Sysco 2007 Annual Report Download - page 85

granted to approximately 2,700 non-executive employees based on tenure, 557,000 options were granted to 18 executive
officers and 5,195,000 options were granted to approximately 1,700 other key employees.
The weighted average grant-date fair value of options granted in fiscal 2007, 2006 and 2005 were $6.85, $7.83 and $7.12,
respectively. The total intrinsic value of options exercised during fiscal 2007, 2006 and 2005, was $73,124,000, $48,928,000
and $81,220,000, respectively.
Employees’ Stock Purchase Plan
SYSCO has an Employees’ Stock Purchase Plan that permits employees to invest in SYSCO common stock by means of
periodic payroll deductions at 85% of the closing price on the last business day of each calendar quarter. The total number
of shares which may be sold pursuant to the plan may not exceed 68,000,000 shares, of which 3,186,098 remained
available as of June 30, 2007.
During fiscal 2007, 1,708,250 shares of SYSCO common stock were purchased by the participants as compared to
1,840,764 shares purchased in fiscal 2006 and 1,712,244 shares purchased in fiscal 2005. In July 2007, 433,498 shares
were purchased by participants.
The weighted average fair value of employee stock purchase rights issued pursuant to the Employees’ Stock Purchase
Plan was $5.02, $4.88 and $5.19 per share during fiscal 2007, 2006 and 2005, respectively. The fair value of the
stock purchase rights was calculated as the difference between the stock price at date of issuance and the employee
purchase price.
Management Incentive Compensation
SYSCO’s Management Incentive Plan compensates key management personnel for specific performance achievements.
The bonuses earned and expensed under this plan are paid in the following fiscal year in both cash and stock or deferred
for payment in future years at the election of each participant. The stock awards under this plan immediately vest upon
issuance; however, participants are restricted from selling, transferring, giving or otherwise conveying the shares for a
period of two years from the date of issuance of such shares. The fair value of the stock issued under the Management
Incentive Plan is based on the stock price less a 12% discount for post-vesting restrictions. The discount for post-vesting
restrictions is estimated based on restricted stock studies and by calculating the cost of a hypothetical protective put
option over the restriction period.
A total of 323,822 shares, 617,637 shares and 1,001,624 shares at a fair value of $30.56, $36.25 and $34.80 were issued
pursuant to this plan in fiscal 2007, 2006 and 2005, respectively, for bonuses earned in the preceding fiscal years.
As of June 30, 2007, there were 2,800,000 remaining shares that may be issued under the Management Incentive Plan.
In August 2007, 588,143 shares were issued in payment of the stock portion of the bonuses earned in fiscal 2007.
Non-Employee Director Stock Grants
Each newly elected director is granted a one-time retainer award of 6,000 shares of SYSCO common stock under the
2005 Non-Employee Directors Stock Plan. These shares vest one-third every year over a three-year period. In fiscal 2007,
12,000 shares in the aggregate of restricted stock were granted to two non-employee directors as one-time retainer
awards under the 2005 Non-Employee Directors Stock Plan. There were no one-time retainer awards issued in fiscal 2006.
In addition, there are one-time retainer awards outstanding under the Non-Employee Directors Stock Plan, which was
replaced by the 2005 Non-Employee Directors Stock Plan. In fiscal 2005, 4,000 shares of restricted stock were granted to
one non-employee director as a one-time retainer award under the Non-Employee Directors Stock Plan. This fiscal 2005
award and the other remaining outstanding unvested awards under this plan vest over a six-year period if certain earnings
goals are met.
The 2005 Non-Employee Directors Stock Plan provides for the issuance of restricted stock to current non-employee
directors. During fiscal 2007 and 2006, 30,000 and 27,000 shares, respectively, of restricted stock were granted to non-
employee directors. These shares will vest ratably over a three-year period.
The total amount of unvested shares related to the one-time retainer awards and other restricted stock awards
as of June 30, 2007 was not significant.
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