AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 19, 2005
REGISTRATION NO. 333-______
--------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SYSCO CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 74-1648137
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
1390 ENCLAVE PARKWAY
HOUSTON, TEXAS 77077-2099
(281) 584-1390
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MICHAEL C. NICHOLS
VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
1390 ENCLAVE PARKWAY
HOUSTON, TEXAS 77077-2099
(281) 584-1390
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
B. JOSEPH ALLEY, JR., ESQ.
ARNALL GOLDEN GREGORY LLP
171 17TH ST., NW
SUITE 2100
ATLANTA, GEORGIA 30309-3450
(404) 873-8500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
--------------------------------- ------------------------------- ------------------------------ -------------------------------
TITLE OF SECURITIES TO BE PROPOSED MAXIMUM AGGREGATE AMOUNT OF REGISTRATION
REGISTERED AMOUNT TO BE REGISTERED OFFERING PRICE FEE(1)
--------------------------------- ------------------------------- ------------------------------ -------------------------------
Debt Securities $1,500,000,000 $1,500,000,000 $176,550.00
--------------------------------- ------------------------------- ------------------------------ -------------------------------
(1) Calculated pursuant to Rule 457 (o).
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities, and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion, Dated April 19, 2005
PROSPECTUS
$1,500,000,000
SYSCO CORPORATION
DEBT SECURITIES
----------------
Sysco Corporation may offer and issue from time to time one or more series
of debt securities with an aggregate initial offering price not to exceed
$1,500,000,000, or the equivalent in foreign currency or units. We will offer
debt securities to the public using this prospectus on terms determined by
market conditions. We will only issue debt securities that have a maturity of
between two years and thirty years. We may issue debt securities in registered
form without coupons or in bearer form with or without coupons attached. We may
issue debt securities denominated in and/or payable in U.S. dollars or in
foreign currency or currency units.
The applicable prospectus supplement will set forth the ranking of the debt
offered under it as senior or subordinated and the specific terms of the debt
securities, including:
o specific designation and aggregate principal amount;
o purchase price and maturity;
o interest rate or manner of calculation thereof and time of payment of
interest, if any;
o redemption provisions, if any;
o listing, if any, on a securities exchange; and
o any other specific terms of such debt securities.
The prospectus supplement will also set forth the name of and compensation to
each dealer, underwriter or agent, if any, involved in the sale of such debt
securities. We will also name the managing underwriters with respect to each
series sold to or through underwriters in the applicable prospectus supplement.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN FACTORS
RELATING TO AN INVESTMENT IN THE DEBT SECURITIES
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
----------------
We may offer debt securities through dealers, underwriters or agents
designated from time to time, as set forth in the applicable prospectus
supplement. Our net proceeds from any offering will be the purchase price minus
the following: the discount if we offer through an underwriter; the commission
if we use an agent; and other expenses attributable to issuance and
distribution. We may also sell debt securities directly to investors on our own
behalf. In the case of sales made directly by us, no commission will be payable.
See "Plan of Distribution" for possible indemnification arrangements with
dealers, underwriters and agents.
----------------
THE DATE OF THIS PROSPECTUS IS ________, 2005
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by SYSCO or any underwriter, dealer or agent. Neither the delivery of this
prospectus nor any sale made hereunder shall under any circumstances create an
implication that there has been no change in our affairs since the date hereof.
This prospectus does not constitute an offer to sell or a solicitation of an
offer to buy debt securities by anyone in any jurisdiction in which such offer
or solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to any person to whom it is unlawful
to make such offer or solicitation.
----------------
In connection with an offering of debt securities, the underwriters may
over-allot or effect transactions which stabilize or maintain the market prices
of the debt securities offered hereby or our other securities at levels above
those which might otherwise prevail in the open market. They may effect such
transactions on an exchange or in the over-the-counter market. If the
underwriters commence such stabilizing, it may be discontinued at any time.
2
PROSPECTUS SUMMARY
SYSCO CORPORATION
Sysco Corporation, together with its subsidiaries and divisions, is the
largest foodservice marketing and distribution organization in North America,
with operations located throughout the United States and Canada. We provide food
and related products and services to approximately 400,000 customers, including:
o restaurants;
o healthcare and educational facilities;
o lodging establishments; and
o other foodservice customers.
Since SYSCO's formation in 1969, annual sales have grown from approximately
$115 million to over $29 billion in fiscal 2004, both through internal expansion
of existing operations and acquisitions. Our operations include:
o broadline companies;
o specialty produce companies;
o custom cut meat operations;
o Asian cuisine foodservice operations;
o hotel supply operations; and
o SYGMA, our chain restaurant distribution subsidiary.
We distribute a full line of frozen foods, such as:
o meats;
o fully prepared entrees;
o fruits;
o vegetables; and
o desserts.
We also distribute a full line of:
o canned and dry foods;
o fresh meats;
o imported specialties; and
o fresh produce.
We also supply a wide variety of non-food items, including:
o paper products, such as disposable napkins, plates and cups;
o tableware, such as china and silverware;
o restaurant and kitchen equipment and supplies; and
o cleaning supplies.
Our operating companies distribute both nationally branded merchandise and
products packaged as SYSCO private brands.
Sysco Corporation is a Delaware corporation, incorporated in 1969, and our
principal executive offices are located at 1390 Enclave Parkway, Houston, Texas
77077-2099. Our telephone number is (281) 584-1390.
3
THE OFFERING
We may issue from time to time one or more series of debt securities with
an aggregate initial offering price not to exceed $1,500,000,000, or the
equivalent in foreign currency. We will offer debt securities to the public
using this prospectus on terms determined by market conditions. We will only
issue debt securities that have a maturity of between two years and thirty
years. We may issue debt securities in registered form without coupons or in
bearer form with or without coupons attached. We may issue debt securities that
are denominated and/or payable in U.S. dollars, foreign currency or currency
units.
The applicable prospectus supplement will set forth the ranking of the debt
offered under it as senior or subordinated and the specific terms of the debt
securities, including:
o specific designation and aggregate principal amount;
o purchase price and maturity;
o interest rate or manner of calculation thereof and time of payment of
interest, if any;
o redemption provisions, if any;
o listing, if any, on a securities exchange; and
o any other specific terms of such debt securities.
RISK FACTORS
In addition to the other information in this prospectus, the following risk
factors should be considered carefully in evaluating
an investment in debt securities offered hereby.
Because we operate a low margin business, our operating results are very
sensitive to inflation and other economic conditions.
The foodservice distribution industry is characterized by relatively high
inventory turnover with relatively low profit margins. We make a significant
portion of our sales at prices that are based on the cost of products we sell
plus a percentage markup. As a result, our profit levels may be negatively
impacted during periods of product cost deflation, even though our gross profit
percentage may remain relatively constant. Prolonged periods of product cost
inflation may also have a negative impact on our profit margins and earnings to
the extent such product cost increases are not passed on to customers due to
resistance to higher prices. The foodservice industry is sensitive to national
and regional economic conditions. Inflation, fuel costs and other factors
affecting consumer confidence and the frequency and amount spent by consumers
for food prepared away from home may negatively impact our sales and operating
results. Sales and operating results are also sensitive to, and may be adversely
affected by, other factors, including:
o difficulties with the collectability of our accounts receivable;
o competitive price pressures;
o severe weather conditions; and
o unexpected increases in fuel or other transportation-related costs.
Although these factors have not had a material adverse impact on our past
operations, there can be no assurance that one or more of these factors will not
adversely affect future operating results.
We have significant leverage and debt service obligations.
Because historically a substantial part of our growth has been the result
of acquisitions and capital expansion, our continued growth depends, in large
part, on our ability to continue this expansion. As a result, our inability to
finance acquisitions and capital expenditures through borrowed funds could
restrict our ability to expand. Moreover, any default under the documents
governing our indebtedness could have a significant adverse effect on the market
value of our common stock and constrain our ability to raise equity capital.
Further, our leveraged position may also increase our vulnerability to
competitive pressures. As of January 1, 2005, we had approximately $1.1 billion
of long-term indebtedness outstanding.
Product liability claims could have a material adverse impact on our business.
