Sysco 2011 Annual Report Download - page 88

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Summary of Nonvested Awards
The following summary presents information regarding outstanding nonvested awards as of July 2, 2011 and changes during the fiscal year
then ended with regard to these awards under all stock incentive plans. Award types represented include: restricted stock units granted to
employees, restricted stock granted to employees and restricted awards granted to non-employee directors.
Shares
Weighted
Average Grant
Date Fair Value
Per Share
Nonvested as of July 3, 2010 ...................................................... 778,623 $ 27.23
Granted ..................................................................... 716,973 28.73
Vested . ..................................................................... (285,536) 27.30
Forfeited .................................................................... (7,534) 29.22
Nonvested as of July 2, 2011 ...................................................... 1,202,526 $ 28.10
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 discount of 15% from the closing price on the last business day of each calendar quarter. In November 2010, the Employees’ Stock
Purchase Plan was amended to reserve an additional 5,000,000 shares of Sysco common stock for issuance under the plan. Including the
additional 5,000,000 shares reserved in fiscal 2011, the total number of shares which may be sold pursuant to the plan may not exceed
79,000,000 shares, of which 6,902,496 remained available as of July 2, 2011.
During fiscal 2011, 1,655,100 shares of Sysco common stock were purchased by the participants as compared to 1,827,386 shares purchased
in fiscal 2010 and 2,031,695 shares purchased in fiscal 2009. In July 2011, 377,730 shares were purchased by participants.
The weighted average fair value of employee stock purchase rights issued pursuant to the Employees’ Stock Purchase Plan was $4.28, $3.87
and $3.85 per share during fiscal 2011, 2010 and 2009, 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. With respect to
bonuses for fiscal 2008 and earlier years, the bonuses earned and expensed under this plan were 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 vested upon
issuance; however, participants were 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 was based on the stock price less a
12% discount for post-vesting restrictions. The discount for post-vesting restrictions was estimated based on restricted stock studies and by
calculating the cost of a hypothetical protective put option over the restriction period. In May 2008, the Management Incentive Plan was amended
to remove the stock component of the bonus structure from all future bonuses granted. A total of 672,087 shares at a fair value of $28.22 were
issued pursuant to this plan in fiscal 2009 for bonuses earned in the fiscal 2008, the final year the bonus included a stock component.
All Share-Based Payment Arrangements
The total share-based compensation cost that has been recognized in results of operations was $59.2 million, $66.4 million and $56.0 million
for fiscal 2011, 2010 and 2009, respectively, and is included within operating expenses in the consolidated results of operations. The total income
tax benefit recognized in results of operations for share-based compensation arrangements was $18.2 million, $13.9 million and $9.9 million for
fiscal 2011, 2010 and 2009, respectively.
As of July 2, 2011, there was $61.3 million of total unrecognized compensation cost related to share-based compensation arrangements. That
cost is expected to be recognized over a weighted-average period of 2.62 years.
Cash received from option exercises and purchases of shares under the Employees’ Stock Purchase Plan was $332.7 million, $94.8 million and
$111.8 million during fiscal 2011, 2010 and 2009, respectively. The actual tax benefit realized for the tax deductions from option exercises totaled
$15.9 million, $5.4 million and $7.4 million during fiscal 2011, 2010 and 2009, respectively.
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