid by the Company in connection
with the relocation. In addition, the amounts shown include the Company
match equal to 50% of the amount each individual elected to defer under the
Company's Executive Deferred Compensation Plan and the amount the Company
paid for term life insurance coverage for each individual as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------------------------- ---------------------------- ----------------------------
DEFERRED TERM DEFERRED TERM DEFERRED TERM
TOTAL MATCH INSURANCE TOTAL MATCH INSURANCE TOTAL MATCH INSURANCE
------- ------- ------ ------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
John F. Woodhouse............. $78,836 $72,878 $5,958 $65,999 $62,700 $3,299 $70,008 $67,275 $2,733
Bill M. Lindig................ 77,058 71,100 5,958 3,299 None 3,299 2,773 None 2,733
Charles H. Cotros............. 60,468 54,510 5,958 47,118 43,830 3,288 47,778 45,045 2,733
Gregory K. Marshall........... 3,724 None 3,724 3,119 None 3,119 2,183 None 2,183
Arthur M. Swenka.............. 31,749 28,440 3,309 3,290 2,205 1,085 27,098 24,753 2,345
</TABLE>
The following table provides, as to the individuals named in the Summary
Compensation Table, information regarding the grants of stock options during the
last fiscal year. The Company did not grant any stock appreciation rights during
the last fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENTAGE
OF
TOTAL
NUMBER OPTIONS
OF GRANTED
SECURITIES TO EXERCISE GRANT
UNDERLYING EMPLOYEES OR DATE
OPTIONS IN BASE PRESENT
GRANTED FISCAL PRICE EXPIRATION VALUE
NAME (#)(1) 1995 ($/SHARE) DATE ($)(2)
- ------------------------- ------ ---- ------ --------- --------
<S> <C> <C> <C> <C> <C>
John F. Woodhouse........ 10,000 1.0% $25.50 8/31/2004 $121,700
Bill M. Lindig........... 10,000 1.0% $25.50 8/31/2004 $121,700
Charles H. Cotros........ 10,000 1.0% $25.50 8/31/2004 $121,700
Gregory K. Marshall...... 8,000 0.8% $25.50 8/31/2004 $ 97,360
Arthur M. Swenka......... -- -- -- -- --
</TABLE>
- ---------------
(1) The options do not vest and become exercisable unless the Company attains
certain levels of increases in pre-tax earnings and return on shareholders'
equity. If these increases are not attained within five years of the date
of grant, the options expire.
(2) The hypothetical grant value for the options was determined using a modified
Black-Scholes pricing model. In applying the model, the Company assumed a
12-month volatility of 28.28%, a 7.17% risk-free rate of return, a dividend
yield at the date of grant of 1.27%, and a 10-year option term. The Company
did not assume any option exercises or risk of forfeiture during the
10-year term. If used, such assumptions could have reduced the reported
grant date value. The actual value, if any, an executive may realize upon
exercise of options will depend on the excess of the stock price over the
exercise price on the date the option is exercised. Consequently, there is
no assurance that the value realized will be at or near the value estimated
by the modified Black-Scholes model.
10
<PAGE> 13
The following table provides information with respect to aggregate option
exercises in the last fiscal year and fiscal year-end option values for the
executive officers named in the Summary Compensation Table. The Company did not
grant any stock appreciation rights during the last fiscal year.
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT
SHARES AT JULY 1, 1995(#) JULY 1, 1995($)(2)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John F. Woodhouse.... None None None 7,838 None $24,393
Bill M. Lindig....... None None 4,316 7,838 $27,331 24,393
Charles H. Cotros.... 6,600 $ 73,012 4,316 7,838 27,331 24,393
Gregory K. Marshall.. None None 4,316 7,838 27,331 24,393
Arthur M. Swenka..... 2,454 29,601 6,251 10,303 48,454 65,695
</TABLE>
- ---------------
(1) Computed based on the difference between the closing price of the Common
Stock on the day prior to exercise and the exercise price.
(2) Computed based on the difference between the closing price on June 30, 1995
and the exercise price.
DEFINED BENEFIT PENSION PLAN
The Company has a defined benefit retirement plan which was amended and
restated effective July 2, 1989 ("Retirement Plan") and further amended
effective December 31, 1994 to reflect the merger of the Sysco Corporation Union
Retirement Plan into the Retirement Plan. The Retirement Plan provides for an
annual benefit payable monthly for five years certain and life thereafter, equal
to (a) the normal retirement benefit which accrued under the prior plan as of
July 2, 1989, plus (b) an amount equal to 1 1/2% of the participant's aggregate
career compensation earned on and after July 2, 1989.
In the event of a participant's death prior to his or her normal retirement
age (age 65) or the commencement of a benefit, if earlier, and if the
participant has five or more years of credited service, a death benefit is
payable in an amount equal to the value of the pension accrued by the deceased
participant prior to his or her death or earlier termination of employment.
Under current law and regulations the maximum annual retirement benefit
that may be payable in 1995 under the five years certain and life thereafter
form of payment to an individual retiring at age 65 is $116,811. Without regard
to this maximum limitation, the named executive officers have accrued the
following benefits and credited benefit service as of July 1, 1995: Mr.
Cotros -- $75,946 and 19 years; Mr. Lindig -- $66,364 and 11 years; Mr.
Marshall -- $17,878 and 6 years; Mr. Swenka -- $18,317 and 6 years; and Mr.
Woodhouse -- $170,684 and 26 years.
The named executive officers also have anticipated future service to age 65
as follows: Mr. Cotros -- 7 years; Mr. Lindig -- 7 years; Mr. Marshall -- 17
years; Mr. Swenka -- 7 years and Mr. Woodhouse -- 5 months. In addition to
benefits accrued to date, each named executive officer will accrue benefits in
the future in accordance with the table below:
11
<PAGE> 14
PENSION PLAN TABLE(1)(2)
<TABLE>
<CAPTION>
CAREER
AVERAGE
COMPENSATION
EARNED ON YEARS OF CREDITED SERVICE
AND AFTER ----------------------------------------------------
JULY 1, 1995(3) 15 20 25 30 35
--------------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
$ 50,000.......................... $11,250 $15,000 $18,750 $22,500 $ 26,250
100,000.......................... 22,500 30,000 37,500 45,000 52,500
150,000.......................... 33,750 45,000 56,250 67,500 78,750
200,000.......................... 45,000 60,000 75,000 90,000 105,000
</TABLE>
- ---------------
(1) Assumes that the annual benefit is payable for five years certain and life
thereafter and that retirement age is 65. Pension plan benefits are not
subject to deduction by social security or any other offsets.
(2) Current law and regulations limit retirement benefits in 1995 to $116,811 if
they are payable for five years certain and life thereafter (assuming
Retirement Plan and Social Security retirement age of 65). This limitation
applies to total retirement benefits under the Retirement Plan as
determined by adding benefits accrued with respect to periods of employment
with the Company both before and after July 1, 1995. The Pension Plan Table
does not reflect this limitation.
(3) Compensation for benefit calculation purposes is limited by law to $150,000
for 1994 and later years subject to future cost-of-living adjustments. Pay
limitations are not taken into account in the Pension Plan Table.
All amounts shown in the Summary Compensation Table, other than deferred
bonus, term life insurance payments and the Company match under the Executive
Deferred Compensation Plan, are utilized to compute career average compensation
subject to the pay limitations noted in footnote (3).
PERFORMANCE GRAPHS
PERFORMANCE GRAPHS
The following two performance graphs compare the performance of the
Company's Common Stock to the S&P 500 Index and to a peer group for the
Company's last five and ten fiscal years, respectively. The peer group is
comprised of Fleming Companies, Inc., Nash Finch Company, Richfood Holdings,
Inc., Rykoff-Sexton, Inc., Super Food Services, Inc. and Super Value Stores,
Inc. These distributors of grocery or foodservice products were selected since
they comprise a broad group of publicly held corporations with food distribution
operations similar in some respects to the Company's operations. Rykoff-Sexton,
Inc. is the only other publicly held foodservice distributor to be in existence
throughout the five and ten year periods, although, unlike the Company, it also
manufactures certain food products. Each other member of the peer group is in
the business of distributing grocery products to retail supermarkets. The
Company considers this to be a more representative peer group than the "S&P
Foods -- Wholesaler" index maintained by Standard & Poor's Corporation and
consisting of the Company, Fleming Companies, Inc. and Super Value Stores, Inc.
