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Sysco Corporation Incoming Letter Dated July 15, 2013

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Sysco Corporation Incoming Letter Dated July 15, 2013 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 DIVISION OF CORPORATION FINANCE September 20, 2013 Russell T. Libby Senior Vice President and General Counsel Sysco Co1p0ration 1390 Enclave Parkway Houston, TX 77077 Re: Sysco Co1p0ration Incoming letter dated July 15,2013 Dear Mr. Libby: This is in response to your letters dated July 15, 2013 and August 23, 2013 concerning the shareholder proposal submitted to Sysco by the International Brotherhood ofTeamsters General Fund We also have received a letter from the proponent dated August 2, 2013. Copies ofall ofthe correspondence on which this response is based will be made available on our website at httn://www.sec.gov/divisions/comfinlcf­ noaction/14a-8.shtml. For your reference, a briefdiscussion ofthe Division's informal procedures regarding shareholder proposals is also available at the same website address. Sincerely, Jonathan A. Ingram Acting ChiefCounsel Enclosure cc: Louis Malizia Assistant Director-Capital Strategies International Brotherhood ofTeamsters [email protected] September 20, 2013 Response ofthe Office of Chief Counsel Division of Corporation Finance Re: Sysco Corporation Incoming letter dated July 15, 2013 The proposal asks the board to adopt a policy that in the event ofa change of control, there shall be no acceleration ofvesting ofany equity award granted to any named executive officer as defined in Item 402 ofRegulation S-K, provided, however, that the board's compensation committee may provide that any unvested award will vest on a partial, pro rata basis. There appears to be some basis for your view that Sysco may exclude the proposal under rule 14a-8(i)(9). You represent that matters to be voted on at the upcoming annual shareholders' meeting include a proposal sponsored by Sysco to approve the 2013 Long-Term Incentive Plan. You indicate that the proposal would directly conflict with Sysco's proposal. You also indicate that inclusion ofthe proposal and Sysco's proposal in Sysco's proxy materials would present alternative and conflicting decisions for shareholders and would create the potential for inconsistent and ambiguous results. Accordingly, we will not recommend enforcement action to the Commission ifSysco omits the proposal from its proxy materials in reliance on rule 14a-8(i)(9). In reaching this position, we have not found it necessary to address the alternative basis for omission upon which Sysco relies. Sincerely, Michael J. Reedich Special Counsel DIVISIO'l\J OF CORPORATiOl~ FINANCE INFORMAL PROCEDURES REGARDING SHAREBOLDER PROPOSALS ' • • • o ' a ~e Division of Corpo~tion Finance believes that its responsibility wit~ respect to ll)atters arisitt$ under Rule 14a-8 {17 CFR:240.14a-8], as with other matters Wider th~ proxy .rules,. is to -~d those who. inust comply With the rule by offering informal advice and suggestions and'to determine, initially, whether or not it may be appropriate in a particular matter to. recQmmend_ e~orce~ent action to the Commission. In COfi:I1ection with a shareholde·r proposal ~der Rule.l4a-8, the Division's.staff conside~s th~ iriformatio·n ruffiished to it·by the Company in support ofits interitiontQ exclude Ute proposals from tbe Company's proxy materials, a(\ well as any infonn~tion furnished by the proponent or-the p~oponent's representative. Although Rule l4a-8(k) does nol require any comm~cations from shareholders to the C~nu:Uission's ~~ the staff will always consider information concerning alleged violations of · the· statutes a~inistered by the-Commission, including argtunent as to whether or notactivities propos~ tq· be-taken ·would be violative·of th~ ·statute ornile inyolv~d. The receipt by the staff ofsuch information; however, should not be construed as changing the stafrs informal . pr~ur~ and--proxy review ·into a formal or adversary procedure. It~ is important to note that the stafrs and. Commissio~' s no-action responses to RUle 14a:-8(j)submissions reflect only infornial views. The d~tenninations·reached in these no­ actio~ l~tters do not ~d cannot adjudicate the ~erits ofa company's position With respect to the proposal. Only acourt such a5 a U.S. District Court.can decide whethe~a company is obligated ·.to inclU~(; shareh.older.proposals in its proxy materials·. Accordingly a discretionary . determination not to reconunend or take Commission enforcement action, does not preclude a proponent, or any shareholder o(a ·('.Ompany, fron1 pursuing any rights he or sh<? may have against the company in·court, should the manag~ment omit the proposal from.the companyts.proxy ·material. · Sysco Corporation 1390 Enclave Parkway Houston, Texas 77077 T 281.584.1390 F 281.584.2510 August 23,2013 Securities and Exchange Commission Office ofthe ChiefCounsel Division of Corporation Finance 100 F Street, NE Washington, DC 20549 RE: Sysco Corporation- Stockholder Proposal ofthe International Brotherhood ofTeamsters Ladies and Gentlemen: On July 15, 2013, I submitted a letter (the "July 15, 2013 letter") on