Sysco 2010 Annual Report Download - page 32
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Please find page 32 of the 2010 Sysco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.expired or will expire. Since July 3, 2010, two contracts covering 452 of the 2,400 employees have been renegotiated. Failure of our operating
companies to effectively renegotiate these contracts could result in work stoppages. Although our operating subsidiaries have not experienced any
significant labor disputes or work stoppages to date, and we believe they have satisfactory relationships with their unions, a work stoppage due to
failure of multiple operating subsidiaries to renegotiate union contracts could have a material adverse effect on us.
A Shortage of Qualified Labor Could Negatively Impact our Business and Materially Reduce Earnings
Our operations rely heavily on our employees, particularly drivers, and any shortage of qualified labor could significantly affect our business. Our
recruiting and retention efforts and efforts to increase productivity gains may not be successful and there may be a shortage of qualified drivers in
future periods. Any such shortage would decrease Sysco’s ability to effectively serve our customers. Such a shortage would also likely lead to higher
wages for employees and a corresponding reduction in our net earnings.
Our Preferred Stock Provides Anti-Takeover Benefits that may not be Viewed as Beneficial to Stockholders
Under our Restated Certificate of Incorporation, Sysco’s Board of Directors is authorized to issue up to 1,500,000 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 existence of this undesignated preferred stock could allow the Board of Directors to adopt a shareholder rights plan without
obtaining stockholder approval, which could result in substantial dilution to a potential acquirer. As a result, hostile takeover attempts that might
result in an acquisition of Sysco, that could otherwise have been financially beneficial to our stockholders, could be deterred.
Item 1B. Unresolved Staff Comments
None.
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