The returns of each member of the peer group are weighted according to each
member's stock market capitalization as of the beginning of each period
measured. The graphs assume that the value of the investment in each of the
Company's Common Stock, the index and the peer group was $100 at each of June
30, 1990 and June 29, 1985, and that all dividends were reinvested. Performance
data for the Company is provided as of the last trading day of each of the
Company's last five and ten fiscal years, respectively.
12
<PAGE> 15
Performance data for the S&P 500 Index and for each member of the peer group is
provided for the last trading day closest to June 30 of each year.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P 500
(FISCAL YEAR COVERED) SYSCO INDEX PEER GROUP
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 120.52 107.40 104.03
1992 141.44 121.80 93.99
1993 147.38 138.40 117.02
1994 140.80 140.35 109.47
1995 181.42 176.94 114.53
</TABLE>
COMPARISON OF TEN-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P 500
(FISCAL YEAR COVERED) SYSCO INDEX PEER GROUP
<S> <C> <C> <C>
1985 100.00 100.00 100.00
1986 157.13 135.82 131.71
1987 195.14 169.99 140.71
1988 165.46 158.26 124.67
1989 268.08 190.79 144.87
1990 390.27 222.25 143.47
1991 470.35 238.68 149.25
1992 551.95 270.69 134.85
1993 575.14 307.58 167.89
1994 549.49 311.92 157.04
1995 708.01 393.24 164.29
</TABLE>
13
<PAGE> 16
OTHER INFORMATION
The Company's Nominating Committee, consisting of Jonathan Golden
(Chairman), Colin G. Campbell, Donald J. Keller, Richard G. Merrill and Thomas
B. Walker, Jr., held three (3) meetings during fiscal year 1995. The function of
the Nominating Committee is to propose directors and officers for election or
reelection. The Nominating Committee will consider nominees recommended in
writing by stockholders.
The Company's Compensation and Stock Option Committee, consisting of Thomas
B. Walker, Jr. (Chairman), Jonathan Golden, Donald J. Keller, Richard G.
Merrill, John W. Anderson, Colin G. Campbell, Frank A. Godchaux III and Phyllis
S. Sewell, held three (3) meetings during fiscal year 1995. The function of the
Compensation and Stock Option Committee is to consider for recommendation to the
Board of Directors of the Company the annual compensation of directors and
officers of the Company, to oversee the administration of the Management
Incentive Plan and the Company's 1991 Stock Option Plan, and to provide guidance
in the area of employee benefits, including retirement plans and group
insurance.
The Board of Directors held six (6) meetings during fiscal year 1995 and
all directors of the Company attended more than 75% of the aggregate of (1) the
total number of meetings of the Board of Directors and (2) the total number of
meetings held by all committees of the Board on which he or she served during
fiscal year 1995.
Section 16(a) of the Securities Exchange Act of 1934 (the "Act") requires
the Company's executive officers and directors, and persons who beneficially own
more than ten percent of the Company's stock, to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission (the "SEC") and the New York Stock Exchange. Executive officers,
directors and greater than ten percent beneficial owners are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based solely on a review of the copies of such forms furnished to the
Company or written representations from the Company's executive officers and
directors, the Company believes that with respect to fiscal year 1995, all
Section 16(a) filing requirements applicable to its executive officers,
directors and greater than ten percent beneficial owners were met except that
each executive officer filed one late report on Form 4 to report a grant of an
option in fiscal 1995 under the 1991 Stock Option Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Anderson, Campbell, Godchaux, Golden, Keller, Merrill, and Walker,
and Mrs. Sewell were the only members of the Company's Board of Directors to
serve on the Company's Compensation and Stock Option Committee during fiscal
1995 and were not, during fiscal year 1995 or prior thereto, officers or
employees of the Company or any subsidiary thereof. Mr. Walker is a limited
partner of the Goldman Sachs Group, L.P., an affiliate of Goldman, Sachs & Co.,
an investment banking firm. Goldman, Sachs & Co. performed management services
in connection with the Company's commercial paper program and brokerage services
in connection with the Company's stock repurchase program and served as an
underwriter of an offering by the Company of debt securities during fiscal 1995.
Mr. Walker is a member of the Compensation Committee of Riviana Foods Inc., a
food products company which had sales to the Company as discussed below. Mr.
Golden is the sole stockholder of Jonathan Golden, P.C., a partner in the law
firm of Arnall Golden & Gregory, Atlanta, Georgia, counsel to the Company. The
Company believes that fees paid to such firm were fair and reasonable in view of
the level and extent of services rendered. Mr. Godchaux is Chairman and the
owner, with his wife, of 5% of the outstanding capital stock of Riviana Foods
Inc., a food products company which had sales to the Company of approximately
$254,000 during fiscal 1995. The Company believes that the terms of such
transactions were fair and no less favorable to the Company than those available
from other suppliers.
14
<PAGE> 17
PROPOSAL TO APPROVE THE SYSCO CORPORATION
1995 MANAGEMENT INCENTIVE PLAN
As noted in the Report of the Compensation and Stock Option Committee under
"Annual Incentive Compensation" above, the Company has had a Management
Incentive Plan in effect since 1974, which plan, as amended and restated in
1994, is currently in effect (the "Current MIP"). On May 7, 1995, the Board of
Directors adopted, subject to stockholder approval, a new management incentive
plan in the form of the 1995 Management Incentive Plan attached hereto as
Exhibit A (the "1995 MIP"). The primary purpose for adopting the 1995 MIP was to
ensure that the Compensation and Stock Option Committee (the "Committee") has
enhanced flexibility in formulating bonus structures. If the shareholders do not
approve the 1995 MIP, no compensation will be paid pursuant thereto and the
Current MIP will remain in effect. Rather than specifying a formula for
determining the relative weights of performance criteria used to determine
incentive bonuses, the 1995 MIP enables the Committee, prior to the beginning of
each fiscal year, to establish an incentive program within the general
parameters of the 1995 MIP, which program may change from year to year as the
Committee determines to be necessary to best meet the Company's needs within the
confines of the 1995 MIP. The Committee has established, subject to shareholder
approval of the 1995 MIP, an incentive program for fiscal 1996 which essentially
mirrors the performance goals contained in the Current MIP for most participants
but provides an appropriate incentive for the Company's senior vice presidents
of operations, a position created during fiscal 1995, which reflects their
responsibilities for the performance of a specified group of Sysco operating
companies.
Set forth below are a brief description of the material differences between
the 1995 MIP and the Current MIP and a summary of certain material provisions of
the 1995 MIP. Except as noted below, the 1995 MIP is materially unchanged from
the Current MIP.
MATERIAL DIFFERENCES BETWEEN THE 1995 MANAGEMENT INCENTIVE PLAN AND THE
CURRENT MANAGEMENT INCENTIVE PLAN.
Classes of Participants
The 1995 MIP provides for four classes of participants, to be designated by
the Committee prior to each fiscal year: (i) corporate participants selected
from officers of the Company who are also employed by the Company or a
subsidiary or division thereof ("Corporate Participants"), (ii) officers of a
division or subsidiary of the Company ("Subsidiary Participants"), (iii)
persons, other than Corporate Participants and Subsidiary Participants, employed
by the corporate office of the Company or by a division or subsidiary of the
Company who are designated by the Committee from time to time ("Designated
Participants") and (iv) "covered employees" of the Company within the meaning of
such term as contained in Section 162(m) of the Internal Revenue Code of 1986,
as amended, and the regulations thereunder who have been designated by the
Committee as Corporate, Subsidiary or Designated Participants ("Senior Executive
Participants"). If a participant qualifies as both a Senior Executive
Participant and a Corporate, Subsidiary or Designated Participant during any
fiscal year, he or she shall be considered to be a Senior Executive Participant
and not a Corporate, Subsidiary or Designated Participant with respect to such
fiscal year. There are 28 Corporate Participants, 80 Subsidiary Participants and
no Designated Participants with respect to fiscal 1996. If the chief executive
officer and the four most highly compensated executive officers of the Company
other than the chief executive officer were selected as Subsidiary, Corporate or
Designated Participants, such persons would constitute Senior Executive
Participants pursuant to the provisions of the 1995 MIP.
The Current MIP provides for only Corporate, Subsidiary and Senior
Executive Participants and limits participation as Subsidiary and Corporate
Participants to persons holding only certain specified titles.
