As filed with the Securities and Exchange Commission on November 1, 2002
Registration No. 333-98489
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SYSCO INTERNATIONAL, CO. SYSCO CORPORATION
(Exact names of co-registrants as specified in their charters)
NOVA SCOTIA 5140 DELAWARE
(State or other (Primary Standard (State or other
jurisdiction of Industrial Classification jurisdiction of
incorporation or Code Number) incorporation or
organization) organization
N/A 74-1648137
---------------------------------- ----------------------------------
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
1390 Enclave Parkway
Houston, Texas 77077-2099
(281) 584-1390
(Address, including zip code, telephone number, including area code, of
registrant's principal executive offices)
-----------------------------------------
MICHAEL C. NICHOLS
Vice President, General Counsel and 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
2800 One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3450
(404) 873-8500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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. [ ]
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION ON SUCH DATE OR DATES AS MAY
BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS 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 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 change. We may not
consummate the exchange offer until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell or exchange these securities and it is not soliciting an offer to buy or
exchange these securities in any state in which the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED NOVEMBER 1, 2002
PROSPECTUS
SYSCO INTERNATIONAL, CO.
OFFER TO EXCHANGE
$200,000,000 AGGREGATE PRINCIPAL AMOUNT OF
6.10% NOTES DUE 2012
FULLY AND UNCONDITIONALLY GUARANTEED BY
SYSCO CORPORATION
FOR
SYSCO INTERNATIONAL, CO.
$200,000,000 AGGREGATE PRINCIPAL AMOUNT OF
6.10% NOTES DUE 2012
FULLY AND UNCONDITIONALLY GUARANTEED BY
SYSCO CORPORATION
AND
EACH REGISTERED UNDER THE SECURITIES ACT OF 1933
THE EXCHANGE OFFER
o The exchange offer will expire at 5:00 p.m. New York City time, on
_____, 2002, unless extended.
o The exchange offer is not subject to any conditions other than that
the exchange offer not violate applicable law or any applicable
interpretation of the staff of the SEC.
o We will exchange all old notes that are validly tendered and not
validly withdrawn.
o You may withdraw tenders of old notes at any time before the
expiration of the exchange offer.
o The terms of the new notes are substantially identical to the
outstanding notes, except that the new notes and guarantees will be
registered and certain transfer restrictions, registration rights and
liquidated damages will not apply to the new notes.
o We will not receive any proceeds from the exchange offer.
o We do not intend to list the new notes on any national stock exchange
or on Nasdaq.
o Any old notes that are not validly tendered will remain outstanding
and accrue interest but will remain subject to existing transfer
restrictions.
o The exchange of new notes for old notes will not be a taxable event
for U.S. and Canadian income tax purposes.
---------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF THE FACTORS
THAT YOU SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER AND AN EXCHANGE
OF OLD NOTES FOR NEW NOTES.
We are not asking you for a proxy, and you are requested not to send us a
proxy.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE
OR COMPLETE OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------
The date of this prospectus is November ___, 2002.
TABLE OF CONTENTS
PAGE
WHERE YOU CAN FIND MORE INFORMATION............................................1
INCORPORATION BY REFERENCE.....................................................1
FORWARD-LOOKING STATEMENTS.....................................................2
SUMMARY........................................................................3
RISK FACTORS..................................................................11
USE OF PROCEEDS...............................................................15
RATIO OF EARNINGS TO FIXED CHARGES............................................15
CAPITALIZATION................................................................16
THE EXCHANGE OFFER............................................................17
DESCRIPTION OF NEW NOTES......................................................26
UNITED STATES FEDERAL AND CANADIAN INCOME TAX CONSIDERATIONS..................39
PLAN OF DISTRIBUTION..........................................................43
LEGAL MATTERS.................................................................45
EXPERTS.......................................................................45
In this prospectus, we refer to SYSCO Corporation and its subsidiaries and
divisions as "SYSCO" and SYSCO International, Co. and subsidiaries as "SYSCO
International," "we" or "us," unless we specifically state otherwise or the
context indicates otherwise. References to the "old notes" mean the 6.10% notes
due 2012 that we issued on May 23, 2002. References to the "new notes" mean the
6.10% notes due 2012 that we have registered under the Securities Act of 1933
and that we are offering in exchange for the old notes.
Each broker-dealer that receives new notes for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of the new notes. The letter of transmittal states
that by so acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act of 1933, which we refer to as the Securities Act. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of new notes received in exchange
for old notes where the old notes were acquired by the broker-dealer as a result
of market-making activities or other trading activities. We have agreed that,
for a period of 180 days after the expiration of the exchange offer, we will
make this prospectus available to any broker-dealer for use in connection with
any such resale. See "Plan of Distribution."
i
WHERE YOU CAN FIND MORE INFORMATION
SYSCO files annual, quarterly and current reports, proxy and information
statements and other information with the Securities and Exchange Commission.
You may read and copy any materials SYSCO files 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 are also available to the public at the SEC's web site at
http://www.sec.gov.
We and SYSCO Corporation have also filed a registration statement with the
SEC relating to the new notes described in this prospectus. This prospectus is
part of the registration statement. You may obtain from the SEC a copy of the
registration statement and exhibits that we and SYSCO filed with the SEC when we
and SYSCO registered the new notes. The registration statement may contain
additional information that may be important to you.
You should rely only on the information contained or incorporated by
reference in this prospectus. Neither we nor SYSCO have authorized anyone else
to provide you with additional or different information. We are only offering to
exchange the old notes for new notes in states where the offer is permitted. You
should not assume that the information in this prospectus is accurate as of any
date other than the date on the front of this document.
INCORPORATION BY REFERENCE
The SEC allows SYSCO to "incorporate by reference" information it files
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 an important part of this prospectus,
and information that SYSCO subsequently files with the SEC will automatically
update and supercede information in this prospectus and in SYSCO's other filings
with the SEC. SYSCO incorporates by reference the document listed below, which
SYSCO has already filed with the SEC, and any future filings SYSCO makes with
the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act
of 1934 (other than the Audit Committee Report, the Report of the Compensation
Committee and the Performance Graph included in SYSCO's definitive proxy
statement), until the later of the date on which we have completed the exchange
offer or the end of the period during which this prospectus is available for use
by participating broker-dealers and others with similar prospectus delivery
requirements for use in connection with any resale of new notes:
o SYSCO's annual report on Form 10-K for the fiscal year ended June 29,
2002; and
o SYSCO's current report on Form 8-K filed on October 28, 2002.
You may request a copy of these filings, other than an exhibit to a filing,
unless that exhibit is specifically incorporated by reference into the filing,
at no cost, and a copy of the indenture and the registration rights agreement
that we refer to in this prospectus by writing or calling us at the following
address:
SYSCO Corporation
1390 Enclave Parkway
Houston, Texas 77077-2099
(281) 584-1390
Attention: Corporate Secretary
To obtain timely delivery of this information, you must request it no later
than five (5) business days before _____, 2002, the expiration date of the
exchange offer.
1
FORWARD-LOOKING STATEMENTS
This prospectus contains and incorporates by reference forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. You can identify SYSCO's and our forward-looking statements by words such
as "estimate," "project," "predict," "believe," "expect," "anticipate," "plan,"
"forecast," "budget," "goal," "outlook" or other words that convey the
uncertainty of future events or outcomes. These statements include statements
about long-term debt to capitalization target ratios, anticipated capital
expenditures and SYSCO's ability to meet future cash requirements and maintain
liquidity. These statements are based on SYSCO's or our expectations and
assumptions about future events at the time the statements were made and are
subject to significant business, economic, competitive, regulatory and other
risks, contingencies and uncertainties, many of which are beyond SYSCO's and our
control, that could cause the actual results to differ materially from those
contemplated in the forward-looking statements. In addition to the assumptions
and other factors referred to specifically in connection with forward-looking
statements, factors that could cause the actual results to differ materially
include the factors described under the caption "Risk Factors" in this
prospectus and other factors described in SYSCO's SEC filings incorporated by
reference into this prospectus. In addition, SYSCO's ability to meet future cash
requirements and maintain liquidity could be affected by conditions in the
economy and the industry and internal factors such as the ability to control
expenses. The ability to meet long-term debt to capitalization target ratios may
also be affected by share repurchases, cash flow, acquisitions and internal
growth. Should any risks and uncertainties develop into actual events, these
developments could have material adverse effects on the business, financial
condition and results of operations of SYSCO and its subsidiaries. For these
reasons, we caution you not to place undue reliance on SYSCO's or our
forward-looking statements. Neither we nor SYSCO undertake any obligation to
update these forward-looking statements unless the securities laws require us to
do so.
2
SUMMARY
You should read the following summary together with the more detailed
information included or incorporated by reference in this prospectus about us,
SYSCO and this offering.
SYSCO INTERNATIONAL, CO.
SYSCO International, Co. is an unlimited liability company organized under the
laws of the Province of Nova Scotia, Canada and a wholly owned subsidiary of
SYSCO. SYSCO International, Co. is a holding company with no independent
operations, sources of income or assets, other than equity interests in its
subsidiaries. Through its wholly-owned subsidiaries, SYSCO International, Co.
owns the SERCA foodservice distribution business, which was recently acquired,
as discussed below. As of September 28, 2002, SYSCO International, Co. had
outstanding Canadian (CAD) $78,579,000 ($50,016,000 at September 28, 2002
exchange rates) of short-term promissory notes issued pursuant to a commercial
paper program and $200,000,000 principal amount of old notes. This commercial
paper was issued primarily to finance the acquisition of SERCA and to provide
working capital for some of SYSCO's Canadian operations. The old notes were
issued to repay a portion of the commercial paper.
Our principal offices are c/o SYSCO Corporation at 1390 Enclave Parkway,
Houston, Texas 77077.
SYSCO CORPORATION
SYSCO Corporation, acting through its subsidiaries and divisions, is the largest
North American distributor of food and related products to the foodservice or
"food-prepared-away-from-home" industry. SYSCO provides its products and
services to more than 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, its annual sales have grown from approximately
$115 million to over $23 billion in fiscal 2002, both through internal expansion
of existing operations and acquisitions of formerly independent companies.
Through the date of this prospectus, SYSCO has acquired sixty-nine (69)
companies or divisions of companies. Food products distributed by SYSCO include:
o a full line of frozen foods, such as meats, fully prepared entrees,
fruits, vegetables and desserts;
o a full line of canned and dry foods;
o fresh meats, poultry and seafood;
o imported specialties;
o fresh produce;
o dairy products; and
o beverages.
3
SYSCO also supplies a wide variety of nonfood 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;
o medical and surgical supplies;
o cleaning supplies; and
o personal care guest amenities, housekeeping supplies, room accessories
and textiles to the lodging industry.
SYSCO distributes both nationally branded merchandise and products packaged
under its own proprietary brands.
SYSCO is a Delaware corporation, with its principal executive offices located at
1390 Enclave Parkway, Houston, Texas 77077-2099.
RECENT DEVELOPMENTS
In October 2002, SYSCO acquired Abbott Foods Inc., an independently owned
broadline foodservice distributor located in Columbus, Ohio.
In October 2002, SYSCO acquired Pronamics, the quick-service distribution
division of priszm brandz (priszm). priszm is the owner and operator of more
than 750 quick-service restaurants in Canada. As part of the transaction, priszm
entered into a distribution contract in which SYSCO will become priszm's
national distributor of all food products, paper and other merchandise.
4
SUMMARY OF EXCHANGE OFFER
The following summary is provided solely for your convenience. This summary is
not intended to be complete. You should read the full text and more specific
details contained in "The Exchange Offer" section of this prospectus.
THE EXCHANGE We are offering to issue up to $200,000,000 aggregate
OFFER principal amount of new notes in exchange for a like
principal amount of old notes. This exchange offer will
satisfy our obligations under the registration rights
agreement that we entered into when we sold the old notes.
We will issue the new notes on or promptly after the
expiration date of the exchange offer.
EXPIRATION DATE; The exchange offer will expire at 5:00 p.m., New York City
TENDERS time, on _____, 2002, unless we extend it, in which case the
expiration date will mean the latest date and time to which
we extend the exchange offer.
By tendering your old notes, you represent to us that:
o you are not our or SYSCO's "affiliate," as defined in
Rule 405 under the Securities Act;
o any new notes you receive in the exchange offer are
being acquired by you in the ordinary course of your
business;
o at the time of commencement of the exchange offer,
neither you nor, to your knowledge, anyone receiving
new notes from you, has any arrangement or
understanding with any person to participate in the
distribution, as defined in the Securities Act, of the
new notes in violation of the Securities Act and you
are not engaged in, and do not intend to engage in, the
distribution of the new notes, as defined in the
Securities Act; and
o if you are a broker-dealer, you will receive the new
notes for your own account in exchange for old notes
that were acquired by you as a result of your
market-making or other trading activities and you will
deliver a prospectus in connection with any resale of
the new notes you receive. For further information
regarding resales of the new notes by participating
broker-dealers, see the discussion below under the
caption "Plan of Distribution."
5
RESALE We believe that the new notes may be offered for resale,
resold and otherwise transferred by you (unless you acquired
the old notes to be exchanged directly from us) without
compliance with the registration or prospectus delivery
provisions of the Securities Act if:
o you are not our or SYSCO's "affiliate;"
o you are acquiring the new notes in the ordinary course
of your business; and
o you are not participating, do not intend to
participate, and have no arrangement or understanding
with any person to participate, in a distribution of
the new notes.
Each participating broker-dealer that receives new notes for
its own account under the exchange offer in exchange for old
notes that were acquired by the broker-dealer as a result of
market-making or other trading activity must acknowledge
that it will deliver a prospectus in connection with any
resale of the new notes. See "Plan of Distribution."
Any holder of old notes who:
o is our or SYSCO's "affiliate;"
o acquired the old notes to be exchanged directly from
us;
o does not acquire new notes in the ordinary course of
its business; or
o exchanges old notes in the exchange offer with the
intention to participate, or for the purpose of
participating, in a distribution of new notes,
must, in the absence of an exemption, comply with the
registration and prospectus delivery requirements of the
Securities Act in connection with the resale of the new
notes.
CONDITIONS TO The exchange offer is not subject to conditions other than
EXCHANGE OFFER that:
o it shall not violate applicable law or any applicable
interpretation of the staff of the SEC; and
o no governmental authority has suspended or threatened
to suspend the registration of the exchange offer.
6
The exchange offer is not conditioned upon any minimum
principal amount of old notes being tendered for exchange.
PROCEDURES FOR If you wish to tender your old notes for new notes pursuant
TENDERING OLD to the exchange offer, you must transmit to Wachovia Bank,
NOTES National Association, as exchange agent, on or before the
expiration date, either:
o a properly completed and duly executed letter of
transmittal, which accompanies this prospectus, or a
facsimile of the letter of transmittal, together with
your old notes and any other required documentation, to
the exchange agent at its address listed in this
prospectus and on the front cover of the letter of
transmittal; or
o a computer-generated agent's message transmitted
through The Depository Trust Company's Automated Tender
Offer Program system and received by the exchange agent
and forming a part of a confirmation of book-entry
transfer in which you acknowledge and agree to be bound
by the terms of the letter of transmittal.