SYSCO, like any other seller of food, faces the risk of exposure to product
liability claims in the event that the use of products sold by us causes injury
or illness. With respect to product liability claims, we believe we have
sufficient primary or excess umbrella liability insurance. However, this
insurance may not continue to be available at a reasonable cost, or, if
available, may not be adequate to cover all of our liabilities. We generally
seek contractual indemnification and insurance coverage from parties supplying
4
our products, but this indemnification or insurance coverage is limited, as a
practical matter, to the creditworthiness of the indemnifying party and the
insured limits of any insurance provided by suppliers. If we do not have
adequate insurance or contractual indemnification available, product liability
relating to defective products could materially reduce our net earnings and
earnings per share.
We may be unable to service our customers, and may lose customers if the third
parties that supply us are either unwilling or unable to do so on a timely
basis.
We obtain substantially all of our foodservice and related products from
third party suppliers. For the most part, we do not have long-term contracts
with its suppliers committing them to provide products to us. Although our
purchasing volume can provide leverage when dealing with suppliers, suppliers
may not provide the foodservice products and supplies needed by us in the
quantities requested. Because we do not control the actual production of the
products we sell, we are also subject to delays caused by interruption in
production based on conditions outside our control. These conditions include:
o job actions or strikes by employees of suppliers,
o weather,
o crop conditions,
o transportation interruptions, and
o natural disasters or other catastrophic events
Our inability to obtain adequate supplies of our foodservice and related
products as a result of any of the foregoing factors or otherwise, could mean
that we not be able to fulfill our obligations to customers. As a result, our
customers may turn to other distributors, and our revenues, liquidity and
operating results could be adversely affected.
Work stoppages or labor disputes could have a material adverse effect on our
business.
As of July 3, 2004, approximately 9,100 employees at 51 of our operating
companies were members of 59 different local unions associated with the
International Brotherhood of Teamsters and other labor organizations. In the
remainder of fiscal 2005 and 2006, approximately 19 agreements covering
approximately 3,100 employees will expire. Failure of the operating companies to
effectively renegotiate these contracts could result in work stoppages. Although
our operating subsidiaries have not experienced any significant labor disputes
or work stoppages to date, and we believe they have satisfactory relationships
with their unions, a work stoppage due to failure of one or more operating
subsidiaries to renegotiate a union contract, or otherwise, could have a
material adverse effect on us.
Our failure to successfully integrate acquired companies could have a material
adverse effect on our business.
If we are unable to integrate acquired businesses successfully and realize
anticipated economic, operational and other benefits in a timely manner, our
profitability may decrease. Integration of an acquired business may be more
difficult when we acquire a business in a market in which we have limited or no
expertise, or with a corporate culture different from ours. If we are unable to
integrate acquired businesses successfully, we may incur substantial costs and
delays in increasing our customer base. In addition, the failure to integrate
acquisitions successfully may divert management's attention from our existing
business and may damage our relationships with key customers and suppliers.
FORWARD LOOKING STATEMENTS
Some of the information contained or incorporated by reference in this
prospectus contains forward-looking statements that involve substantial risks
and uncertainties. You can identify these statements by forward-looking words
such as "may," "will," "expect," "anticipate," "believe," "estimate," "could"
and "continue" or similar words. You should read statements that contain these
words carefully for the following reasons:
o the statements discuss our future expectations;
o the statements contain projections of our future results of operations
or of our financial condition; and
o the statements state other "forward-looking" information.
We believe it is important to communicate our expectations to our
investors. There may be events in the future, however, that we are not able to
predict accurately or over which we have no control. The risk factors listed
above under the section "Risk Factors," as well as any other cautionary language
in this prospectus, provide examples of risks, uncertainties and events that may
cause our actual results to differ materially from the expectations we describe
in our forward-looking statements. Before you invest in our securities, you
should be aware that the occurrence of any of the events described in those risk
factors and elsewhere in this prospectus could have a material adverse effect on
our business, financial condition and results of operations. In such case, the
trading price of our common stock could decline and you may lose all or part of
your investment.
5
USE OF PROCEEDS
Unless otherwise set forth in the applicable prospectus supplement, the net
proceeds from the sale of the debt securities will be used for general corporate
purposes, which may include additions to working capital, capital expenditures,
acquisitions, stock repurchases and repayment of indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES
SYSCO's ratio of earnings to fixed charges for each of the periods
indicated is as follows:
FISCAL YEAR ENDED
-----------------------------------------------------------------------
26 WEEKS
ENDED
JANUARY JULY 3, JUNE 28, JUNE 29, JUNE 30, JULY 1,
1, 2005 2004(2) 2003 2002 2001 2000
--------------------------------------- ----------- ------------ ---------- ----------- ----------- ------------
Ratio of earnings to fixed charges(1) 18.8x 18.6x 16.1x 16.4x 13.2x 10.8x
----------------
(1) For the purpose of calculating this ratio, "earnings" consist of
earnings before income taxes and fixed charges (exclusive of interest
capitalized). "Fixed charges" consist of interest expense, capitalized interest
and the estimated interest portion of rents.
(2) The fiscal year ended July 3, 2004 was a 53-week year.
DESCRIPTION OF DEBT SECURITIES
The debt securities to be offered will constitute either senior or
subordinated debt of SYSCO and will be issued, in the case of senior debt, under
a Senior Debt Indenture (the "Senior Debt Indenture"), as it may be amended and
supplemented from time to time, between SYSCO and Wachovia National Bank, as
successor to First Union National Bank of North Carolina, as Trustee, and, in
the case of subordinated debt, under a Subordinated Debt Indenture (the
"Subordinated Debt Indenture"), as it may be amended and supplemented from time
to time, between SYSCO and the trustee to be named in any prospectus supplements
relating to subordinated debt. The Senior Debt Indenture and the Subordinated
Debt Indenture are sometimes hereinafter referred to individually as an
"Indenture" and collectively as the "Indentures." Wachovia National Bank of
North Carolina and the trustee to be named in the prospectus supplements
relating to subordinated debt, if any, are hereinafter referred to individually
as a "Trustee" and collectively as the "Trustees." The Senior Debt Indenture and
form of Subordinated Debt Indenture are included as exhibits to the Registration
Statement of which this prospectus is a part (the "Registration Statement"). The
following summaries of certain provisions of the Indentures and the debt
securities do not purport to be complete, and such summaries are subject to the
detailed provisions of the applicable Indenture to which reference is hereby
made for a full description of such provisions, including the definition of
certain terms used herein, and for other information regarding the debt
securities. Numerical references in parentheses below are to sections in the
applicable Indenture. Wherever particular sections or defined terms of the
applicable Indenture are referred to, such sections or defined terms are
incorporated herein by reference as part of the statement made, and the
statement is qualified in its entirety by such reference. The Indentures are
substantially identical, except for the provisions relating to subordination and
certain covenants. See "Senior Debt" and "Subordinated Debt."
GENERAL
The Indentures do not limit the amount of additional indebtedness we or any
of our subsidiaries may incur. The debt securities will be unsecured senior or
subordinated obligations of SYSCO.
The Indentures provide that debt securities may be issued from time to time
in one or more series. We have issued the following securities under the Senior
Debt Indenture prior to the date of this prospectus:
o $150,000,000 of 6.5% Senior Notes due June 15, 2005;
o $200,000,000 of 7.0% Senior Notes due May 1, 2006;
o $50,000,000 of 7.16% Debentures due April 15, 2027 (callable at the
option of the holders on April 15, 2007);
o $225,000,000 of 6.5% Debentures due August 1, 2028;
o $100,000,000 of 7.25% Senior Notes due April 15, 2007;
o $200,000,000 of 4.6% Senior Notes due March 15, 2014; and
o $200,000,000 of 4.75% Senior Notes due July 30, 2005.
6
In addition, a wholly-owned subsidiary of SYSCO has issued, and SYSCO has wholly
and unconditionally guaranteed, $200,000,000 of 6.1% Senior Notes due June 1,
2012 issued under a separate indenture, as to which Wachovia National Bank is
also the trustee.