Method of Operation
The Current MIP contains specific formulas for the determination of amounts
of bonuses to which the several categories of participants may be entitled,
which formulas fix the relative weights of the various performance criteria as
well as the percentages of the various components comprising the total bonus
available. The 1995 Plan continues to set forth the performance criteria but
provides that the weights ascribed
15
<PAGE> 18
to each and the percentages of the bonuses to be comprised of the results of
operation of the Company as a whole and of the relevant divisions or
subsidiaries as to any participant shall be at the sole discretion of the
Committee. As noted above, the Committee has established an incentive program
for fiscal 1996 which for most participants would result in the same incentive
bonuses as would have been paid in respect of fiscal 1995 had such program been
in effect during fiscal 1995. In addition, the 1995 MIP provides that as to
Designated Participants the bonus structure may be based on performance factors
selected by the Committee in its sole discretion and that the bonus structure
for Designated Participants may be similar to or may vary materially from the
bonus structure for the other categories of participants.
SUMMARY OF CERTAIN MATERIAL PROVISIONS OF THE 1995 MANAGEMENT INCENTIVE PLAN
Corporate Participants
A portion of the bonus to be paid to Corporate Participants under the 1995
MIP may depend upon the Company's return on stockholders' equity and increase in
earnings per share. A portion of such bonus may depend upon the return on
capital and increase in pretax earnings in respect of selected divisions and/or
subsidiaries of the Company, and a portion of the bonus may depend upon one or
more of the following performance factors: (i) sales of the Company and/or one
or more selected divisions and/or subsidiaries, (ii) pretax earnings of the
Company, (iii) net earnings of the Company and/or one or more selected divisions
and/or subsidiaries, (iv) control of operating and/or non-operating expenses of
the Company and/or one or more selected divisions and/or subsidiaries, (v)
margins of the Company and/or one or more selected divisions and/or
subsidiaries, (vi) market price of the Company's securities and (vii) other
objectively measurable factors directly tied to the performance of the Company
and/or one or more selected divisions and/or subsidiaries, provided that the
Committee shall define the above performance factors, which definitions may
differ depending upon the entity to which it is applied, and may alter the bonus
formula with respect to any such participant by changing the performance targets
in respect of these performance factors in its sole discretion.
Subsidiary Participants
A portion of the bonus under the 1995 MIP for Subsidiary Participants may
be calculated based upon the return on capital and increase in pretax earnings
of the subsidiary or division employing such participant. A portion of such
bonus may depend upon return on stockholders' equity and increase in earnings
per share of the Company as a whole and a portion of the bonus may depend upon
one or more of the following performance factors: (i) sales of the Company
and/or one or more selected divisions and/or subsidiaries, (ii) pretax earnings
of the Company, (iii) net earnings of the Company and/or one or more selected
divisions and/or subsidiaries, (iv) control of operating and/or non-operating
expenses of the Company and/or one or more selected divisions and/or
subsidiaries, (v) margins of the Company and/or one or more selected divisions
and/or subsidiaries, (vi) market price of the Company's securities and (vii)
other objectively measurable factors directly tied to the performance of the
Company and/or one or more selected divisions and/or subsidiaries, provided that
the Committee shall define the above performance factors, which definitions may
differ depending upon the entity to which it is applied, and may alter the bonus
formula with respect to any such participant by changing the performance targets
in respect of these performance factors in its sole discretion.
Subsidiary Participants may also receive an additional bonus (the
"Additional Bonus") to be awarded in the sole discretion of the Committee. The
Additional Bonus is based upon such criteria as the Committee may develop in its
sole discretion.
Designated Participants
The Committee may formulate a bonus structure for each Designated
Participant which is based upon performance factors determined by the Committee
in its sole discretion, which structure may be similar to or may vary materially
from the bonus structure formulated for other categories of participants.
16
<PAGE> 19
Senior Executive Participants
Senior Executive Participants are compensated pursuant to the 1995 MIP in
accordance with the criteria described above utilized in connection with
Corporate, Subsidiary, and Designated Participants, as applicable; provided,
however, that no Senior Executive Participant may in any event receive an
aggregate bonus under the 1995 MIP, determined by aggregating the value of all
cash and securities received, which is in excess of one percent (1%) of the
Company's earnings before income taxes as disclosed in the "Consolidated Results
of Operations" section of the Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the applicable fiscal year, the same limit
which is applicable in the current MIP.
Election to Receive Common Stock
A participant may give notice to the Committee within the first ninety (90)
days of a fiscal year that such participant irrevocably elects to receive a
certain percentage (up to 40% in 5% increments) of his or her annual bonus under
the 1995 MIP in the form of Company Common Stock (valued at the closing price on
the New York Stock Exchange ("NYSE") on the last trading day of such fiscal
year). In the event of such election, such participant will receive an
additional number of shares equal to 50% of the number of shares determined as
described above ("Additional Shares") and an additional cash amount equal to the
value of such Additional Shares multiplied by the effective tax rate applicable
to the Company for such fiscal year. The vesting, matching and other provisions
applicable thereto are identical to those described under the heading "Report of
Compensation and Stock Option Committee on Executive Compensation -- Annual
Incentive Compensation" above.
17
<PAGE> 20
1995 PLAN BENEFITS
It is impossible to determine the benefits which will be paid to any
individuals with respect to fiscal 1996 pursuant to the 1995 MIP should it be
approved by the Company's stockholders. The following table sets forth the
dollar value of the bonuses paid to each of the following with respect to fiscal
1995 pursuant to the Current MIP. Except for the amount paid to Mr. Swenka, the
amounts which would have been paid with respect to fiscal 1995 pursuant to the
1995 MIP if it had been in effect are identical to the amounts set forth below
because the Committee retained for fiscal 1996 the same bonus structure in
respect to such individuals as applied under the Current Plan:
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE($)
----------------- ---------------
<S> <C>
John F. Woodhouse $ 932,832
Chairman of the Board of
Directors
Bill M. Lindig $ 910,080
President and Chief
Executive Officer
and Director
Charles H. Cotros $ 697,728
Executive Vice President,
Chief Operating Officer
and President, Foodservice
Operations and Director
Arthur M. Swenka *
Senior Vice President,
Operations and Director
Gregory K. Marshall $ 401,952
Senior Vice President
Multi-Unit Sales
Executive Officer Group $ 4,899,422
Non-Executive Officer Director $ 173,847
Group
Non-Executive Officer $ 1,607,221
Employee Group
</TABLE>
- ---------------
* Mr. Swenka would have received $291,132 if the 1995 MIP had been in effect
during fiscal 1995. His bonus under the Current Plan in respect of fiscal 1995
was $364,032.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF APPROVAL OF THE 1995
MANAGEMENT INCENTIVE PLAN.
PROPOSAL TO APPROVE NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
There will be presented at the 1995 Annual Meeting a proposal to approve
the Non-Employee Directors Stock Option Plan (the "Plan"), attached hereto as
Exhibit B, which Plan was adopted, subject to such stockholder approval, by the
Board of Directors on December 1, 1994. This Plan is intended to benefit the
Company and its stockholders by allowing members of the Board of Directors of
the Company who are not current employees of the Company to increase their
financial stake in the Company through ownership of Common Stock, thus
underscoring the directors' mutual interest with stockholders in increasing the
long-term value of the Company's Common Stock. Primary aspects of the Plan are
as follows:
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<PAGE> 21
PARTICIPATION
Participation in this Plan would be limited to members of the Board of
Directors who are not current employees of the Company or any of its
subsidiaries ("Non-Employee Directors"). On November 3, 1995, there will be nine
Non-Employee Directors.