If you cannot satisfy either of these procedures on or
before the expiration date, then you should comply with the
guaranteed delivery procedures described below.
Do not send letters of transmittal or certificates
representing old notes to us.
SPECIAL PROCEDURES If you are a beneficial owner whose old notes are registered
FOR BENEFICIAL in the name of a broker, dealer, commercial bank, trust
OWNERS company or other nominee and you wish to tender your old
notes in the exchange offer, you should contact the
registered holder promptly and instruct the registered
holder to tender on your behalf. If you wish to tender on
your own behalf, you must obtain a properly completed bond
power from the registered holder, before completing and
executing the letter of transmittal and delivering your old
notes.
GUARANTEED If you wish to tender your old notes and time will not
DELIVERY permit the documents required by the letter of transmittal
PROCEDURES to reach the exchange agent before the expiration date, or
the procedure for book-entry transfer cannot be completed
before the expiration date, you must tender your old notes
according to the guaranteed delivery procedure described in
this prospectus under "The Exchange Offer - Procedures for
Tendering Old Notes - Guaranteed Delivery Procedures."
7
ACCEPTANCE OF OLD Subject to the satisfaction or waiver of the conditions to
NOTES AND DELIVERY the exchange offer, we will accept for exchange any and all
OF NEW NOTES old notes which are validly tendered in the exchange offer
and not withdrawn before 5:00 p.m., New York City time, on
the expiration date. We will issue and deliver the new notes
on or promptly after the expiration date.
WITHDRAWAL RIGHTS You may withdraw the tender of your old notes at any time
before 5:00 p.m., New York City time, on the expiration
date, by complying with the procedures for withdrawal
described in this prospectus under "The Exchange Offer -
Withdrawal Rights."
FEDERAL INCOME TAX The exchange of old notes will not be a taxable event for
CONSIDERATIONS United States federal income tax purposes. For a discussion
of the material federal income tax consequences relating to
the exchange of old notes, see "United States Federal and
Canadian Income Tax Considerations--United States Federal
Income Tax Consequences."
EXCHANGE AGENT Wachovia Bank, National Association, the trustee under the
indenture governing the old notes, is serving as the
exchange agent. The address and telephone and fax numbers of
the exchange agent are set forth in "The Exchange
Offer-Exchange Agent."
CONSEQUENCES OF If you do not exchange your old notes for new notes,
FAILURE TO you will continue to be subject to the restrictions on
EXCHANGE OLD NOTES transfer provided in the old notes and in the indenture
FOR NEW NOTES (which governs both the new notes and the old notes). In
general, the old notes may not be offered or sold, unless
registered under, pursuant to an exemption from, or in a
transaction not subject to, the Securities Act and
applicable state securities laws. We do not currently plan
to register the old notes under the Securities Act.
Because we anticipate that most holders of old notes will
elect to exchange their old notes, we expect that the
liquidity of the markets, if any, for the old notes
remaining outstanding after the completion of the exchange
offer will be substantially limited.
REGISTRATION The registration rights agreement entitles you to an
RIGHTS AGREEMENT opportunity to exchange your old notes for new transferable
notes with substantially the identical terms. The exchange
offer satisfies this right. After the exchange offer is
completed and you have had the opportunity to receive new
notes, you will no longer be entitled to any exchange
registration rights with respect to your old notes or to
additional interest in respect of the old notes in the event
certain requirements of the registration rights agreement
are not satisfied.
8
USE OF PROCEEDS Neither we nor SYSCO will receive any proceeds from the
issuance of the new notes.
9
SUMMARY DESCRIPTION OF THE NEW NOTES
The following summary description is not intended to be complete. You should
read the full text and more specific details contained in the "Description of
New Notes" section of this prospectus.
ISSUER SYSCO International, Co.
THE NEW NOTES $200 million aggregate principal amount of 6.10% Notes due
June 1, 2012.
MATURITY DATE The new notes will mature on June 1, 2012, if not redeemed
earlier.
INTEREST PAYMENT Interest on the new notes is payable on June 1 and December
DATES 1 of each year, commencing on December 1, 2002.
OPTIONAL The new notes may be redeemed by us at any time by paying
REDEMPTION the greater of principal and interest or a "make-whole
amount."
RANKING The new notes are unsecured obligations of SYSCO
International, Co. and will rank equally with each other and
with all other unsecured and unsubordinated debt of SYSCO
International, Co. The new notes will be effectively
subordinated to all existing and future indebtedness and
other liabilities (excluding intercompany liabilities) of
our subsidiaries. On September 28, 2002, our subsidiaries
had aggregate liabilities (excluding intercompany
liabilities) of approximately $103,718,000. See "Description
of New Notes--General."
GUARANTEES Our parent company, SYSCO Corporation, will fully and
unconditionally guarantee the payment of all principal and
interest under the new notes. SYSCO Corporation's guarantees
of the new notes will rank equally with each other and with
all other unsecured and unsubordinated debt of SYSCO
Corporation, which totaled $1.278 billion (including
$249,399,000 of guarantees of SYSCO International, Co.'s and
other subsidiaries' debt) as of September 28, 2002. SYSCO
Corporation's guarantees will be effectively subordinated to
all existing and future indebtedness and other liabilities
(excluding intercompany liabilities) of SYSCO's
subsidiaries. On September 28, 2002, SYSCO's subsidiaries
had aggregate liabilities (excluding intercompany
liabilities) of approximately $2.227 billion.
RESTRICTIVE The indenture governing the new notes will restrict our
COVENANTS ability and the ability of SYSCO to create certain
liens, enter into sale and leaseback transactions and
merge or consolidate.
10
RISK FACTORS
You should carefully consider the following risk factors and the other
information included or incorporated by reference in this prospectus before
deciding to tender your old notes in exchange for new notes pursuant to the
exchange offer.
RISKS RELATED TO THE NEW NOTES
WE ARE A HOLDING COMPANY WITH NO INDEPENDENT OPERATIONS AND, ACCORDINGLY, WILL
DEPEND ON THE CASH FLOW OF SYSCO AND SYSCO'S SUBSIDIARIES TO SATISFY OUR
OBLIGATIONS UNDER THE NEW NOTES.
We are a holding company with no independent operations, sources of income or
assets, other than our equity interests in our subsidiaries. We will depend on
payments on intercompany loans or dividends or other distributions from SYSCO's
subsidiaries or payments to us by SYSCO to make payments on the new notes. Our
subsidiaries and other affiliates to which we have made loans are separate legal
entities that have no obligation to pay any amounts due pursuant to the new
notes. We cannot assure you that the amounts we receive from SYSCO or its
subsidiaries will be sufficient to enable us to service our obligations under
the new notes.
SYSCO'S SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT ITS FINANCIAL HEALTH AND
PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER THE NEW NOTES.
SYSCO has a significant amount of indebtedness. As of September 28, 2002, SYSCO
had, on a consolidated basis, outstanding total debt of $1.329 billion, and
stockholders' equity of $2.194 billion. SYSCO's ratio of earnings to fixed
charges for the fiscal year ended June 29, 2002 was 16.4x.
SYSCO's substantial amount of debt could have important consequences for you.
For example, it could:
o make it more difficult for us to satisfy our obligations with respect
to the new notes;
o limit SYSCO's ability to obtain additional financing, if needed, for
working capital, capital expenditures, acquisitions, debt service
requirements or other purposes;
o increase SYSCO's vulnerability to adverse economic and industry
conditions;
o limit SYSCO's flexibility in planning for, or reacting to, changes in
its business and its industry; and
o place SYSCO at a competitive disadvantage compared to its competitors
that have less debt.
THE NEW NOTES ARE EFFECTIVELY SUBORDINATED TO ANY EXISTING AND FUTURE
INDEBTEDNESS OF OUR SUBSIDIARIES.
The new notes are effectively subordinated to all existing and future
indebtedness and other liabilities (excluding intercompany liabilities) of our
subsidiaries. At September 28, 2002, our subsidiaries had aggregate liabilities
(excluding intercompany liabilities) of approximately $103,718,000. The
indenture does not limit our or our subsidiaries' ability to incur additional
indebtedness. Any significant additional indebtedness incurred may adversely
impact our ability to service our debt, including our obligations under the new
notes.
THE GUARANTEES ARE EFFECTIVELY SUBORDINATED TO ANY EXISTING AND FUTURE
INDEBTEDNESS OF SYSCO CORPORATION'S SUBSIDIARIES.
The guarantees are effectively subordinated to all existing and future
indebtedness and other liabilities (excluding intercompany liabilities) of
SYSCO's subsidiaries. At September 28, 2002, SYSCO's subsidiaries had aggregate
liabilities of approximately $2.227 billion. The indenture does not limit
SYSCO's or its subsidiaries' ability to incur additional indebtedness. Any
significant additional indebtedness incurred may adversely impact SYSCO's
ability to service its debt, including its obligations under the guarantees.
11
IF YOU DO NOT EXCHANGE YOUR OLD NOTES FOR NEW NOTES, YOU WILL CONTINUE TO HAVE
RESTRICTIONS ON YOUR ABILITY TO RESELL THEM.
The old notes were not registered under the Securities Act or under the
securities laws of any state and may not be resold, offered for resale, or
otherwise transferred unless they are subsequently registered or resold pursuant
to an exemption from the registration requirements of the Securities Act and
applicable state securities laws. If you do not exchange your old notes for new
notes pursuant to the exchange offer, you will not be able to resell, offer to
resell, or otherwise transfer the old notes unless they are registered under the
Securities Act or unless you resell them, offer to resell them or otherwise
transfer them under an exemption from the registration requirements of, or in a
transaction not subject to, the Securities Act. In addition, we will no longer
be under an obligation to register the old notes under the Securities Act except
in the limited circumstances provided in the registration rights agreement.
IF AN ACTIVE TRADING MARKET DOES NOT DEVELOP FOR THE NEW NOTES, YOU MAY NOT BE
ABLE TO RESELL.
There is currently no established market for the new notes. We do not intend to
list the new notes on any securities exchange. We cannot assure you that an
active trading market for the new notes will develop.
If a market for the new notes does develop, that market may cease to exist at
any time. In addition, in any such market, the new notes could trade at prices
that may be higher or lower than their principal amount.
The liquidity of any market for the new notes will depend upon various factors,
including:
o the number of holders of the new notes;
o the interest of securities dealers in making a market for the new
notes;
o the overall market for investment grade securities;
o SYSCO's and our financial performance and prospects; and
o the prospects for companies in our industry generally.
In addition, the liquidity of the trading market in the new notes, and the
market price quoted for the new notes, may be adversely affected by changes in
the overall market for fixed income securities generally. As a result, an active
trading market may not develop for the new notes. If no active trading market
develops, you may not be able to resell your notes at their fair market value or
at all.
To the extent that old notes are surrendered and accepted in the exchange offer,
the trading market for unsurrendered old notes and for
surrendered-but-unaccepted old notes could be adversely affected due to the
limited amount of old notes that are expected to remain outstanding following
the exchange offer. Generally, when there are fewer outstanding securities of an
issue, there is less demand to purchase that security, which results in a lower
price for the security. Conversely, if many old notes are not surrendered, or
are surrendered but unaccepted, the trading market for the new notes could be
adversely affected. See "Plan of Distribution" and "The Exchange Offer" for
further information regarding the distribution of the new notes and the
consequences of failure to participate in the exchange offer.
RISKS RELATED TO SYSCO'S BUSINESS
SYSCO IS IN A LOW MARGIN BUSINESS, AND ITS PROFITABILITY MAY BE NEGATIVELY
IMPACTED BY FOOD PRICE DEFLATION AND OTHER FACTORS.
The foodservice distribution industry is characterized by relatively high
inventory turnover with relatively low profit margins. SYSCO makes a significant
portion of its sales at prices that are based on the cost of products it sells
plus a percentage markup. As a result, SYSCO's profit levels may be negatively
impacted during periods of food price deflation, even though its gross profit
percentage may remain relatively constant. The foodservice industry is sensitive
to national and regional economic conditions. SYSCO's operating results also are
sensitive to, and may be adversely affected by, other factors, including
difficulties with the collectability of accounts receivable, inventory control,
competitive price pressures, severe weather conditions and unexpected increases
in fuel or other transportation-related costs. Although these factors have not
12
had a material adverse impact on its past operations, SYSCO can provide no
assurance that one or more of these factors will not adversely affect its future
operating results.
SYSCO'S SIGNIFICANT INDEBTEDNESS COULD INCREASE ITS VULNERABILITY TO COMPETITIVE
PRESSURES, NEGATIVELY AFFECT ITS ABILITY TO EXPAND AND DECREASE THE MARKET VALUE
OF ITS STOCK.
At September 28, 2002, SYSCO had, on a consolidated basis, approximately $1.329
billion of outstanding total debt. Because historically a substantial part of
SYSCO's growth has resulted from acquisitions and capital expansion, SYSCO's
continued growth depends, in large part, on its ability to continue this
expansion. As a result, SYSCO's inability to finance acquisitions and capital
expenditures through borrowed funds could restrict its ability to expand.
Moreover, any default under the documents governing SYSCO's indebtedness could
have a significant adverse effect on the market value of its common stock.
Further, SYSCO's leveraged position may also increase its vulnerability to
competitive pressures.
BECAUSE IT SELLS FOOD PRODUCTS, SYSCO FACES THE RISK OF EXPOSURE TO PRODUCT
LIABILITY CLAIMS.
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 it causes injury
or illness. With respect to product liability claims, SYSCO believes it has
sufficient primary and 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 SYSCO's liabilities. SYSCO
generally seeks contractual indemnification and insurance coverage from parties
supplying its products, but this indemnification or insurance coverage is
limited, as a practical matter, to the creditworthiness of the indemnifying
party and the policy limits of any insurance provided by suppliers. If SYSCO
does not have adequate insurance or contractual indemnification available,
product liability relating to defective products could materially reduce its net
income and earnings per share.
BECAUSE SYSCO HAS FEW LONG-TERM CONTRACTS WITH SUPPLIERS AND DOES NOT CONTROL
THE ACTUAL PRODUCTION OF THE PRODUCTS IT SELLS, IT MAY BE UNABLE TO OBTAIN
ADEQUATE SUPPLIES OF ITS PRODUCTS.
SYSCO obtains substantially all of its foodservice products from third-party
suppliers. For the most part, SYSCO does not have long-term contracts with its
suppliers committing them to provide products to it. Although SYSCO's purchasing
volume can provide leverage when dealing with suppliers, suppliers may not
provide the foodservice products and supplies SYSCO needs in the quantities it
requests. Because it does not control the actual production of the products it
sells, SYSCO is also subject to delays caused by interruption in production
based on conditions outside its control. These conditions include job actions or
strikes by employees of suppliers, weather, crop conditions, transportation
interruptions and natural disasters or other catastrophic events. SYSCO's
inability to obtain adequate supplies of its foodservice products, as a result
of any of the foregoing factors or otherwise, could mean that SYSCO could not
fulfill its obligations to customers, and customers may turn to other
distributors.
