Item 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;

APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN

OFFICERS.

On June 23, 2021, the Compensation and Leadership Development Committee (the "Committee") of the Board of Directors (the "Board") of Sysco Corporation (the "Company" or "Sysco") approved the cancellation and replacement of the performance share units ("PSUs") previously issued to Mr. Kevin Hourican, the President and Chief Executive Officer ("CEO") of the Company, on February 12, 2020, in connection with his new hire compensation. These PSUs consisted of (i) 65,259 PSUs issued as part of his fiscal year 2020 annual long-term incentive award (the "FY20 PSU Award") and (ii) 54,595 PSUs issued as a make-whole award (the "Make-Whole PSU Award") for outstanding equity issued by Mr. Hourican's prior employer that was forfeited. The goals for these PSU awards were established in July 2019, more than six months prior to Mr. Hourican's appointment as President and CEO.

Summary of Mr. Hourican's New Hire PSU Awards

As disclosed previously, in January 2020, the Board elected Mr. Hourican as President and CEO, effective February 1, 2020. At the time of his election, the Committee approved a new hire compensation package for Mr. Hourican with a significant emphasis on equity-based incentives in order to immediately and significantly align his interests with the interests of Sysco's stockholders, as well as to motivate and reward him for driving improvements in the Company's performance. Specifically, these awards included a target annual equity award and a make-whole award for shares that Mr. Hourican was forfeiting by leaving his prior employer, as described further below:





                            Target
Compensation Component       Value                       Description
Target annual equity      $8,500,000    Represents annual LTI target award valued at
award for fiscal 2020                   654% of his annual base salary, which was
granted on February 12,                 approximately at median for Sysco's peer
2020                                    group at the time.

                                        Awarded 40% in stock options and 60% in PSUs.
                                        The options vest in three equal, annual
                                        installments on August 21, 2020, 2021 and
                                        2022. The PSUs were issued with a performance
                                        period from June 30, 2019 through July 2,
                                        2022.

Equity make whole -       $12,800,000   Replaced the value of outstanding equity
forfeited equity awards                 awards issued by his previous employer that
                                        were scheduled to vest in April 2021
                                        (restricted stock units ("RSUs"), PSUs and
                                        options), April 2022 (PSUs and options) and
                                        April 2023 (options).

                                        Awarded 33% in stock options, 33% in
                                        time-based RSUs and 33% in PSUs. The options
                                        have a 10-year term and vest in three equal,
                                        annual installments on August 21, 2020, 2021
                                        and 2022. The RSUs vest and settle in two
                                        equal installments on the 12-month and
                                        18-month anniversaries of Mr. Hourican's
                                        start date, February 1, 2020. The PSUs were
                                        issued with a performance period from
                                        June 30, 2019 through July 2, 2022.




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Impact of COVID-19 Pandemic on New Hire PSUs

Within weeks of Mr. Hourican's appointment, the World Health Organization declared the coronavirus a pandemic and governments across the U.S. and Europe initiated lockdowns. These events had an adverse impact on numerous aspects of Sysco's business, financial condition and results of operations, including the Company's financial performance with respect to the performance metrics under its annual and long-term incentive awards. Immediately after the onset of the crisis, Sysco leadership acted quickly to stabilize the business, including ensuring access to liquidity, reducing variable and structural costs and pivoting its business to maximize sales during a period of disruption. In addition, Mr. Hourican has led the Company's efforts to substantially accelerate the transformation of its business and strengthen the executive leadership team required to successfully implement the transformation plan.

In excess of 40% of Mr. Hourican's total new hire equity award was in the form of PSUs with performance goals that were established in July 2019, prior to Mr. Hourican's employment. Due to the effects of the pandemic, within months of the grant date the performance goals under the PSUs granted to Mr. Hourican in February of 2020 became effectively unachievable, and the Committee deemed those previously set goals no longer relevant. Although the Committee believes strongly in pay-for-performance, the circumstances surrounding the impact of the pandemic on Sysco's business, which occurred almost immediately after Mr. Hourican's appointment, were extraordinary, and the Committee believes it would be detrimental to the Company's business to undermine the motivation and retention of its CEO by allowing his new hire PSUs to remain unachievable. No adjustments to the PSUs previously issued to any other participant were made or are contemplated by the Committee.

Approval of Replacement PSU Award

As a result, following careful deliberations, on June 23, 2021, the Committee approved (i) the cancellation of the FY20 PSU Award and the Make-Whole PSU Award; and (ii) the issuance, pursuant to the Sysco 2018 Omnibus Incentive Plan, of a replacement award comprised of an equivalent number of new PSUs. The new PSUs were granted using the same performance goals as the fiscal year 2021 PSUs awarded to Sysco's leadership team and described in Sysco's Current Report on Form 8-K dated July 31, 2020, subject to the following additional terms:





     •    The shares of common stock received by Mr. Hourican, if any, upon the
          vesting of these replacement PSUs will be subject to a two-year holding
          requirement;




     •    Consistent with his original award, 50% of the new PSUs issued to replace
          the FY20 PSU Award will vest immediately if Mr. Hourican's employment is
          terminated without cause or upon his resignation for good reason, as such
          terms are defined in the letter agreement between Sysco and Mr. Hourican
          (together, an "Involuntary Termination"); and




     •    Consistent with his original award, 100% of the new PSUs issued to
          replace the Make-Whole PSU Award will vest immediately upon
          Mr. Hourican's Involuntary Termination.

This action allowed the Committee to align Mr. Hourican's new hire incentives with the current business context, recognize the scope and effectiveness of his strong leadership during this crisis, including the company's business transformation initiatives, as well as continue to motivate and incentivize Mr. Hourican's performance with equity compensation that includes achievable, while still rigorous, goals.





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