STOCK OPTION GRANT
The Plan provides that each year, on the first business day following the
Company's Annual Meeting of Stockholders ("Award Date"), each individual
elected, reelected or continuing as a Non-Employee Director will automatically
receive a stock option for 2,000 shares of Common Stock, none of which options
will be "Incentive Stock Options" under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"). Currently, 200,000 shares of Company Common
Stock are reserved for issuance under the Plan. Under the Plan, the exercise
price for options granted under the Plan will be the last closing price of
Company Common Stock on the New York Stock Exchange ("NYSE") prior to the date
of the grant; thus, the Plan would not permit options granted thereunder to be
repriced to a reduced exercise price. Options become exercisable in accordance
with Exhibit A attached to the Plan, as the same may be amended from time to
time in accordance with the Plan, and expire ten years from date of grant. The
exercise price must be paid in cash, in shares of Common Stock having an
aggregate value equal to the option exercise price, or by a combination of cash
and Common Stock. For the purpose of determining the number of shares to be
delivered in full or partial payment of the exercise price, the value of such
shares shall equal the last closing price on the NYSE on the first business day
prior to the exercise date. If, on the Award Date, the General Counsel of the
Company determines, in his or her sole discretion, that the Company is in
possession of material, undisclosed information about the Company, then the
annual grant of options to Non-Employee Directors will be suspended until the
second day after public dissemination of the information (or the first trading
day thereafter) and the price, exercisability dates and option period shall then
be determined by reference to such later date.
CESSATION OF SERVICE
Upon retirement from the Board of Directors in good standing (determined by
the Board of Directors in its sole discretion, provided that a Non-Employee
Director who serves out his or her term but does not stand for reelection shall
be deemed to have retired from the Board in good standing), a Non-Employee
Director's options will remain in effect, vest, become exercisable and expire as
if the option holder had remained a Non-Employee Director. Upon a Non-Employee
Director's death, his or her legal representatives or heirs have one year within
which to exercise those options which were exercisable at the time of death.
Should an individual cease to serve as a Non-Employee Director for any other
reason, all options held by such person, whether or not then exercisable, shall
be forfeited upon cessation of service.
OTHER INFORMATION
The Plan will become effective, subject to stockholder approval at the 1995
Annual Meeting, as of December 1, 1994, all option grants under the Plan made
prior to such stockholder approval having been made expressly contingent upon
obtaining such approval. The Plan will terminate, for purposes of granting
additional options, ten years following the date of stockholder approval of the
Plan, unless terminated earlier by the Board of Directors or extended by the
Board with the approval of stockholders, but options granted prior to such date
shall continue to become exercisable, and may be exercised, in accordance with
their terms.
Non-Employee Directors are compensated for their services as directors. For
a description of such compensation see page 4 of this Proxy Statement. The cash
component of such compensation was last adjusted during fiscal 1993.
All persons who are nominees for reelection to the Board of Directors at
the 1995 Annual Meeting, other than Mr. Woodhouse, will be entitled to receive
options under the Plan.
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<PAGE> 22
The market value of Company Common Stock on the NYSE as of the close of
trading on September 21, 1995 was $27.50.
FEDERAL INCOME TAX CONSEQUENCES
Options granted under the Plan to Non-Employee Directors cannot qualify as
Incentive Stock Options pursuant to Section 422 of the Code and consequently
will be treated as "Non-Qualified Options." Under current law relating to
Non-Qualified Options, the grant of an option under the Plan to a Non-Employee
Director will not result in the recognition of any taxable income by such
Director. If the shares received by a Non-Employee Director upon exercise of the
option are subject to restrictions under Section 16(b) of the Securities
Exchange Act of 1934, as amended, unless within 30 days of receipt of the option
shares the Non-Employee Director makes an election pursuant to Section 83(b) of
the Code (an "83(b) Election") for the gain on the shares to be treated as
income on the date of receipt, income will be recognized by such Director at the
time the Section 16(b) restrictions lapse. The amount of such income will be
equal to the excess of the value of the option shares at the time the
restrictions lapse over the amount paid for the shares. If an 83(b) Election is
made or if the shares are not subject to Section 16(b) restrictions at the time
of exercise, income will be recognized by the Non-Employee Director on the date
of receipt of the option shares in an amount equal to the excess of the value of
the option shares on such date over the option price. A Non-Employee Director's
tax basis for the option shares will be equal to the exercise price of the
option plus the amount included in gross income as compensation. The
Non-Employee Director's holding period for the option shares will commence on
the date on which the option shares are acquired.
NEW PLAN BENEFITS
It is impossible to determine the dollar value of benefits to which any
individuals would be entitled during 1996 pursuant to the Plan. As only
Non-Employee Directors will be entitled to receive options under the Plan, no
executive officers named in the Summary Compensation Table, nor any other
executive officers, other officers or employees will be entitled to receive
options under the Plan. The group of Non-Employee Directors, which during fiscal
1996 will consist of nine (9) persons assuming the election of all nominees at
the 1995 Annual Meeting, would receive options covering an aggregate of 18,000
shares of Company Common Stock in fiscal 1996.
As noted under "Election Of Directors -- Director Compensation" above, each
Non-Employee Director received a grant, effective December 1, 1994, subject to
stockholder approval of the Plan at the 1995 Annual Meeting, of options to
purchase 2,000 shares of Company Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF APPROVAL OF THE
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN.
PROPOSAL TO INCREASE THE NUMBER OF SHARES RESERVED
FOR ISSUANCE UNDER THE SYSCO CORPORATION 1991 STOCK OPTION PLAN
The Company's Directors and stockholders originally provided that 1,500,000
shares of Sysco Corporation Common Stock be reserved for issuance under the
Sysco Corporation 1991 Stock Option Plan (the "Option Plan"). This amount has
been increased to 3,000,000 shares as a result of the 2-for-1 stock split by way
of a stock dividend paid on June 19, 1992.
The Board of Directors believes that because there are only approximately
956,582 shares so reserved and currently available for issuance upon the
exercise of options granted or to be granted under the Option Plan, it is
necessary to increase the number of reserved shares. In light of the historical
rate at which shares have been issued under the Option Plan, the Board of
Directors, on September 1, 1995, approved (subject to stockholder approval) the
reservation of 8,000,000 additional shares for issuance under the Option Plan.
Since no options which have an exercise price less than the fair market
value of the Company's Common Stock may be granted under the Option Plan, the
Option Plan does not permit options whose exercise price equals the fair market
value of such stock to be repriced to a reduced exercise price.
20
<PAGE> 23
The Company traditionally has issued options under the Option Plan to a
large number of individuals throughout its corporate and operating company
ranks; options have not been limited to only a few highly compensated
individuals. Moreover, grants of options to the Company's senior executives have
traditionally been modest. A review of options granted in fiscal 1995
demonstrates the Company's practice with respect to options. In September 1994,
options to purchase 1,004,100 shares were issued to 657 employees. Approximately
551 of these individuals were employees of the Company's operating subsidiaries
and divisions who received options for 811,600 shares in the aggregate. One
hundred six of these individuals were corporate employees who received options
for approximately 192,500 shares in the aggregate, only 38,000 of which (or 4%
of the total number of options granted in fiscal 1995) were granted to
individuals identified in the Summary Compensation Table.
In addition, the vast majority of all options issued in the past under the
Option Plan have been subject to performance vesting requirements. That is, the
Company or its operating companies must achieve certain specified and
predetermined targets of earnings increases and/or return on capital before the
options become exercisable. The Company's senior management and the Compensation
and Stock Option Committee currently intend to continue this practice with
future grants. A more complete description of the vesting provisions
historically contained in stock options as well as proposed vesting provisions
for future grants of options is set forth on pages 7-8 in the "Report of the
Compensation and Stock Option Committee on Executive Compensation."
Accordingly, the Option Plan has been a vehicle to provide
performance-based incentives to a large number of employees throughout the
Company's organization and it is the current intention of the Company's senior
management and the Compensation and Stock Option Committee to continue this
practice.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE PROPOSAL TO
RESERVE ADDITIONAL SHARES OF SYSCO CORPORATION COMMON STOCK FOR ISSUANCE UNDER
THE OPTION PLAN.
VOTING PROCEDURES AND VOTE REQUIRED
The Board of Directors of the Company will select one or more Inspectors of
Election, who shall determine the number of shares of voting stock outstanding,
the voting power of each, the number of shares of stock represented at the
Annual Meeting, the existence of a quorum (which shall consist of thirty-five
percent (35%) of the shares entitled to vote), and the validity and effect of
proxies. The Inspectors of Election shall receive votes, ballots or consents,
hear and determine any challenges and questions arising in connection with the
right to vote, tabulate all votes cast for and against (and abstentions in
respect of) each proposal and determine the result of such vote.
In accordance with the Delaware General Corporation Law, the election of
the nominees named herein as directors will require the affirmative vote of a
plurality of the votes cast by the shares of Company Common Stock entitled to
vote in the election provided that a quorum is present at the Annual Meeting.