IF SYSCO CANNOT RENEGOTIATE ITS UNION CONTRACTS, ITS PROFITABILITY MAY DECREASE
BECAUSE OF WORK STOPPAGES.
As of June 29, 2002, approximately 9,700 employees at 50 of SYSCO's operating
companies were members of 59 different local unions associated with the
International Brotherhood of Teamsters and other labor organizations. In fiscal
2003, 14 agreements covering approximately 2,130 employees will expire. Failure
of the operating companies to effectively renegotiate these contracts could
result in work stoppages. Although SYSCO's operating subsidiaries have not
experienced any significant labor disputes or work stoppages to date, and SYSCO
believes 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 SYSCO.
IF SYSCO CANNOT INTEGRATE ACQUIRED COMPANIES WITH ITS BUSINESS, ITS
PROFITABILITY MAY DECREASE.
If SYSCO is unable to integrate acquired businesses successfully and realize
anticipated economic, operational and other benefits in a timely manner, its
profitability may decrease. Integration of an acquired business may be more
difficult when it acquires a business in a market in which it has limited or no
expertise, or with a corporate culture different from its own. If SYSCO is
unable to integrate acquired businesses successfully, it may incur substantial
costs and delays in increasing its customer base. In addition, the failure to
integrate acquisitions successfully may divert SYSCO's management's attention
from existing business and may damage its relationships with its key customers
and suppliers.
13
PROVISIONS IN SYSCO'S CHARTER AND STOCKHOLDER RIGHTS PLAN MAY INHIBIT A TAKEOVER
OF SYSCO.
Under its Restated Certificate of Incorporation, SYSCO's board of directors is
authorized to issue up to 1.5 million shares of preferred stock without
stockholder approval. Issuance of these shares could make it more difficult for
anyone to acquire SYSCO without approval of the board of directors, depending on
the rights and preferences of the stock issued. In addition, if anyone attempts
to acquire SYSCO without approval of the board of directors of SYSCO, the
stockholders of SYSCO have the right to purchase preferred stock of SYSCO
pursuant to its stockholder rights plan, which could result in substantial
dilution to a potential acquiror. The existence of either of these provisions
could deter hostile takeover attempts that might result in an acquisition of
SYSCO that could otherwise have been financially beneficial to SYSCO's
stockholders.
14
USE OF PROCEEDS
This exchange offer is intended to satisfy our obligations under the
registration rights agreement. Neither we nor SYSCO will receive any proceeds
from the exchange offer. You will receive, in exchange for old notes tendered by
you and accepted by us in the exchange offer, new notes in the same principal
amount. The old notes surrendered in exchange for the new notes will be retired
and cancelled and cannot be reissued. Accordingly, the issuance of the new notes
will not result in any increase of our outstanding debt. We have agreed to pay
the expenses of the exchange offer.
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
----------------------------------------------------------
JUNE 29, JUNE 30, JULY 1, JULY 3, JUNE 27,
2002 2001 2000 1999(1) 1998
------- ------- ------ ------- -------
Ratio of earnings
to fixed charges 16.4x 13.2x 10.8x 8.6x 9.4x
- --------------------------------------------------------------------------------
(1) The fiscal year ended July 3, 1999 was a 53-week year.
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.
15
CAPITALIZATION
The following table sets forth SYSCO's consolidated capitalization as of June
29, 2002.
- --------------------------------------------------------------------------------
(IN THOUSANDS) AS OF JUNE 29, 2002
- --------------------------------------------------------------------------------
CURRENT MATURITIES OF LONG-TERM DEBT $13,754
LONG-TERM DEBT:
Senior notes, interest at 6.10%, maturing in fiscal 2012...... 199,366
Senior notes, interest at 4.75%, maturing in fiscal 2006...... 199,569
Senior notes, interest at 6.5%, maturing in fiscal 2005....... 149,733
Senior notes, interest at 7.0%, maturing in fiscal 2006....... 200,000
Senior notes, interest at 7.25%, maturing in fiscal 2007...... 99,813
Debentures, interest at 7.16%, maturing in fiscal 2027........ 50,000
Debentures, interest at 6.50%, maturing in fiscal 2029........ 224,381
Industrial Revenue Bonds, mortgages and other debt,
interest averaging 5.1%, maturing at various dates
through fiscal 2026, net of current maturities............ 53,445
---------
Total long-term debt .........................................1,176,307
SHAREHOLDERS' EQUITY:
Preferred stock, $1 par value; 1,500,000 shares
authorized; none issued................................. --
Common stock, $1 par value; 1,000,000,000 shares
authorized; 765,174,900 shares issued................... 765,175
Paid-in capital.............................................. 217,891
Retained earnings............................................ 2,869,417
Other comprehensive loss..................................... (65,435)
Less cost of treasury stock (111,634,603 shares).............(1,654,529)
----------
Total shareholders' equity................................... 2,132,519
----------
TOTAL CAPITALIZATION............................................$3,322,580
==========
- --------------------------------------------------------------------------------
16
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
We sold the old notes on May 23, 2002, pursuant to a purchase agreement, which
we refer to in this prospectus as the purchase agreement, dated as of May 20,
2002, among us, SYSCO and JP Morgan Securities, Inc. on its own behalf and as
representative of the initial purchasers of the old notes. These initial
purchasers subsequently sold some or all of the old notes to:
o "qualified institutional buyers," as defined in Rule 144A under the
Securities Act, in reliance on Rule 144A, and to
o persons in offshore transactions in reliance on Regulation S under the
Securities Act.
As a condition to the initial sale of the old notes, we and the initial
purchasers entered into a registration rights agreement dated as of May 23,
2002. Pursuant to the registration rights agreement, we agreed to:
o file a registration statement under the Securities Act with respect to
the new notes with the SEC by August 21, 2002; and
o use our reasonable best efforts to cause the registration statement to
become effective under the Securities Act on or before November 19,
2002.
We agreed to issue and exchange the new notes for all old notes validly tendered
and not validly withdrawn before the expiration of the exchange offer. A copy of
the registration rights agreement has been filed as an exhibit to the
registration statement which includes this prospectus. The registration
statement is intended to satisfy some of our obligations under the registration
rights agreement and the purchase agreement.
The term "holder" with respect to the exchange offer means any person in whose
name old notes are registered on the trustee's books or any other person who has
obtained a properly completed bond power from the registered holder, or any
person whose old notes are held of record by The Depository Trust Company, which
we refer to as the Depositary or DTC, who desires to deliver the old note by
book-entry transfer at DTC.
RESALE OF THE NEW NOTES
We believe that you will be allowed to resell the new notes to the public
without registration under the Securities Act, and without delivering a
prospectus that satisfies the requirements of Section 10 of the Securities Act,
if you can make the representations set forth below under "The Exchange
Offer--Procedures for Tendering Old Notes." However, if you intend to
participate in a distribution of the new notes, you acquired the old notes to be
exchanged directly from us or you are an "affiliate" of us as defined in Rule
405 of the Securities Act, you must comply with the registration requirements of
the Securities Act and deliver a prospectus, containing, among other
information, the information pertaining to selling shareholders required by
Items 507 and 508 of Regulation S-K under the Securities Act unless an exemption
from registration is otherwise available to you. You have to represent to us in
the letter of transmittal accompanying this prospectus that you meet the
conditions exempting you from these registration requirements.
We base our view on interpretations by the staff of the SEC in no-action letters
issued to other issuers in exchange offers like ours. However, we have not asked
the SEC to consider this particular exchange offer in the context of a no-action
letter. Therefore, you cannot be sure that the SEC will treat it in the same way
it has treated other exchange offers in the past.
A broker-dealer may only participate in the exchange offer if it has bought old
notes for market-making or other trading activities. Such a participating
broker-dealer has to deliver a prospectus in order to resell any new notes it
receives for its own account in the exchange. This prospectus may be used by
such a participating broker-dealer to resell any of its new notes. We have
agreed in the registration rights agreement to send this prospectus to any
broker-dealer that requests copies for a period of up to 180 days after the
expiration of the exchange offer. See "Plan of Distribution" for more
information regarding broker-dealers.
17
The exchange offer is not being made to, nor will we accept surrenders for
exchange from, holders of old notes in any jurisdiction in which this exchange
offer or the acceptance of the exchange offer would not be in compliance with
the securities or blue sky laws.
TERMS OF THE EXCHANGE OFFER
General. Based on the terms and conditions set forth in this prospectus and in
the letter of transmittal, we will accept any and all old notes validly tendered
and not validly withdrawn before the expiration date.
Subject to the minimum denomination requirements of the new notes, we will issue
$1,000 principal amount of new notes in exchange for each $1,000 principal
amount of outstanding old notes validly tendered pursuant to the exchange offer
and not validly withdrawn before the expiration date. Holders may tender some or
all of their old notes pursuant to the exchange offer. However, old notes may be
tendered only in amounts that are integral multiples of $1,000 principal amount.
The form and terms of the new notes are the same as the form and terms of the
old notes except that:
o the new notes will be registered under the Securities Act and,
therefore, the new notes will not bear legends restricting the
transfer of the new notes, and
o holders of the new notes will not be entitled to any of the exchange
registration rights of holders of old notes under the registration
rights agreement, which rights will terminate upon the completion of
the exchange offer.
The new notes of a particular series will evidence the same indebtedness as the
old notes of that same series, which they replace, and will be issued under, and
be entitled to the benefits of, the same indenture that governs the old notes.
As a result, both the new notes of a particular series and the old notes of that
same series will be treated as a single series of debt securities under the
indenture. The exchange offer does not depend on any minimum aggregate principal
amount of old notes being surrendered for exchange.
As of the date of this prospectus, $200,000,000 in aggregate principal amount of
the old notes is outstanding, all of which is registered in the name of Cede &
Co., as nominee for DTC. Solely for reasons of administration, we have fixed the
close of business on ______________, 2002 as the record date for the exchange
offer for purposes of determining the persons to whom we will initially mail
this prospectus and the letter of transmittal. There will be no fixed record
date for determining holders of the old notes entitled to participate in this
exchange offer.
As a holder of old notes, you do not have any appraisal or dissenters' rights or
any other right to seek monetary damages in court under the Delaware General
Corporation Law, the laws of the province of Nova Scotia, Canada or the
indenture governing the notes. We intend to conduct the exchange offer in
accordance with the provisions of the registration rights agreement, the
applicable requirements of the Exchange Act, and the related rules and
regulations of the SEC. Old notes that are not surrendered for exchange in the
exchange offer will remain outstanding and interest on these notes will continue
to accrue.
We will be deemed to have accepted validly surrendered old notes if and when we
give oral or written notice of our acceptance to Wachovia Bank, National
Association, which is acting as the exchange agent. The exchange agent will act
as agent for the tendering holders of old notes for the purpose of receiving the
new notes from us.
If you surrender old notes in the exchange offer, you will not be required to
pay brokerage commissions or fees. In addition, subject to the instructions in
the letter of transmittal, you will not have to pay transfer taxes for the
exchange of old notes. We will pay all charges and expenses in connection with
the exchange offer, other than certain applicable taxes described under "--Fees
and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The "expiration date" means 5:00 p.m., New York City time, on ____________,
2002, unless we extend the exchange offer, in which case the expiration date
will be the latest date and time to which we extend the exchange offer.
In order to extend the exchange offer, we will:
18
o notify the exchange agent of any extension by oral or written
communication; and
o issue a press release or other public announcement, which will report
the approximate dollar amount of old notes deposited, before 9:00
a.m., New York City time, on the next business day after the
previously scheduled expiration date.
During any extension of the exchange offer, all old notes previously surrendered
and not withdrawn will remain subject to the exchange offer.
We reserve the right:
o to delay accepting any old notes;
o to amend the terms of the exchange offer in any manner;
o to extend the exchange offer; or
o if, in the opinion of our counsel, the consummation of the exchange
offer would violate any law or interpretation of the staff of the SEC,
to terminate or amend the exchange offer by giving oral or written
notice to the exchange agent.
Any delay in acceptance, extension, termination, or amendment will be followed
as soon as practicable by a press release or other public announcement. If we
amend the exchange offer in a manner that we determine constitutes a material
change, we will promptly disclose that amendment by means of a prospectus
supplement that will be distributed to the registered holders of the old notes,
and we will extend the exchange offer for a period of time that we will
determine, depending upon the significance of the amendment and the manner of
disclosure to the registered holders, if the exchange offer would have otherwise
expired.
We will have no obligation to publish, advertise, or otherwise communicate any
public announcement that we may choose to make, other than by making a timely
release to an appropriate news agency.
In all cases, issuance of the new notes for old notes that are accepted for
exchange will be made only after timely receipt by the exchange agent of a
properly completed and duly executed letter of transmittal or a book-entry
confirmation with an agent's message, in each case, with all other required
documents. However, we reserve the absolute right to waive any conditions of the
exchange offer or any defects or irregularities in the surrender of old notes.
If we do not accept any surrendered old notes for any reason set forth in the
terms and conditions of the exchange offer or if you submit old notes for a
greater principal amount than you want to exchange, we will return the
unaccepted or non-exchanged old notes to you, or substitute old notes evidencing
the unaccepted or non-exchanged portion, as appropriate. See "--Return of Old
Notes."
INTEREST ON THE NEW NOTES
The new notes will accrue cash interest on the same terms as the old notes,
i.e., at the rate of 6.10% per year (using a 360-day year consisting of twelve
30-day months), payable semi-annually in arrears on June 1 and December 1 of
each year. Old notes accepted for exchange will not receive accrued interest at
the time of exchange. However, each new note will bear interest:
o from the later of (1) the last interest payment date on which interest
was paid on the old note surrendered in exchange for the new note or
(2) if the old note is exchanged for the new note on a date after the
record date for an interest payment date to occur on or after the date
of the exchange and as to which that interest will be paid, the date
of that interest payment date; or
o if no interest has been paid on the old note, from May 23, 2002.
PROCEDURES FOR TENDERING OLD NOTES
If you wish to surrender old notes you must:
19
o complete and sign the letter of transmittal or send a timely
confirmation of a book-entry transfer of old notes to the exchange
agent;
o have the signatures on the letter of transmittal guaranteed if
required by the letter of transmittal; and
o mail or deliver the required documents to the exchange agent at its
address set forth in the letter of transmittal for receipt before the
expiration date.
In addition, either:
o certificates for old notes must be received by the exchange agent
along with the letter of transmittal;
o a timely confirmation of a book-entry transfer of old notes into the
exchange agent's account at DTC, pursuant to the procedure for
book-entry transfer described below, must be received by the exchange
agent before the expiration date; or
o you must comply with the procedures described below under
"--Guaranteed Delivery Procedures."
If you do not withdraw your surrender of old notes before the expiration date,
it will indicate an agreement between you and us that you have agreed to
surrender the old notes, in accordance with the terms and conditions in the
letter of transmittal.
