US Foods Holding (USFD) PREC14APreliminary proxy with contested solicitation

PRELIMINARY COPY – SUBJECT TO COMPLETION – DATED MARCH 29, 2022

UNITED STATES  

SECURITIES AND EXCHANGE COMMISSION  

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)  

INFORMATION REQUIRED IN PROXY STATEMENT  

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the  

Securities Exchange Act of 1934

Filed by the Registrant  ☒                            Filed by a party other than the Registrant  ☐

Check the appropriate box:

US Foods Holding Corp. 

(Name of Registrant as Specified in its Charter)

Not applicable.  

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply): 

[●], 2022

DEAR FELLOW SHAREHOLDER: 

We cordially invite you to attend our 2022 annual meeting of shareholders (including any adjournments, postponements or continuations thereof, the “Annual Meeting”) scheduled to be held on [●], 2022 at [●] a./p.m. Central Daylight Time in a virtual meeting format only, via a live webcast. To participate in the Annual Meeting, you must pre-register at [●] by [●] p.m. Central Daylight Time on [●], 2022. Included with this letter are the Notice of Annual Meeting of Shareholders, a proxy statement detailing the business to be conducted at the Annual Meeting (the “Proxy Statement”) and a WHITE proxy card.

The matters to be voted on at the Annual Meeting by the holders of our common stock, par value $0.01 per share (“Common Stock”), and the holders of our Series A Convertible Preferred Stock, par value $0.01 per share (“Series A Preferred Stock”), voting together as a single class, are: (i) the election of ten director nominees to our board of directors (our “Board”); (ii) the approval, on an advisory basis, the compensation paid to our named executive officers, as disclosed in the Proxy Statement; (iii) the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2022 and (iv) consideration of the adoption of a stockholder proposal, if properly presented at the Annual Meeting. In addition, the holders of our Series A Preferred Stock, voting as a separate class, will be asked to elect an 11th director nominee, designated by KKR Fresh Aggregator L.P. and KKR Fresh Holdings L.P. (collectively, “KKR”) under the terms of an Investment Agreement, dated as of April 21, 2020 (the “Investment Agreement”), to our Board. We may also transact such other business that may properly come before the Annual Meeting. Our Board recommends that you vote in accordance with our Board’s recommendations on all proposals using the enclosed WHITE proxy card.

Your vote will be especially important this year because Sachem Head Capital Management LP (together with its affiliates and associates, “Sachem Head”) has notified us that Sachem Head intends to nominate seven candidates for election at the Annual Meeting. OUR BOARD DOES NOT ENDORSE ANY OF SACHEM HEAD’S NOMINEES AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” OUR BOARD’S NOMINEES BY USING THE ENCLOSED WHITE PROXY CARD AND DISREGARD ANY MATERIALS, AND DO NOT SIGN, RETURN OR VOTE ON ANY GOLD PROXY CARD, SENT TO YOU BY OR ON BEHALF OF SACHEM HEAD. If you have already voted using a proxy card sent to you by Sachem Head, you can revoke it by: (i) executing and delivering the WHITE proxy card, (ii) voting via the Internet using the Internet address on the WHITE proxy card, (iii) voting by telephone using the toll-free number on the WHITE proxy card or (iv) voting at the Annual Meeting. Only your latest dated proxy will count, and any proxy may be revoked at any time prior to its exercise at the Annual Meeting as described in the accompanying Proxy Statement.

IT IS EXTREMELY IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT THE ANNUAL MEETING. Whether or not you plan to attend the Annual Meeting, we encourage you to vote as soon as possible so that your shares are represented. We urge you to vote TODAY by completing, signing and dating the enclosed WHITE proxy card and promptly mailing it in the postage pre-paid envelope provided or following the instructions on the enclosed WHITE proxy card to vote via the Internet or by telephone. Returning your WHITE proxy card will not prevent you from attending the Annual Meeting but will ensure that your vote is counted if you are unable to attend.

On behalf of everyone at US Foods, we are grateful for your continued trust and support. Thank you for being a US Foods shareholder.

Sincerely,

KRISTIN M. COLEMAN

Executive Vice President, General Counsel,

Chief Compliance Officer and Corporate Secretary

If you have any questions or require any assistance, please contact our proxy solicitor:

Okapi Partners LLC  

1212 6th Avenue, Floor 24 

New York, NY 10036 

Banks and Brokers Call: (212) 297-0720

or 

Shareholder and All Others Call Toll-Free: (877) 285-5990 

Email: info@okapipartners.com

PRELIMINARY COPY – SUBJECT TO COMPLETION – DATED MARCH 29, 2022

	9399 W. HIGGINS ROAD SUITE 100 ROSEMONT, IL 60018

[●], 2022

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 

[●]

[●] a./p.m. (Central Daylight Time)

We are pleased to provide notice of the 2022 annual meeting of shareholders of US Foods Holding Corp. (including any adjournments, postponements or continuations thereof, the “Annual Meeting”). The Annual Meeting will be held in a virtual meeting format only. You will be able to attend and participate in the virtual Annual Meeting by visiting [●], where you will be able to listen to the meeting live, submit questions, and vote.

As described in the proxy statement detailing the business to be conducted at the Annual Meeting (the “Proxy Statement”), the holders of our Common Stock, par value $0.01 per share (“Common Stock”), and the holders of our Series A Convertible Preferred Stock, par value $0.01 per share (“Series A Preferred Stock”), voting together as a single class, will be asked to:

In addition, the holders of our Series A Preferred Stock, voting as a separate class, will be asked to elect an 11th director nominee, designated by KKR Fresh Aggregator L.P. and KKR Fresh Holdings L.P. (collectively, “KKR”) under the terms of an Investment Agreement, dated as of April 21, 2020 (the “Investment Agreement”), to the Board.

Shareholders of record at the close of business on [●], 2022 are entitled to notice of, and to vote at, the Annual Meeting. Such shareholders are urged to submit an enclosed WHITE proxy card, even if their shares were sold after such date. A complete list of shareholders entitled to vote at the Annual Meeting may be accessed electronically, upon request, starting 10 days prior to the meeting by contacting [●] via email at [●]. In addition, this shareholder list will be posted on the virtual meeting website for the Annual Meeting.

YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible so that your voice is heard. We urge you to VOTE TODAY by following the instructions on the enclosed WHITE proxy card to vote by the Internet or telephone or by signing, dating and returning the enclosed WHITE proxy card in the postage-paid envelope provided. Returning the proxy does not deprive you of your right to attend the Annual Meeting and to vote your shares at the Annual Meeting. More information on voting your WHITE proxy card and attending the Annual Meeting can be found in the accompanying Proxy Statement. Please refer to “Proxy Voting Summary” on page 7 of the Proxy Statement and the instructions on the WHITE proxy card. If you are the beneficial owner of your shares (that is, you hold your shares in “street name” through an intermediary such as a broker, bank or other nominee), you will receive instructions from your broker, bank or other nominee as to how to vote your shares or submit a proxy to have your shares voted. Because of the contested nature of the election, if you do not give instructions to your broker, your broker may not be able to vote your shares with respect to any of the proposals. We urge you to instruct your broker, bank or other nominee to vote your shares “FOR” our Board’s nominees and “FOR” Proposals 2 and 3 using the enclosed WHITE proxy card.

IMPORTANT 

Sachem Head Capital Management LP (together with its affiliates and associates, “Sachem Head”) has provided notice to the Company of its intent to nominate seven directors for election to the Board at the Annual Meeting. When determining the Board’s recommendations on the nominees and matters before the Annual Meeting, the Board has carefully considered the best interests of the Company and its shareholders.

OUR BOARD DOES NOT ENDORSE ANY OF SACHEM HEAD’S NOMINEES AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” OUR BOARD’S NOMINEES BY USING THE ENCLOSED WHITE PROXY CARE AND DISREGARD ANY MATERIALS, AND DO NOT SIGN, RETURN OR VOTE ON ANY GOLD PROXY CARD, SENT TO YOU OR ON BEHALF OF SACHEM HEAD. If you have already signed any gold proxy card provided by or on behalf of Sachem Head, you have every legal right to change your vote by completing, signing and dating the enclosed WHITE proxy card and promptly mailing it in the postage pre-paid envelope provided or following the instructions on the enclosed WHITE proxy card to vote via the Internet or by telephone. Only your latest dated proxy will count.

OUR BOARD UNANIMOUSLY RECOMMENDS VOTING “FOR” THE ELECTION OF OUR BOARD’S NOMINEES UNDER PROPOSAL 1 AND “FOR” PROPOSALS 2 AND 3 USING THE ENCLOSED WHITE PROXY CARD.

If you have any questions or need any assistance in voting your shares, please contact our proxy solicitor:

Okapi Partners LLC  

1212 6th Avenue, Floor 24 

New York, NY 10036 

Banks and Brokers Call: (212) 297-0720

or 

Shareholder and All Others Call Toll-Free: (877) 285-5990 

Email: info@okapipartners.com

By Order of the Board of Directors,

KRISTIN M. COLEMAN

Executive Vice President, General Counsel,
Chief Compliance Officer and Corporate Secretary

IMPORTANT DATES FOR 2023 ANNUAL MEETING 

Deadline to include shareholder proposals in our Proxy Statement			On or before [●]
Period to submit shareholder proposals not included in our Proxy Statement			Between [●] and [●]
Period for shareholders to nominate director candidates for election			Between [●] and [●]

REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:

Please refer to the Notice or the information forwarded by your bank, broker, or other nominee to see which voting methods are available to you.

PRELIMINARY COPY – SUBJECT TO COMPLETION – DATED MARCH 29, 2022

PROXY STATEMENT FOR  

2022 ANNUAL MEETING OF SHAREHOLDERS OF 

US FOODS HOLDING CORP.

This proxy statement (this “Proxy Statement”) is furnished in connection with the solicitation of proxies by the board of directors (the “Board”) of US Foods Holding Corp., a Delaware corporation (“US Foods,” the “Company,” “we,” “us” or “our”), for the annual meeting of shareholders scheduled to be held on [●], 2022 (including any adjournments, postponements or continuations thereof, the “Annual Meeting”) at [●] a./p.m., Central Daylight Time. The Annual Meeting will be held in a virtual meeting format only, via a live webcast. This Proxy Statement and accompanying form of proxy card were first mailed to shareholders on or about [●], 2022.

US Foods (NYSE: USFD) is one of America’s great food companies and a leading foodservice distributor, providing restaurants, healthcare, hospitality, governmental and educational institutions with a broad and innovative food offering, a comprehensive suite of e-commerce, technology and business solutions and omni-channel solutions that enable our customers to receive product in ways that best suit their needs. Our success is powered by our talented US Foods associates who come to work every day with one goal in mind: to help our customers make it.

150	28,000	$29.5B	~6,500
years in business	associates	in revenue	trucks in our fleet
250,000	~4,000	400,000	~6,000
customers	sales associates	products	suppliers

LEARN MORE ABOUT US 

You can learn more about US Foods, by visiting our website, www.usfoods.com

Learn about our CSR initiatives in our most recent CSR report at www.usfoods.com/csr 

  @usfoods 

  @usfoods 

  us_foods 

  US Foods 

  US Foods

Note: Information provided above is for fiscal 2021 or as of January 1, 2022

PROXY VOTING SUMMARY

INFORMATION ABOUT THE ANNUAL MEETING

You have received these proxy materials because the Board is soliciting your proxy to vote your shares during the Annual Meeting. This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider in deciding how to vote your shares, and you should read the entire Proxy Statement carefully before voting. Page references are supplied to help you find further information in this Proxy Statement.

*Due to the continuing impact of the novel coronavirus (or COVID-19) pandemic and to support the health and well-being of our shareholders and associates, the Annual Meeting will be held in a virtual meeting format only. You will not be able to attend the Annual Meeting in person. If you plan to participate in the virtual meeting, please see “Questions and Answers About the Proxy Materials and Our Annual Meeting” on page 26. Shareholders will be able to attend, vote and submit questions from any location via the Internet.

MATTERS TO BE VOTED UPON

At the Annual Meeting, the holders of our Common Stock, par value $0.01 per share (“Common Stock”), and the holders of our Series A Convertible Preferred Stock, par value $0.01 per share (“Series A Preferred Stock”), voting together as a single class, will be asked to vote upon the following matters:

In addition, the holders of our Series A Preferred Stock will be asked to vote as a separate class on an 11th director nominee designated by KKR Fresh Aggregator L.P. and KKR Fresh Holdings L.P. (collectively, “KKR”) under the terms of an Investment Agreement, dated as of April 21, 2020 (the “Investment Agreement”). Shareholders of record at the close of business on [●], 2022 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting.

INFORMATION ABOUT OUR BOARD OF DIRECTORS 

BOARD HIGHLIGHTS

HIGHLY ENGAGED

HIGHLY RESPONSIVE

We recognize the value of listening to our shareholders and considering their perspectives. The feedback we receive from our shareholders through the year-round engagement program informs our boardroom agenda. Following our shareholder engagement efforts in 2021, we have:

■ Separated our Chairman of the Board and CEO roles and elected Robert M. Dutkowsky as Chairman of the Board. See page 19.

■ Elected Cheryl A. Bachelder as the new Chair of the Compensation Committee. See page 35.

■ Elected Ann E. Ziegler as the new Chair of the Nominating and Corporate Governance Committee. See page 35.

■ Returned to an executive long-term incentive program structure that includes performance-based restricted stock units (“PRSUs”) for 2022 at an enhanced 50% ratio that exceeds the pre-pandemic level. See page 53.

■ Expanded our disclosure to include more robust workforce demographic data. See page 42.

The following table provides summary information about each of our current directors:

  * All directors are independent in accordance with the standards of the New York Stock Exchange (the “NYSE”) except for Pietro Satriano, the Chief Executive Officer of the Company.  

  ** Mr. Taylor, the KKR Designee, has elected to waive his right to receive compensation for serving on the Board, including any annual cash retainer or RSU grant and is not subject to our Stock Ownership Guidelines.

  ***Mr. Lederer has given notice of his intent to retire from the Board effective as of the Annual Meeting.

  ****Ms. Gottschalk and Mr. Roach were appointed effective March 28, 2022.

BACKGROUND AND EXPERIENCE OF OUR DIRECTOR NOMINEES

The professional background and experience of each of the Company's director nominees is provided below. We believe that our director nominees collectively provide an appropriate mix of experience and skills relevant to the size and nature of our business.

TEN NOMINEES FOR ELECTION AS DIRECTORS WITH A TERM EXPIRING AT THE 2023 ANNUAL MEETING, TO BE ELECTED BY THE HOLDERS OF OUR COMMON STOCK AND HOLDERS OF SERIES A PREFERRED STOCK, VOTING TOGETHER AS A SINGLE CLASS. OUR BOARD UNANIMOUSLY RECOMMENDS VOTING “FOR” THE ELECTION OF EACH OF OUR BOARD’S NOMINEES ON THE ENCLOSED WHITE PROXY CARD.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING TEN DIRECTOR NOMINEES.