Abstentions and broker non-votes will not be relevant to the outcome.
The proposal for approval of the 1995 Management Incentive Plan, the
proposal for approval of the Non-Employee Directors Option Plan and the proposal
to approve additional shares for issuance under the 1991 Stock Option Plan will
each require the affirmative vote of a majority of the shares of Common Stock
present in person or by proxy and entitled to vote on the proposal. Abstentions
will have the effect of "negative" votes with respect to this proposal, while
broker non-votes will have no effect on the outcome of the proposal.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as the independent public accountants providing
auditing, financial and tax services to the Company for fiscal year 1995 and
will provide such services during the current fiscal year 1996. The Company
expects that representatives of Arthur Andersen LLP will be present at the
Annual Meeting
21
<PAGE> 24
with the opportunity to make a statement if they desire to do so and that they
will be available to respond to appropriate questions.
The Company has an Audit Committee of the Board of Directors which is
composed of Richard G. Merrill (Chairman), Colin G. Campbell, Frank A. Godchaux
III, Frank H. Richardson, Phyllis S. Sewell and Thomas B. Walker, Jr. The Audit
Committee held three (3) meetings during fiscal year 1995. The Audit Committee
reviews and reports to the Company's Board of Directors with respect to various
auditing and accounting matters, including recommendations as to the selection
of the Company's independent public accountants, the scope of the audit
procedure, the nature of the services to be performed for the Company, the fees
to be paid to the Company's independent public accountants, the performance of
the Company's independent public accountants and the accounting practices of the
Company.
STOCKHOLDER PROPOSALS
Appropriate proposals of stockholders intended to be presented at the
Company's 1996 Annual Meeting of Stockholders must be received by the Company by
June 3, 1996 for inclusion in its Proxy Statement and form of proxy relating to
that meeting. If the date of the next Annual Meeting is advanced by more than 30
calendar days or delayed by more than 90 calendar days from the date of the
Annual Meeting to which the Proxy Statement relates, the Company shall, in a
timely manner, inform its stockholders of the change and the date by which
proposals of stockholders must be received.
OTHER MATTERS TO COME BEFORE THE MEETING
Management does not know of any other matters to come before the Annual
Meeting. However, if any other matters properly come before the Annual Meeting,
it is the intention of the persons designated as proxies to vote in accordance
with their best judgment on such matters.
UPON THE WRITTEN REQUEST OF ANY RECORD OR BENEFICIAL OWNER OF COMMON STOCK
OF THE COMPANY WHOSE PROXY WAS SOLICITED IN CONNECTION WITH THE 1995 ANNUAL
MEETING OF STOCKHOLDERS, THE COMPANY WILL FURNISH SUCH OWNER, WITHOUT CHARGE, A
COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR ITS FISCAL YEAR ENDED JULY 1, 1995.
REQUEST FOR A COPY OF SUCH ANNUAL REPORT ON FORM 10-K SHOULD BE ADDRESSED TO
MRS. LA DEE G. RIKER, VICE PRESIDENT AND SECRETARY, SYSCO CORPORATION, 1390
ENCLAVE PARKWAY, HOUSTON, TEXAS 77077-2099.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO SIGN, DATE AND RETURN THE
PROXY IN THE ENCLOSED ENVELOPE TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES.
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<PAGE> 25
EXHIBIT A
SYSCO CORPORATION
1995 MANAGEMENT INCENTIVE PLAN
This Sysco Corporation 1995 Management Incentive Plan (the "Plan") was
adopted by unanimous action of the Plan Compensation Committee (as hereinafter
defined) of Sysco Corporation (the "Company") on May 9, 1995, and by the Board
of Directors of the Company (the "Board of Directors") on May 10, 1995.
1. STATEMENT OF PRINCIPLE
The purpose of the Plan is to reward (i) certain key management personnel
for outstanding performance in the management of the divisions or subsidiaries
of the Company (both a division and subsidiary of the Company are herein
referred to as a "Subsidiary") and (ii) certain corporate personnel for managing
the operations of the Company as a whole and/or managing the operations of
certain Subsidiaries. Except as otherwise provided in Section 8 hereof, the
total number of shares of Sysco Common Stock, $1.00 par value ("Common Stock"),
which may be awarded pursuant to the Plan shall not exceed 2,124,234 shares. All
references to periods in the Plan are to fiscal periods unless otherwise
specifically noted. Nothing in the Plan shall be deemed to affect incentive
bonuses paid or to be paid to participants under any predecessor management
incentive plan for fiscal years prior to the Company's 1996 fiscal year.
2. PLAN COMPENSATION COMMITTEE
The Board of Directors has established a committee (the "Plan Compensation
Committee") which is charged with structuring, proposing the implementation of,
and implementing the terms and conditions of, the Plan. The Plan Compensation
Committee shall, at all times, consist of two or more directors of the Company.
The Plan Compensation Committee shall have the authority to adopt, alter and
repeal such rules, guidelines and practices governing the Plan as it shall, from
time to time, deem advisable; to interpret the terms and provisions of the Plan
and any award issued under the Plan (and any agreements relating thereto)
including without limitation the manner of determining financial and accounting
concepts discussed in the Plan; to otherwise supervise the administration of the
Plan; and, except as to the application of the Plan to Senior Executive
Participants (as defined in Section 3 below), to delegate such authority
provided to it hereunder as it may deem necessary or appropriate to the Chairman
of the Board, Chief Executive Officer, President, Chief Operating Officer and
any Executive Vice President, and any of them individually. All decisions made
by the Plan Compensation Committee pursuant to the provisions of the Plan shall
be made in the Plan Compensation Committee's sole discretion and shall be final
and binding on all persons, including the Company and Participants (hereinafter
defined). Each director while a member of the Plan Compensation Committee shall
(i) meet the definition of "disinterested person" contained in Rule 16b-3
promulgated pursuant to Section 16 of the Securities Exchange Act of 1934, as
amended, and (ii) be an "outside director," within the meaning of Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code"), any regulations
interpreting Section 162(m) of the Code, or any other applicable Internal
Revenue Service pronouncements pertaining thereto.
3. PARTICIPANTS
The participants in the Plan for a fiscal year shall be designated by the
Plan Compensation Committee from the persons who are employed by any Subsidiary
or the Company, in the following capacities (Subsidiary Participants, Corporate
Participants, Designated Participants and Senior Executive Participants are
referred to collectively as "Participants" or individually as a "Participant"):
Subsidiary Participants -- Persons who serve as an officer of a Subsidiary,
regardless of whether such Participant works for a division or a subsidiary
of the Company.
Corporate Participants -- Persons who serve as an officer of the Company
who are also employees of the Company or a Subsidiary.
1
<PAGE> 26
Designated Participants -- Persons other than Corporate Participants or
Subsidiary Participants who are employed by a Subsidiary or by the
corporate office of the Company who are designated by the Plan Compensation
Committee from time to time.
Senior Executive Participants -- Persons who are "covered employees" of the
Company within the meaning of Code Section 162(m) and proposed Treasury
Regulation 1.162-27(c)(2) (or any successor statute or regulation section,
or any administrative interpretation thereof) (the "Executive Compensation
Provisions") during a fiscal year of the Company and who have been
designated by the Plan Compensation Committee as Corporate, Subsidiary or
Designated Participants in the Plan for such fiscal year. If a Participant
is both a Senior Executive Participant and a Corporate, Subsidiary or
Designated Participant during a fiscal year as a result of the application
of the Executive Compensation Provisions, he or she shall be considered a
Senior Executive Participant, and not a Corporate, Subsidiary or Designated
Participant, during such fiscal year, and shall be subject to any and all
restrictions applicable to Senior Executive Participants hereunder during
such fiscal year.
To the extent possible, the Plan Compensation Committee shall designate
Participants in the Plan prior to the commencement of the fiscal year in which
such designated Participants will be entitled to a bonus under the Plan, or as
soon as practicable during the fiscal year in which a person first becomes
eligible to be a Participant. Once designated as a Participant, the Plan
Compensation Committee can remove an employee as a Participant with or without
cause at any time and the Participant shall not be entitled to any bonus under
the Plan for the year in which he or she is removed regardless of when during
such year he or she is removed.