Reference is made to the prospectus supplement for the following terms of
and information relating to the debt securities of any series (to the extent
such terms are applicable): (i) the classification as senior or subordinated
debt securities, the specific designation, aggregate principal amount and
purchase price; (ii) the currency or units based on or relating to currencies in
which such debt securities are denominated and/or in which principal, premium,
if any, and/or interest, if any, will or may be payable; (iii) the date or dates
of maturity; (iv) any redemption, repayment or sinking fund provisions; (v) the
interest rate or rates, if any, and the dates on which any such interest will be
payable (or the method by which such rate or rates or dates will be determined);
(vi) the method by which amounts payable in respect of principal, premium, if
any, or interest, if any, on such debt securities may be calculated, and any
currencies, commodities or indices, or value, rate or price, relevant to such
calculation; (vii) the place or places where the principal of, premium, if any,
and interest, if any, on such debt securities will be payable; (viii) whether
such debt securities will be issuable in registered form, without coupons, or
bearer form, with or without coupons ("bearer securities") or both and, if
bearer securities are issuable, any restrictions applicable to the exchange of
one form for another and to the offer, sale and delivery of bearer securities;
(ix) whether such debt securities are to be issued in whole or in part in the
form of one or more temporary or permanent global debt securities and if so, the
identity of the depositary, if any, for such global debt securities; (x) any
applicable United States federal income tax consequences, including whether and
under what circumstances we will pay additional amounts on such debt securities
held by a person who is not a U.S. person (as defined in the prospectus
supplement) in respect of any tax, assessment or governmental charge withheld or
deducted and, if so, whether we will have the option to redeem such debt
securities rather than pay such additional amounts; (xi) the terms and
conditions upon which and the manner in which such debt securities may be
defeased or discharged if different from the defeasance provisions described
below; and (xii) any other specific terms of such debt securities, including any
additional or different events of default or covenants provided for with respect
to such debt securities, and any terms which may be required by or advisable
under applicable laws or regulations.
Debt securities may be presented for exchange and registered debt
securities may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the debt securities and the applicable
Indenture. Such services will be provided without charge, other than any tax or
other governmental charge payable in connection therewith, but subject to the
limitations provided in the applicable Indenture. Bearer securities (except when
held in temporary global form) and the coupons, if any, appertaining thereto
(except when attached to temporary global securities) will be transferable by
delivery.
Debt securities may bear interest at a fixed rate or a floating rate. Debt
securities bearing no interest, or interest at a rate that at the time of
issuance is below the prevailing market rate, will be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted debt securities (or to certain
debt securities issued at par which are treated as having been issued at a
discount for United States federal income tax purposes) are described in the
relevant prospectus supplement.
Debt securities may be issued from time to time with payment terms which
are calculated by reference to the value, rate or price of one or more
currencies, commodities, indices or other factors. Holders of such debt
securities may receive a principal amount (including premium, if any) on any
principal payment date, or a payment of interest on any interest payment date,
that is greater than or less than the amount of principal (including premium, if
any) or interest otherwise payable on such dates, depending upon the value, rate
or price on such dates of the applicable currency, commodity, index or other
factor. Information as to the methods for determining the amount of principal,
premium, if any, or interest payable on any date, the currencies, commodities,
indices or other factors to which the amount payable on such date is linked and
certain additional tax considerations will be set forth in the applicable
prospectus supplement.
Unless otherwise set forth in the prospectus supplement, and except as set
forth below under "--Merger or Consolidation," the debt securities will not
contain any provisions which may afford holders of the debt securities
protection in the event of a change in control or in the event of a highly
leveraged transaction (whether or not such transaction results in a change in
control).
GLOBAL SECURITIES
Registered Global Securities. The registered debt securities of a series
may be issued in the form of one or more fully registered global securities (a
"Registered Global Security") that will be deposited with (and registered in the
name of) a depositary (a "Depositary") identified in the prospectus supplement
relating to such series (or a nominee of the Depositary). Unless and until it is
exchanged in whole for debt securities in "definitive" form, a Registered Global
Security may not be transferred except as a whole by the Depositary for such
Registered Global Security to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor of such Depositary or a
nominee of such successor. (A security held in "definitive" form is a
certificated security other than a Global Security, meaning that it is not
registered in the name of and held by a Depositary, and it is therefore not
subject to the transfer restriction described immediately above.)
The specific terms of the depositary arrangement with respect to any
portion of a series of debt securities to be represented by a Registered Global
Security will be described in the prospectus supplement relating to such series.
We anticipate that provisions substantially similar to the following will apply
to all depositary arrangements. However, the operations and procedures of
depositaries are solely within their control and are subject to changes by them.
We do not take any responsibility for those operations and procedures. Thus,
investors receiving interests in a Registered Global Security would need to
contact the depositary or the participants in the depositary through which the
investors hold their interests in order to discuss these matters.
A depositary (such as, for example, the Depository Trust Company, or "DTC")
is generally an entity created to hold securities for its participating
organizations, referred to as "participants," and facilitate the clearance and
7
settlement of transactions in those securities between DTC's participants
through electronic book-entry changes in accounts of its participants.
Participants generally include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. Access to a
depositary's system may also be available to other entities such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant of the depositary, either directly or
indirectly, and these entities are referred to as "indirect participants."
Therefore, ownership of beneficial interests in a Registered Global
Security would be limited to persons that are participants in (i.e., persons who
have accounts with) the Depositary and persons that hold interests through
participants. Upon the issuance of a Registered Global Security, the Depositary
for such Registered Global Security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal
amounts of the debt securities represented by such Registered Global Security
beneficially owned by or through such participants. The accounts to be credited
initially will be designated by any dealers, underwriters or agents
participating in the distribution of such debt securities or by us, if such debt
securities are offered and sold directly by us. Ownership of beneficial
interests in such Registered Global Security will be shown on, and the transfer
of such ownership interests will be effected only through, records maintained by
the Depositary for such Registered Global Security (with respect to interests of
participants) and on the records of participants (with respect to interests of
persons holding through participants).
The laws of some states (and countries other than the United States) may
require that certain persons take physical delivery of certificates evidencing
securities they own. Consequently, the ability to transfer beneficial interests
in a Global Security to such persons would be limited to that extent. Because a
depositary can act only on behalf of its participants, which in turn act on
behalf of indirect participants, the ability of beneficial owners of interests
in a Global Security to pledge such interests to persons or entities that do not
participate in the depositary's system, or otherwise take actions in respect of
such interests, may be affected by the lack of a physical certificate evidencing
such interests.
So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, we will consider the
Depositary or its nominee, as the case may be, the sole owner and holder of the
debt securities represented by the Registered Global Security for all purposes
under the applicable Indenture. Except as set forth below, owners of beneficial
interests in a Registered Global Security will not be entitled to have the debt
securities represented by such Registered Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such debt
securities in definitive form and will not be considered the owners or holders
thereof under such Indenture. Accordingly, each person owning a beneficial
interest in a Registered Global Security must rely on the procedures of the
Depositary for such Registered Global Security (and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest) to exercise any rights of a holder under such Indenture. We
understand that under existing industry practices, if we request any action of
holders or if an owner of a beneficial interest in a Registered Global Security
desires to give or take any action which a holder is entitled to give or take
under the Indenture, the Depositary for such Registered Global Security
generally either (i) authorizes the participants holding the relevant beneficial
interests to give or take such action, and such participants would authorize
beneficial owners owning through such participants to give or take such action,
or (ii) otherwise acts upon the instructions of beneficial owners holding
through them.
Payments of principal, premium, if any, and interest, if any, on debt
securities represented by a Registered Global Security registered in the name of
a Depositary or its nominee will be made to such Depositary or its nominee, as
the case may be, as the registered owner of such Registered Global Security.
Neither SYSCO, the Trustee, nor any of their agents will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in such Registered Global Security or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
We expect that the Depositary for any debt securities represented by a
Registered Global Security, upon receipt of any payment of principal, premium or
interest in respect of such Registered Global Security, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in such Registered Global Security as shown on
the records of such Depositary. We also expect that payments by participants to
owners of beneficial interests in such Registered Global Security held through
such participants will be the responsibility of such participants and will be
governed by standing customer instructions and customary practices, as is now
the case with securities held for the accounts of customers or registered in
"street name."
If the Depositary for any debt securities represented by a Registered
Global Security is at any time unwilling or unable to continue as Depositary
(including its loss of eligibility to so serve because it is no longer a
clearing agency registered under the Exchange Act), and we do not appoint a
successor Depositary which is registered as a clearing agency under the Exchange
Act within 90 days, we will issue such debt securities in definitive form in
exchange for such Registered Global Security. In addition, we may at any time
and in its sole discretion determine not to have any of the debt securities of a
series represented by one or more Registered Global Securities and, in such
event, will issue debt securities of such series in definitive form in exchange
for all of the Registered Global Security or Securities representing such debt
securities. Any debt securities issued in definitive form in exchange for a
Registered Global Security will be registered in such name or names as the
Depositary shall instruct the applicable Trustee. It is expected that such
instructions will be based upon directions received by the Depositary from
participants with respect to ownership of beneficial interests in such
Registered Global Security.