CHERYL A. BACHELDER
INDEPENDENT		Ms. Bachelder serves on the board of directors, as Lead Director, of Chick-fil-A, Inc., a family-owned and privately held restaurant chain, and the advisory board of Procter & Gamble’s franchising venture, Tide Cleaners. While a member of the Pier 1 Imports, Inc. board of directors, a home furnishings and decor retailer, she was asked, and agreed, to serve as Interim Chief Executive Officer, from December 2018 to November 2019. During her career, Ms. Bachelder served as Chief Executive Officer of Popeyes Louisiana Kitchen, Inc., a multi-national restaurant operator and franchisor, from 2007 until her retirement in 2017. Prior to her role with Popeyes, she served as President and Chief Concept Officer of KFC restaurants, a division of Yum! Brands, Inc. Ms. Bachelder’s earlier career included brand leadership roles at Domino’s Pizza, RJR Nabisco, Gillette, and Procter & Gamble.
Age 65  Director since: 2018
OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS:  •  None   PAST PUBLIC COMPANY DIRECTORSHIPS:  •  Pier 1 Imports, Inc.  •  Popeyes Louisiana Kitchen, Inc.   COMMITTEES:  •  Compensation (Chair)  •  Executive			SKILLS AND QUALIFICATIONS:   •  Ms. Bachelder is an accomplished executive, with extensive experience in the food industry and a track record of creating strong brand value.   •  Her expertise provides valuable insights as the Company executes on our Great Food. Made Easy.® strategy.   •  Ms. Bachelder is an experienced public company director, with expertise in human capital management, including oversight of incentive compensation.

NOMINEE FOR ELECTION AS A DIRECTOR WITH A TERM EXPIRING AT THE 2023 ANNUAL MEETING, TO BE ELECTED SEPARATELY BY THE HOLDERS OF OUR SERIES A PREFERRED STOCK.

 THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE FOLLOWING DIRECTOR NOMINEES.

DIRECTOR NOT STANDING FOR REELECTION AT THE ANNUAL MEETING

JOHN A. LEDERER
INDEPENDENT		Mr. Lederer has served as a Senior Advisor with Sycamore Partners, a private equity firm specializing in retail and consumer investments, since September 2017. In that capacity, he serves as Executive Chairman of the board of directors and Interim Chief Executive Officer of Staples, Inc. and its U.S. and Canadian businesses. From September 2010 to July 2015, Mr. Lederer served as our President and Chief Executive Officer. From 2008 to 2010, Mr. Lederer was Chairman and Chief Executive Officer of Duane Reade, a retail pharmacy chain. Prior to his work at Duane Reade, he spent 30 years at Loblaw Companies Limited, a Canadian grocery retailer and wholesale food distributor, where he held a number of leadership roles and served as President from 2000 to 2006. He served on the board of directors of Tim Hortons Inc. from 2007 until 2014, when it was acquired by Restaurant Brands International.   Mr. Lederer has given notice of his intent to retire from the Board effective as of the Annual Meeting.
Age 66 Director since: 2010
OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • NextPoint Financial Inc. • Walgreens Boots Alliance, Inc.   PAST PUBLIC COMPANY DIRECTORSHIPS: • Maple Leaf Foods Inc. • Restaurant Brands International, Inc.   COMMITTEES: • None			SKILLS AND QUALIFICATIONS:   • Mr. Lederer has extensive senior executive leadership experience in the retail and food industry, including five years of service as our Chief Executive Officer.   • He brings unique knowledge to our Board derived from his service as CEO and his subsequent board service.

INDEPENDENCE, DIVERSITY, AGE AND TENURE

During the past four fiscal years, we refreshed four of our board positions with independent directors, including three diverse directors, and added an independent director voted on by the holders of our Series A Preferred Stock. Effective March 28, 2022, we added two additional directors, Marla Gottschalk and Quentin Roach, who are each independent and diverse directors. In all, 11 of 12 directors directors are independent and all members of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee are independent. We believe the composition of the Board strikes a balanced mix of experienced leaders with varying professional backgrounds and other differentiating personal characteristics who provide a broad spectrum of experience and expertise. The differing tenures of our directors allow the Board to benefit from fresh perspectives of newer directors while ensuring we retain the knowledge and experience of longer-serving directors.

CORPORATE GOVERNANCE HIGHLIGHTS

GOVERNANCE HIGHLIGHTS

	Independent Chairman of the Board			Declassified Board – all directors elected annually
	11 of 12 directors are independent			No shareholder rights plan or poison pill
	Fully independent Audit, Compensation, and Nominating and Corporate Governance Committees			Majority vote standard in uncontested director elections
	Comprehensive and strategic approach to enterprise risk management			Plurality vote standard in contested director elections
	Audit Committee oversight of cybersecurity			Shareholders can amend bylaws and no supermajority is required
	Nominating and Corporate Governance Committee oversight of corporate social responsibility (“CSR”)			Stock ownership guidelines for directors and executives
	Compensation Committee oversight of diversity and inclusion			No stock hedging or pledging permitted by directors and executives
	Proactive shareholder engagement			Strong commitment to diversity
	Annual say-on-pay vote			Annual Board and committee self-evaluations

SHAREHOLDER ENGAGEMENT

We recognize the value of listening to our shareholders and considering their perspectives. Throughout the year, we maintain an ongoing dialogue with our shareholders to discuss their areas of focus and to provide updates on our corporate governance, executive compensation, sustainability and human capital management programs. The feedback we receive from our shareholders informs our boardroom agenda.

HIGHLIGHTS OF FISCAL 2021 ENGAGEMENT

During 2021, as part of our year-round engagement, we met with over 30 shareholders (representing over 72% of our outstanding stock), individually and through our participation at industry and investment community conferences.

Through these individual engagements with our shareholders, we gained further insight into their views on our governance and compensation practices and disclosures, including feedback on the 2021 value creation PRSUs awarded to our named executive officers (“NEOs”). Overall, our shareholders provided positive feedback about our governance and corporate responsibility programs and expressed their support for the following:

Shareholders who wish to communicate with us may contact our Corporate Secretary at:

US Foods Holding Corp.
9399 W. Higgins Road, Suite 100
Rosemont, IL 60018

generalcounsel@usfoods.com

Shareholders may also contact our directors by utilizing the process described under “Communications with Our Directors” on page 85.

BOARD LEADERSHIP STRUCTURE

On February 11, 2022, the Board announced that it had separated the roles of Chief Executive Officer and Chairman. Mr. Dutkowsky, previously the Company's independent lead director, was elected non-executive Chairman of the Board. Mr. Satriano continues in his role as Chief Executive Officer and as a director.

The Board believes this allocation of responsibilities provides a clear and efficient leadership structure for the Company.

RISK OVERSIGHT

Our approach to enterprise risk management is designed to effectively identify, assess, prioritize, mitigate, and monitor the Company’s principal risks. Management is responsible for the Company’s day-to-day risk management activities. The Board’s role is to exercise informed risk oversight, which is done both directly and indirectly through its committees. For each of the Company’s top risks, the Board and/or its applicable committee receives periodic updates from a senior member of management. The Board’s effectiveness in risk oversight is bolstered through open dialogue with management, established monitoring and reporting processes, and the collective knowledge and experience of its members.

There are several ways the Board and its committees undertake their risk oversight responsibilities, including:

ANNUAL BOARD AND COMMITTEE SELF-EVALUATIONS

The Nominating and Corporate Governance Committee oversees the annual self-evaluation process for the Board and each of its committees. These self-evaluations are designed to assess whether the Board or the respective committee is functioning effectively and to provide a mechanism for the Board or the respective committee to identify potential areas for improvement. For example, in furtherance of the Board’s commitment to maintaining a diverse Board membership, the Board self-evaluation specifically asks directors to assess the Board’s progress against that commitment. Once completed, the results of the self-evaluations and any appropriate recommendations or action plans are discussed among the members of the Board and each of its committees.

COMMITTEES OF THE BOARD

Committees*	Audit	Compensation	Executive	Nominating and Corporate Governance
Total number of committee meetings during 2021:	5	4	0	4
Cheryl A. Bachelder	—		—	—
Court D. Carruthers				—
Robert M. Dutkowsky	—	—
Sunil Gupta		—	—	—
John A. Lederer**	—	—	—	—
Carl Andrew Pforzheimer	—	—	—
Pietro Satriano	—	—		—
Nathaniel H. Taylor	—	—	—	—
David M. Tehle				—
Ann E. Ziegler		—	—

On May 22, 2021, Ms. Bachelder stepped down from the Nominating and Corporate Governance Committee and was appointed to the Compensation Committee, and Ms. Ziegler stepped down from the Compensation Committee and was appointed to the Nominating and Corporate Governance Committee.

On February 10, 2022, Ms. Bachelder was elected to serve as Chair of the Compensation Committee and Ms. Ziegler was elected to serve as Chair of the Nominating and Corporate Governance Committee. As a result of these changes, the membership of the Executive Committee, consisting of our Chairman of the Board and the chair of each committee, also changed. This table does not reflect such changes as they occurred after January 1, 2022.

On March 28, 2022, Marla Gottschalk was appointed director and joined the Nominating and Corporate Governance Committee, and Quentin Roach was appointed director and joined the Compensation Committee.

The following descriptions of our committees reflect membership information as of the date of this Proxy Statement:

AUDIT COMMITTEE

COMPENSATION COMMITTEE

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

EXECUTIVE COMMITTEE

BOARD ATTENDANCE AT THE ANNUAL MEETING

Although the Company does not have a written policy concerning Board attendance at annual meetings of the Company’s shareholders, it is our expectation that all directors attend the annual meetings of our shareholders. All of our directors attended the 2021 annual meeting of shareholders, with the exception of Ms. Gottschalk and Mr. Roach who had not yet been appointed to the Board.

ANTI-HEDGING AND ANTI-PLEDGING POLICY

Under the terms of the Company’s insider trading policy, our directors and executive officers are prohibited from engaging in transactions that involve short-term trades, short sales, exchange-traded options, hedging, margin loans, or pledging of or relating to our Common Stock. The Company’s insider trading policy does not currently prevent our associates, other than executive officers, from engaging in hedging, pledging or other speculative transactions, but it allows management to consider whether to prohibit our associates from engaging in these transactions.

RELATED PARTY TRANSACTIONS

The Audit Committee has adopted a written policy related to the review and approval of related party transactions. Under the policy, the Audit Committee evaluates, and if appropriate, approves any proposed transactions involving the Company and in which any of our directors, nominees for director, executive officers or significant shareholders (or persons related to any of them) has a direct or indirect interest. Under the policy, certain related party transactions are deemed to be pre-approved, for example, those transactions where the aggregate amount will not exceed $120,000 or where the rates or charges involved are determined by competitive bids. In determining whether to approve a proposed related party transaction, the Audit Committee considers, among other things, whether: the terms of the transaction are fair to the Company and would apply if the transaction did not involve a related party; there are compelling business reasons for the Company to enter into the related party transaction and the nature of any available alternative transactions; the transaction would impair the independence of an otherwise independent director; or the transaction would create an improper conflict of interest for any director or executive officer of the Company, taking into account the size of the transaction, the overall financial position of the related party, the direct or indirect nature of the related party’s interest in the transaction and the ongoing nature of any proposed relationship.

KKR INVESTMENT

On May 6, 2020 (the “Issuance Date”), the Company issued 500,000 shares of its Series A Preferred Stock to KKR for an aggregate purchase price of $500 million, or $1,000 per share, pursuant to the Investment Agreement. In connection with the investment, under a registration rights agreement, dated May 6, 2020, the Company agreed to provide KKR with certain customary registration rights with respect to shares of the Company’s Common Stock issued in connection with any future conversion of the Series A Preferred Stock.

The Series A Preferred Stock ranks senior to the shares of Common Stock, with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Series A Preferred Stock has a liquidation preference of $1,000 per share. Holders of the Series A Convertible Stock are entitled to a cumulative dividend at the rate of 7.0% per annum, payable quarterly in arrears. If the Company does not declare and pay a dividend on the Series A Preferred Stock, the dividend rate will increase by 3.0% to 10.0% per annum until all accrued but unpaid dividends have been paid in full.

Dividends on the Series A were payable in kind, through the issuance of additional shares of Series A Preferred Stock, for the first four dividend payment dates, through March 31, 2021, and subsequently are payable in cash or in kind (or a combination of both) at the option of the Company. From the Issuance Date through March 31, 2021, we paid dividends in-kind to KKR of 32,281 shares of Series A Preferred Stock, and as of the Record Date, KKR held 532,281 shares of Series A Preferred Stock, which represented approximately 10% of the Company’s Common Stock on an as-converted basis.

The Series A Preferred Stock is convertible at the option of the holders at any time into shares of Common Stock at an initial conversion price of $21.50 per share and an initial conversion rate of 46.5116 shares of Common Stock per share of Series A Preferred Stock, subject to certain anti-dilution adjustments. At any time after May 6, 2023, if the volume weighted average price of Common Stock exceeds the mandatory conversion price of $43.00 per share, as may be adjusted, for at least twenty trading days in any period of thirty consecutive trading days, the Company has the option to convert all of the outstanding shares of Series A Preferred Stock into Common Stock.

At any time after May 6, 2025, the Company may redeem some or all of the Series A Preferred Stock for a per share amount in cash equal to: (i) the sum of 100% of the liquidation preference thereof, plus all accrued and unpaid dividends, multiplied by (ii) (A) 105% if the redemption occurs at any time after May 6, 2025 and prior to May 6, 2026, (B) 103% if the redemption occurs at any time after May 6, 2026 and prior to May 6, 2027, and (C) 100% if the redemption occurs at any time after May 6, 2027.

Upon certain change in control events involving the Company, on or before the fifth business day prior to the effective date of such change in control event, the holders of the Series A Preferred Stock must either (i) convert their shares of Series A Preferred Stock into Common Stock at the then-current conversion price or (ii) cause the Company to redeem their shares of Series A Preferred Stock for an amount in cash equal to 100% of the liquidation preference thereof plus all accrued but unpaid dividends. In the case of either clause (i) or (ii) above, if such change in control occurs on or before May 6, 2025, the Company will also be required to pay the holders of the Series A Preferred Stock a “make-whole” premium.

The holders of our Series A Preferred Stock are entitled to vote with our common shareholders on an as-converted basis, voting together as a single class. Holders of the Series A Preferred Stock are also entitled to a separate class vote with respect to, among other things, amendments to the Company’s organizational documents that have an adverse effect on the Series A Preferred Stock, authorizations or issuances by the Company of securities that are senior to, or equal in priority with, the Series A Preferred Stock, increases or decreases in the number of authorized shares of Series A Preferred Stock and issuances of shares of Series A Preferred Stock after the Issuance Date, other than shares issued as in kind dividends with respect to shares of Series A Preferred Stock issued on the Issuance Date. So long as KKR or its affiliates beneficially own shares of Series A Preferred Stock and/or shares of Common Stock that represent, in the aggregate and on an as-converted basis, at least 50% of the shares of Common Stock beneficially owned by KKR, on an as-converted basis, as of the Issuance Date, KKR has the right to designate one director to be nominated by the Board for election to the Board.

