SYSCO CORPORATION Dividend Reinvestment Plan With Optional Cash Purchase Feature This Is Not A Prospectus. 02/23/2006
GENERAL INFORMATION What is the SYSCO Corporation Dividend Reinvestment Plan with Optional Cash Purchase Feature? The SYSCO Corporation Dividend Reinvestment Plan with Optional Cash Purchase Feature (the Plan ) is an investment service being offered to shareholders of record of SYSCO Corporation ( SYSCO ) by American Stock Transfer & Trust Company ( AST ). The Plan provides an opportunity to purchase additional shares of SYSCO s common stock with the automatic reinvestment of all cash dividends and, at a Plan participant s option, with cash investments. Who may participate? Any shareholder of record with a minimum of one (1) share of SYSCO s common stock is eligible to participate in the Plan. Shares held in a brokerage account do not qualify for participation in the Plan. Your initial investment in SYSCO s common stock must be made through a stockbroker or other securities dealer, or in a transaction with a SYSCO shareholder. What are the Plan s features? You can reinvest all cash dividends in SYSCO s common stock. Additional cash purchases of SYSCO s common stock may be made, either regularly or from time to time, in a minimum amount of $100 per transaction and a maximum of $10,000 per month. Your money is fully invested through the purchase of both full and fractional shares calculated to three decimal places. Dividends are earned on all full and fractional shares credited to your account. All such dividends are subject to federal and applicable state and local taxes. SYSCO pays all costs associated with the automatic dividend reinvestment feature of the Plan. Each dollar of reinvested dividends going into the Plan is applied in full to the purchase of shares with no deduction for brokerage commissions, service charges or administrative fees. Shares in your Plan account may be sold directly through AST. You are relieved of the burden of certificate custody and may, at your option, deposit in your Plan account for safekeeping additional SYSCO shares you own which are registered in the same name as your Plan account. Shares purchased under the Plan are retained by AST. If you prefer, however, a certificate for your whole-share holdings can be issued to you upon request at no charge; fractional share certificates will not be issued under the Plan. How much does it cost? There will be no charge to any participant for the automatic reinvestment of dividends under the Plan. A modest service charge of $2.50 per transaction plus $0.05 per share will be deducted from each optional cash investment. The Plan provides an investment alternative with savings from the typical brokers commissions on odd lot transactions. Additionally, a service charge of $10.00 per transaction plus $0.05 per share will be deducted from the proceeds of each sale of any shares in - 2 -
your account. SYSCO will pay all other brokerage commissions, fees, expenses and administrative costs incurred in the operation of the Plan. SYSCO may at any time institute additional service charges in connection with each transaction effected on your behalf. How do I participate? You may enroll in the Plan at any time by simply completing and signing the authorization form and returning it to AST in the enclosed envelope. Should you misplace the envelope, just mail the authorization form to AST s general transaction processing address: American Stock Transfer & Trust Company Attn: Dividend Reinvestment P.O. Box 922 Wall Street Station New York, NY 10269-0560 General Correspondence Regarding the Plan or your Account should be mailed to: American Stock Transfer & Trust Company 59 Maiden Lane New York, NY 100038 Or visit AST s website at www.amstock.com to enroll in the Plan or process financial transactions. You may also call the toll free number 1-888-CALL SYY (1-888-225-5799) to process certain transactions. What does the authorization form provide? The authorization form permits AST to do the following: Dividend Reinvestment Fully reinvest dividends on all shares currently or subsequently registered in your name. Optional Cash Payments After receipt of the minimum optional cash investment of $100 per transaction up to a maximum of $10,000 per month by check, money order or automatic funds transfer (in U.S. dollars, drawn on a U.S. financial institution and payable to AST ); AST will purchase shares of SYSCO s common stock for your account. You are never obligated to make optional cash investments, and the amount of any cash investment may vary, subject to the minimum and maximum investment requirements. You should include with each optional payment the tear-off Transaction Request Form included with the most recent Plan statement you received. If you misplace the Transaction Request Form, you should include with each optional payment a request that the payment be applied to the purchase of SYSCO shares. Your instructions also should indicate your Plan account number and the name as it appears on your Plan account. Optional cash payments must be received by AST no later than five (5) business days prior to an Investment Date, as defined below, ( Cash Investment Deadline ). All optional cash investments should be mailed to the Transaction Processing address above. It is not necessary to make regular optional cash payments to participate. However, you may set up a program to transfer funds automatically on a regular, periodic basis from a U.S. bank or other - 3 -