Global Securities for Bearer Instruments. Debt securities of a series
intended to trade in bearer form (referred to elsewhere herein as bearer
securities) may also be represented by one or more Global Securities that will
be deposited with a common depositary or with a nominee for such depositary, in
either case as identified in the prospectus supplement relating to such series.
The specific terms and procedures, including the specific terms of the
depositary arrangement, with respect to any portion of a series of bearer debt
securities to be represented by a Global Security will be described in the
prospectus supplement relating to such series.
8
SENIOR DEBT
The debt securities (and, in the case of bearer securities, any coupons
appertaining thereto) issued under the Senior Debt Indenture (referred to herein
as the "senior debt securities") will rank pari passu with all of our other debt
which is a) unsecured and unsubordinated debt and b) senior to the subordinated
debt securities described below under "--Subordinated Debt." We have issued the
following senior debt securities under the Senior Debt Indenture prior to the
date of this prospectus:
o $150,000,000 of 6.5% Senior Notes due June 15, 2005;
o $200,000,000 of 7.0% Senior Notes due May 1, 2006;
o $50,000,000 of 7.16% Debentures due April 15, 2027 (callable at the
option of the holders on April 15, 2007);
o $225,000,000 of 6.5% Debentures due August 1, 2028;
o $100,000,000 of 7.25% Senior Notes due April 15, 2007;
o $200,000,000 of 4.6% Senior Notes due March 15, 2014; and
o $200,000,000 of 4.75% Senior Notes due July 30, 2005.
Our wholly-owned subsidiary also issued $200,000,000 of 6.10% Senior Notes, due
June 1, 2012, which are wholly and unconditionally guaranteed by us, under a
separate indenture. See "Description of the Notes" of the prospectus supplement
for information regarding any additional debt securities issued after the date
of this prospectus.
Limitations on Liens. We covenant in the Senior Debt Indenture that we will
not (nor will we permit any Subsidiary to) issue, incur, create, assume or
guarantee any debt for borrowed money (including all obligations evidenced by
bonds, debentures, notes or similar instruments) secured by a mortgage, security
interest, pledge, lien, charge or other encumbrance ("mortgage") upon any
Principal Property or upon any shares of stock or indebtedness of any Subsidiary
that owns or leases a Principal Property (whether such Principal Property,
shares or indebtedness are now existing or owed or hereafter created or
acquired) without in any such case effectively providing concurrently with the
issuance, incurrence, creation, assumption or guaranty of any such secured debt,
or the grant of such mortgage, that the senior debt securities (together with,
if we shall so determine, any other indebtedness of or guarantee by us or such
Subsidiary ranking equally with the senior debt securities) shall be secured
equally and ratably with (or, at our option, prior to) such secured debt. The
foregoing restriction, however, will not apply to each of the following: (a)
mortgages on property, shares of stock or indebtedness or other assets of any
corporation existing at the time such corporation becomes a Subsidiary, provided
that such mortgages or liens are not incurred in anticipation of such
corporation's becoming a Subsidiary; (b) mortgages on property, shares of stock
or indebtedness or other assets existing at the time of acquisition thereof by
us or a Subsidiary, or mortgages thereon to secure the payment of all or any
part of the purchase price thereof, or mortgages on property, shares of stock or
indebtedness or other assets to secure any debt incurred prior to, at the time
of, or within 180 days after, the latest of the acquisition thereof or, in the
case of property, the completion of construction, the completion of improvements
or the commencement of substantial commercial operation of such property for the
purpose of financing all or any part of the purchase price thereof, such
construction or the making of such improvements; (c) mortgages to secure
indebtedness owing to us or to a Subsidiary; (d) mortgages existing at the date
of the initial issuance of any senior debt securities then outstanding; (e)
mortgages on property of a person existing at the time such person is merged
into or consolidated with SYSCO or a Subsidiary or at the time of a sale, lease
or other disposition of the properties of a person as an entirety or
substantially as an entirety to us or a Subsidiary, provided that such mortgage
was not incurred in anticipation of such merger or consolidation or sale, lease
or other disposition; (f) mortgages in favor of the United States of America or
any state, territory or possession thereof (or the District of Columbia), or any
department, agency, instrumentality or political subdivision of the United
States of America or any state, territory or possession thereof (or the District
of Columbia), to secure partial, progress, advance or other payments pursuant to
any contract or statute or to secure any indebtedness incurred for the purpose
of financing all or any part of the purchase price or the cost of constructing
or improving the property subject to such mortgages; or (g) extensions, renewals
or replacements of any mortgage referred to in the foregoing clauses (a), (b),
(d), (e) or (f); provided, however, that the principal amount of indebtedness
secured thereby shall not exceed the principal amount of indebtedness so secured
at the time of such extension, renewal or replacement. Any mortgages permitted
by any of the foregoing clauses (a) through (g) shall not extend to or cover any
other Principal Property of ours or of one of our Subsidiaries, or any shares of
stock or indebtedness of any such Subsidiary, subject to the foregoing
limitations, other than the property, including improvements thereto, stock or
indebtedness specified in such clauses. (Senior Debt Indenture Section 3.7).
Notwithstanding the restrictions in the preceding paragraph, we or any
Subsidiary of ours may issue, incur, create, assume or guarantee debt secured by
a mortgage which would otherwise be subject to such restrictions, without
equally and ratably securing the senior debt securities, provided that after
giving effect thereto, the aggregate amount of all debt so secured by mortgages
(not including mortgages permitted under clauses (a) through (g) above) does not
exceed 20% of SYSCO's Consolidated Net Tangible Assets. (Senior Debt Indenture
Section 3.7).
Limitations on Sale and Lease-Back Transactions. We also covenant in the
Senior Debt Indenture that we will not, nor will we permit any Subsidiary to,
enter into any Sale and Lease-Back Transaction with respect to any Principal
Property, other than any such transaction involving a lease for a term of not
more than three years or any such transaction between us and one of our
Subsidiaries, or between Subsidiaries, unless: (a) we or such Subsidiary would
be entitled to incur indebtedness secured by a mortgage on the Principal
Property involved in such transaction at least equal in amount to the
Attributable Debt with respect to such Sale and Lease-Back Transaction, without
equally and ratably securing the senior debt securities, pursuant to the
limitation on liens described above; or (b) the proceeds of such transaction are
at least equal to the fair market value of the affected Principal Property (as
determined in good faith by our Board of Directors) and we apply an amount equal
to the greater of the net proceeds of such sale or the Attributable Debt with
respect to such Sale and Lease-Back Transaction within 180 days of such sale to
9
either (or a combination of) (i) the retirement (other than any mandatory
retirement, mandatory prepayment or sinking fund payment or by payment at
maturity) of debt for borrowed money of SYSCO or a Subsidiary (other than debt
that is subordinated to the senior debt securities or debt to us or a
Subsidiary) that matures more than 12 months after its creation or (ii) the
purchase, construction or development of other comparable property. (Senior Debt
Indenture Section 3.8).
"Attributable Debt" with regard to a Sale and Lease-Back Transaction with
respect to any property is defined in the Senior Debt Indenture to mean, at the
time of determination, the lesser of: (a) the fair market value of such property
(as determined in good faith by our Board of Directors); or (b) the present
value of the total net amount of rent required to be paid under such lease
during the remaining term thereof (including any period for which such lease has
been extended), discounted at the rate of interest set forth or implicit in the
terms of such lease (or, if not practicable to determine such rate, the weighted
average interest rate per annum borne by the securities then outstanding under
the Senior Debt Indenture) compounded semi-annually. In the case of any lease
which is terminable by the lessee upon the payment of a penalty, such net amount
shall be the lesser of the net amount determined assuming termination upon the
first date such lease may be terminated (in which case the net amount shall also
include the amount of the penalty, but no rent shall be considered as required
to be paid under such lease subsequent to the first date upon which it may be so
terminated) or the net amount determined assuming no such termination.