Until KKR no longer has the right to designate a director for election to the Board, it and its affiliates have committed to vote all of their shares of Series A Preferred Stock and/or Common Stock (i) in favor of each director nominated and recommended for election by the Board, (ii) against any shareholder nominations for director which are not approved and recommended for election by the Board, (iii) in favor of the Company’s proposal for ratification of the appointment of the Company’s independent registered public accounting firm and (iv) for any proposal approved by the KKR-designated director. With regard to all other matters submitted to the vote of shareholders, KKR and its affiliates are under no obligation to vote in the same manner as recommended by the Board or otherwise.

In February 2021, KKR Capital Markets, LLC (“KCM”), an affiliate of KKR, acted as a joint bookrunning manager in the private offering by our direct, wholly-owned subsidiary, US Foods, Inc., of $900 million aggregate principal amount of its 4.750% Senior Notes due 2029 and realized $1,113,750 in fees in the form of a discount to the purchase price which was equivalent to the fees realized by the other lead joint bookrunning manager for the offering. In addition, in November 2021, KCM (i) received $540,000 for debt advisory fees for services rendered in connection with the Company’s $900 million new incremental senior secured loan facility and (ii) acted as a joint bookrunning manager in the private offering by our direct, wholly-owned subsidiary, US Foods, Inc., of $500 million aggregate principal amount of its 4.625% Senior Notes due 2030 and realized $450,000 in fees in the form of a discount to the purchase price which was equivalent to the fees realized by the other lead joint bookrunning manager for the offering.

Additionally, as of January 1, 2022, investment funds managed by an affiliate of KKR held approximately $17 million in aggregate principal amount of our incremental senior term loan facility due 2026, as reported by the administrative agent.

CORPORATE GOVERNANCE MATERIALS

The Board has adopted Corporate Governance Guidelines in furtherance of its commitment to the principles of good corporate governance. The Board and the Nominating and Corporate Governance Committee review the Corporate Governance Guidelines annually and make amendments, as they deem necessary or appropriate, based on shareholder feedback, changes in the rules of the SEC or the corporate governance standards of the NYSE, or best practices.

The Board has also adopted a Code of Conduct that applies to all of our directors, officers, and associates, including our principal executive officer, principal financial officer, and principal accounting officer. Our directors agree to comply with the Code of Conduct annually. We intend to make available any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Conduct on our investor relations website.

Copies of our Corporate Governance Guidelines; the charters of each of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee; and our Code of Conduct are publicly available and may be found by visiting the “Corporate Governance—Governance Documents” page of our investor relations website at https://ir.usfoods.com/investors/corporate-governance/governance-documents.

QUALIFICATIONS AND RELEVANT EXPERIENCE

The Board is comprised of individuals with experience in key areas relevant to US Foods. Each director nominee was nominated based on the unique experience, qualifications and skills that he or she brings to the Board. This blend of diverse backgrounds provides the Board with the benefit of a broad array of perspectives. The table below highlights some of the experience and skills embodied by our directors. If an individual is not listed as having a particular attribute, it does not signify a director’s lack of ability to contribute in such area.

Director Nominee:

Bachelder

Carruthers

Dutkowsky

Gottschalk

Gupta

Lederer***

Pforzheimer

Roach

Satriano

Taylor

Tehle

Ziegler

Committee Membership:*

C, E

A, C

E, N

N

A

N

C

A, C, E

A, E, N

Food Industry

✓

✓

✓

✓

✓

✓

✓

✓

Supply Chain and Logistics

✓

✓

✓

✓

✓

✓

CEO Leadership

✓

✓

✓

✓

✓

✓

✓

Public Company Governance

✓

✓

✓

✓

✓

✓

✓

✓

✓

Sustainability and Corporate Responsibility

✓

✓

✓

✓

Accounting/ Finance

✓

✓

✓

✓

✓

✓

✓

FE**

FE

Risk Management

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Technology

✓

✓

✓

✓

✓

Marketing & Strategy

✓

✓

✓

✓

✓

✓

✓

Human Capital Management

✓

✓

✓

✓

✓

✓

✓

✓

Other Public Company Board(s)

✓

✓

✓

✓

✓

✓

✓

✓

✓

*A = Audit Committee, C = Compensation Committee, N = Nominating and Corporate Governance Committee, E = Executive Committee; committee membership reflects membership information as of the date of this Proxy Statement

** FE = director qualifies as an audit committee “financial expert”

***Mr. Lederer has given notice of his intent to retire from the Board effective as of the Annual Meeting.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING

WHY DID YOU PROVIDE ME THIS PROXY STATEMENT?

We provided you this Proxy Statement because you were a holder of our Common Stock or Series A Preferred Stock as of the Record Date, and the Board is soliciting your proxy to vote your stock at the Annual Meeting. For more information on the participants in our Board’s solicitation, please see “Additional Information Regarding Participants in the Solicitation” on page A-1 of this Proxy Statement.

WHAT IS A PROXY?

A proxy is your legal designation of another person to vote the stock you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. Our Board has designated [●] and [●] as the Company’s proxies for the Annual Meeting.

WHAT SHOULD I DO IF I RECEIVE A GOLD PROXY CARD OR OTHER PROXY MATERIALS FROM SACHEM HEAD CAPITAL MANAGEMENT LP?

Sachem Head Capital Management LP (together with its affiliates and associates, “Sachem Head”) has notified the company that Sachem Head intends to nominate seven director candidates for election at the Annual Meeting. You may receive proxy solicitation materials from Sachem Head. The Company is not responsible for the accuracy of any information provided by or relating to Sachem Head’s nominees contained in proxy materials filed or disseminated by or on behalf of Sachem Head or any other statements that Sachem Head may make. Since Sachem Head intends to nominate a majority slate at the Annual Meeting, if Sachem Head is successful in electing six or more of its nominees at the Annual Meeting, then a change in control may be deemed to have occurred under certain of the Company’s material contracts and other legal instruments (see “Certain Effects of the Sachem Head Solicitation” beginning on page 37 of this Proxy Statement).

Our Board strongly urges you NOT to sign or return any gold proxy card sent to you by Sachem Head. Voting to “WITHHOLD” with respect to any of Sachem Head’s nominees on a gold proxy card sent to you by Sachem Head is not the same as voting “FOR” our Board’s nominees because a vote to “WITHHOLD” with respect to any of Sachem Head’s nominees on its gold proxy card will revoke any WHITE proxy card you may have previously submitted. To support our Board’s nominees, you should vote “FOR” our Board’s nominees on the WHITE proxy card and disregard, and not return, any gold proxy card sent to you by Sachem Head. If you have previously submitted a proxy card sent to you by Sachem Head, you can revoke it and vote “FOR” our director nominees recommended by our Board by signing, dating and returning the enclosed WHITE proxy card in the postage-paid envelope provided, or by following the instructions on the WHITE proxy card to vote via the Internet or by telephone. Only the latest validly executed proxy that you submit will be counted, and any proxy may be revoked at any time prior to its exercise at the Annual Meeting. If you attend and validly vote at the Annual Meeting, your proxy will not be used.

Our Board unanimously recommends using the enclosed WHITE proxy card to vote “FOR” each of our Board’s nominees. Our Board recommends that you DISREGARD any gold proxy cards that you may receive.

HOW WILL SHARES BE VOTED BY THE WHITE PROXY CARD?

The shares represented by any WHITE proxy card that is properly executed and received by the Company prior to or at the Annual Meeting will be voted in accordance with the specifications made on the card.

If you return a validly executed and dated WHITE proxy card without indicating how your shares should be voted on a matter and you do not revoke your proxy, your proxy will be voted: “FOR” the election of all ten director nominees recommended by our Board as set forth on the WHITE proxy card (Proposal 1); “FOR” the approval, on an advisory basis, of the compensation paid to our named executive officers, as disclosed in this Proxy Statement (commonly known as a “say-on-pay resolution”) (Proposal 2); “and FOR” the ratification of the appointment of Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for fiscal 2022 (Proposal 3). The persons named as proxies on the enclosed WHITE proxy card will abstain from voting for the approval of the shareholder proposal to adopt greenhouse gas emissions reduction targets (Proposal 4).

Our Board is not aware of any matters that are expected to come before the Annual Meeting other than those described in this Proxy Statement. If any other matter is presented at the Annual Meeting upon which a vote may be properly taken, shares represented by all WHITE proxy cards received by the Company will be voted with respect thereto at the discretion of the persons named as proxies on the enclosed WHITE proxy card.

WHAT IF I RECEIVE MORE THAN ONE WHITE PROXY CARD OR SET OF PROXY MATERIALS FROM THE COMPANY?

If your shares are held in more than one account, you will receive more than one WHITE proxy card, and in that case, you can and are urged to vote all of your shares by signing, dating and returning all WHITE proxy cards you receive from the Company in the postage-paid envelope provided. If you choose to vote by telephone or via the Internet, please vote using each WHITE proxy card you receive to ensure that all of your shares are voted. Only your latest dated proxy for each account will count. Please sign each proxy card exactly as your name or names appear on the proxy card. For joint accounts, each owner should sign the proxy card. When signing as an executor, administrator, attorney, trustee, guardian or other representative, please print your full name and title on the proxy card.

If Sachem Head proceeds with its previously announced proxy solicitation, the Company will likely conduct multiple mailings prior to the Annual Meeting to ensure shareholders have the Company’s latest proxy materials to vote. The Company will send you a new WHITE proxy card with each mailing, regardless of whether you have previously voted. We encourage you to vote every WHITE proxy card you receive. The latest dated proxy you submit will be counted, and, if you wish to vote as recommended by our Board, then you should only submit WHITE proxy cards.

If you have any questions or need assistance voting, please contact [●]. Shareholders may call toll-free at [●] or send an email to [●]. Brokers and banks may call collect at [●].

Will my shares be voted if I do nothing, or if I do not vote for some of the proposals listed on my proxy card?

If your shares are registered in your name, you must sign and return a proxy card in order for your shares to be voted, unless you vote via the Internet or by telephone, or attend and vote at the Annual Meeting. If you provide specific voting instructions, your shares will be voted as you have instructed. If you execute the WHITE proxy card and do not provide voting instructions on any matter, your shares will be voted in accordance with our Board’s recommendations on that matter (and the persons named as proxies on the enclosed WHITE proxy card will abstain from voting on Proposal 4). We urge you to sign, date and return the enclosed WHITE proxy card in the postage-paid envelope provided, or vote via the Internet or by telephone as instructed on the WHITE proxy card, whether or not you plan to attend the Annual Meeting.

If your shares are held in “street name” (that is, held for your account by a broker, bank or other nominee), you will receive voting instructions from your broker, bank or other nominee. You must follow these instructions in order for your shares to be voted. Your broker is required to vote those shares in accordance with your instructions. If you do not instruct your broker, bank or other nominee how to vote your shares, then, your broker, bank or other nominee will not be able to vote your shares with respect to Proposal 1, Proposal 3, or Proposal 4 or, the extent that Sachem Head provides you with a proxy card or voting instruction form, any of the other proposals. If Sachem Head does not provide you with a proxy card or voting instruction form, your broker, bank or other nominee will be able to vote your shares with respect to Proposal 2. We urge you to instruct your broker, bank or other nominee, by following the instructions on the enclosed WHITE voting instruction form, to vote your shares in accordance with our Board’s recommendations on the WHITE voting instruction form, whether or not you plan to attend the Annual Meeting.

WHAT WILL I BE VOTING ON?

At the Annual Meeting, the holders of our Common Stock and the holders of our Series A Preferred Stock, voting together as a single class, will be asked to vote on:

OUR BOARD UNANIMOUSLY RECOMMENDS VOTING “FOR” THE ELECTION OF EACH OF OUR BOARD’S NOMINEES ON PROPOSAL 1 AND “FOR” PROPOSALS 2 AND 3 USING THE ENCLOSED WHITE PROXY CARD.

Holders of our Series A Preferred Stock, voting as a separate class, will also vote on the election of an 11th director nominee, designated by KKR pursuant to the Investment Agreement (“KKR Designee”), to the Board (Nathaniel H. Taylor).

WHO IS ENTITLED TO VOTE ON THESE MATTERS?

You are entitled to vote at the Annual Meeting if you owned shares of our Common Stock or Series A Preferred Stock as of the close of business on the Record Date. On the Record Date, [●] shares of our Common Stock were outstanding and eligible to be voted and [●] shares of Series A Preferred Stock, representing [●] shares of Common Stock on an as-converted basis, were outstanding and eligible to be voted. Each share of Common Stock owned as of the close of business on the Record Date is entitled to one vote on each matter that is properly brought before the Annual Meeting and on which our common shareholders are entitled to vote. Each record holder of Series A Preferred Stock will have a number of votes equal to the largest number of whole shares of Common Stock into which such shares are convertible on the Record Date on each matter that is properly brought before the Annual Meeting and on which holders of Series A Preferred Stock are entitled to vote together with Common Stock as a single class. In addition, each holder of record of Series A Preferred Stock will have one vote for each share of Series A Preferred Stock on each matter that is properly brought before the Annual Meeting and on which holders of Series A Preferred Stock are entitled to vote separately, as a class.

Business may not be conducted at the Annual Meeting unless a quorum is present. Under our Bylaws, a majority of the outstanding voting power of the shares, present or represented by proxy, and entitled to vote at the Annual Meeting, constitutes a quorum. Where a separate vote by a class or series is required, the holders of a majority in voting power of all issued and outstanding stock of such class or series entitled to vote on such matter, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to such matter. If there are not sufficient shares present or represented by proxy at the Annual Meeting to constitute a quorum for approval of any matter to be voted upon, the Annual Meeting may be adjourned to permit further solicitation of proxies in order to achieve a quorum. Abstentions or withheld votes and broker non-votes are counted as shares present and entitled to vote for purpose of determining whether a quorum is present.

WHY ARE COMMON SHAREHOLDERS BEING ASKED TO VOTE ON THE ELECTION OF ONLY TEN OUT OF THE 11 DIRECTOR NOMINEES UP FOR ELECTION?

A total of 11 director nominees will be voted upon at the Annual Meeting. Holders of our Common Stock and holders of our Series A Preferred Stock, voting together as a single class, are being asked to vote on ten of the 11 director nominees.

The 11th director will be voted upon only by the holders of our Series A Preferred Stock. Pursuant to the Investment Agreement (see “KKR Investment” beginning on page 23) and based on their current level of ownership, the holders of our Series A Preferred Stock are entitled to designate a director nominee for election to the Board and vote separately as a class on his or her election to the Board.

IS THE COMPANY USING A UNIVERSAL PROXY CARD IN CONNECTION WITH VOTING AT THE ANNUAL MEETING?