financial institution that is a member of the Automated Clearing House Association. To initiate automatic monthly optional payments, contact AST by telephone at (800) 278-4353 or in writing at AST s Transaction address specified above to request an Automatic Investment Form. Once the completed form has been returned to AST, optional payments made in this manner will be drawn from your account five (5) business days prior to an Investment Date, as long as the completed form is received by the last business day of the preceding month. Completed forms received after the last business day of any month will authorize automatic monthly payments, commencing five (5) business days prior to the second Investment Date following receipt. To terminate automatic monthly payments, deliver written notice to AST at the transaction address specified on page 3. The termination request must be received no later than ten (10) business days prior to any Investment Date in order to be effective as of that Investment Date. If any check you send to AST for investment is returned unpaid for any reason, AST will consider the request for investment of this money null and void and will immediately remove from your account shares of SYSCO s common stock, if any, purchased upon the prior credit of this money. AST will be entitled to sell these shares to satisfy any uncollected amounts. If the net proceeds of the sale of these shares are insufficient to satisfy the balance of the uncollected amounts, AST will have the option to sell additional shares of SYSCO common stock from your account as necessary to satisfy the uncollected balance. AST will sell additional shares of SYSCO common stock from your account to satisfy return and check fees. How are shares purchased? Upon receipt of your completed authorization form, AST will designate your account for dividend reinvestment and optional cash purchase. All purchases of stock made with future dividends on SYSCO s common stock and optional cash investments will be credited to your account. The price at which shares of SYSCO s common stock are acquired for your account will be the average purchase price per share for shares purchased on any Investment Date in any bulk purchase(s) for the accounts of Plan participants. As soon as practical after each purchase is made, AST will send you an itemized statement indicating the net dollars invested on your behalf, the price per share of common stock purchased thereby, the number of shares acquired (full and fractional) and the new share balance. The Plan s Investment Dates are the fourth Friday of each month, or if that day is not a day on which both AST and The New York Stock Exchange are open for business, the next day on which they are both open. On each Investment Date, AST utilizes the dividends (if any) and optional payments received from participants since the last Investment Date and prior to the Cash Investment Deadline for the bulk purchase(s) of shares of SYSCO s common stock. AST will reinvest dividends and make share purchases as described above, and in no event later than thirty (30) days after receipt of funds, except when necessary to comply with applicable provisions of federal securities laws. After enrolling in the Plan, there is no need for any further action by you except for the remittance of any desired optional cash investments, which may be made either regularly or from time to time. Future investments and dividend reinvestments will be confirmed promptly by AST. You should retain all statements received from AST for tax and other purposes, as AST may charge a fee if requested to provide past history - 4 -
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON OPTIONAL CASH PAYMENTS HELD PENDING INVESTMENT BY AST. YOU MAY OBTAIN A REFUND OF ANY OPTIONAL CASH PAYMENT UPON WRITTEN REQUEST TO AST, PROVIDED THAT SUCH REQUEST IS RECEIVED NO LATER THAN TWO (2) BUSINESS DAYS BEFORE AN INVESTMENT DATE. How will my shares be held for safekeeping under the Plan? As a safeguard against loss, theft or destruction of your stock certificates, AST will segregate and hold all shares purchased as well as shares deposited by you into your account in the name of AST s nominee until you terminate your participation in the Plan or withdraw or sell shares. No certificates for shares will be issued to you unless you request a certificate in writing or terminate your participation in the Plan. You also may elect to deposit in your Plan account shares of SYSCO s common stock which you currently hold in certificated form and are registered in the same name as your Plan account. Shares deposited in the account are treated the same as those purchased under the Plan; that is, dividends on all shares deposited in your Plan account will be reinvested. Any certificates of SYSCO s common stock that you desire to deposit in your Plan account should be sent to AST at the transaction address specified on page 3 by registered or certified mail, return receipt requested, accompanied by a completed Transaction Request Form, which is attached to the bottom of your Plan statement, or instructions requesting certificate deposit. As you bear the risk of loss in transit, you may want to purchase postal insurance of 2% of the approximate market value of the shares, which is the cost of posting a bond to