4. METHOD OF OPERATION
The bonus which a Participant can earn is based on the performance of the
Company as a whole and either the performance of the Subsidiary which employs
such Participant (as to Subsidiary Participants and possibly Designated
Participants) or of a select group of Subsidiaries (as to Corporate and possibly
Designated Participants), subject to the discretion of the Plan Compensation
Committee to formulate a different bonus structure as to any Participant, other
than Senior Executive Participants. The bonus is calculated with respect to an
entire fiscal year and, if earned, shall be paid in accordance with Section 6
hereof.
(A) Subsidiary Participants and certain Senior Executive Participants.
With respect to each Subsidiary Participant and each Senior Executive
Participant who would be a Subsidiary Participant but for the application of the
Executive Compensation Provisions, a portion of the bonus may depend upon the
return on capital and/or increase in pretax earnings of the Subsidiary employing
such Participant; a portion of the bonus may depend upon the return on
stockholder's equity and increase in earnings per share of the Company as a
whole; and a portion of the bonus may depend upon any one or more of the
following performance factors: (i) sales of the Company and/or one or more
Subsidiaries, (ii) pretax earnings of the Company, (iii) net earnings of the
Company and/or one or more Subsidiaries, (iv) control of operating and/or
nonoperating expenses of the Company and/or one or more Subsidiaries, (v)
margins of the Company and/or one or more Subsidiaries, (vi) market price of the
Company's securities, and (vii) other objectively measurable factors directly
tied to the performance of the Company and/or one or more Subsidiaries. The
relative weights of the factors considered and the percentages of the total
bonus comprised by the portion of the bonus determined with respect to the
Subsidiary employing the Participant and the portion of the bonus determined
with respect to the Company shall be determined by the Plan Compensation
Committee in its sole discretion. Notwithstanding the foregoing, the Plan
Compensation Committee may alter the bonus formula with respect to any such
Participant by changing the performance targets as determined in the sole
discretion of the Committee.
In addition to the bonus calculated in accordance with the first paragraph
of Section 4(A) above, a Subsidiary Participant may also be entitled to an
additional bonus ("Additional Bonus") if awarded by the Plan Compensation
Committee in its sole discretion. The Additional Bonus may be established by the
Plan Compensation Committee at one or more times during such fiscal year or
within ninety (90) days following
2
<PAGE> 27
the end of such fiscal year based on such criteria as the Plan Compensation
Committee may develop in its sole discretion.
(B) Corporate Participants and certain Senior Executive Participants.
With respect to a Corporate Participant or Senior Executive Participant who
would be a Corporate Participant but for the application of the Executive
Compensation Provisions and subject to the further adjustments and additions
provided for in the Plan, a portion of the bonus may depend upon the return on
stockholder's equity and increase in earnings per share of the Company; portion
of the bonus may depend upon the return on capital of one or more of the
Subsidiaries and/or the increase in pretax earnings of one or more of the
Subsidiaries; and a portion of the bonus may depend upon any one or more of the
following performance factors: (i) sales of the Company and/or one or more
Subsidiaries, (ii) pretax earnings of the Company, (iii) net earnings of the
Company and/or one or more Subsidiaries, (iv) control of operating and/or
nonoperating expenses of the Company and/or one or more Subsidiaries, (v)
margins of the Company and/or one or more Subsidiaries, (vi) market price of the
Company's securities, and (vii) other objectively measurable factors directly
tied to the performance of the Company and/or one or more Subsidiaries. The
relative weights of the factors considered and the percentage of the total bonus
comprised by the portion of the bonus determined with respect to the
Subsidiaries of the Company and the portion determined with respect to the
Company shall be determined by the Plan Compensation Committee in its sole
discretion. Notwithstanding the foregoing, the Plan Compensation Committee may
alter the bonus formula with respect to any such Participant by changing the
performance targets as determined in the sole discretion of the Committee.
(C) Designated Participants.
The Plan Compensation Committee may formulate a bonus structure for each
Designated Participant which is based on performance factors determined by the
Plan Compensation Committee in its sole discretion. The bonus structure for any
Designated Participant may be similar to or may vary materially from the bonus
structure for Corporate Participants or Subsidiary Participants.
(D) General Rules Regarding Bonus Calculation.
In determining whether or not the results of operations of a Subsidiary or
Subsidiaries or the Company for a given fiscal year result in a bonus, generally
accepted accounting principles shall be applied on a basis consistent with prior
periods, and such determination shall be based on the calculations made by the
Company and binding on each Participant. Except as provided in Section 10 as to
Senior Executive Participants, there is no limit to the bonus that can be
obtained. Prior to payment of the bonus to Senior Executive Participants, the
Plan Compensation Committee shall certify that the performance goals and other
material terms of the Plan have been achieved with respect to the Senior
Executive Participants.
5. NO EMPLOYMENT ARRANGEMENTS IMPLIED
Nothing herein shall imply any right of employment for a Participant and if
a Participant is terminated, voluntarily or involuntarily, with or without
cause, prior to the end of a given fiscal year, such Participant shall not be
entitled to any bonus for such fiscal year regardless of whether or not such
bonus had been or would have been earned in whole or in part, but any unpaid
bonus earned with respect to a prior fiscal year shall not be affected.
6. PAYMENT
Within 90 days following the end of each fiscal year, the Company shall
determine the amount of any bonus earned by each Participant pursuant to the
provisions of Section 4 above. Such bonus shall be payable in cash unless the
Participant has given notice to the Plan Compensation Committee within 90 days
after the commencement of such fiscal year that such Participant has elected the
option provided in Section 6(A) below. The amount of any bonus that a
Participant is entitled to receive for a fiscal year shall be determined as of
the last day of such fiscal year and each Participant shall be deemed to have
constructively
3
<PAGE> 28
received his or her bonus (including the value of the shares of stock if he or
she elects to receive a portion of his or her bonus in stock) as of the last day
of such fiscal year notwithstanding the fact that it may be paid or delivered to
him or her thereafter.
(A) Each Participant shall be entitled to receive, in increments of 5%, up
to 40% of his or her bonus in shares of Common Stock (with the exact percent
fixed by the Participant) with such shares to be valued at the closing price of
the Common Stock on the primary securities exchange on which such stock is
traded on the last trading day of such fiscal year. Such election shall be made
no later than 90 days after the beginning of the fiscal year in respect of which
the bonus is to be calculated and once made shall be irrevocable for such fiscal
year. If the Participant elects to receive such shares, the Participant shall
receive as additional compensation an additional number of shares of Common
Stock equal to 50% of the number of shares received by reason of this election
(the "Additional Shares"), plus the Additional Cash Bonus (as defined in Section
6(B) below). For example, if a Participant earns a $10,000 bonus and the Common
Stock is selling at $50 per share, and the Participant elects to receive 40% of
the bonus in the form of Common Stock in a timely manner, the Participant would
receive $6,000 plus 120 shares of Common Stock (80 shares pursuant to his or her
election, plus 40 Additional Shares), plus the Additional Cash Bonus (as defined
in Section 6(B) below).
(B) If a Participant elects to receive Common Stock in accordance with
Section 6(A) above, he or she shall also receive, as an additional bonus
pursuant to the Plan, a cash amount equal to the value of the Additional Shares
(which shall be the aggregate closing price of the Additional Shares on the last
trading day of such fiscal year), multiplied by the effective tax rate
applicable to the Company for the fiscal year for which the bonus is calculated,
as described in the "Summary of Accounting Policies" section of the Company's
annual report to the Securities and Exchange Commission on Form 10-K for such
fiscal year (the "Additional Cash Bonus").
7. RECAPITALIZATION OF COMPANY
In the event of a recapitalization of the Company or its merger into or
consolidation with another corporation, a Participant shall be entitled to
receive such securities which he or she would have been entitled to receive had
he or she been a shareholder of the Company holding shares pursuant to the Plan
at the time of such recapitalization, merger or consolidation. In the event of a
stock split, stock dividend or combination of shares with respect to the Common
Stock of the Company after the determination of the number of shares to which a
Participant is entitled but before delivery of such shares to the Participant,
then the number of shares that such Participant shall be entitled to receive
shall be proportionately adjusted.