No. The SEC has adopted new rules requiring the use of a universal proxy card in contested director elections that take place after August 31, 2022. As the Annual Meeting will be held on [●], 2022, shareholders voting by proxy at the Annual Meeting will vote using a customary proxy card, as has been the case in prior years.

HOW MANY VOTES DO I HAVE?

Each record holder of our Common Stock will have the right to cast one vote for each share of Common Stock he or she owns on each matter that is properly brought before the Annual Meeting and on which our common shareholders are entitled to vote. As of the Record Date, there were [●] shares of Common Stock outstanding.

Each record holder of Series A Preferred Stock will have a number of votes equal to the largest number of whole shares of Common Stock into which such shares are convertible on the Record Date on each matter that is properly brought before the Annual Meeting and on which holders of Series A Preferred Stock are entitled to vote together with Common Stock as a single class. As of the Record Date, there were [●] shares of Series A Preferred Stock outstanding, which, as of such date, were convertible into [●] shares of Common Stock.

In addition, each holder of record of Series A Preferred Stock will have one vote for each share of Series A Preferred Stock on each matter that is properly brought before the Annual Meeting and on which holders of Series A Preferred Stock are entitled to vote separately, as a class.

Cumulative voting is not permitted in the election of directors.

ARE THERE ANY REQUIREMENTS ON HOW THE HOLDERS OF THE SERIES A PREFERRED STOCK MUST VOTE ON MATTERS PROPERLY BROUGHT BEFORE THE ANNUAL MEETING?

Under the Investment Agreement, KKR is required to vote its shares of our Series A Preferred Stock (i) in favor of each of the director nominees recommended for election by the Board; (ii) for ratification of the appointment of Deloitte as the Company’s independent registered public accounting firm for fiscal 2022; and (iii) for all other proposals to be voted on at the Annual Meeting that have been recommended for approval by the Board.

WHAT VOTE IS REQUIRED, AND HOW WILL MY VOTES BE COUNTED, TO ELECT THE DIRECTOR NOMINEES AND TO APPROVE EACH OF THE OTHER PROPOSALS DISCUSSED IN THIS PROXY STATEMENT?

OUR BOARD UNANIMOUSLY RECOMMENDS VOTING “FOR” THE ELECTION OF EACH OF OUR BOARD’S NOMINEES ON PROPOSAL 1 AND “FOR” PROPOSALS 2 AND 3 USING THE ENCLOSED WHITE PROXY CARD.

WHY ARE YOU CONDUCTING A VIRTUAL-ONLY ANNUAL MEETING?

We are conducting this year’s Annual Meeting entirely online because of the continuing public health risks related to the COVID-19 pandemic and to support the health and well-being of our associates and shareholders. In addition, the virtual meeting format provides our shareholders with expanded access to the Annual Meeting, providing shareholders who would not otherwise be able to attend the meeting the opportunity to do so. Like our prior in-person and virtual annual meetings, we will provide our shareholders with ample opportunity to ask questions or provide comments.

WHO IS ALLOWED TO ATTEND THE VIRTUAL ANNUAL MEETING?

Shareholders as of the close of business on the Record Date ([●], 2022), or their authorized representatives, are welcome to attend the virtual Annual Meeting. Even if you plan to attend the virtual Annual Meeting, we recommend that you also vote by proxy as soon as possible so that your vote will be counted if you later decide not to attend the virtual Annual Meeting.

HOW DO I ATTEND THE VIRTUAL ANNUAL MEETING?

To join the virtual Annual Meeting, log in at [●]. To participate in the Annual Meeting, you will need to have your control number, which is included on the Notice, WHITE proxy card or other instructions that accompanied your proxy materials.

The live audio webcast of the Annual Meeting will begin promptly at [●] a./p.m., Central Daylight Time. Online access to the audio webcast will open prior to the start of the meeting to allow time for shareholders to log in and test the computer audio system. We encourage you to log in prior to the meeting start time. We will have a support team ready to assist shareholders with any technical difficulties they may have accessing or hearing the audio webcast of the meeting. If you encounter technical difficulties accessing the audio webcast, please call our support team at [●] (U.S.) or [●] (International).

Whether or not you plan to attend the Annual Meeting, we urge you to sign, date and return the enclosed WHITE proxy card in the postage-paid envelope provided, or vote via the Internet or by telephone as instructed on the WHITE proxy card.

Additional information and our proxy materials can also be found at [●]. If you have any difficulty following the registration process, please email [●].

MAY I ASK QUESTIONS AT THE VIRTUAL ANNUAL MEETING?

Yes. We expect that all of our directors and executive officers, as well as representatives of our independent registered public accounting firm, Deloitte, will attend the virtual Annual Meeting and be available to answer questions. We will provide our shareholders the opportunity to ask questions and make statements. Instructions for submitting questions and making statements will be posted on the virtual meeting website. This question and answer session will be conducted in accordance with certain Rules of Conduct. These Rules of Conduct will be posted on our investor relations website prior to the date of the Annual Meeting, and may include certain procedural requirements.

WHAT HAPPENS IF THE ANNUAL MEETING IS ADJOURNED?

Unless a new record date is fixed, your proxy will still be valid and may be used to vote shares of our Common Stock at the adjourned Annual Meeting. You will still be able to change or revoke your proxy until it is used to vote your shares.

WHERE CAN I FIND THE RESULTS OF THE ANNUAL MEETING?

We will report the voting results of the Annual Meeting in a Current Report on Form 8-K filed with the SEC within four business days following our Annual Meeting, a copy of which will also be available on our website, https://ir.usfoods.com/investors.

WHO IS SOLICITING PROXIES FOR THE ANNUAL MEETING WITH THIS PROXY STATEMENT?

Our Board, on behalf of the Company, is soliciting your proxy to vote your shares of our Common Stock on all matters scheduled to come before the Annual Meeting, whether or not you attend the Annual Meeting. By completing, signing, dating and returning the enclosed proxy card and voting instruction form, or by submitting your proxy and voting instructions via the Internet or by telephone, you are authorizing the proxy holders to vote your shares of our Common Stock at the Annual Meeting as you have instructed.

Under applicable SEC rules and regulations, members of the Board, the Board’s directors, director nominees and certain officers of the Company are “participants” with respect to the Company’s solicitation of proxies in connection with the Annual Meeting (each such person, a “Participant”). For more information on the Participants in the Board’s solicitation, please see “Additional Information Regarding Participants in the Solicitation” in Appendix A of this Proxy Statement.

WHAT IS THE DIFFERENCE BETWEEN A SHAREHOLDER OF RECORD AND A “STREET NAME” HOLDER?

If your shares are registered directly in your name with American Stock Transfer & Trust Company, LLC, the Company’s transfer agent, you are considered the shareholder of record, or a registered holder, with respect to those shares.

If your shares are held in a brokerage account or by a bank or other nominee (“in street name”), you are considered the beneficial owner of those shares.

Your broker, bank or other nominee has enclosed a voting instruction form for you to use in directing your broker, bank or other nominee as to how to vote your shares. You must follow these instructions in order for your shares to be voted. Your broker is required to vote those shares in accordance with your instructions. Because of the contested nature of the election, if you do not give instructions to your broker, your broker may not be able to vote your shares with respect to any of the proposals. We urge you to instruct your broker, bank or other nominee, by following the instructions on the enclosed WHITE voting instruction form, to vote your shares in line with our Board’s recommendations on the WHITE voting instruction form.

HOW DO I VOTE BY PROXY BEFORE THE ANNUAL MEETING?

If your shares are held directly in your own name, and you received printed or electronic copies of the proxy materials, you may vote your shares by mail by completing, signing and dating the WHITE proxy card. To vote over the Internet at www.proxyvote.com or by telephone by dialing [●], you should refer to your WHITE proxy card for instructions and use your control number, which is included on your proxy card.

If your shares are held in “street name,” meaning registered in the name of your broker, bank or other nominee, you should vote your shares by following the instructions from your broker, bank or other nominee.

WHAT SHARES ARE INCLUDED ON A PROXY OR VOTING INSTRUCTION CARD?

Each proxy or voting instruction card represents the shares registered to you as of the close of business on the Record Date. You may receive more than one proxy or voting instruction card if you hold your shares in multiple accounts, some of your shares are registered directly in your name with the Company’s transfer agent, or some of your shares are held in street name through a broker, bank or other nominee. Please vote the shares on each WHITE proxy card or voting instruction card to ensure that all of your shares are counted at the Annual Meeting.

WHAT IF I HAVE SHARES REGISTERED IN MY NAME AND DON’T VOTE ON A PARTICULAR MATTER WHEN RETURNING A PROXY CARD?

Properly signed proxy cards received by the Corporate Secretary before the close of voting at the Annual Meeting will be voted according to the directions provided. If a signed proxy card is returned without shareholder direction on a matter, the shares will be voted as recommended by the Board.

WHAT IF I HOLD MY SHARES IN STREET NAME AND DON’T VOTE ON A PARTICULAR MATTER WHEN RETURNING A PROXY CARD?

If you are the beneficial owner of your shares (that is, you hold your shares in “street name” through an intermediary such as a broker, bank or other nominee), you will receive instructions from your broker, bank or other nominee as to how to vote your shares or submit a proxy to have your shares voted. Because of the contested nature of the election, if you do not give instructions to your broker, your broker may not be able to vote your shares with respect to any of the proposals. We urge you to instruct your broker, bank or other nominee to vote your shares “FOR” our Board’s nominees and “FOR” Proposals 2 and 3 using the enclosed WHITE proxy card.

HOW CAN I VOTE AT THE VIRTUAL ANNUAL MEETING?

Shareholders of record may vote their shares electronically at the Annual Meeting by following the instructions at [●] or by following the instructions provided on the enclosed WHITE proxy card.

Even if you plan to attend the virtual Annual Meeting, we encourage you to vote your shares on the WHITE proxy card by Internet, telephone or mail prior to the Annual Meeting.

The Company is incorporated under Delaware law, which specifically permits electronically transmitted proxies, provided that each such proxy contains or is submitted with information from which the inspector of election can determine that such proxy was authorized by the shareholder. The electronic voting procedures provided for the Annual Meeting are designed to authenticate each shareholder by the use of a control number to allow shareholders to vote their shares and to confirm that their instructions have been properly recorded.

If you were the beneficial owner of shares (that is, you held your shares in “street name” through an intermediary such as a broker, bank or other nominee) as of the Record Date, you will receive instructions from your broker, bank or other nominee as to how to vote your shares or submit a proxy to have your shares voted. In most cases, you will be able to do this by mail, via the Internet or by telephone. Alternatively, you may obtain a “legal proxy” from your broker, bank or other nominee and register in advance to attend the Annual Meeting at [●] prior to the deadline of [●], 2022 at [●] Central Daylight Time by following the instructions described below. As discussed herein, your broker, bank or other nominee may not be able to vote your shares on any matters at the Annual Meeting unless you provide instructions on how to vote your shares. You should instruct your broker, bank or other nominee how to vote your shares by following the directions provided by your broker, bank or other nominee.

I HAVE SHARES REGISTERED IN MY NAME, AND ALSO HAVE SHARES IN A BROKERAGE ACCOUNT. HOW DO I VOTE THESE SHARES?

Shares that you hold in street name are not included in the total number of shares set forth on your proxy card. Your broker, bank or other nominee will send you instructions on how to vote those shares.

CAN I CHANGE MY VOTE OR REVOKE MY PROXY?

If your shares are registered directly in your name, you may change your vote or revoke your proxy by:

If your shares are held in street name, you should contact your broker, bank or other nominee to change your vote or revoke your proxy.

If you have previously submitted a gold proxy card sent to you by Sachem Head, you may change your vote by completing and returning the enclosed WHITE proxy card in the postage-paid envelope provided, or by voting via the Internet or by telephone by following the instructions on the WHITE proxy card. Please note that submitting a gold proxy card sent to you by Sachem Head will revoke votes you have previously made via the Company’s WHITE proxy card. Voting to “WITHHOLD” with respect to any of Sachem Head’s nominees on a gold proxy card sent to you by Sachem Head is not the same as voting “FOR” our Board’s nominees because a vote to “WITHHOLD” with respect to any of Sachem Head’s nominees on its gold proxy card will revoke any WHITE proxy you may have previously submitted.

Whether or not you plan to attend the Annual Meeting, we urge you to sign, date and return the enclosed WHITE proxy card in the postage-paid envelope provided, or vote via the Internet or by telephone as instructed on the WHITE proxy card.

WHO COUNTS THE VOTES?

A representative of [●] will count the votes and serve as the independent inspector of election at the Annual Meeting.

WHAT IS THE DEADLINE FOR VOTING?

The deadline for voting by telephone or electronically is [●] p.m. (Central Time) on [●], 2022. If you attend the virtual Annual Meeting, you may vote your shares electronically during the meeting.

DO I HAVE ANY DISSENTERS’ OR APPRAISAL RIGHTS WITH RESPECT TO ANY OF THE MATTERS TO BE VOTED ON AT THE ANNUAL MEETING?

No. Delaware law does not provide shareholders any dissenters’ or appraisal rights with respect to the matters to be voted on at the Annual Meeting.

WHOM DO I CONTACT IF I HAVE QUESTIONS ABOUT THE ANNUAL MEETING?

If you have any questions or need any assistance in voting your shares, please contact our proxy solicitor:

Okapi Partners LLC  

1212 6th Avenue, Floor 24 

New York, NY 10036 

Banks and Brokers Call: (212) 297-0720

or 

Shareholder and All Others Call Toll-Free: (877) 285-5990 

Email: info@okapipartners.com

BACKGROUND TO THE SOLICITATION

On November 14, 2018, Sachem Head filed a Form 13F disclosing a 1.98% stake in the Company. Since then and until August 2021, Sachem Head filed regular Form 13Fs disclosing its stake in the Company, which ranged from 1.09% to 2.53%. From October 2017 (when an introductory call took place) through August 2021, the Company had at least 55 meetings and calls with Sachem Head, including group meetings and calls at investor conferences.

On October 6, 2021, Mr. Ferguson called Nathaniel H. Taylor, a director of the Company, to inform him that Sachem Head would be filing a Schedule 13D shortly.

On October 7, 2021, Mr. Ferguson called Pietro Satriano, the Chief Executive Officer of the Company, to inform him that Sachem Head would be filing a Schedule 13D shortly.

On October 7, 2021, Sachem Head filed a Schedule 13D disclosing a 5.1% beneficial ownership position and aggregate economic exposure to 9.2% of the outstanding shares of Common Stock. The Schedule 13D also disclosed that Sachem Head had retained Mr. Hees to serve as an advisor and as a potential director nominee for election to the Board.