The method of delivery of old notes, the letter of transmittal, and all other
required documents to the exchange agent is at your election and risk. Instead
of delivery by mail, we recommend that you use an overnight or hand delivery
service, properly insured, with return receipt requested. In all cases, you
should allow sufficient time to assure delivery to the exchange agent before the
expiration date. Do not send any letter of transmittal or old notes to us. You
may request that your broker, dealer, commercial bank, trust company, or nominee
effect the above transactions for you.
If you are a beneficial owner of the old notes and you hold those notes through
a broker, dealer, commercial bank, trust company, or other nominee and you want
to surrender your old notes, you should contact that intermediary promptly and
instruct it to surrender the old notes on your behalf.
Generally, an eligible institution must guarantee signatures on a letter of
transmittal unless:
o you tender your old notes as the registered holder, which term
includes any participant in DTC whose name appears on a security
listing as the owner of old notes, and the new notes issued in
exchange for your old notes are to be issued in your name and
delivered to you at your registered address appearing on the security
register for the old notes; or
o you surrender your old notes for the account of an eligible
institution.
An "eligible institution" is:
o a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.;
o a commercial bank or trust company having an office or correspondent
in the United States; or
o an "eligible guarantor institution" as defined by Rule 17Ad-15 under
the Exchange Act.
In each instance, the entity must be a member of one of the signature guarantee
programs identified in the letter of transmittal.
If the new notes or unexchanged old notes are to be delivered to an address
other than that of the registered holder appearing on the security register for
the old notes, an eligible institution must guarantee the signature in the
letter of transmittal.
20
Your surrender will be deemed to have been received as of the date when:
o the exchange agent receives a properly completed and signed letter of
transmittal accompanied by the old notes, or a confirmation of
book-entry transfer of the old notes into the exchange agent's account
at DTC with an agent's message; or
o the exchange agent receives a notice of guaranteed delivery from an
eligible institution.
Issuances of new notes in exchange for old notes surrendered pursuant to a
notice of guaranteed delivery or letter to similar effect by an eligible
institution will be made only against submission of a duly signed letter of
transmittal, and any other required documents, and deposit of the surrendered
old notes, or confirmation of a book-entry transfer of the old notes into the
exchange agent's account at DTC pursuant to the book-entry procedures described
below.
We will make the determination regarding all questions relating to the validity,
form, eligibility, including time of receipt, acceptance, and withdrawal of
surrendered old notes, and our determination will be final and binding on all
parties.
We reserve the absolute right to reject any and all old notes improperly
surrendered. We will not accept any old notes if our acceptance of them would,
in the opinion of our counsel, be unlawful. We also reserve the absolute right
to waive any defects, irregularities, or conditions of surrender as to any
particular old note. Our interpretation of the terms and conditions of the
exchange offer, including the instructions in the letter of transmittal, will be
final and binding on all parties. Unless waived, you must cure any defects or
irregularities in connection with surrenders of old notes within the time we
determine. Although we currently intend to notify holders of defects or
irregularities in connection with surrenders of old notes, neither we, the
exchange agent, nor anyone else will incur any liability for failure to give
that notice. Surrenders of old notes will not be deemed to have been made until
any defects or irregularities have been cured or waived.
We have no current plan to acquire any old notes that are not surrendered in the
exchange offer or to file a registration statement to permit resales of any old
notes that are not surrendered pursuant to the exchange offer. We reserve the
right in our sole discretion to purchase or make offers for any old notes that
remain outstanding after the expiration date. To the extent permitted by law, we
also reserve the right to purchase old notes in the open market, in privately
negotiated transactions, or otherwise. The terms of any future purchases or
offers could differ from the terms of the exchange offer.
Pursuant to the letter of transmittal, if you elect to surrender old notes in
exchange for new notes, you must exchange, assign, and transfer the old notes to
us and irrevocably constitute and appoint the exchange agent as your true and
lawful agent and attorney-in-fact with respect to the surrendered old notes,
with full power of substitution, among other things, to cause the old notes to
be assigned, transferred, and exchanged. By executing the letter of transmittal,
you make the representations and warranties set forth below to us. By executing
the letter of transmittal you also promise, on our request, to execute and
deliver any additional documents that we consider necessary to complete the
transactions described in the letter of transmittal.
By executing the letter of transmittal and surrendering old notes in the
exchange offer, you will be representing to us that, among other things,
o you have full power and authority to tender, exchange, assign, and
transfer the old notes surrendered;
o we will acquire good title to the old notes being surrendered, free
and clear of all security interests, liens, restrictions, charges,
encumbrances, conditional sale agreements, or other obligations
relating to their sale or transfer, and not subject to any adverse
claim when we accept the old notes;
o you are acquiring the new notes in the ordinary course of your
business;
o you are not engaging in and do not intend to engage in a distribution
of the new notes;
o you have no arrangement or understanding with any person to
participate in the distribution of the new notes;
21
o you acknowledge and agree that if you are a broker-dealer registered
under the Exchange Act or you are participating in the exchange offer
for the purpose of distributing the new notes, you must comply with
the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale of the new notes,
and that you cannot rely on the position of the SEC's staff set forth
in their no-action letters;
o you understand that a secondary resale transaction described above and
any resales of new notes obtained by you in exchange for old notes
acquired by you directly from us should be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K of the SEC; and
o you are not an "affiliate," as defined in Rule 405 under the
Securities Act, of us or SYSCO, or, if you are an "affiliate," that
you will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable.
If you are a broker-dealer and you will receive new notes for your own account
in exchange for old notes that you acquired as a result of market-making
activities or other trading activities, you will be required to acknowledge in
the letter of transmittal that you will deliver a prospectus in connection with
any resale of the new notes. See "Plan of Distribution."
Participation in the exchange offer is voluntary. You are urged to consult your
financial and tax advisors in making your decision on whether to participate in
the exchange offer.
RETURN OF OLD NOTES
If any old notes are not accepted for any reason described in this prospectus,
or if old notes are withdrawn or are submitted for a greater principal amount
than you want to exchange, the exchange agent will return the unaccepted,
withdrawn, or non-exchanged old notes to you or, in the case of old notes
surrendered by book-entry transfer, into an account for your benefit at DTC,
unless otherwise provided in the letter of transmittal. The old notes will be
credited to an account maintained with DTC as promptly as practicable.
BOOK ENTRY TRANSFER
The exchange agent will make a request to establish an account with respect to
the old notes at DTC for purposes of the exchange offer within two business days
after the date of this prospectus. Any financial institution that is a
participant in DTC's system may make book-entry delivery of old notes by causing
DTC to transfer the old notes into the exchange agent's account at DTC in
accordance with DTC's procedures for transfer. To effectively tender notes
through DTC, the financial institution that is a participant in DTC will
electronically transmit its acceptance through the Automatic Transfer Offer
Program. DTC will then edit and verify the acceptance and send an agent's
message to the exchange agent for its acceptance. An agent's message is a
message transmitted by DTC to the exchange agent stating that DTC has received
an express acknowledgment from the participant in DTC tendering the old notes
that the participant has received and agrees to be bound by the terms of the
letter of transmittal, and that we may enforce this agreement against the
participant.
A delivery of old notes through a book-entry transfer into the exchange agent's
account at DTC will only be effective if an agent's message or the letter of
transmittal with any required signature guarantees and any other required
documents is transmitted to and received by the exchange agent at its address
set forth in the letter of transmittal for receipt before the expiration date
unless the guaranteed delivery procedures described below are complied with.
Delivery of documents to DTC does not constitute delivery to the exchange agent.
GUARANTEED DELIVERY PROCEDURES
If you wish to surrender your old notes and (1) your old notes are not
immediately available so that you can meet the expiration date deadline, (2) you
cannot deliver your old notes or other required documents to the exchange agent
before the expiration date, or (3) the procedure for book-entry transfer cannot
be completed on a timely basis, you may nonetheless participate in the exchange
offer if:
o you surrender your old notes through an eligible institution;
22
o before the expiration date, the exchange agent receives from the
eligible institution a properly completed and duly executed notice of
guaranteed delivery substantially in the form provided by us, by mail
or hand delivery, showing the name and address of the holder, the
name(s) in which the old notes are registered, the certificate
number(s) of the old notes, if applicable, and the principal amount of
old notes surrendered; the notice of guaranteed delivery must state
that the surrender is being made by the notice of guaranteed delivery
and must guarantee that, within three New York Stock Exchange trading
days after the expiration date, the letter of transmittal, together
with the certificate(s) representing the old notes, in proper form for
transfer, or a book-entry confirmation with an agent's message, as the
case may be, and any other required documents, will be delivered by
the eligible institution to the exchange agent; and
o the properly executed letter of transmittal, as well as the
certificate(s) representing all surrendered old notes, in proper form
for transfer, or a book-entry confirmation, as the case may be, and
all other documents required by the letter of transmittal are received
by the exchange agent within three New York Stock Exchange trading
days after the expiration date.
Unless old notes are surrendered by the above-described method and deposited
with the exchange agent within the time period set forth above, we may, at our
option, reject the surrender. The exchange agent will send you a notice of
guaranteed delivery upon your request if you want to surrender your old notes
according to the guaranteed delivery procedures described above.
WITHDRAWAL OF TENDERS OF OLD NOTES
You may withdraw your surrender of old notes at any time before the expiration
date.
To withdraw old notes surrendered in the exchange offer, the exchange agent must
receive a written notice of withdrawal at its address set forth below before the
expiration date. Any notice of withdrawal must:
o specify the name of the person having deposited the old notes to be
withdrawn;
o identify the old notes to be withdrawn, including the certificate
number or numbers, if applicable, and principal amount of the old
notes;
o contain a statement that the holder is withdrawing the election to
have the old notes exchanged;
o be signed by the holder in the same manner as the original signature
on the letter of transmittal used to surrender the old notes; and
o specify the name in which any old notes are to be registered, if
different from that of the registered holder of the old notes and,
unless the old notes were tendered for the account of an eligible
institution, the signatures on the notice of withdrawal must be
guaranteed by an eligible institution. If old notes have been
surrendered pursuant to the procedure for book-entry transfer, any
notice of withdrawal must specify the name and number of the account
at DTC.
We, in our sole discretion, will make the final determination on all questions
regarding the validity, form, eligibility, and time of receipt of notices of
withdrawal, and our determination will bind all parties. Any old notes withdrawn
will be deemed not to have been validly surrendered for purposes of the exchange
offer and no new notes will be issued in exchange unless the old notes so
withdrawn are validly surrendered again. Properly withdrawn old notes may be
surrendered again by following one of the procedures described above under
"--Procedures for Tendering Old Notes" at any time before the expiration date.
Any old notes that are not accepted for exchange will be returned at no cost to
the holder or, in the case of old notes surrendered by book-entry transfer, into
an account for your benefit at DTC pursuant to the book-entry transfer
procedures described above, as soon as practicable after withdrawal, rejection
of surrender or termination of the exchange offer.
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ADDITIONAL OBLIGATIONS
We may be required, under certain circumstances, to file a shelf registration
statement. See "Description of New Notes - Registration Rights Agreement and
Exchange Offer." In any event, we are under a continuing obligation, for a
period of up to 180 days after the SEC declares the registration statement of
which this prospectus is a part effective, to keep the registration statement
effective and to provide copies of the latest version of this prospectus to any
broker-dealer that requests copies for use in a resale, subject to our ability
to suspend the effectiveness of any registration statement as described under
"Description of New Notes - Registration Rights Agreement and Exchange Offer"
below.
CONDITIONS OF THE EXCHANGE OFFER
Notwithstanding any other term of the exchange offer, or any extension of the
exchange offer, we do not have to accept for exchange, or exchange new notes
for, any old notes, and we may terminate the exchange offer before acceptance of
the old notes, if:
o any statute, rule, or regulation has been enacted or any action has
been taken by any court or governmental authority that, in our
reasonable judgment, seeks to or would prohibit, restrict, or
otherwise render consummation of the exchange offer illegal, or
o any change, or any development that would cause a change, in our
business or financial affairs has occurred that, in our sole judgment,
might materially impair our ability to proceed with the exchange offer
or a change that would materially impair the contemplated benefits to
us of the exchange offer, or
o a change occurs in the current interpretations by the staff of the SEC
that, in our reasonable judgment, might materially impair our ability
to proceed with the exchange offer.
If we, in our sole discretion, determine that any of the above conditions are
not satisfied, we may:
o refuse to accept any old notes and return all surrendered old notes to
the surrendering holders;
o extend the exchange offer and retain all old notes surrendered before
the expiration date, subject to the holders' right to withdraw the
surrender of the old notes; or
o waive any unsatisfied conditions regarding the exchange offer and
accept all properly surrendered old notes that have not been
withdrawn. If this waiver constitutes a material change to the
exchange offer, we will promptly disclose the waiver by means of a
prospectus supplement that will be distributed to the registered
holders of the old notes, and we will extend the exchange offer for a
period of time that we will determine, depending upon the significance
of the waiver and the manner of disclosure to the registered holders,
if the exchange offer would have otherwise expired.
EXCHANGE AGENT
We have appointed Wachovia Bank, National Association as exchange agent for the
exchange offer. Questions and requests for assistance, requests for additional
copies of this prospectus or of the letter of transmittal and requests for
notices of guaranteed delivery should be directed to the exchange agent at the
following address:
By Mail, Hand or Overnight Courier:
Wachovia Bank Customer Information Center
Corporate Trust Operations - NC1153
1525 West W. T. Harris Blvd. - 3C3
Charlotte, N.C. 28262-1153
Attention: Marsha Rice
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To Confirm by Telephone:
(704) 590-7413
For information with respect to the exchange offer, call
Investor Relations Department of the Exchange Agent:
(704) 590-7413
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. The principal solicitation is
being made by mail; however, additional solicitation may be made by facsimile,
telephone, or in person by our officers and regular employees or by officers and
employees of our affiliates. No additional compensation will be paid to any
officers and employees who engage in soliciting tenders.
We have not retained any dealer-manager or other soliciting agent for the
exchange offer and will not make any payments to brokers, dealers, or others
soliciting acceptance of the exchange offer. We will, however, pay the exchange
agent reasonable and customary fees for its services and will reimburse it for
related, reasonable out-of-pocket expenses. We may also reimburse brokerage
houses and other custodians, nominees, and fiduciaries for reasonable
out-of-pocket expenses they incur in forwarding copies of this prospectus, the
letter of transmittal and related documents.
We will pay all expenses incurred in connection with the performance of our
obligations in the exchange offer, including registration fees, fees and
expenses of the exchange agent, the transfer agent and registrar, and printing
costs, among others.
We will pay all transfer taxes, if any, applicable to the exchange of the old
notes. If, however, new notes, or old notes for principal amounts not
surrendered or accepted for exchange, are to be delivered to, or are to be
issued in the name of, any person other than the registered holder of the old
notes surrendered, or if a transfer tax is imposed for any reason other than the
exchange, then the amount of any transfer taxes will be payable by the person
surrendering the old notes. If you do not submit satisfactory evidence of
payment of those taxes or exemption from payment of those taxes with the letter
of transmittal, the amount of those transfer taxes will be billed directly to
you.
