Sysco 2012 Annual Report Download - page 33

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SYSCO CORPORATION-Form10-K10
PARTI
ITEM1BUnresolved Staff Comments
to effectively renegotiate these contracts could result in work stoppages. Although our operating subsidiaries have not experienced any signifi cant 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 qualifi ed labor could negatively impact our business and materially reduce earnings
Our operations rely heavily on our employees, particularly drivers, and any shortage of qualifi ed labor could signifi cantly 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 qualifi ed 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 authorized preferred stock provides anti-takeover benefi ts that may not be viewed as benefi cial to stockholders
Under our Restated Certifi cate 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 diffi cult 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 fi nancially benefi cial to our stockholders, could be deterred.
ITEM1B Unresolved Staff Comments
None.