On October 15, 2021, Mr. Satriano and Dirk J. Locascio, the Chief Financial Officer of the Company, met with Mr. Ferguson and another representative of Sachem Head at the Company’s headquarters. At the meeting, Mr. Ferguson shared a presentation containing Sachem Head’s views regarding the Company. Mr. Ferguson requested that the Company appoint himself, Bernardo Hees, and David Toy as directors to the Board. Mr. Ferguson also asked the Company to appoint Mr. Hees as Executive Chairman of the Board and form an Operational Improvement Committee of the Board.

On October 21, 2021, Messrs. Satriano and Locascio met with Mr. Hees at the Company’s headquarters to discuss his views regarding the Company.

On October 27, 2021, Mr. Satriano emailed Mr. Ferguson to indicate that he had met with the Board to discuss Sachem Head’s proposals and that the Board had asked Mr. Satriano, Lead Independent Director, Robert M. Dutkowsky, and director, Cheryl A. Bachelder, to meet with Messrs. Ferguson and Hees.

On November 1, 2021, Messrs. Satriano and Dutkowsky and Ms. Bachelder met with Messrs. Ferguson and Hees in person, during which meeting Mr. Ferguson shared his high-level thoughts on improving the Company’s financial performance and encouraged the Company to consider Mr. Hees for the role of Executive Chair. Mr. Dutkowsky and Ms. Batchelder asked a number of questions regarding Mr. Hees’ experience and his ideas for performance improvement at the Company. Mr. Dutkowsky also noted that most of the ideas set forth in Mr. Ferguson’s presentation were already underway.

On November 8, 2021, the Company issued a press release announcing its 2021 third quarter earnings and held an accompanying earnings call.

On November 15, 2021, Messrs. Satriano and Dutkowsky and Ms. Bachelder had a call with Mr. Ferguson. On the call, Mr. Satriano informed Mr. Ferguson that: (i) the Company was interested in continuing constructive engagement with Sachem Head; (ii) the Board would like to proceed with an evaluation of Messrs. Ferguson, Hees and Toy as potential candidates to join the Board, consistent with the Board’s standard candidate evaluation procedures, which include interviews and background and reference checks; and (iii) the Board had questions and concerns about Mr. Hees’ experience in distribution and past leadership roles at other companies, including The Kraft Heinz Company (“Kraft Heinz”), and would expect Mr. Hees to address such concerns during his interviews with the Company.

On November 24, 2021, Mr. Ferguson asked Mr. Satriano to expedite the evaluation process and asked that it be completed over the next two weeks. Mr. Satriano responded that the Company was already accelerating its normal director selection process for Messrs. Ferguson, Hees and Toy. Following the call, a representative of the Company offered Mr. Ferguson additional potential dates for interviews.

Between November 16 and November 29, 2021, the Company and representatives of Sachem Head coordinated the interviews of Sachem Head’s candidates with members of the Nominating and Corporate Governance Committee of the Board.

On November 30, 2021, Sachem Head filed an amended Schedule 13D disclosing a 6.3% beneficial ownership position and an unchanged aggregate economic exposure to 9.2% of the outstanding shares of Common Stock.

On December 6, 2021, Mr. Dutkowsky, the then-Chair of the Nominating and Corporate Governance Committee of the Board, interviewed Mr. Ferguson as a candidate for director. During the interview, Mr. Ferguson reiterated his belief that the Company should create a new Executive Chairman role on its Board and that Mr. Hees should serve in that position.

On December 8, 2021, Ann E. Ziegler and Carl Andrew Pforzheimer, members of the Nominating and Corporate Governance Committee, also interviewed Mr. Ferguson.

Also on December 8, 2021, Sachem Head filed an amended Schedule 13D disclosing a 7.6% beneficial ownership position and an unchanged aggregate economic exposure to 9.2% of the outstanding shares of Common Stock.

On December 14, 2021, Mr. Pforzheimer interviewed Messrs. Hees and Toy as candidates for director.

On December 15, 2021, Mr. Dutkowsky and Ms. Ziegler also interviewed Messrs. Hees and Toy.

Also on December 15, 2021, Sachem Head filed an amended Schedule 13D disclosing a 8.7% beneficial ownership position and an unchanged aggregate economic exposure to 9.2% of the Company’s outstanding shares of Common Stock.

On December 20, 2021, Mr. Taylor called Mr. Ferguson to state that: (i) the Board appreciated Sachem Head’s perspectives and had evaluated Sachem Head’s proposed director candidates; (ii) the Board was open to adding certain of Sachem Head’s director candidates to the Board; and (iii) the Board was not supportive of adding Mr. Hees as a director due to significant concerns regarding his previous leadership roles at other companies, which Mr. Hees did not adequately address during his interviews with various members of the Board.

On December 21, 2021, Messrs. Satriano and Dutkowsky and Ms. Bachelder called Mr. Ferguson to follow up on Mr. Taylor’s call the prior day. They stated that the Board would be open to a resolution with Sachem Head that would include adding Mr. Ferguson as a director and an additional director with operational expertise, but the Board remained unwilling to add Mr. Hees as a director due to his concerning track record. Mr. Ferguson stated that he would reflect on the Board’s offer (the “December 21 Offer”).

On January 4, 2022, Mr. Satriano reached out to Mr. Ferguson because the Company had not heard back from Mr. Ferguson since the December 21 Offer had been presented.

On January 7, 2022, Mr. Satriano had a video call with Mr. Ferguson, during which Mr. Satriano reiterated the December 21 Offer. Mr. Ferguson responded by expressing disappointment with the offer and threatening to run a proxy contest with a majority slate of director nominees. Mr. Satriano stated that the Board was open to other directors with operating experience besides Mr. Hees and offered Mr. Ferguson the opportunity to participate in that process of identifying such directors. Mr. Ferguson promised to call Mr. Satriano the following week.

On February 10, 2022, Mr. Taylor called Mr. Ferguson to reiterate the December 21 Offer once again and encourage Mr. Ferguson to engage constructively with the Company. The Company did not receive any further communications from Mr. Ferguson prior to February 15, 2022, when the Sachem Head Group launched its proxy contest.

On February 11, 2022, the Company issued a press release stating that, following its annual governance review, the Board had implemented a series of changes consistent with its commitment to best corporate governance practices. Such changes included the separation of the CEO and Chair roles by electing Mr. Dutkowsky as independent Chair and the election of Ms. Bachelder and Ms. Ziegler as new chairs of the Compensation Committee and the Nominating and Corporate Governance Committee, respectively.

On February 15, 2022, without any further notice to the Company, Sachem Head delivered a Notice of Stockholder Nomination of Individuals for Election as Directors at the Annual Meeting (the “Nomination Notice”) to the Company indicating its intent to nominate the following seven candidates for election to the Board at the Annual Meeting, the election of which would represent a change of control of the Board: Meredith Adler, James J. Barber Jr., Mr. Ferguson, Jeri B. Finard, John J. Harris, Mr. Hees and Mr. Toy (collectively, the “Sachem Head Nominees”). Until that date, Sachem Head had never even mentioned the names of four of these seven Sachem Head Nominees to the Company.

Also on February 15, 2022, Sachem Head filed an amended Schedule 13D disclosing its intent to nominate the Sachem Head Nominees at the Annual Meeting. The Schedule 13D reported a reduced aggregate economic exposure to 8.7% of the outstanding shares of Common Stock.

Also on February 15, 2022, Sachem Head issued a press release announcing its nomination of the Sachem Head Nominees. The Company issued a press release in response, disclosing that Sachem Head made it a pre-condition to any resolution that the Board appoint Mr. Hees as director with an executive role. The Company highlighted its concerns with Mr. Hees’ troubling background, including the fact that: (i) Brazil’s securities regulator equivalent to the SEC, the Comissão de Valores Mobiliários (the “CVM”), investigated Mr. Hees as the former CEO and director of America Latina Logistica (“ALL”) over serious financial irregularities in the company’s financial statements, resulting in ALL and its former executives and directors, including Mr. Hees, paying a BRL 10.27 million fine to settle with the CVM; (ii) Mr. Hees stepped down as CEO of Kraft Heinz in 2019 after the company had to take a $15.4 billion impairment charge following his tenure as CEO; and (iii) the SEC found that Kraft Heinz had falsified supplier contracts to achieve cost savings and artificially inflated earnings during Mr. Hees’ tenure as CEO, resulting in a cease-and-desist order and a civil penalty of $62 million for Kraft Heinz.

On February 16, 2022, Performance Food Group Company (“PFG”) sent a letter to one of the Sachem Head Nominees, Ms. Adler, who had served on the PFG board until November 18, 2021, copying Ms. Coleman in her capacity as General Counsel of the Company. The letter reminded Ms. Adler of her continuing fiduciary and confidentiality obligations to PFG and noted that, if were to be elected to the Board, she would be expected to establish procedures to ensure compliance with such obligations.

On February 17, 2022, Sachem Head sent the Company a demand to inspect certain books and records of the Company pursuant to Section 220 of the Delaware General Corporation Law (the “Section 220 Demand”).

Also on February 17, 2022, the Company issued a press release announcing its 2021 fourth quarter earnings and held an accompanying earnings call. The Company also detailed its long-range plan, which is expected to result in significant earnings growth from the combination of profitable volume growth and margin expansion.

On February 18, 2022, the Company sent a letter to Sachem Head in response to the Nomination Notice (the “February 18 Letter”), noting that the Nomination Notice was incomplete and deficient with respect to: (i) the requirement under the Company’s Bylaws that each director nominee consent to being named in the proxy statement (the “Consent Requirement”) and (ii) the requirement under the Bylaws that each director nominee disclose, pursuant to Item 401 of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), any legal proceedings that occurred during the past 10 years and that are material to an evaluation of the ability or integrity of such nominee.

Also on February 18, 2022, Sachem Head responded to the February 18 Letter, stating its belief that the Consent Requirement only applies to Sachem Head’s proxy statement (and not the Company’s proxy statement) and disclosing that there were no events requiring disclosure pursuant to Item 401 of Regulation S-K with respect to any of the Sachem Head Nominees.

On February 25, 2022, the Company sent a letter in response to the Section 220 Demand, agreeing to produce the relevant materials requested by Sachem Head under the Section 220 Demand.

On March 15, 2022, the Company sent a letter to Sachem Head, inviting each of the new Sachem Head Nominees except for Ms. Adler to interviews by the Nominating and Corporate Governance Committee. Sachem Head responded on the same day and requested a call of Mr. Ferguson with Mr. Dutkowsky.

On March 17, 2022, Sachem Head filed its preliminary proxy statement with the SEC.

On March 19, 2022, on a call with US Foods’ Chairman and another independent director, Mr. Ferguson refused the Board’s offer to interview any Sachem Head nominees. Instead, he demanded that the Board give Sachem Head a majority of the seats on the Board. Even though he noted twice during the call that a potential proxy contest would be a “nail biter,” Mr. Ferguson further stated that he would proceed with his proxy contest if his demands were not met.

On March 29, 2022, the Company filed a Current Report on Form 8-K disclosing that Mr. Lederer has given notice of his intent to retire from the Board and will not stand for reelection at the Annual Meeting, and appointing two independent directors, Marla Gottschalk and Quentin Roach, to the Board, effective immediately. In connection with such appointments, the size of the Board has increased from ten to 12 directors, but will decrease to 11 directors following Mr. Lederer's departure at the conclusion of the Annual Meeting.

On March 29, 2022, the Company filed this preliminary proxy statement with the SEC.

CERTAIN EFFECTS OF THE SACHEM HEAD SOLICITATION

Sachem Head is seeking to replace seven of the directors on our board of directors at the Annual Meeting. Certain of our material agreements and other legal instruments could be impacted if a “change in control” is deemed to occur if Sachem Head’s proxy solicitation is successful. Generally, a change in control would be deemed to occur under these material agreements and other legal instruments if Incumbent Directors of our board of directors cease for any reason to constitute at least a majority of the board of directors within a period of 12 months. “Incumbent Directors” are individuals who, at the beginning of such period, constitute the board of directors and directors whose election or nomination for election was approved by at least a two-thirds vote of the Incumbent Directors then on the board of directors, provided that they were not initially elected or nominated as a result of an actual or threatened proxy contest. Following the conclusion of the Annual Meeting, our board of directors will be composed of 11 members, meaning that a change in control could be deemed to occur under these material agreements and other legal instruments if six or more directors are replaced within the applicable measurement period.

The election of the Sachem Head nominees could be deemed to constitute a change in control under certain of our material agreements and other legal instruments, including equity grant agreements under the 2016 US Foods Holding Corp. Omnibus Incentive Plan, US Foods Holding Corp. 2019 Long-Term Incentive Plan, and each Amended and Restated Executive Severance Agreement by and between US Foods, Inc. and each of its executive leadership team members. Such a change in control would constitute the first trigger of potential “double-trigger” provisions under certain of our material agreements and other legal instruments. If any of our associates who is a party to these agreements were to experience a qualifying termination of employment during the applicable change in control period, that associate would be entitled to enhanced severance benefits and/or accelerated vesting of equity awards.

Additional information about the potential impact of a change in control can be found in the “Executive Compensation—Potential Payments upon Termination or Change in Control” section of this Proxy Statement.

PROPOSAL 1: ELECTION OF DIRECTORS

Our business and affairs are managed under the direction of the Board. The Board is currently comprised of twelve directors, eleven of whom are independent under the corporate governance standards of the NYSE. The terms of twelve of our directors expire on the date of the Annual Meeting, subject to the election and qualification of their respective successors. At our 2019 annual meeting of shareholders, our shareholders adopted an amendment and restatement of our Certificate of Incorporation to, among other things, eliminate the classification of the Board over time. Beginning at the Annual Meeting, the declassification of the Board will be complete, and all of our directors will now be subject to annual election. On March 28, 2022, John A. Lederer notified us of his intent to resign from the Board and that he would not stand for reelection at the Annual Meeting upon the expiration of this current term at the Annual Meeting. Mr. Lederer's determination not to stand for reelection is not the result of any disagreement between him and the Company, its management, board of directors or any committee thereof, or any matter relating to the Company's operations, policies or practices. On March 28, 2022, the Board appointed two new directors, Marla Gottschalk and Quentin Roach, to the Board. As a result, the size of the Board increased to 12 directors, but will decrease to 11 directors following Mr. Lederer's departure at the conclusion of the Annual Meeting.

Based upon the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated 11 individuals to serve for one-year terms until the 2023 annual meeting of shareholders and until their respective successors are duly elected and qualified (or their earlier death, resignation, retirement, disqualification, or removal).

Ten of the 11 director nominees will be voted upon by the holders of our Common Stock and the holders of our Series A Preferred Stock, voting together as a single class. WHITE proxies solicited by the Board will be exercised for the election of each of the following ten nominees: Cheryl A. Bachelder, Court D. Carruthers, Robert M. Dutkowsky, Marla Gottschalk, Sunil Gupta, Carl Andrew Pforzheimer, Quentin Roach, Pietro Satriano, David M. Tehle and Ann E. Ziegler, unless you vote to “withhold” for one or more of the nominees on our WHITE proxy card.