"Consolidated Net Tangible Assets" is defined in the Senior Debt Indenture
to mean, as of any particular time, the aggregate amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom: (a) all current liabilities, except for current maturities of
long-term debt and of obligations under capital leases; and (b) intangible
assets, to the extent included in said aggregate amount of assets, all as set
forth on our most recent consolidated balance sheet and computed in accordance
with generally accepted accounting principles.
"Principal Property" is defined in the Senior Debt Indenture to mean the
land, improvements, buildings and fixtures (including any leasehold interest
therein) constituting the principal corporate office, any manufacturing plant,
any manufacturing, distribution or research facility or any self-serve center
(in each case, whether now owned or hereafter acquired) which is owned or leased
by us or any Subsidiary and is located within the United States of America or
Canada unless our Board of Directors has determined in good faith that such
office, plant facility or center is not of material importance to the total
business conducted by us and our Subsidiaries taken as a whole. With respect to
any Sale and Lease-Back Transaction or series of related Sale and Lease-Back
Transactions, the determination of whether any property is a Principal Property
shall be determined by reference to all properties affected by such transaction
or series of transactions.
"Sale and Lease-Back Transaction" is defined in the Senior Debt Indenture
to mean any arrangement with any person providing for the leasing by us or any
Subsidiary of any Principal Property which property has been or is to be sold or
transferred by us or such Subsidiary to such person.
"Subsidiary" is defined in the Senior Debt Indenture to mean any
corporation in which we and/or one or more of our Subsidiaries together own
voting stock having the power to elect a majority of the board of directors of
such corporation, directly or indirectly. For the purposes of this definition,
"voting stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency. (Senior Debt Indenture Section
1.1).
SUBORDINATED DEBT
The debt securities (and, in the case of bearer securities, any coupons
appertaining thereto) issued under the Subordinated Debt Indenture (referred to
herein as the subordinated debt securities) will rank junior to "Senior
Indebtedness" (as such term is defined in the Subordinated Debt Indenture). The
payment of the principal, premium, if any, and interest on the subordinated debt
securities is subordinated and junior in right of payment, to the extent set
forth in the Subordinated Debt Indenture, to the prior payment in full of all
"Senior Indebtedness," as explained below.
No Payment If Senior Indebtedness In Default. No payment (including the
making of any deposit in trust with the Trustee in accordance with Section 10.1
of the Subordinated Debt Indenture) on account of principal, premium, if any, or
interest on any subordinated debt securities (nor any payment to acquire any of
the subordinated debt securities for cash or property) may be made if, at the
time of such payment or immediately after giving effect thereto, either of the
following is true:
o there exists a default in the payment of the principal, premium, if
any, or interest with respect to any Senior Indebtedness, when due and
payable, whether at maturity, upon redemption, by declaration or
otherwise; or
o during certain "blockage periods" based on a non-monetary default with
respect to Senior Indebtedness. A blockage period begins when holders
of any Senior Indebtedness give written notice of certain types of
events of default with respect to the Senior Indebtedness to the
Trustee and us. The event of default must not be a default in the
payment of principal, premium (if any), or interest, and it must
permit the holders of the Senior Indebtedness to accelerate the
maturity of the Senior Indebtedness. A blockage period will last 180
days, except that it will end earlier if the event of default has been
cured or waived, or if the holders of the Senior Indebtedness send a
notice to the Trustee and us terminating the blockage period.
The Trustee may still make payments on subordinated debt securities
during a blockage period, if the payments are made from monies or
securities previously deposited with the Trustee pursuant to the terms
of Section 10.1 of the Subordinated Debt Indenture, so long as at the
time such deposit was made (and immediately after giving effect
thereto) the above conditions did not exist.
10
Once the blockage period expires, we will be obligated to promptly pay
to subordinated debt holders all sums not paid during the blockage
period. Only one such blockage period may be commenced within any 360
consecutive days. In addition, where an event of default exists on the
day a blockage period is commenced, that event of default cannot be
made the basis for a second blockage period until the earlier default
was cured or waived for a period of at least 90 consecutive days.
(Subordinated Debt Indenture, Section 13.2).
Priority of Senior Indebtedness. The holders of Senior Indebtedness will be
entitled to require payment in full of all principal, premium (if any), and
interest on the Senior Indebtedness before subordinated debt holders may receive
any payment of principal, premium (if any), or interest on the subordinated debt
securities, or any payment to acquire any of the subordinated debt securities,
upon any of the following events:
o insolvency, bankruptcy proceedings, receivership, liquidation or
reorganization of SYSCO under Federal or state law, or similar
proceedings, relative to SYSCO or its creditors, or its property;
o voluntary liquidation, dissolution or winding up of SYSCO;
o an assignment for the benefit of creditors or any other marshalling of
assets of SYSCO (whether or not involving insolvency or bankruptcy);
or
o a declaration that any subordinated debt security is due and payable
before its expressed maturity because of the occurrence of an Event of
Default under the Subordinated Debt Indenture (see "Events of Default"
below).
However, the Trustee may nonetheless make payments on a subordinated debt
security under such circumstances if the payment is made from monies or
securities previously deposited with the Trustee pursuant to the terms of
Section 10.1 of the Subordinated Debt Indenture, so long as at the time such
deposit was made (or immediately after giving effect thereto) the above
conditions did not exist. (Subordinated Debt Indenture, Section 13.3).
Under the Subordinated Debt Indenture, the term "Senior Indebtedness" means
(a) all indebtedness and obligations of SYSCO existing on the date of the
Subordinated Debt Indenture or created, incurred or assumed thereafter, and
which (i) are for money borrowed; (ii) are evidenced by any bond, note,
debenture or similar instrument; (iii) represent the unpaid balance on the
purchase price of any assets or services of any kind; (iv) are obligations as
lessee under any lease of property, equipment or other assets required to be
capitalized on the balance sheet of the lessee under generally accepted
accounting principles; (v) are reimbursement obligations with respect to letters
of credit or other similar instruments; (vi) are obligations under interest
rate, currency or other indexed exchange agreements, agreements for caps or
floors on interest rates, foreign exchange agreements or any other similar
agreements; (vii) are obligations under any guaranty, endorsement or other
contingent obligations in respect of, or to purchase or otherwise acquire,
indebtedness or obligations of other persons of the types referred to in clauses
(i) through (vi) above (other than endorsements for collection or deposits in
the ordinary course of business); or (viii) are obligations of other persons of
the type referred to in clauses (i) through (vii) above secured by a lien to
which any of our properties or assets are subject, whether or not the
obligations secured thereby shall have been issued by us or shall otherwise be
our legal liability; and (b) any deferrals, renewals, amendments, modifications,
refundings or extensions of any such indebtedness or obligations of the types
referred to above. However, notwithstanding the foregoing, Senior Indebtedness
does not include (1) any indebtedness of SYSCO to any of our subsidiaries, (2)
any indebtedness or obligation of SYSCO which by its express terms is stated to
be not superior in the right of payment to the subordinated debt securities or
to rank pari passu with, or to be subordinated to, the subordinated debt
securities, or (3) any indebtedness or obligation incurred by us in connection
with the purchase of any assets or services in the ordinary course of business
and which constitutes a trade payable or account payable. (Subordinated Debt
Indenture, Section 1.1).
By reason of such subordination, in the event of insolvency, holders of
subordinated debt securities who are not holders of Senior Indebtedness may
recover less, ratably, than holders of Senior Indebtedness.
If this prospectus is being delivered in connection with a series of
subordinated debt securities, the applicable prospectus supplement or the
information incorporated herein by reference will set forth the approximate
amount of Senior Indebtedness outstanding as of the end of the most recent
fiscal quarter.
MERGER OR CONSOLIDATION
Each of the Indentures provides that we may merge or consolidate with any
other person or persons (whether or not affiliated with us), and we may sell,
convey, transfer or lease all or substantially all of our property to any other
person or persons (whether or not affiliated with us), so long as we meet the
following conditions:
1. Either (a) the transaction is a merger or consolidation, and SYSCO is
the surviving entity; or (b) the successor person (or the person which
acquires by sale, conveyance, transfer or lease substantially all of
our property) is a corporation organized under the laws of the United
States or any state thereof and expressly assumes, by supplemental
indenture satisfactory to the Trustee, all of our obligations under
the Indenture and the relevant debt securities and coupons; and
2. Immediately after giving effect to the transaction, no Event of
Default (and no event or condition which, after notice or lapse of
time or both, would become an Event of Default) shall have occurred
and be continuing with respect to any series of debt security
outstanding under the relevant Indenture.