CONSEQUENCES OF FAILURE TO EXCHANGE
Old notes that are not exchanged will remain "restricted securities" within the
meaning of Rule 144(a)(3) of the Securities Act. Accordingly, they may not be
offered, sold, pledged or otherwise transferred except:
o to us or SYSCO or to any of SYSCO's subsidiaries;
o inside the United States to a qualified institutional buyer in
compliance with Rule 144A under the Securities Act;
o inside the United States to an institutional accredited investor
purchasing for its own account or the account of an institutional
accredited investor, if such transfer is in respect of an aggregate
principal amount of old notes at the time of transfer of not less than
$250,000;
o outside the United States in compliance with Rule 904 of Regulation S
under the Securities Act;
o pursuant to any other available exemption from registration under the
Securities Act; or
o pursuant to an effective registration statement under the Securities
Act.
The liquidity of the old notes could be adversely affected by the exchange
offer. See "Risk Factors--Risk Factors Relating to the New Notes-- If an active
trading market does not develop for the new notes, you may not be able to
resell."
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ACCOUNTING TREATMENT
For accounting purposes, we will recognize no gain or loss as a result of the
exchange offer. We will amortize the expenses of the exchange offer and the
unamortized expenses related to the issuance of the old notes over the remaining
term of the new notes.
DESCRIPTION OF NEW NOTES
In this "Description of New Notes," (1) all references to "we" or "us" mean
SYSCO International, Co. only and do not include its subsidiaries, (2) all
references to "SYSCO" mean SYSCO Corporation only and do not include its
subsidiaries, and (3) all references to the "notes" are references to both the
old notes and the new notes.
GENERAL
The form and terms of the new notes and the old notes are identical in all
material respects, except that transfer restrictions and registration rights
applicable to the old notes do not apply to the new notes. The old notes were,
and the new notes will be, issued under the indenture dated as of May 23, 2002,
which is a contract among us, SYSCO, as guarantor, and Wachovia Bank, National
Association, as trustee.
The trustee's main role is to enforce the rights of the holders of the notes
against us if we default. We describe some limitations on the extent to which
the trustee acts on behalf of the holders of the notes under "--Events of
Default--Remedies if an Event of Default Occurs." The trustee will also act as
registrar, paying agent and authenticating agent and perform administrative
duties for us, such as sending out interest payments and notices under the
indenture.
The following description of the provisions of the indenture is only a summary.
This summary is not complete. We recommend that you read the entire indenture
carefully before investing in the new notes. You can obtain a copy of the
indenture by following the directions under the caption "Where You Can Find More
Information" on page 1 of this prospectus.
After the completion of the exchange offer (see "--Registration and Exchange
Offer"), the Trust Indenture Act of 1939 will apply to the indenture. We refer
you to the Trust Indenture Act for additional terms and definitions that will
apply to the indenture at that time.
PRINCIPAL, MATURITY AND INTEREST
The new notes will be a new series of debt securities under the indenture. The
amount of debt securities we can issue under the indenture is unlimited. We
issued the old notes in an initial aggregate principal amount of $200,000,000.
However, we may issue additional notes from the series of new notes offered by
this prospectus and other debt without the consent of the holders of the
existing notes and without notifying those holders. Any such additional notes
from the same series as the new notes offered by this prospectus will have the
same ranking, interest rate, maturity date, redemption rights and other terms as
the new notes offered by this prospectus. Any such additional notes, together
with the new notes offered by this prospectus and any unexchanged old notes,
will constitute a single series of debt securities under the indenture. The new
notes will be issued in principal amounts of $1,000 and any integral multiple
thereof.
The new notes will mature on June 1, 2012. Interest will accrue on the new notes
from the issue date of the new notes at a rate equal to 6.10% per year. We will
pay interest on the new notes on June 1 and December 1 of each year, beginning
on December 1, 2002. The new notes will not be entitled to any sinking fund. We
will make all payments on the new notes without withholding or deducting any
taxes or other governmental charges imposed by a United States or Canadian
jurisdiction, unless we are required to do so by applicable law. If, however, we
are so required, we will not pay any additional, or gross up, amounts with
respect to the withholding or deduction.
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RANKING
The new notes are not secured by any of our property or assets. The new notes
will be our senior unsecured obligations and will rank equally with our existing
and future senior unsecured debt and effectively will be junior to our existing
and future senior secured debt. The new notes will be effectively subordinated
to all existing and future indebtedness and other liabilities (excluding
intercompany liabilities) of our subsidiaries. On September 28, 2002, our
subsidiaries had aggregate liabilities (excluding intercompany liabilities) of
approximately $103,718,000.
SYSCO'S GUARANTEES
SYSCO will unconditionally and irrevocably guarantee the payment of all
principal and interest on the new notes. SYSCO's guarantees of the new notes
will not be secured by any of its property or assets. SYSCO's guarantees of the
notes will be senior unsecured obligations of SYSCO and will rank equally with
all its existing and future senior unsecured debt and effectively junior to any
senior secured debt it issues in the future. As of September 28, 2002, SYSCO had
no senior secured debt and had senior unsecured debt totaling $1.278 billion
(including $249,399,000 of guarantees). SYSCO's guarantees will be effectively
subordinated to all existing and future indebtedness and other liabilities
(excluding intercompany liabilities) of SYSCO's subsidiaries. On September 28,
2002, SYSCO's subsidiaries had aggregate liabilities (excluding intercompany
liabilities) of approximately $2.227 billion.
In general, the guarantees provide that if we fail to pay any interest payment
or the principal of the new notes when due and payable, SYSCO will, without any
action by the trustee or any holder of the new notes, pay the amount of the
interest payment or the principal then due. The guarantees will not require
holders of the new notes to take any action or institute any proceeding against
us in order to demand or receive payments under the guarantees. Although, upon
making any such payment, SYSCO will be subrogated to the rights of those holders
against us for any payment of interest or principal we fail to make, SYSCO will
not be entitled to make a claim against us with respect to those rights until
the notes have been paid in full.
OPTIONAL REDEMPTION
We may redeem some or all of the notes at any time. If we choose to redeem any
notes prior to maturity, we will pay a redemption price equal to the greater of
the following amounts, plus, in either case, accrued and unpaid interest on the
principal amount being redeemed to the redemption date:
o 100% of the principal amount of the notes being redeemed; or
o the sum of the present values of the remaining scheduled payments of
the principal of and interest on the notes being redeemed (exclusive
of interest accrued to the redemption date), discounted to the
redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate referred to
below plus 15 basis points.
If we choose to redeem any notes, we will mail a notice of redemption not less
than 30 days and not more than 60 days before the redemption date to each holder
of the notes to be redeemed at its registered address. If we are redeeming less
than all the notes, the trustee will select the particular notes or portions of
notes to be redeemed by lot or pro rata or by another method the trustee deems
fair and appropriate. Unless we default in payment of the redemption price, on
and after the redemption date, interest will cease to accrue on the notes or
portions of notes called for redemption.
For purposes of calculating the redemption price in connection with the
redemption of the notes on any redemption date, the following terms have the
meanings set forth below:
"Business Day" means any calendar day that is not a Saturday, Sunday or legal
holiday in New York, New York or Houston, Texas and on which commercial banks
are open for business in New York, New York and Houston, Texas.
"Comparable Treasury Issue" means the United States Treasury security selected
by the Quotation Agent as having a maturity comparable to the remaining term of
the new notes that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of such new notes.
27
"Comparable Treasury Price" means, with respect to any redemption date, the
average of two Reference Treasury Dealer Quotations for that redemption date.
"Quotation Agent" means J. P. Morgan Securities Inc. or its successor.
"Reference Treasury Dealer" means each of (1) J.P. Morgan Securities Inc. or its
successors and (2) one other firm that is a primary U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer") which we specify from time
to time; provided, however, that, if either of them ceases to be a Primary
Treasury Dealer, we will substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
trustee, of the bid and asked price for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted in writing to the
trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on
the third Business Day preceding that redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per year
equal to: (1) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15 (519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue; provided that, if no
maturity is within three months before or after the maturity date of the notes,
yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined, and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding
to the nearest month; or (2) if such release or any successor release is not
published during the week preceding the calculation date or does not contain
such yields, the rate per year equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue, expressed as a percentage of its principal amount,
equal to the Comparable Treasury Price for such redemption date. The Treasury
Rate will be calculated on the third business day preceding the redemption date.
All determinations made by the trustee with respect to determining the
redemption price will be final and binding on all parties, absent manifest
error.
RESTRICTIVE COVENANTS OF SYSCO
For the benefit of the noteholders, SYSCO will agree to the following
restrictive covenants in the indenture in its capacity as guarantor. We define
some of the terms we use in the next two subsections below under "Definitions
for Restrictive Covenants. "
Limitations on Liens. Neither SYSCO nor any of its Subsidiaries, as defined
below, will issue, incur, create, assume or guarantee any debt for borrowed
money secured by a mortgage, security interest, pledge, lien, charge or other
encumbrance ("mortgage") upon any Principal Property, as defined below, 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 now
exists or is now owed or is hereafter created or acquired) without in any such
case effectively providing concurrently that the notes (together with, if SYSCO
shall so determine, any other indebtedness of or guaranteed by SYSCO or such
Subsidiary ranking equally with the notes) shall be secured equally and ratably
with (or, at the option of SYSCO, prior to) such secured debt.
The foregoing restriction, however, will not apply to each of the following:
o 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,
o mortgages on property, shares of stock or indebtedness or other assets
existing at the time of acquisition by SYSCO or a Subsidiary or
mortgages 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
28
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,
o mortgages to secure indebtedness owing to SYSCO or to a Subsidiary,
o mortgages existing at the date of the initial issuance of the notes,
o mortgages on property of a person existing at the time that 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 SYSCO or a Subsidiary,
provided that such mortgage was not incurred in anticipation of such
merger or consolidation or sale, lease or other disposition,
o mortgages in favor of the United States of America or any of its
states, territories or possessions (or the District of Columbia), or
any department, agency, instrumentality or political subdivision of
the United States of America or any of its states, territories or
possessions (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
o extensions, renewals or replacements of any mortgage referred to in
the list above, provided that the principal amount of indebtedness
secured thereby shall not exceed the principal amount of the
indebtedness being extended, renewed or replaced.
Notwithstanding the restrictions outlined above, SYSCO or any Subsidiary may
issue, incur, create, assume or guarantee debt secured by a mortgage which would
otherwise be subject to those restrictions, without equally and ratably securing
the notes, provided that after giving effect to the debt secured by a mortgage,
the aggregate amount of all debt so secured by mortgages (not including
mortgages described as being permitted under the bullet points listed above)
does not exceed 20% of SYSCO's Consolidated Net Tangible Assets.
Limitations on Sale and Lease-Back Transactions. Neither SYSCO nor any of its
Subsidiaries will enter into any Sale and Lease-Back Transaction, as defined
below, with respect to any Principal Property, other than a transaction
involving a lease for a term of not more than three years or any such
transaction between the Company and a Subsidiary or between Subsidiaries,
unless:
o SYSCO or such Subsidiary would be entitled to incur indebtedness
secured by a mortgage on the Principal Property involved in that
transaction at least equal in amount to the Attributable Debt, as
defined below, with respect to that Sale and Lease-Back Transaction,
without equally and ratably securing the notes pursuant to the
limitation on liens covenant described above, or
o the proceeds of that transaction are at least equal to the fair market
value of the affected Principal Property (as determined in good faith
by SYSCO's Board of Directors) and SYSCO applies an amount equal to
the greater of the net proceeds of that sale or the Attributable Debt
with respect to that Sale and Lease-Back Transaction within 180 days
of that sale to either, or a combination of:
o 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
notes or debt owed to SYSCO or a Subsidiary, that matures
more than 12 months after its creation, or
o the purchase, construction or development of other
comparable property.
Corporate Existence. Except as otherwise provided in the indenture, SYSCO will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and the corporate existence of each of its
Subsidiaries, including us, and all rights and franchises of SYSCO and its
Subsidiaries. However, SYSCO will not be required to preserve the corporate
existence of any Subsidiary or any right or franchise if SYSCO determines that
the preservation of that Subsidiary, right or franchise is no longer desirable
in the conduct of business of SYSCO and its Subsidiaries taken as a whole and
that the loss of that Subsidiary, right or franchise would not have a material
adverse effect on the business, prospects, assets or financial condition of
29
SYSCO and its Subsidiaries taken as a whole and would not have a material
adverse effect on the payment and performance of our obligations under the notes
and the indenture or SYSCO's obligations under the guarantees.
DEFINITIONS FOR RESTRICTIVE COVENANTS
"Attributable Debt" with regard to a Sale and Lease-Back Transaction with
respect to any property means, at the time of determination, the lesser of: (1)
the fair market value of that property, as determined in good faith by SYSCO's
Board of Directors; or (2) the present value of the total net amount of rent
required to be paid under the lease during the remaining term thereof, including
any period for which the lease has been extended, discounted at the rate of
interest set forth or implicit in the terms of the lease compounded
semiannually, or if not practicable to determine that rate, the Composite Rate.
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.
"Composite Rate" means, at any time, the rate of interest, per annum, compounded
semiannually, equal to the sum of the rates of interest borne by each series of
notes outstanding under the indenture multiplied, in the case of each series of
notes, by the percentage of the aggregate principal amount of all the notes then
outstanding represented by that series of notes.
"Consolidated Net Tangible Assets" means, as of any particular time, the
aggregate amount of assets, less applicable reserves and other properly
deductible items, after deducting therefrom all current liabilities, except for
current maturities of long-term debt and of obligations under capital leases,
and all goodwill, trade names, trademarks, patents, unamortized debt discount
and expense and other intangible assets, to the extent included in said
aggregate amount of assets, all as set forth on the most recent consolidated
balance sheet of SYSCO and its consolidated subsidiaries and computed in
accordance with generally accepted accounting principles.
"Principal Property" means 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 SYSCO or any Subsidiary and is located
within the United States of America or Canada unless the Board of Directors of
SYSCO has determined in good faith that such office, plant facility or center is
not of material importance to the total business conducted by SYSCO and its
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" means any arrangement with any person
providing for the leasing by SYSCO or any Subsidiary of any Principal Property,
which property has been or is to be sold or transferred by SYSCO or such
Subsidiary to such person.
"Subsidiary" means any corporation of which outstanding voting stock having the
power to elect a majority of the board of directors of such corporation is at
the time owned, directly or indirectly, by SYSCO or by one or more other
Subsidiaries, or by SYSCO and one or more other Subsidiaries. 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.
MERGER, CONSOLIDATION AND SALE OF ASSETS
In the indenture, SYSCO has agreed not to consolidate with or merge into any
other person or sell, lease, convey, transfer, or otherwise dispose of all or
substantially all of its assets to any person, unless:
o the continuing entity following the transaction is either SYSCO or a
company organized and validly existing under the laws of the United
States, any State thereof or the District of Columbia that expressly
assumes by a supplemental indenture the performance of the guarantees
and SYSCO's covenants and obligations under the indenture and the
notes,
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o immediately after giving effect to the transaction, no default or
event of default under the notes shall have occurred and be continuing
or would result from the transaction, and
o SYSCO delivers an officers' certificate and an opinion of counsel to
the trustee, each stating that the transaction and any supplemental
indenture comply with the indenture.