One of the 11 director nominees, Nathaniel H. Taylor, has been designated by KKR pursuant to the Investment Agreement. The holders of Series A Preferred Stock will vote separately, as a class, on the election of Mr. Taylor to hold office until the 2023 annual meeting of shareholders and until his successor is duly elected and qualified (or until his earlier death, resignation, retirement, disqualification, or removal). Only the holders of Series A Preferred Stock have the right to vote on the election of Mr. Taylor and proxies solicited by the Board from holders of our Series A Preferred Stock will be exercised for the election of Mr. Taylor unless the holder votes “against” or abstains from voting for Mr. Taylor. In the event KKR or its affiliates no longer beneficially own at least 50% of the shares of our Series A Preferred Stock purchased under the Investment Agreement or an equivalent amount of our Common Stock, on an as-converted basis, Mr. Taylor (or his successor) will resign, and KKR and its affiliates will no longer have the ability to designate a nominee to the Board.

Our Bylaws provide that an election will be held under a plurality vote standard if the number of nominees for director exceeds the number of directors to be elected. On February 18, 2022, Sachem Head provided notice to the Corporate Secretary of the Company that it intends to nominate seven director candidates for election at the Annual Meeting. Unless this notice is withdrawn prior to the Annual Meeting, the election of directors at the Annual Meeting will be conducted under a plurality vote standard. The ten nominees for election by the holders of our Common Stock and the holders of our Series A Preferred Stock, voting together as a single class, at the Annual Meeting who receive the highest number of affirmative votes properly cast will be elected, provided that a quorum is present at the Annual Meeting. Shareholders are not permitted to cumulate their votes for the election of directors.

Votes may be cast for or withheld from the nominees for election as directors listed below as a group, or for or withheld from each individual nominee. Shares that are not represented at the Annual Meeting, withheld votes, and broker non-votes will have no effect on the outcome of the election. Each nominee has consented to being named in the proxy statement and agreed to serve if elected. However, if any of the Board’s nominees, other than the KKR Designee, is unable to serve or for good cause will not serve as a director, the Board may choose a substitute nominee. If any substitute nominees are designated, we will file an amended proxy statement that, as applicable, identifies the substitute nominees, discloses that such nominees have consented to being named in the revised proxy statement and agreed to serve if elected, and includes certain biographical and other information about such nominees required by SEC rules. The persons named as proxies on the Company’s WHITE proxy card will vote for the Company’s remaining nominees and substitute nominees chosen by the Board.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE BOARD’S DIRECTOR NOMINEES ON THE WHITE PROXY CARD.

DIRECTOR NOMINATING PROCESS

The Nominating and Corporate Governance Committee recommends candidates to the Board it believes are qualified and suitable to become members of the Board. The Nominating and Corporate Governance Committee also considers the performance of incumbent directors in determining whether to recommend them for re-election. Recommendations may be received by the Nominating and Corporate Governance Committee from various sources, including current and former directors, a search firm retained by the Nominating and Corporate Governance Committee, shareholders, Company executives, and candidates themselves. Pursuant to the Investment Agreement, the Board has agreed to nominate, and recommend, the KKR Designee for election to the Board at the Annual Meeting.

In the case of a vacancy on the Board, including a vacancy created by an increase in the size of the Board, the Nominating and Corporate Governance Committee will recommend to the Board an individual to fill the vacancy (except for a vacancy created by the death, resignation or removal of the KKR Designee).

Shareholders who wish to identify director candidates for consideration by the Nominating and Corporate Governance Committee should write to the address provided in the section entitled “Communications with Our Directors” on page 85. Shareholders may also nominate directors for election to the Board as described in the section entitled “Shareholder Proposals and Nominations” on page 84. All submissions should comply with the requirements set forth in our Bylaws.

SKILLS, EXPERIENCE, AND COMMITMENT TO DIVERSITY

The Board seeks members with varying professional backgrounds and other differentiating personal characteristics who combine a broad spectrum of experience and expertise with a reputation for integrity. The Board believes that maintaining a diverse membership enhances the Board’s discussions and enables the Board to better represent all of the Company’s constituents. The Board is currently comprised of three sitting chief executive officers, three former chief executive officers, two former chief financial officers, a private equity investor and a tenured business school professor. During the past four fiscal years, we refreshed four of our board positions with independent directors, adding three diverse directors such that the Board reflects a more diverse composition, with two of our directors being women and one of our directors being ethnically diverse.

Our Corporate Governance Guidelines provide that individuals will be considered for nomination to the Board based on their business and professional experience, judgment, gender, race and ethnicity, skills, background, and other unique characteristics as the Board deems appropriate. Accordingly, the Board is committed to actively seeking out highly qualified women and individuals from minority groups as well as candidates with diverse or non-traditional backgrounds, skills, and experiences as part of the director search process.

Director candidates should demonstrate a reputation for integrity, strong values, discipline, high ethical standards, a commitment to full participation on the Board and its committees, and relevant career experience, along with other skills and characteristics that meet the current needs of the Board. The Nominating and Corporate Governance Committee and the Board will also consider whether candidates meet applicable independence standards where appropriate and evaluate any potential conflicts of interest with respect to each candidate.

The 11 nominees have been recommended to the Board by the Nominating and Corporate Governance Committee and nominated by the Board to serve as directors until our 2023 annual meeting of shareholders and until their successors are duly elected and qualified (or until their earlier death, resignation, retirement, disqualification or removal). Each nominee has consented to stand for election, and the Board does not anticipate that any nominee will be unavailable to serve. However, if any of the Board’s nominees, other than the KKR Designee, is unable to serve or for good cause will not serve as a director, the Board may choose a substitute nominee. If any substitute nominees are designated, we will file an amended proxy statement that, as applicable, identifies the substitute nominees, discloses that such nominees have consented to being named in the revised proxy statement and to serve if elected, and includes certain biographical and other information about such nominees required by SEC rules. The persons named as proxies on the Company’s WHITE proxy card will vote for the Company’s remaining nominees and substitute nominees chosen by the Board.

CORPORATE SOCIAL RESPONSIBILITY

Our Nominating and Corporate Governance Committee, pursuant to its Charter, oversees our CSR program, including program strategy, areas of focus, goals and progress. The Nominating and Corporate Governance Committee receives quarterly reports from management regarding our CSR initiatives and accomplishments.

Our Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary (“GC”) leads a cross-functional CSR working group to advance our CSR objectives. This working group is comprised of leaders and subject matter experts from across the enterprise, including Supply Chain, Real Estate, Merchandising, Human Resources, Investor Relations, Legal and Communications. The GC reports directly to our Chief Executive Officer, and the CSR Working Group regularly works with members from our Executive Leadership Team to plan for, and assess progress against, environment, social and governance commitments and priorities.

In 2021, we introduced several new roles committed to supporting our growing CSR efforts across each of our key focus areas, including a Vice President of Fleet and Sustainability, a Director of CSR and a Vice President of Diversity and Inclusion, as well as three additional diversity and inclusion subject matter specialists.

Our most recent CSR Report and additional information regarding our CSR strategy, efforts, initiatives, and accomplishments can be found at http://www.usfoods.com/csr.

OUR CSR STRATEGY

Our CSR strategy is organized around our commitments in three key CSR focus areas:

At US Foods, we leverage multiple programs and policies to provide a growing portfolio of products, sourced from a diverse supplier base, that offer social or environmental benefits. Our key programs include:

At US Foods, we strive to make a positive difference in the lives of our associates and in the communities we serve by:

■ Fostering an inclusive and dynamic workplace where our associates can grow and thrive.

■ Investing in our communities through philanthropy and volunteerism activities.

SPOTLIGHT ON DIVERSITY AND INCLUSION

Our commitment to diversity and inclusion is grounded in three strategic areas of focus through which we continue to work toward a more equitable future:

2021 WORKFORCE DIVERSITY METRICS

As of January 2022, 54% of our associates are women or people of color, up from 51% in 2020. In 2021, we set a goal to fill 40% of our new or open leadership roles with diverse candidates and subsequently enhanced our hiring process to further diversify our candidate slates. This effort, in conjunction with other complementary initiatives, has resulted in 39% of new or open leadership roles being filled by women or people of color in 2021. These efforts also yielded progress in the diversity of our new hires, and, consequently, in 2021, 40% of our leadership new hires and 57% of our manager new hires were women or people of color.

	Women	People of Color
Board of Directors
Leadership (Director and above)
Managers
All Associates

We are continually engaging in best practices to improve the efficiency of our facilities and fleet and to reduce our environmental footprint by:

■ Optimizing the efficiency of our building operations and investing in renewable energy to reduce the energy intensity of our facilities.

■ Improving our routing to reduce miles driven, deploying new technology and leveraging alternative fuels to increase the efficiency of our fleet.

SPOTLIGHT ON INCREASED USE OF ALTERNATIVE FUELS

DIRECTOR COMPENSATION

For 2021, the non-employee directors serving on the Board each received an annual cash retainer of $100,000. Our Chairman and the Chair of the Audit Committee each received an additional annual cash retainer of $25,000, and the Chair of the Compensation Committee and the Chair of the Nominating and Corporate Governance Committee each received an additional annual cash retainer of $20,000. All cash retainers were paid quarterly, in arrears. In addition, each non-employee director received an annual equity grant consisting of $150,000 in restricted stock units (“RSUs”), which will vest on the earlier of the first anniversary of the grant date and our first annual meeting of shareholders that occurs after the grant date. Mr. Satriano, who is also an employee, does not receive additional compensation for serving on the Board. Mr. Taylor has elected to waive his right to receive compensation for serving on the Board.

The Nominating and Corporate Governance Committee is responsible for reviewing and making recommendations to the Board regarding our director compensation. In completing its review, the Nominating and Corporate Governance Committee receives assistance from an independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”).

The Board reviews the recommendations of the Nominating and Corporate Governance Committee and determines the form and amount of director compensation. The Board made no changes to our director compensation for 2021.

Our stock ownership guidelines that apply to each of our non-employee directors provide that each non-employee director is expected to own and retain shares of our Common Stock with a value of at least five times the annual cash retainer, or $500,000, within five years of the date the director joins the Board. Our stock ownership guidelines do not apply to Mr. Taylor since he has waived his right to receive compensation for serving on the Board. All applicable non-employee directors were in compliance with the guidelines at the end of fiscal 2021.

The following table reflects the fees earned by our non-employee directors who were compensated for their service in fiscal 2021:

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS, AND OFFICERS

The following table sets forth information as of [●], 2022 with respect to the beneficial ownership of our Common Stock by: (1) each individual or entity known to us to own beneficially more than 5% of our capital stock, (2) each of our directors, (3) each of our named executive officers, and (4) all of our directors and executive officers as a group. For each applicable beneficial owner, percent ownership has been computed based on a total of [●] shares, consisting of [●] shares of our Common Stock outstanding as of [●], 2022 and [●] shares of Common Stock which would be received by KKR upon conversion of their Series A Preferred Stock as of such date.

The amounts and percentages of shares of our Common Stock beneficially owned are reported on the basis of SEC rules governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of the security. A person is also deemed a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be acquired this way are deemed to be outstanding for purposes of computing a person’s ownership percentage, but not for purposes of computing any other person’s ownership percentage. Under these rules, more than one person may be deemed a beneficial owner of the same securities, and a person may be deemed a beneficial owner of securities to which that person has no economic interest.

Except as otherwise indicated in the footnotes to the following table, each of the beneficial owners listed below has, to our knowledge, sole voting and investment power for the indicated shares of our capital stock. Unless otherwise noted, the address of each beneficial owner listed below is c/o US Foods Holding Corp., 9399 W. Higgins Road, Suite 100, Rosemont, IL 60018.

PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), enables shareholders to approve, on an advisory and non-binding basis, the compensation of our named executive officers as disclosed pursuant to Section 14A of the Securities Exchange Act of 1934, as amended. This proposal, commonly known as a “Say-on-Pay” proposal, gives our shareholders the opportunity to express their views on our named executive officers’ compensation as a whole and our executive compensation philosophy, policies, and practices described in this Proxy Statement.

With this Say-on-Pay proposal, we are offering our shareholders an opportunity to cast an advisory vote to approve the compensation of our named executive officers, as disclosed in this Proxy Statement. Although the vote on this proposal is advisory and non-binding on the Company and the Board and its committees, we value the perspectives of our shareholders and the Compensation Committee will consider the outcome of the vote when making future executive compensation decisions.

As discussed in the sections entitled “Compensation Discussion and Analysis” beginning on page 48 and “Executive Compensation” beginning on page 70, which we urge you to review carefully, our executive compensation program is designed to attract, motivate, and retain the right talent and appropriately incentivize our executives to stay committed to executing our long-range plan and increasing long-term shareholder value.

We believe our fiscal 2021 executive compensation program demonstrates our philosophy of aligning pay with performance and is supported by sound compensation policies and practices.

The Board unanimously recommends that our shareholders vote for the following resolution:

“RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including in the sections entitled “Compensation Discussion and Analysis” and “Executive Compensation” in this Proxy Statement.”

Provided that a quorum is present, the affirmative vote of the holders of a majority in voting power of the shares present at the meeting or represented by proxy and entitled to vote on the proposal will be required to approve this proposal. Abstentions are treated as shares present to vote at the Annual Meeting and, therefore, will have the same effect as a vote “against” this proposal. Broker non-votes will have no effect on the outcome of the vote.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL ON THE WHITE PROXY CARD.

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Committee determines and approves the compensation of our NEOs. Our NEOs for fiscal 2021 and their current positions are as follows:

EXECUTIVE SUMMARY

COMPENSATION PHILOSOPHY

Our executive compensation program is designed to attract, motivate, develop, and retain the right talent, in the right places, at the right time. The following guiding principles form the basis of our executive compensation philosophy:

FISCAL 2021 HIGHLIGHTS

We are proud of the critical role our 28,000 associates played in 2021 to help our customers navigate the ongoing impact of the COVID-19 pandemic. Much like our customers, we tackled the challenges to our own business head on, taking steps to drive increased volumes and profitable growth. We continued to streamline our operating model to drive enhanced operational effectiveness and efficiency. We built new relationships with customers and associates, deepened pre-existing relationships, and captured market share.

While supply chain headwinds are expected to persist, the industry is well on its way to recovery, with our restaurant volumes in 2021 exceeding our 2019 levels. We remain focused on executing a strategy that will enable us to profitably grow market share, enhance our gross margins and increase operational efficiencies. Notable achievements during fiscal 2021 included:

Expanded our market share:

Increased gross profit per case while increasing volume:

Improved operational efficiency:

Strengthened our relationships with our customers, associates and communities:

Positioned US Foods for long-term value growth:

Resulting in increased Adjusted EBITDA and creating momentum for long-term profitable growth:

LOOKING TO 2022 AND BEYOND

By leveraging this momentum, the Company intends to deliver ~$1.7 billion in Adjusted EBITDA in 2024 by executing a clear strategy to drive profitable volume growth and margin expansion. Our strategy starts with a focus on profitably growing market share by delivering fresh, efficient and reliable quality and service, advancing differentiated solutions and accelerating the omni-channel platform to deliver an unmatched value proposition. Building on our record gross profit per case in 2021, we plan to further optimize gross margins by focusing on areas like increasing our Exclusive Brand penetration, strategically managing vendors to lower our cost of goods, and piloting next generation pricing to dynamically optimize prices. We also plan to improve operational efficiencies by bringing greater standardization and process discipline in the short term, while exploring opportunities for automation in the long-term. US Foods is confident it has the right plan and the right Board and management team to capitalize on the significant opportunities ahead.