8. INVESTMENT REPRESENTATION AND RESTRICTIONS ON THE STOCK AND RIGHT OF
REPURCHASE BY THE COMPANY
(A) The shares to be issued to a Participant may be unregistered, at the
option of the Company, and in such event the Participant shall execute an
investment letter in form satisfactory to the Company, which letter shall
contain an agreement that the Participant will not sell, transfer, give or
otherwise convey any of such shares for a period of two years from the date on
which such shares were issued to the Participant, except in the event of the
Participant's death or termination of employment due to disability or retirement
under normal Company benefit plans, but then only in accordance with the
requirements of the Securities Act of 1933, as amended, and the rules and
regulations thereunder, and the shares shall bear a legend reflecting the
investment representation and the unregistered status of the shares.
(B) If the shares to be issued to a Participant are registered pursuant to
the registration provisions of the Securities Act of 1933, as amended, then the
Participant shall enter into an agreement at the time of issuance of such shares
that the Participant will not sell, transfer, give or otherwise convey any of
such shares for a period of two years from the date on which such shares were
issued to the Participant, except in the event of death or termination of
employment due to disability or retirement under the normal Company benefit
plans, and such shares shall bear a legend reflecting the terms of such
restriction.
(C) If a Participant's employment is terminated at any time within the
first year following the issuance of shares for any reason, with or without
cause, other than the Participant's death or termination of employment due to
disability or retirement under normal Company benefit plans, then upon demand of
the Company made
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in writing within 30 days from the date of termination, such Participant will
sell to the Company all of the stock issued to the Participant within the twelve
months preceding the date of termination at a purchase price equal to the lower
of the then market price of the stock as hereinafter determined or the price at
which the stock was valued for purposes of issuing it pursuant to the Plan. If a
Participant's employment is terminated after one year but before two years from
the date on which any shares of Common Stock were issued to the Participant
pursuant to the Plan, on the demand of the Company made in writing within 30
days from the date of termination, such Participant will sell to the Company, in
addition to the shares he or she may be required to sell under the preceding
sentence, 50% of the stock issued to the Participant within twenty-four months
but more than twelve months preceding the date of termination at a purchase
price equal to the lower of the then market price of the stock as hereinafter
determined, or the price at which the stock was valued for purposes of issuing
it pursuant to the Plan. The market price of the Common Stock shall be deemed to
be the closing price of such stock on the primary securities exchange on which
such stock is traded on the date of termination; and if such stock did not trade
on such date, then on the next day on which it does trade. The shares of Common
Stock issued under the Plan shall bear a legend reflecting these restrictions.
9. AMENDMENTS AND TERMINATION
The Plan may be amended at any time by the Board of Directors and any such
amendment shall be effective as of commencement of the fiscal year during which
the Plan is amended, regardless of the date of the amendment, unless otherwise
stated by the Board of Directors. The Plan may be terminated at any time by the
Board of Directors and termination will be effective as of the commencement of
the fiscal year in which such action to terminate the Plan is taken.
10. OVERALL LIMITATION UPON PAYMENTS UNDER PLAN TO SENIOR EXECUTIVE
PARTICIPANTS.
Notwithstanding any other provision in the Plan to the contrary, in no
event shall any Senior Executive Participant be entitled to a bonus amount for
any fiscal year (which bonus amount shall include, if applicable, the value of
the Additional Shares (as defined in Section 6(A) above, and the Additional Cash
Bonus (as defined in Section 6(B) above)) in excess of one percent (1%) of the
Company's earnings before income taxes as publicly disclosed in the
"Consolidated Results of Operations" section of the Company's annual report to
the Securities and Exchange Commission on Form 10-K for such fiscal year.
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EXHIBIT B
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
This Non-Employee Directors Stock Option Plan (the "Plan") is established
to attract, retain and compensate for service as members of the Board of
Directors highly qualified individuals who are not current employees of Sysco
Corporation (the "Corporation") and to enable them to increase their ownership
in the Corporation's common stock. This Plan will be beneficial to the
Corporation and its stockholders since it will allow these directors to have a
greater personal financial stake in the Corporation through the ownership of
Corporation common stock, in addition to underscoring their common interest with
stockholders in increasing the value of the Corporation over the longer term.
1. ELIGIBILITY. All members of the Corporation's Board of Directors who are
not current employees of the Corporation or any of its subsidiaries
("Non-Employee Directors") are eligible to participate in this Plan.
2. OPTIONS. No stock options granted pursuant to this Plan ("Options") may
be "Incentive Stock Options" under Section 422 of the Internal Revenue Code of
1986, as amended.
3. SHARES AVAILABLE.
(a) Number of Shares Available: There are hereby reserved for issuance
under this Plan 200,000 shares of the Corporation's Common Stock, $1.00 par
value ("Common Stock"), which may be authorized but unissued shares,
treasury shares, or shares purchased on the open market.
(b) Recapitalization Adjustment: In the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares,
merger, consolidation, rights offering, or any other change in the
corporate structure or shares of the Corporation, adjustments in the number
and kind of shares authorized by this Plan, in the number and kind of
shares to be issued under Section 4 below, in the number and kind of shares
covered by outstanding Options under this Plan, and in the option price
thereof, shall be made if, and in the same manner as, such adjustments are
made to options issued under the Corporation's plan pursuant to which
Incentive Stock Options may be granted which is then in effect.
4. ANNUAL GRANT OF STOCK OPTIONS. If the Corporation achieves for any
fiscal year an increase in after-tax earnings per share of 10% or more over
after-tax earnings per share for the prior fiscal year, determined consistently
with determinations made in connection with the measurement of the Corporation's
performance under incentive compensation plans for management of the
Corporation, each individual elected, re-elected or continuing as a Non-Employee
Director shall automatically receive an Option for 2,000 shares of Common Stock
on the first business day (the "Award Date") after the Corporation's Annual
Meeting of Stockholders which follows the close of such fiscal year.
Notwithstanding the foregoing, if, on the Award Date, the General Counsel of the
Corporation determines, in his/her sole discretion, that the Corporation is in
possession of material, undisclosed information about the Corporation, then the
annual grant of Options to Non-Employee Directors shall be suspended until the
second day after public dissemination of such information, and the price,
exercisability dates and option period shall then be determined by reference to
such later date. If Common Stock is not traded on the New York Stock Exchange
("NYSE") on any date a grant would otherwise be awarded, then the grant shall be
made the next day thereafter on which Common Stock is so traded. The foregoing
notwithstanding, the first Option grant pursuant to this Plan shall be made
effective as of December 12, 1994. All Option grants pursuant to this Plan shall
be evidenced by a written instrument consistent with the provisions hereof.
5. OPTION PRICE. The price of the Option shall be the last closing price of
the Corporation Common Stock on the NYSE prior to the grant of the Option.
6. OPTION PERIOD. An Option granted under the Plan shall become exercisable
and shall expire in accordance with the vesting and other conditions contained
on Exhibit A hereto, as the same may be amended in accordance with paragraph 10
hereof; provided, however, that no Option may be exercised later than ten years
after the date of grant thereof.
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7. PAYMENT. The Option exercise price shall be paid in cash in U.S. dollars
at the time the Option is exercised or in shares of Corporation Common Stock
having an aggregate value equal to the Option exercise price (determined as of
the first business day prior to the date of exercise, pursuant to the formula
set forth in paragraph 5 above) or by a combination of cash and Common Stock.
8. CESSATION OF SERVICE. Upon cessation of service as a Non-Employee
Director (for reasons other than death), all Options, whether or not exercisable
at the date of cessation of service, shall be forfeited by the grantee;
provided, however, that, subject to Paragraph 3 of Exhibit A, if a grantee
leaves the Board of Directors in "good standing" (for reasons other than death),
such grantee's Options shall remain in effect, vest, become exercisable and
expire as if the grantee had remained a Non-Employee Director of the
Corporation. Whether or not a Non-Employee Director has left the Board in "good
standing" shall be determined by the Corporation's Board of Directors, in its
sole discretion; provided, however, that any Non-Employee Director who serves
out his/her term but does not stand for re-election at the end thereof shall be
deemed to have left the Board of Directors in "good standing."
9. DEATH. Upon the death of a Non-Employee Director, only those Options
which were exercisable on the date of death shall be exercisable by his/her
legal representatives or heirs. Such Options must be exercised within one year
from date of death or they shall be automatically forfeited (but in no event may
the Options be exercised beyond the last date on which they could have been
exercised had the Non-Employee Director not died).