behalf ofSysco Corporation (the "Company") informing the staffofthe Division ofCorporation Finance (the "Staff') that the Company intends to omit from its proxy materials for its 2013 Annual Meeting ofStockholders (the "2013 Annual Meeting") a stockholder proposal (the "Proposal") submitted by the International Brotherhood ofTeamsters (the "Proponent"). The July 15,2013 letter also requested the advice ofthe Staffthat it will not recommend enforcement action ifthe Company omits the Proposal from its proxy materials for the 2013 Annual Meeting. By a letter dated August 2, 2013, the Proponent submitted a response to the July 15, 2013letter, asserting that the relief sought in the July 15, 2013 letter should not be granted. For the reasons set forth in the July 15,2013 letter and in this letter, the Company continues to believe that the Proposal may be excluded from the proxy materials for its 2013 Annual Meeting and that the Company's request for no-action relief should be granted. In accordance with StaffLegal Bulletin No. 14D, the Company is submitting this letter via e-mail to [email protected] and is concurrently sending a copy ofthis correspondence via e-mail to the Proponent. In addition, the Company hereby confrrms that a Company proposal to adopt the Sysco Corporation Long-Term Incentive Plan (the "Plan") will be included in the 2013 Proxy Materials. The Plan, as proposed for stockholder approval, will contain the provision relating to acceleration ofvesting and exercisability ofawards set forth in the July 15, 2013 letter. I. The Proposal May be Excluded Pursuant to Rule 14a-8(i)(9) Because it Directly Conflicts with the Company's Own Proposal to Adopt the Company's 2013 Long-Term Incentive Plan DB 1175285228.2 1 The Proponent argues that the Proposal should not be excluded because it includes language stating that the Proposal "should be implemented after the 2013 Annual Meeting ofStockholders so as not to violate existing contractual obligations or the terms of any benefit plan currently in effect or being voted on at the 2013 Annual Meeting of Stockholders." The Proponent asserts that the explicit reference to a plan being voted on at the 2013 Annual Meeting distinguishes the Proposal from the substantially similar proposals addressed in McKesson Corp. (May I, 2013 ), Starwood Hotels & Resorts Worldwide (March 21, 2013) and Verizon Communications (February 8, 2013). This is a distinction without substance. The proponents in McKesson, Starwood Hotels and Verizon each argued that no conflict existed between the stockholder proposal and management's proposal for adoption ofa new or amended equity plan because the stockholder proposal could not be implemented until after stockholder approval ofthe plan and the stockholder proposal explicitly stated that it is to be implemented "so as not to affect any contractual rights in existence on the date this proposal is adopted." In other words, the proponents argued that the timing ofimplementation ofthe proposal, coupled with the restriction on implementation so as not to affect contractual rights, resulted in there being no conflict between the stockholder proposal and the plan adoption proposal. The Staff did not accept this argument and should not accept the substantively identical argument made by the Proponent. The mere fact that the Proponent has added specific reference to a benefit plan being voted on at the meeting does not change the analysis. Each ofthe proposals, including the Proposal, (i) called for policies restricting acceleration ofvesting that conflicted with change ofcontrol provisions in an equity plan to be submitted for stockholder vote at the same meeting at which the proposal was intended to be considered; (ii) could not be implemented until after the plan was approved; and (iii) contained language that would preclude implementation ofthe policy in the event implementation would conflict with contractual rights, including rights derived from a conflicting provision in the equity plan. In this regard, we believe the Proponent mischaracterizes the argument ofthe proponents in McKesson, Starwood Hotels and Verizon when it states ''the proponents explained to the Staff" that it was the proponents' "intention" that the companies frrst adopt the new plans and then consider the stockholder proposal to limit acceleration ofequity awards in connection with change ofcontrol, but the language in their proposals "did not make explicit this intention." The Proponent seeks to distinguish the Proposal by stating that it "added new language ... to make explicit the Proponent's intention." However, the proponents' arguments had nothing to do with intent; indeed the words "intent" or "intention" do not appear in their arguments addressing the issue. Instead, as noted above, the proponents made essentially the same timing of implementation argument as the Proponent now makes. We believe that the Proponent itself expressed the fundamental principle supporting rejection of its timing ofimplementation argument. On page 4 of its letter, the Proponent states: "In the end, shareholders are voting on a policy matter." We agree.
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