replace certificates if they are lost. Will I have full shareholder rights? Yes. Your shares of SYSCO s common stock purchased under the Plan have full voting power. Your account will be credited for all distributions including stock splits and dividends payable on all shares held under the Plan. In the event SYSCO makes available to its shareholders rights to purchase additional shares of common stock or other securities, to the extent that AST is permitted, it will sell such rights and use the proceeds to purchase additional shares of common stock for the account of each participant. Transaction processing may either be curtailed or suspended until the completion of any stock dividend, stock split or corporate action. How do I terminate my participation in the Plan? You may terminate your participation in the Plan at any time by delivering notice to AST or via the website. Just complete and return an executed Transaction Request Form (on the bottom of your Plan account statement) or write AST at the transaction address specified on page 3 and request that your participation be discontinued. The termination will be effective with the first dividend for which a record date occurs after AST receives your notice. Thereafter, all dividends will be paid to you in cash. Termination notice received by AST after a cash dividend record date, but prior to the cash dividend payment date, may not become effective until the next business day following such cash dividend payment date. - 5 -
Unless you instruct AST to sell your shares, you will receive a certificate for all full shares and a check for the cash value of any fractional share. There is no service charge or fee in connection with any termination of participation in the Plan, unless you instruct AST to sell your shares. How do I sell shares in my Plan account? You may direct AST to sell any number of SYSCO shares in your Plan account by notifying AST. Just complete and return an executed Transaction Request Form (on the bottom of your Plan account statement) or write AST at the transaction address specified on page 3 or via the internet, indicating the number of shares to be sold and the name as it appears on your Plan account. You must, however, retain at least one (1) share to continue participation in the Plan. Sales will be executed within five (5) business days of receipt of your instructions. The sales price of your Plan shares will be the average sales price per share of all Plan shares sold by AST on the sales date. As soon as practical after each sale is made, AST will send you an itemized statement indicating the net sale proceeds, the service fees charged, the sales price per share and the new share balance in your Plan account. AST also will provide you information for tax purposes with respect to each sale along with each sale proceeds check. Please retain these statements for tax and other purposes as AST may charge a fee if requested to provide duplicate information. If you sell or transfer ownership of all whole shares in your Plan account, any fractional share remaining in the Plan will be paid to you at the then current market value of the stock and the account will be closed. PLEASE BE AWARE THAT THE PRICE OF SYSCO s COMMON STOCK IS SUBJECT TO MARKET FLUCTUATIONS AND CAN DECREASE AS WELL AS INCREASE. NO SALES PRICE CAN BE DETERMINED IN ADVANCE. YOU ALONE BEAR THE MARKET RISK AND SHOULD CONSIDER THIS RISK CAREFULLY BEFORE ISSUING SELLING INSTRUCTIONS. How do I withdraw shares in my Plan account? You may request a distribution of all or part of the shares in your Plan account by delivering written notice to AST at any time. Just complete and return an executed Transaction Request Form (on the bottom of your Plan account statement) indicating the number of shares you desire to be distributed. You will receive a certificate for your full shares and a check for the cash value of any fractional share, in the event of a distribution of all shares in the account. - 6 -
SYSCO CORPORATION DIVIDEND REINVESTMENT PLAN WITH OPTIONAL CASH PURCHASE FEATURE 1. Purpose. The SYSCO Corporation Dividend Reinvestment Plan with Optional Cash Purchase Feature (the Plan ) is intended to provide to holders of record of SYSCO s Common Stock the opportunity to purchase additional shares of Common Stock with their cash dividends and, at their option, with cash payments. 2. Definitions: (a) Average Price means the average purchase or sales price per share of SYSCO s Common Stock for the accounts of Participants in the Plan. (b) AST means American Stock Transfer & Trust Company and any successor thereto. (c) Business Day means any day other than a Saturday, Sunday or legal holiday. (d) Cash Investment Deadline means the date which is five (5) business days prior to an Investment Date. (e) Common Stock means the Common Stock, $1.00 par value, of SYSCO. (f) Investment Date means the fourth Friday of each month, or if that day is not a day on which both AST and The New York Stock Exchange are open for business, the next day on which they are both open for business. (g) Market Price means, for any given day, the closing price of SYSCO s Common Stock as reported on The New York Stock Exchange for that day. (h) Participant means any Stockholder who has elected to participate in the Plan in accordance with the terms and conditions hereinafter set forth by completing and returning a Plan Authorization. (i) Plan Authorization means the authorization form which a Stockholder executes and returns to AST to enroll in the Plan. (j) Stockholder means any holder of record of the Common Stock. (k) SYSCO means SYSCO Corporation and any successor thereto by merger, consolidation, liquidation or other reorganization which has made provision for adoption of this Plan and the assumption of SYSCO s obligations hereunder. 