We may assign our rights and obligations under the indenture and the notes to:
o a person with which SYSCO consolidates, merges or which it acquires or
to which it transfers its assets,
o SYSCO, or
o another SYSCO subsidiary.
In such case, our successor will assume our payment, covenant and other
obligations under the indenture. In the case of any assignment to a person other
than SYSCO, the covenants of SYSCO under the indenture will remain in effect
following the assignment, and SYSCO will execute a new guarantee agreement
containing substantially the same covenants. If we assign our rights and
obligations under the indenture to SYSCO, then the SYSCO guarantees will no
longer apply to the notes, but SYSCO's other covenants and obligations will
continue to apply for the benefit of holders of the notes.
REPORTS
We and SYSCO have agreed to deliver to the trustee within 15 days after SYSCO is
required to file with the SEC, copies of the annual reports and other
information documents and reports which SYSCO is required to file with the SEC.
EVENTS OF DEFAULT
The term "event of default" means any of the following:
o we default in the payment of any interest on any of the notes and that
default continues for 30 days,
o we default in the payment of any principal on any of the notes, either
at maturity, or upon any redemption, by declaration or otherwise,
o we or SYSCO default in the observance or performance of any other
covenant or agreement applicable to the notes or in the indenture for
a period of 90 days after written notice of that default is delivered
to us or SYSCO by the trustee or by holders of at least 25% in
aggregate principal amount of the outstanding securities of all series
issued under the indenture that are affected by that default,
o SYSCO repudiates its obligations under its guarantees of the notes or
the guarantees become unenforceable or invalid or are no longer in
full force and effect,
o either we or SYSCO file for bankruptcy or certain other events of
bankruptcy, insolvency or reorganization occur, or
o any other event of default provided for in a supplemental indenture
for the notes.
Remedies if an Event of Default Occurs. If an event of default has occurred and,
where applicable, has not been cured, either the trustee or the holders of not
less than 25% of the aggregate principal amount of the notes outstanding may
declare the entire principal amount of all the notes to be due and immediately
payable. If an event of default occurs because of certain events in bankruptcy,
insolvency or reorganization, the principal amount of all notes will be
automatically accelerated, without any action by the trustee or any holder. A
declaration of acceleration of maturity may be canceled by the holders of at
least a majority in principal amount of the notes.
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Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indenture at the request of
any holders unless the holders offer the trustee protection from expenses and
liability satisfactory to the trustee, which is called an indemnity. If
reasonable indemnity is provided, the holders of a majority of the principal
amount of the outstanding notes may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee. These
majority holders may also direct the trustee in performing any other action
under the indenture.
Before a holder of notes may bypass the trustee and bring a lawsuit or other
formal legal action or take other steps to enforce that holder's rights or
protect its interests relating to the notes, the following must occur:
o that holder must give the trustee written notice that an event of
default has occurred and is continuing;
o the holders of not less than 25% in principal amount of all
outstanding notes must make a written request that the trustee take
action because of the default and must offer reasonable indemnity to
the trustee against the costs and other liabilities of taking that
action;
o the holders of a majority in principal amount of all outstanding notes
must not have given the trustee any direction inconsistent with that
request; and
o the trustee must have not taken action for 60 days after the receipt
of the above notice, request and offer of indemnity.
Holders are, however, entitled at any time to bring a lawsuit for the payment of
principal and interest due on their notes on or after its due date.
We will furnish to the trustee every year a written statement regarding our
performance of our obligations under the indenture and any default in such
performance.
MODIFICATION AND WAIVER
With the agreement of SYSCO and the trustee, we can modify and amend the
indenture with the consent of the holders of a majority of the principal amount
of the outstanding notes. However, we may not, without the consent of each
holder of notes to be affected:
o reduce the amount of notes whose holders must consent to an amendment,
supplement or waiver,
o reduce the rate of or change the time for payment of interest on the
notes,
o reduce the principal of or premium, if any, on or any mandatory
sinking fund payment with respect to the notes or change the stated
maturity date of the notes or reduce the amount of the principal that
would be due and payable upon a declaration of acceleration of the
notes,
o reduce the premium, if any, payable upon redemption of the notes or
change the time at which the notes may or shall be redeemed,
o change the currency in which interest is payable on the notes,
o impair the right of any holder to sue for enforcement of any payment
of principal of or premium, if any, or interest on the notes,
o make any change in the percentage of principal amount of notes
necessary to waive compliance with specified provisions of the
indenture,
o waive a continuing default or event of default in the payment of
principal or premium, if any, or interest on the notes, or
o modify the obligations of SYSCO under the guarantee in a manner
adverse to holders of the notes.
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We and the trustee may also modify and amend the indenture without the consent
of the holders of the notes in limited circumstances, such as clarifications and
changes that would not adversely affect holders of the notes.
The holders of a majority of the principal amount of the outstanding notes may
waive our and SYSCO's compliance with the restrictive covenants in the
indenture. The holders of at least a majority in aggregate principal amount of
the securities of all series at the time outstanding under the indenture may, on
behalf of all holders of those securities (including the holders of the notes),
waive any past default or event of default under the indenture, except:
o a default in the payment of principal of, premium, if any, or interest
on the notes; and
o a default in respect of a covenant or provision of the indenture that
cannot be modified or amended without the consent of the holder of
each outstanding note affected.
We generally will be entitled to set any day as a record date for the purpose of
determining the holders of outstanding notes that are entitled to vote or take
other action under the indenture in accordance with applicable laws. If we or
the trustee set a record date for a vote or other action to be taken by holders
of the notes, that vote or action may be taken only by persons who are holders
of outstanding securities of the notes on the record date and must be taken
within 90 days following the record date.
You should consult your bank or broker for information on how approval may be
granted or denied if we seek to change the indenture or the notes or request a
waiver.
DEFEASANCE
Full Defeasance. If there is a change in U.S. federal tax law, as described
below, we can fully defease the notes, which means the notes will be deemed paid
and discharged and the provisions of the indenture relating to the notes and the
guarantees (subject to some exceptions outlined below) will cease to be of any
further effect. In order to fully defease the notes in these circumstances, we
must put in place the following arrangements for repayment of the notes and
certain other conditions the indenture specifies must be satisfied:
o we or SYSCO must irrevocably deposit or cause to be deposited with the
trustee as trust funds in trust, for the purpose of making the
following payments, cash, U.S. government obligations or a combination
of cash and U.S. government obligations that will generate sufficient
cash to make principal and interest payments on the notes on each date
that a principal or interest payment is due,
o no event of default shall have occurred and be continuing,
o there must be a change in current U.S. federal tax law or a U.S.
Internal Revenue Service ruling, in either case to the effect that the
holders of the notes will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to U.S. federal income tax on the
same amount, in the same manner and at the same times as would have
been the case if that deposit and discharge had not occurred, and
o we or SYSCO must deliver to the trustee a legal opinion of our counsel
confirming the tax law change described above.
If we fully defease the notes, as described above, holders of the notes would
have to rely solely on the trust deposit for payment on the notes. Holders could
not look to us or SYSCO for payment in the event of a shortfall.
If we fully defease the notes, we will remain obligated under the indenture to:
o register the transfer or exchange of notes,
o abide by our obligations and duties with respect to the trustee,
o replace mutilated, defaced, destroyed, lost or stolen notes, and
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o maintain paying agencies and hold moneys for payment in trust.
Covenant Defeasance. Under current U.S. federal tax law, we can make the same
type of deposit described above and be released and have SYSCO and its other
subsidiaries released from some of the restrictive covenants in the indenture,
but we would remain obligated to make payments on the notes and SYSCO would
remain obligated under the guarantees. This release is called covenant
defeasance. If we effect covenant defeasance of the notes, holders would lose
the protection of those restrictive covenants but would gain the protection of
having money and securities set aside in trust to repay the notes. In addition,
holders of the notes could look to us for repayment of the notes (and to SYSCO
under the guarantees) if there were a shortfall in the trust deposit.
In addition to making the same type of deposit described above and meeting
certain other conditions the indenture specifies, in order for us to effect
covenant defeasance, we must deliver to the trustee a legal opinion of our
counsel confirming that, under current U.S. federal income tax law, holders of
the notes will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such covenant defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such covenant defeasance had not occurred.
If we effect covenant defeasance of the notes, the following provisions of the
indenture and the notes would no longer apply:
o the promises regarding the conduct of the business of SYSCO and its
subsidiaries described above under "--Restrictive Covenants of SYSCO;"
o the obligations described above under "--Reports;" and
o the conditions that would apply if either we or SYSCO merge or engage
in similar transactions, as described above under "--Merger,
Consolidation and Sale of Assets."
THE TRUSTEE
The trustee's current address is 5847 San Felipe, Suite 1050, Houston, Texas
77057, Attn: Corporate Trust Administration Department. The trustee is one of a
number of banks with which SYSCO maintains ordinary banking relationships. In
addition, an affiliate of the trustee was an initial purchaser of the notes.
The indenture provides that, except during the continuance of an event of
default, the trustee will perform only such duties as are specifically set forth
in the indenture. During the existence of an event of default, the trustee must
exercise such rights and powers vested in it as a prudent person would exercise
under the circumstances in the conduct of such person's own affairs.
The indenture and provisions of the Trust Indenture Act incorporated by
reference in the indenture contain limitations on the rights of the trustee,
should it become our creditor, to obtain payment of claims in certain cases or
to liquidate certain property received by it in respect of any such claim as
security or otherwise. The trustee is permitted to engage in other transactions
with us or any of our affiliates. If the trustee acquires any conflicting
interest, as defined in the indenture or in the Trust Indenture Act, it must
eliminate that conflict or resign.
GOVERNING LAW
The indenture, the notes and the guarantees will be governed by and construed in
accordance with the laws of the State of New York.
REGISTRATION RIGHTS AGREEMENT AND EXCHANGE OFFER
As a condition to the initial sale of the notes, we, SYSCO and the initial
purchasers entered into a registration rights agreement. Under this agreement,
we and SYSCO agreed to:
o file with the SEC, on or prior to 90 days following the date we issued
the old notes, a registration statement under the Securities Act of
1933 with regard to an offer to exchange the old notes for new notes;
and
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o use our reasonable best efforts and act in accordance with applicable
laws to cause the registration statement for the new notes to become
effective under the Securities Act as soon as practicable, but not
later than 180 days after the sale of the old notes.
We have satisfied those obligations.
We and SYSCO have also agreed that the exchange offer will be open for a period
of at least 20 business days and will be completed within 210 days following the
date we issued the old notes. During this period, we will exchange the new notes
for all old notes properly surrendered and not withdrawn before the last day of
this period. We have also agreed, if requested by the initial purchasers or by
certain broker/dealers who hold notes for their own accounts, to include in the
registration statement a prospectus for use in any resales by such
broker/dealers and to keep the registration statement effective for up to 180
days after the last old notes are accepted for exchange.
Each holder of the old notes, other than certain specified holders, who wishes
to accept the exchange offer will be required to make certain representations,
including representations that:
o any new notes to be received by the holder will be acquired in the
ordinary course of its business;
o at the time of the commencement of the exchange offer, the holder has
no arrangement or understanding with any person to participate in the
distribution (with the meaning of the Securities Act of 1933) of the
new notes;
o the holder did not acquire the old notes to be exchanged directly from
us, SYSCO or our affiliate of SYSCO;
o the holder is not our or SYSCO's "affiliate" (as defined in Rule 405
under the Securities Act of 1933); and
o the holder is not acting on behalf of any person who could not
truthfully make all the foregoing representations.
If:
o SEC interpretations are changed before we complete the exchange offer
such that the new notes received by each holder, except for certain
restricted holders, are not or would not be transferable without
restriction,
o the exchange offer has not been completed within 210 days after the
sale of the old notes,
o the exchange offer has been completed and subject to certain
conditions the registration rights agreement specifies, a registration
statement must be filed and a prospectus must be delivered by certain
of the initial purchasers in connection with the offering or sale of
the new notes, or
o any applicable law or interpretation does not allow any holder to
participate in the exchange offer, we will file a shelf registration
statement for resale of the new notes within 45 days of that
obligation arising. We will use our reasonable best efforts in
accordance with applicable laws to cause the shelf registration
statement to become effective no later than 90 days after the
obligation to file arises and to keep the registration effective for
up to two years. We will provide the applicable holders with copies of
the prospectus, notify them when the resale registration for the new
notes has become effective and take other actions reasonably required
to permit unrestricted sales of the new notes by those holders who
satisfy various conditions relating to the provision of information in
connection with the shelf registration statement.
If the holder is not a broker-dealer, it will be required to represent that it
is not engaged in, and does not intend to engage in, the distribution of the new
notes and that the old notes to be exchanged for new notes were acquired as a
result of market-making activities or other trading activities. It will also be
required to acknowledge that it will deliver a prospectus in connection with any
resale of its new notes.
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A registration default will exist if any of the following situations occurs:
o we do not complete the exchange offer within 210 days after the
initial issuance of the old notes, or
o any registration statement required under the registration rights
agreement is filed and declared effective but we later withdraw it or
the SEC issues an effective stop order suspending its effectiveness,
except as specifically permitted in the registration rights agreement,
without being succeeded immediately by an additional registration
statement filed and declared effective.
During any period of registration default, in addition to the interest we
normally pay on the notes, we will pay additional interest on any registrable
notes. Additional interest will accrue at an annual rate of 0. 25% per annum
during the first 90 days during which a default has occurred and is continuing,
and 0. 50% per annum for the remaining period during which a default has
occurred and is continuing. Additional interest will not exceed 0. 50% per annum
at any time. As soon as we cure all registration defaults, the interest rate on
the notes will revert to its original level.
This description of the registration rights agreement is a summary only. The
summary is not complete. We recommend that you read the entire registration
rights agreement carefully before exchanging old notes. You can obtain a copy of
the registration rights agreement by following the directions under the caption
"Where You Can Find More Information" on page 1 of this prospectus.
BOOK-ENTRY DELIVERY AND SETTLEMENT
THE GLOBAL NOTES
We will issue the new notes in the form of one or more global notes in fully
registered form. The global notes will be deposited with or on behalf of The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee of DTC, or another nominee of DTC or will remain in the custody of the
trustee in accordance with the FAST Balance Certificate Agreement between DTC
and the trustee.
You may hold beneficial interests in the global note directly through DTC if you
have an account at DTC, or indirectly through organizations that have accounts
at DTC.
What is a Global Security? A global security, such as a global note, is a
special type of security held in the form of a certificate by a depositary for
the investors in a particular issue of securities. The aggregate principal
amount of the global security equals the sum of the principal amounts of the
issue of securities it represents. The depositary or its nominee is the sole
legal holder of the global security. The beneficial interests of investors in
the issue of securities are represented in book-entry form in the computerized
records of the depositary. If investors want to purchase securities represented
by a global security, they must do so through brokers, banks or other financial
institutions that have an account with the depositary.