11
(Senior and Subordinated Debt Indentures, Section 9.1).
In the event of any of the above transactions, if there is a successor person as
described in paragraph (1)(b) immediately above, then the successor will
expressly assume all of our obligations under the Indenture and automatically be
substituted for us in the Indenture and as issuer of the debt securities.
Further, if the transaction is in the form of a sale or conveyance, after any
such transfer (except in the case of a lease), SYSCO will be discharged from all
obligations and covenants under the Indenture and all debt securities issued
thereunder and may be liquidated and dissolved. (Senior and Subordinated Debt
Indentures, Section 9.2).
EVENTS OF DEFAULT
An Event of Default is defined under each Indenture with respect to debt
securities of any series issued under such Indenture as being: (a) default in
payment of any principal of or premium, if any, on the debt securities of such
series, either at maturity, upon any redemption, by declaration or otherwise
(including a default in the deposit of any sinking fund payment with respect to
the debt securities of such series when and as due); (b) default for 30 days in
payment of any interest on any debt securities of such series; (c) default for
90 days after written notice in the observance or performance of any other
covenant or agreement in respect of the debt securities of such series or such
Indenture other than a covenant or agreement which is not applicable to the debt
securities of such series, or a covenant or agreement with respect to which more
particular provision is made; (d) certain events of bankruptcy, insolvency or
reorganization; or (e) any other Event of Default provided in the supplemental
indenture under which such series of debt securities is issued, or in the form
of debt security for such series. (Senior and Subordinated Debt Indentures,
Section 5.1).
Under each Indenture, if an Event of Default occurs and is continuing with
respect to a series, then either the Trustee or the holders of 25% or more in
principal amount of the outstanding debt securities of the affected series
(voting as a single class) may declare the principal (or such portion thereof as
may be specified in the terms thereof) of all debt securities of all affected
series (plus any interest accrued thereon) to be due and payable immediately
(unless the principal of such series has already become due and payable).
However, upon certain conditions, such declarations may be annulled and past
defaults may be waived (except a continuing default in payment of principal of
(or premium, if any) or interest on such debt securities) by the holders of a
majority in principal amount of the outstanding debt securities of all such
affected series (treated as one class). If an Event of Default due to certain
events of bankruptcy, insolvency or reorganization shall occur, the principal
(or such portion thereof as may be specified in the terms thereof) of and
interest accrued on all debt securities then outstanding shall become due and
payable immediately, without action by the Trustees or the holders of any such
debt securities. (Senior and Subordinated Debt Indentures, Sections 5.1 and
5.10).
Each Indenture entitles the Trustee, subject to the duty of the Trustee
during a default to act with the required standard of care, to be indemnified by
the holders of debt securities issued under such Indenture before proceeding to
exercise any right or power under such Indenture at the request of such holders.
(Senior and Subordinated Debt Indentures, Sections 5.6 and 6.2). Subject to such
indemnification and certain other limitations, the holders of a majority in
principal amount of the outstanding debt securities of each affected series
issued under such Indenture (treated as one class) may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred or the Trustee with respect to such
series. (Senior and Subordinated Debt Indentures, Section 5.9). The Indenture
does not require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there are reasonable grounds for
believing that the repayment of such funds or adequate indemnity against such
liability is not reasonably assured to it. (Senior and Subordinated Debt
Indentures, Section 6.1).
Each Indenture provides that no holder of debt securities of any series or
of any coupon issued under such Indenture may institute any action against SYSCO
under such Indenture (except actions for payment of overdue principal, premium,
if any, or interest) unless (1) such holder previously shall have given to the
Trustee written notice of default and continuance thereof, (2) the holders of
not less than 25% in aggregate principal amount of the outstanding debt
securities of each affected series issued under such Indenture (treated as one
class) shall have requested the Trustee to institute such action and shall have
offered the Trustee reasonable indemnity, (3) the Trustee shall not have
instituted such action within 60 days of such request, and (4) the Trustee shall
not have received direction inconsistent with such written request by the
holders of a majority in principal amount of the outstanding debt securities of
each affected series issued under such Indenture (treated as one class). (Senior
and Subordinated Debt Indentures, Sections 5.6 and 5.9).
Each Indenture contains a covenant that we will file annually with the
Trustee a certificate stating whether or not we are in compliance (without
regard to grace periods or notice requirements) with all conditions and
covenants of the Indenture and, if we are not in compliance, describing the
nature and status of the non-compliance. (Senior and Subordinated Debt
Indentures, Section 3.5).
DEFEASANCE
Each Indenture provides that we may defease and be discharged from any and
all obligations (except as described below) with respect to the debt securities
of any series which have not already been delivered to the Trustee for
cancellation and which have either become due and payable or are by their terms
due and payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the Trustee, as trust funds, money or, in the case
of debt securities payable only in U.S. dollars, U.S. Government Obligations (as
defined) which through the payment of principal and interest in accordance with
their terms will provide money, in an amount certified to be sufficient to pay
at maturity (or upon redemption) the principal of (and premium, if any) and
interest on such debt securities. Such defeasance does not apply to obligations
related to the following (the "Surviving Obligations"):
12
o registration of the transfer or exchange of the debt securities of
such series and of coupons appertaining thereto;
o Issuer's right to optional redemption, if any;
o substitution of mutilated, destroyed, lost or stolen debt securities
of such series or coupons appertaining thereto;
o maintenance of an office or agency in respect of the debt securities
of such series;
o receipt of payment of principal and interest on the stated due dates
(but any rights of holders to force redemption of the debt securities
does not survive);
o rights, obligations, duties and immunities of the Trustee; and
o rights of Holders as beneficiaries of any trust created as described
above for purposes of the defeasance.
In addition, each Indenture provides that with respect to each series of
debt securities issued under such Indenture, even if the debt securities will
not become due and payable within one year, we may elect either (a) to defease
and be discharged from all obligations with respect to the debt securities of
such series (except for the Surviving Obligations) or (b) to be released from
only the restrictions described under "Senior Debt," if applicable, and "Merger
or Consolidation" and, to the extent specified in connection with the issuance
of such series of debt securities, other covenants applicable to such series of
debt securities, by meeting certain conditions. Those conditions include
depositing with the Trustee (or other qualifying trustee), in trust for such
purpose, money (or, in the case of debt securities payable only in U.S. dollars,
U.S. Government Obligations which through the payment of principal and interest
in accordance with their terms will provide money) in an amount certified to be
sufficient to pay at maturity (or upon redemption) the principal of (and
premium, if any) and interest on the debt securities of such series. Such a
trust may only be established if, among other things, we have delivered to the
Trustee an opinion of counsel (as specified in the Indenture) to the effect that
the holders of the debt securities of such series will not recognize income,
gain or loss for Federal income tax purposes as a result of such defeasance and
will be subject to Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such defeasance had not
occurred. Such opinion, in the case of a defeasance under clause (a) above, must
refer to and be based upon a ruling of the Internal Revenue Service or a change
in applicable Federal income tax law occurring after the date of such Indenture.
In the event of any defeasance of any series of subordinated debt
securities issued thereunder, the Subordinated Debt Indenture provides that
holders of all outstanding Senior Indebtedness will receive written notice of
such defeasance. (Senior and Subordinated Debt Indentures, Section 10.1).
The foregoing provisions relating to defeasance may be modified in
connection with the issuance of any series of debt securities, and any such
modification will be described in the applicable prospectus supplement.
MODIFICATION OF THE INDENTURES
Under each of the Indentures, we may enter into supplemental indentures
with the Trustee without the consent of the holders of debt securities in order
to accomplish any of the following: (a) secure any debt securities, (b) evidence
the assumption by a successor corporation of our obligations, (c) add covenants
or Events of Default for the protection of the holders of any debt securities,
(d) cure any ambiguity or correct any inconsistency in such Indenture or add any
other provision which shall not adversely affect the interests of the holders of
the debt securities, (e) establish the forms or terms of debt securities of any
series or of the coupons appertaining to such debt securities, and (f) evidence
the acceptance of appointment by a successor trustee. (Senior and Subordinated
Debt Indentures, Section 8.1).