3. Plan Enrollment; Effect of Investments by a Participant. A Stockholder may enroll in the Plan at any time. A Plan Authorization received by AST on or before a record date for payment of cash dividends on Common Stock will qualify such Stockholder s dividends for reinvestment as of the first dividend payment date after such record date and for optional cash investment as of the next Investment Date, subject to the relevant Cash Investment Deadline. - 7 -
A Stockholder who has elected to participate in the Plan by executing and returning to AST a Plan Authorization shall, by virtue of that authorization, reinvest all cash dividends to purchase shares of Common Stock and may make either regular or periodic optional cash investments in additional shares of Common Stock. Optional investments shall be permitted in an amount of not less than $100 per transaction or more than $10,000 per month. In order to avoid delays prior to the investment of cash payments, Participants are advised to send their cash remittances so as to reach AST no later than the relevant Cash Investment Deadline. Cash remittances must be by check or money order in U.S. dollars and should be accompanied by the cash remittance form included with the statement of a Participant s Plan account. All cash payments received by the Cash Investment Deadline will be invested concurrently with the Participant s dividend funds (if received in a month of dividend payment) on the immediately following Investment Date. Cash payments received after a Cash Investment Deadline will not be invested until the next Investment Date which follows the subsequent month s Cash Investment Deadline. No interest will accrue or be paid on optional cash payments held pending investment by AST. Participants may obtain a refund of any optional cash payment upon written request to AST received not less than two (2) Business Days prior to an Investment Date. In the event any Participant s check is returned unpaid for any reason, AST will consider the request for investment of such money null and void and shall immediately remove from a Participant s account shares of Common Stock, if any, purchased upon the prior credit of such money. AST shall thereupon be entitled to sell these shares to satisfy any uncollected amounts. If the net proceeds of the sale of such shares are insufficient to satisfy the balance of such uncollected amounts, AST shall have the option to sell such additional shares of Common Stock from a Participant s account as necessary to satisfy the uncollected balance. AST will sell additional shares from a participant account to satisfy and return check fees. 4. Frequency and Manner of Purchases and Sales of Common Stock by Bank. Upon the timely receipt of all dividends and optional cash investments by AST on behalf of all Participants, AST, as agent for the Participants, will apply on each Investment Date all funds received to the purchase of shares of Common Stock for the accounts of such Participants. Upon receipt of notice from any Participant to sell shares of Common Stock held on their behalf, AST will execute such sales transaction within five (5) Business Days of receipt of the notice to sell. AST may make such purchases and sales (i) on any securities exchange where the Common Stock is traded, in the over-the-counter market or in negotiated transactions, and (ii) on such terms as to price, delivery and otherwise as AST in its sole discretion may determine; provided, however, AST shall be prohibited from purchasing or selling any shares of Common Stock from or to SYSCO or any affiliate thereof. In making purchases or sales of shares of Common Stock, as the case may be, for a Participant s account, AST will combine the Participant s funds or shares with those of other Participants. AST shall have no responsibility with respect to the value of the Common Stock acquired or sold for a Participant s account. Governmental regulations may require the temporary curtailment or suspension of purchases or sales of Common Stock under the Plan, and AST shall not be accountable for its inability to make purchases or sales under the Plan at such times. 5. Price to Participant. The price at which AST shall be deemed to have acquired or sold shares for the Participant s account shall be the Average Price of purchase or sale of all shares purchased or sold - 8 -
