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SYSCO CORPORATION-Form10-K72
PARTII
ITEM8Financial Statements and Supplementary Data
Restricted Stock
In fi scal 2009, 75,822shares of restricted stock were granted to an executive offi cer. The fair value of theseshares was $23.74 per share, which was
based on the stock price on the grant date. Theseshares were to vest ratably over a three-year period. In fi scal 2010, this executive offi cer announced his
retirement, and 37,911 of theshares were forfeited according to the terms of the agreement. The remainingshares have vested according to the terms of
the agreement as amended in connection with the executive offi cer’s retirement. The total fair value of restricted stock vested during fi scal 2011 and 2010
was $0.4million and $0.7million, respectively. There were no vestings of restricted stock in fi scal 2012.
Non-Employee Director Awards
The 2009 Non-Employee Directors Stock Plan, as well as previous plans, provides for the issuance of restricted awards to current non-employee directors.
During fi scal 2012,2011 and 2010, 63,657, 60,973 and 58,310shares, respectively, of restricted awards were granted to non-employee directors. The
awards granted in fi scal 2012 and 2011 vest over a one-year period, and the awards granted in fi scal 2010 vest over a three-year period. Beginning in
fi scal 2011, the non-employee directors may elect to receive these awards in restricted stockshares that will vest at the end of the award’s stated vesting
period or as deferred units which convert intoshares of Sysco common stock upon a date selected by the non-employee director that is subsequent to the
award’s stated vesting date. The fair value of the restricted awards is based on the company’s stock price as of the date of grant. The weighted average
grant-date fair value of theshares granted during fi scal 2012,2011 and 2010 was $27.65, $28.87 and $27.44, respectively. The total fair value of restricted
stockshares vested and deferred units distributed during fi scal 2012,2011 and 2010 was $2.2million, $1.7million and $1.4million, respectively. Restricted
stockshares are valued on their vesting date. Vested deferred units are valued on their subsequent conversion and distribution date.
Under the 2009 Non-Employee Directors Stock Plan, non-employee directors may elect to receive up to 100% of their annual directors’ fees in Sysco
common stock on either an annual or deferred basis. Previous plans allowed for the election to receive up to 50% of annual directors’ fees in Sysco
common stock. Sysco provides a matching grant of 50% of the number ofshares received for the stock election subject to certain limitations. As a result
of such elections, a total of 31,397, 27,979 and 23,111shares with a weighted-average grant date fair value of $28.46, $29.26 and $24.42 per share were
issued in fi scal 2012,2011 and 2010, respectively, in the form of fully vested common stock or deferred units. The total fair value of common stock issued
as a result of electionshares and deferred units distributed during fi scal 2012,2011 and 2010 was $0.5million, $0.4million and $0.6million, respectively.
Common stockshares are valued on their vesting date. Vested deferred units are valued on their subsequent conversion and distribution date.
As of June30,2012, there were 42,040 fully vested deferred units outstanding which will convert intoshares of Sysco common stock upon dates selected
by the respective non-employee directors.
Summary of Nonvested Awards
The following summary presents information regarding outstanding nonvested awards as of June30,2012 and changes during the fi scal year then ended
with regard to these awards under all stock incentive plans. Award types represented include: restricted stock units granted to employees and restricted
awards granted to non-employee directors.
Shares
Weighted Average
Grant Date Fair
Value Per Share
Nonvested as of July2,2011 1,202,526 $ 28.10
Granted 1,592,391 27.36
Vested (530,878) 27.95
Forfeited (50,668) 27.85
NONVESTED AS OF JUNE30,2012 2,213,371 $ 27.61
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 fi scal 2011, the total number ofshares which may be sold pursuant to the plan may not exceed 79,000,000shares, of which 5,240,738 remained
available as of June30,2012.
During fi scal 2012, 1,661,758shares of Sysco common stock were purchased by the participants as compared to 1,655,100shares purchased in fi scal
2011 and 1,827,386shares purchased in fi scal 2010. In July2012, 398,165shares were purchased by participants.
The weighted average fair value of employee stock purchase rights issued pursuant to the Employees’ Stock Purchase Plan was $4.33, $4.28 and $3.87
per share during fi scal 2012,2011 and 2010, 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.