We are not providing a reconciliation of Adjusted EBITDA, a forward-looking non-GAAP financial measure, because we are is unable to predict with reasonable certainty the financial impact of certain significant items, including restructuring costs and asset impairment charges, share-based compensation expenses, non-cash impacts of Last In First Out reserve adjustments, losses on extinguishments of debt, business transformation costs, other gains and losses, business acquisition and integration related costs and diluted earnings per share. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance periods. For the same reasons, we are unable to address the significance of the unavailable information, which could be material to future results.

2021 COMPENSATION DESIGN AND PAY-FOR-PERFORMANCE ALIGNMENT

The Compensation Committee’s decisions regarding the design of our 2021 executive compensation program anticipated continuing unpredictability, volume volatility, supply chain issues, labor shortages, restrictions placed on our customers and other challenges resulting from the COVID-19 pandemic. For 2021, our executive compensation program emphasized our strategic and operational priorities, focused on profitable market share gains, and optimized gross margins and operational efficiency to position us for long-term growth.

The Compensation Committee also retained discretion to reduce or eliminate AIP bonus payments if, regardless of achievement against the performance metrics, the Company’s financial performance did not warrant such payments.

The following graphs show the proportionate target value of these components of 2021 compensation for our CEO and NEOs:

CEO TARGET COMPENSATION MIX	OTHER NEOs TARGET COMPENSATION MIX

2021 CEO PAY-FOR-PERFORMANCE ALIGNMENT

In 2021, the Compensation Committee approved an increase to Mr. Satriano’s total compensation to $8.68 million to more closely align his total compensation with those of other chief executive officers in our peer group. The Compensation Committee made the $1.3 million market adjustment by increasing his LTIP target value in order to reward future financial performance, support retention and align with our shareholders’ long-term interests. The following chart highlights 2021 CEO pay compared to previous years.

CEO Total Target Compensation 

($ Millions)

VALUE CREATION AWARDS

As described above, following the impacts of COVID-19 on the business and the industry and the steps to be taken in 2021 to redefine our operating model including crucial sales and supply chain initiatives, the Compensation Committee determined that it was appropriate to incentivize our executives to create exceptional long-term shareholder value during and beyond the pandemic recovery and reward exceptional performance results through the Value Creation Awards. The below graph illustrates the value to our shareholders if the 30%, 60%, or 90% of TSR goal is achieved.

The TSR metric was chosen as a vesting criteria for the Value Creation Awards because it closely tracks our shareholder experience and ensured that the Value Creation Awards would vest only if our long-term strategic initiatives generate meaningful value for our shareholders. The TSR threshold, target and maximum performance levels were set to require significant growth, sustained over 30 consecutive trading days, that would result in market capitalization growth between $2.7 billion and $8.2 billion over the succeeding four-year period, with a threshold share price that exceeds our all-time high share price. To further enhance long-term alignment with the interests of our shareholders, any shares earned based on these awards vest only at the end of the four-year performance period.

In approving this award, the Compensation Committee considered the value of the CEO’s LTIP award, the execution timeline on certain strategic initiatives, the extraordinary rigor of the performance targets and the significant value that would be generated for our shareholders, if these TSR targets were achieved.

FISCAL 2021 PAY-FOR-PERFORMANCE AWARD PAYOUTS

ANNUAL CASH INCENTIVE PLAN

As a result of our fiscal 2021 financial performance, including strong performance against national market share and gross profit per case goals, as described in more detail under “Fiscal 2021 Annual Incentive Plan Awards” starting on page 62, cash awards approximately equal to 76% of target were paid to our NEOs under our fiscal 2021 AIP as follows:

VESTING OF PRIOR PERFORMANCE-BASED AWARDS

In fiscal 2019, we granted PRSAs under the 2016 US Foods Holding Corp. Omnibus Incentive Plan to our NEOs that vested in March 2022 based on the average of our financial performance during the three-year performance period ended January 1, 2022. 70% of the awards vested based on the average of our annual Adjusted EBITDA growth rate in each of the three fiscal years in the performance period, and 30% of the awards vested based on the average of our annual ROIC growth for each of the three fiscal years in the performance period. Despite the adverse impact of the COVID-19 pandemic on our business, which effectively made the fiscal 2020 goals, set before the pandemic, unattainable, the Compensation Committee determined it was important to retain the goals established at the time the award was granted, and therefore did not modify or adjust the goals in response to the adverse impact of COVID-19. For additional information regarding the calculation of this vesting percentage, see the section entitled “Vesting of Prior Performance-Based Awards” beginning on page 65.

2022 LONG-TERM INCENTIVE PLAN DESIGN

Feedback gathered from conversations with our shareholders during 2021 informed the Compensation Committee’s decisions for the 2022 LTIP design and we returned to our pre-pandemic practice of including PRSUs as a component of the 2022 LTIP. In previous years, one-third of the LTIP grant date value was awarded in the form of PRSUs. For 2022, the Compensation Committee, wishing to incentivize financial performance, determined that one-half of the grant date LTIP value should be awarded in the form of PRSUs. The Compensation Committee did not approve any additional equity awards to our NEOs in connection with the annual LTIP grant in 2022. The change in LTIP mix over time from pre-pandemic to recovery is illustrated in the below graph:

EXECUTIVE COMPENSATION PRACTICES

The Compensation Committee evaluates whether our executive compensation program is consistent with both our pay-for-performance philosophy and best practices among our peer group and the overall market. The following table reflects the features of our executive compensation program that the Compensation Committee believes reinforce our pay-for-performance philosophy and best practices.

WHAT WE DO…
	Pay-for-Performance Philosophy. Directly link a substantial portion of our executives’ compensation opportunities to our financial and/or stock performance.
	Benchmarking. Review external market data when making compensation decisions and generally target compensation opportunities within a competitive range of the median of our peer group.
	Independent Compensation Consultant. The Compensation Committee selects and engages its own independent consultant, Meridian.
	Stock Ownership Guidelines. Require stock ownership equal to 6x base salary for our CEO and 3x base salary for our other executives.
	“Double-trigger” Change in Control (“CIC”) Severance Benefits. Our executives are entitled to enhanced CIC severance benefits only if their employment is terminated by the Company without cause or by the executive for good reason within 18 months following a CIC.
	Clawback Policy. Maintain an Executive Compensation Recoupment Policy that provides for recovery of certain incentive-based compensation paid to our executives in the event of a restatement of our financial results due to material noncompliance with any financial reporting requirement under federal securities laws, whether or not attributable to any fraud by the executive officer.
	Long-Term Performance Targets. As part of our normal cycle, grant PRSUs with three-year performance goals, a practice which we returned to in 2022.
	Pre-Established Targets. Set our AIP and PRSUs at the beginning of the applicable performance periods and did not change the targets in light of the COVID-19 pandemic.
	Annual Say-on-Pay Vote. Provide shareholders with the opportunity to cast an advisory vote on our executive compensation on an annual basis.

WHAT WE DON’T DO…
	No Excise Tax Reimbursements or Gross-Ups. Our executives are not reimbursed for CIC excise taxes. We do not reimburse our executives for taxes related to their annual executive allowance or any other compensation or benefits.
	No Uncapped Incentive Compensation Opportunities. Our AIP and annual LTIP performance-based equity awards have maximum payouts of 150% and 200% of their target levels, respectively.
	No Accelerated Vesting of Equity Awards upon CIC. We do not provide for accelerated vesting of long-term incentive awards upon a CIC, except where awards are not assumed or there is a qualifying termination within 18 months following the CIC.
	No Employment Agreements for Defined Terms. We do not have fixed-term employment agreements with any of our executives, including our CEO.
	No Repricing of Underwater Stock Options. We do not allow repricing of outstanding stock options without shareholder approval.
	No Excessive Perquisites. We do not provide excessive perquisites to our executives.
	No Supplemental Retirement Benefits. We do not offer supplemental retirement benefit plans to any of our executives.
	No Stock Hedging or Pledging. Our executive officers are prohibited from hedging or pledging our stock.

PHILOSOPHY OF OUR EXECUTIVE COMPENSATION PROGRAM

Our executive compensation program is designed to attract, motivate, develop, and retain the right talent, in the right places, at the right time. We strive to provide a total compensation package to our executives that is competitive with employers who compete with us for talent and is equitable among our workforce, balancing pay-for-performance alignment with retention considerations. This means that even during temporary downturns in either the foodservice distribution industry or the general economy, our program is designed to appropriately incentivize our executives to stay committed to executing our long-range plan and increasing long-term shareholder value. The guiding principles described in the section entitled “Executive Summary” above form the basis of our executive compensation philosophy.

COMPONENTS AND OBJECTIVES OF OUR EXECUTIVE COMPENSATION PROGRAM

Our executive compensation program for fiscal 2021 was built upon the following framework:

HOW WE MAKE COMPENSATION DECISIONS

The Compensation Committee, in consultation with management and its independent compensation consultant, regularly evaluates whether our executive compensation program reinforces our pay-for-performance philosophy and enhances long-term shareholder value creation.

COMPENSATION COMMITTEE OVERSIGHT

The Compensation Committee is responsible for overseeing our executive compensation program. The Compensation Committee determines and approves all compensation for our NEOs, including the framework and components of our executive compensation program. When setting compensation levels, the Compensation Committee is assisted by our CEO, who evaluates the performance of and presents an annual compensation recommendation for each of our other executives. Our Chairman (also the Chair of the Nominating and Corporate Governance Committee) evaluates our CEO’s performance and sets his goals each fiscal year, sharing that information with the Compensation Committee in connection with its review and approval of compensation awards and payout levels for our CEO. For fiscal 2021, our Chairman (who was, at that point, the Lead Independent Director) consulted with our CEO in setting the goals, and our CEO provided a self-assessment of his performance. Our Chairman also solicited feedback from the full Board in executive session, and this feedback was shared with the Compensation Committee to inform its decisions regarding CEO compensation.

The Compensation Committee, with the assistance of its independent compensation consultant and inputs from the members of our human resources, legal, and finance organizations, annually assesses whether our compensation plans, policies, and practices encourage excessive or inappropriate risk taking by our associates. As a result of the assessment, the Compensation Committee has concluded that our compensation plans, policies, and practices do not encourage excessive or inappropriate risk taking and are not reasonably likely to have a material adverse effect on the Company.

The Compensation Committee uses several resources and analytical tools when making decisions related to executive compensation. These resources and tools are described below.

INDEPENDENT COMPENSATION CONSULTANT

Meridian Compensation Partners provides independent advice to the Compensation Committee in connection with matters pertaining to executive compensation. The scope of services Meridian provides includes:

Meridian is engaged directly by the Compensation Committee to provide these services. In fiscal 2021, Meridian did not provide any services to management that were unrelated to executive compensation. In addition, as described in the section entitled “Director Compensation” on page 44, Meridian assists the Nominating and Corporate Governance Committee in the review of our non-employee director compensation program.

After evaluating information presented in accordance with the independence rules of the NYSE, the Compensation Committee concluded that Meridian was independent.

HUMAN RESOURCES DEPARTMENT

Our Human Resources Department (“HR”) also works with Meridian to compile benchmarking data (consisting of peer group analysis and supplemental external compensation survey data analysis) and provide recommendations with respect to annual base salary, AIP, and LTIP compensation decisions to the Compensation Committee. As requested by the Compensation Committee, HR works with Meridian to gather and analyze relevant competitive market data and to identify and evaluate various alternatives for features of our executive compensation program.

ROLE OF CEO IN DETERMINING EXECUTIVE COMPENSATION

Our CEO assists the Compensation Committee by evaluating the performance of our other NEOs and recommending compensation levels. Our CEO also consults with management with respect to recommendations for the Company’s performance goals used in the AIP and LTIP. In preparing recommendations to the Compensation Committee, our CEO consults benchmarking data and other market surveys from Meridian and our Human Resources Department. Our CEO structures his recommendations to adhere to the principles and objectives described in the section entitled “Philosophy of Our Executive Compensation Program” above.

Our CEO is not involved in, or present during, discussions of the Compensation Committee or Board related to his own compensation.

USE OF COMPETITIVE MARKET DATA

We believe our executive compensation program should be competitive with the external market for executive talent. For our NEOs, we generally construct external market comparisons by examining peer group proxy statement data and compensation market survey data, and we generally target to be within a competitive range of median for base salary, annual cash incentive target, and long-term equity incentive opportunity ranges for similar executive positions in our peer group. Although the elements of our compensation packages are structured with market practice as a guide, the Compensation Committee believes in the importance of retaining flexibility in structuring our compensation programs and adjusting compensation for the evolving business environment.

Periodically, the Compensation Committee and Meridian review our peer group to evaluate whether it continues to reflect companies that are similar to us in business, size, and complexity and with which we compete for top executive talent. In selecting our peer group:

INTERNAL ANALYSIS IN SETTING COMPENSATION ELEMENTS

With respect to annual base salary, AIP awards, and LTIP awards, the Compensation Committee also considers the internal equity of the compensation awarded by using comparisons within the Company based on, among other factors, role, title, and relative responsibilities.

CONSIDERATION OF 2021 SAY-ON-PAY VOTE

At our 2021 annual meeting, shareholders continued to show strong support for our executive compensation program, with 97% of the votes cast approving, on an advisory basis, the compensation paid to our NEOs. The Compensation Committee considered this result and the support received in the past (more than 90% of the votes cast approving our executive compensation program each year since 2018), and, consequently, did not make significant changes to our executive compensation program in response. Similar to the prior year, our executive compensation program for fiscal 2021 continued to emphasize performance and retention-based compensation opportunities designed to incentivize our executives to execute our long-range plan and increase long-term shareholder value, with adjustments to the structure of our compensation program to reflect the impact of, and flexibility required by, the COVID-19 pandemic.

We value the perspectives of our shareholders, and the Compensation Committee will continue to consider the outcomes of say-on-pay votes when making future executive compensation decisions.

OVERVIEW OF FISCAL 2021 ANNUAL INCENTIVE PLAN

Our AIP is designed to offer cash compensation opportunities for eligible associates, including our NEOs and other executives, based upon the Company’s annual financial performance. Payments under our AIP are generally made in the first quarter of the fiscal year following the plan year completion. Our NEOs are not eligible to receive an AIP award unless they were employed by the Company at the end of the plan year.