10. ADMINISTRATION AND AMENDMENT OF THE PLAN. This Plan shall be
administered by the Board of Directors of the Corporation. This Plan may be
terminated or amended by the Board of Directors as it deems advisable. However,
amendments to this Plan shall not be made more frequently than every six months
unless necessary to comply with the Internal Revenue Code of 1986, as amended,
or with the Employee Retirement Income Security Act of 1974, as amended, or any
successors thereto, or the regulations promulgated thereunder. No amendment may
revoke or alter in a manner unfavorable to the grantees any Options then
outstanding, nor may the Board amend this Plan without stockholder approval
where the absence of such approval would cause the Plan to fail to comply with
Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Act"), or
any other requirement of applicable law or regulation. An Option may not be
granted under this Plan after that date which is ten years from the date of
stockholder approval of this Plan, but Options granted prior to that date shall
continue to become exercisable and may be exercised according to their terms.
11. NONTRANSFERABILITY. No Option granted under this Plan is transferable
other than by will or the laws of descent and distribution. During the grantee's
lifetime, an Option may be exercised only by the grantee or the grantee's
guardian or legal representative.
12. COMPLIANCE WITH SEC REGULATIONS. It is the Corporation's intent that
this Plan comply in all respects with Rule 16b-3 under the Act and any
regulations promulgated thereunder. If any provision of this Plan is at any time
found not to be in compliance with the Rule, the provision shall be deemed null
and void. All grants and exercises of Options under this Plan shall be executed
in accordance with the requirements of Section 16 of the Act, as amended, and
any regulations promulgated thereunder.
13. MISCELLANEOUS. Except as provided in this Plan, no Non-Employee
Director shall have any claim or right to be granted an Option under this Plan.
Neither this Plan nor any actions hereunder shall be construed as giving any
director any right to be retained in the service of the Corporation.
14. EFFECTIVE DATE. This Plan shall be effective on December 1, 1994,
subject to stockholder approval hereof being obtained at the Corporation's 1995
Annual Meeting of Stockholders; provided, however, that all Option grants made
hereunder prior to this Plan having been approved by the Corporation's
stockholders are hereby expressly made contingent upon obtaining such approval.
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<PAGE> 32
EXHIBIT A TO SYSCO CORPORATION
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
In addition to the conditions set out in the Plan, the exercise of an
Option is contingent upon satisfying the below requirements:
1. The fiscal year immediately prior to the fiscal year in which the Option
is granted is the "Base Year" for determining if vesting requirements have been
met. One-third of the total number of shares covered by an Option shall vest at
the conclusion of each of the next three fiscal years of the Corporation
following the Base Year, provided that the pretax earnings of the Corporation
increased at least 20% in such fiscal year over the Corporation's pretax
earnings for the prior fiscal year. If pretax earnings of the Corporation should
increase less than 20% in any one fiscal year over the prior fiscal year, the
Option can be vested at the conclusion of any fiscal year ending within the
five-year period following the date of grant of the Option (the "Vesting
Period") in which pretax earnings of the Corporation for the fiscal years after
the Base Year have grown at a minimum rate of 15%, compounded annually, with
one-third of the total number of shares covered by the Option to vest for each
fiscal year after the Base Year included in the calculation of the 15%
compounded minimum growth rate.
2. If neither of the vesting requirements set out in the paragraph
immediately above are met, an Option may still vest, in part or in whole,
subject to the following criteria:
(a) For any fiscal year within the Vesting Period in which the
Corporation's annual return on shareholders' equity (computed in a manner
consistent with the computation of the Corporation's annual return on
shareholders' equity under the Corporation's incentive compensation plans
for management of the Corporation) equals or exceeds 17.5% and the increase
in pretax earnings of the Corporation over the prior fiscal year equals or
exceeds 15%, one-third of the Option will vest.
(b) If the Corporation's average annual return on shareholders' equity
(computed in a manner consistent with the computation of the Corporation's
annual return on shareholders' equity under the Corporation's incentive
compensation plans for management of the Corporation) for the five fiscal
years ending within the Vesting Period equals or exceeds 17.5% and the
increase in pretax earnings of the Corporation over such five fiscal years
equals or exceeds 10%, compounded annually, the Option will fully vest.
3. If none of the vesting requirements set out above are met within the
Vesting Period as to any portion of an Option, such Option (or portion thereof)
will nonetheless vest and become exercisable six months prior to the expiration
thereof (the "Supplemental Vesting Date") provided that the grantee of the
Option (the "Grantee") continues to serve on the Corporation's Board of
Directors as a Non-Employee Director on the Supplemental Vesting Date.
Notwithstanding anything in Section 8 of the Plan to the contrary, if any Option
(or portion thereof) has not vested by the end of the Vesting Period, said
Option (or portion thereof) shall be automatically forfeited when the Grantee
ceases to serve as a Non-Employee Director (for reasons other than death) if
such cessation occurs prior to the Supplemental Vesting Date.
4. Subject to the limitations set forth in the Plan, the vested portion of
an Option may be exercised at any time following the conclusion of the fiscal
year in which it vests, provided that at the time of exercise all of the
conditions set forth in the Plan have been met. No portion of any Option may be
exercised prior to one calendar year following the date of grant thereof.
<PAGE> 33
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SYSCO CORPORATION PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SYSCO CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERS NOVEMBER 3, 1995, 10:00 A.M.
The undersigned hereby constitutes and appoints John F. Baugh and Donald H.
Pegler, Jr., and each of them jointly and severally, proxies, with full power of
substitution to vote all shares of Common Stock which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of Sysco Corporation (the
"Company") to be held on November 3, 1995, at 10:00 A.M., at the Four Seasons
Hotel Houston, 1300 Lamar Street, Houston, Texas, or any adjournment thereof.
The undersigned acknowledges the receipt of Notice of the aforesaid Annual
Meeting and Proxy Statement, each dated September 29, 1995, grants authority to
any of said proxies, or their substitutes, to act in the absence of others, with
all the powers which the undersigned would possess if personally present at such
meeting, and hereby ratifies and confirms all that said proxies, or their
substitutes, may lawfully do in the undersigned's name, place and stead. The
undersigned instructs said proxies, or any of them, to vote as set forth below.
/X/ Please mark votes as in this example.
1. Election of Directors.
NOMINEES: Colin G. Campbell, Frank A. Godchaux III, Donald J. Keller,
Frank H. Richardson and John F. Woodhouse
/ / / / FOR / / WITHHELD
____________________________________________________________________
FOR all nominees except those whose name(s) are written above.
2. Approval of the Sysco Corporation 1995 Management Incentive Plan:
/ / FOR / / AGAINST / / ABSTAIN
3. Approval of the Sysco Corporation Non-Employee Directors Stock Option
Plan:
/ / FOR / / AGAINST / / ABSTAIN
4. Approval of the reservation of 8,000,000 additional shares of Sysco
Corporation Common Stock under the Sysco Corporation 1991 Stock Option
Plan:
/ / FOR / / AGAINST / / ABSTAIN
5. On all other matters which may properly come before the meeting or any
adjournment thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
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<PAGE> 34
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ALL PROXIES SIGNED AND RETURNED WILL BE VOTED OR NOT VOTED IN ACCORDANCE WITH
YOUR INSTRUCTIONS, BUT THOSE WITH NO CHOICE SPECIFIED WILL BE VOTED "FOR" EACH
OF THE NOMINEES FOR DIRECTOR NAMED ABOVE AND "FOR" APPROVAL OF THE SYSCO
CORPORATION 1995 MANAGEMENT INCENTIVE PLAN, THE SYSCO CORPORATION NON-EMPLOYEE
DIRECTORS STOCK OPTION PLAN AND THE RESERVATION OF 8,000,000 ADDITIONAL SHARES
OF SYSCO CORPORATION COMMON STOCK UNDER THE SYSCO CORPORATION 1991 STOCK OPTION
PLAN.
Mark Here for Address Change and Note at Left / /
Signature:__________Date_____
Signature:__________Date_____
(SIGNATURE SHOULD CONFORM TO
NAME AND TITLE STENCILED
HEREON. WHERE THERE IS MORE
THAN ONE OWNER EACH SHOULD
SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES,
GUARDIANS AND ATTORNEYS
SHOULD ADD THEIR TITLES UPON
SIGNING.)
PLEASE SIGN BELOW, DATE AND
RETURN PROMPTLY.
NO POSTAGE REQUIRED IF THIS PROXY IS RETURNED IN THE ENCLOSED ENVELOPE AND
MAILED IN THE UNITED STATES.
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