Each Indenture also contains provisions permitting the Trustee and us, with
the consent of the holders of not less than a majority in principal amount of
the debt securities of all series issued under such Indenture then outstanding
and affected (voting as one class), to add any provisions to, or change in any
manner or eliminate any of the provisions of, such Indenture or modify in any
manner the rights of the holders of the debt securities of each series so
affected. However, we may not do any of the following without the consent of the
holder of each outstanding debt security affected thereby:
o extend the final maturity of any debt security, or reduce the
principal amount thereof,
o reduce the rate (or alter the method of computation) of interest
thereon or extend the time for payment thereof,
o reduce (or alter the method of computation of) any amount payable on
redemption or repayment thereof or extend the time for payment
thereof,
o change the currency in which the principal thereof, premium, if any,
or interest thereon is payable,
o reduce the amount payable upon acceleration,
o alter certain provisions of the Indenture relating to the debt
securities issued thereunder not denominated in U.S. dollars,
o impair or affect the right to institute suit for the enforcement of
any payment on any debt security when due,
o if the debt securities provide therefor, any right of repayment at the
option of the holder of such debt securities, or
o reduce the percentage in principal amount of debt securities of any
series, the consent of the holders of which is required for any of the
foregoing modifications.
(Senior and Subordinated Debt Indentures, Section 8.2).
13
In addition, the Subordinated Debt Indenture provides that it may not be
amended to alter the subordination of any outstanding subordinated debt
securities without the consent of each holder of Senior Indebtedness then
outstanding whose rights would be adversely affected thereby. (Subordinated Debt
Indenture, Section 8.6).
GOVERNING LAW
Each of the Indentures provides that it and the debt securities issued
thereunder shall be deemed to be a contract under, and for all purposes shall be
construed in accordance with, the laws of the State of New York.
CONCERNING THE SENIOR DEBT INDENTURE TRUSTEE
Wachovia National Bank, the Trustee under the Senior Debt Indenture, is one
of a number of banks with which we maintain ordinary banking relationships.
PLAN OF DISTRIBUTION
We may sell the debt securities being offered hereby in four ways:
o directly to purchasers;
o through agents;
o through underwriters; and
o through dealers.
Offers to purchase debt securities may be solicited by agents designated by
us from time to time. Any such agent, who may be deemed to be an underwriter as
that term is defined in the Securities Act, involved in the offer or sale of any
debt securities will be named, and any commissions payable by us to such agent
will be set forth, in the prospectus supplement relating to such debt
securities. Unless otherwise indicated in the prospectus supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
We may agree to indemnify any such agents against certain liabilities, including
liabilities under the Securities Act. Such agents might also be customers of
ours, or otherwise engage in transactions with or perform services for us in the
ordinary course of business.
We might conduct an offering of debt securities through underwriters (by
entry into an underwriting agreement) from time to time. If we do so, we will
name the underwriters and describe the terms of our sale of the securities to
them in the prospectus supplement relating to such debt securities, which will
be used by the underwriters to make resales of such debt securities. We might
agree to indemnify the underwriters against certain liabilities, including
liabilities under the Securities Act. Such underwriters might also be customers
of ours, or otherwise engage in transactions with or perform services for us in
the ordinary course of business.
We might conduct an offering of debt securities through dealers from time
tot time. If we do so, we would sell such debt securities to the dealer, as
principal. The dealer might then resell such debt securities to the public at
varying prices to be determined by such dealer at the time of resale. We might
agree to indemnify the dealers against certain liabilities, including
liabilities under the Securities Act. Such dealers might also be customers of
ours, or otherwise engage in transactions with or perform services for us in the
ordinary course of business.
We might also authorize agents, underwriters or dealers to solicit offers
by certain institutions to purchase debt securities from us at a particular
public offering price pursuant to delayed delivery contracts ("Contracts")
providing for payment and delivery on a particular the date or dates. If we do
so, we will describe such Contracts in the relevant prospectus supplement,
including the price and date or prices and dates provided by such Contracts.
Contracts may be entered into for a variety of reasons, including (without
limitation) the need to assemble a pool of collateral, the need to match a
refunding date or interest coupon date, or to meet the business needs of the
purchaser. Each Contract will be for an amount not less than, and the aggregate
principal amount of debt securities sold pursuant to Contracts shall not be less
nor more than, the respective amounts stated in such prospectus supplement.
Institutions with whom Contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, education and charitable institutions and other institutions, but
will in all cases be subject to our approval. Contracts will not be subject to
any conditions except that (i) the purchase by a purchaser of the debt
securities covered by its Contract shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which such
purchaser is subject and (ii) we shall have sold, and delivery shall have taken
place to the underwriters named in the prospectus supplement, such part of the
debt securities as is to be sold to them. The prospectus supplement will set
forth the commission payable to agents, underwriters or dealers soliciting
purchases of debt securities pursuant to Contracts accepted by us. The
underwriters and such agents or dealers will not have any responsibility in
respect of the validity or performance of Contracts.
Each series of debt securities will be a new issue of securities with no
established trading market. Any underwriters to whom debt securities are sold by
us for public offering and sale may make a market in such debt securities, but
such underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for any debt securities.
14
LEGAL MATTERS
The validity of the debt securities is being passed upon for SYSCO by
Arnall Golden Gregory LLP, Atlanta, Georgia. Jonathan Golden, the sole
stockholder of Jonathan Golden P.C. (a partner of Arnall Golden Gregory LLP), is
a director of SYSCO. As of April 15, 2005, attorneys with Arnall Golden Gregory
LLP beneficially owned an aggregate of approximately 110,975 shares of SYSCO's
common stock.
Certain legal matters relating to offerings of debt securities will be
passed upon on behalf of the applicable dealers, underwriters or agents by
counsel named in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements of Sysco Corporation appearing in
Sysco Corporation's Annual Report (Form 10-K) for the year ended July 3, 2004
(including schedules appearing therein) have been audited by Ernst & Young LLP,
independent registered public accounting firm, as set forth in their report
thereon, included therein, and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
With respect to the unaudited condensed consolidated interim financial
information of Sysco Corporation for the quarters ended October 2, 2004 and
January 1, 2005, incorporated herein by reference, Ernst & Young LLP reported
that they have applied limited procedures in accordance with professional
standards for a review of such information. However, their separate reports
dated November 10, 2004 and February 10, 2005, included in Sysco Corporation's
Quarterly Reports on Form 10-Q for the quarters ended October 2, 2004 and
January 1, 2005, and incorporated by reference herein, state that they did not
audit and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
Ernst & Young LLP is not subject to the liability provisions of Section 11 of
the Securities Act of 1933 (the "Act") for their reports on the unaudited
interim financial information because those reports are not "reports," or a
"part" of the Registration Statement, prepared or certified by Ernst & Young LLP
within the meaning of Sections 7 and 11 of the Act.
WHERE YOU CAN FIND MORE INFORMATION
SYSCO files annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any materials we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information regarding the public reference room. SYSCO's SEC filings
made via the EDGAR system, including periodic and current reports, proxy
statements, and other information regarding SYSCO are also available to the
public at the SEC's web site at http://www.sec.gov., and are also available on
SYSCO's website, www.SYSCO.com.
The SEC allows SYSCO to "incorporate by reference" information we file with
the SEC, which means that SYSCO can disclose important information to you by
referring you to those documents filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, and later
information that we file with the SEC will automatically update and supersede
information contained in this prospectus.
The following documents filed by SYSCO (File No. 1-06544) with the SEC are
incorporated by reference in and made a part of this prospectus:
o SYSCO's Annual Report on Form 10-K for the fiscal year ended July 3,
2004;
o SYSCO's Quarterly Report on Form 10-Q for the quarter ended October 2,
2004;
o SYSCO's Quarterly Report on Form 10-Q for the quarter ended January 1,
2005;
o SYSCO's Current Report on Form 8-K filed with the Securities and
Exchange Commission on August 16, 2004;
o SYSCO's Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 9, 2004;
o SYSCO's Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 10, 2004;
o SYSCO's Current Report on Form 8-K filed with the Securities and
Exchange Commission on November 1, 2004;
o SYSCO's Current Report on Form 8-K filed with the Securities and
Exchange Commission on November 17, 2004;
15
o SYSCO's Current Report on Form 8-K filed with the Securities and
Exchange Commission on November 23, 2004;
o SYSCO's Current Report on Form 8-K filed with the Securities and
Exchange Commission on January 31, 2005;
o SYSCO's Current Report on Form 8-K filed with the Securities and
Exchange Commission on February 23, 2005; and
o The description of SYSCO's common stock contained in SYSCO's
registration statement on Form 8-A filed under Section 12 of the
Securities Exchange Act of 1934, and any amendment or report filed for
the purpose of updating such description, including the update
contained in SYSCO's Current Report on Form 8-K filed on October 26,
2000.