Special Investor Considerations for Global Securities. Because you, as an
investor, will not be a registered legal holder of a global note, your rights
relating to a global note will be governed by the account rules of your bank or
broker and of the depositary, DTC, as well as general laws relating to
securities transfers. We will not recognize a typical investor as a legal owner
of the notes for any purpose under the indenture or the notes and instead will
deal only with the trustee and DTC, the depositary that is the registered legal
holder of the global notes.
You should be aware that as long as the new notes are issued only in the form of
global securities:
o You cannot have any of the new notes registered in your own name.
o You cannot receive physical certificates for your interest in the new
notes.
o You will not be a registered legal holder of any of the new notes and
must look to your own bank or broker for payments on the new notes and
protection of your legal rights relating to the new notes.
o You may not be able to sell interests in any of the new notes to some
insurance companies and other institutions that are required by law to
own their securities in the form of physical certificates.
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o As an owner of beneficial interests in the global note, you may not be
able to pledge your interests to anyone who does not have an account
with DTC, or to otherwise take actions in respect of your interests,
because you cannot obtain physical certificates representing those
interests.
o DTC's policies will govern payments of principal and interest,
transfers, exchanges and other matters relating to your interest in a
global note. We and the trustee have no responsibility for any aspect
of DTC's actions or for its records of ownership interests in the
global note. Also, we and the paying agent do not supervise DTC in any
way.
o DTC will require that interests in the global note be purchased or
sold within its system using same-day funds.
Description of DTC. DTC has advised us as follows:
o DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered under Section 17A of the
Securities Exchange Act of 1934.
o DTC holds securities that its participants ("direct participants")
deposit with DTC and facilitates the settlement among direct
participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book
entry changes in direct participants' accounts, thereby eliminating
the need for physical movement of securities certificates.
o Direct participants include securities brokers and dealers, banks,
trust companies, clearing corporations and other organizations.
o DTC is owned by a number of its direct participants and by the New
York Stock Exchange, Inc., the American Stock Exchange LLC and the
National Association of Securities Dealers, Inc.
o Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a direct
participant, either directly or indirectly.
o The rules applicable to DTC and its direct and indirect participants
are on file with the SEC.
The descriptions of the operations and procedures of DTC in this prospectus are
provided solely as a matter of convenience. These operations and procedures are
solely within the control of DTC and are subject to change by them from time to
time. Neither we, SYSCO, nor the trustee takes any responsibility for these
operations or procedures, and you are urged to contact DTC, or its participants
directly to discuss these matters.
CERTIFICATED NOTES
In a few special situations described in the next paragraph, a global note will
terminate and interests in it will be exchanged for physical certificates
representing the notes previously included within the global note. After that
exchange, the choice of whether to hold the notes directly or in "street name"
(in computerized book-entry form) will be up to you. You must consult your own
bank or broker to find out how to have your interests in the notes transferred
to your own name if we complete such an exchange and you wish to be a direct
legal holder of the notes.
We will issue certificated notes to each person that DTC identifies as the
beneficial owner of the notes represented by the global notes upon surrender by
DTC of the global notes if either:
o DTC notifies us and the trustee that DTC is unwilling, unable or no
longer qualified to continue acting as the depositary for the global
note, or it has ceased to be a clearing agency registered under the
Securities Exchange Act at a time when it is required to be so
registered, and we do not appoint a successor depositary within 90
days of that notice;
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o an event of default with respect to the notes represented by the
global notes has occurred and is continuing, as described under
"--Events of Default," and DTC requests the issuance of certificated
notes; or
o we notify the trustee that we have elected to cause the issuance of
certificated notes under the indenture.
None of SYSCO, the trustee or us will be liable for any delay by DTC, its
nominee or any DTC participant or indirect participant in identifying the owners
of security entitlements in any related notes. We, SYSCO and the trustee may
conclusively rely on, and will be protected in relying on, instructions from DTC
or its nominee for all purposes, including with respect to the registration and
delivery, and the respective principal amounts, of the notes to be issued.
We would issue certificated notes in the following manner:
o in fully registered form;
o without interest coupons; and
o in denominations of multiples of $1,000.
PAYMENTS ON THE NEW NOTES
Global Notes. Payments on the new notes represented by the global notes will be
made to DTC or its nominee, as the case may be, as the registered owner thereof.
We expect that DTC or its nominee, upon receipt of any payment on the new notes
represented by a global note, will credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the global
note as shown in the records of DTC or its nominee. We also expect that payments
by participants to owners of beneficial interests in the global note held
through those participants will be governed by standing instructions and
customary practice as is now the case with securities held for the accounts of
customers registered in the names of nominees for those customers. The
participants will be responsible for those payments.
Under the terms of the indenture, we, SYSCO, as guarantor of the notes, the
trustee and any paying agent we appoint may treat the persons in whose names the
new notes, including the global notes, are registered as the owners thereof for
the purpose of receiving payment thereon and for any and all other purposes
whatsoever. Neither we, SYSCO nor the trustee will have any responsibility or
liability for any aspect of DTC's, or its participants' or account holders'
records relating to, or payments made on account of, beneficial ownership
interests in the global note (including payments of principal and interest) or
for maintaining, supervising or reviewing any records of those organizations
relating to the new notes.
Holders of the new notes in "street name" and other owners of beneficial
interests in a global note should consult their banks or brokers for information
on how they will receive payments.
Certificated New Notes. Payment of the principal of certificated new notes, if
any are issued, will be made at the office of the paying agent. Payment of the
interest on certificated new notes will be paid by check mailed to you, if you
are a registered holder of certificated notes. At the request of a registered
holder of more than $1,000,000 principal amount of certificated notes, payments
of principal or interest may be made to that holder by wire transfer.
CLEARANCE AND SETTLEMENT PROCEDURES
Principal and interest payments with respect to the new notes will be made in
immediately available funds.
Global Notes. Secondary market trading between DTC participants will occur in
the ordinary way in accordance with DTC rules and will be settled in immediately
available funds.
Certificated Notes. Certificated new notes, if any are issued, may be presented
for registration of transfer or exchange at the corporate trust office of the
trustee in The City of New York, which we have appointed as the security
registrar and transfer agent for the new notes.
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UNITED STATES FEDERAL AND
CANADIAN INCOME TAX CONSIDERATIONS
The following summaries are of a general nature only and are not intended to be
and should not be construed as legal or tax advice to any prospective holders of
new notes, and no representations with respect to the tax consequences to any
particular holder of new notes are made hereby. Accordingly, prospective holders
of new notes should consult with, and rely upon, their own tax advisors for
advice with respect to the tax consequences to them of the exchange of old notes
for new notes in light of their own particular circumstances, including any
consequences arising under federal, state, provincial and local tax laws of the
United States, Canada and any other taxing jurisdiction.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain of the U.S. federal income tax
consequences of the exchange of old notes for new notes and the ownership and
disposition of new notes. This discussion applies only to beneficial owners of
old notes that purchased the old notes at their "issue price" on the issue date
in connection with the issue of the old notes and who exchange such old notes
for new notes in this exchange offer. Except where noted, this discussion deals
only with old notes held as capital assets and does not apply to holders that
are subject to special tax rules. For example, this discussion does not address:
o tax consequences to holders who may be subject to special tax
treatment, such as dealers in securities or currencies, financial
institutions, tax-exempt entities, traders in securities that elect to
use a mark-to-market method of accounting, corporations that
accumulate earnings to avoid federal income tax, insurance companies,
or, in some cases, an expatriate of the United States or a nonresident
alien individual who has made a valid election to be treated as a
United States resident;
o tax consequences to persons holding notes as part of a hedging,
integrated, constructive sale or conversion transaction or a straddle;
o tax consequences to U.S. holders of notes whose "functional currency"
is not the U.S. dollar;
o alternative minimum tax consequences; or
o any state or local tax consequences.
The discussion below is based upon the provisions of the Internal Revenue Code,
existing and proposed regulations promulgated thereunder, and published rulings
and judicial decisions, all as of the date of this prospectus. Those authorities
may be changed, perhaps retroactively, in which case U.S. federal income tax
consequences may be different from those discussed below.
You should consult your own tax advisors concerning the U.S. federal income tax
consequences to you of the exchange of old notes for new notes, the ownership
and disposition of new notes and any consequences arising under the tax laws of
any state, local or other jurisdiction.
CONSEQUENCES TO UNITED STATES HOLDERS
The following discussion summarizes certain U.S. federal tax consequences that
will apply to you if you are a United States holder of old notes.
"United States holder" means a beneficial owner of an old note who:
o a citizen or resident of the United States;
o a corporation or partnership created or organized in or under the laws
of the United States or any political subdivision of the United
States;
o an estate, the income of which is subject to U.S. federal income
taxation regardless of its source; or
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o a trust that (1) is subject to the primary supervision of a court
within the United States and the control of one or more U.S. persons
or (2) has a valid election in effect under applicable U.S. Treasury
regulations to be treated as a U.S. person.
The Exchange. The exchange of old notes for new notes should not be treated as
an exchange for United States federal income tax purposes. Therefore, a new note
should be treated as a continuation of the corresponding old note and, as a
result, an exchanging United States holder should not recognize any gain or loss
on the exchange, and its holding period and basis in the new note would be the
same as in the old note.
Payments of Interest. Interest on a new note will generally be taxable to you as
ordinary income at the time it is paid or accrued in accordance with your method
of accounting for U.S. federal income tax purposes.
The notes will be treated as indebtedness of a U.S. obligor for U.S. federal
income tax purposes and, as a result, interest on the notes generally will be
treated as U.S. source income. Nonetheless, in the case of a United States
holder that is entitled to benefits under the Canada-United States Tax
Convention, as currently in effect, interest income on the notes may, subject to
certain restrictions and limitations, be treated as foreign source income for
purposes of claiming a U.S. foreign tax credit for certain Canadian income
taxes, if any, imposed on the holder.
Sale, Exchange and Retirement of Notes. In general, your tax basis in a new note
will be equal to your tax basis in the old note, reduced by any cash payments on
that note other than stated interest. Upon the sale, exchange, retirement or
other disposition of a note, you generally will recognize gain or loss equal to
the difference between the amount you realize upon the sale, exchange,
retirement or other disposition (less an amount equal to any accrued stated
interest that you did not previously include in income, which will be taxable as
ordinary income) and your adjusted tax basis in the note. That gain or loss will
be capital gain or loss and generally will be a U.S. source gain or loss unless
it is attributable to an office or other fixed place of business maintained by
you outside the United States and certain other conditions are met. Capital
gains of individuals derived in respect of capital assets held for more than one
year may be eligible for reduced rates of taxation. The deductibility of capital
losses is subject to limitations.
Market Discount. The market discount provisions of the Internal Revenue Code may
apply to a purchaser of the new notes. For this purpose, the market discount on
a note generally will equal the amount, if any, by which the stated redemption
price at maturity of the note immediately after its acquisition, other than at
original issue, exceeds the U.S. holder's adjusted tax basis in the note.
Subject to a limited exception, these provisions generally require a U.S. holder
who acquires a note at a market discount to treat as ordinary income any gain
recognized on the disposition of that note to the extent of the accrued market
discount on that note at the time of maturity or disposition, unless the U.S.
holder elects to include accrued market discount in income over the life of the
note.
This election to include market discount in income over the life of the note,
once made, applies to all market discount obligations acquired on or after the
first taxable year to which the election applies and may not be revoked without
the consent of the IRS. In general, market discount will be treated as accruing
on a straight-line basis over the remaining term of the note at the time of
acquisition, or, at the election of the U.S. holder, under a constant yield
method. If an election is made to accrue market discount under a constant yield
method, it will apply only to the note with respect to which it is made, and may
not be revoked. A U.S. holder who acquires a note at a market discount and who
does not elect to include accrued market discount in income over the life of the
note may be required to defer the deduction of a portion of the interest on any
indebtedness incurred or maintained to purchase or carry the note until maturity
or until the note is disposed of in a taxable transaction.
Amortizable Premium. In general, if you acquire a note for a premium over its
stated principal amount, plus accrued interest, such excess will constitute bond
premium. A U.S. holder generally may elect to amortize the premium over the
remaining term of the note under a constant-yield method, with a corresponding
decrease in tax basis. Such amortized premium is treated as an offset to
interest income on the note and not as a separate deduction. The election to
amortize premium on a constant yield method, once made, applies to all debt
obligations held or subsequently acquired by the electing U.S. holder on or
after the first day of the first taxable year to which the election applies and
may not be revoked without the consent of the IRS. If the U.S. holder does not
elect to amortize bond premium, that premium will decrease the gain or increase
the loss otherwise recognized on disposition of a new note.
Information Reporting and Backup Withholding. In general, information reporting
requirements will apply to certain payments of principal and interest on the new
notes and to the proceeds of sale of the new notes unless you are an exempt
recipient (such as a corporation). A backup withholding tax at a rate equal to
the fourth lowest income tax rate applicable for individuals (which, under
40
current law, is 30% for 2002 and 2003, 29% for 2004 and 2005, 28% for 2006 and
thereafter) will apply to such payments if you fail to provide a correct
taxpayer identification number, certified under penalties of perjury, or
certification of exempt status, or if you are notified by the Internal Revenue
Service that you have failed to report all interest and dividends required to be
shown on your U.S. federal income tax returns.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against your U.S. federal income tax liability provided the
required information is timely furnished to the IRS.
CONSEQUENCES TO NON-UNITED STATES HOLDERS
The following is a discussion of certain of the U.S. federal income and estate
tax consequences that generally will apply to you if you are a non-United States
holder of new notes. A non-United States holder is a beneficial owner of new
notes other than a United States holder.
U.S. Federal Withholding Tax. The 30% U.S. federal withholding tax will not
apply to any payment to you of interest on the new notes, provided that:
o you do not actually or constructively own 10% or more of the total
combined voting power of all classes of SYSCO voting stock within the
meaning of Section 871(h)(3) of the Internal Revenue Code and related
U.S. Treasury regulations;
o you are not a controlled foreign corporation that is related, directly
or indirectly, to SYSCO through stock ownership and you are not a bank
that received the notes on an extension of credit entered into in the
ordinary course of your trade or business; and
o either (1) you provide your name and address on an IRS Form W-8BEN,
and certify, under penalty of perjury, that you are not a U.S. person
or (2) you hold your new notes through certain foreign intermediaries
and you satisfy the certification requirements of applicable U.S.
Treasury regulations.
If you do not satisfy the requirements described above, payments of interest
made to you will be subject to the 30% U.S. federal withholding tax, unless you
provide us with a properly executed (1) IRS Form W-8BEN (or successor form)
claiming an exemption from or reduction in the rate of withholding under an
applicable tax treaty (in which case interest on the new notes will be subject
to U.S. federal withholding tax at the applicable treaty rate) or (2) IRS Form
W-8ECI (or successor form) stating that interest paid on the new notes is not
subject to withholding tax because it is effectively connected with your conduct
of a trade or business in the United States.
The 30% U.S. federal withholding tax generally will not apply to any payment of
principal or any gain that you realize on the sale, exchange, retirement or
other disposition of the new notes.