by AST in accordance with Paragraph 4 above. No Participant shall have any authority or power to direct the time or price at which Common Stock may be purchased or sold. 6. Custody of Stock and Issuance of Stock Certificates. AST will segregate and hold shares of Common Stock of all Participants, including all shares purchased pursuant to the Plan as well as shares deposited by Participants in their accounts, in the name of AST s nominee. No certificates for Common Stock will be issued to a Participant unless the Participant requests such certificates in writing or terminates the Participant s account as hereinafter provided. No certificate for a fractional share will be issued under the Plan; however, fractional share purchased for the account of a Participant and dividends and distributions on such fractional share will be credited to a Participant s account. 7. Statements to Participants. As soon as practical following each purchase or sale of Common Stock Paragraph 4 above, AST will furnish each Participant with a statement indicating (a) the net dollars invested or received on behalf of said Participant, (b) the price per share of Common Stock purchased or sold, (c) the number of full and fractional shares of Common Stock purchased or the number of full shares sold, (d) the service charge, if any, (e) the total number of full and fractional shares held under the Plan, and (f) a cumulative summary of all transactions affecting said Participant s account for the current year. Each Participant should retain all statements received from AST for tax and other purposes, as AST may charge a fee if requested to provide past history. 8. Stock Dividends and Stock Splits. Any shares of Common Stock representing stock dividends or splits distributed by SYSCO with respect to shares of Common Stock held by AST for the Participant s account will be credited to the account of the Participant. Transaction processing may either be curtailed or suspended until the completion of any stock dividend, stock split or corporate action. 9. Rights to Purchase Shares or Other Securities. In the event SYSCO should make available to Stockholders rights to purchase additional shares or other securities, AST will sell such rights accruing to the shares held by AST for the Participant s account, to the extent AST is permitted to sell such in accordance with their terms, and will apply the net proceeds of such sale to the purchase of Common Stock accordance with Paragraph 4 above. 10. Voting of Shares Held by Bank. AST will vote any shares of Common Stock that it holds for account of a Participant in accordance with the directions of the Participant. AST will not vote the shares held by AST for the account of a Participant from whom no voting directions were received. 11. Other Information to be Furnished to Participants. The automatic reinvestment of cash dividends under this Plan does not relieve the Participant of any liability for the payment of federal or applicable state or income taxes resulting from receipt of such dividends. Annually, AST will provide the Participant information for tax purposes with respect to the dividends on the shares held by AST for the Participant s account. As soon as practical after the date of distribution of any stock dividend or shares resulting from a split, AST will furnish the Participant with a statement reflecting such transaction. AST also will provide the Participant with information for tax purposes in connection with each sale of shares in Participant s account. 12. Termination of Participant s Account and Termination of Plan; Withdrawal or Sale of Shares. Participant may terminate participation in the Plan at any time by delivering notice to AST or via the website; termination notice received by AST after a cash dividend record date, but prior to the - 9 -
cash dividend payment date, may not become effective until the next Business Day following such cash dividend payment date. The Participant may request a distribution (with respect to whole shares only) or sale of any Common Stock in the Participant s Plan account at any time. SYSCO may terminate the Plan at any time upon notice in writing mailed to each Participant. In the event of termination of the Plan by SYSCO, termination of participation in the Plan by the Participant or a request for distribution of shares held in a Participant s account, AST will send the Participant certificates for the full shares (or the number of shares Participant has requested to be distributed) in his or her account. The Participant s fractional share interest will be converted to cash at the Market Price as of the date AST gives effect to such termination or withdrawal of all shares. 13. Service Charges and Brokerage Commissions. There shall be no service charge to any Participant for any reinvestment of cash dividends for the account of a Participant pursuant to the Plan. A service charge of $10.00 per sale plus $0.05 per share sold shall be deducted from the proceeds due any Participant. SYSCO shall pay all other brokerage commissions, fees, expenses and administrative costs incurred in the operation of the Plan; provided, however, SYSCO may at any time institute additional service charges to Participants in connection with each transaction effected on behalf of a Participant. 14. Responsibilities. AST and SYSCO shall not be liable for any acts done in good faith or for any good faith omission to act, including, without limitation, any claims of liability (a) arising out of the failure to terminate the Participant s account on the death of such Participant prior to receipt of written notice by AST of such death; (b) with respect to the price or prices at which shares are purchased or sold for the Participant s account; (c) concerning the times the purchases or sales are made; and (d) concerning the value of the shares acquired for the Participant s account. 15. Amendment of Plan. SYSCO may amend the terms and provisions of this Plan at any time without the prior written consent of the parties affected thereby. - 10 -