We are also incorporating by reference any future filings we make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act. These
documents will be deemed to be incorporated by reference in this prospectus and
to be a part of it from the date they are filed with the SEC.
You may obtain a copy of these filings, excluding all exhibits unless we
have specifically incorporated by reference an exhibit in this prospectus or in
a document incorporated by reference herein, at no cost, by writing or
telephoning:
Sysco Corporation
Michael C. Nichols, Secretary
1390 Enclave Parkway
Houston, Texas 77077-2099
Telephone: (281) 584-1390
16
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY............................................................3
SYSCO CORPORATION.............................................................3
THE OFFERING..................................................................4
RISK FACTORS..................................................................4
FORWARD LOOKING STATEMENTS....................................................5
USE OF PROCEEDS...............................................................6
RATIO OF EARNINGS TO FIXED CHARGES............................................6
DESCRIPTION OF DEBT SECURITIES................................................6
PLAN OF DISTRIBUTION.........................................................14
LEGAL MATTERS................................................................15
EXPERTS......................................................................15
WHERE YOU CAN FIND MORE INFORMATION..........................................15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission Filing Fee.................$176,550
Rating Agency Fees.............................................600,000*
Fees and Expenses of Indenture Trustees........................150,000*
Printing Expenses..............................................100,000*
Accountants' Fees and Expenses.................................225,000*
Legal Fees and Expenses........................................225,000*
Blue Sky Fees and Expenses......................................20,000*
Miscellaneous Expenses...........................................3,450*
Total..............................................$1,500,000*
========
* estimated
ITEM 15. Indemnification of Directors and Officers
Charter and Bylaws. SYSCO's Certificate of Incorporation and Bylaws provide
for indemnification of SYSCO's directors, officers, employees and other agents
("Agents") against all expense, liability and loss reasonably incurred in
connection with any proceeding arising by reason of the fact that such person is
or was an Agent of the Registrant, to the fullest extent permitted by the
Delaware General Corporation Law (except that generally, indemnification is not
available for proceedings brought by the Agent). This indemnification extends
also to persons who serve as Agents for any entity at SYSCO's request,
including, for example, persons who serve as Agents for SYSCO's employee benefit
plans. In addition, SYSCO's Certificate of Incorporation includes a provision
eliminating, to the fullest extent permitted by Delaware law, the personal
liability of directors for monetary damages for breaches of fiduciary duty.
Delaware Law. The Delaware General Corporation Law currently requires SYSCO
to indemnify an Agent for all expenses incurred by him (including attorney's
fees) when he is successful (on the merits or otherwise) in defense of any
proceeding brought by reason of the fact that he is or was SYSCO's Agent. In
addition, with respect to all Proceedings other than Proceedings by or in the
right of the corporation (such as derivative lawsuits), Delaware law allows
SYSCO to indemnify an Agent against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, even if the Agent is not
successful on the merits, if he or she:
o acted in good faith;
o acted in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation; and
o in the case of a criminal proceeding, had no reasonable cause to
believe his conduct was unlawful.
SYSCO may indemnify Agents with respect to Proceedings brought by or in the
right of the corporation (i.e., derivative lawsuits) to the same extent as with
respect to other Proceedings, except that if the Agent is held liable to SYSCO
in the Proceeding, then SYSCO may not indemnify the Agent unless the court
determines that even though the Agent was held liable to SYSCO, the Agent is
nonetheless fairly and reasonably entitled to indemnification.
II-1
Except for indemnification mandated by law or ordered by a court, SYSCO may
not indemnify an Agent without a formal determination that the required criteria
have been met. In the case of officers and directors, the determination must be
made by a majority of the disinterested directors (or a committee appointed by
them), independent legal counsel in a written opinion, or the stockholders.
SYSCO may advance expenses incurred by a current officer or director in
defending a Proceeding before the final disposition of the Proceeding, if the
officer or director undertakes to repay the advanced amounts in the event it is
ultimately determined that he or she is not entitled to be indemnified. SYSCO
may advance expenses to other Agents upon whatever terms and conditions it deems
appropriate.
Plan Provisions and Other Contractual Arrangements. Certain of SYSCO's
employee benefit plans provide indemnification of directors and other Agents
against certain claims arising from administration of such plans. In addition,
SYSCO's Executive Severance Agreements entitle executive officers to require an
indemnification agreement from SYSCO before taking any action otherwise required
by the officer's Severance Agreement for the purpose of minimizing adverse tax
consequences resulting from potential "parachute" payments under the Internal
Revenue Code.
D&O Insurance. SYSCO maintains liability insurance for its directors and
officers covering, subject to certain exceptions, any actual or alleged
negligent act, error, omission, misstatement, misleading statement, neglect or
breach of duty by such directors or officers, individually or collectively, in
the discharge of their duties in their capacity as directors and officers of the
Registrant.
ITEM 16. Exhibits
Exhibit
No. Description
-------- -----------
4(a) Senior Debt Indenture, dated as of June 15, 1995, between
Sysco Corporation and First Union National Bank, as Trustee
(Incorporated by reference to Exhibit 4(a) to the
Registrant's Registration Statement on Form S-3 (No.
33-60023).
4(b) Form of Subordinated Debt Indenture between Sysco
Corporation and _______, as Trustee (Incorporated by
reference to Exhibit 4(b) to the Registrant's Registration
Statement on Form S-3 (No. 33-60023)).
*5 Opinion of Arnall Golden Gregory LLP, as to the validity of
the debt securities to be issued.
*12 Computation of Ratio of Earnings to Fixed Charges.
*15 Letter from Ernst & Young regarding unaudited interim
financial information.
*23(a) Consent of Ernst & Young.
23(b) Consent of Arnall Golden Gregory LLP, is contained in the
opinion filed as Exhibit 5.
*25(a) Form T-1 Statement of Eligibility of Trustee under the Trust
Indenture Act of 1939 of Wachovia National Bank.
---------------------
* Filed herewith.
ITEM 17. Undertakings
The undersigned registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) shall not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Act, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on April 19, 2005.
SYSCO CORPORATION
By: /s/ Richard J. Schnieders
------------------------------------
Richard J. Schnieders
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby constitutes and appoints Michael C. Nichols and John K. Stubblefield,
Jr., or any one of them, as such person's true and lawful attorney-in-fact and
agent with full power of substitution for such person and in such person's name,
place and stead, in any and all capacities, to sign and to file with the
Securities and Exchange Commission, any and all amendments and post-effective
amendments to this Registration Statement, with exhibits thereto and other
documents in connection therewith, granting unto said attorney-in-fact and agent
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or any
substitute therefor, may lawfully do or cause to be done by virtue thereof.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Richard J. Schnieders Chairman of the Board and Chief Executive Officer
------------------------------------ (principal executive officer) April 19, 2005
Richard J. Schnieders
Executive Vice President, Finance, Chief Financial
/s/ John K. Stubblefield, Jr. Officer and Director
------------------------------------ (principal financial and accounting officer) April 19, 2005
John K. Stubblefield, Jr.
/s/ Colin G. Campbell
------------------------------------ Director April 19, 2005
Colin G. Campbell
/s/ John M. Cassaday
------------------------------------ Director April 19, 2005
John M. Cassaday
/s/ Judith B. Craven
------------------------------------ Director April 19, 2005
Judith B. Craven
/s/ Jonathan Golden
------------------------------------ Director April 19, 2005
Jonathan Golden
/s/ Joseph A. Hafner, Jr.
------------------------------------ Director April 19, 2005
Joseph A. Hafner, Jr.
/s/ Thomas E. Lankford
------------------------------------ Director April 19, 2005
Thomas E. Lankford
/s/ Richard G. Merrill
------------------------------------ Director April 19, 2005
Richard G. Merrill
/s/ Phyllis S. Sewell
------------------------------------ Director April 19, 2005
Phyllis S. Sewell
/s/ Richard G. Tilghman
------------------------------------ Director April 19, 2005
Richard G. Tilghman
/s/ Jackie M. Ward
------------------------------------ Director April 19, 2005
Jackie M. Ward
II-4