U.S. Federal Estate Tax. Your estate will not be subject to U.S. federal estate
tax on the new notes beneficially owned by you at the time of your death,
provided that, at the time of your death (1) you do not own, within the meaning
of the Internal Revenue Code and the U.S. Treasury regulations, 10% or more of
the total combined voting power of all classes of SYSCO voting stock, and (2)
interest on the new notes would not have been effectively connected with the
conduct by you of a trade or business in the United States.
U.S. Federal Income Tax. If you are engaged in a trade or business in the United
States and interest on any new note is effectively connected with the conduct of
that trade or business, you will be subject to U.S. federal income tax on that
interest on a net income basis (although generally exempt from the 30%
withholding tax) in the same manner as if you were a U.S. person as defined
under the Internal Revenue Code. In addition, if you are a foreign corporation,
you may also be subject to a branch profits tax equal to 30% (or lower
applicable treaty rate) of your earnings and profits for the taxable year,
subject to adjustments, that are effectively connected with the conduct by you
of a trade or business in the United States. For this purpose, interest on new
notes will be included in your earnings and profits.
Any gain or income realized on the disposition of a new note generally will not
be subject to U.S. federal income tax unless (1) that gain or income is
effectively connected with the conduct of a trade or business in the United
States by you, or (2) in the case of gain, you are an individual who is present
in the United States for 183 days or more in the taxable year of that
disposition and certain other conditions are met.
41
Information Reporting and Backup Withholding. Under U.S. Treasury regulations
that became effective for payments made on or after January 1, 2001, backup
withholding and information reporting will not apply to payments that we make or
any of our paying agents (in its capacity as such) makes to you if you have
provided the required certification that you are a non-United States holder and
provided that neither we nor any of our paying agents has actual knowledge that
you are a United States holder (as described above).
In addition, you will not be subject to backup withholding and information
reporting with respect to the proceeds of the sale of a new note within the
United States or conducted through certain U. S. -related financial
intermediaries, if the payor receives the statement described above and does not
have actual knowledge that you are a U.S. person, as defined under the Internal
Revenue Code, or you otherwise establish an exemption.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against your U.S. federal income tax liability provided the
required information is timely furnished to the IRS.
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
General. This summary is of the principal Canadian federal income tax
considerations under the Income Tax Act (Canada) and the Income Tax Regulations
(which we refer to in this section as the Act and the Regulations, respectively)
in effect on the date hereof generally applicable to a beneficial owner of old
notes who exchanges such old notes for new notes, a Holder, pursuant to the
exchange offer and who, for the purposes of the Act:
o deals with us at arm's-length;
o is neither resident nor deemed to be resident in Canada at any time;
and
o holds the notes as capital property and does not use or hold and is
not deemed to use or hold the notes in a business that the Holder
carries on, or is deemed to carry on, in Canada at any time.
For purposes of the Income Tax Act (Canada), related persons (as defined
therein) are deemed not to deal at arm's length, and it is a question of fact
whether persons not related to each other deal at arm's length.
Special rules that are not discussed in this summary may apply to a Holder that
is an insurer carrying on business in Canada and in a country other than Canada.
This summary is not applicable to a Holder that is a "financial institution," as
defined by the Act for purposes of certain rules applicable to income, gain or
loss arising from "mark-to-market property. "
We have based this summary on the current provisions of the Act and the
Regulations, all specific proposals to amend the Act and Regulations publicly
announced by or on behalf of the Minister of Finance (Canada) prior to the date
of this prospectus and the current published administrative practices and
policies of the Canada Customs and Revenue Agency. This summary assumes that the
Act and the Regulations will be amended in accordance with the proposals as so
announced, although no assurance of that can be given.
This summary is not exhaustive of all possible Canadian federal income tax
considerations, and except for the proposed amendments, does not take into
account or anticipate any changes in law whether by judicial, governmental or
legislative decision or action, nor does it take into account tax legislation or
considerations of any province or territory of Canada or any jurisdiction other
than Canada. The provisions of provincial income tax legislation vary from
province to province in Canada and in some cases differ from federal income tax
legislation.
This summary is of a general nature only and is not intended to be, and should
not be interpreted as, legal or tax advice to any particular Holder.
Accordingly, holders of old notes considering exchanging their old notes for new
notes are urged to consult their own tax advisors as to the particular tax
consequences to them of participating in the exchange offer.
Canadian Withholding Tax. Subject to the exception in the next paragraph, any
amount paid or credited, or deemed to be paid or credited, by a resident of
Canada as, on account or in lieu of payment of, or in satisfaction of interest
to non-residents of Canada (other than certain persons carrying on business in
Canada, to the extent provided in the Act and the Regulations) generally will be
subject to a 25% non-resident withholding tax. The rate of such tax may be
reduced through the application of international tax treaties or conventions to
42
which Canada is a party, usually to a rate of 10% or 15%.
Generally, interest (other than certain interest described in the Act) payable
by a corporation resident in Canada to non-residents of Canada who deal at
arm's-length with that corporation on an obligation where the evidence of
indebtedness was issued by that corporation after June 23, 1975 is exempt from
such withholding tax if under the terms of the obligation or any related
agreement, the corporation may not under any circumstances be obliged to pay
more than 25% of the principal amount of the obligation (or the aggregate
principal amount of a number of obligations, identical in all respects but for
their separate principal amounts, that comprise a single debt issue of
obligations) within five years from the date of its issue except:
o in the event of a failure or default under such terms or agreement;
o if the terms of the obligation or such agreement become unlawful or
are changed by legislation or by a court, statutory board or
commission;
o if such a non-resident person exercises a right under the terms of the
obligation or such agreement to convert the obligation into, or
exchange the obligation for, a "prescribed security" under the Act and
the Regulations for this purpose; or
o in the event of the death of the holder of the obligation.
For purposes of the Act and the Regulations, we are treated as a corporation
resident in Canada. We believe that interest (including any make-whole premium
deemed to be interest) paid or credited (or deemed to be paid or credited for
purposes of the Act) on a new note to a Holder will be exempt from Canadian
withholding tax.
In addition, no other taxes on income including taxable capital gains will be
payable by a Holder in respect of the acquisition, ownership or disposition of a
new note. The exchange of old notes for new notes will not result in any
Canadian federal income tax consequences to a Holder.
PLAN OF DISTRIBUTION
We are not using any underwriters for this exchange offer.
Each broker-dealer that receives new notes for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of the new notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of any new notes received in exchange for new notes
acquired by the broker-dealer as a result of market-making or other trading
activities. For a period of up to 180 days after the expiration of the exchange
offer, we will promptly send additional copies of this prospectus and any
amendment or supplement to this prospectus to any broker-dealer that requests
these documents. In addition, during this 180-day period, all dealers effecting
transactions in the new notes may be required to deliver a prospectus.
We will not receive any proceeds from any sale of new notes by
broker-dealers or any other persons. New notes received by broker-dealers for
their own account pursuant to the exchange offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the notes, or a combination of
these methods of resale, at market prices prevailing at the time of resale, at
prices related to the prevailing market prices or negotiated prices. Any resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any
broker-dealer and/or the purchasers of any new notes. Any broker-dealer that
resells new notes that were received by it for its own account pursuant to the
exchange offer and any broker-dealer that participates in a distribution of
notes may be deemed to be an "underwriter" within the meaning of the Securities
Act, and any profit resulting from these resales of new notes and any
commissions or concessions received by any of these persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
43
We have agreed to pay all expenses incident to the exchange offer other
than commissions or concessions of any brokers or dealers and will indemnify the
holders of the old notes, including any broker-dealers, against certain
liabilities, including liabilities under the Securities Act.
44
LEGAL MATTERS
The validity of the new notes will be passed upon for us by Arnall Golden
Gregory LLP, Atlanta, Georgia, SYSCO's outside counsel, and Stewart McKelvey
Stirling Scales LLP, our special Canadian counsel. Jonathan Golden, the sole
shareholder of a professional corporation which is a partner of Arnall Golden
Gregory LLP, is one of SYSCO's directors. Attorneys with the firm Arnall Golden
Gregory LLP own an aggregate of approximately 170,000 shares of SYSCO common
stock.
EXPERTS
The consolidated financial statements and the related consolidated financial
statement schedule of SYSCO Corporation at June 29, 2002, and for each of the
three year periods then ended appearing in SYSCO Corporation's Annual Report on
Form 10-K for the fiscal year ended June 29, 2002, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report included therein
and incorporated herein by reference. Such consolidated financial statements and
consolidated financial statement schedule are incorporated herein by reference
in reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
45
No dealer, salesperson, or other individual has been authorized to give any
information or to make any representation not contained in this prospectus and,
if given or made, such information or representations must not be relied upon as
having been authorized by us. This prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any of the securities offered hereby
in any jurisdiction to any person to whom it is unlawful to make an offer in
those jurisdictions. Neither the delivery of this prospectus nor any sale made
hereunder will, under any circumstances, create any implication that the
information in this prospectus is correct as of any time subsequent to the date
of this prospectus or that there has been no change in the affairs of SYSCO or
SYSCO International, Co. since that date.
SYSCO INTERNATIONAL, CO.
OFFER TO EXCHANGE
6.10% NOTES DUE 2012
UNCONDITIONALLY GUARANTEED BY
SYSCO CORPORATION
NOVEMBER ___, 2002
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of the Delaware General Corporation Law and the Restated
Certificate of Incorporation, as amended, and the Amended and Restated By-laws
of SYSCO contain provisions covering indemnification of corporate directors and
officers against certain liabilities and expenses incurred as a result of
proceedings involving such persons in their capacities as directors and
officers, including proceedings under the Securities Act and the Exchange Act.
SYSCO has entered into indemnity contracts and provides indemnity insurance
pursuant to which officers and directors are indemnified and insured against
liability or loss under certain circumstances which may include liability or
related loss under the Securities Act and the Exchange Act.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits Description
-------- -----------
1.1* Purchase Agreement dated as of May 20, 2002 between SYSCO
International, Co., SYSCO Corporation and the several
purchasers named in Schedule I thereto.
4.1* Indenture, including form of note, dated May 23, 2002,
between SYSCO International, Co., SYSCO Corporation and
Wachovia Bank, National Association, as trustee.
4.2* Registration Rights Agreement dated May 23, 2002 between
SYSCO International, Co., SYSCO Corporation and the several
initial purchasers named therein.
5.1* Opinion of Arnall Golden Gregory LLP.
5.2* Opinion of Stewart McKelvey Stirling Scales.
23.1* Consent of Arnall Golden Gregory LLP (included in the
opinion filed as Exhibit 5.1 to this Registration
Statement).
23.2 Consent of Ernst & Young LLP.
24.1* Powers of Attorney (included in the signature page of this
Registration Statement).
25.1* Statement of Eligibility of Trustee on Form T-1.
99.1* Form of Letter of Transmittal for old 6.10% notes due 2012.
99.2* Form of Notice of Guaranteed Delivery for old 6.10% notes
due 2012.
99.3* Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
99.4* Form of Letter to Clients.
II-1
- --------------------
*Previously filed.
(b) Financial Statement Schedules -- None
(c) Report, Opinion or Appraisal - Not applicable
ITEM 22. UNDERTAKINGS
(a) 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; and
(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.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
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 prior to any public reoffering of the securities
registered hereunder through the use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the Registrant undertakes that
such reoffering prospectus will contain the information called for by the
applicable registration form with respect to reofferings by persons who may be
deemed underwriters, in addition to the information called for by the other
items of the applicable form.
5. That every prospectus (i) that is filed pursuant to the
immediately preceding paragraph, or (ii) that purports to meet the requirements
of Section 10(a)(3) of the Securities Act of 1933 and is used in connection with
an offering of securities subject to Rule 415, will be filed as part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for the purposes of determining any liability
under the Securities Act of 1933, 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.
6. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Securities Act of 1933 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
II-2
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
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
7. That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(b) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of
receipt of such request, and to send the incorporated documents by first-class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston and State of
Texas, on the 31st day of October, 2002.
SYSCO CORPORATION
By:/s/Charles H. Cotros
----------------------------------
Charles H. Cotros
Chairman 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.
SIGNATURE TITLE DATE
/s/Charles H. Cotros Chairman, Chief Executive October 31, 2002
- ---------------------- Officer and Director
Charles H. Cotros (principal executive officer)
/s/John K. Stubblefield, Jr. Executive Vice President, October 31, 2002
- ---------------------------- Finance and Administration
John K. Stubblefield, Jr. (principal financial and
accounting officer)
* Director October 31, 2002
- ----------------------------
John W. Anderson
* Director October 31, 2002
- ----------------------------
Colin G. Campbell
* Director October 31, 2002
- ----------------------------
Judith B. Craven
* Director October 31, 2002
- -----------------------------
Jonathan Golden
/s/ Thomas E. Lankford Director October 31, 2002
- -----------------------------
Thomas E. Lankford
* Director October 31, 2002
- -----------------------------
Richard G. Merrill
* Director October 31, 2002
- -----------------------------
Frank H. Richardson
/s/Richard J. Schnieders Director October 31, 2002
- -----------------------------
Richard J. Schnieders
* Director October 31, 2002
- -----------------------------
Phyllis S. Sewell
* Director October 31, 2002
- -----------------------------
Jackie M. Ward
By: */s/ Charles H. Cotros
Charles H. Cotros
Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston and State of
Texas, on the 31st day of October, 2002.
SYSCO International, Co.
By /s/ Michael C. Nichols
------------------------------------
Michael C. Nichols
President
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.
SIGNATURE TITLE DATE
/s/ Michael C. Nichols President and Director October 31, 2002
- ------------------------ (principal executive officer)
Michael C. Nichols
/s/ Diane Day Sanders Treasurer and Director October 31, 2002
- ------------------------ (principal financial and
Diane Day Sanders accounting officer)
/s/ Bruce Soltis Director October 31, 2002
- ------------------------
Bruce Soltis
EXHIBIT INDEX
Exhibits Description
1.1* Purchase Agreement dated as of May 20, 2002 between SYSCO
International, Co., SYSCO Corporation and the several purchasers
named in Schedule I thereto.
4.1* Indenture, including form of note, dated May 23, 2002, between
SYSCO International, Co., SYSCO Corporation and Wachovia Bank,
National Association, as trustee.
4.2* Registration Rights Agreement dated May 23, 2002 between SYSCO
International, Co., SYSCO Corporation and the several initial
purchasers named therein.
5.1* Opinion of Arnall Golden Gregory LLP.
5.2* Opinion of Stewart McKelvey Stirling Scales.
23.1* Consent of Arnall Golden Gregory LLP (included in the opinion
filed as Exhibit 5.1 to this Registration Statement).
23.2 Consent of Ernst & Young LLP.
24.1* Powers of Attorney (included in the signature page of this
Registration Statement).
25.1* Statement of Eligibility of Trustee on Form T-1.
99.1* Form of Letter of Transmittal for old 6.10% notes due 2012.
99.2* Form of Notice of Guaranteed Delivery for old 6.10% notes due
2012.
99.3* Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
99.4* Form of Letter to Clients.
------------------------------
*Previously filed.
1476730