Additionally, the Compensation Committee retained discretion to reduce or eliminate payouts under the 2021 AIP if it was determined that, despite achievement against the AIP performance goals, the Company’s performance did not warrant such payments.

In February 2021, the Compensation Committee approved the 2021 AIP design framework, the metrics for the performance goals, the Company performance goals for the first half of fiscal 2021 and annual target awards for our NEOs. In August 2021, the Compensation Committee approved the Company performance goals for the second half of fiscal 2021. The framework for the AIP for our NEOs for each half of fiscal 2021 was based on the following:

For the 2021 AIP, the performance goals and their relative weightings are set out in the chart below:

FISCAL 2021 AIP PERFORMANCE GOALS

Potential cash bonus awards under the fiscal 2021 AIP award ranged from 0% to 150% of the NEO’s target award. The Compensation Committee believes that our executives’ annual cash bonuses should be based on the Company’s achievement of its performance goals. For this reason, the fiscal 2021 AIP did not include any individual performance component. However, the Compensation Committee retained the ability to use negative discretion to reduce or eliminate an AIP award based on individual performance.

OVERVIEW OF FISCAL 2021 LONG-TERM EQUITY INCENTIVE PLAN

Our LTIP is designed to align our NEOs’ interests with our long-term performance, and provide the Company with an important means to recruit, retain, and motivate key personnel. LTIP awards are designed to compensate our NEOs for their long-term commitment to the Company, while motivating sustained increases in our financial performance and shareholder value. Moreover, the LTIP creates long-term incentive opportunities that are competitive with the opportunities offered by the companies with which we compete for talent.

As discussed above, due to the uncertain continued impact of the pandemic on the industry and our business, the Compensation Committee determined that it was not possible to set clear and meaningful performance goals tied to Adjusted EBITDA growth rate and ROIC growth over an extended period of time. To strengthen the alignment of our executives’ interests with those of our shareholders, awards granted to our NEOs under our 2021 LTIP consisted of one-half time-based RSUs and one-half stock options, compared to 2020 when the mix was one-third stock options and two-thirds restricted stock. Additionally, in 2022, consistent with feedback from our shareholders, we returned to our pre-pandemic practice of including PRSUs as one of the components of the fiscal 2022 LTIP with a mix of one-half PRSUs and one-half RSUs. The below chart illustrates the 2021 LTIP mix:

Our equity awards are granted with a per share price or exercise price, as applicable, equal to the “fair market value” of one share of our Common Stock on the date of grant. Individual LTIP aggregate grant date values for each NEO were determined based on competitive market data. Both the time-based RSUs and the stock options vest ratably on an annual basis over three years, subject to the NEO’s continued employment through the applicable vesting date. The stock options expire 10 years from the grant date, subject to certain exceptions.

OVERVIEW OF FISCAL 2021 ADDITIONAL EQUITY GRANTS

VALUE CREATION AWARDS

The Value Creation Awards are designed to further align our NEOs’ compensation with our shareholders’ interests, provide an additional incentive for superior performance and create a substantial increase in long-term Company value. The Value Creation Awards are high-reach, 100% performance-based and deliver value only to the extent the below goals are met and maintained over 30 consecutive trading days during a four-year performance period. The Value Creation Awards will cliff vest at the end of the four-year performance period if, and only to the extent, the following increasingly stretch, pre-set TSR goals are met:

The Value Creation Awards will be forfeited if the threshold goal, which exceeds our all-time high share price since going public, is not achieved during the performance-period. As a further retention incentive, the Value Creation Awards will be forfeited if a recipient fails to remain employed with the Company through the end of the four-year performance period, except in the event of death, disability, termination of employment by the Company without cause or by the holder for good reason following the third anniversary of the grant date, or certain qualifying terminations of employment following a change in control.

STRATEGIC INITIATIVES AWARDS

In March 2021, we paid cash bonuses pursuant to a non-executive 2020 pandemic bonus program put in place for the second half of fiscal 2020. No cash bonuses were paid to our executive officers for 2020 performance. The Compensation Committee approved modest Strategic Initiatives Awards for our executive leadership team, including our NEOs, in the form of RSUs with a one-year vesting period, that recognized our 2020 financial performance and progress against several near- and longer-term strategic initiatives consisting of:

The Strategic Initiatives Awards were an exception to our regular grant practices to recognize performance during fiscal 2020 and were necessitated by the overall uncertainty across our industry, challenging talent market environment and strategic importance of keeping a cohesive executive team as we continued to navigate through the most challenging period of the pandemic.

While non-executive associates received cash bonuses based on financial performance for the second half of fiscal 2020, the Compensation Committee determined that it was in the best interest of the company to grant Strategic Initiatives Awards to our executive leadership team, including NEOs, in the form of RSUs. The RSUs were issued with a one-year service vesting requirement to align with the interests of our shareholders, provide for management continuity, and encourage continued focus and leadership in an ongoing challenging environment.

SUMMARY OF FISCAL 2021 EXECUTIVE COMPENSATION PROGRAM

For fiscal 2021, except as otherwise noted below, our NEOs’ compensation primarily consisted of a base salary, an AIP award, LTIP awards, a Value Creation Award and Strategic Initiatives Award.

BASE SALARY

No annual merit increases were awarded to our NEOs in fiscal 2021 in light of the November 2020 merit increases that were delayed due to the COVID-19 pandemic, except for Mr. Iacobucci’s increase with his promotion to Chief Commercial Officer, as noted below. The following table shows the annual base salary rates that were in effect for fiscal 2021, as approved by the Compensation Committee:

In addition, Messrs. Iacobucci and Kvasnicka continued to receive a bi-weekly stipend in the amount of $5,000, through February 11 and March 25, 2021, respectively, as additional compensation for their interim leadership of local sales and our supply chain organization, respectively.

DISCRETIONARY CASH BONUS

In February 2021, the Compensation Committee approved the payment of a $100,000 discretionary cash bonus to Mr. Guberman in recognition of his continuing efforts related to the integration of the Food Group as well as his leadership of certain key initiatives.

FISCAL 2021 ANNUAL INCENTIVE PLAN AWARDS

Eligible Earnings, the AIP Target Percentages, and AIP Target Awards for our NEOs under our fiscal 2021 AIP were as follows:

BUSINESS PERFORMANCE FACTORS AND POTENTIAL PAYOUTS

Due to continued volatility and unpredictability caused by the COVID-19 pandemic, the Compensation Committee set targets for each half of fiscal 2021 (1H 2021 and 2H 2021), in February for 1H 2021 and in August for 2H 2021. When determining these targets, the Compensation Committee reviewed our historic performance from 2019 and 2020. As a relative measure, the Compensation Committee set targets compared to the most recent ended fiscal period to incentivize continued market share improvements. On the other hand, pandemic volume volatility in our industry resulted in lower gross profit per case and higher variable distribution labor costs per case in 2020. To incentivize higher gross profit per case and lower variable distribution labor costs per case in 2021, the Compensation Committee set goals to close the gap to pre-pandemic 2019 performance while anticipating lower gross profit per case and higher variable distribution labor costs per case compared to pre-pandemic 2019 due to pandemic headwinds.

The threshold, target, and maximum goals and unweighted payout percentages for the first and second halves of fiscal 2021 under the fiscal 2021 AIP are set forth in the following table:

The Compensation Committee believes the threshold and target levels of performance represented challenging but attainable performance, while the maximum level represented extremely challenging and exemplary performance. Prior to application of the relative weightings, the threshold payout percentage for each goal was 25% and the maximum payout percentage was 150%, except as noted above in the table. The Compensation Committee reserved its negative discretion to reduce or eliminate the 2021 fiscal AIP payouts if it determined that the Company’s financial performance, despite achievement of the AIP performance goals, did not warrant such payments.

FISCAL 2021 AIP ACTUAL AWARDS

Based on the Company’s actual performance against the goals described below, the business performance factor for the fiscal 2021 AIP was determined by the Compensation Committee as follows:

Accordingly, based on the Company’s performance for fiscal 2021, the fiscal 2021 AIP awards approved by the Compensation Committee and paid to each NEO in March 2022 were as follows:

FISCAL 2021 LONG-TERM INCENTIVE PLAN AWARDS

Due to the uncertain impact of the COVID-19 pandemic on our business, the Compensation Committee determined it was not possible to set clear and meaningful performance goals tied to our operations over an extended period of time and therefore awards granted to our NEOs under our 2021 LTIP consisted of one-half time-based RSUs and one-half stock options. Consistent with feedback from our shareholders, in 2022 we returned to our pre-pandemic practice of including PRSUs as a component with one-half of the grant date LTIP value awarded in PRSUs.

The Compensation Committee maintained the same grant date value for each NEO under the 2021 LTIP as under the 2020 LTIP, except for Mr. Satriano whose grant date value increased to $6,000,000 to align his total compensation with competitive benchmarking and Mr. Iacobucci whose grant date value increased to $1,250,000 to reflect his promotion to Chief Commercial Officer. The aggregate grant date value and the number of RSUs and stock options that were awarded to our NEOs under the 2021 LTIP, and the vesting conditions attributable to each of the awards, are as follows:

ADDITIONAL AWARDS

VALUE CREATION AWARDS

To further align our NEOs’ compensation with our shareholders’ interests and provide an additional incentive to create a substantial increase in long-term Company value, the Compensation Committee awarded Value Creation Awards with a grant date target value approximately equal to the aggregate grant date value of our CEO’s 2020 LTIP award and each NEO’s applicable 2021 LTIP award. The aggregate grant value and the number of Value Creation Awards that were awarded to our NEOs are as follows:

The Value Creation Awards will cliff vest four years from the date of grant, if, and only to the extent that, the TSR performance goals are met by the end of the four-year performance period. The Value Creation Awards will be forfeited if a recipient fails to remain employed with the Company through the end of the four-year performance period, except in limited circumstances (see page [●]).

STRATEGIC INITIATIVES AWARD

In March 2021, we paid cash bonuses pursuant to a non-executive 2020 pandemic bonus program put in place for the second half of fiscal 2020. No cash bonuses were paid to our executive officers for 2020 performance. To recognize 2020 financial performance and progress against several near-term and long-term strategic initiatives and to promote continued focus and leadership in an ongoing challenging environment, the Compensation Committee granted the Strategic Initiatives Awards for our executive leadership team, including NEOs, in the form of RSUs with a one-year vesting period (see page [●]). The aggregate grant value and the number of Strategic Initiatives Awards that were awarded to our NEOs are as follows:

VESTING OF PRIOR PERFORMANCE-BASED AWARDS

FISCAL 2019 PERFORMANCE-BASED AWARDS

The PRSAs that were granted to our NEOs under our 2019 LTIP vested in March 2022 at 102.41% based on our achievement of Adjusted EBITDA growth rate and Adjusted ROIC growth goals set by the Compensation Committee at the beginning of 2019 for the three-year performance period ended January 1, 2022. The payout percentage is based on the average achievement against the performance goals for each of the three fiscal years. Despite the adverse impact of the COVID-19 pandemic on our business, which effectively made the fiscal 2020 goals, set before the pandemic, unattainable, the Compensation Committee felt it was important to retain the goals established at the time the award was granted, and therefore did not modify or adjust the goals in response to the adverse impact of COVID-19.

Based on the Company’s actual annual Adjusted EBITDA growth rate for 2019, 2020 and 2021, the vesting percentage for the corresponding tranches of these PRSAs was determined by the Compensation Committee as follows:

Based on the Company’s actual annual Adjusted ROIC growth for 2019, 2020 and 2021, the vesting percentage for the corresponding tranche of these PRSAs was determined by the Compensation Committee as follows:

Accordingly, based on the Company’s actual Adjusted EBITDA growth rate and Adjusted ROIC growth during the three-year performance period ended January 1, 2022, the vesting percentage of the PRSAs granted in fiscal 2019 to our NEOs, and which vested on March 28, 2022, was 102.41% of the target shares underlying those awards.

EXECUTIVE SEVERANCE AGREEMENTS

All of our NEOs are employed “at will” and have no defined term of employment with us. Each of our NEOs has an executive severance agreement with the Company. These agreements outline additional compensation considerations in the event of (1) termination of the executive’s employment by the Company other than for “cause” or (2) termination of the executive’s employment by the executive with “good reason.” The executive severance agreements are designed to provide standard protections to both the executive and the Company and help us to ensure continuity and aid in recruitment and retention. We believe that the severance benefits are reasonable and appropriate to protect our NEOs against circumstances over which they do not have control. The executive severance agreements also provide us with commitments of non-disclosure, non-competition, non-solicitation, and non-interference.

The key terms of our executive severance agreements include:

RETIREMENT BENEFITS AND OTHER COMPENSATION

The only retirement benefits currently provided to our NEOs are (1) those under our tax-qualified 401(k) savings plan, which is offered to all eligible associates (not just to our executives), and (2) the continued vesting of any annual LTIP awards granted beginning in 2020, provided that the executive has attained age 60 with at least five years of service and the awards have been outstanding for over a year prior to retirement. Messrs. Guberman and Kvasnicka previously accrued benefits under the US Foods, Inc. Defined Benefit Pension Plan and the Alliant Foodservice, Inc. Pension Plan, which have since been consolidated into the US Foods Consolidated Defined Benefit Retirement Plan and are now frozen for associates who are exempt from over-time.

Each of our NEOs receives an annual executive allowance, which is intended to defray expenses such as those for financial and legal planning, professional organization membership, and executive physicals, and a monthly cellular phone allowance. We do not reimburse our NEOs for taxes related to their annual executive allowance or any other compensation or benefits.

EXECUTIVE COMPENSATION RECOUPMENT “CLAWBACK” POLICY

Our Executive Compensation Recoupment Policy provides that in the event of a restatement of our financial results due to material noncompliance with any financial reporting requirement under the federal securities laws, we will use reasonable efforts to recover the amount of any excess incentive-based compensation paid to any current or former executive officer during the previous three fiscal years based on the erroneous financial data, whether or not attributable to any fraud by the executive officer, including compensation received under the AIP and LTIP. The Compensation Committee has the sole discretion, subject to applicable law, to determine the form and timing of the recoupment. This may include:

EXECUTIVE STOCK OWNERSHIP PROGRAM

Each of our executives and senior leaders is required to satisfy certain stock ownership guidelines. These guidelines have been designed to closely align our executives’ and senior leaders’ financial interests with those of our shareholders. The guidelines require equity holdings with a value of six times base salary for our CEO and three times base salary for our other executives.

Executives have five years from the later of the date the stock ownership guidelines were effective (June 1, 2017) and the executive’s hire or promotion date to reach the applicable guideline. All of our executives were in compliance with the guidelines at the end of fiscal 2021.

COMPENSATION COMMITTEE REPORT 

The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management of the Company. Based on the review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2022.

EXECUTIVE COMPENSATION 

FISCAL 2021 SUMMARY COMPENSATION TABLE

The following table provides information regarding the compensation of the NEOs, listed by name and current position below, for fiscal 2021, as well as fiscal 2020 and fiscal 2019 where applicable: