Doughties Foods Inc – ‘DEFM14A’ on 7/23/99

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Definitive Proxy Solicitation Material — Merger or Acquisition   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEFM14A     Doughtie's Foods, Inc.                               131    669K 

Document Table of Contents

DEFM14A
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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES 
EXCHANGE ACT OF 1934 (AMENDMENT NO.   ) 

Filed by the Registrant [X]                                           
Filed by a Party other than the Registrant [ ]                        
Check the appropriate box:                                            
[ ] Preliminary Proxy Statement       [ ] Confidential, for Use of the
                                              Commission Only (as permitted by
                               Rule 14a-6(e)(2))
[X] Definitive Proxy Statement                                        
[ ] Definitive Additional Materials                                   
   [ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12

DOUGHTIE'S FOODS, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

N/A 
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              
[ ] No fee required.                                                  
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.                                                         

(1) Title of each class of securities to which transaction applies:   

        ------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:      

        ------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed  
       pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):    

        ------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:                  

        ------------------------------------------------------------------------
(5) Total fee paid:                                                   

        ------------------------------------------------------------------------

[X] Fee paid previously with preliminary materials.                   

    [ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid   
previously. Identify the previous filing by registration statement number, or   
the Form or Schedule and the date of its filing.                                

(1) Amount Previously Paid:                                           

--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:                     

--------------------------------------------------------------------------------
(3) Filing Party:                                                     

--------------------------------------------------------------------------------
(4) Date Filed:                                                       

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DOUGHTIE'S FOODS, INC.                                         SYSCO CORPORATION

MERGER PROPOSED -- YOUR VOTE IS VERY IMPORTANT

  You are cordially invited to attend a special meeting of shareholders of
Doughtie's Foods, Inc. to be held on August 23, 1999, at 10:00 a.m. local time, 
at the Crestar Bank Board Room, 500 Main Street, Norfolk, Virginia 23510.       

  At this important meeting, Doughtie's will ask you to approve the merger
between Doughtie's and a wholly-owned subsidiary of SYSCO Corporation. If the   
merger is completed, you will receive a maximum amount ranging from             
approximately $14.03 to $14.83 per share immediately following closing of the   
merger. In addition, you may receive an additional amount ranging from          
approximately $2.07 to $2.87 per share, depending on whether Doughtie's will be 
able to contract to sell and/or leaseback two properties prior to closing and   
whether additional amounts will be released from an escrow account and a        
shareholder representative fund established at closing. These amounts are also  
subject to a possible net worth adjustment at closing. The maximum amount that  
Doughtie's shareholders will receive, assuming no net worth adjustment and that 
all available amounts will be released from escrow and the shareholders         
representative fund, is approximately $16.90 per share. After the merger, SYSCO 
will operate the Doughtie's business as a wholly-owned subsidiary of SYSCO.     

  The merger cannot be completed unless more than two-thirds of Doughtie's
shareholders approve it. 61.87% of the vote is controlled by directors and      
executive officers of Doughtie's, and their family members. Your Board of       
Directors unanimously recommends that you vote for approval of the merger, which
it believes is in Doughtie's and your best interests. YOUR VOTE IS VERY         
IMPORTANT.                                                                      

     Doughtie's has also enclosed a proxy card and cash election form so you can
vote on the merger without attending the special meeting and make an election as
to the kind of consideration you choose to receive in exchange for your stock.  
You will have the option to receive all SYSCO common stock, all cash or a       
combination of cash and SYSCO common stock.                                     

This proxy statement/prospectus provides you with detailed information
about the proposed merger. Doughtie's encourages you to read this document      
carefully. In addition, please see "Where You Can Find More Information" on page
63 for additional information about SYSCO and Doughtie's on file with the       
Securities and Exchange Commission.                                             

                                        /s/ STEVEN C. HOUFEK
                                            ------------------------------------
                                           Steven C. Houfek,
                                           President and Chief Executive
                                           Officer
                                            Doughtie's Foods, Inc.

SYSCO and Doughtie's have mailed this proxy statement/prospectus and  
accompanying proxy card and cash election form to shareholders of Doughtie's on 
or about July 23, 1999. AN INVESTMENT IN SYSCO COMMON STOCK IS SUBJECT TO RISK. 
SEE "RISK FACTORS" BEGINNING ON PAGE 12.                                        

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES         
REGULATOR HAS APPROVED OR DISAPPROVED THE SYSCO COMMON STOCK TO BE ISSUED UNDER 
THIS PROXY STATEMENT/PROSPECTUS OR DETERMINED IF THIS PROXY STATEMENT/PROSPECTUS
IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL       
OFFENSE.                                                                        

THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS JULY 23, 1999. 

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DOUGHTIE'S FOODS, INC.
2410 WESLEY STREET
PORTSMOUTH, VIRGINIA 23707

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS 

TO BE HELD: 
AUGUST 23, 1999 
10:00 A.M. LOCAL TIME 
BOARD ROOM OF CRESTAR BANK
500 MAIN STREET 
NORFOLK, VIRGINIA 23510 

TO THE SHAREHOLDERS OF DOUGHTIE'S FOODS, INC.:                                  

The Board of Directors of Doughtie's asks you to attend this special  
meeting for the following purposes:                                             

1. Proposed Merger. To consider and vote upon a proposal to adopt the 
agreement and plan of merger dated May 5, 1999 describing Doughtie's proposed   
merger with and into a wholly-owned subsidiary of SYSCO Corporation. If the     
merger is completed, SYSCO will pay to each holder of outstanding shares of     
common stock of Doughtie's, for each share of Doughtie's common stock owned:    

- up to a maximum of approximately $16.90 in cash,                    

- the equivalent value paid in shares of SYSCO common stock, or       

- a combination of cash and SYSCO common stock,                       

all subject to possible adjustment as described in the proxy                    
statement/prospectus. After the merger, SYSCO will operate the Doughtie's       
business as a wholly-owned subsidiary of SYSCO. SYSCO and Doughtie's have       
attached the agreement and plan of merger, which describes the terms of the     
merger in detail, as Appendix A to the accompanying proxy statement/prospectus; 
and                                                                             

  2. Other Business. To consider and vote on any incidental matters to the
business to be conducted at the special meeting or any adjournments or          
postponements thereof.                                                          

  Because of the merger which is the subject of the special meeting, there
will be no annual meeting of Doughtie's shareholders, unless the merger is not  
approved, in which event, notice of an annual meeting will thereafter be given. 

    Only shareholders who hold their Doughtie's stock at the close of business
on July 19, 1999 are entitled to notice of and to vote at the special meeting or
any adjournments or postponements thereof.                                      

  We invite you to attend the special meeting because it is important that
your shares be represented at the special meeting. Please sign and date the     
enclosed proxy card and return it to us in the accompanying blue postage-prepaid
envelope. Please complete and return the cash election form, along with your    
stock certificates, to the exchange agent in the additional accompanying white  
envelope only if you would like to receive cash or a combination of cash and    
SYSCO common stock. If you attend the special meeting, you may revoke your proxy
and vote in person. In addition, you may revoke your election to receive cash in
the merger at any time prior to 5:00 p.m. eastern time on the date of the       
special meeting.                                                                

                                          BY ORDER OF THE BOARD OF DIRECTORS

                             /s/ MICHAEL S. LAROCK
                                            ------------------------------------
                         Michael S. LaRock
                 Secretary

Portsmouth, Virginia                                                            
July 23, 1999                                                                   

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
SUMMARY.....................................................     1
  QUESTIONS AND ANSWERS ABOUT THE MERGER....................     1
  ADDITIONAL SUMMARY INFORMATION............................     4
     The Companies..........................................     4
     Reasons for the Merger.................................     5
     Recommendation to Doughtie's Shareholders..............     5
     Other Interests of Doughtie's Officers and Directors in      
      the Merger............................................     5
     Opinion of Doughtie's Financial Advisor................     5
     What Will Happen to Doughtie's.........................     5
     Record Date............................................     6
     Risk Factors...........................................     6
     Differences In The Rights Of Shareholders..............     6
     Important Federal Income Tax Consequences..............     6
     Conditions To The Merger...............................     6
     Termination Of The Merger Agreement....................     6
     Regulatory Approvals...................................     7
     Accounting Treatment...................................     7
     Pro Forma Financial Information........................     7
     Dividends After The Merger.............................     7
     Comparative Per Share Data.............................     7
     Comparative Per Share Market Price Information.........     8
     Historical Market Prices of SYSCO and Doughtie's.......     9
     SYSCO Selected Consolidated Financial Information......    10
     Doughtie's Selected Consolidated Financial                   
      Information...........................................    11
RISK FACTORS................................................    12
  RISKS RELATING TO THE MERGER..............................    12
  RISKS RELATING TO THE BUSINESS OF SYSCO AND THE COMBINED        
     COMPANY................................................    14
  RISKS RELATING TO THE BUSINESS OF DOUGHTIE'S..............    15
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING                   
  STATEMENTS................................................    17
THE MERGER..................................................    18
  Background of the Merger..................................    18
  Reasons for the Merger; Recommendation of The Doughtie's        
     Board..................................................    20
  Potential Conflicts of Interest of Directors and Executive      
     Officers in The Merger.................................    21
  Opinion of Doughtie's Financial Advisor...................    22
  Effective Time............................................    26
  Material Federal Income Tax Consequences..................    26
  Accounting Treatment......................................    30
  Regulatory Matters; Approvals and Consents................    31
  New York Stock Exchange Listing...........................    31
  Federal Securities Law Consequences.......................    31
  Board of Directors and Management Following Merger........    32
  Appraisal or Dissenters' Rights...........................    32
THE SPECIAL MEETING.........................................    33
  Purpose, Time And Place...................................    33
  Record Date; Voting Power.................................    33
  Share Ownership of Management.............................    33
  Voting of Proxies.........................................    33
  Revocability of Proxies...................................    34
  Solicitation of Proxies...................................    34
MATERIAL PROVISIONS OF THE MERGER AGREEMENT.................    35
  Structure of the Merger; Closing Date.....................    35
  Merger Consideration......................................    35
  Escrow Amounts............................................    37

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                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
  Shareholder Representative Fund...........................    39
  Shareholder Representative................................    40
  Cash Election Form and Procedures.........................    40
  Procedure For Surrendering Doughtie's Common Stock              
     Certificates After the Effective Time..................    41
  Conditions To Completion of The Merger....................    42
  Environmental Condition...................................    43
  Conduct of Business Pending The Merger....................    43
  Termination...............................................    44
  Fees and Expenses.........................................    45
  Representations And Warranties............................    45
  Other Covenants...........................................    46
  Amendment And Waiver......................................    46
  No Solicitation By Doughtie's.............................    47
BUSINESS OF SYSCO...........................................    48
BUSINESS OF DOUGHTIE'S......................................    50
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION       
  AND RESULTS OF OPERATIONS OF DOUGHTIE'S...................    51
  Results of Operations.....................................    51
  Liquidity and Capital Resources...........................    53
  New Accounting Pronouncements.............................    54
  Year 2000 Compliance......................................    54
  Quantitative and Qualitative Disclosures About Market           
     Risk...................................................    55
PRINCIPAL DOUGHTIE'S SHAREHOLDERS...........................    56
COMPARISON OF SHAREHOLDER RIGHTS............................    57
  Authorized Capital Stock..................................    57
  Number and Term of Directors..............................    57
  Removal of Directors......................................    58
  Special Meeting of Shareholders...........................    58
  Notice For Meetings.......................................    58
  Charter Amendments........................................    58
  Amendments To Bylaws......................................    58
  Advance Notice Bylaw Provisions for Election of                 
     Directors..............................................    59
  Shareholder Proposals.....................................    59
  State Takeover Laws Applicable To The Companies...........    60
  Inspection Of Books And Records...........................    60
  Vote Required For Mergers And Similar Fundamental               
     Corporate Transactions.................................    61
  Vote Required For Sales Of All Or Substantially All Of The      
     Corporate Assets.......................................    61
  Dividends.................................................    61
  Dissenters' Appraisal Rights..............................    61
  SYSCO Rights Plan.........................................    62

                                                                [Download Table]
EXPERTS.                                                        62
                                                                  
LEGAL MATTERS...............................................    63
SHAREHOLDER PROPOSALS.......................................    63
OTHER MATTERS...............................................    63
WHERE YOU CAN FIND MORE INFORMATION.........................    63
DOUGHTIE'S FOODS, INC. INDEX TO CONSOLIDATED FINANCIAL            
  STATEMENTS................................................   F-1

                                                                [Download Table]
                                                                              
APPENDIX      Agreement and Plan of Merger dated as of May 5, 1999, among     
  A --        SYSCO, SYSCO Food Services of Eastern Virginia, Inc.,        A-1
              Doughtie's and Doughtie's Shareholder Representative........    
APPENDIX B--  Opinion of Mann, Armistead & Epperson, Ltd. ................ B-1

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SUMMARY 

QUESTIONS AND ANSWERS ABOUT THE MERGER

1. WHAT AM I BEING ASKED TO VOTE UPON?                                        

You are being asked to approve a merger agreement which provides that   
Doughtie's will merge into a wholly-owned subsidiary of SYSCO.          

2. HOW DO I VOTE?                                                             

    After reading this proxy statement/prospectus, please fill out and sign your
proxy card. Then mail your signed proxy card in the blue enclosed return
   envelope as soon as possible so that your shares will be represented at the
special meeting.                                                        

3. WHAT HAPPENS IF I DON'T RETURN A PROXY CARD?                               

  Your failure to return your proxy card will have the same effect as voting
against the merger.                                                     

4. MAY I VOTE IN PERSON?                                                      

Yes. You may attend the special meeting and vote your shares in person, 
rather than signing and mailing your proxy card.                        

5. MAY I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?             

   Yes. You may change your vote at any time before your proxy is voted at the
 special meeting. To do so, you can attend the special meeting and vote in
    person or you can complete a new proxy card or send a written notice stating
you would like to revoke your proxy. These should be sent to Doughtie's 
Foods, Inc., 2410 Wesley Street, Portsmouth, Virginia 23707, Attention: 
 Michael S. LaRock. However, simply attending the meeting, without casting
your vote, will not revoke your proxy.                                  

6. IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE   
THEM FOR ME?                                                            

   Yes, but your broker will vote your shares only if you provide instructions
on how to vote. Otherwise, without instructions, your shares will not be
  voted. Shares that are not voted will have the same effect as shares voted
against the merger.                                                     

7. AM I ENTITLED TO APPRAISAL OR DISSENTERS' RIGHTS?                          

No. Holders of Doughtie's common stock are not entitled to appraisal or 
dissenters' rights under Virginia law.                                  

8. WHAT IS THE MERGER PRICE?                                                  

 The merger price contained in the merger agreement is $17.00 per share of
Doughtie's stock, to be paid in cash and/or SYSCO common stock. However,
  there are several potential and expected deductions from this amount which
are described in question 9 below. As a result, the maximum amount that 
   Doughtie's shareholders will receive is approximately $16.90 per share. See
"Material Provisions of the Merger Agreement -- Merger Consideration" on
page 35.                                                                

9. WHAT ARE THE ADJUSTMENTS TO THE MERGER PRICE?                              

 - Net Worth Adjustment. If Doughtie's net worth at closing is less than
     $9,853,617, then SYSCO will have the right to either make an adjustment
     to the per share merger price in an amount that reflects the difference
   in the net worth, or to terminate the merger agreement. See "Material
     Provisions of the Merger Agreement -- Merger Consideration" on page 35.

     - Escrows. $3 million will be placed in escrow at closing to cover purchase
     price adjustments which may need to be made in the event of breaches of
   representations and warranties given by Doughtie's to SYSCO regarding
 Doughtie's business and financial matters. Additionally, up to $1.2
     million may also be placed in escrow depending on the status at closing
      of the sale of two pieces of property owned by Doughtie's. See "Material
Provisions of the Merger Agreement -- Escrow Amounts" on page 37. 

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     - Shareholder Representative Fund. At closing, a shareholder representative
will be appointed. For a period of three years after closing, the 
    shareholder representative will act on behalf of the former Doughtie's
     shareholders regarding the funds placed in escrow at closing, and will,
   for example, negotiate with SYSCO regarding any claims SYSCO may make
      against the escrow funds. Approximately $305,000 (or $0.20 per share) of
      the merger price will be set aside at closing to establish a shareholder
representative fund. This fund will be used to pay a salary to the
       shareholder representative in the total amount of $150,000 over the three
       years. The remainder of the shareholder representative fund will be used,
   if necessary, to cover the shareholder representative's expenses. See
"Material Provisions of the Merger Agreement -- Shareholder       
Representative Fund" on page 39.                                  

10. HOW MUCH WILL I RECEIVE AT CLOSING, AND HOW MUCH MIGHT I RECEIVE AFTER      
CLOSING?                                                                

Because of the potential and expected deductions described above, and   
  assuming there is no net worth adjustment, at closing you will immediately
receive a maximum amount ranging from approximately $14.03 to $14.83 per
share in cash and/or SYSCO common stock. Subsequent to the closing, and 
 after the escrow accounts are fully administered over the course of three
years, you may receive an additional maximum amount ranging from        
approximately $2.07 to $2.87 per share, a portion of which may be paid  
 approximately two years after the closing and the balance of which may be
paid approximately three years after the closing. The decrease in the   
   maximum amount payable to Doughtie's shareholders from $17.00 to $16.90 per
  share is due to the payment of $150,000 (or approximately $0.10 per share)
of the $305,000 shareholder's representative fund to the shareholder    
representative as salary over three years, which amount will not be     
available for later distribution to the Doughtie's shareholders. See    
"Material Provisions of the Merger Agreement -- Merger Consideration" on
page 35.                                                                

11. SHOULD I SEND IN MY STOCK CERTIFICATES NOW?                                 

 Yes, if you would like to receive cash or a combination of cash and SYSCO
  common stock. The stock certificates should be mailed to Bank Boston N.A.,
   the exchange agent for SYSCO, in the accompanying white envelope along with
the cash election form.                                                 

12. HOW DO I INDICATE WHETHER I WOULD PREFER TO RECEIVE CASH OR SHARES OF SYSCO 
COMMON STOCK?                                                           

 If you want all cash or a combination of stock and cash just complete the
cash election form and return it with your stock certificates to the    
   exchange agent in the white envelope. IN ORDER FOR YOUR CASH ELECTION TO BE
EFFECTIVE, YOU MUST PROPERLY COMPLETE AND SIGN A CASH ELECTION FORM AND 
  DELIVER IT TO THE EXCHANGE AGENT WITH YOUR STOCK CERTIFICATES SO THAT THEY
    ARE RECEIVED NO LATER THAN 5:00 P.M. EASTERN TIME ON THE DATE OF THE SPECIAL
 MEETING. IF YOUR CASH ELECTION FORM AND STOCK CERTIFICATES ARE NOT TIMELY
    RECEIVED, YOU WILL RECEIVE SYSCO COMMON STOCK ONLY. See "Material Provisions
 of The Merger Agreement -- Cash Election Form and Procedures" on page 40.

IF YOU DO NOT WISH TO RECEIVE ANY CASH, DO NOT SEND IN THE CASH ELECTION
   FORM OR YOUR STOCK CERTIFICATES AT THIS TIME. You will receive instructions
from the exchange agent shortly after the special meeting.              

13. IF MY SHARES ARE IN "STREET NAME," HOW SHOULD I INDICATE WHETHER I WANT CASH
OR STOCK?                                                               

 Your broker, or other person holding your stock, will need to send in the
  cash election form on your behalf. You should contact your broker for more
information.                                                            

14. WHAT WILL I RECEIVE IF THE AMOUNT OF CASH ELECTED BY THE OTHER SHAREHOLDERS 
AND ME EXCEEDS THE MAXIMUM AMOUNT OF CASH AVAILABLE IN THE MERGER?      

SYSCO will reduce the amount of cash you will receive and the difference
will be paid to you in shares of SYSCO common stock. See "Material      
Provisions of the Merger Agreement -- Merger Consideration" on page 35. 

15. WHERE WILL MY SYSCO SHARES TRADE AFTER THE MERGER?                          

   Any SYSCO common stock received in connection with the merger will trade on
the New York Stock Exchange under the symbol "SYY."                     

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16. WHAT DO I NEED TO DO NOW?                                                   

    After you have carefully read this proxy statement/prospectus, just complete
and sign your proxy card and cash election form, if you would like to   
   receive cash or a combination of cash and SYSCO common stock, and mail them
   in the enclosed envelopes as soon as possible. That way, your shares can be
 represented at the Doughtie's shareholders special meeting. You must also
send in your stock certificates with the cash election form.            

17. WHO SHOULD SHAREHOLDERS CALL WITH QUESTIONS?                                

If you have questions about the merger you should contact:              

                                                                [Download Table]
                                                                              
Doughtie's Foods, Inc.                      SYSCO Corporation                 
Attn: Marion S. Whitfield, Jr., Investor    Toni Spigelmyer                   
  Relations                                 Assistant Vice President, Investor
2410 Wesley Street                          Relations                         
Portsmouth, Virginia 23707                  1390 Enclave Parkway              
(757) 393-6007                              Houston, Texas 77077-2099         
                                            (281) 584-1390                    

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ADDITIONAL SUMMARY INFORMATION

This additional summary information, together with the preceding      
"Summary -- Questions and Answers About The Merger," highlights selected        
information from this document but may not contain all of the information that  
is important to you. To understand the merger fully and for a more complete     
description of the legal terms of the merger, you should read carefully this    
entire document and the other available information referred to in "Where You   
Can Find More Information" on page 63. The merger agreement is included as      
Appendix A to this proxy statement/prospectus. It is the legal document that    
governs the merger. The page references in parentheses direct you to a more     
complete description of the topics presented in this summary.                   

THE COMPANIES (BEGINNING AT PAGE 48)                                            

SYSCO Corporation                                                               
1390 Enclave Parkway                                                            
Houston, Texas 77077-2099                                                       
(281) 584-1390                                                                  

 SYSCO Corporation, together with its subsidiaries and divisions, is the
largest U.S. distributor of food and related products to the foodservice or     
"away-from-home-eating" industry. SYSCO provides its products and services to   
approximately 300,000 customers, including:                                     

- restaurants;                                                        

- healthcare and educational facilities;                              

- lodging establishments; and                                         

- other foodservice customers throughout the entire continental United
States, as well as portions of Alaska and Canada.                   

     Since SYSCO's formation in 1969, annual sales have grown from approximately
$115 million to over $15 billion in fiscal 1998. SYSCO's innovations in food    
technology, packaging and transportation provide customers with quality products
delivered on time, in excellent condition and at reasonable prices.             

Doughtie's Foods, Inc.                                                          
2410 Wesley Street                                                              
Portsmouth, Virginia                                                            
(757) 393-6007                                                                  

 Doughtie's Foods, Inc. was incorporated in Virginia in November 1971 to
sell and distribute a wide variety of meat and seafood products and other food  
items. Doughtie's has historically manufactured many of the meat and seafood    
products sold by it, while it has always purchased from other sources some food 
items that it sells, like fruits, vegetables, condiments, and seasonings. In    
1997 Doughtie's completed its divestment of its unprofitable manufacturing      
operations. Following these divestitures, Doughtie's has been able to           
concentrate on its business of distributing food products to commercial and     
institutional customers, including:                                             

- supermarkets;                                                       

- restaurants;                                                        

- cafeterias;                                                         

- independent food distributors;                                      

- schools;                                                            

- hospitals; and                                                      

- other public and private facilities.                                

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Doughtie's marketing area covers:                                     

- the central, northern, and eastern portions of Virginia;            

- Maryland;                                                           

- Washington, D.C.;                                                   

- portions of North Carolina; and                                     

- small areas of Delaware.                                            

Although Doughtie's is no longer engaged in the manufacture of food   
products, it continues to distribute its traditional "Doughtie's" label products
through the buyers of the manufacturing businesses.                             

REASONS FOR THE MERGER (PAGE 20)                                                

   SYSCO and Doughtie's believe that their combination will create value for
both companies' shareholders for many reasons, including:                       

- Doughtie's limited growth opportunities. Doughtie's may require     
       substantial capital investments to significantly expand its business from
    an operating and marketing standpoint, and Doughtie's may be unable to
obtain the required capital.                                      

   - SYSCO's resources. SYSCO has the resources to develop Doughtie's growth
    opportunities and has offered a fair price to Doughtie's shareholders.

 - Consolidation. In the foodservice industry, consolidation with larger
  distribution networks sometimes offers an advantage in buying power,
operating efficiency and technological development.               

    - Liquid investment. The Doughtie's shareholders will receive SYSCO common
    stock that is listed on the New York Stock Exchange. In addition, most
      shareholders will be free to sell their SYSCO common stock and diversify
into other investments.                                           

RECOMMENDATION TO DOUGHTIE'S SHAREHOLDERS (PAGE 20)                             

   The Doughtie's Board of Directors believes that the merger is in the best
interests of Doughtie's and its shareholders and unanimously recommends that you
vote for the merger.                                                            

OTHER INTERESTS OF DOUGHTIE'S OFFICERS AND DIRECTORS IN THE MERGER (PAGE 21)    

   In considering the Doughtie's Board of Directors' recommendation that you
vote for the merger, you should be aware that the officers and directors of     
Doughtie's have interests in the merger that are different from, or in addition 
to, their rights as Doughtie's shareholders. For example:                       

- all options held by officers and directors will vest and become     
exercisable for cash when the merger becomes effective;           

   - Mr. Vernon W. Mules, a director of Doughtie's, will be appointed as the
   shareholder representative and will receive a salary of $150,000 over
three years for his services; and                                 

  - SYSCO will employ the current officers of Doughtie's after the merger.

OPINION OF DOUGHTIE'S FINANCIAL ADVISOR (PAGE 22)                               

   Mann, Armistead & Epperson, Ltd. has delivered to the Doughtie's Board of
Directors its written opinion, dated as of May 5, 1999, that the merger price   
per share to be received by the Doughtie's shareholders is fair from a financial
point of view to the Doughtie's shareholders. This opinion is included as       
Appendix B to this proxy statement/prospectus. Shareholders of Doughtie's should
read this opinion.                                                              

WHAT WILL HAPPEN TO DOUGHTIE'S                                                  

If the merger is completed, Doughtie's will merge into a subsidiary of
SYSCO and the Doughtie's business will be operated as a wholly-owned subsidiary 
of SYSCO. Individuals who owned stock in Doughtie's                             

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before the merger will own stock in SYSCO after the merger, unless they elect to
receive only cash. Assuming no Doughtie's shareholders elect to receive cash in 
the merger, former Doughtie's shareholders will own less than 0.5% of SYSCO's   
common stock after the merger.                                                  

RECORD DATE (PAGE 33)                                                           

   You can vote at the special meeting of Doughtie's shareholders, in person
or by proxy, if you owned Doughtie's common stock at the close of business on   
July 19, 1999.                                                                  

RISK FACTORS (PAGE 12)                                                          

     The success of the merger will be influenced by many factors, including the
risks with which each of SYSCO and Doughtie's contend and other risks which may 
impact their combined operations. See "Risk Factors" for a discussion of risk   
factors relating to the merger and the businesses of SYSCO and Doughtie's.      

DIFFERENCES IN THE RIGHTS OF SHAREHOLDERS (PAGE 57)                             

  Upon completion of the merger, the rights of Doughtie's shareholders who
become shareholders of SYSCO in the merger will be governed by Delaware law, the
Certificate of Incorporation of SYSCO and the Bylaws of SYSCO.                  

IMPORTANT FEDERAL INCOME TAX CONSEQUENCES (PAGE 26)                             

It is expected that the merger will be tax-free for federal income tax
purposes. No gain or loss will be recognized by Doughtie's or SYSCO by reason of
the merger. Additionally, no gain or loss will be recognized by Doughtie's      
shareholders on their receipt of shares of SYSCO common stock in the merger. In 
general, however, Doughtie's shareholders will recognize taxable gain to the    
extent they receive cash in the merger. Doughtie's shareholders should consult  
their tax advisors for a full understanding of the tax consequences of the      
merger.                                                                         

CONDITIONS TO THE MERGER (PAGE 42)                                              

   The completion of the merger depends upon meeting a number of conditions,
including:                                                                      

- compliance with the rules and regulations of the:                   

- Securities and Exchange Commission;                       

- Federal Trade Commission; and                             

- Department of Justice;                                    

- the approval of Doughtie's shareholders; and                        

- the receipt of legal opinions that the merger will be treated as a  
tax-free reorganization.                                          

TERMINATION OF THE MERGER AGREEMENT (PAGE 44)                                   

Either SYSCO or Doughtie's can terminate the merger agreement without 
completing the merger, if any of the following occurs:                          

- the merger is not completed by September 30, 1999;                  

 - the holders of more than two-thirds of the stock of Doughtie's do not
approve the merger;                                               

  - the Boards of Directors of Doughtie's and SYSCO agree to terminate the
merger agreement;                                                 

- a court or governmental authority prevents the merger; or           

  - the other party materially breaches or materially fails to comply with
      any of its representations or warranties or obligations under the merger
agreement.                                                        

  In addition, SYSCO can terminate the merger agreement without completing
the merger if any one of the following occurs:                                  

- the Doughtie's Board of Directors withdraws its recommendations to  
approve the merger agreement;                                     

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- the net worth of Doughtie's at closing is less than the net worth of
Doughtie's as shown on its December 26, 1998 balance sheet; or    

 - prior to the closing, SYSCO, in its sole discretion, is not satisfied
       with the results of an environmental due diligence investigation and with
any issues which arise from that investigation.                   

REGULATORY APPROVALS (PAGE 31)                                                  

SYSCO and Doughtie's have satisfied the requirements of the           
Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to the merger.

ACCOUNTING TREATMENT (PAGE 30)                                                  

   The merger will be accounted for under the purchase method of accounting.

PRO FORMA FINANCIAL INFORMATION                                                 

   The purpose of pro forma financial information is to determine any effect
the merger will have on the net income and earnings per share of SYSCO.         
Doughtie's net income will have a de minimis effect on SYSCO's results of       
operations.                                                                     

   Unaudited pro forma combined basic and diluted earnings per share for the
fiscal year ended June 27, 1998 and the thirty-nine weeks ended March 27, 1999, 
after giving effect to the merger were equal to SYSCO's reported earnings per   
share for those periods. The unaudited pro forma effect of the merger on SYSCO's
net earnings for those periods and on total assets as of March 27, 1999 was de  
minimis. The unaudited pro forma combined financial information includes the    
estimated allocation of the purchase price to the assets acquired and           
liabilities assumed based on preliminary estimates of fair value and may be     
revised as additional information concerning the valuation of the assets and    
liabilities becomes available. The unaudited pro forma purchase price assumes no
net worth adjustment and that all amounts escrowed and subject to the           
shareholder representative fund will be subsequently released to Doughtie's     
shareholders and the shareholder representative.                                

DIVIDENDS AFTER THE MERGER                                                      

 SYSCO's current annualized dividend rate is $0.40 per share. Doughtie's
current annualized dividend rate is $0.12 per share. The payment of dividends by
SYSCO in the future, however, will depend on business conditions, its financial 
position, earnings and other factors. If the merger is approved, Doughtie's will
not pay any further dividends.                                                  

COMPARATIVE PER SHARE DATA                                                      

 The comparative per share data shows how each share of Doughtie's stock
that you hold would have participated in the income from continuing operations, 
cash dividends and book value of SYSCO if the merger had been effective as of   
the dates below, and should be taken into account in valuing the SYSCO stock to 
be received in the merger. However, these amounts do not necessarily reflect    
future per share levels of income from continuing operations, cash dividends and
book value of SYSCO.                                                            

    SYSCO and Doughtie's have summarized below per share information for SYSCO
and Doughtie's on a historical and equivalent pro forma basis. The Doughtie's   
earnings and cash dividends per share equivalents assume the merger had occurred
as of June 29, 1997, and the book value per share equivalents assume the merger 
had occurred as of March 27, 1999, and are calculated by multiplying the SYSCO  
unaudited pro forma per share amounts by an exchange ratio of 0.5606, which     
assumes an average SYSCO closing price during the ten trading days ending two   
trading days prior to the closing of $30.325, no net worth adjustment, and that 
all amounts escrowed and subject to the shareholder representative fund will be 
subsequently released to Doughtie's shareholders and the shareholder            
representative. The average closing price was calculated assuming a May 25, 1999
closing date.                                                                   

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SYSCO CORPORATION -- HISTORICAL 

                                                        [Enlarge/Download Table]

                                                              AT AND FOR THE  AT AND FOR THE
                                                                 39 WEEKS      FISCAL YEAR  
                                                                  ENDED           ENDED     
                                                              MARCH 27, 1999  JUNE 27, 1998 
                                                              --------------  --------------
                                                                                            
Per Share Data:                                                                             
  Income from continuing operations per common share                                        
                                               -- Basic.....      $0.74           $0.95     
                                               -- Diluted...       0.73            0.95     
  Cash dividends per common share...........................       0.28            0.33     
  Book value per common share...............................       4.22            4.05     

                            DOUGHTIE'S FOODS, INC. -- HISTORICAL                            

Per Share Data:                                                                             
  Income from continuing operations per common share                                        
                                            -- Basic(1).....      $0.57           $0.60     
                                            -- Diluted(1)...       0.56            0.60     
  Cash dividends per common share(1)........................       0.09            0.11     
  Book value per common share...............................       6.62            6.14     

                  DOUGHTIE'S FOODS, INC. -- PRO FORMA PER SHARE EQUIVALENTS                 

Per Share Data:                                                                             
  Income from continuing operations per common share                                        
                                               -- Basic.....      $0.41           $0.53     
                                               -- Diluted...       0.41            0.53     
  Cash dividends per common share...........................       0.16            0.18     
  Book value per common share...............................       2.37            2.27     

---------------                                                                 

(1) Doughtie's fiscal year ended December 26, 1998. To conform Doughtie's       
   historical information to SYSCO's fiscal year end, the applicable quarterly
    historical financial statements were combined to present the information for
  the fiscal year ended June 27, 1998 and the 39 weeks ended March 27, 1999.

COMPARATIVE PER SHARE MARKET PRICE INFORMATION                                  

 Shares of SYSCO common stock are listed on the New York Stock Exchange.
Shares of Doughtie's common stock are listed on the Nasdaq SmallCap Market. On  
July 21, 1999, SYSCO common stock closed at $31.625 per share and Doughtie's    
common stock closed at $13.250 per share on that date. SYSCO and Doughtie's urge
you to obtain current market quotations before making any decision with respect 
to the merger.                                                                  

    The following table sets forth the closing sales price for a share of each
of the indicated stocks on February 16, 1999, the last trading day preceding the
announcement of the proposed merger, and the Doughtie's equivalent share value. 

                                                                [Download Table]

                                                              CLOSING SALES PRICE ON
                                                                FEBRUARY 16, 1999   
                                                              ----------------------
                                                                                    
SYSCO.......................................................         $26.0625       
Doughtie's Historical.......................................         $13.2500       
Doughtie's Equivalent at an assumed Exchange Ratio of .5606,                        
  which assumes an average per share SYSCO price of                                 
  $30.325...................................................         $14.6106       

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HISTORICAL MARKET PRICES OF SYSCO AND DOUGHTIE'S

    The tables below set forth the (1) high and low sales prices per share for
SYSCO common stock, as reported on the New York Stock Exchange Composite Tape,  
and the cash dividends paid on SYSCO common stock for the periods indicated,    
adjusted for the 2-for-1 stock split effected by a 100% stock dividend paid on  
March 20, 1998, and (2) the high and low sales prices per share for Doughtie's  
common stock, as reported by the Nasdaq SmallCap Market, and the cash dividends 
paid on Doughtie's common stock for the periods indicated, adjusted to reflect  
the 50% stock split effected on January 12, 1998.                               

                                                        [Enlarge/Download Table]

                                            SYSCO                                          
                                            -----                                          
                                                             COMMON STOCK PRICE            
                                                             -------------------  DIVIDENDS
                                                               HIGH       LOW       PAID   
                                                             --------   --------  ---------
                                                                                           
FISCAL YEAR ENDED JUNE 28, 1997                                                            
  First Quarter............................................. $17.250    $13.563    $0.065  
  Second Quarter............................................  17.750     15.813     0.065  
  Third Quarter.............................................  17.813     14.625     0.075  
  Fourth Quarter............................................  19.125     16.500     0.075  
FISCAL YEAR ENDED JUNE 27, 1998                                                            
  First Quarter............................................. $19.719    $17.094    $0.075  
  Second Quarter............................................  23.406     17.906     0.075  
  Third Quarter.............................................  26.750     21.625     0.085  
  Fourth Quarter............................................  26.750     21.875     0.090  
FISCAL YEAR ENDED JULY 3, 1999                                                             
  First Quarter............................................. $25.938    $19.938    $0.090  
  Second Quarter............................................  28.688     23.938     0.090  
  Third Quarter.............................................  29.875     24.938     0.100  
  Fourth Quarter............................................  31.875     25.000     0.100  
FISCAL YEAR ENDING JULY 1, 2000                                                            
  First Quarter (through July 21)...........................  32.125     30.063        --  

                                                        [Enlarge/Download Table]

                                          DOUGHTIE'S                                       
                                          ----------                                       
                                                             COMMON STOCK PRICE            
                                                             -------------------  DIVIDENDS
                                                               HIGH       LOW       PAID   
                                                             --------   --------  ---------
                                                                                           
FISCAL YEAR ENDED DECEMBER 27, 1997                                                        
  First Quarter............................................. $ 3.583    $ 2.667    $0.027  
  Second Quarter............................................   3.667      2.500     0.027  
  Third Quarter.............................................   5.083      3.583     0.027  
  Fourth Quarter............................................   7.500      4.500     0.026  
FISCAL YEAR ENDED DECEMBER 26, 1998                                                        
  First Quarter............................................. $ 8.750    $ 6.125    $0.030  
  Second Quarter............................................   8.500      7.125     0.030  
  Third Quarter.............................................   7.875      4.875     0.030  
  Fourth Quarter............................................   8.250      6.000     0.030  
FISCAL YEAR ENDING DECEMBER 25, 1999                                                       
  First Quarter............................................. $15.750    $ 6.813    $0.030  
  Second Quarter............................................  15.000     13.000        --  
  Third Quarter (through July 21)...........................  13.250     13.250        --  

  As of June 30, 1999, there were 329,869,917 shares of SYSCO common stock
outstanding, which were owned by 15,483 holders of record. As of that date there
were 1,495,023 shares of Doughtie's common stock outstanding, which shares were 
owned by 228 holders of record.                                                 

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SYSCO SELECTED CONSOLIDATED FINANCIAL INFORMATION 

The following table sets forth selected consolidated financial data of
SYSCO. SYSCO derived this information from audited financial statements for     
fiscal years 1994 through 1998. The selected consolidated financial data for the
39 weeks ended March 27, 1999 and March 28, 1998 has been derived from SYSCO's  
unaudited consolidated financial statements and includes, in the opinion of     
management of SYSCO, all adjustments, consisting only of normal recurring       
adjustments, necessary to present fairly the data for these periods. The        
financial data included herein may not necessarily be indicative of the         
financial position or results of operations of SYSCO in the future. The         
information is only a summary and should be read in conjunction with SYSCO's    
historical financial statements and related notes contained in the annual       
reports and other information of SYSCO on file with the Securities and Exchange 
Commission. See "Where You Can Find More Information" on page 63.               

SYSCO -- HISTORICAL SELECTED FINANCIAL INFORMATION

                                                        [Enlarge/Download Table]

                              39-WEEKS ENDED                                  FISCAL YEAR ENDED                          
                         -------------------------                      (SATURDAY CLOSEST TO JUNE 30)                    
                          MARCH 27,     MARCH 28,    ------------------------------------------------------------------- 
                            1999          1998          1998          1997          1996          1995          1994     
                         -----------   -----------   -----------   -----------   -----------   -----------   ----------- 
                                (UNAUDITED)                                                                              
                                            (IN THOUSANDS EXCEPT FOR PER SHARE DATA AND PERCENTAGES)                     
                                                                                                                         
Sales                    $12,604,182   $11,326,162   $15,327,536   $14,454,589   $13,395,130   $12,118,047   $10,942,499 
Earnings before income                                                                                                   
  taxes                      402,292       372,633       532,493       495,955       453,943       417,618       367,582 
Income taxes                 156,894       145,327       207,672       193,422       177,038       165,794       150,830 
                         -----------   -----------   -----------   -----------   -----------   -----------   ----------- 
Earnings before                                                                                                          
  cumulative effect of                                                                                                   
  accounting change          245,398       227,306       324,821       302,533       276,905       251,824       216,752 
Cumulative effect of                                                                                                     
  accounting change               --       (28,053)      (28,053)           --            --            --            -- 
                         -----------   -----------   -----------   -----------   -----------   -----------   ----------- 
Net earnings             $   245,398   $   199,253   $   296,768   $   302,533   $   276,905   $   251,824   $   216,752 
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 
Earnings before                                                                                                          
  accounting change:(1)                                                                                                  
  Basic earnings per                                                                                                     
    share                $      0.74   $      0.67   $      0.95   $      0.85   $      0.76   $      0.69   $      0.59 
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 
  Diluted earnings per                                                                                                   
    share                $      0.73   $      0.66   $      0.95   $      0.85   $      0.75   $      0.68   $      0.58 
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 
Cumulative effect of                                                                                                     
  accounting change:(1)                                                                                                  
  Basic earnings per                                                                                                     
    share                         --   $     (0.08)  $     (0.08)           --            --            --            -- 
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 
  Diluted earnings per                                                                                                   
    share                         --   $     (0.08)  $     (0.08)           --            --            --            -- 
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 
Net earnings:(1)                                                                                                         
  Basic earnings per                                                                                                     
    share                $      0.74   $      0.58   $      0.87   $      0.85   $      0.76   $      0.69   $      0.59 
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 
  Diluted earnings per                                                                                                   
    share                $      0.73   $      0.58   $      0.86   $      0.85   $      0.75   $      0.68   $      0.58 
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 
Cash dividends per                                                                                                       
  share(1)               $      0.28   $      0.24   $      0.33   $      0.28   $      0.24   $      0.20   $      0.16 
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 
Total assets             $ 4,019,709   $ 3,600,014   $ 3,780,189   $ 3,433,823   $ 3,319,943   $ 3,097,161   $ 2,811,729 
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 
Capital expenditures     $   211,154   $   179,014   $   259,353   $   210,868   $   235,891   $   201,577   $   161,485 
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 
Long-term debt           $   913,632   $   747,803   $   867,017   $   685,620   $   581,734   $   541,556   $   538,711 
Shareholders' equity       1,398,077     1,371,858     1,356,789     1,400,472     1,474,678     1,403,603     1,240,909 
                         -----------   -----------   -----------   -----------   -----------   -----------   ----------- 
Total capitalization     $ 2,311,709   $ 2,119,661   $ 2,223,806   $ 2,086,092   $ 2,056,412   $ 1,945,159   $ 1,779,620 
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 
Ratio of long-term debt                                                                                                  
  to capitalization             39.5%         35.3%         39.0%         32.9%         28.3%         27.8%         30.3%
                         ===========   ===========   ===========   ===========   ===========   ===========   =========== 

---------------                                                                 

(1) Per share information has been adjusted to reflect the 2-for-1 stock split  
effected on March 20, 1998.                                             

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DOUGHTIE'S SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following table sets forth selected consolidated financial data of
Doughtie's. Doughtie's derived this information from audited financial          
statements for fiscal years 1994 through 1998. The selected consolidated        
financial data for the 13 weeks ended March 27, 1999 and March 28, 1998 has been
derived from Doughtie's unaudited consolidated financial statements and         
includes, in the opinion of management of Doughtie's, all adjustments,          
consisting only of normal recurring adjustments, necessary to present fairly the
data for these periods. The financial data included herein may not necessarily  
be indicative of the financial position or results of operation of Doughtie's in
the future. The information is only a summary and should be read in conjunction 
with Doughtie's historical financial statements and related notes contained in  
the annual reports and other information of Doughtie's on file with the         
Securities and Exchange Commission and the audited financial statements of      
Doughtie's beginning on page F-1. See "Where You Can Find More Information" on  
page 63.                                                                        

DOUGHTIE'S -- HISTORICAL FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT FOR PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                                                                 FISCAL YEAR ENDED                    
                                         13-WEEKS ENDED                     (LAST SATURDAY IN DECEMBER)               
                                      ---------------------  ---------------------------------------------------------
                                      MARCH 27,   MARCH 28,                                                           
                                        1999        1998       1998        1997        1996        1995        1994   
                                      ---------   ---------  ---------   ---------   ---------   ---------   ---------
                                                                                                                      
Net sales                             $ 19,063    $ 19,309   $  87,194   $  85,233   $  80,633   $  76,586   $  73,369
                                      ---------   ---------  ---------   ---------   ---------   ---------   ---------
Net income (loss)                     $     82    $    181   $   1,197   $     947   $     928   $  (1,212)  $     364
                                      =========   =========  =========   =========   =========   =========   =========
Weighted average number of shares                                                                                     
  outstanding:                                                                                                        
  Basic                               1,495,023   1,495,023  1,495,023   1,496,085   1,500,468   1,511,652   1,516,845
                                      =========   =========  =========   =========   =========   =========   =========
  Diluted                             1,507,112   1,495,053  1,495,023   1,496,085   1,500,468   1,511,652   1,516,845
                                      =========   =========  =========   =========   =========   =========   =========
Net earnings (loss) per share(1):                                                                                     
  Basic                               $   0.06    $   0.12   $    0.80   $    0.63   $    0.62   $   (0.80)  $    0.24
                                      =========   =========  =========   =========   =========   =========   =========
  Diluted                             $   0.05    $   0.12   $    0.80   $    0.63   $    0.62   $   (0.80)  $    0.24
                                      =========   =========  =========   =========   =========   =========   =========
Cash dividends per share(1)           $   0.03    $   0.03   $    0.12   $    0.11   $    0.11   $    0.11   $    0.11
                                      =========   =========  =========   =========   =========   =========   =========
Total assets                          $ 13,857    $ 15,289   $  15,223   $  16,445   $  15,932   $  16,086   $  16,798
                                      =========   =========  =========   =========   =========   =========   =========
Long-term debt, less current portion  $    550    $  2,034   $     683   $   2,738   $   5,065   $   6,688   $   5,032
                                      =========   =========  =========   =========   =========   =========   =========
Total shareholders' equity            $  9,891    $  8,972   $   9,854   $   8,836   $   8,055   $   7,303   $   8,700
                                      =========   =========  =========   =========   =========   =========   =========
Shareholders' equity per share(1)     $   6.62    $   6.00   $    6.59   $    5.91   $    5.38   $    4.86   $    5.75
                                      =========   =========  =========   =========   =========   =========   =========

---------------                                                                 

(1) Per share information has been adjusted to reflect the 50% stock split      
effected on January 12, 1998.                                           

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RISK FACTORS

  In addition to the other information in this proxy statement/prospectus,
you should carefully consider the following risk factors in evaluating whether  
to approve the merger and adopt the merger agreement.                           

RISKS RELATING TO THE MERGER

IF THE TRADING PRICE OF SYSCO COMMON STOCK FALLS BELOW $21.00 PER SHARE, YOU MAY
RECEIVE SYSCO STOCK WITH A VALUE OF LESS THAN $16.90 PER SHARE                  

    In the event that the average closing price of SYSCO common stock over the
ten trading days ending two trading days prior to the closing date is less than 
$21.00 per share, then the shares of SYSCO common stock to be issued to each    
Doughtie's shareholder may have a value of less than $16.90 per share at the    
time of issuance. This is because SYSCO and Doughtie's have agreed that if the  
actual average closing price of SYSCO stock during the relevant trading period  
is less than $21 per share, it will nonetheless be deemed to be $21 per share   
for purposes of determining the exchange ratio. As of July 21, 1999, the closing
sales price of SYSCO common stock on the New York Stock Exchange was $31.625.   
See "Material Provisions of the Merger Agreement -- Merger Consideration" on    
page 35.                                                                        

BECAUSE OF DIFFERENCES BETWEEN THE CORPORATE LAWS OF VIRGINIA AND DELAWARE AND  
BETWEEN THE GOVERNING DOCUMENTS OF SYSCO AND DOUGHTIE'S, DOUGHTIE'S             
SHAREHOLDERS' RIGHTS COULD BE MATERIALLY ADVERSELY AFFECTED FOLLOWING THE MERGER

If the merger is completed, shareholders of Doughtie's, a Virginia    
corporation, will, except to the extent cash is received, become shareholders of
SYSCO, a Delaware corporation. There are significant differences between the    
corporate laws of Virginia and the corporate laws of Delaware and between the   
charter and other corporate governance documents of Doughtie's and SYSCO. These 
differences may materially adversely affect the rights of Doughtie's            
shareholders. For example, a charter amendment or merger requires the           
affirmative vote of two-thirds of the stockholders under Doughtie's corporate   
governance documents, but only requires the affirmative vote of a majority of   
the stockholders under SYSCO's corporate governance documents. This difference  
could make it easier for SYSCO to adopt a merger or other corporate change that 
a particular stockholder might not believe to be in the best interests of all   
stockholders, like the sale of corporate assets or the creation of preemptive   
rights. See "Comparison of Shareholder Rights" on page 57.                      

THE MERGER COULD RESULT IN POTENTIAL ADVERSE FEDERAL INCOME TAX CONSEQUENCES TO 
THE DOUGHTIE'S SHAREHOLDERS                                                     

If the Internal Revenue Service determines that the merger is not a   
tax-free reorganization, the merger will be treated as a taxable sale of assets 
by Doughtie's, followed by a taxable liquidation of Doughtie's. Doughtie's      
shareholders generally would then recognize gain or loss equal to the difference
between:                                                                        

- the value of the SYSCO stock plus the cash received, if any; and    

- the shareholders' basis in their Doughtie's stock.                  

The merger is conditioned on the receipt of opinions of counsel to    
Doughtie's and counsel to SYSCO that the merger will be treated for federal     
income tax purposes as a tax-free reorganization. The merger agreement also     
provides that receipt of the opinions as a condition to the merger may be waived
in writing by the party to receive the opinion. Neither SYSCO nor Doughtie's    
intends to waive this condition; however, opinions of counsel are subject to    
qualifications, assumptions and representations, and are not binding on the     
Internal Revenue Service or the courts.                                         

    In addition, the tax treatment of the escrowed portion of the merger price
is uncertain and it is possible that Doughtie's shareholders may have to pay tax
on the escrowed amounts before the termination of the escrow. See "Material     
Federal Income Tax Consequences" on page 26.                                    

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THE AMOUNTS CONTAINED IN THE ESCROW AND THE SHAREHOLDER REPRESENTATIVE FUND     
ESTABLISHED AT CLOSING MAY NEVER BE PAID OUT TO DOUGHTIE'S SHAREHOLDERS         
SUBSEQUENT TO CLOSING                                                           

    SYSCO will pay between $3 million and $4.2 million of the aggregate merger
consideration into escrow. In addition, $305,000 of the aggregate merger        
consideration will be used to establish a shareholder representative fund. There
can be no guaranty that any of the amounts paid into escrow or any portion of   
the shareholder representative fund will be released to Doughtie's shareholders 
subsequent to the closing. In fact, $150,000 of the shareholder representative  
fund will be paid to compensate the shareholder representative and will         
therefore not be paid out to the Doughtie's shareholders subsequent to the      
closing. Also, if Doughtie's net worth at closing is not approximately $50,000  
greater than $9,853,617, SYSCO intends to make a claim against the escrow fund  
at closing for the shortfall, in order to pay the cost of an environmental      
liability insurance policy. See, "Material Provisions Of The Merger             
Agreement -- Escrow Amounts," "-- Shareholder Representative Fund," and         
"-- Shareholder Representative" beginning at page 37.                           

IF THE SHAREHOLDER REPRESENTATIVE TAKES ACTIONS THAT HARM THE DOUGHTIE'S        
SHAREHOLDERS, DOUGHTIE'S SHAREHOLDERS WILL HAVE LIMITED RECOURSE                

Doughtie's shareholders will be bound by all actions taken by the     
shareholder representative in connection with the merger agreement and escrow   
agreement. If the shareholder representative fails to properly represent the    
Doughtie's shareholders, the Doughtie's shareholders may not be able to recover 
damages from the representative. Except for willful misconduct or gross         
negligence, the shareholder representative shall not be liable for any action   
taken in the performance of his duties and shall be entitled to indemnification 
for expenses and other liabilities incurred, to the extent escrow amounts are   
available after satisfaction of all claims made by SYSCO.                       

   Any indemnification will reduce amounts, if any, to be paid to Doughtie's
shareholders from escrow. The shareholder representative could fail to perform  
his duties in the best interests of Doughtie's shareholders and optionholders or
be diligent in the performance of his duties. See "Material Provisions of the   
Merger Agreement -- Shareholder Representative" on page 40.                     

IF DOUGHTIE'S NET WORTH AT CLOSING IS LESS THAN $9,853,617, THE AGGREGATE AND   
PER SHARE MERGER CONSIDERATION TO BE PAID TO DOUGHTIE'S SHAREHOLDERS WILL BE    
REDUCED                                                                         

If Doughtie's net worth as reflected on a balance sheet prepared as of
closing is less than the net worth reflected on Doughtie's December 26, 1998    
audited balance sheet of $9,853,617, then SYSCO will have the right to make a   
net worth adjustment to the aggregate merger price in an amount that equals the 
deficiency. This adjustment would reduce the per share amount received by a     
Doughtie's shareholder. For example, if the net worth of Doughtie's at closing  
is $9,000,000, the maximum per share amount received by you in the merger will  
be approximately $16.34. See "Material Provisions Of The Merger                 
Agreement -- Merger Consideration" on page 35.                                  

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RISKS RELATING TO THE BUSINESS OF 
SYSCO AND THE COMBINED COMPANY

     The following is a discussion of risks which affect the business, financial
condition or results of operations of SYSCO and will affect the combined company
following the consummation of the merger.                                       

SYSCO'S SIGNIFICANT INDEBTEDNESS COULD INCREASE ITS VULNERABILITY TO COMPETITIVE
PRESSURES, NEGATIVELY AFFECT ITS ABILITY TO EXPAND AND DECREASE THE MARKET VALUE
OF ITS COMMON STOCK                                                             

Because historically a substantial part of SYSCO's growth has been the
result of acquisitions and capital expansion, SYSCO's continued growth depends, 
in large part, on its ability to continue this expansion. As a result, its      
inability to finance acquisitions and capital expenditures through borrowed     
funds could restrict its ability to expand. Moreover, any default under the     
documents governing the indebtedness of SYSCO could have a significant adverse  
effect on the market value of SYSCO's common stock. Further, SYSCO's leveraged  
position may also increase its vulnerability to competitive pressures.          

 As of March 27, 1999, SYSCO had approximately $914 million of long term
indebtedness outstanding and approximately $1.4 billion of shareholders' equity.
Also, SYSCO had available approximately $300 million of borrowing capacity under
its revolving credit facility agreement, subject to the maintenance of financial
ratios set forth in that agreement. Borrowings under this facility would        
increase SYSCO's indebtedness and magnify the above risks.                      

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 would make it more difficult for 
anyone to acquire SYSCO without approval of the Board of Directors because more 
shares would have to be acquired to gain control. 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, which also means more
shares would have to be acquired to gain control. Both of these devices may     
deter hostile takeover attempts that might result in an acquisition of SYSCO    
that would have been financially beneficial to SYSCO's stockholders. See        
"Comparison Of Shareholder Rights -- SYSCO Rights Plan" on page 62.             

BECAUSE SYSCO SELLS FOOD PRODUCTS, IT FACES THE RISK OF EXPOSURE TO PRODUCT     
LIABILITY CLAIMS                                                                

    SYSCO, like any other seller of food, including Doughtie's, 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 has primary or excess umbrella liability insurance with coverage limits in
excess of $10 million. However, this insurance may not continue to be available 
at a reasonable cost, or, if available, may not be adequate to cover            
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 insured 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 SYSCO's net income and earnings per share.              

BECAUSE SYSCO HAS FEW LONG-TERM CONTRACTS WITH SUPPLIERS AND DOES NOT CONTROL   
THE ACTUAL PRODUCTION OF ITS PRODUCTS, SYSCO MAY BE UNABLE TO OBTAIN ADEQUATE   
SUPPLIES OF ITS PRODUCTS                                                        

     SYSCO obtains all of its foodservice products from other suppliers. For the
most part, SYSCO does not have long-term contracts with any supplier committing 
it to provide products to SYSCO. Although SYSCO's purchasing volume can provide 
leverage when dealing with suppliers, suppliers may not provide the foodservice 
products and supplies needed by SYSCO in the quantities requested. Because SYSCO
does not                                                                        

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control the actual production of its products, it 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.                     

The inability of SYSCO 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 suppliers.                                                        

IF SYSCO FAILS TO ADEQUATELY ADDRESS THE YEAR 2000 ISSUE, IT MAY LOSE REVENUE OR
INCUR ADDITIONAL COSTS                                                          

   Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering  
the impact of the upcoming change in the century. If not corrected, many        
computer applications could fail or create erroneous results by or at the year  
2000.                                                                           

As a result, SYSCO may suffer the following consequences:             

   - SYSCO may experience a significant number of operational inconveniences
  and inefficiencies for it and its customers that may divert time and
    attention and financial and human resources from its ordinary business
activities.                                                       

 - SYSCO may suffer serious system failures that may require significant
      efforts by it or its customers to prevent or alleviate material business
disruptions.                                                      

- SYSCO may experience a significant loss of revenues or incur a      
significant amount of unanticipated expenses.                     

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 SYSCO acquires a business in a market in which it has limited or 
no expertise, or with a corporate culture different from SYSCO's. 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 management's attention from      
SYSCO's existing business and may damage SYSCO's relationships with its key     
customers and suppliers. This risk is significant to SYSCO because historically 
it has acquired more businesses than many of its competitors.                   

RISKS RELATING TO THE BUSINESS OF DOUGHTIE'S

    If the merger is not approved, Doughtie's shareholders will continue to be
subject to those risks which could adversely affect the business, financial     
condition and results of operation of Doughtie's. These risks include the       
following:                                                                      

IF DOUGHTIE'S LOSES ITS LARGEST CUSTOMER, ITS PROFITS MAY DECREASE              

 Doughtie's has a contract with the Department of Defense which produced
13.2% of net sales in 1998, 15.8% in 1997 and 11.5% in 1996. The contract       
expires in January, 2000. Doughtie's believes that it would have to settle for  
smaller profit margins in order to bid successfully on a new contract.          
Therefore, Doughtie's profits may decrease either as a result of the lost sales 
or renewal of the contract at lower profit margins.                             

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DOUGHTIE'S MAY HAVE DIFFICULTY OBTAINING SUBSTANTIAL ADDITIONAL CAPITAL TO      
SIGNIFICANTLY EXPAND ITS BUSINESS                                               

   In order to develop its markets and expand its business, Doughtie's would
need substantial additional capital. Doughtie's current facilities are operating
at capacity, and there is no available land for expansion at its present site.  
Since further fragmentation of its facilities would be inefficient, Doughtie's  
only practical option would be to build a new facility. As of June 26, 1999,    
Doughtie's available borrowing capacity under its credit facility was $6.8      
million, which may not be sufficient to build a new facility or to support these
growth opportunities.                                                           

DOUGHTIE'S MAY NOT BE ABLE TO COMPETE EFFECTIVELY WITH ITS COMPETITORS          

   Because there are many food distribution companies, many of which operate
nationally and have more assets and sales than Doughtie's, Doughtie's may not be
able to increase its share of the market. Larger companies may be able to offer 
lower prices, a larger selection of products and greater flexibility in delivery
schedules. In addition, larger food distribution companies may offer Doughtie's 
employees better compensation and benefits which may make it difficult for      
Doughtie's to retain those employees.                                           

LOWER FOOD COSTS MAY REDUCE DOUGHTIE'S PROFIT LEVELS                            

The food distribution industry has low profit margins. A significant  
portion of Doughtie's sales are made at prices based on product cost plus a     
percentage markup. If food prices decrease, Doughtie's profit may decrease even 
though the percentage markup stays the same.                                    

IF DOUGHTIE'S SUPPLIES FOOD WHICH CAUSES INJURY, DOUGHTIE'S MAY BE LIABLE FOR   
PRODUCT LIABILITY CLAIMS                                                        

    Doughtie's has liability insurance coverage of $3,000,000. Doughtie's also
has indemnification agreements with its suppliers regarding the safety of their 
products. However, if insurance coverage is inadequate or if the suppliers are  
insolvent, a successful product liability claim could result in a loss to       
Doughtie's.                                                                     

BECAUSE DOUGHTIE'S HAS NO LONG-TERM SUPPLY CONTRACTS AND DOES NOT CONTROL       
PRODUCTION OF ITS PRODUCTS, SOME OF THE PRODUCTS IT NEEDS MAY NOT BE AVAILABLE  

Doughtie's obtains all of its food products from suppliers and has no 
long-term contracts with the suppliers. If suppliers are affected by weather,   
strikes, crop conditions, transportation problems or natural disasters,         
Doughtie's may not be able to obtain the products it needs.                     

CHANGES IN GOVERNMENTS REGULATIONS COULD NEGATIVELY AFFECT DOUGHTIE'S           

Because Doughtie's is in the food distribution industry, Doughtie's is
subject to government regulations, including those relating to health and       
safety, labeling of products, weights and measures, transportation,             
environmental matters and labor matters. Changes in government regulations could
increase Doughtie's costs or make Doughtie's products or services no longer     
economically feasible.                                                          

THE INCREASED NUMBER OF CHAIN BUSINESSES MAY CAUSE DOUGHTIE'S NET SALES TO      
DECREASE                                                                        

The trend in restaurants, supermarkets, hospitals and other private   
businesses which are potential customers of Doughtie's is toward chain          
businesses rather than independent operations which have historically been      
Doughtie's primary customers. Chain businesses may prefer to deal with one      
distributor which can supply their needs on a regional or nationwide basis and  
which may be in a position to supply more favorable volume discounts.           

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

   SYSCO and Doughtie's have each made "forward-looking statements," as that
term is defined in Section 27A of the Securities Act and in Section 20A of the  
Exchange Act, in this proxy statement/ prospectus, and in documents that are    
incorporated by reference by SYSCO and Doughtie's in this proxy                 
statement/prospectus, that are subject to risks and uncertainties. These        
statements are based on the current beliefs and assumptions of SYSCO's and      
Doughtie's management, and on information currently available to the management.
Forward-looking statements include:                                             

- the information concerning possible or assumed future results of    
      operations of SYSCO and Doughtie's set forth under "Summary -- Questions
      And Answers About The Merger," "-- Additional Summary Information," "The
Merger -- Background of The Merger," "-- Reasons for The Merger;  
    Recommendation of The Doughtie's Board," and "-- Opinion of Doughtie's
Financial Advisor;"                                               

- statements made regarding the estimated net worth of Doughtie's at  
       closing and the amount of the resulting anticipated net worth adjustment;
and                                                               

- other statements preceded by, followed by or that include the words 
      "believes," "expects," "anticipates," "intends," "plans," "estimates" or
similar expressions.                                              

Forward-looking statements are not guarantees of performance. By their
nature, they involve risks, uncertainties and assumptions. The future results   
and shareholder values of SYSCO and Doughtie's may differ materially from those 
expressed in these forward-looking statements. Many of the factors that will    
determine these results and values are beyond SYSCO's and Doughtie's ability to 
control or predict. Shareholders are cautioned not to put undue reliance on any 
forward-looking statement. Any such statement speaks only as of the date of this
proxy statement/prospectus, and SYSCO and Doughtie's do not have any intention  
or obligation to update forward-looking statements after they distribute this   
proxy statement/ prospectus, even if new information, future events or other    
circumstances have made them incorrect or misleading. For those statements,     
SYSCO and Doughtie's claim the protection of the safe harbor for forward-       
looking statements contained in the Private Securities Litigation Reform Act of 
1995.                                                                           

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THE MERGER

  The following discussion describes the material aspects of the merger of
Doughtie's with SYSCO Food Services of Eastern Virginia, Inc., a wholly-owned   
subsidiary of SYSCO. The detailed terms of the merger are contained in the      
merger agreement, which is attached as Appendix A to this proxy                 
statement/prospectus. The description in this proxy statement/prospectus is not 
complete, and you should refer to the merger agreement for more detail.         

As discussed below in "Reasons for The Merger; Recommendation of The  
Doughtie's Board," the Doughtie's Board believes that the merger and the merger 
agreement are fair to, and in the best interests of, Doughtie's and its         
shareholders.                                                                   

BACKGROUND OF THE MERGER                                                        

Early Consideration and Sale Process                                        

The Doughtie's Board of Directors historically has understood that    
Doughtie's would need substantial additional capital in order to fully develop  
the Tidewater, Virginia area and surrounding markets. It discussed on several   
occasions in 1997 and 1998 the various expansion, relocation and other          
alternatives available to it. Doughtie's existing facilities are at capacity,   
and there is no available land for expansion at its present site. Since further 
fragmentation of its facilities would be inefficient, its only practical options
were to build a new facility or seek a buyer for its business.                  

   In July 1998, following a general discussion of an indication of interest
that had been received by Doughtie's, Doughtie's counsel discussed with members 
of the Board of Directors the process involved in mergers and acquisitions of   
publicly held companies and suggested that a controlled auction process would   
probably result in the best maximization of value for the Doughtie's            
shareholders. Messrs. Vernon W. Mules, Steven C. Houfek and William R. Waddell  
met with representatives of Mann, Armistead & Epperson, Ltd., and with          
representatives of two other investment banking firms, on August 3, 1998. Each  
firm presented an overview of the current landscape for acquisitions of         
companies comparable to Doughtie's. The Board of Directors received a report    
from Messrs. Mules, Houfek and Waddell at the Board of Directors meeting on     
September 2, 1998. The Board also received an additional presentation from Mann,
Armistead & Epperson. Mann, Armistead & Epperson recommended a phased           
exploration of Doughtie's alternatives, consisting of:                          

   - a preliminary evaluation of Doughtie's by Mann, Armistead & Epperson to
  establish whether the estimated probable selling price of Doughtie's
would be acceptable to the Board;                                 

- canvassing the market for buyers; and                               

- negotiating a sale.                                                 

    Messrs. Mules and Houfek were then instructed by the Board to finalize the
selection of an investment banker, assuming an acceptable financial arrangement 
could be negotiated. On September 14, 1998, Doughtie's signed an engagement     
letter with Mann, Armistead & Epperson and instructed Mann, Armistead & Epperson
to proceed with the first phase of valuing Doughtie's.                          

     The factors considered by the Board in deciding to engage Mann, Armistead &
Epperson included its familiarity with the Southeastern marketplace, its        
emphasis on mergers and acquisitions, the number of transactions in which it has
been involved, and its reputation and expertise.                                

    Between September 14, 1998 and October 8, 1998, Mann, Armistead & Epperson
conducted an analysis of Doughtie's in order to finalize its opinion of the     
value of Doughtie's stock. This analysis included a review of available business
and financial information relating to Doughtie's including the following:       

  - Doughtie's Annual Reports to Shareholders, Annual Reports on Form 10-K
    and related financial information for the two years ended December 27,
1997 and December 28, 1996;                                       

     - Doughtie's Quarterly Reports on Form 10-Q for the quarterly periods ended
March 28,1998; June 27, 1998 and September 26, 1998;              

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   - publicly available information with respect to historical market prices
and trading activities for Doughtie's common stock;               

     - publicly available information with respect to other foodservice industry
companies; and                                                    

  - such other financial studies, analyses, inquiries and other matters as
Mann, Armistead & Epperson deemed relevant.                       

   Mann, Armistead & Epperson worked with Doughtie's management in analyzing
historical financial data of Doughtie's and making adjustments to that data to  
compensate for undervalued assets and for expenses which would not continue if a
sale occurred.                                                                  

   On October 8, 1998, Mann, Armistead & Epperson presented its valuation of
Doughtie's, and after a further discussion of the alternatives available,       
including preliminary estimates of the cost of a new facility, the Board        
directed Mann, Armistead & Epperson to seek interested buyers.                  

During October and November 1998, Mann, Armistead & Epperson prepared 
extensive descriptive material concerning Doughtie's, contacted financial and   
strategic buyers it thought were likely to be interested in acquiring           
Doughtie's, and distributed such material as an "offering memorandum" to certain
of the prospective buyers. During October, November and December 1998, Mann,    
Armistead & Epperson met or discussed Doughtie's by telephone with 19           
prospective acquirors, of which 13 requested and received offering memoranda    
after signing confidentiality agreements. The offering memorandum invited       
prospective buyers to submit preliminary indications regarding their level of   
interest by late December 1998. On January 4, 1999, Doughtie's announced        
publicly that it had engaged Mann, Armistead & Epperson and that it was         
considering alternatives, including a possible sale of Doughtie's.              

    On January 8, 11 and 12, 1999, representatives of four prospective bidders
(SYSCO and Companies "A," "B," and "C"), each of whom had indicated a serious   
interest in purchasing Doughtie's, attended meetings at which the senior        
management of Doughtie's and of the bidders made presentations regarding their  
respective interests. The bidders were also given an opportunity to tour        
Doughtie's facilities and review the data which had been assembled and made     
available at the offices of Doughtie's counsel. Based on potential interest from
such prospective acquirors, Mann, Armistead & Epperson then asked for more      
formal proposals by late January 1999.                                          

The SYSCO Offer and Negotiations                                            

    In October 1998, SYSCO was contacted by James M. Mann of Mann, Armistead &
Epperson to inquire whether SYSCO would be interested in acquiring Doughtie's.  
SYSCO responded in the affirmative and a confidentiality agreement was entered  
into between the parties on November 17, 1998. Subsequently, SYSCO received the 
offering memorandum and other financial and operating information from          
Doughtie's, and on December 18, 1998 SYSCO provided Doughtie's with a           
preliminary indication that it might be interested in purchasing Doughtie's     
assets for a total consideration of approximately $25 to $30 million.           

  During January 1999, SYSCO began its due diligence review and there were
continuing discussions among representatives of SYSCO and Doughtie's. On January
20, 1999, SYSCO informed Doughtie's that it was seeking approval from its       
executive committee for an offer to Doughtie's shareholders of $16.00 per share 
for Doughtie's stock, which the Board of Doughtie's and Mann, Armistead &       
Epperson considered superior, because of tax considerations, to SYSCO's previous
indication of interest in buying assets. Executive committee approval by SYSCO  
was obtained on January 25, 1999. SYSCO submitted its formal bid to Doughtie's  
on January 27, 1999 with an offer of $16.00 per share.                          

Final Negotiations                                                          

   In late January 1999, Mann, Armistead & Epperson received, in addition to
the SYSCO offer, proposals from three other potential acquirors (Companies "A," 
"B" and "C"). Doughtie's Board of Directors met on January 28, 1999 to consider 
the four proposals. Mann, Armistead & Epperson representatives led a discussion 
and detailed comparison of the features of each proposal. After discussing each 
proposal in detail, the Board                                                   

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directed Mann, Armistead & Epperson and Doughtie's counsel to ask for           
clarification with respect to a number of points from each of the four bidders. 
The offers from Companies "A," "B" and "C" were each expressed in terms of a    
stock for stock acquisition, with various valuation mechanisms. As expressed in 
its January 27, 1999 proposal, SYSCO's offer was for a transaction in which     
Doughtie's shareholders were to receive SYSCO common stock, with an implied     
value for Doughtie's stock of approximately $16.00. Although SYSCO's offer of   
$16.00 in stock was on its face superior to the other offers, it was subject to 
terms regarding escrows and purchase price adjustments which were unacceptable  
to Doughtie's.                                                                  

    On January 28, 1999, Doughtie's responded to SYSCO, and Companies "A," "B"
and "C", with comments regarding the structure of the proposed transactions and 
asked for "best and final" offers. Extensive discussions were held between Mann,
Armistead & Epperson and each of SYSCO and Companies "A," "B" and "C" during the
week of February 1, 1999. "Best and final" proposals were received from         
Companies "A" and "B" during that week. Company "C" declined to re-submit its   
bid. On February 1, 1999, SYSCO responded to the January 28, 1999 invitation by 
adjusting certain terms of its offer, including adding a cash option, but it did
not increase its offer of $16.00 per share for Doughtie's stock. After          
considering all of the offers, Doughtie's informed SYSCO that it was inclined to
regard SYSCO's offer as superior, but that it was unhappy with certain facets of
the proposed structure of the transaction. SYSCO responded that it was not      
willing to change the proposed structure of the deal, but increased its offer to
$17.00 per share for Doughtie's stock on February 5, 1999.                      

    A meeting of the Doughtie's Board was held on February 5, 1999 to consider
these three final proposals and receive a further extensive analysis from Mann, 
Armistead & Epperson with respect to the comparative values of the proposals. As
noted above, discussions between Mann, Armistead & Epperson and SYSCO resulted  
in an additional $1.00 per share being added to SYSCO's bid before the Board    
meeting. After discussing the three final bids in detail, Mann, Armistead &     
Epperson and counsel for Doughtie's were instructed to attempt to negotiate a   
formal letter of intent with SYSCO based upon the offered terms, and a letter of
intent was entered into on February 8, 1999.                                    

  The Doughtie's Board of Directors approved the merger agreement on April
28, 1999 and the merger agreement was executed on May 5, 1999.                  

REASONS FOR THE MERGER; RECOMMENDATION OF THE DOUGHTIE'S BOARD                  

    The Doughtie's Board of Directors believes that the merger is fair to, and
in the best interests of, Doughtie's and its shareholders. The terms of the     
merger agreement, including the merger consideration, are the results of        
arms-length negotiations between representatives of SYSCO and Doughtie's. In    
considering the terms and conditions of the merger agreement, the material      
factors considered by the Doughtie's Board of Directors were:                   

  - The merger consideration was analyzed in relation to the market value,
     book value and earnings per share of the common stock of Doughtie's and
was considered superior to each such measure;                     

   - Doughtie's may require substantial capital investments to significantly
 expand its business from an operating and marketing standpoint, and
Doughtie's may be unable to obtain the required capital;          

  - SYSCO has the resources to develop Doughtie's growth opportunities and
has offered a fair price to Doughtie's shareholders;              

- In the foodservice industry, consolidation with larger distribution 
networks sometimes offers an advantage in buying power, operating 
efficiency, and technological development;                        

- The Doughtie's shareholders will receive SYSCO common stock that is 
   listed on the New York Stock Exchange. In addition, most shareholders
    will be free to sell their SYSCO common stock and diversify into other
investments;                                                      

     - The expected, although not certain, treatment of the merger as a tax-free
exchange of stock, with only the cash received being taxable;     

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    - The financial presentation of Mann, Armistead & Epperson and its opinion
     that the consideration to be received by the shareholders of Doughtie's
  pursuant to the merger agreement is fair to such shareholders from a
financial point of view;                                          

 - A review of strategic alternatives, including other possible business
   combinations, and based on such review, the belief that a transaction
    with another company may not offer terms with advantages comparable to
those of a business combination with SYSCO;                       

  - Due diligence review of the financial condition, results of operations
       and business prospects of SYSCO, which revealed no significant factors to
       cause the Doughtie's Board of Directors to pursue other alternatives; and

  - The anticipated favorable impact of the merger on Doughtie's employees
and customers and the communities served by Doughtie's.           

 The Doughtie's Board of Directors believes that the merger is advisable
because it is fair to, and in the best interests of, Doughtie's and its         
shareholders. The Doughtie's Board of Directors unanimously recommends that     
Doughtie's shareholders vote for the merger agreement and the merger.           

   The foregoing discussion of the factors considered by Doughtie's Board of
Directors is not intended to be exhaustive, but is believed to include all      
material factors considered by Doughtie's Board of Directors. In reaching its   
decision to approve the merger agreement and the merger, Doughtie's Board of    
Directors did not quantify or assign any relative weights to the factors        
considered or consider any one factor to be determinative, and individual       
directors may have given different weight to different factors.                 

POTENTIAL CONFLICTS OF INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS IN THE      
MERGER                                                                          

   In considering the recommendation of the Doughtie's Board with respect to
the merger, shareholders of Doughtie's should be aware that, as described below,
members of Doughtie's management and Board may have interests in the merger that
are different from, or in addition to, their rights as shareholders of          
Doughtie's, which may create conflicts of interest. The Doughtie's Board was    
aware of and considered these interests in reaching its conclusion that the     
merger agreement and the transactions contemplated thereby are fair to, and in  
the best interests of, Doughtie's and its shareholders.                         

     Stock Holdings. As of the record date, the directors and executive officers
of Doughtie's and members of their family beneficially owned approximately      
938,513 or 61.87% of the outstanding shares of common stock of Doughtie's.      

 Voting Trust. Mary D. Houfek, wife of Steven C. Houfek, president and a
director of Doughtie's, Barbara D. Horton, mother of Robert F. Horton, Vice     
President -- Business Development of Doughtie's, and Elsie D. Waddell are the   
owners of record of 747,743 shares as trustees of a trust, which was created    
under a voting trust agreement among Ms. Houfek, Ms. Horton, Ms. Waddell, and   
Mary H. Doughtie dated June 17, 1986. Ms. Houfek, Ms. Horton and Ms. Waddell    
share voting and investment power with respect to these shares. On February 23, 
1995, the parties to the voting trust agreement agreed to extend the term of the
voting trust until December 31, 2004.                                           

   1998 Stock Incentive Plan. If the merger is completed, executive officers
and directors of Doughtie's will receive in the aggregate approximately         
$441,000, subject to possible adjustments, in merger consideration in exchange  
for their Doughtie's options, assuming no net worth adjustment or required tax  
withholding.                                                                    

    Under the terms of the 1998 Stock Incentive Plan and the merger agreement,
all of the outstanding options granted to the executive officers and directors  
shall, notwithstanding any other provisions of this plan or any grant agreement 
to the contrary, become immediately vested and exercisable and convert into the 
right to receive cash.                                                          

Counsel to Doughtie's. William R. Waddell, a Doughtie's director since
1996, is a partner in the law firm of McGuire, Woods, Battle & Boothe LLP, which
has served as counsel to Doughtie's on a regular basis since 1974 and is        
currently representing Doughtie's in connection with the merger.                

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Employment with SYSCO. It is anticipated that the current officers of 
Doughtie's will be employed after the merger by SYSCO; however, it is not       
anticipated that any of the officers so employed will have employment or        
severance agreements with SYSCO. None of the current directors of Doughtie's    
will become directors of SYSCO under the terms of the merger agreement.         

    Shareholder Representative. Mr. Vernon W. Mules, a director of Doughtie's,
will be appointed the shareholder representative for each Doughtie's shareholder
and optionholder and receive compensation for his services in the amount of     
$50,000 per annum, plus expenses, for three years following the closing. Except 
for willful misconduct or gross negligence, Mr. Mules will not be liable for any
action taken in the performance of shareholder representative duties and will be
entitled to indemnification, to the extent escrowed amounts are available after 
satisfaction of all claims made by SYSCO against such amounts.                  

  Officer and Director Indemnification. The merger agreement provides that
the surviving corporation will maintain in effect in accordance with their terms
all rights to indemnification and exculpation from liabilities for acts or      
omissions occurring at or prior to the effective time existing as of the date of
the merger agreement for the current and former directors or officers of        
Doughtie's and its subsidiary.                                                  

    In addition, the merger agreement provides that, for a period of six years
after the effective time, the surviving corporation will maintain officers and  
directors liability insurance covering current officers and directors of        
Doughtie's for acts or omissions occurring prior to the effective time.         
Additionally, the organizational documents of SYSCO Food Services of Eastern    
Virginia, Inc. will contain the provisions with respect to indemnification that 
are contained in Doughtie's organizational documents for the individuals who at 
the effective time were directors or officers of Doughtie's or its subsidiary   
which provisions will not be amended, repealed or otherwise modified, except as 
required by applicable law, for a period of six years from the effective date.  

OPINION OF DOUGHTIE'S FINANCIAL ADVISOR                                         

Mann, Armistead & Epperson is a recognized investment banking firm    
regularly engaged in the valuation of private and public businesses and their   
securities in connection with mergers and acquisitions, competitive biddings and
valuations for estate, corporate and other purposes, and acting as financial    
advisor in connection with other forms of strategic corporate transactions.     

   On February 5, 1999, Mann, Armistead & Epperson delivered an oral opinion
to the effect that, as of the date of such opinion and based upon and subject to
matters stated in the opinion, the merger consideration as described in this    
proxy statement/prospectus was fair, from a financial point of view, to the     
shareholders of Doughtie's. Mann, Armistead & Epperson has subsequently         
delivered to the Doughtie's Board of Directors its written opinion dated as of  
May 5, 1999. Mann, Armistead & Epperson's opinion is addressed to the Doughtie's
Board of Directors and does not constitute a recommendation as to how any       
shareholder of Doughtie's should vote with respect to the merger agreement. No  
limitations were imposed by the Doughtie's Board of Directors with respect to   
the procedures followed or the investigations made by Mann, Armistead & Epperson
in rendering its opinion.                                                       

   The full text of Mann, Armistead & Epperson's written opinion, which sets
forth certain assumptions made, matters considered and limitations on review    
undertaken is attached as Appendix B to this proxy statement/prospectus, and is 
incorporated herein by reference. The summary of the opinion of Mann, Armistead 
& Epperson contained in this proxy statement/prospectus does not describe every 
provision of the opinion, and you should therefore review the full text of the  
opinion attached. Mann, Armistead & Epperson's opinion is directed only to the  
fairness, from a financial point of view, of the merger consideration as        
described herein, to the shareholders of Doughtie's.                            

   In arriving at its opinion, Mann, Armistead & Epperson reviewed available
business and financial information relating to Doughtie's and SYSCO and other   
information provided to it, including the following:                            

  - Doughtie's Annual Reports to Shareholders, Annual Reports on Form 10-K
    and related financial information for the two years ended December 27,
1997 and December 26, 1998;                                       

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     - Doughtie's Quarterly Reports on Form 10-Q for the quarterly periods ended
March 28, 1998, June 27, 1998 and September 26, 1998 and the press
 release announcing earnings for the quarterly period and year ended
December 26, 1998;                                                

   - SYSCO's Annual Reports to Shareholders, Annual Reports on Form 10-K and
     related financial information for the two years ended June 27, 1998 and
June 28, 1997;                                                    

    - SYSCO's Quarterly Reports on Form 10-Q and related financial information
       for the quarterly periods ended September 26, 1998 and December 26, 1998;

   - publicly available information with respect to historical market prices
    and trading activities for Doughtie's common stock, SYSCO common stock
      and for other publicly traded foodservice industry companies which Mann,
Armistead & Epperson deemed relevant;                             

- publicly available information with respect to selected foodservice 
industry companies;                                               

- other merger and acquisition transactions which Mann, Armistead &   
Epperson deemed relevant;                                         

- the form of merger agreement;                                       

 - other financial information concerning the business and operations of
   Doughtie's, including financial analyses and forecasts for Doughtie's
prepared by senior management; and                                

  - such other financial studies, analyses, inquiries and other matters as
Mann, Armistead & Epperson deemed reasonable and appropriate.     

In addition, Mann, Armistead & Epperson discussed the business and    
prospects of Doughtie's and SYSCO with members of senior management of each     
respective company.                                                             

   In connection with its review, Mann, Armistead & Epperson relied upon and
assumed the accuracy and completeness of all of the foregoing information       
provided to it or publicly available, including the representations and         
warranties of Doughtie's and SYSCO included in the form of merger agreement, and
Mann, Armistead & Epperson has not assumed any responsibility for independent   
verification of such information. Mann, Armistead & Epperson relied upon the    
senior management of Doughtie's as to the reasonableness and achievability of   
its financial and operational forecasts and projections, and the assumptions and
basis therefor, provided to Mann, Armistead & Epperson, and assumed that such   
forecasts and projections reflect the best currently available estimates and    
judgments of Doughtie's senior management and that such forecasts and           
projections will be realized in the amounts and in the time periods currently   
estimated by such senior management. Mann, Armistead & Epperson also assumed,   
without independent verification, that the aggregate reserves for losses,       
litigation and other contingencies for Doughtie's are adequate to cover such    
losses. Additionally, Mann, Armistead & Epperson did not undertake any          
independent valuation or appraisal of the real estate owned by Doughtie's.      

     In rendering its opinion, Mann, Armistead & Epperson performed a variety of
financial analyses. The preparation of a fairness opinion involves various      
determinations as to the most appropriate and relevant methods of financial     
analysis and the application of those methods to the particular circumstances   
and, therefore, such an opinion is not readily susceptible to partial analysis  
or summary description. Moreover, the evaluation of the fairness of the merger  
consideration, from a financial point of view, to holders of the Doughtie's     
common stock was to some extent a subjective one based on the experience and    
judgment of Mann, Armistead & Epperson and not merely or only the result of     
mathematical analysis of financial data. Accordingly, notwithstanding the       
separate factors summarized below, Mann, Armistead & Epperson believes that its 
analyses must be considered as a whole and that selecting portions of its       
analyses and of the factors contained therein, without considering all analyses 
and factors, could create an incomplete view of the evaluation process          
underlying its opinion.                                                         

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The following is a summary of the material analyses performed by Mann,
Armistead & Epperson in connection with rendering its opinion:                  

   (A) Offer Valuation: Mann, Armistead & Epperson reviewed the terms of the
merger proposal, including the exchange ratio and the cash option, based on a   
per share merger consideration value of $17.00 per share for each share of      
Doughtie's common stock outstanding, and determined that SYSCO's offer          
represented a premium, based on market closing stock prices for Doughtie's for  
the following dates as set forth in the table below:                            

                                                        [Enlarge/Download Table]

                                       SIGNIFICANCE                   DOUGHTIE'S  AMOUNT 
                                            OF                          STOCK       OF   
         DATE                              DATE                         PRICE     PREMIUM
         ----                          ------------                   ----------  -------
                                                                                         
September 14, 1998.... Date Mann, Armistead employed                    $ 6.50    161.5% 
January 3, 1999....... Last trading date prior to public                $ 8.00    112.5% 
                       announcement of employment of Mann, Armistead                     
February 5, 1999...... Date Doughtie's Board of Directors met to        $13.00     30.1% 
                       consider the merger proposal                                      

The merger consideration value of $17.00 per share represents:        

  - an earnings before interest and taxes ("EBIT") multiple of 13.0 times;

   - an earnings before interest, taxes and depreciation ("EBITDA") multiple
of 11.4 times;                                                    

 - a net income multiple of 21.3 times based on the financial results of
Doughtie's for the year ended December 26, 1998; and              

- a multiple of 2.65 times book value per share for Doughtie's as of  
December 26, 1998.                                                

Mann, Armistead & Epperson also considered the elements of the merger 
proposal providing that a net worth adjustment might be made to the per share   
merger price, and that funds would be placed in escrow to cover issues relating 
to representations and warranties to be contained in the merger agreement and   
relating to the sale of real estate. In consideration of the possibility that   
these amounts may not ultimately be available to the shareholders of Doughtie's,
Mann, Armistead & Epperson determined that SYSCO's offer represented a premium  
for Doughtie's shareholders.                                                    

 (B) Liquidity Analysis: Mann, Armistead & Epperson analyzed the trading
volume, market capitalization and related shareholder liquidity for the         
Doughtie's common stock and SYSCO common stock. The trading volume was reviewed 
for the 30 day period ended December 31, 1998, a period considered to be        
representative of Doughtie's normal trading activity. The average daily trading 
volume and market capitalization for each of SYSCO and Doughtie's over the      
period reviewed is contained in the table below:                                

                                                                [Download Table]

                                                        SYSCO       DOUGHTIE'S 
                                                        -----       ---------- 
                                                                               
Average Daily Trading Volume....................... 510,000 shares  850 shares 
Approximate Market Capitalization.................. $9.4 billion    $12 million

    Additionally, as noted in the merger agreement, shareholders of Doughtie's
may elect to receive a cash payment for their Doughtie's common stock as opposed
to receiving SYSCO common stock, provided the aggregate cash consideration going
to Doughtie's shareholders does not exceed 49.0% of the total merger            
consideration. The above noted trading volume activity and market capitalization
values for Doughtie's and SYSCO, plus the shareholders' cash option as related  
to the merger consideration, provide, in the opinion of Mann, Armistead &       
Epperson, a significantly enhanced liquidity option to the shareholders of      
Doughtie's.                                                                     

   (C) Discounted Cash Flow Analysis: Using a discounted cash flow analysis,
Mann, Armistead & Epperson estimated the net present value of the future streams
of after-tax cash flow that Doughtie's could produce on a stand alone basis for 
the periods 1999 and 2000 and a terminal multiple value was utilized to         

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determine the residual value for the period thereafter. For this analysis, Mann,
Armistead & Epperson considered various scenarios for the performance of the    
Doughtie's common stock using:                                                  

- Doughtie's sales revenue;                                           

 - net income and cash flow projections as supplied by Doughtie's senior
management;                                                       

 - a range of 17.5 times to 21.5 times earnings as the terminal value of
Doughtie's common stock; and                                      

- a range of discount rates from 9.0% to 11.0%.                       

    The estimates and ranges used in this analysis were chosen based upon what
Mann, Armistead & Epperson, in its judgment, considered to be appropriate taking
into account, among other things, Doughtie's past and current financial         
performance, the general level of inflation, and rates of return generally      
required in the marketplace for companies with similar risk profiles. In all of 
the scenarios considered, the present value of a share of Doughtie's common     
stock was calculated to be less than that of the merger consideration.          

(D) Analysis of Selected Foodservice Industry Acquisition             
Transactions: Mann, Armistead & Epperson attempted to review publicly available 
information regarding selected acquisitions in the foodservice industry but was 
unable to complete such analysis due to the fact that a large number of the     
acquisitions occurring within the industry are those involving a private company
and complete financial information was not generally available. Additionally,   
due to Doughtie's relatively small market capitalization value, Mann, Armistead 
& Epperson was not able to locate any comparable foodservice industry           
transactions of a public nature which it considered to be directly comparable.  

     (E) Additional Analysis: Since Doughtie's shareholders will have the option
to exchange their Doughtie's common stock for shares of SYSCO common stock,     
Mann, Armistead & Epperson also reviewed historical information relating to     
SYSCO's common stock. This review included a total return analysis and a        
comparison of trading multiple to net income. Lastly, Mann, Armistead & Epperson
reviewed the impact of the merger on the amount of dividends a Doughtie's       
shareholder, electing to receive SYSCO's common stock, would receive on a       
post-merger basis versus a pre-merger basis. While Doughtie's trading multiple  
to net income may be more favorable than SYSCO's, the superior total return and 
enhanced dividend of SYSCO provide, in the opinion of Mann, Armistead &         
Epperson, an increased benefit to the shareholders of Doughtie's.               

The summary above does not purport to be a complete description of the
analyses or data utilized by Mann, Armistead & Epperson in the preparation of   
its opinion. The preparation of a fairness opinion is a complex process and is  
not necessarily susceptible to summary description. Mann, Armistead & Epperson  
based its analyses on assumptions that it deemed reasonable, including          
assumptions concerning Doughtie's, general overall business and economic        
conditions, and industry related factors.                                       

Mann, Armistead & Epperson and Doughtie's have entered into a letter  
agreement relating to the services to be provided by Mann, Armistead & Epperson 
to Doughtie's. Doughtie's has agreed to pay Mann, Armistead & Epperson fees as  
follows:                                                                        

   - a cash fee of $15,000, which was paid when Doughtie's initially engaged
Mann, Armistead & Epperson;                                       

    - an additional cash fee of $15,000, which was paid when Mann, Armistead &
     Epperson rendered a draft copy of its evaluation report on the expected
value of Doughtie's; and                                          

     - an additional cash fee of $418,000 payable upon completion of the merger.

    Doughtie's has also agreed to reimburse Mann, Armistead & Epperson for its
reasonable and necessary out-of-pocket expenses and to indemnify Mann, Armistead
& Epperson against liabilities, including liabilities under federal securities  
laws.                                                                           

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EFFECTIVE TIME                                                                  

    On the closing date, the parties will file certificates of merger or other
appropriate documents and will make all other filings or recordings required    
under the Delaware General Corporation Law and the Virginia Stock Corporation   
Act. The merger will become effective at such time as all such filings have been
completed, or at such later time as SYSCO and Doughtie's specify in such        
filings. The filings will be made as promptly as practicable after satisfaction 
or waiver of the conditions to the merger contained in the merger agreement.    

MATERIAL FEDERAL INCOME TAX CONSEQUENCES                                        

    The following is a summary of the material federal income tax consequences
of the merger to the Doughtie's shareholders. The actual tax consequences of the
merger to specific shareholders may vary depending upon each shareholder's      
particular facts and circumstances. Further, shareholders, including, but not   
limited to:                                                                     

- tax-exempt organizations;                                           

- dealers in securities or currencies;                                

- regulated investment companies;                                     

- real estate investment trusts;                                      

- real estate mortgage investment conduits;                           

- financial asset securitization investment trusts;                   

- financial institutions;                                             

- persons subject to alternative minimum tax;                         

- insurance companies;                                                

 - persons holding their stock as a part of a hedging, conversion, short
sale, or integrated transaction or a straddle; or                 

   - shareholders who acquired their Doughtie's common stock pursuant to the
exercise of an employee stock option or otherwise as compensation,

may be subject to special rules not discussed below.              

In addition, this summary does not discuss the tax consequences of the
merger under state, local, or foreign law, nor does it discuss the tax          
consequences to persons who are neither citizens nor residents of the United    
States, or persons who are or own their interests through foreign corporations, 
foreign partnerships or foreign estates or trusts.                              

This summary is based upon the provisions of law and the regulations, 
administrative rulings, and judicial decisions now in effect. All of these are  
subject to change, possibly with retroactive effect, or different               
interpretations. Any such changes could affect the accuracy of the statements   
and conclusions in this proxy statement/prospectus. This summary does not       
purport to be a comprehensive description of all of the tax considerations that 
may be relevant to a decision as to whether to approve the merger or whether to 
elect to receive stock or cash as consideration in the merger. This summary is  
provided for general information purposes only, and does not constitute, and    
should not be considered as, legal or tax advice.                               

     ACCORDINGLY, ALL DOUGHTIE'S SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS AS TO THE SPECIFIC FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES  
OF THE MERGER TO THEM.                                                          

    Arnall Golden & Gregory, LLP, counsel to SYSCO, and McGuire, Woods, Battle
& Boothe LLP, counsel to Doughtie's, will each deliver an opinion that the      
description of the federal income tax consequences of the merger contained in   
this section is accurate. These tax opinions are based on certain assumptions   
and are subject to certain limitations and qualifications. These assumptions    
include the following:                                                          

- that the merger will be completed as described in this proxy        
statement/prospectus and the merger agreement;                    

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   - that the factual representations contained in letters delivered to such
       counsel by Doughtie's, SYSCO and SYSCO Food Services of Eastern Virginia,
     Inc. in connection with the tax opinions are true, correct and complete
as of the date of the tax opinions; and                           

    - that such representations will remain true, correct and complete through
the effective time.                                               

   An opinion of counsel only represents counsel's best judgment, and has no
binding effect or official status of any kind. No assurance can be given that   
contrary positions may not be taken by the Internal Revenue Service or a court  
considering the issues. Neither SYSCO nor Doughtie's has requested or will      
request a ruling from the IRS with regard to any of the federal income tax      
consequences of the merger.                                                     

   Tax consequences of the merger. Based upon and subject to the assumptions
and limitations stated above, SYSCO and Doughtie's believe that the merger      
should constitute a tax-free reorganization within the meaning of Sections      
368(a) and 368(a)(2)(D) of the Internal Revenue Code, and the material federal  
income tax consequences discussed below should result.                          

To qualify as a tax-free reorganization under Section 368(a) of the   
Internal Revenue Code, the merger must satisfy, in addition to other            
requirements, a "continuity of interest" test. This test requires that the      
holders of Doughtie's common stock, as a group, retain a substantial proprietary
interest in the Doughtie's business that will be conducted following the merger.
The IRS's current ruling guidelines provide that this requirement will be       
satisfied if the holders of Doughtie's common stock, as a group, receive an     
amount of SYSCO common stock in the merger having a value equal to at least 50% 
of the value of the formerly outstanding Doughtie's common stock. However, these
guidelines only describe the circumstances in which the IRS will issue a        
favorable ruling in advance of the completion of a transaction. They are not a  
statement of the substantive law regarding the qualification of a merger as a   
tax-free reorganization under Section 368(a) of the Internal Revenue Code. The  
case law is less restrictive than the IRS ruling guidelines in this area and, in
one early case, the Supreme Court held that the continuity requirement was      
satisfied where the shareholders of the acquired company received stock of the  
acquiring company having a value of less than 45% of the value of the formerly  
outstanding stock of the acquired company.                                      

 The merger agreement contains a mechanism for determining the number of
shares of SYSCO common stock to be received by the Doughtie's shareholders. This
number is determined by the average closing price of the SYSCO common stock over
the ten trading days ending two trading days prior to closing. Assuming the     
economic value of the SYSCO common stock on the merger date is at least $21 per 
share, this value will equal at least 51% of the value of the formerly          
outstanding Doughtie's common stock. In this event, the continuity of interest  
test will be satisfied. However, if the economic value of SYSCO common stock    
drops below $21 per share, then the value of the SYSCO common stock received by 
the Doughtie's shareholders will be less than 51% of the value of the formerly  
outstanding Doughtie's common stock. This is because the valuation mechanism    
contained in the merger agreement limits the number of shares of SYSCO common   
stock to be issued in the merger if the stock trades at less than $21 per share.
Therefore, if the SYSCO common stock drops to a value substantially below $21   
per share, this could cause the merger to fail the continuity of interest test. 
In such an event the total merger consideration would become taxable. As of May 
25, 1999, SYSCO common stock closed at $30.438 per share on the New York Stock  
Exchange. The following discussion assumes that SYSCO common stock does not drop
in per share value substantially below $21 per share.                           

   Treatment of shareholders who exchange Doughtie's common stock solely for
SYSCO common stock. Except as discussed below with respect to the receipt of    
cash in lieu of fractional shares, a holder of Doughtie's common stock who      
receives solely SYSCO common stock in exchange for Doughtie's common stock in   
the merger will not recognize gain or loss upon such exchange. The aggregate tax
basis of the SYSCO common stock received by such holder, including any          
fractional shares deemed received, as described below, will be equal to the     
aggregate tax basis of the Doughtie's common stock surrendered, and the holding 
period of the SYSCO common stock will include the holding period of the         
Doughtie's common stock surrendered.                                            

Treatment of shareholders who exchange Doughtie's common stock for a  
combination of SYSCO common stock and cash. Except as discussed below with      
respect to the receipt of cash in lieu of fractional shares, a holder of        
Doughtie's common stock who receives a combination of SYSCO common stock and    
cash,                                                                           

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other than cash in lieu of fractional shares, in exchange for Doughtie's common 
stock in the merger will recognize gain, but not loss, on the exchange. The     
gain, if any, that the holder will recognize will equal the lesser of:          

- the amount of cash received in the exchange; and                    

- the amount of gain that the holder realizes in the exchange.        

    The amount of gain that the holder realizes in the exchange will equal the
excess of:                                                                      

    - the sum of the cash plus the fair market value of the SYSCO common stock
received in the exchange; over                                    

- the tax basis of the Doughtie's common stock surrendered.           

   The aggregate tax basis of the SYSCO common stock received, including any
fractional shares deemed received, as described below, will be equal to the     
aggregate tax basis of the Doughtie's common stock surrendered in the exchange, 
decreased by the amount of cash received and increased by the amount of gain    
recognized. The holding period of the SYSCO common stock received will include  
the holding period of the Doughtie's common stock surrendered. Except as        
discussed below, any gain recognized by a holder with respect to the exchange   
will be capital gain. This capital gain will be long-term capital gain if the   
holding period of the Doughtie's common stock surrendered in the merger is more 
than one year as of the effective date.                                         

If the receipt of cash has the effect of a distribution of a dividend,
however, a Doughtie's shareholder receiving a combination of SYSCO common stock 
and cash could be required to treat part or all of the holder's recognized gain 
as dividend income. In making this determination, such holders will be treated  
as receiving solely SYSCO common stock in the merger and, immediately           
thereafter, having SYSCO redeem a number of shares of SYSCO common stock equal  
in value to the cash consideration the holders actually received. The receipt of
cash will not have the effect of a distribution of a dividend under this        
analysis if this hypothetical redemption satisfies the requirements for         
non-dividend treatment under Section 302 of the Internal Revenue Code.          
Generally, the requirements for non-dividend treatment under Section 302 of the 
Internal Revenue Code will be satisfied if:                                     

   - a holder's percentage ownership of SYSCO common stock immediately after
     the redemption is less than 80% of the holder's percentage ownership of
such stock immediately before the redemption;                     

 - the holder's ownership interest in SYSCO is completely terminated; or

- the redemption is "not essentially equivalent to a dividend."       

     If a holder's percentage ownership of SYSCO common stock is minimal and the
holder exercises no control over the affairs of SYSCO, even a small reduction in
the holder's percentage ownership should satisfy the "not essentially equivalent
to a dividend" test. In determining whether any of these tests are satisfied,   
holders must generally take into account not only the stock they own or are     
deemed to own directly, but also stock that they are treated as owning          
constructively by reason of the attribution rules under Section 318 of the      
Internal Revenue Code. This would include generally:                            

- stock owned by certain family members;                              

- stock issuable upon the exercise of options;                        

   - stock owned by certain estates and trusts of which the shareholder is a
beneficiary; and                                                  

- stock owned by certain affiliated entities.                         

  Doughtie's shareholders should consult with their own tax advisers as to
application of this test to their particular circumstances, and as to other     
potential consequences of dividend treatment.                                   

   Treatment of shareholders who exchange Doughtie's common stock solely for
cash. A holder of Doughtie's common stock who receives solely cash in the merger
in complete termination of that shareholder's stock interests will, except as   
set forth below, recognize gain or loss equal to the difference between the tax 
basis of the Doughtie's common stock surrendered and the amount of cash         
received. Generally, such gain or                                               

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loss will be capital gain or loss, and will be long-term capital gain or loss if
the holding period of the Doughtie's common stock surrendered in the merger is  
more than one year as of the effective date.                                    

     Receipt of cash in lieu of fractional shares. A holder of Doughtie's common
stock who receives cash in lieu of fractional shares of SYSCO common stock will 
be treated as having received such fractional shares pursuant to the merger and 
then as having exchanged such fractional shares for cash in a redemption by     
SYSCO. The holder will recognize gain or loss on this deemed redemption in an   
amount equal to the difference between:                                         

- the portion of the tax basis of the holder's Doughtie's common stock
    surrendered in the merger that is allocated to such fractional shares;
and                                                               

- the cash received in lieu of fractional shares.                     

Such gain or loss generally will be capital gain or loss, and will be 
long-term capital gain or loss if the holding period of the Doughtie's common   
stock surrendered in the merger is more than one year as of the effective date. 

Tax Treatment of SYSCO Stock Placed in Escrow. A portion of the merger
consideration will be retained by SYSCO in escrow to cover various contingent   
purchase price adjustments. There is substantial uncertainty as to whether these
assets will ever be paid to Doughtie's shareholders. See "Risk Factors -- The   
Amount Contained in the Escrow and the Shareholder Representative Fund          
Established at Closing May Never be Paid out to Doughtie's Shareholders         
Subsequent to Closing" above. Because the tax rules which apply to escrowed     
stock differ from the tax rules which apply to escrowed cash, the tax treatment 
of escrowed cash is discussed separately below.                                 

Shares of SYSCO common stock placed in escrow will not be taxable to  
Doughtie's shareholders. At closing, Doughtie's shareholders will allocate a    
portion of their aggregate tax basis in Doughtie's common stock to the SYSCO    
common stock held in escrow. This allocation will be made by reference to the   
maximum number of SYSCO shares that may be distributed ultimately to Doughtie's 
shareholders. Because any dividends paid by SYSCO on such stock will be retained
in escrow to satisfy claims under the escrow agreement, the dividends will not  
be taxable to Doughtie's shareholders until distributed. Upon final distribution
of SYSCO common stock from escrow, Doughtie's shareholders will adjust the tax  
basis of their SYSCO common stock to reflect any escrowed shares not distributed
due to the occurrence of one or more stated contingencies.                      

     Tax Treatment of Cash Placed in Escrow. The federal income tax treatment of
cash deposited by SYSCO into escrow is unclear under current law. Under the     
installment method of reporting, amounts placed into escrow with contingencies  
and other substantial restrictions are not taxable to the recipient until paid. 
However, the installment method does not apply to a sale of stock that is traded
on an established securities market. Because Doughtie's common stock is traded  
on such a market, current law would prohibit the use of installment reporting   
for sales of such stock. Nevertheless, based on several recently issued private 
letter rulings, the current administrative position of the IRS appears to permit
installment reporting for Doughtie's shareholders who currently are subject to  
securities law restrictions that impede their ability to sell their stock (such 
as "affiliate" limitations imposed by Rule 144 as promulgated by the Securities 
and Exchange Commission).                                                       

Shareholders who are restricted in the public sale of their Doughtie's
stock and who report their sale under the installment method may be subject to  
certain interest charge rules if such shareholders hold aggregate installment   
obligations arising during the year in excess of $5 million. In addition, a     
portion of the assets actually paid to Doughtie's shareholders from escrow may  
be taxable as interest income rather than capital gain for tax purposes.        

    Shareholders who are not restricted in the public sale of their Doughtie's
common stock will not be permitted to use the installment method. Instead, such 
shareholders are required to treat "all payments to be received" as having been 
received in the year of sale. Under current law, it is unclear how the amount of
such                                                                            

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payments should be determined when receipt is subject to substantial            
restrictions and contingencies. Several alternatives are possible:              

- The IRS may seek to tax Doughtie's shareholders on the full amount  
      transferred to escrow. This approach assumes that all contingencies will
    be resolved in favor of the shareholders. If the ultimate distribution
   were less than such amount, Doughtie's shareholders would recognize a
capital loss in the year of final distribution.                   

     - Alternatively, Doughtie's shareholders may be taxed currently on the fair
market value of their rights to receive funds from escrow, after  
 discounting to reflect the contingent nature of their rights. Funds
distributed in excess of this current value would be taxable to   
    Doughtie's shareholders in the year received. A portion of such excess
       funds may be taxable as interest, with the balance taxed as capital gain.
   If the aggregate distributions from escrow were less than the current
     value, the shareholders would be treated as incurring a capital loss in
the year of final distribution.                                   

- As a third approach, Doughtie's shareholders may be allowed to delay
 reporting the escrowed funds as taxable income until such funds are
      actually received in the future. As payments are received from escrow, a
   portion may be taxable as interest, with the balance taxed as capital
gain. This approach is termed the "open transaction" method.      

The open transaction method has been upheld by courts where taxpayers 
receive deferred payment obligations (such as contingent escrow rights), if such
obligations have no ascertainable fair market value. Regulations promulgated by 
the Treasury Department also recognize the validity of the open transaction     
method, but limit its applicability to "rare and extraordinary" situations in   
which the value of the contingent obligation cannot reasonably be ascertained.  
Doughtie's shareholders may determine that the fair value of the escrowed assets
cannot reasonably be ascertained due to the substantial contingencies imposed   
under the escrow agreement. This determination may be supported by the trading  
value of Doughtie's common stock immediately prior to closing. If the trading   
value of such stock does not exceed the merger consideration received at        
closing, it may reflect a market determination that the value of the escrowed   
assets cannot be ascertained.                                                   

The parties intend to treat the income earned on the escrowed funds as
taxable to SYSCO. This treatment is consistent with the open transaction method,
and inconsistent with an assertion that the contingent funds should be taxable  
to Doughtie's shareholders when placed into escrow.                             

     Considering the relevant authorities, Doughtie's shareholders should have a
reasonable basis for electing the open transaction method. Nevertheless, because
of the lack of clear legal authority, counsel is unable to express an opinion as
to whether Doughtie's shareholders can defer the recognition of gain with       
respect to cash placed in escrow. Consequently, each shareholder is urged to    
consult his or her tax advisor concerning the recognition of gain with respect  
to amounts placed in escrow.                                                    

     Opinions of Counsel. Completion of the merger is conditioned on the receipt
of opinions of Arnall Golden & Gregory, LLP and McGuire, Woods, Battle & Boothe 
LLP, each dated as of the effective time, that the merger will constitute a     
tax-free reorganization within the meaning of Section 368(a) of the Internal    
Revenue Code. Such opinions will be based on certain assumptions and subject to 
certain limitations and qualifications similar to those set forth above with    
respect to the tax opinions delivered by Arnall Golden & Gregory, LLP and       
McGuire, Woods, Battle & Boothe LLP.                                            

    THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL
OF THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER. THIS DISCUSSION IS   
NOT TAX ADVICE; IT IS INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY AND MAY NOT
APPLY TO A PARTICULAR SHAREHOLDER IN LIGHT OF SUCH SHAREHOLDER'S PARTICULAR     
CIRCUMSTANCES. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE     
PARTICULAR TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE APPLICATION OF 
FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS.                                     

ACCOUNTING TREATMENT                                                            

     The merger will be accounted for under the purchase method of accounting in
accordance with U.S. generally accepted accounting principles. Under this method
of accounting, the purchase price, including costs                              

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directly related to the merger, will be allocated to the assets acquired taking 
into account the liabilities assumed based on their fair value as of the date on
which the merger is closed, with any excess consideration being allocated to    
goodwill. The operating results of Doughtie's will be included with those of    
SYSCO from the date on which the merger is closed.                              

REGULATORY MATTERS; APPROVALS AND CONSENTS                                      

The merger agreement provides that Doughtie's and SYSCO will use their
reasonable good faith efforts and cooperate with one another:                   

  - in promptly determining whether any filings are required to be made or
     consents, approvals, waivers, permits or authorizations are required to
be obtained under any applicable law or regulation or from any    
      governmental authorities or third parties in connection with the merger;
and                                                               

   - in promptly making any such filings, in furnishing information required
in such filings and in timely seeking to obtain any such consents,
approvals, waivers, permits or authorizations.                    

 Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the
rules, and regulations adopted under the Hart-Scott Act, the merger may not be  
completed until the requisite notifications and report forms have been filed    
with the Antitrust Division of the United States Department of Justice and the  
Federal Trade Commission and the specified Hart-Scott Act waiting period        
requirements have been satisfied. The Hart-Scott Act waiting period is thirty   
days from the date both parties have filed their notification and report form,  
unless terminated earlier or extended by the Federal Trade Commission or the    
Department of Justice issuing a request for additional information or           
documentary materials. Thereafter, the waiting period may be extended only by   
court order or with the parties' consent. The expiration or earlier termination 
of the Hart-Scott Act waiting period does not preclude the Department of Justice
or the Federal Trade Commission from challenging the merger on antitrust grounds
either before or after completion of the merger. Private parties and state      
attorneys general may also bring legal action under federal or state antitrust  
laws. On May 10, 1999, SYSCO and Doughtie's filed applicable documents with the 
Department of Justice and the Federal Trade Commission. The applicable waiting  
period expired on June 9, 1999.                                                 

 If the merger is not completed within twelve months after June 9, 1999,
SYSCO and Doughtie's would be required to submit new filings to the Department  
of Justice and the Federal Trade Commission, and a new Hart-Scott Act waiting   
period would have to expire or be earlier terminated before the merger could be 
completed. The Federal Trade Commission and the Department of Justice frequently
scrutinize the legality under the antitrust laws of transactions such as the    
merger. Neither SYSCO nor Doughtie's believes that the merger will violate      
federal antitrust laws. Nevertheless, there can be no assurance that a challenge
to the merger will not be made on antitrust grounds or, if such a challenge is  
made, what the result would be.                                                 

NEW YORK STOCK EXCHANGE LISTING                                                 

   SYSCO will use its best efforts to cause the shares of SYSCO common stock
to be issued in the merger to be approved for listing on the New York Stock     
Exchange, subject to notice of issuance, prior to the closing date. This listing
is a condition to closing the merger.                                           

 Effective at the closing date, Doughtie's common stock will be delisted
from the Nasdaq SmallCap Market and deregistered under the Securities Exchange  
Act.                                                                            

FEDERAL SECURITIES LAW CONSEQUENCES                                             

     All shares of SYSCO common stock received by Doughtie's shareholders in the
merger will be freely transferable, except that shares of SYSCO common stock    
received by individuals and entities who are deemed to be "affiliates" of       
Doughtie's under the Securities Act before the merger may be resold by them only
in transactions permitted by the resale provisions of Rule 145 under the        
Securities Act (or Rule 144 under the Securities Act, in the case of individuals
and entities who become affiliates of SYSCO) or as otherwise permitted under the
Securities Act. Persons who may be deemed to be affiliates of Doughtie's        
generally include individuals or entities that control, are controlled by, or   
are under common control with, Doughtie's                                       

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and may include officers and directors of Doughtie's as well as principal       
shareholders of Doughtie's. The merger agreement also requires Doughtie's to    
cause each of its affiliates to execute and deliver to SYSCO a written agreement
to the effect that such affiliate will not offer or sell or otherwise dispose of
SYSCO common stock issued to such affiliate in or pursuant to the merger in     
violation of the Securities Act or the rules and regulations adopted by the SEC.
The delivery of such agreements is also a condition to SYSCO's obligation to    
complete the merger.                                                            

BOARD OF DIRECTORS AND MANAGEMENT FOLLOWING MERGER                              

  After the merger, SYSCO will continue to be managed by the same Board of
Directors and officers of SYSCO as before the merger. Information relating to   
the management, executive compensation, voting securities, certain relationships
and related transactions and other related matters pertaining to SYSCO is       
contained in or incorporated by reference in its Annual Report on Form 10-K for 
the fiscal year ended June 27, 1998. Such Annual Report is incorporated by      
reference into this proxy statement/prospectus. See "Where You Can Find More    
Information" on page 63 .                                                       

     The directors and officers of SYSCO Food Services of Eastern Virginia, Inc.
shall be the directors and officers of Doughtie's SYSCO Food Services, Inc. and 
each such officer shall hold office in accordance with the Certificate of       
Incorporation and bylaws of Doughtie's SYSCO Food Services, Inc.                

APPRAISAL OR DISSENTERS' RIGHTS                                                 

     Pursuant to Virginia law, Doughtie's shareholders do not have any appraisal
or dissenters' rights with respect to the merger.                               

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THE SPECIAL MEETING 

PURPOSE, TIME AND PLACE                                                         

This proxy statement/prospectus is being furnished to shareholders of 
Doughtie's in connection with the solicitation of proxies by the Doughtie's     
Board for use at the Doughtie's special meeting.                                

   The Doughtie's special meeting is to be held on August 23, 1999, at 10:00
a.m. local time at the Board Room of Crestar Bank, 500 Main Street, Norfolk,    
Virginia 23510. At the Doughtie's special meeting, holders of Doughtie's common 
stock will be asked to consider and vote upon a proposal to approve the merger  
agreement and the merger. Other than the proposal to approve the merger         
agreement and the merger, Doughtie's is not aware of any other matters that may 
come before the special meeting. However, you may be asked to consider and vote 
upon matters incidental to the business to be conducted at the special meeting. 

RECORD DATE; VOTING POWER                                                       

  The Doughtie's Board has fixed the close of business on July 19, 1999 as
the record date for determining the holders of Doughtie's common stock entitled 
to notice of, and to vote at, the Doughtie's special meeting. Only holders of   
record of Doughtie's common stock at the close of business on the record date   
will be entitled to notice of, and to vote at, the Doughtie's special meeting.  

     At the close of business on the record date, 1,495,023 shares of Doughtie's
common stock were issued and outstanding and entitled to vote at the Doughtie's 
special meeting. Holders of record of Doughtie's common stock are entitled to   
one vote for each share of Doughtie's common stock held of record on the record 
date on any matter which may properly come before the Doughtie's special        
meeting. Votes may be cast at the Doughtie's special meeting in person or by    
proxy.                                                                          

The presence at the Doughtie's special meeting, either in person or by
proxy, of the holders of a majority of the outstanding shares of the Doughtie's 
common stock is necessary to constitute a quorum in order to transact business  
at the Doughtie's special meeting. In the event that a quorum is not present at 
the Doughtie's special meeting, it is expected that such meeting will be        
adjourned or postponed in order to solicit additional proxies.                  

    Approval of the proposal to adopt the merger agreement and the merger will
require the affirmative vote of more than two-thirds of the outstanding shares  
of Doughtie's common stock entitled to vote.                                    

  Abstentions and broker non-votes, i.e., proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial 
owners or other persons entitled to vote shares as to a matter with respect to  
which brokers or nominees do not have discretionary power to vote, will be      
considered as present for the purposes of establishing a quorum. Brokers who    
hold shares of Doughtie's common stock as nominees, in the absence of           
instructions from the beneficial owners, will not have discretionary authority  
to vote such shares for the approval and adoption of the merger agreement and   
the merger. Any shares which are not voted because the nominee-broker lacks such
discretionary authority will be counted and have the same effect as a vote      
against the proposal.                                                           

SHARE OWNERSHIP OF MANAGEMENT                                                   

  As of the close of business on the record date, Doughtie's directors and
executive officers and their affiliates had the right to vote 938,513           
outstanding shares of Doughtie's common stock, collectively representing        
approximately 61.87% of Doughtie's outstanding shares of common stock, which    
includes 747,743 shares held in a voting trust agreement among Mary D. Houfek,  
Barbara D. Horton, Elsie D. Waddell and Mary H. Doughtie. Doughtie's directors  
and executive officers are expected to vote for the approval of the merger.     

VOTING OF PROXIES                                                               

  Shares represented by properly executed proxies received in time for the
special meeting will be voted at the meeting in the manner specified by such    
proxies. You should be aware that, if your proxy is properly                    

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executed but does not contain voting instructions, your proxy will be voted for 
approval of the merger agreement and the merger. It is not expected that any    
matter other than as described in this proxy statement/ prospectus will be      
brought before the Doughtie's special meeting. If incidental matters are        
properly presented before the meeting, the persons named in your proxy will have
authority to vote on such matters without consulting you. These matters may     
include a proposal to adjourn or postpone the meeting in order to solicit       
additional votes in favor of the merger.                                        

REVOCABILITY OF PROXIES                                                         

The grant of a proxy on the enclosed Doughtie's proxy card does not   
preclude a shareholder from voting in person. A shareholder of Doughtie's may   
revoke a proxy at any time prior to its exercise by:                            

    - delivering, prior to the Doughtie's special meeting, to Doughtie's, 2410
Wesley Street, Portsmouth, Virginia 23707, Attention: Secretary, a
       written notice of revocation bearing a later date or time than the proxy;

     - delivering to the Secretary of Doughtie's a duly executed proxy bearing a
later date or time than the revoked proxy; or                     

- attending the Doughtie's special meeting and voting in person.      

    Attendance at the Doughtie's special meeting will not by itself constitute
revocation of a proxy, unless you cast your vote at the special meeting.        

   Doughtie's does not expect to adjourn its special meeting for a period of
time long enough to require the setting of a new record date for the special    
meeting. If an adjournment occurs, it will have no effect on the ability of     
Doughtie's shareholders of record as of the record date to exercise their voting
rights or to revoke any previously delivered proxies.                           

SOLICITATION OF PROXIES                                                         

   The Doughtie's Board is soliciting the accompanying proxy, and Doughtie's
will bear the cost of the solicitation. Arrangements will be made with brokerage
houses and other custodians, nominees and fiduciaries for the forwarding of     
solicitation material to the beneficial owners of Doughtie's common stock held  
of record by such persons and Doughtie's will reimburse such companies'         
custodians, nominees and fiduciaries for their reasonable out-of-pocket         
expenses. In addition to solicitation by mail, the directors, officers and      
employees of Doughtie's may solicit proxies from shareholders by telephone,     
telegram or in person. Such persons will not receive any additional compensation
for their solicitation activities.                                              

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MATERIAL PROVISIONS OF THE MERGER AGREEMENT 

The following is a summary of the material provisions of the merger   
agreement, which is attached as Appendix A to this proxy statement/prospectus   
and incorporated herein by reference. Other provisions of the merger agreement  
are summarized elsewhere in this proxy statement/prospectus. These summaries are
not complete descriptions of every provision of the merger agreement, and you   
should refer to the merger agreement for more detail.                           

STRUCTURE OF THE MERGER; CLOSING DATE                                           

  SYSCO formed its wholly-owned subsidiary, SYSCO Food Services of Eastern
Virginia, Inc., a Delaware corporation, to effect the merger. The merger        
agreement provides that following the approval of the merger agreement by the   
shareholders of Doughtie's and the satisfaction or waiver of all other          
conditions to the merger, including regulatory approvals, Doughtie's will merge 
with and into SYSCO Food Services of Eastern Virginia, Inc. After the merger,   
SYSCO Food Services of Eastern Virginia, Inc. will continue as the surviving    
company under the name "Doughtie's SYSCO Food Services, Inc."                   

    SYSCO and Doughtie's anticipate that the effective time and closing of the
merger will occur as soon as practicable after the approval of the merger by the
shareholders of Doughtie's. SYSCO and Doughtie's currently expect the merger to 
be completed by August 31, 1999.                                                

MERGER CONSIDERATION                                                            

As a result of the merger, each outstanding share of Doughtie's common
stock shall be automatically converted into the right to receive one of the     
following:                                                                      

- $17.00 in cash;                                                     

     - a number of shares of SYSCO common stock determined by dividing $17.00 by
    the average of the closing prices of SYSCO common stock as reported in
    the Wall Street Journal during the ten trading days ending two trading
    days prior to the closing date of the merger; provided, that SYSCO and
 Doughtie's have agreed that, for purposes of this calculation, such
     average shall not be greater than $31.00 per share nor less than $21.00
per share; or                                                     

- a combination of cash and shares of SYSCO common stock;             

all less the amount of any net worth adjustment and amounts required to be held 
in escrow and required to establish a shareholder representative fund, as set   
forth below.                                                                    

    Because SYSCO and Doughtie's have agreed that the average closing price of
SYSCO stock for purposes of calculation of the exchange ratio shall not be      
greater than $31.00 per share or less than $21.00 per share, if the actual      
average closing price of SYSCO common stock is less than $21.00, then the shares
of SYSCO common stock to be issued to each Doughtie's shareholder may have a    
value of less than $17.00 per Doughtie's share at the time of issuance.         
Conversely, if the actual average closing price is greater than $31.00 per      
share, then the shares of SYSCO common stock to be issued to each Doughtie's    
shareholder may have a value of greater than $17.00 per Doughtie's share at the 
time of issuance.                                                               

As a result of the $50,000 per annum payable to the shareholder       
representative for three years following the closing and other expenses, as     
discussed below, approximately $0.10 per share will be deducted from the merger 
price of $17.00. Thus, the maximum amount that any Doughtie's shareholder will  
receive for each share of Doughtie's common stock in cash and/or SYSCO common   
stock in the merger is approximately $16.90 per share.                          

   The holders of Doughtie's common stock may elect to receive approximately
$16.90 in cash, as adjusted to reflect the net worth adjustment, if any, for all
or any portion of the Doughtie's common stock held. However, the merger         
agreement provides that no more than 49% of the aggregate merger consideration  
will be paid in cash. In the event that shareholders elect to receive an amount 
which causes the aggregate amount of                                            

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cash to be received to exceed 49% of the merger consideration, the number of    
shares a shareholder may exchange for cash will be reduced and converted on a   
pro rata basis into the right to receive cash based on the proportion that the  
maximum number of shares as to which cash consideration may be paid bears to the
total number of shares of Doughtie's common stock as to which a cash election   
was actually made. This reduction will permit the merger to qualify as a        
tax-free reorganization within the meaning of Section 368 of the Internal       
Revenue Code by ensuring that at least 51% of the value of the total            
consideration paid, including all cash paid in exchange for fractional shares,  
cash paid for options under Doughtie's 1998 Stock Incentive Plan and any other  
payments required to be considered for tax purposes, consists of SYSCO common   
stock. The remainder of the shareholder's Doughtie's common stock which he, she 
or it had requested to exchange for cash will be converted into the right to    
receive SYSCO common stock.                                                     

 The following table gives examples of how the allocations would work in
various situations for a hypothetical Doughtie's shareholder holding 1,000      
shares. These are only examples and the actual allocations will depend on the   
actual elections made by all shareholders.                                      

                                                                [Download Table]

TOTAL PERCENTAGE OF      IF YOU ELECT ALL CASH YOU WOULD RECEIVE: 
AGGREGATE MERGER         -----------------------------------------
CONSIDERATION FOR WHICH    STOCK FOR THIS         CASH FOR THIS   
CASH IS ELECTED(1)        NUMBER OF SHARES      NUMBER OF SHARES  
-----------------------  -------------------   -------------------
                                                                  
         1%                        0                  1,000       
         10                        0                  1,000       
         20                        0                  1,000       
         30                        0                  1,000       
         40                        0                  1,000       
         50                       20                    980       
         60                      184                    816       
         70                      300                    700       
         80                      388                    612       
         90                      456                    544       
         100                     510                    490       

---------------                                                                 

(1) Including cash paid for fractional shares and options and other cash        
payments.                                                               

    No net worth adjustment will be made to the per share merger price as long
as the closing net worth of Doughtie's, adjusted as provided in the merger      
agreement, is equal to or greater than the net worth of Doughtie's as shown on  
its December 26, 1998 audited balance sheet of $9,853,617. However, an          
adjustment to the per share merger price will be made in the event that the     
closing net worth is less than the 1998 net worth of Doughtie's and SYSCO       
decides to proceed with closing the merger. Doughtie's does not expect that a   
net worth adjustment will be made to the per share merger price; however,       
Doughtie's shareholders should note that this expectation is an estimate and    
that a net worth adjustment may be made.                                        

     Assuming that Doughtie's closing net worth is less than $9,853,617 and that
SYSCO does not terminate the merger agreement as a result, the table below      
contains examples of how the merger price per share would                       

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be impacted by a net worth adjustment over the Doughtie's net worth range       
presented. The actual net worth adjustment, if any, may be greater or less than 
any presented in the table below.                                               

                                                                [Download Table]

                      NET WORTH               
CLOSING NET WORTH     ADJUSTMENT  MERGER PRICE
OF DOUGHTIE'S         AMOUNT(1)    PER SHARE  
-----------------     ----------  ------------
                                              
$9,853,617 and above    $0.00        $16.90   
9,000,000                0.56         16.34   
8,500,000                0.89         16.01   
8,000,000                1.22         15.68   
7,500,000                1.55         15.35   
7,000,000                1.88         15.02   
6,500,000                2.20         14.70   
6,000,000                2.53         14.37   
5,500,000                2.86         14.04   
5,000,000                3.19         13.71   

---------------                                                                 

(1) Calculated as the difference between the December 31, 1998 net worth of     
    $9,853,617 and the net worth of Doughtie's at closing, divided by 1,520,927,
   which includes 1,495,023 issued and outstanding shares of Doughtie's common
 stock as of the record date, and 25,904 equivalent shares. (The number of
equivalent shares is calculated by multiplying the 42,100 options       
 outstanding under the 1998 Doughtie's Stock Incentive Plan by (1) ($17.00
  less $6.54, the weighted average exercise price of the options) divided by
(2) $17.00, which equals 25,904.)                                       

  No fractional shares of SYSCO common stock will be issued in the merger.
Instead of fractional shares, holders will receive cash in an amount equal to   
the value of their fractional shares based on the average closing prices of     
SYSCO common stock as reported in the Wall Street Journal during the ten trading
days ending two trading days prior to the closing date of the merger, provided  
that SYSCO and Doughtie's have agreed that, for purposes of this calculation,   
such average shall not be greater than $31.00 per share nor less than $21.00 per
share. As of the effective time, by virtue of the merger, the outstanding shares
of Doughtie's common stock will not represent any ownership interest in         
Doughtie's but will only represent the right to receive cash, SYSCO common stock
or a combination of cash and SYSCO common stock.                                

ESCROW AMOUNTS                                                                  

     $3 million of the total merger consideration in SYSCO common stock and cash
will be placed into escrow at the closing of the merger. Also, approximately    
$305,000 of the total merger consideration in SYSCO common stock and cash will  
be placed in a shareholder representative fund at the closing of the merger, as 
described below. In addition, up to an additional $1.2 million of the merger    
consideration in SYSCO common stock and cash will be placed into escrow as      
follows:                                                                        

   - $1.13 million, if the sale and leaseback by Doughtie's of its warehouse
and associated realty located in Portsmouth, Virginia has not been
completed, or is not subject to a fully executed, specifically    
enforceable contract to effectuate the sale and leaseback of such 
warehouse and associated realty in which all conditions to the    
     performance of the purchaser have been satisfied or waived, at or prior
to the closing of the merger; and                                 

- $70,000, if the sale by Doughtie's of its annex property located in 
       Portsmouth, Virginia has not been completed, or is not subject to a fully
   executed, specifically enforceable contract to effectuate the sale of
   such annex property in which all conditions to the performance of the
    purchaser have been satisfied or waived, at or prior to the closing of
the merger.                                                       

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Thus, the amount to be paid to the Doughtie's shareholders immediately
following the closing will be approximately one of the following:               

    - if both properties are either sold or placed under contract, then $14.83
per share will be paid at closing;                                

- if only the warehouse and associated realty is sold or placed under 
contract, then $14.78 per share will be paid at closing;          

    - if only the annex property is sold or placed under contract, then $14.08
per share will be paid at closing; or                             

 - if neither property is sold or placed under contract, then $14.03 per
share will be paid at closing,                                    

without giving effect to any possible adjustment based on Doughtie's net worth  
at closing. The actual amount to be paid to Doughtie's shareholders will depend 
upon the total funds placed in escrow. Each individual Doughtie's shareholder   
will receive his or her pro rata share of cash and/or SYSCO common stock        
released from escrow, if any, as determined by his or her election in the       
merger.                                                                         

     The $3 million will be placed in escrow to cover purchase price adjustments
which may need to be made for breaches of representations and warranties given  
by Doughtie's to SYSCO regarding its business and financial matters. The $3     
million will be released to former shareholders of Doughtie's, less any claims  
made by SYSCO, as follows:                                                      

- promptly after the second anniversary of closing, the balance of any
      escrowed amount remaining in escrow, less $300,000 in SYSCO common stock
     and/or cash, which is required to remain in escrow for tax matters, and
 less 110% of the aggregate amount of the outstanding balance of all
  Doughtie's accounts receivable at the second anniversary of closing,
 which amount is also required to remain in escrow, and less amounts
       pertaining to any claims in dispute at the second anniversary of closing;
and                                                               

- promptly after the third anniversary of closing, the balance of any 
  amount remaining in escrow, less amounts pertaining to any claims in
      dispute at the third anniversary of closing, which amounts, if any, will
 be released to former shareholders following the resolution of such
claims in dispute.                                                

If the $1.13 million is paid into escrow pertaining to the Portsmouth,
Virginia warehouse and associated realty, then this amount will be released,    
with interest, to former shareholders of Doughtie's as follows:                 

    - on such date that the sale and leaseback is completed, provided that the
   sale and leaseback occurs before the third anniversary of closing; or

    - on such date that the warehouse and associated realty are sold, provided
    that SYSCO has the right to occupy the warehouse and associated realty
      for a period ending no earlier than 90 days after the second anniversary
of the closing.                                                   

In the event that the sale and leaseback of the Portsmouth, Virginia  
warehouse and associated realty are not completed on or before the third        
anniversary of the closing, the $1.13 million, with interest, shall be forfeited
and returned to SYSCO. Further, in the event the sale and leaseback are timely  
completed, but at a price lower than $2.91 million, an amount equal to the      
deficiency, with interest, will be forfeited and returned to SYSCO and the      
balance, with interest, will be released to former shareholders of Doughtie's.  

If the $70,000 is paid into escrow pertaining to the annex property   
commonly referred to as 2413 and 2415 Wesley Street located in Portsmouth,      
Virginia, then this amount will be released, with interest, to former           
shareholders of Doughtie's as follows:                                          

  - on such date that the sale is completed, provided that the sale occurs
before the third anniversary of closing.                          

  In the event that the sale of the Portsmouth, Virginia annex property is
not completed on or before the third anniversary of the closing, the $70,000,   
with interest, will be forfeited and returned to SYSCO. Further,                

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in the event the sale is timely completed, but at a price lower than $190,000,  
an amount equal to the deficiency, with interest, will be forfeited and returned
to SYSCO and the balance, with interest, will be released to former shareholders
of Doughtie's.                                                                  

     The SYSCO common stock and cash paid into escrow will be paid and released,
if any funds are available for release, in the relative proportions determined  
by each shareholder's cash election.                                            

SHAREHOLDER REPRESENTATIVE FUND                                                 

 If the merger is approved by Doughtie's shareholders, at closing a fund
will be established to compensate the shareholder representative for his        
services and to pay all expenses and fees incurred by or on behalf of the       
shareholder representative in connection with the performance of his duties,    
including without limitation:                                                   

- the cost of suitable insurance coverage for the shareholder         
  representative, estimated to be no more than approximately $4,000 to
$5,000 per year; and                                              

     - the fees and costs of attorneys, financial consultants, and other experts
consulted by the shareholder representative, if any.              

All fees and expenses incurred by the shareholder representative in   
carrying out his functions under the merger agreement shall be paid from the    
representative fund, and if the representative fund becomes exhausted, from     
escrowed amounts, after satisfaction of all claims of SYSCO against the escrow  
amounts.                                                                        

The shareholder representative fund shall be funded from the merger   
consideration by reducing the merger consideration otherwise payable to each    
Doughtie's shareholder and optionholder by twenty cents ($0.20) per share in    
accordance with such shareholder's cash election percentage, a total aggregate  
reduction of approximately $305,000. Of this amount, $50,000 per annum for three
years following the closing or an aggregate amount of approximately $0.10 per   
share will be paid as compensation to the shareholder representative from the   
fund and will not be payable to shareholders of Doughtie's. The fund will be    
established at closing and transferred to the shareholder representative or as  
directed in writing by the shareholder representative.                          

  The shareholder representative will issue periodic reports to Doughtie's
shareholders no less than once every twelve months beginning fourteen months    
after the closing, in which reports the shareholder representative will         
summarize disbursements from the representative fund and the status of the      
escrow amounts, any claims filed against the escrow amounts, and any other      
matters deemed by the shareholder representative to be material to Doughtie's   
shareholders.                                                                   

 Upon the completion of the duties of the shareholder representative and
satisfaction or final resolution of all claims against the escrow amounts and   
satisfaction of all compensation, fees, expenses, and other obligations to be   
paid out of the shareholder representative fund, any funds remaining in the     
representative fund shall be distributed to the Doughtie's shareholders and     
optionholders in the same proportion as determined by his or her election in the
merger.                                                                         

   After payment of compensation to Mr. Mules of $50,000 per annum for three
years following the closing, and payment of insurance and expenses the maximum  
amount that Doughtie's shareholders will receive in the merger is approximately 
$16.90 per share, less other amounts not released from the shareholder          
representation fund, amounts not released from escrow and the amount of any net 
worth adjustment. There can be no assurance that any funds will be available for
distribution to former Doughtie's shareholders.                                 

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SHAREHOLDER REPRESENTATIVE                                                      

    If the merger is approved by Doughtie's shareholders, Mr. Vernon W. Mules,
a director of Doughtie's, or at Mr. Mules' election, a limited liability company
formed and wholly-owned by him, will be appointed as the shareholder            
representative for each Doughtie's shareholder and optionholder under Doughtie's
1998 Stock Incentive Plan. As the shareholder representative, Mr. Mules will be 
authorized to take all actions and make any decisions required or permitted to  
be taken by him under the merger agreement or escrow agreement entered into in  
connection with the merger. For example, under the merger agreement, the        
shareholder representative will have the authority to:                          

    - execute the escrow agreement entered into in connection with the merger;

    - receive or give any notice on behalf of Doughtie's shareholders required
by the merger agreement or the escrow agreement;                  

- authorize delivery to SYSCO of escrowed amounts in satisfaction of  
claims;                                                           

- agree to, negotiate, enter into settlements and compromises of, and 
demand arbitration and comply with orders of courts and awards of 
arbitrators with respect to, any claims;                          

- vote the shares placed into escrow;                                 

- resolve any claims; and                                             

- take all actions necessary in the judgment of the shareholder       
representative for the accomplishment of the foregoing.           

Doughtie's shareholders and optionholders will be bound by all actions
taken by the shareholder representative in connection with the merger agreement 
or escrow agreement, and SYSCO will be entitled to rely on any action or        
decision of the shareholder representative evidenced by a written document      
executed by the shareholder representative as the action or decision of each of 
Doughtie's shareholders and optionholders. Except for willful misconduct or     
gross negligence, the shareholder representative shall not be liable for any    
action taken in the performance of his duties and shall be entitled to          
indemnification, to the extent escrow amounts are available after satisfaction  
of all claims made by SYSCO, from all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any   
kind which may be imposed on, incurred by, or asserted against the shareholder  
representative by SYSCO, Doughtie's, Doughtie's shareholders or optionholders or
any other person.                                                               

  Mr. Mules, as the shareholder representative for Doughtie's shareholders
and optionholders, will receive compensation for his services in the amount of  
$50,000 per annum for three years following the closing, plus expenses. Mr.     
Mules' compensation will be paid from the shareholder representative fund which 
will be established at closing, as discussed above.                             

CASH ELECTION FORM AND PROCEDURES                                               

  Each Doughtie's shareholder will have the opportunity to submit the cash
election form enclosed with this proxy statement/prospectus specifying the kind 
of consideration sought to be received in exchange for his or her Doughtie's    
shares of common stock. Shareholders of Doughtie's that become holders of       
Doughtie's common stock after the record date shall receive SYSCO common stock, 
unless the new holder requests a cash election form from the exchange agent and 
the cash election form is properly completed, signed and received by the        
exchange agent, along with the stock certificates to be exchanged, no later than
5:00 p.m. eastern time on the date of the special meeting.                      

    The cash election form will permit Doughtie's shareholders to elect one of
the following in exchange for their shares of Doughtie's common stock:          

- to receive only cash; or                                            

- to receive a combination of SYSCO common stock and cash.            

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    To be effective, the cash election form must be properly completed, signed
and received by the exchange agent, with stock certificates, no later than 5:00 
p.m. eastern time on the date of the special meeting. An election may be changed
or revoked, but only by written notice received by the exchange agent prior to  
5:00 p.m. eastern time on the date of the special meeting which includes, in the
case of a change, a properly completed and signed, revised cash election form.  
IF YOU DO NOT WISH TO MAKE A CASH ELECTION, DO NOT SEND IN THE CASH ELECTION    
FORM AND DO NOT SEND IN YOUR STOCK CERTIFICATES AT THIS TIME.                   

 Any Doughtie's shareholder who does not submit a properly completed and
signed cash election form along with the stock certificates to the exchange     
agent prior to 5:00 p.m. eastern time on the date of the special meeting and any
Doughtie's shareholder that properly executes a cash election form but does not 
indicate his or her choice of consideration or does not include his or her stock
certificates will receive only SYSCO common stock in exchange for his or her    
Doughtie's common stock, other than as to fractional shares. Accordingly,       
persons who become shareholders of Doughtie's after the close of business on the
date of the special meeting shall receive SYSCO common stock.                   

    SYSCO has the discretion, which it may delegate in whole or in part to the
exchange agent, to determine whether the cash election forms have been properly 
completed, signed and submitted or changed or revoked and to disregard          
immaterial defects in cash election forms. The decision of SYSCO, or the        
exchange agent, in such matters shall be conclusive and binding. Neither SYSCO  
nor the exchange agent will be under any obligation to notify any person of any 
defect in a cash election form submitted to the exchange agent.                 

Because the merger agreement provides that the merger is intended to  
qualify as a tax-free reorganization, the extent to which individual elections  
will be accommodated will depend upon the number of Doughtie's shareholders who 
elect cash, who elect SYSCO common stock, and who fail to make an election.     
Accordingly, a Doughtie's shareholder who elects to receive all cash may instead
receive a combination of cash and SYSCO common stock and a Doughtie's           
shareholder who elects to receive a specific combination of cash and SYSCO      
common stock may instead receive a different combination of cash and SYSCO      
common stock.                                                                   

  As of the effective time, Doughtie's stock transfer books will be closed
and no further transfer of Doughtie's shares will be recognized or registered on
Doughtie's stock transfer records. Following the effective time and until       
certificates are surrendered, all share certificates formerly evidencing        
Doughtie's shares will evidence only the right of the registered holders to     
receive the merger consideration. Such share certificates may be exchanged for  
the merger consideration into which holders' Doughtie's shares have been        
converted.                                                                      

   Because the tax consequences of receiving cash or SYSCO common stock will
differ, Doughtie's shareholders are urged to read carefully the subsection      
above, "The Merger -- Material Federal Income Tax Consequences" and consult     
their own tax advisors to determine the particular tax consequences to them of  
the merger.                                                                     

     TO MAKE AN EFFECTIVE ELECTION, A DOUGHTIE'S SHAREHOLDER WILL BE REQUIRED TO
RETURN A PROPERLY COMPLETED CASH ELECTION FORM, WITH STOCK CERTIFICATES,        
SUFFICIENTLY IN ADVANCE OF THE ELECTION DEADLINE SO THAT IT IS ACTUALLY RECEIVED
BY THE EXCHANGE AGENT ON OR PRIOR TO THE ELECTION DEADLINE. THE ELECTION        
DEADLINE IS 5:00 P.M. EASTERN TIME ON THE DATE OF THE SPECIAL MEETING. IF THE   
MERGER IS NOT APPROVED, THE EXCHANGE AGENT WILL RETURN YOUR STOCK CERTIFICATES  
TO YOU.                                                                         

PROCEDURE FOR SURRENDERING DOUGHTIE'S COMMON STOCK CERTIFICATES AFTER THE       
EFFECTIVE TIME                                                                  

Promptly after the effective time, the exchange agent will mail the   
following materials to each person who held shares of Doughtie's common stock as
of the effective time and has not made an effective cash election:              

     - a letter of transmittal to be used by the holder to surrender his, her or
its shares to the exchange agent in exchange for the merger       
consideration; and                                                

     - instructions explaining what the holder must do to effect the exchange of
shares of Doughtie's common stock for the merger consideration.   

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Each Doughtie's shareholder should complete and sign the letter of    
transmittal and return it to the exchange agent in accordance with the          
instructions provided by the exchange agent, together with any stock            
certificates for Doughtie's common stock held by such holder.                   

   If certificates for any shares of Doughtie's common stock have been lost,
stolen or destroyed, the holder must submit an affidavit to that effect to the  
exchange agent. The exchange agent may prescribe the form of affidavit required 
and may also require the holder to deliver a bond to the exchange agent in an   
amount reasonably required to indemnify the exchange agent and SYSCO against    
claims with respect to the lost certificates.                                   

    If a record holder of Doughtie's common stock at the effective time wishes
the merger consideration to be paid to another designated person, then, before  
the merger consideration can be issued to the designated recipient, such record 
holder must provide the exchange agent with the following documentation:        

     - a properly endorsed certificate for the shares of Doughtie's common stock
being exchanged;                                                  

   - properly completed and signed originals of any other documents required
       by the exchange agent to show that a transfer to the designated recipient
occurred; and                                                     

- evidence that any transfer taxes resulting from the issuance of any 
  certificate for SYSCO common stock to a person other than the record
holder of Doughtie's common stock have been paid.                 

To the extent that the merger consideration is payable in SYSCO common
stock, holders of Doughtie's common stock exchanged in the merger will be       
entitled to receive dividends and other distributions with respect to SYSCO     
common stock that they receive in the merger that are declared or made with a   
record date after the effective time. No such dividends or other distributions  
will be paid to any former holder of Doughtie's common stock, however, until    
such holder surrenders his, her or its shares of Doughtie's common stock to the 
exchange agent.                                                                 

After six months following the effective time, the exchange agent will
return to SYSCO any merger consideration which has not been exchanged for       
Doughtie's common stock, which merger consideration will be exclusive of any    
amounts held in escrow. After the return of the merger consideration to SYSCO,  
SYSCO will act as the exchange agent and any former holders of Doughtie's common
stock who have not exchanged their shares for merger consideration shall be     
required to surrender their certificates to SYSCO. Once SYSCO has assumed the   
role of exchange agent, former holders of Doughtie's common stock, to the extent
permitted under applicable law, shall look to SYSCO only as general creditors   
for payment of the merger consideration, but shall not look to SYSCO in the     
event merger consideration is delivered to a public official pursuant to any    
applicable abandoned property, escheat or similar law.                          

HOLDERS OF DOUGHTIE'S COMMON STOCK MUST SEND IN THEIR STOCK CERTIFICATES UPON   
RECEIPT OF THE TRANSMITTAL LETTER FROM THE EXCHANGE AGENT IN ORDER TO RECEIVE   
THE MERGER CONSIDERATION, UNLESS YOUR STOCK CERTIFICATES WERE PREVIOUSLY        
SURRENDERED TO THE EXCHANGE AGENT ALONG WITH A CASH ELECTION FORM.              

CONDITIONS TO COMPLETION OF THE MERGER                                          

  Each party's obligation to complete the merger is subject to a number of
conditions which must be met or, where permitted by law, waived by the closing  
date. These conditions include:                                                 

- the approval of the merger by the Doughtie's shareholders;          

     - the expiration or early termination of the waiting period that applies to
the merger under applicable federal antitrust laws;               

- the receipt of all licenses, permits, consents, approvals,          
       authorizations, qualifications and orders of governmental authorities and
third parties;                                                    

    - the absence of any governmental order, rule or injunction, or any law or
regulation prohibiting the merger;                                

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- the effectiveness of the registration statement of which this proxy 
    statement/prospectus is a part, and the absence of a stop order or any
proceedings or threats to suspend its effectiveness;              

- the approval for listing on the New York Stock Exchange, subject to 
    official notice of issuance, of the shares of SYSCO common stock to be
issued in the merger;                                             

- the receipt of tax opinions by each of SYSCO and Doughtie's that the
     merger will qualify as a tax-free reorganization under Internal Revenue
Code Section 368;                                                 

    - the accuracy of the representations and warranties of the other party to
       the merger agreement, except where the failure of the representations and
      warranties to be accurate does not have a material adverse effect on the
other party;                                                      

    - each party's performance of and compliance in all material respects with
  all of its obligations under the merger agreement at or prior to the
closing date; and                                                 

- the non-occurrence of any material adverse change or event having a 
material adverse effect on Doughtie's.                            

ENVIRONMENTAL CONDITION                                                         

     The closing of the merger is also conditioned upon SYSCO's satisfaction, in
its sole discretion, with the results of an environmental due diligence         
investigation and the financial, regulatory and contractual resolution of any   
issues which arise from such investigation, with respect to:                    

  - any release of hazardous substances from the annex property located in
Portsmouth, Virginia relating to the property's use as a petroleum
    storage facility and any other matter discovered prior to closing as a
result of such investigation; and                                 

   - any release of hazardous substances from an underground storage tank or
   other source discovered at Doughtie's property located in Manchester,
      Maryland and any matters discovered prior to closing as a result of such
investigation.                                                    

CONDUCT OF BUSINESS PENDING THE MERGER                                          

    Pursuant to the merger agreement, Doughtie's has agreed to take or refrain
from taking the actions below from the date of the merger agreement until the   
completion of the merger. Subject to exceptions contained in the merger         
agreement, Doughtie's has agreed as follows:                                    

  - to conduct and cause its subsidiary to conduct their businesses in the
  ordinary course consistent with past practice and use all reasonable
efforts to preserve intact their current business organizations;  

     - not to grant to any current or former officer or director any increase in
     compensation, bonus or other benefits, except as required by employment
agreements in effect as of the date of the merger agreement;      

- not to adopt or amend any collective bargaining agreement, or other 
Doughtie's benefit plans, in any manner;                          

    - not to declare, set aside or pay any dividends on its outstanding shares
      of capital stock other than regular quarterly dividends, which dividends
shall not exceed $0.03 per share;                                 

    - not to split, combine or reclassify any of its capital stock or issue or
     authorize the issuance of any other securities, except for issuances of
    Doughtie's common stock upon the exercise of Doughtie's employee stock
options outstanding on the date of the merger agreement;          

  - not to purchase, redeem or otherwise acquire any shares of its capital
stock;                                                            

   - not to issue, deliver, sell, pledge or otherwise encumber or subject to
  any lien any shares of its capital stock or any of its properties or
assets;                                                           

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   - not to amend its articles of incorporation, by-laws or other comparable
organizational documents;                                         

- not to acquire or agree to acquire any business or, except in the   
ordinary course of business, make any investment;                 

    - not to make any tax election that individually or in the aggregate would
       have a material adverse effect on Doughtie's or any of its tax attributes
or settle or compromise any material income tax liability;        

- not to incur any indebtedness for borrowed money or issue any debt  
securities or assume, guarantee or endorse, or otherwise become   
      responsible for, the obligations of any person for borrowed money, other
  than pursuant to a revolving credit facility or receivables facility
currently in effect;                                              

  - not to settle any material claim, action or proceeding involving money
damages;                                                          

 - not to enter into or terminate any material contract or agreement, or
make any change in any of its material leases or contracts; and   

   - not to authorize, commit or agree to take any of the foregoing actions.

TERMINATION                                                                     

   The merger agreement may be terminated at any time prior to the effective
time, whether before or after approval of the merger by the shareholders of     
Doughtie's:                                                                     

- by mutual written consent of the Boards of Directors of SYSCO and   
Doughtie's;                                                       

- by either SYSCO or Doughtie's if:                                   

- the merger has not been completed by September 30, 1999;          

     - approval of the Doughtie's shareholders has not been obtained at a duly
convened shareholders meeting; or                               

  - any court or other governmental body has taken any action enjoining,
restraining or otherwise prohibiting the merger;                

- by SYSCO, if Doughtie's materially breaches its representations,    
     warranties or agreements under the merger agreement or fails to perform
     any of its material obligations under the merger agreement which breach
    or failure would constitute a failure of a condition to the merger and
      has not been cured within 45 days after receipt of written notice of the
failure;                                                          

   - by SYSCO, if prior to the special meeting the Doughtie's Board fails to
     make, withdraws or adversely modifies its recommendation to approve the
merger agreement;                                                 

- by Doughtie's, if SYSCO materially breaches its representations,    
warranties or agreements under the merger agreement;              

- by SYSCO, if the closing net worth of Doughtie's is less than the   
    December 26, 1998 net worth of Doughtie's, as contained in its audited
financial statements, of $9,853,617; or                           

    - by SYSCO, in its sole discretion, if the results of an environmental due
   diligence investigation and the financial, regulatory and contractual
  resolution of any issues which arise from such investigation are not
satisfactory to SYSCO.                                            

Upon termination in accordance with the above provisions, the merger  
agreement will become void and have no effect, without any liability or         
obligation on the part of SYSCO or Doughtie's, other than the payment of        
expenses as described below, and provisions relating to confidentiality and     
other provisions that survive generally; provided, however, that termination    
will not relieve any party from liability for any willful breach of the         
representations, warranties, covenants or agreements set forth in the merger    
agreement that occurs prior to termination.                                     

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FEES AND EXPENSES                                                               

     All costs and expenses incurred in connection with the merger agreement and
the merger will be paid by the party incurring the expenses, whether or not the 
merger is completed, except as follows:                                         

  - Each of SYSCO and Doughtie's shall pay one-half of the costs, expenses
and fees incurred in connection with the following:               

- filings made under the Hart-Scott Act;                            

    - filings made with the Securities and Exchange Commission pertaining to
      the registration of SYSCO's common stock on Form S-4 and to this proxy
statement/prospectus;                                           

     - printing and mailing the Form S-4 registration statement and this proxy
statement/prospectus; and                                       

 - removal of the underground storage tank at the warehouse located in
Portsmouth, Virginia.                                           

    - Doughtie's shall pay to SYSCO a termination fee equal to the actual cost
      of reasonable and customary expenses associated with the merger if SYSCO
terminates the agreement because of:                              

- a breach of the merger agreement by Doughtie's;                   

     - prior to the special meeting, the Doughtie's Board of Directors failing
 to make, withdrawing or adversely modifying its recommendation to
approve the merger agreement;                                   

     - the closing net worth of Doughtie's being less than Doughtie's December
31, 1998 net worth; or                                          

- the failure of the Doughtie's shareholders to approve the merger  
agreement.                                                      

    - SYSCO shall pay to Doughtie's a termination fee equal to the actual cost
of reasonable and customary expenses associated with the merger if
Doughtie's terminates the merger because of a breach of the merger
agreement by SYSCO.                                               

REPRESENTATIONS AND WARRANTIES                                                  

    The merger agreement contains customary and reciprocal representations and
warranties by Doughtie's and SYSCO relating, among other things, to:            

   - their organization, good standing and corporate power and that of their
subsidiaries;                                                     

- ownership of subsidiaries;                                          

- capital structure;                                                  

- corporate power to enter into, and due authorization, execution and 
delivery of, the merger agreement;                                

  - the execution and delivery of the merger agreement not violating their
charter documents, applicable law, and other material agreements; 

   - the accuracy of reports and financial statements filed by them with the
Securities and Exchange Commission;                               

- broker's fees and expenses; and                                     

- the accuracy of information supplied by them in connection with this
proxy statement/prospectus.                                       

In addition to those listed above, Doughtie's has also made other     
representations and warranties relating to:                                     

- the absence of material changes or events;                          

- the absence of dissenters' rights;                                  

- the absence of undisclosed liabilities;                             

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- the absence of pending or threatened litigation, labor matters and  
compliance with all applicable laws;                              

- benefit plans and other matters relating to the Employee Retirement 
Income Security Act of 1974 and employment matters;               

- the filing of tax returns and payment of taxes;                     

- the closing net worth of Doughtie's;                                

- immigration, inventory and intellectual property matters;           

- environmental liability;                                            

 - good and marketable title to properties and assets free of liens; and

- insurance matters and year 2000 compliance.                         

    In addition to those set forth above, SYSCO has also made a representation
and warranty that it will continue to operate at least one significant historic 
business line of Doughtie's.                                                    

OTHER COVENANTS                                                                 

 The merger agreement contains other covenants of the parties, including
covenants relating to:                                                          

- public announcements and notification of material changes;          

- access to information;                                              

 - qualification of the merger as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code;                      

- reasonable good faith efforts and further assurances;               

 - compliance with legal requirements and cooperation in connection with
governmental and regulatory filings and in obtaining consents and 
approvals;                                                        

- confidential treatment of non-public information; and               

- removal of an underground storage tank at the warehouse located in  
Portsmouth, Virginia in compliance with applicable law.           

AMENDMENT AND WAIVER                                                            

  The merger agreement may be amended by the parties at any time before or
after approval of the merger by the shareholders of Doughtie's; except that     
after approval, changes to the amount or form of merger consideration to be     
received by the Doughtie's shareholders may not be made without further approval
by Doughtie's shareholders. Prior to the effective time, the parties may:       

     - extend the time for the performance of any obligation or other act of any
other party to the merger agreement;                              

     - waive any inaccuracies in the representations and warranties contained in
     the merger agreement or in any document required to be delivered by the
merger agreement; and                                             

  - waive compliance with any of the agreements or conditions contained in
the merger agreement.                                             

All amendments and waivers must be in writing.                        

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NO SOLICITATION BY DOUGHTIE'S                                                   

Doughtie's has agreed in the merger agreement that, from the date of  
execution of the merger agreement until its termination, Doughtie's will not    
directly or indirectly solicit or encourage or authorize any individual,        
corporation or other entity to solicit or encourage any proposal that may       
reasonably be expected to lead to a merger, consolidation or other business     
combination involving Doughtie's or any subsidiary of Doughtie's other than the 
transactions contemplated by the merger agreement.                              

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BUSINESS OF SYSCO 

 SYSCO Corporation, together with its subsidiaries and divisions, is the
largest U.S. distributor of food and related products to the foodservice or     
"away-from-home-eating" industry. SYSCO provides its products and services to   
approximately 300,000 customers, including:                                     

- restaurants;                                                        

- healthcare and educational facilities;                              

- lodging establishments; and                                         

- other foodservice customers throughout the entire continental United
States, as well as portions of Alaska and Canada.                 

     Since SYSCO's formation in 1969, annual sales have grown from approximately
$115 million to over $15 billion in fiscal 1998. SYSCO's innovations in food    
technology, packaging and transportation provide customers with quality products
delivered on time, in excellent condition and at reasonable prices.             

Products distributed by SYSCO include:                                

- a full line of frozen foods, such as meats, fully prepared entrees, 
fruits, vegetables and desserts;                                  

- a full line of canned and dry goods;                                

- fresh meats;                                                        

- imported specialties; and                                           

- fresh produce.                                                      

SYSCO also supplies a wide variety of nonfood items, including:       

- paper products such as disposable napkins, plates and cups;         

- tableware such as china and silverware;                             

- restaurant and kitchen equipment and supplies;                      

- medical and surgical supplies; and                                  

- cleaning supplies.                                                  

     SYSCO distributes both nationally-branded merchandise and products packaged
under its own private brands.                                                   

  SYSCO estimates that it purchases from thousands of independent sources,
none of which accounts for more than 5% of SYSCO's purchases. These sources     
consist generally of large corporations selling brand name and private label    
merchandise and independent private label processors and packers. Generally,    
purchasing is carried out on a decentralized basis through centrally developed  
purchasing programs and direct purchasing programs established by SYSCO's       
various operating subsidiaries and divisions. SYSCO continually develops        
relations with suppliers but has no material long-term purchase commitments with
any supplier.                                                                   

   The directors and officers of SYSCO will remain unchanged upon completion
of the merger. Information concerning directors and the executive officers of   
SYSCO, including compensation information, is incorporated by reference in this 
proxy statement/prospectus from information previously filed with the SEC. For  
more information concerning SYSCO, we encourage shareholders to consult and     
review information previously filed by SYSCO with the SEC and listed at "Where  
You Can Find More Information" on page 63.                                      

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On May 17, 1999, SYSCO entered into a non-binding letter of intent to 
acquire certain assets of the Buckhead Beef Company, Inc. located in Atlanta,   
Georgia. Buckhead Beef distributes custom-cut fresh steaks and other meats,     
seafood and poultry products. If completed, this acquisition will not have a    
material impact on SYSCO's business, financial condition or results of          
operations.                                                                     

 On July 9, 1999, SYSCO signed a merger agreement with Newport Meat Co.,
Inc. located in Irvine, California. Newport Meat distributes fresh aged beef and
other meats, seafood and poultry products to the southern California foodservice
market. SYSCO currently expects that the merger will be completed by July 30,   
1999. This acquisition will not have a material impact on SYSCO's business,     
financial condition or results of operations.                                   

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BUSINESS OF DOUGHTIE'S

 Doughtie's Foods, Inc. was incorporated in Virginia in November 1971 to
engage in the sale and distribution of a wide variety of meat and seafood       
products and other food items. Doughtie's has historically manufactured,        
processed or produced many of the meat and seafood products sold by it, while   
Doughtie's has always purchased from other sources certain other food items that
it sells, such as fruits, vegetables, condiments, and seasonings. In 1997       
Doughtie's completed its divestment of its manufacturing operations, which were 
not profitable. Following these divestitures, Doughtie's has been able to       
concentrate on its business of distributing food products to commercial and     
institutional customers, including:                                             

- supermarkets;                                                       

- restaurants;                                                        

- cafeterias;                                                         

- independent food distributors;                                      

- schools;                                                            

- hospitals; and                                                      

- other public and private facilities.                                

Doughtie's marketing area covers:                                     

- the central, northern, and eastern portions of Virginia;            

- Maryland;                                                           

- Washington, DC;                                                     

- portions of North Carolina; and                                     

- small areas of Delaware.                                            

Although Doughtie's is no longer engaged in the manufacture of food   
products, it continues to distribute its traditional "Doughtie's" label products
pursuant to product supply agreements with the respective buyers of the         
manufacturing business.                                                         

 Doughtie's distribution facilities are located in Portsmouth, Virginia.
Prior to the sale of the manufacturing division, these facilities were also     
involved in the manufacture of pork and beef barbecue, hot dog sauce, meat loaf,
chili and other cooked meat products. Doughtie's subsidiary, TWB Gourmet Foods, 
Inc., also manufactured and sold a line of specialty gourmet food products until
that portion of the business was sold in September 1996.                        

  Doughtie's markets many of its products under its own label. Most of its
products are packaged under the registered trade name and service mark          
"Doughtie's". Registration covering this mark remains in force twenty years from
the date of registration and may be renewed for periods of twenty years.        

 Doughtie's offers to its institutional and commercial customers a broad
range of food items including meat products, frozen, refrigerated, canned, and  
dry items in the seafood, fruit, vegetable, and other lines. Most items needed  
by such customers for the operation of their business are offered by Doughtie's,
including eggs, produce, staples such as flour and sugar, restaurant supplies,  
and a limited amount of cooking and processing equipment. Availability of such  
items is generally good. Doughtie's has no material long-term contract with     
respect to the supply of any of such items.                                     

More detailed information regarding the business of Doughtie's is     
incorporated by reference in this proxy statement/prospectus from information   
previously filed with the SEC. For more information concerning Doughtie's       
business, we encourage shareholders to consult and review information previously
filed by Doughtie's with the SEC and listed at "Where You Can Find More         
Information" on page 63.                                                        

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
CONDITION AND RESULTS OF OPERATIONS OF DOUGHTIE'S 

The following discussion should be read in conjunction with the       
accompanying consolidated financial statements and the related notes of         
Doughtie's contained in this proxy statement/prospectus and incorporated herein 
by reference.                                                                   

RESULTS OF OPERATIONS                                                           

Quarter Ended March 27, 1999 Compared to Quarter Ended March 28, 1998       

     Sales for the quarter ended March 27, 1999 were $19.1 million or 1.3% lower
than sales for the prior year's first quarter of $19.3 million. Reduced sales to
the U. S. Military under a Department of Defense Contract were the cause of the 
decrease.                                                                       

    Doughtie's gross profit margin, gross profit as a percentage of net sales,
increased from 16.83% in the quarter ended March 28, 1998 to 16.93% for the     
quarter ended March 27, 1999. This increase was due to the reduced lower profit 
margin sales under the Department of Defense contract.                          

 Doughtie's selling, general and administrative expenses, expressed as a
percentage of net sales, increased from 15.10% in the first quarter of 1998 to  
15.91% in 1999. The increase was primarily due to expenses of approximately     
$80,000 associated with the proposed merger with SYSCO.                         

     Interest expense for the quarter ended March 27, 1999 decreased to 0.08% of
sales compared to 0.24% of sales for the first quarter of 1998. Decreased       
borrowing levels and lower interest rates were the cause of the decreased       
expense. As the interest on Doughtie's debt is both London Interbank Offered    
Rates and prime related, interest expense will increase or decrease in          
subsequent periods based on fluctuations in these rates and the borrowing levels
of Doughtie's.                                                                  

     Income tax expense was $97,000 for the quarter ended March 27,1999 compared
to $108,000 for the corresponding period of 1998. The effective tax rate        
increased in 1999 due to the nondeductible merger expenses incurred in the first
quarter of 1999.                                                                

  Doughtie's reported net income of $82,000 or $.06 and $.05 per basic and
diluted share, respectively, for the first quarter of 1999 compared to net      
income of $181,000 or $.12 per basic and diluted share in the first quarter of  
1998.                                                                           

1998 Compared to 1997 and 1997 Compared to 1996                             

   Net sales of Doughtie's increased 2.3% in 1998. For the 1998 fiscal year,
Doughtie's reported net sales of $87.2 million compared to net sales of $85.2   
million in 1997. Sales under the contract with the United States Department of  
Defense decreased from $13.5 million in 1997 to $11.5 million in 1998, which    
represented 15.8% and 13.2% of Doughtie's consolidated revenue, respectively.   
The volume increases from multi-unit accounts more than offset the reduction in 
sales to the Department of Defense. There were no significant price changes in  
1998.                                                                           

   Net sales of Doughtie's increased 5.7% in 1997. For the 1997 fiscal year,
Doughtie's reported net sales of $85.2 million compared to net sales of $80.6   
million in 1996. Sales under a contract with the United States Department of    
Defense increased from $9.3 million in 1996 to $13.5 million in 1997, which     
represented 11.5% and 15.8% of Doughtie's consolidated revenue, respectively.   
Additional volume increases resulted from new multi-unit accounts obtained      
during the third quarter. These increases were offset by a reduction in sales   
caused by the sales of Doughtie's manufacturing operations. Manufacturing       
operations represented less than 2% and 8% of sales in 1997 and 1996,           
respectively.                                                                   

    Doughtie's gross profit margin, gross profit as a percentage of net sales,
decreased slightly from 16.5% in 1997 to 16.2% in 1998. The decline was due to  
the 1997 disposition of the manufacturing division, which had a higher markup.  
Doughtie's gross profit margin increased from 16.3% in 1996 to 16.5% in 1997.   

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 Doughtie's selling, general and administrative expenses, expressed as a
percentage of net sales, decreased to 13.8% in 1998 from 14.5% in 1997.         
Doughtie's selling, general and administrative expenses, expressed as a         
percentage of net sales, decreased slightly to 14.5% in 1997 from 14.8% in 1996.

During 1997, Doughtie's experienced an increase in accounts past due  
greater than 60 days from approximately 10.6% to 20.8% of accounts receivable   
and an increase in accounts written off which led to an increase of $468,000 in 
bad debt expense for 1997 as compared to 1996 and an increase in the allowance  
for doubtful accounts at December 27, 1997. Management attributed the increase  
in past due accounts to inadequate collection efforts and financial difficulties
experienced by several customers. Doughtie's made administrative changes to     
address the collection issue, including appointment of a new credit manager in  
March 1998. During 1998, Doughtie's collections improved and accounts past due  
greater than 60 days decreased to 15.2%. In addition, accounts written off      
decreased from $387,000 in 1997 to $149,000 in 1998. As a result of improved    
customer credit quality during the fourth quarter of 1998, including collection 
of amounts previously considered doubtful, the allowance for doubtful accounts  
was reduced to $360,000 as compared to $628,000 at December 27, 1997 and bad    
debt expense for the year ended December 26, 1998 decreased $790,000, as        
compared to 1997.                                                               

    The decline in selling, general and administrative expense as a percentage
of sales in both 1998 and 1997 also reflects the increase in sales without a    
corresponding increase in expenses.                                             

Interest expense was $162,000 in 1998 compared to $242,000 in 1997 and
$469,000 in 1996. Decreased average borrowing levels and lower average interest 
rates were the cause of the lower expense in 1998 and 1997. As the interest on  
Doughtie's debt is both London Interbank Offered Rate and prime related,        
interest expense will increase or decrease in subsequent periods based on       
fluctuations in these rates and the borrowing levels of Doughtie's.             

     Income tax expense was $747,000 for 1998 compared to expense of $566,000 in
1997 and income tax benefit of $202,000 for 1996. During the fiscal year ended  
December 28, 1996, Doughtie's eliminated the valuation allowance related to the 
net operating losses of a subsidiary as a result of utilization of the net      
operating loss carryforward becoming more likely than not.                      

   During 1994 and 1995, Doughtie's owned 70% of TWB Gourmet Foods, Inc. TWB
was not included in Doughtie's consolidated returns for 1994 and 1995, and the  
realization of the net operating loss carryforward of TWB was not considered to 
be a likely occurrence. On August 28, 1996, Doughtie's acquired the remaining   
30% of TWB's stock and simultaneously merged Dutterer's of Manchester, its      
wholly-owned subsidiary, into TWB. TWB, as the wholly-owned surviving entity of 
the merger, was included in Doughtie's 1996 consolidated tax return.            

As a result of the transaction and inclusion of TWB in Doughtie's     
consolidated tax return during 1996, Doughtie's utilized approximately $600,000 
of the TWB net operating loss. Accordingly, Doughtie's concluded that it was now
"more likely than not" that the remaining net operating loss would be utilized  
and did not provide a valuation allowance for the balance of the deferred tax   
asset. In 1997, Doughtie's utilized an additional $284,000 of the TWB net       
operating loss carryforward. The remaining $248,000 was utilized in 1998.       

Over the past three years, the effects of inflation on Doughtie's     
operations have been negligible, averaging less than 4% per year.               

 Doughtie's reported net income of $1,197,000 or $0.80 per share in 1998
compared to $947,000 or $0.63 per share for 1997 and $928,000 or $0.62 per share
for 1996.                                                                       

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LIQUIDITY AND CAPITAL RESOURCES                                                 

Liquidity                                                                   

  Doughtie's uses a number of liquidity indicators for internal evaluation
purposes. The indicators are discussed below as of the close of the past three  
fiscal years and the thirteen weeks ended March 27, 1999 and March 28, 1998:    

                                                        [Enlarge/Download Table]

                                                       13 WEEKS ENDED                           
                                                    ---------------------    FISCAL YEAR ENDED  
                                                    MARCH 27,   MARCH 28,  ---------------------
                                                      1999        1998     1998    1997    1996 
                                                    ---------   ---------  -----   -----   -----
                                                                                                
Total Debt to Total Debt Plus Shareholders' Equity      .10         .22     0.11    0.27    0.41
Current Assets to Current Liabilities                  3.28        2.91     2.68    2.81    4.36
Inventory Turnover (The Annualized Cost of Goods                                                
  Sold to Ending Inventory)                           16.95       15.01    15.79   15.23   15.00

 The decrease in total debt to total debt plus shareholders' equity from
1996 to 1997 relates to the sales of the manufacturing operations, the proceeds 
of which were used to reduce long-term debt. The decrease from 0.27 at December 
27, 1997 to 0.11 at December 26, 1998 was due to improved financial results and 
decreased accounts receivable, which enabled Doughtie's to continue to reduce   
its long-term debt. The total debt to total debt plus shareholders' equity ratio
remained substantially unchanged from .11 on December 26, 1998 to .10 on March  
27, 1999.                                                                       

The ratio of current assets to current liabilities from 1997 to 1998  
remained relatively unchanged. The decrease in current assets to current        
liabilities in 1997 was the result of an increase in accounts payable due to    
changes in terms with vendors. The ratio of current assets to current           
liabilities increased to 3.28 on March 27, 1999 from 2.68 on December 26, 1998  
due to the decrease in accounts receivable and inventory of $686,000 and        
$890,000, respectively, and the decrease in accounts payable of $1,066,000.     

   The inventory turnover rate increased from 15.00 in 1996 to 15.23 in 1997
and 15.79 in 1998, as a result of increased sales and management focus on       
inventory levels, due primarily to warehouse constraints.                       

     Doughtie's has continued to focus on collections of accounts receivable and
improving the inventory turnover rate (15.01 in the first quarter of 1998 to    
16.95 in the first quarter of 1999).                                            

    Doughtie's supplements its cash requirements by borrowing against existing
credit lines. As of December 26, 1998, and June 26, 1999, Doughtie's had        
borrowing capacity under its credit line of $6.4 million and $6.8 million,      
respectively.                                                                   

Capital Resources                                                           

     Doughtie's debt financing at March 27, 1999 and June 26, 1999, consisted of
the following:                                                                  

      1. A $7,500,000 revolving bank note at LIBOR plus 1.50%. The LIBOR
 rate at March 27, 1999 was 4.95%. The note is due three years after the
     annual renewal date, currently July, 2001, subject to annual renewal. As of
     March 27, 1999 and June 26, 1999, Doughtie's had no borrowings against this
credit line.                                                          

          2. A $2,000,000 Industrial Revenue Bond from a bank for the purpose of
     expanding Doughtie's plant and office facilities in Portsmouth, Virginia at
   an annual interest rate of 91.50% of prime. As of March 27, 1999 and June
    26, 1999, the outstanding balance was approximately $433,000 and $400,000,
respectively.                                                         

         3. A $1,750,000 bank term loan at LIBOR plus 1.50%. The loan is to be
    repaid in quarterly installments of $100,000 plus interest through January
  1, 2001. As of March 27, 1999 and June 26, 1999, the outstanding balance
     was $650,000 and $550,000, respectively. The funds were used to finance the
    increased inventory and accounts receivable required to service a one-year
contract awarded to Doughtie's in January 1996 by the United States   
Department of Defense to furnish food items to various military       
   installations. The contract contains three yearly renewal options and was
     renewed for 1999. The current contract expires in February 2000. The United
States Department of Defense had estimated                            

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 annual sales volume under the contract to be approximately $19 million.
Actual sales volume for fiscal 1998 was $11.5 million.                

 The loan agreements associated with Doughtie's long-term debt financing
contain restrictive covenants, including a minimum amount of tangible net worth,
a minimum working capital ratio and a maximum debt to equity ratio. All         
requirements were met for the fiscal years ended 1998 and 1997 and as of June   
26, 1999.                                                                       

 While Doughtie's does not anticipate any other material increase in its
capital requirements in the near future, such an increase, if it occurs, is     
likely to be met through additional long-term debt financing, if available.     

NEW ACCOUNTING PRONOUNCEMENTS                                                   

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting For Derivative Instruments And Hedging Activities. This statement    
establishes accounting and reporting standards for derivative instruments,      
including certain derivative instruments embedded in other contracts, and for   
hedging activities. This statement was amended June 30, 1999 by SFAS No. 137,   
Accounting for Derivative Instruments and Hedging Activities -- Deferral of the 
Effective Date of SFAS No. 133. The amended statement delays the effective date 
of SFAS No. 133 to all fiscal quarters of fiscal years beginning after June 15, 
2000. This Statement is not currently applicable to Doughtie's, since Doughtie's
does not have any derivative instruments and is not involved in hedging         
activities.                                                                     

YEAR 2000 COMPLIANCE                                                            

Many computer systems, programs, components, and other hardware with  
embedded microcontrollers currently record years in a two-digit format. Such    
systems, if not modified, will be unable to recognize properly dates beyond     
1999 -- the so-called "Year 2000 Problem." Doughtie's relies on its computer    
systems, applications and devices in operating and monitoring various aspects of
its business. Doughtie's also relies, directly and indirectly, on systems of    
customers, suppliers, and financial institutions. Doughtie's has divided this   
issue into three sections: its own computer systems, its own embedded systems,  
and the computer systems of third party suppliers and customers.                

With respect to Doughtie's computer systems, Doughtie's believes all  
critical hardware and third party software to be "Year 2000 Compliant."         
Doughtie's custom software has been modified. Testing of the computer system    
began in 1998 and was completed in March 1999. Doughtie's believes its computer 
systems are "Year 2000 Compliant." Doughtie's estimates the total cost of       
modifying its computers and software to be about $50,000. About $40,000 has been
expended to date, approximately $10,000 of which was in the first quarter of    
1999. The remaining $10,000 of Doughtie's estimate is for contingencies.        
Doughtie's has funded and expects to continue to fund any additional costs of   
Year 2000 compliance through operating cash flows.                              

     Doughtie's uses several time-sensitive non-computer systems. Doughtie's has
completed an inventory of these systems and related components. Based upon      
information received from suppliers, Doughtie's believes that all significant   
non-computer equipment is compliant. Doughtie's is accepting no new equipment of
any type that does not meet standards of compliance for the Year 2000.          

Doughtie's relies on the computer systems of third party suppliers and
customers. While Doughtie's queried major suppliers and customers regarding     
their readiness for the Year 2000, Doughtie's cannot guarantee the accuracy of  
the representations. Doughtie's contacted all of its significant suppliers and  
customers in March 1999, and will summarize and review the responses and        
follow-up with suppliers' and customers' assessments. Doughtie's purchases its  
inventory from numerous vendors and believes that the failure of a limited      
number of suppliers to be Year 2000 Compliant would not materially affect       
Doughtie's operations given the number of alternative suppliers. Doughtie's has 
also considered the possibility of one or more major customers being temporarily
unable to meet its financial obligations because of the Year 2000 Problem and   
believes that Doughtie's existing lines of credit are sufficient to compensate  
for such potential temporary shortfall in cash flow.                            

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   There are numerous uncertainties relating to addressing Year 2000 issues,
including the actual cost and effort of implementing corrective measures, the   
degree to which outside parties appropriately address their Year 2000 issues,   
and other factors, some of which are beyond Doughtie's control, and all of which
may cause results to be different from those currently anticipated by           
Doughtie's. Doughtie's has developed contingency plans to cover minor failure   
due to supplier or customer problems. Doughtie's believes that the internal     
systems will work properly due to the extensive analysis and testing that was   
completed in March 1999.                                                        

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                      

    Doughtie's bank credit line and Industrial Development Bonds bear interest
at variable rates which expose Doughtie's to risk from interest rate            
fluctuations. If interest rates were to increase or decrease by 10%, the effect 
on net income and cash flows would not be material.                             

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PRINCIPAL DOUGHTIE'S SHAREHOLDERS 

The following table sets forth information as of June 30, 1999, as to 
shares of Doughtie's common stock owned by:                                     

- each director of Doughtie's;                                        

     - the chief executive officer and the four other most highly paid executive
officers of Doughtie's;                                           

- all directors and executive officers, as a group; and               

     - each person who is known by Doughtie's to own beneficially more than five
percent of Doughtie's common stock,                               

together with their respective ownership percentages.                           

                                                        [Enlarge/Download Table]

                                                                SHARES               
                                                             BENEFICIALLY  PERCENT OF
NAME                                                           OWNED(1)      CLASS   
----                                                         ------------  ----------
                                                                                     
Vernon W. Mules(2)..........................................   134,889        9.02   
Steven C. Houfek(3)(9)......................................   777,851       51.64   
Marion S. Whitfield, Jr.(9).................................     6,450             * 
Adolphus W. Hawkins, Jr.(9).................................     1,448           *   
Donald B. Ratcliffe(9)......................................       133           *   
James F. Cerza, Jr.(4)(9)...................................       766           *   
William R. Waddell(9).......................................     1,579           *   
Thomas G. Brown(9)..........................................     2,250           *   
Robert F. Horton(9).........................................    12,979           *   
Voting Trust u/a dated June 17, 1986, as extended(5)........   747,743       50.02   
Mary D. Houfek(6)(7)........................................   766,601       51.28   
Elsie D. Waddell(6)(8)......................................   755,079       50.51   
Barbara D. Horton(6)(10)....................................   751,592       50.27   
Performance Food Group Company(11)..........................   110,750        7.41   
All officers and directors as a group (13                                            
  persons)(2)(3)(4)(9)......................................   938,513       61.87   

---------------                                                                 

*  Less than 1% of outstanding shares of Common Stock.                      

(1) Unless otherwise indicated by footnote, each individual has sole voting   
power and sole investment power with respect to the shares set forth  
opposite his or her name.                                             

(2) Includes 1,731 shares owned of record by Mr. Mules' wife, the beneficial  
    ownership of which shares Mr. Mules disclaims. Mr. Mules' business address
   is Doughtie's Foods, Inc., 2700 Lord Baltimore Drive, Baltimore, Maryland
21244.                                                                

(3) Includes 747,743 shares beneficially held by Mr. Houfek's wife, Mary D.   
Houfek, and includes 14,673 shares held by Ms. Houfek as custodian for
certain of her children, the beneficial ownership of which shares Mr. 
 Houfek disclaims. Ms. Houfek's beneficial holdings are set forth in the
 table and in Notes 6 and 7. Mr. Houfek's business address is Doughtie's
Foods, Inc., 2410 Wesley Street, Portsmouth, Virginia 23707.          

(4) Includes 633 shares owned of record by Mr. Cerza's wife, the beneficial   
ownership of which shares Mr. Cerza disclaims.                        

(5) The shares are owned of record by Mary D. Houfek, Barbara D. Horton and   
   Elsie D. Waddell as trustees of the trust (the "Voting Trust"), which was
  created under a voting trust agreement among Ms. Houfek, Ms. Horton, Ms.
   Waddell, and Mary H. Doughtie dated June 17, 1986. Ms. Houfek, Ms. Horton
 and Ms. Waddell share voting and investment power with respect to these
 shares. On February 23, 1995, the parties to the voting trust agreement
    agreed to extend the term of the Voting Trust until December 31, 2004. The
     Voting Trust's address is 705 Crystal Lane, Virginia Beach, Virginia 23451.

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(6) Includes 747,743 shares held by Ms. Houfek, Barbara D. Horton and Elsie D.
Waddell, as trustees of the Voting Trust. See Note 5 above.           

(7) Includes 14,673 shares held by Ms. Houfek as custodian for certain of her 
 children and 4,185 shares owned by Ms. Houfek's husband, the beneficial
     ownership of which shares Ms. Houfek disclaims. Ms. Houfek's address is 705
 Crystal Lane, Virginia Beach, Virginia 23451. Ms. Houfek is the wife of
Steven C. Houfek, President and Director of Doughtie's.               

(8) Includes 7,336 shares held by Ms. Waddell as custodian for her children,  
the beneficial ownership of which shares Ms. Waddell disclaims. Ms.   
   Waddell's address is 2777 Broad Bay Road, Virginia Beach, Virginia 23451.

(9) Includes shares subject to options exercisable within 60 days as follows: 
Mr. Houfek -- 11,250; Mr. Whitfield -- 2,250; Mr. Hawkins -- 133; Mr. 
     Ratcliffe -- 133; Mr. Cerza -- 133; Mr. Waddell -- 133; Mr. Brown -- 2,250;
and Mr. Horton -- 5,625.                                              

(10) Includes 3,849 shares owned of record by Ms. Horton's husband, the         
 beneficial ownership of which shares Ms. Horton disclaims. Ms. Horton's
address is 5200 Lake Circle Drive, Portsmouth, Virginia 23703.        

(11) Performance Food Group Company's address is 6800 Paragon Place, Suite 500, 
   Richmond, Virginia 23230. Information is based on Schedule 13D filed with
the SEC on June 16, 1998.                                             

COMPARISON OF SHAREHOLDER RIGHTS

As a result of the merger, Doughtie's common shareholders will become 
holders of SYSCO common stock. The rights of Doughtie's shareholders are        
currently governed by the Doughtie's charter and bylaws and the laws of         
Virginia. Following the merger, the rights of all former holders of Doughtie's  
common stock will be governed by the SYSCO charter and bylaws and Delaware law, 
except for former holders, if any, who receive only cash for their Doughtie's   
common stock. The following is a summary comparison of the material differences 
between the rights of holders of Doughtie's common stock and holders of SYSCO   
common stock under the respective charter and bylaws of the companies and under 
Delaware and Virginia law. For information on how to obtain copies of the       
charters and bylaws of the companies, see "Where You Can Find More Information" 
on page 63.                                                                     

AUTHORIZED CAPITAL STOCK: 

                                                                [Download Table]

                   SYSCO                                 DOUGHTIE'S         
                   -----                                 ----------         
                                                                            
-  1,500,000 shares of preferred stock. -  4,000,000 shares of common stock.
-  500,000,000 shares of common stock.                                      

NUMBER AND TERM OF DIRECTORS: 

                                                        [Enlarge/Download Table]

                   SYSCO                                       DOUGHTIE'S                 
                   -----                                       ----------                 
                                                                                          
-  Not less than 3 but no more than 15,       -  Not less than 3, currently 7 directors,  
   elected in 3 classes with staggered        elected annually at the shareholders meeting
   3-year terms, with exact numbers to be        with the exact number to be determined by
   determined from time to time by the           a majority of the Board from time to     
   Board, currently 15 directors. No class       time.                                    
   may have more than one director more than                                              
   any other class.                                                                       

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REMOVAL OF DIRECTORS: 

                                                        [Enlarge/Download Table]

                   SYSCO                                       DOUGHTIE'S                 
                   -----                                       ----------                 
                                                                                          
-  Can be removed with or without cause by    -  Can be removed with or without cause at  
   the shareholders.                             any time by shareholders at a special    
                                                 meeting of shareholders called for that  
                                                 purpose.                                 
-  Can be removed for cause by action of the  -  Can be removed for cause by action of the
   Board.                                        Board.                                   

SPECIAL MEETING OF SHAREHOLDERS:

                                                        [Enlarge/Download Table]

                   SYSCO                                       DOUGHTIE'S                    
                   -----                                       ----------                    
                                                                                             
-  Can be called at any time by the Chairman  -  Can be called at any time by the Board or   
   of the Board, the Directors or any            by the President, and shall be called by the
   officer instructed by the Directors.          President or Secretary upon written         
                                                 request by holders of at least 25% of the   
                                                 outstanding shares entitled to vote.        

NOTICE FOR MEETINGS:

                                                        [Enlarge/Download Table]

                   SYSCO                                      DOUGHTIE'S                  
                   -----                                      ----------                  
                                                                                          
-  Notice to stockholders of any meeting     -  Notice to shareholders of any meeting     
   requires written notice delivered not        requires written notice delivered not less
   less than ten days nor more than 50 days     than ten days, or less than 25 days for   
   before the date of the meeting to each       merger transactions, nor more than 50     
   stockholder entitled to vote at such         days before the date of the meeting to    
   meeting.                                     each shareholder entitled to vote at such 
                                                meeting.                                  

CHARTER AMENDMENTS: 

                                                        [Enlarge/Download Table]

                   SYSCO                                  DOUGHTIE'S                    
                   -----                                  ----------                    
                                                                                        
-  Requires board approval and the       -  Requires board approval and the             
   affirmative vote of the holders of a     affirmative vote of the holders of more than
   majority of the outstanding shares       two-thirds of the outstanding stock         
   entitled to vote.                        entitled to vote.                           

AMENDMENT TO BYLAWS:

                                                        [Enlarge/Download Table]

                   SYSCO                                       DOUGHTIE'S                
                   -----                                       ----------                
                                                                                         
-  Board has full power to amend, alter and   -  Bylaws may be amended by the affirmative
   repeal the bylaws, and to adopt new           vote of shareholders holding a majority 
   bylaws; provided that the Board may           of the outstanding shares entitled to   
   delegate such power, in whole or in part,     vote at any annual or special meeting of
   to the stockholders, which power has not      shareholders, or by the Board of        
   been delegated; and provided, further,        Directors, except that the Board shall  
   that any bylaw which provides for the         have no power to change the quorum for  
   election of directors by classes for          meetings of shareholders or of the Board
   staggered terms shall be adopted by the       or change any provisions of the bylaws  
   stockholders.                                 with respect to the removal of directors
                                                 or the filling of vacancies in the Board
                                                 resulting from the removal by the       
                                                 shareholders. All amendments to the     
                                                 by-laws made by the Board are subject to
                                                 amendment by a majority of the          
                                                 shareholders entitled to vote.          

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ADVANCE NOTICE BYLAW PROVISIONS FOR ELECTION OF DIRECTORS:

                                                        [Enlarge/Download Table]

                   SYSCO                                       DOUGHTIE'S                
                   -----                                       ----------                
                                                                                         
-  Only persons who are nominated by or at    -  Doughtie's bylaws do not contain advance
   the direction of:                             notice provisions for the election of   
   -  the Board of Directors, or any duly        directors.                              
      authorized committee thereof;                                                      
   -  a stockholder of SYSCO (1) who is a                                                
      stockholder of record on the date the                                              
      notice to stockholders is mailed and                                               
      on the record date for stockholders                                                
      entitled to notice of and to vote at                                               
      such meeting and (2) who complies with                                             
      the notice and disclosure procedures                                               
      contained in the bylaws,                                                           
   are eligible for election as directors of                                             
   SYSCO.                                                                                
-  To be timely, a stockholder's notice must                                             
   be delivered to SYSCO, in the case of an                                              
   annual meeting, not less than 90 days nor                                             
   more than 130 days prior to the date of                                               
   the anniversary of the previous year's                                                
   annual meeting or in the case of a                                                    
   special meeting of stockholders called                                                
   for the purpose of electing directors,                                                
   not later than the close of business on                                               
   the 10th day following the day on which                                               
   notice of the date of the special meeting                                             
   was mailed or public disclosure of the                                                
   date of the special meeting was made,                                                 
   whichever first occurs.                                                               

SHAREHOLDER PROPOSALS:

                                                        [Enlarge/Download Table]

                   SYSCO                                       DOUGHTIE'S            
                   -----                                       ----------            
                                                                                     
-  No business may be transacted at an        -  Doughtie's does not have shareholder
   annual meeting of SYSCO stockholders,         proposal provisions in its bylaws.  
   other than business that is either                                                
   specified in the notice of meeting given                                          
   by or at the direction of the Board of                                            
   Directors, otherwise properly brought                                             
   before the annual meeting by or at the                                            
   direction of the Board of Directors, or                                           
   any duly authorized committee thereof, or                                         
   otherwise properly brought before the                                             
   annual meeting by a stockholder of SYSCO                                          
   (1) who is a stockholder of record on the                                         
   date of the notice and on the record date                                         
   for stockholders entitled to notice of                                            
   and to vote at such annual meeting and                                            
   (2) who complies with the notice and                                              
   disclosure provisions procedures                                                  
   contained in the bylaws.                                                          

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                                                                [Download Table]
                                                      
-  To be timely, a stockholder's notice must          
   be received by SYSCO not less than 90              
   days nor more than 130 days prior to the           
   date of the anniversary of the previous            
   year's annual meeting.                             

STATE TAKEOVER LAWS APPLICABLE TO THE COMPANIES:

                                                        [Enlarge/Download Table]

                   SYSCO                                       DOUGHTIE'S                 
                   -----                                       ----------                 
                                                                                          
-  Section 203 of the Delaware General        -  Under Section 13.1-728.1, et. seq. of the
   Corporation Law restricts a corporation's     Virginia Stock Corporation Act, unless   
   right to engage in a business combination     voting rights are granted by the         
   with any interested stockholder within a      shareholders to an acquiror in a "control
   period of three years from the date that      share acquisition," as defined under this
   such stockholder became an interested         Act, the acquiror does not receive voting
   stockholder. In general, an interested        rights for its shares. Only Virginia     
   stockholder is a stockholder who holds        corporations which have more than 300    
   15% or more of the outstanding voting         shareholders are subject to the          
   stock of a Delaware corporation;              provisions regarding control share       
   provided, however, if such stockholder        acquisitions. If the shareholders of a   
   holds 85% of the outstanding stock, the       Virginia corporation grant voting rights 
   board approves either the transaction in      in a control share acquisition in which  
   question or the acquisition of shares by      shares having a majority of votes are    
   the stockholder, or the transaction is        acquired, those shareholders not         
   approved by two-thirds of the company's       approving the grant of voting rights may 
   stockholders other than the stockholder       obtain dissenters rights and can demand  
   in question, then the prohibition against     fair value for their shares. Doughtie's  
   a business combination does not apply.        is not currently subject to these        
                                                 provisions.                              

INSPECTION OF BOOKS AND RECORDS:

                                                        [Enlarge/Download Table]

                   SYSCO                                       DOUGHTIE'S                 
                   -----                                       ----------                 
                                                                                          
-  Any stockholder has the right to inspect   -  Any shareholder who has been a           
   and copy SYSCO's stock ledger, its list       shareholder for at least six months      
   of stockholders and other corporate books     immediately preceding his or her demand  
   and records during the usual hours of         or is the holder of at least 5% of all of
   business upon written demand stating a        the outstanding shares has the right to  
   purpose reasonably related to such            inspect and copy excerpts from minutes of
   person's interest as a stockholder.           any meeting of the Board or any committee
                                                 of the Board while acting in place of the
                                                 Board, any meeting of the shareholders   
                                                 and records of action taken by the       
                                                 shareholders or the Board without a      
                                                 meeting; accounting records of the       
                                                 corporation; or the record of            
                                                 shareholders, by giving five days written
                                                 notice, if the demand is made in good    
                                                 faith and for a proper purpose.          
                                              -  Any shareholder has the right to inspect 
                                                 and copy corporate records such as the   
                                                 articles of incorporation, the bylaws,   
                                                 resolutions of the Board creating classes
                                                 of shares, and minutes of shareholder    
                                                 meetings, by giving five days written    
                                                 notice.                                  

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   VOTE REQUIRED FOR MERGERS AND SIMILAR FUNDAMENTAL CORPORATE TRANSACTIONS:

                                                        [Enlarge/Download Table]

                   SYSCO                                       DOUGHTIE'S                 
                   -----                                       ----------                 
                                                                                          
-  Generally requires Board approval and the  -  Generally requires Board approval and the
   affirmative vote of the holders of a          affirmative vote of the holders of more  
   majority of the outstanding stock             than two-thirds of the outstanding stock 
   entitled to vote.                             entitled to vote.                        

VOTE REQUIRED FOR SALES OF ALL OR SUBSTANTIALLY ALL OF THE CORPORATE ASSETS:

                                                        [Enlarge/Download Table]

                   SYSCO                                       DOUGHTIE'S                 
                   -----                                       ----------                 
                                                                                          
-  Generally requires Board approval and the  -  Generally requires Board approval and the
   affirmative vote of the holders of a          affirmative vote of the holders of more  
   majority of the outstanding stock             than two-thirds of the outstanding stock 
   entitled to vote.                             entitled to vote.                        

DIVIDENDS:

                                                        [Enlarge/Download Table]

                   SYSCO                                       DOUGHTIE'S                    
                   -----                                       ----------                    
                                                                                             
-  Under Delaware corporate law, a            -  Under Virginia corporate law, a             
   corporation's Board of Directors may          corporation's Board of Directors may declare
   declare and pay dividends either:             distributions to shareholders if, after     
   -  out of surplus, the amount of net          the distribution, the corporation can pay   
      assets of the corporation in excess of     its debts as they generally become due      
      all liabilities, including capital         or to the extent the corporation's          
      stock; or                                  total assets exceed its total               
   -  if there is no surplus, out of net         liabilities.                                
      profits generated in the fiscal year                                                   
      in which the dividend is declared                                                      
      and/or the preceding fiscal year.                                                      

DISSENTERS' APPRAISAL RIGHTS: 

                                                        [Enlarge/Download Table]

                   SYSCO                                      DOUGHTIE'S                 
                   -----                                      ----------                 
                                                                                         
-  No appraisal rights are available for     -  No dissenters' rights are available for  
   shares of any class or series of stock,      shares of any class or series of stock,  
   which stock, at the record date fixed to     which stock, at the record date fixed to 
   determine the shareholders entitled to       determine the shareholders entitled to   
   receive notice of and to vote at the         notice of and to vote at a meeting to act
   meeting of shareholders to act upon a        upon a merger, share exchange or         
   merger, is listed on a national              disposition of all or substantially all  
   securities exchange, as is SYSCO's, or       of a corporation's assets, is listed on a
   designated a national market system          national securities exchange or on the   
   security on an interdealer quotation         National Association of Securities       
   system by the National Association of        Dealers Automated Quotation System,      
   Securities Dealers, Inc.                     including the Nasdaq SmallCap Market, on 
                                                which the Doughtie's common stock is     
                                                listed. Thus, Doughtie's shareholders do 
                                                not have any appraisal or dissenters'    
                                                rights with respect to the merger.       

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SYSCO RIGHTS PLAN                                                               

Under SYSCO's Amended and Restated Rights Agreement, as amended in May
1999, each share of SYSCO common stock has attached to it one-half of one       
preferred stock purchase right. Each right entitles the holder to purchase from 
SYSCO one two-thousandth of a share of SYSCO's junior preferred stock at a price
of $175 per one two-thousandth of a share.                                      

The rights are not exercisable until the earliest to occur of:        

 - a public announcement that, without the prior consent of the Board of
      Directors of SYSCO, a person or group has acquired or obtained the right
      to acquire beneficial ownership of 10% or more of the outstanding shares
of SYSCO common stock; or                                         

- ten business days, or such later date as the Board may determine,   
      following the commencement or announcement of an intention, which is not
    subsequently withdrawn, to make a tender offer or exchange offer which
       would result in any person or group having beneficial ownership of 10% or
 more of the outstanding shares of SYSCO common stock with the prior
consent of the Board of Directors.                                

     Upon the occurrence of either of the events described above, each holder of
a right will have the right for a 60 day period after the later of the date of  
such occurrence and the effectiveness of registration statement, or such other  
longer period set by the Board of Directors, to receive upon exercise of the    
right that number of units of one two-thousandths of a share of preferred stock,
or, in some cases, common stock or other securities, having an average market   
value during a specified time period immediately prior to the occurrence of two 
times the exercise price of the right.                                          

     In addition, if SYSCO is acquired in a merger or other business combination
transaction or 50% or more of SYSCO's assets or earning power is sold, each     
right will entitle the holder to receive, upon the exercise of the right, that  
number of shares of common stock of the acquiring company with a market value of
two times the exercise price of the right.                                      

   Because an acquiring person or group is not entitled to exercise purchase
rights that relate to its shares, the acquiring person's or group's ownership of
SYSCO would be severely diluted if the other shareholders exercise their right  
to purchase the preferred stock, which has preferential dividends, liquidation, 
voting and other rights. Therefore, the effect of the rights agreement is to    
encourage any person or group who wants to acquire SYSCO to negotiate with the  
SYSCO Board to agree on a transaction that is not coercive and is beneficial to 
all shareholders.                                                               

  Prior to there being an occurrence described above, SYSCO may redeem the
rights at a price of $0.01 per right. The rights will expire on May 31, 2006,   
unless earlier redeemed by SYSCO.                                               

The rights are not triggered by the merger.                           

EXPERTS 

  The consolidated balance sheets of SYSCO and subsidiaries as of June 27,
1998 and June 28, 1997, and the related statements of consolidated results of   
operations, shareholders' equity and cash flows and financial statement schedule
for each of the three years in the period ended June 27, 1998, incorporated by  
reference in the registration statement of which this proxy statement/prospectus
is a part have been audited by Arthur Andersen LLP, independent public          
accountants, as indicated in their report with respect thereto, and are         
incorporated herein by reference upon the authority of said firm as experts in  
giving said report.                                                             

  With respect to the unaudited interim financial information of SYSCO for
the quarters ended September 26, 1998, December 26, 1998 and March 27, 1999     
incorporated herein by reference, Arthur Andersen LLP has applied limited       
procedures in accordance with professional standards for a review of that       
information. However, their separate reports thereon state that they did not    
audit and they do not express an opinion on that interim financial information. 
Accordingly, the degree of reliance on their reports on that information should 
be restricted in light of the limited nature of the review procedures applied.  
In addition, the accountants are not subject to the liability provisions of     
Section 11 of the Securities Act of 1933 for their                              
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reports on the unaudited interim information because those reports are not a    
"report" or a "part" of the registration statement of which this proxy          
statement/prospectus is a part prepared or certified by the accountants within  
the meaning of Sections 7 and 11 of the Securities Act.                         

  The consolidated financial statements of Doughtie's at December 26, 1998
and December 27, 1997 and for each of the three fiscal years in the period ended
December 26, 1998, included in this proxy statement/ prospectus, have been so   
included in reliance on the report of PricewaterhouseCoopers LLP, independent   
accountants, given on the authority of said firm as experts in auditing and     
accounting.                                                                     

LEGAL MATTERS 

     The legality of the shares of SYSCO common stock to be issued in the merger
will be passed upon for SYSCO by Arnall Golden & Gregory, LLP. Jonathan Golden, 
a partner of Arnall Golden & Gregory, LLP, is a director of SYSCO. As of July   
19, 1999, attorneys with Arnall, Golden & Gregory, LLP beneficially owned an    
aggregate of approximately 66,000 shares of the SYSCO's common stock. Arnall    
Golden & Gregory, LLP and McGuire, Woods, Battle & Boothe LLP will deliver their
opinions to SYSCO and Doughtie's, respectively, as to certain federal income tax
consequences of the merger. See "The Merger -- Material Federal Income Tax      
Consequences."                                                                  

SHAREHOLDER PROPOSALS 

   Doughtie's currently does not intend to hold an annual meeting in 1999 if
the merger is completed. In the event that the merger is not completed,         
Doughtie's will notify its shareholders of the date of the 1999 annual meeting. 
If the date of such meeting has been advanced or delayed by more than thirty    
days from the date of the 1998 annual meeting, Doughtie's will inform its       
shareholders of the revised dates by which shareholder proposals must be        
submitted.                                                                      

    Pursuant to various rules promulgated by the SEC, any proposals of holders
of Doughtie's common stock intended to be presented at the annual meeting of    
shareholders of Doughtie's if, held in 1999, must have been received by         
Doughtie's no later than December 26, 1998 to be included in Doughtie's proxy   
statement and form of proxy relating to that meeting.                           

  In addition to the SEC rules referred to in the preceding paragraph, for
business to be properly brought before Doughtie's annual meeting by a           
shareholder, the shareholder must have given timely notice in writing of the    
business to be brought before the meeting, which shareholder's notice must have 
been delivered or mailed on or before March 10, 1999.                           

OTHER MATTERS 

   As of the date of this proxy statement/prospectus, the Board of Directors
of Doughtie's knows of no matters that will be presented for consideration at   
the special meeting other than as described in this proxy statement/prospectus. 
However, if any incidental matter shall come before the special meeting or any  
adjournments or postponements thereof and shall be voted upon, the proxy will be
deemed to confer authority to the individuals named as authorized therein to    
vote the shares represented by such proxy as to any such matters that fall      
within the purposes set forth in the notice of special meeting.                 

WHERE YOU CAN FIND MORE INFORMATION 

    SYSCO and Doughtie's file annual, quarterly and current reports, proxy and
information statements and other information with the SEC. You may read and copy
any reports, proxy and information statements and other information that SYSCO  
and Doughtie's file at the SEC's public reference rooms at Room 1024, Judiciary 
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's Regional 
Offices located at: Citicorp Center, 500 West Madison Street, Suite 1400,       
Chicago, Illinois 60661-2511 and Seven World Trade Center, 13th Floor, New York,
New York 10048. Please call the SEC at 1-800-SEC-0330 for further               

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information regarding the public reference rooms. SYSCO's and Doughtie's SEC    
filings should also be available to the public from commercial document         
retrieval services and at the Internet web site maintained by the SEC at        
http://www.sec.gov.                                                             

    In addition, material and information concerning SYSCO can be inspected at
the New York Stock Exchange, Inc., 20 Broad Street, 7th Floor, New York, New    
York 10005, on which exchange the SYSCO common stock is listed. Material and    
information concerning Doughtie's can be inspected at the Nasdaq Stock Market,  
Inc. Reports Section, 1735 K Street, N.W. Washington, D.C. 20006.               

   SYSCO has filed a registration statement on Form S-4 to register with the
SEC the SYSCO common stock that SYSCO will issue to the Doughtie's shareholders 
in the merger. This document is a part of that registration statement and       
constitutes a prospectus of SYSCO in addition to being a proxy statement for    
Doughtie's special meeting. As allowed by SEC rules, this proxy                 
statement/prospectus does not contain all of the information you can find in the
registration statement or the exhibits to the registration statement.           

The SEC allows SYSCO and Doughtie's to "incorporate by reference"     
information into this proxy statement/prospectus, which means that SYSCO and    
Doughtie's can disclose important information to you by referring you to another
document filed separately with the SEC by SYSCO or Doughtie's as the case may   
be. The information incorporated by reference is deemed to be part of this proxy
statement/prospectus, except for any information superseded by information      
contained in this proxy statement/prospectus. This proxy statement/prospectus   
incorporates by reference the documents set forth below that SYSCO and          
Doughtie's have previously filed with the SEC. These documents contain important
information about SYSCO and Doughtie's and their financial condition.           

The following documents filed by SYSCO (File No. 1-06544) and filed by
Doughtie's (File No. 0-07166) with the SEC are incorporated by reference in and 
made a part of this proxy statement/ prospectus:                                

SYSCO:                                                                          

- SYSCO's Annual Report on Form 10-K for the year ended June 27, 1998;

   - SYSCO's Quarterly Reports on Form 10-Q for the quarters ended September
26, 1998, December 26, 1998 and March 27, 1999; and               

     - The description of SYSCO's common stock contained in SYSCO's registration
      statement filed under Section 12 of the Securities Exchange Act of 1934,
      including any amendment or report filed for the purpose of updating such
description.                                                      

DOUGHTIE'S:                                                                     

 - Doughtie's Annual Report on Form 10-K, as amended, for the year ended
December 26, 1998;                                                

    - Doughtie's Quarterly Report on Form 10-Q for the quarter ended March 27,
1999; and                                                         

- Doughtie's Current Report on Form 8-K filed January 5, 1999.        

- Doughtie's Current Report on Form 8-K filed July 7, 1999.           

SYSCO and Doughtie's are also incorporating by reference additional   
documents that either SYSCO or Doughtie's files with the SEC pursuant to        
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as   
amended, between the date of this proxy statement/prospectus and the date of the
special meeting. These documents will be deemed to be incorporated by reference 
in this proxy statement/prospectus and to be a part of it from the date they are
filed with the SEC.                                                             

   SYSCO has supplied all information contained or incorporated by reference
in this proxy statement/ prospectus relating to SYSCO, and Doughtie's has       
supplied all such information contained or incorporated by reference in this    
proxy statement/prospectus relating to Doughtie's. Neither SYSCO nor Doughtie's 
assumes any responsibility for the accuracy or completeness of the information  
provided by the other party.                                                    

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  A Doughtie's shareholder can obtain any of the documents incorporated by
reference through SYSCO and Doughtie's, as the case may be, or through the SEC  
or the SEC's internet web site as described above. Documents incorporated by    
reference are available from SYSCO and Doughtie's, as the case may be, without  
charge, excluding all exhibits unless SYSCO or Doughtie's has specifically      
incorporated by reference an exhibit in this proxy statement/prospectus or in a 
document incorporated by reference herein. Shareholders may obtain documents    
incorporated by reference in this proxy statement/prospectus by requesting them 
in writing or by telephone from:                                                

 SYSCO Corporation
Toni Spigelmyer 
                           Assistant Vice President Investor Relations
    1390 Enclave Parkway
         Houston, Texas 77077-2099
         Telephone: (281) 584-1390

or              

      Doughtie's Foods, Inc.
                        Attn: Marion S. Whitfield, Jr., Investor
Relations       
  2410 Wesley Street
          Portsmouth, Virginia 23707
(757) 393-6007  

   If you would like to request documents from SYSCO or Doughtie's, you must
do so no later than five business days prior to the special meeting, or August  
23, 1999, in order to receive them prior to the special meeting.                

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY  
REFERENCE IN THIS PROXY STATEMENT/ PROSPECTUS TO VOTE ON THE MERGER. NEITHER    
SYSCO NOR DOUGHTIE'S HAS AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT 
IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS. THIS    
PROXY STATEMENT/PROSPECTUS IS DATED JULY 23, 1999. YOU SHOULD NOT ASSUME THAT   
THE INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS IS ACCURATE AS OF  
ANY DATE OTHER THAN THAT DATE, AND NEITHER THE MAILING OF THIS PROXY            
STATEMENT/PROSPECTUS TO SHAREHOLDERS NOR THE ISSUANCE OF SYSCO'S COMMON STOCK IN
THE MERGER SHALL CREATE ANY IMPLICATION TO THE CONTRARY.                        

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DOUGHTIE'S FOODS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
Report of Independent Accountants...........................  F-2 
Consolidated Balance Sheets at December 26, 1998, December        
  27, 1997 and March 27, 1999 (unaudited)...................  F-3 
Consolidated Statements of Income for the Three Years Ended       
  December 26, 1998, December 27, 1997, December 28, 1996         
  and the thirteen weeks ended March 27, 1999 (unaudited)         
  and March 28, 1998 (unaudited)............................  F-4 
Consolidated Statements of Shareholders' Equity for the           
  Three Years Ended December 26, 1998, and the thirteen           
  weeks ended March 27, 1999 (unaudited)....................  F-5 
Consolidated Statements of Cash Flows for the Three Years         
  Ended December 26, 1998, and the thirteen weeks ended           
  March 27, 1999 (unaudited) and March 28, 1998                   
  (unaudited)...............................................  F-6 
Notes to Consolidated Financial Statements..................  F-7 

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REPORT OF INDEPENDENT ACCOUNTANTS 

To the Board of Directors and Shareholders of Doughtie's Foods, Inc.            

In our opinion, the consolidated financial statements listed in the   
accompanying index present fairly, in all material respects, the financial      
position of Doughtie's Foods, Inc. and its subsidiaries at December 26, 1998 and
December 27, 1997, and the results of their operations and their cash flows for 
each of the three fiscal years in the period ended December 26, 1998, in        
conformity with generally accepted accounting principles. These financial       
statements are the responsibility of Doughtie's management; our responsibility  
is to express an opinion on these financial statements based on our audits. We  
conducted our audits of these statements in accordance with generally accepted  
auditing standards which require that we plan and perform the audit to obtain   
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements, assessing the          
accounting principles used and significant estimates made by management, and    
evaluating the overall financial statement presentation. We believe that our    
audits provide a reasonable basis for the opinion expressed above.              

PricewaterhouseCoopers LLP                                                      

Virginia Beach, Virginia                                                        
February 10, 1999, except for                                                   
Note 10, which is as of                                                         
May 5, 1999                                                                     

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DOUGHTIE'S FOODS, INC. AND SUBSIDIARIES 

CONSOLIDATED BALANCE SHEETS 

ASSETS

                                                        [Enlarge/Download Table]

                                                        DECEMBER 26,  DECEMBER 27,    MARCH 27,   
                                                            1998          1997           1999     
                                                        ------------  ------------  --------------
                                                                                     (UNAUDITED)  
                                                                                                  
Current assets:                                                                                   
  Cash and cash equivalents                             $    16,706   $    26,929    $    16,475  
  Accounts receivable, net                                7,651,940     8,566,995      6,965,997  
  Inventories                                             4,625,780     4,669,291      3,736,058  
  Deferred income taxes                                     175,179       372,220        175,179  
  Prepaid expenses and other current assets                 109,042        68,166        302,514  
                                                        -----------   -----------    -----------  
          Total current assets                           12,578,647    13,703,601     11,196,223  
Property, plant and equipment -- at cost:                                                         
  Land                                                      280,827       280,827        280,827  
  Buildings                                               3,608,055     3,608,055      3,608,055  
  Delivery equipment                                        251,980       169,195        236,301  
  Plant and refrigeration equipment                       1,648,195     1,590,626      1,731,462  
  Office equipment                                          505,698       491,078        508,180  
                                                        -----------   -----------    -----------  
                                                          6,294,755     6,139,781      6,364,825  
  Less -- accumulated depreciation                        3,762,874     3,513,216      3,813,980  
                                                        -----------   -----------    -----------  
                                                          2,531,881     2,626,565      2,550,845  
Other assets                                                112,289       114,651        110,307  
                                                        -----------   -----------    -----------  
                                                        $15,222,817   $16,444,817    $13,857,375  
                                                        ===========   ===========    ===========  

                                LIABILITIES AND SHAREHOLDERS' EQUITY                              
Current liabilities:                                                                              
  Current portion of long-term debt                     $   533,333   $   533,333    $   533,333  
  Accounts payable                                        3,375,081     3,198,641      2,308,635  
  Income taxes payable                                      468,061       891,657        471,427  
  Accrued salaries, commissions and bonuses                 259,873       182,965         43,963  
  Other accrued liabilities                                  49,518        63,948         59,001  
                                                        -----------   -----------    -----------  
          Total current liabilities                       4,685,866     4,870,544      3,416,359  
Long-term debt -- less current portion                      683,334     2,737,910        550,000  
                                                        -----------   -----------    -----------  
          Total liabilities                               5,369,200     7,608,454      3,966,359  
Shareholders' equity:                                                                             
  Common stock -- $1 par value; authorized 4,000,000                                              
     shares at December 26, 1998 and 2,000,000 at                                                 
     December 27, 1997; issued and outstanding                                                    
     1,495,023 shares at December 26, 1998 and                                                    
     December 27, 1997                                    1,495,023     1,495,023      1,495,023  
  Additional paid-in capital                              2,807,037     2,807,037      2,807,037  
  Retained earnings                                       5,551,557     4,534,303      5,588,956  
                                                        -----------   -----------    -----------  
          Total shareholders' equity                      9,853,617     8,836,363      9,891,016  
                                                        -----------   -----------    -----------  
                                                        $15,222,817   $16,444,817    $13,857,375  
                                                        ===========   ===========    ===========  

---------------                                                                 

Commitments (Note 8)                                                            

See notes to consolidated financial statements. 

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DOUGHTIE'S FOODS, INC. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF INCOME 

                                                        [Enlarge/Download Table]

                                              FISCAL YEAR ENDED                    13-WEEKS ENDED      
                                  ------------------------------------------  -------------------------
                                  DECEMBER 26,   DECEMBER 27,   DECEMBER 28,   MARCH 27,     MARCH 28, 
                                      1998           1997           1996         1999          1998    
                                  ------------   ------------   ------------  -----------   -----------
                                                                                     (UNAUDITED)       
                                                                                                       
Net sales                         $87,194,488    $85,233,420    $80,632,688   $19,062,795   $19,308,576
Cost of sales                      73,043,280     71,133,101     67,481,372    15,835,651    16,057,978
                                  -----------    -----------    -----------   -----------   -----------
Gross profit                       14,151,208     14,100,319     13,151,316     3,227,144     3,250,598
Selling, general and                                                                                   
  administrative expenses          12,045,931     12,344,934     11,956,604     3,032,652     2,914,860
Interest expense                      162,087        241,696        468,652        15,059        46,600
                                  -----------    -----------    -----------   -----------   -----------
                                   12,208,018     12,586,630     12,425,256     3,047,711     2,961,460
                                  -----------    -----------    -----------   -----------   -----------
Income before income taxes          1,943,190      1,513,689        726,060       179,433       289,138
Income tax expense (benefit)          746,533        566,191       (201,760)       97,183       108,427
                                  -----------    -----------    -----------   -----------   -----------
Net income                        $ 1,196,657    $   947,498    $   927,820   $    82,250   $   180,711
                                  ===========    ===========    ===========   ===========   ===========
Earnings per share:                                                                                    
  Basic                           $       .80    $       .63    $       .62   $       .06   $       .12
                                  ===========    ===========    ===========   ===========   ===========
  Diluted                         $       .80    $       .63    $       .62   $       .05   $       .12
                                  ===========    ===========    ===========   ===========   ===========
Cash dividends per share          $       .12    $       .11    $       .11   $       .03   $       .03
                                  ===========    ===========    ===========   ===========   ===========
Weighted average shares                                                                                
  outstanding -- basic              1,495,023      1,496,085      1,500,468     1,495,023     1,495,023
Dilutive effect of stock options        1,275             --             --        12,089            30
                                  -----------    -----------    -----------   -----------   -----------
Weighted average shares                                                                                
  outstanding -- including                                                                             
  dilutive potential shares         1,496,298      1,496,085      1,500,468     1,507,112     1,495,053
                                  ===========    ===========    ===========   ===========   ===========

See notes to consolidated financial statements. 

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DOUGHTIE'S FOODS, INC. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 

                                                        [Enlarge/Download Table]

                                                           ADDITIONAL      RETAINED               
                                           COMMON STOCK  PAID-IN CAPITAL   EARNINGS      TOTAL    
                                           ------------  ---------------  ----------   ---------- 
                                                                                                  
BALANCES AT DECEMBER 30, 1995               $1,503,791     $2,820,629     $2,978,640   $7,303,060 
Cash dividends ($.11 per share)                     --             --       (160,072)    (160,072)
Net income for the year ended December                                                            
  28, 1996                                          --             --        927,820      927,820 
Acquisition of treasury stock, at cost --                                                         
  6,713 shares                                  (6,713)        (9,188)            --      (15,901)
                                            ----------     ----------     ----------   ---------- 
BALANCES AT DECEMBER 28, 1996                1,497,078      2,811,441      3,746,388    8,054,907 
Cash dividends ($.11 per share)                     --             --       (159,583)    (159,583)
Net income for the year ended December                                                            
  27, 1997                                          --             --        947,498      947,498 
Acquisition of treasury stock, at cost --                                                         
  2,055 shares                                  (2,055)        (4,404)            --       (6,459)
                                            ----------     ----------     ----------   ---------- 
BALANCES AT DECEMBER 27, 1997                1,495,023      2,807,037      4,534,303    8,836,363 
Cash dividends ($.12 per share)                     --             --       (179,403)    (179,403)
Net income for the year ended December                                                            
  26, 1998                                          --             --      1,196,657    1,196,657 
                                            ----------     ----------     ----------   ---------- 
BALANCES AT DECEMBER 26, 1998                1,495,023      2,807,037      5,551,557    9,853,617 
Cash dividends ($.03 per share)                                                                   
  (unaudited)                                       --             --        (44,851)     (44,851)
Net income for the thirteen weeks ended                                                           
  March 27, 1999 (unaudited)                        --             --         82,250       82,250 
                                            ----------     ----------     ----------   ---------- 
BALANCES AT MARCH 27, 1999 (UNAUDITED)      $1,495,023     $2,807,037     $5,588,956   $9,891,016 
                                            ==========     ==========     ==========   ========== 

See notes to consolidated financial statements. 

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DOUGHTIE'S FOODS, INC. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF CASH FLOWS 

                                                        [Enlarge/Download Table]

                                                FISCAL YEAR ENDED                   13-WEEKS ENDED      
                                    ------------------------------------------  ----------------------- 
                                    DECEMBER 26,   DECEMBER 27,   DECEMBER 28,   MARCH 27,    MARCH 28, 
                                        1998           1997           1996         1999         1998    
                                    ------------   ------------   ------------  -----------   --------- 
                                                                                      (UNAUDITED)       
                                                                                                        
Cash flows from operating                                                                               
  activities:                                                                                           
  Net income                        $ 1,196,657    $   947,498    $   927,820   $    82,250   $ 180,711 
  Adjustments to reconcile net                                                                          
     income to net cash provided                                                                        
     by operations:                                                                                     
     Depreciation                       309,097        274,686        469,445        66,785      70,662 
     Deferred income taxes              197,041         14,051       (242,863)           --          -- 
     Provision for doubtful                                                                             
       accounts                        (120,000)       674,000        206,413          (500)         -- 
     Loss (gain) on sale of                                                                             
       property, plant and                                                                              
       equipment                         (2,264)         5,932        (99,129)           --          -- 
  (Increase) decrease in assets:                                                                        
     Accounts receivable              1,035,055     (2,316,339)    (1,369,210)      685,943     981,455 
     Inventories                         43,511       (171,592)       351,405       889,722     390,700 
     Prepaid expenses and other                                                                         
       current assets                   (40,876)        22,876        155,637      (193,472)   (121,352)
     Other assets                         2,362        (23,094)       741,612         1,982       1,982 
  Increase (decrease) in                                                                                
     liabilities:                                                                                       
     Accounts payable                   176,440      1,567,527         84,007    (1,066,446)   (124,398)
     Income taxes payable              (423,596)       444,882        446,775         3,366    (295,573)
     Accrued salaries, commissions                                                                      
       and bonuses                       76,908         42,348         63,911      (215,910)   (146,000)
     Accrued employee group                                                                             
       insurance                             --             --       (174,026)           --          -- 
     Other accrued liabilities          (14,430)         3,408        (53,040)        9,483     (22,108)
                                    -----------    -----------    -----------   -----------   --------- 
                                      2,435,905      1,486,183      1,508,757       263,203     916,079 
Cash flows from investing                                                                               
  activities:                                                                                           
  Additions to property, plant and                                                                      
     equipment                         (246,102)      (266,544)      (250,782)      (85,749)   (165,363)
  Proceeds from sale of property,                                                                       
     plant and equipment                 33,953        927,735            700           500          -- 
                                    -----------    -----------    -----------   -----------   --------- 
                                       (212,149)       661,191       (250,082)      (85,249)   (165,363)
Cash flows from financing                                                                               
  activities:                                                                                           
  Long-term borrowings                       --             --      2,150,000            --          -- 
  Reductions of long-term debt       (2,054,576)    (2,327,090)    (3,373,334)     (133,334)   (703,917)
  Cash dividends                       (179,403)      (159,583)      (160,072)      (44,851)    (44,850)
  Acquisition of treasury stock              --         (6,459)       (15,901)           --          -- 
                                    -----------    -----------    -----------   -----------   --------- 
                                     (2,233,979)    (2,493,132)    (1,399,307)     (178,185)   (748,767)
                                    -----------    -----------    -----------   -----------   --------- 
Net decrease in cash and cash                                                                           
  equivalents                           (10,223)      (345,758)      (140,632)         (231)      1,949 
Cash and cash equivalents at                                                                            
  beginning of period                    26,929        372,687        513,319        16,706      26,929 
                                    -----------    -----------    -----------   -----------   --------- 
Cash and cash equivalents at end                                                                        
  of period                         $    16,706    $    26,929    $   372,687   $    16,475   $  28,878 
                                    ===========    ===========    ===========   ===========   ========= 

See notes to consolidated financial statements. 

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DOUGHTIE'S FOODS, INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                            

Principles of consolidation -- The consolidated financial statements  
include the accounts of Doughtie's Foods, Inc. ("Doughtie's") and its           
wholly-owned subsidiary in 1998 and 1997 (and its majority-owned and            
wholly-owned subsidiaries in 1996). All material intercompany accounts and      
transactions have been eliminated in consolidation. The consolidated group      
operates in one segment and is engaged in the processing, manufacturing (1997   
and 1996 only) and wholesaling of a broad line of meat products and other food  
items.                                                                          

Interim Financial Information (Unaudited) -- The interim financial    
information at March 27, 1999 and for the 13 weeks ended March 27, 1999 and     
March 28, 1998 is unaudited. Although this financial information is unaudited,  
Doughtie's believes that it contains all adjustments (consisting of normal      
recurring accruals) necessary to present fairly the consolidated financial      
position at March 27, 1999 and consolidated results of operations and cash flows
for the 13 weeks ended March 27, 1999 and March 28, 1998. Because inventory     
valuations under the LIFO method are based on an annual determination, estimates
must be made at interim dates of year-end costs and levels of inventory. The    
possibility of variations between estimated year-end costs and levels of LIFO   
inventories and the actual year-end amounts may materially affect the results of
operations as finally determined for the full year. The results of operations   
for the interim periods cited above are not necessarily indicative of the       
results to be expected for the full year.                                       

   Use of estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make       
estimates and assumptions that affect the reported amounts of assets and        
liabilities and disclosure of contingent assets and liabilities at the date of  
the financial statements and the reported amounts of revenues and expenses      
during the reporting period. Actual results could differ from those estimates.  

     Cash equivalents -- Doughtie's considers all highly liquid debt instruments
purchased with an original maturity of three months or less to be cash          
equivalents.                                                                    

     Allowance for doubtful accounts -- Doughtie's and its subsidiaries maintain
allowances for doubtful accounts based on an analysis of previous loss          
experience and current conditions.                                              

 Inventories -- Inventories, consisting principally of raw materials and
finished food products, are stated at the lower of last-in, first-out (LIFO)    
cost, or market value.                                                          

   Property, plant and equipment -- Property, plant and equipment are stated
at cost. Accelerated methods are used to provide for depreciation on all assets 
other than buildings. The straight-line method is used for buildings.           

The estimated useful asset lives used in computing depreciation are as
follows:                                                                        

                                                                [Download Table]
                                                                            
Buildings                                                      8 to 40 years
Delivery equipment                                             3 to 7 years 
Plant and refrigeration equipment                              3 to 7 years 
Office equipment                                               3 to 7 years 
Leasehold improvements                                         1 to 7 years 

    The cost and accumulated depreciation applicable to assets retired or sold
are removed from the respective accounts, and gains and losses thereon are      
included in income.                                                             

Accounts payable -- At December 26, 1998 and December 27, 1997,       
approximately $1,247,000 and $1,414,000, respectively, of outstanding checks are
included in accounts payable.                                                   

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Fair value of financial instruments -- The carrying value of financial
instruments including cash and cash equivalents, net accounts receivable,       
accounts payable, accrued liabilities and long-term debt approximated fair value
at December 26, 1998 and December 27, 1997.                                     

    Income taxes -- Doughtie's files a consolidated federal income tax return.
Prior to the acquisition of the minority interest during 1996, one subsidiary   
was required to file a separate return.                                         

Doughtie's accounts for income taxes in accordance with Statement of  
Financial Accounting Standards No. 109 (FAS 109), "Accounting for Income Taxes,"
which requires the recognition of deferred tax assets and liabilities for the   
expected future tax consequences of temporary differences between the carrying  
amounts of assets and liabilities and their respective tax bases. The provision 
for income taxes is based on taxes currently payable and the changes in deferred
tax assets and liabilities.                                                     

  Earnings per share -- Earnings per share (EPS) are based on the weighted
average number of shares outstanding. Doughtie's adopted Statement of Financial 
Accounting Standards No. 128 (FAS 128), "Earnings per Share" during 1997. The   
statement replaces the presentation of primary and fully diluted EPS with a     
presentation of basic and diluted EPS. For Doughtie's, there is no difference   
between the calculation of basic and primary EPS. Doughtie's had no potentially 
dilutive securities at December 27, 1997 or December 28, 1996. At December 26,  
1998, diluted earnings per share includes the dilutive effect of the stock      
options issued in 1998.                                                         

    Stock split -- On November 25, 1997, the Board of Directors declared a 50%
stock split payable on January 12, 1998, to stockholders of record on December  
12, 1997. All references in the consolidated financial statements referring to  
shares, share prices and per share amounts have been adjusted retroactively for 
the 50% stock split.                                                            

Concentrations of credit risk and significant customers -- One of     
Doughtie's commercial customers represents 12.5% and 13.1% of trade accounts    
receivable at December 26, 1998 and December 27, 1997, respectively. During     
1998, 1997 and 1996, Doughtie's had sales under a contract with the United      
States Department of Defense which aggregated approximately 13.2%, 15.8% and    
11.5%, respectively, of net sales. This contract expires in February 2000.      

     New accounting standard -- In June 1998, the Financial Accounting Standards
Board issued FAS No. 133, Accounting for Derivative Instruments and Hedging     
Activities. This statement establishes accounting and reporting standards for   
derivative instruments, including certain derivative instruments embedded in    
other contracts, and for hedging activities. The Statement is effective for all 
fiscal quarters of fiscal years beginning after June 15, 1999. This Statement is
not currently applicable to Doughtie's, since Doughtie's does not have any      
derivative instruments and is not involved in hedging activities.               

   Reclassifications -- Certain prior year amounts have been reclassified to
conform with the current year presentation.                                     

NOTE 2 -- ACCOUNTS RECEIVABLE                                                   

     Accounts receivable are net of allowances for doubtful accounts as follows:

                                                                [Download Table]

                                  DECEMBER 26,  DECEMBER 27,
                                      1998          1997    
                                  ------------  ------------
                                                            
Trade accounts receivable          $8,011,565    $9,195,367 
Allowances for doubtful accounts     (359,625)     (628,372)
                                   ----------    ---------- 
                                   $7,651,940    $8,566,995 
                                   ==========    ========== 

 Earnings for the year and the quarter ended December 26, 1998 include a
$180,000 increase to income after income taxes or $.12 per basic and diluted    
share related to improved customer credit quality during the fourth quarter of  
1998, including collection of certain accounts previously considered doubtful.  

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NOTE 3 -- INVENTORIES                                                           

Inventories used in determining cost of sales are as follows:         

                                                                [Download Table]

                                                        FINISHED 
                              TOTAL     RAW MATERIALS   PRODUCTS 
                            ----------  -------------  ----------
                                                                 
December 30, 1995           $4,849,104   $1,163,240    $3,685,864
December 28, 1996           $4,497,699   $  549,161    $3,948,538
December 27, 1997           $4,669,291           --    $4,669,291
December 26, 1998           $4,625,780           --    $4,625,780
March 27, 1999 (unaudited)  $3,736,058           --    $3,736,058
                            ----------   ----------    ----------

The differences between first-in, first-out (FIFO) and LIFO inventory 
values are as follows:                                                          

                                                                [Download Table]

                MARCH 27    DECEMBER 26,  DECEMBER 27,  DECEMBER 28,  DECEMBER 30,
                  1999          1998          1997          1996          1995    
               -----------  ------------  ------------  ------------  ------------
               (UNAUDITED)                                                        
                                                                                  
FIFO cost      $4,423,160    $5,342,882    $5,419,163   $ 5,517,080    $5,680,063 
LIFO reserves    (687,102)     (717,102)     (749,872)   (1,019,381)     (830,959)
               ----------    ----------    ----------   -----------    ---------- 
LIFO cost      $3,736,058    $4,625,780    $4,669,291   $ 4,497,699    $4,849,104 
               ==========    ==========    ==========   ===========    ========== 

    The $32,770 change in LIFO reserves in 1998 increased net income and basic
and diluted earnings per share by approximately $20,200 and $.01, respectively. 
The $269,509 change in LIFO reserves in 1997 increased net income and basic and 
diluted earnings per share by approximately $166,000 and $.11, respectively. The
$188,422 change in LIFO reserves in 1996 decreased net income and basic and     
diluted earnings per share by approximately $121,000 and $.08, respectively.    

NOTE 4 -- LONG-TERM DEBT                                                        

Long-term debt consists of the following:                             

                                                                [Download Table]

                                        DECEMBER 26,  DECEMBER 27,
                                            1998          1997    
                                        ------------  ------------
                                                                  
Long-term revolving bank note            $       --    $1,521,243 
Bank term loan                              750,000     1,150,000 
Industrial Revenue Bond                     466,667       600,000 
                                         ----------    ---------- 
                                          1,216,667     3,271,243 
Less -- current portion                     533,333       533,333 
                                         ----------    ---------- 
Long-term debt -- less current portion   $  683,334    $2,737,910 
                                         ==========    ========== 

    Principal payments are due as follows: 1999 -- $533,333, 2000 -- $483,333,
and 2001 -- $200,001.                                                           

  Doughtie's has a $7,500,000 revolving bank note at LIBOR plus 1.50%. The
LIBOR rate at December 26, 1998 was 5.63%. The note is due three years after the
annual renewal date, currently July 2001, subject to annual renewal. The amount 
available under this line is limited to the sum of 85% of qualifying accounts   
and notes receivable and 20% of qualifying inventory on hand. Doughtie's had    
$6,400,000 of borrowing capacity available on this credit line at December 26,  
1998. Doughtie's has a bank term loan at LIBOR plus 1.50%. The loan is payable  
in quarterly installments of $100,000 plus interest through January 1, 2001.    

 Doughtie's has a $2,000,000 Industrial Revenue Bond from a bank for the
purpose of expanding its plant and office facilities in Portsmouth, Virginia, at
an interest rate of 91.5% of prime. The prime rate at December 26, 1998, was    
7.75%. The bond is payable in monthly installments of $11,111 plus interest     
through July 1, 2001 with a final payment of the outstanding balance due on July
1, 2001.                                                                        

  Cash paid for interest totaled $162,087, $241,696, and $468,652 in 1998,
1997 and 1996, respectively.                                                    

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Each of the three loans is collateralized by all accounts and notes   
receivable, inventories, contract rights and property, plant and equipment of   
the consolidated group. These loan agreements contain restrictive covenants     
including a minimum amount of tangible net worth, a minimum working capital     
ratio, and a maximum debt to equity ratio. All requirements were met for 1998.  

NOTE 5 -- RETIREMENT PLANS                                                      

Doughtie's has a retirement savings and 401(k) plan which covers      
substantially all full-time employees except those covered by a collective      
bargaining agreement. Doughtie's makes contributions to the plan based on 50% of
the participants' contributions, which can range from 1% to 6% of their total   
compensation. In addition to the matched contribution, participants may make    
additional unmatched contributions of up to 9% of their compensation. Doughtie's
may also make discretionary contributions to the plan. Contributions to the     
retirement savings and 401(k) plan for 1998, 1997 and 1996 were $75,765, $79,955
and $91,517, respectively.                                                      

NOTE 6 -- INCOME TAXES                                                          

    The provision for income taxes is based on taxes currently payable and the
changes in deferred tax assets and liabilities.                                 

The components of income tax expense (benefit) are as follows:        

                                                                [Download Table]

                    1998      1997      1996    
                  --------  --------  --------- 
                                                
Current federal   $498,949  $459,623  $  52,109 
Current state       50,543    92,517    (11,006)
Deferred federal   163,591     2,386   (201,635)
Deferred state      33,450    11,665    (41,228)
                  --------  --------  --------- 
                  $746,533  $566,191  $(201,760)
                  ========  ========  ========= 

    The effective income tax rates vary from the statutory U.S. federal income
tax rate as follows:                                                            

                                                        [Enlarge/Download Table]

                                     1998                 1997                  1996         
                              ------------------  ---------------------  ------------------- 
                                         PERCENT              PERCENT                PERCENT 
                                           OF                    OF                    OF    
                               DOLLAR    PRETAX    DOLLAR      PRETAX     DOLLAR     PRETAX  
                               AMOUNT    INCOME    AMOUNT      INCOME     AMOUNT     INCOME  
                              --------   -------  --------   ----------  ---------   ------- 
                                                                                             
Federal income taxes                                                                         
  computed at statutory                                                                      
  rates                       $660,685    34.0%   $514,654      34.0%    $ 246,860     34.0% 
State income taxes, net of                                                                   
  federal income tax benefit    60,444     3.1      64,937       4.3        31,148      4.3  
Fuel tax credit                (15,278)   (0.8)    (15,278)     (1.0)      (15,278)    (2.1) 
Nondeductible merger                                                                         
  expenses                      25,996     1.3          --        --            --       --  
Recognition of subsidiary                                                                    
  operating loss                    --      --          --        --      (467,954)   (64.5) 
Other                           14,686     0.8       1,878       0.1         3,464      0.5  
                              --------    ----    --------      ----     ---------    -----  
                              $746,533    38.4%   $566,191      37.4%    $(201,760)   (27.8)%
                              ========    ====    ========      ====     =========    =====  

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  Significant components of Doughtie's deferred tax assets and liabilities
are as follows:                                                                 

                                                                [Download Table]

                                  DECEMBER 26,  DECEMBER 27,
                                      1998          1997    
                                  ------------  ------------
                                                            
Simplified LIFO differences         $ 54,916      $ 57,425  
Capitalized inventory cost            25,836        24,687  
Allowances for doubtful accounts     137,700       240,604  
Net operating loss of subsidiary          --        94,996  
                                    --------      --------  
Gross deferred tax asset             218,452       417,712  
Involuntary conversion               (43,273)      (45,492) 
                                    --------      --------  
Net deferred tax asset              $175,179      $372,220  
                                    ========      ========  

Cash paid (refunded) for income taxes totaled $973,088, $73,037 and   
$(185,033) in 1998, 1997 and 1996, respectively.                                

NOTE 7 -- STOCK INCENTIVE PLAN                                                  

    In 1998, Doughtie's adopted a Stock Incentive Plan. Doughtie's has elected
to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock     
Issued to Employees" (APB 25) in accounting for its employee stock options. In  
electing to account for its stock options under APB 25, Doughtie's is required  
by FAS No. 123, "Accounting for Stock-Based Compensation," to disclose pro forma
information regarding net income and earnings per share as if Doughtie's had    
adopted FAS No. 123.                                                            

     Under Doughtie's Stock Incentive Plan, selected employees of Doughtie's and
certain directors may be granted options to purchase common stock. The exercise 
price of the options may not be less than 100% of the fair market value of      
Doughtie's common stock on the date of grant of such options, and the options   
must be exercised within ten years. A maximum of 112,500 shares of common stock 
may be granted under this plan. The options vest immediately upon a change of   
ownership (Note 10) or one-half at the grant date and the remaining balance over
a two year period.                                                              

During 1998, Doughtie's issued 40,500 options to certain employees and
1,600 options to certain directors at a weighted average exercise price of      
$6.54. The range of exercise prices for options issued during 1998 was          
$6.50-$7.50. At December 26, 1998, all options were outstanding and 21,050 of   
the options were vested at a weighted-average exercise price of $6.54.          

  The fair value of each stock option granted in fiscal 1998 was estimated
using the Black-Scholes option model with the following weighted average        
assumptions: dividend yield of 1.83%, expected volatility of 53.83%, weighted   
average risk-free interest rate of 4.30% and an expected life of one and one    
half years. The weighted average fair value of options granted in fiscal 1998 is
$1.73. Had compensation cost for Doughtie's stock options been determined based 
on the fair value at the grant dates for awards consistent with the requirements
of FAS No. 123, Doughtie's pro forma net income would have decreased by $34,000 
or $.02 per basic and diluted share for the year ended December 26, 1998. No    
options were granted in prior years.                                            

NOTE 8 -- OPERATING LEASES                                                      

In January 1996, Doughtie's entered into a seven-year full service    
operating lease covering thirty-six new trucks and ten new trailers. The lease  
provides for increases in rentals based on increases in the Consumer Price      
Index.                                                                          

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    Minimum annual rentals under the aforementioned lease are set forth in the
table below. These minimum rental commitments do not include contingent rentals 
which are based on usage.                                                       

                                                                [Download Table]

                                                             TRUCKS  
                                                              AND    
                                                            TRAILERS 
                                                           ----------
                                                                     
1999                                                       $  527,724
2000                                                          527,724
2001                                                          527,724
2002                                                          527,724
2003                                                          263,862
                                                           ----------
                                                           $2,374,758
                                                           ==========

  Total rent expense charged to consolidated operations in 1998, 1997, and
1996 was $1,251,975, $1,182,909 and $1,043,642, respectively. Rental expense in 
1998, 1997 and 1996 included contingent rentals of approximately $437,489,      
$380,681 and $396,191, respectively.                                            

NOTE 9 -- SALE OF ASSETS                                                        

On August 28, 1996, Doughtie's merged its Dutterer's of Manchester    
Corporation subsidiary into TWB Gourmet Foods, Inc. in order to streamline      
operations. Simultaneously, Doughtie's acquired the remaining 30% interest in   
TWB from the minority stockholder.                                              

On September 6, 1996, Doughtie's sold certain assets of TWB and       
discontinued manufacturing of the associated gourmet food products. The terms of
the sale were a $30,000 cash down payment, $20,000 assigned accounts receivable 
and $137,000 of free trade credit from the buyer for a total sale price of      
$187,000. No gain or loss was recognized as a result of this sales transaction. 

On February 28, 1997, Doughtie's sold the assets of its manufacturing 
division's barbecue and chili business for approximately $840,000 in cash.      
Barbecue and chili sales accounted for less than 5% of consolidated 1996 sales  
volume. The net pretax gain on the sale was approximately $50,000.              

On April 14, 1997, Doughtie's sold the assets of its manufacturing    
division's deli meats business for approximately $486,000. The terms of the sale
were a $286,000 cash down payment with the $200,000 balance in the form of      
secured notes to be paid prior to April 15, 1998. Deli meat sales accounted for 
less than 5% of consolidated 1996 sales volume. The net pretax gain on the sale 
was approximately $140,000.                                                     

NOTE 10 -- SUBSEQUENT EVENT                                                     

     On February 8, 1999, Doughtie's and SYSCO signed a letter of intent whereby
Doughtie's will merge into a wholly owned subsidiary of SYSCO. On May 5, 1999,  
SYSCO and Doughtie's entered into a definitive merger agreement to effect the   
merger of Doughtie's into a wholly owned subsidiary of SYSCO. Under the merger  
agreement, the shareholders of Doughtie's will receive $17.00 per share in cash 
and/or shares of SYSCO common stock for each share owned, subject to possible   
adjustment. In addition, all options outstanding will become immediately vested 
and exercisable and convert into the right to receive cash in the amount of     
$17.00 per share, subject to possible adjustment, less the applicable per share 
exercise price and any required tax withholding as of the closing of the merger.
Completion of the merger is subject to, among other things, approval by         
Doughtie's shareholders.                                                        

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NOTE 11 -- QUARTERLY FINANCIAL DATA (UNAUDITED)                                 

The following is a summary of the results of operations by quarters:  

                                                                [Download Table]

                                                  BASIC AND  
                                                   DILUTED   
                                                 EARNINGS PER
QUARTER    NET SALES   GROSS PROFIT  NET INCOME     SHARE    
-------   -----------  ------------  ----------  ------------
                                                             
1998                                                         
  First   $19,308,576  $ 3,250,598   $  180,711   $      .12 
  Second   22,987,483    3,638,347      252,685          .17 
  Third    23,596,821    3,657,243      271,994          .18 
  Fourth   21,301,608    3,605,020      491,267          .33 
          -----------  -----------   ----------   ---------- 
          $87,194,488  $14,151,208   $1,196,657   $      .80 
          ===========  ===========   ==========   ========== 
1997                                                         
  First   $18,692,236  $ 3,182,477   $  143,543   $      .09 
  Second   21,683,108    3,587,253      341,622          .23 
  Third    24,172,942    3,720,523      329,462          .22 
  Fourth   20,685,134    3,610,066      132,871          .09 
          -----------  -----------   ----------   ---------- 
          $85,233,420  $14,100,319   $  947,498   $      .63 
          ===========  ===========   ==========   ========== 

 Unusual items affecting 1998 and 1997 net income in the above quarterly
data are discussed in Notes 2 and 9.                                            

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                                                                      APPENDIX A

AGREEMENT AND PLAN OF MERGER

    THIS AGREEMENT AND PLAN OF MERGER (as the same may be amended from time to
time, the "Agreement") is made as of May 5, 1999, among SYSCO CORPORATION, a    
Delaware corporation ("SYSCO"), SYSCO FOOD SERVICES OF EASTERN VIRGINIA, INC.   
("Merger Sub"), a Delaware corporation and a wholly-owned subsidiary of SYSCO,  
and DOUGHTIE'S FOODS, INC., a Virginia corporation ("DFI").                     

RECITALS

 A. The respective Boards of Directors of SYSCO, Merger Sub and DFI have
each approved the merger of DFI with and into Merger Sub (the "Merger"), upon   
the terms and subject to the conditions set forth in this Agreement, whereby    
each issued and outstanding share of common stock, par value $1.00 per share, of
DFI ("DFI Common Stock"), other than any shares owned by SYSCO, will be         
converted into the right to receive the Merger Consideration (as defined in     
Section 1.01).                                                                  

 B. The respective Boards of Directors of SYSCO, Merger Sub and DFI have
each determined that the Merger and the other transactions contemplated hereby  
are consistent with, and in furtherance of, their respective business strategies
and goals and are in the best interests of their respective stockholders.       

 C. For federal income tax purposes, it is intended that the Merger will
qualify as a reorganization under the provisions of Section 368(a) of the       
Internal Revenue Code of 1986, as amended (the "Code").                         

   D. For financial accounting purposes, it is intended that the Merger will
be accounted for under the purchase method of accounting.                       

E. SYSCO, Merger Sub and DFI desire to make certain representations,  
warranties, covenants and agreements in connection with the Merger and also to  
prescribe various conditions to the Merger.                                     

NOW, THEREFORE, in consideration of the representations, warranties,  
covenants and agreements contained in this Agreement, the parties agree as      
follows:                                                                        

ARTICLE I 

THE MERGER

SECTION 1.01  THE MERGER.                                                       

   Upon the terms and subject to the conditions set forth in this Agreement,
and in accordance with the Delaware General Corporation Law (the "DGCL") and the
Virginia Stock Corporation Act (the "VSCA"), DFI shall be merged with and into  
Merger Sub at the Effective Time (as defined in Section 1.03). Following the    
Effective Time, the separate corporate existence of DFI shall cease and Merger  
Sub shall be the surviving corporation (the "Surviving Corporation") and shall  
succeed to and assume all the rights and obligations of DFI in accordance with  
the DGCL and VSCA.                                                              

     (i) Pursuant to the Merger and the terms of this Agreement: (A) all holders
of DFI Common Stock, in exchange for the surrender and cancellation of the DFI  
Common Stock, shall be entitled to receive consideration in the form of shares  
of SYSCO Common Stock and/or cash as a result of a Cash Election (Section       
2.01(f)) and any cash in lieu of fractional shares of SYSCO Common Stock        
(Section 2.02(e)), and (B) all holders of Options (as hereinafter defined) shall
be entitled to receive cash in accordance with Section 2.01(e).                 

   (ii) The consideration to be delivered to each holder of DFI Common Stock
or Option Shares (as hereinafter defined) pursuant to clause (i) above is       
referred to hereinafter as the "Merger Consideration." The total consideration  
payable by SYSCO hereunder to all holders of DFI Common Stock and Option        
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Shares is referred to hereinafter as the "Aggregate Merger Consideration." The  
dollar value of the Aggregate Merger Consideration (the "Merger Price") is equal
to (A) the number of issued and outstanding shares of DFI Common Stock times the
Average SYSCO Price (defined below) times the Exchange Ratio (as defined in     
Section 2.01(b) plus (B) the Option Share Consideration (as defined in Section  
2.01(e)) times the total number of Option Shares. "Average SYSCO Price" means   
the average of the closing prices of the SYSCO Common Stock as reported on the  
NYSE Composite Reporting Tape (as reported in The Wall Street Journal, or, if   
not reported therein, any other authoritative source) during the ten (10)       
trading days ending two (2) trading days prior to the Closing Date (but in no   
event greater than $31 per share of SYSCO Common Stock or less than $21 per     
share of SYSCO Common Stock).                                                   

SECTION 1.02  CLOSING.                                                          

  The closing of the Merger (the "Closing") will take place at 10:00 a.m.,
New York City time, on a date to be specified by the parties (the "Closing      
Date"), which shall be no later than the second business day after satisfaction 
or waiver of the conditions set forth in Article VI, unless another time or date
is agreed to by the parties hereto. The Closing will be held at the offices of  
McGuire, Woods, Battle & Boothe, LLP, in Norfolk, Virginia, or such other       
location as may be agreed to by the parties hereto.                             

SECTION 1.03  EFFECTIVE TIME.                                                   

    Subject to the provisions of this Agreement, as soon as practicable on the
Closing Date, the parties shall cause the Merger to be consummated by filing a  
certificate of merger or other appropriate documents (in any such case, the     
"Certificate of Merger") executed in accordance with the relevant provisions of 
the DGCL and the VSCA and shall make all other filings or recordings required   
under the DGCL and the VSCA. The Merger shall become effective at such time as  
the Certificate of Merger is duly filed with the Secretary of State of Delaware 
and is declared effective by the Virginia State Corporation Commission, or at   
such subsequent date or time as SYSCO and DFI shall agree and specify in the    
Certificate of Merger (the time the Merger becomes effective being hereinafter  
referred to as the "Effective Time").                                           

SECTION 1.04  STATUTORY EFFECTS OF THE MERGER.                                  

    The Merger shall have the effects set forth in Section 259 of the DGCL and
Section 13.1-721 of the VSCA.                                                   

SECTION 1.05  CERTIFICATE OF INCORPORATION AND BYLAWS.                          

    (i) At the Effective Time, the Certificate of Incorporation of Merger Sub,
as in effect immediately prior to the Effective Time, shall be the Certificate  
of Incorporation of the Surviving Corporation until thereafter amended in       
accordance with applicable law; provided, however, that Article First of the    
Certificate of Incorporation of the Surviving Corporation shall be amended to   
read as follows:                                                                

"The name of the Corporation (which is hereinafter referred to as the 
"Corporation") is Doughtie's SYSCO Food Services, Inc."                         

   (ii) At the Effective Time, the bylaws of the Surviving Corporation shall
be amended as set forth in Exhibit A and, as so amended, such bylaws shall be   
the bylaws of the Surviving Corporation until thereafter changed or amended as  
provided therein or by applicable law.                                          

SECTION 1.06  DIRECTORS AND OFFICERS.                                           

     The directors and officers of Merger Sub immediately prior to the Effective
Time shall be the initial directors and officers of the Surviving Corporation,  
each to hold office in accordance with the Certificate of Incorporation and     
bylaws of the Surviving Corporation.                                            

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SECTION 1.07  RESERVATION OF RIGHT TO REVISE TRANSACTION.                       

     If each of DFI and SYSCO agree, the parties hereto, prior to the receipt of
the DFI Stockholder Approval (as defined herein), may change the method of      
effecting the business combination between SYSCO and DFI, and each party shall  
cooperate in such efforts, including to provide for a merger of DFI with and    
into SYSCO with SYSCO being the surviving corporation, provided, however, that  
no such change shall (i) alter or change the amount or kind of the Merger       
Consideration, (ii) adversely affect the tax treatment to SYSCO, DFI or their   
respective stockholders as a result of receipt of the Merger Consideration, or  
(iii) materially delay receipt of any approval referred to in Section 6.01(c) or
the consummation of the transactions contemplated by this Agreement.            

SECTION 1.08  CLOSING DELIVERIES.                                               

   (a) DFI Deliveries. At Closing, DFI shall deliver to SYSCO and Merger Sub
each of the following, together with any additional items which SYSCO may       
reasonably request to effect the transactions contemplated herein:              

     (i) a certified copy of the corporate resolutions of the Board of
   Directors of DFI and of the stockholders of DFI authorizing and approving
   the Merger and the execution, delivery and performance of this Agreement,
 together with an incumbency certificate with respect to officers of DFI
executing documents or instruments on behalf of DFI;                  

   (ii) a certificate of the President of DFI certifying as to the
matters set forth in Sections 6.01 and 6.02 hereof and as to the      
satisfaction of all other conditions set forth in this Agreement;     

(iii) the Escrow Agreement duly executed by the Stockholder 
     Representative on behalf of the DFI Stockholders, the DFI Optionholders and
Escrow Agent;                                                         

          (iv) the Non-competition Agreements referred to in Section 5.18 hereof
     duly executed by Steven C. Houfek ("Houfek") and Vernon W. Mules ("Mules");

         (v) written consents from all persons, entities and regulatory bodies
whose consent to the Merger is required;                              

          (vi) the corporate minute books, seals and stock transfer books of DFI
   and each subsidiary certified by the corporate secretary thereof as true,
correct and complete;                                                 

      (vii) an opinion of McGuire Woods Battle & Boothe, LLP, counsel to
DFI, substantially in the form of Exhibit B attached hereto;          

(viii) the Certificate of Merger executed by DFI;           

       (ix) Tax Opinion of McGuire Woods Battle & Boothe, LLP, pursuant to
Section 6.01(g); and                                                  

    (x) any other documents or agreements contemplated hereby and/or
necessary or appropriate to consummate the transactions contemplated  
hereby.                                                               

     (b) SYSCO and Merger Sub Deliveries. At Closing, SYSCO and Merger Sub shall
deliver to DFI each of the following, together with any additional items which  
DFI may reasonably request to effect the transactions contemplated herein:      

   (i) written confirmation from SYSCO's transfer agent that stock
  certificates evidencing the shares of SYSCO Common Stock to be issued in
the Merger (including the Escrow Shares) have been issued;            

    (ii) the Escrow Agreement duly executed by SYSCO and Merger Sub;

       (iii) certified copies of the corporate resolutions of the Board of
  Directors of SYSCO and of the Board of Directors and sole stockholder of
     Merger Sub authorizing and approving the Merger and the execution, delivery
  and performance of this Agreement by SYSCO and Merger Sub, together with
  incumbency certificates with respect to the respective officers of SYSCO
  and Merger Sub executing documents or instruments on behalf of SYSCO and
Merger Sub;                                                           
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       (iv) a certificate of an authorized officer of SYSCO and Merger Sub
     certifying as to the matters set forth in Sections 6.01 and 6.03 hereof and
as to the satisfaction of all other conditions set forth herein;      

(v) the Certificate of Merger executed by Merger Sub;       

   (vi) Opinion of Arnall Golden & Gregory, LLP, counsel to SYSCO,
     substantially in the form of Exhibit B-2 attached hereto and the opinion of
    Clark & Stant, P.C., special counsel to SYSCO, as provided for in the last
paragraph of Exhibit B-2;                                             

          (vii) Tax Opinion of Arnall Golden & Gregory, LLP, pursuant to Section
6.01(g); and                                                          

       (viii) any other documents or agreements contemplated hereby and/or
necessary or appropriate to consummate the transactions contemplated  
hereby.                                                               

ARTICLE II

EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES AND CASH

SECTION 2.01  EFFECT ON CAPITAL STOCK.                                          

     As of the Effective Time, by virtue of the Merger and without any action on
the part of Merger Sub, DFI or the holder of any shares of the following        
securities:                                                                     

  (a) Cancellation of Stock Owned by SYSCO. Each share of DFI Common Stock
that is owned by Merger Sub or SYSCO shall automatically be cancelled and       
retired and shall cease to exist, and no consideration shall be delivered in    
exchange therefor. Except for purposes of using the total number of shares of   
issued and outstanding DFI Common Stock in calculations, the term "DFI Common   
Stock" in this Agreement shall be deemed to exclude any shares owned by Merger  
Sub or SYSCO.                                                                   

    (b) Conversion of DFI Common Stock. Subject to Section 2.01(f) and Section
2.02(e), each issued and outstanding share of DFI Common Stock shall be         
converted into the right to receive that number of validly issued, fully paid   
and non-assessable shares of common stock, par value $1.00 per share of SYSCO   
("SYSCO Common Stock") equal to the Exchange Ratio. "Exchange Ratio" means the  
quotient resulting from dividing (A) $17.00 less the Net Worth Adjustment by (B)
the Average SYSCO Price. As of the Effective Time, the DFI Common Stock shall no
longer be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any shares of DFI 
Common Stock (a "DFI Stockholder") shall cease to have any rights with respect  
thereto, except the right to receive the Merger Consideration.                  

    (c) Conversion of Merger Sub Common Stock. Each share of common stock, par
value $1.00 per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall remain outstanding as a validly issued, fully paid and 
non-assessable share of common stock of the Surviving Corporation.              

(d) SYSCO Common Stock. At and after the Effective Time, each share of
SYSCO Common Stock issued and outstanding immediately prior to the Effective    
Time shall remain an issued and outstanding share of common stock of SYSCO and  
shall not be affected by the Merger.                                            

(e) DFI Options. (i) In accordance with action duly taken by the      
Compensation Committee of the board of directors of DFI pursuant to Section     
13(b) of the Doughtie's Foods, Inc. 1998 Stock Incentive Plan (the "DFI Option  
Plan"), all options granted under the DFI Option Plan and any other DFI Employee
Stock Options, as defined in Section 3.01(c), outstanding as of the Effective   
Time (collectively, the "Options") shall, effective upon Closing, become fully  
vested and exercisable notwithstanding any other provision of the DFI Option    
Plan or any grant agreement to the contrary and shall be deemed exercised in    
full. Each share deemed to be issued pursuant to such exercise is referred to   
herein as an "Option Share" and is not included for any purposes of this        
Agreement in calculating the number of issued and outstanding shares of DFI     
Common Stock.                                                                   

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   (ii) Each Option Share shall, as of the Effective Time, be converted into
the right to receive cash equal to $17.00 less (A) the Net Worth Adjustment,    
less (B) the per share exercise price of the underlying Option, less (C) any    
amounts required for Tax withholding (the "Option Share Consideration"). Each   
holder of an Option Share is referred to hereinafter as a "DFI Optionholder").  

   (f) Cash Election. (i) Each DFI Stockholder shall have the right to elect
to receive, in cash, $17.00 less the Net Worth Adjustment per share of DFI      
Common Stock designated by such holder to be converted/ to cash (the "Cash      
Election"), provided, however, that if DFI Stockholders elect in the aggregate  
to receive more than 49% of the Merger Price in cash (counting the aggregate    
amount of the Option Share Consideration and cash paid in lieu of fractional    
shares as equivalent to Cash Elections for purposes of this calculation), then  
each DFI Stockholder shall be deemed to have made a Cash Election for that      
number of shares of DFI Common Stock equal to the product of (A) the number of  
shares of DFI Common Stock actually designated for the Cash Election by such DFI
Stockholder times (B) a fraction, the numerator of which is 49% of the Merger   
Price divided by $17 (less the Net Worth Adjustment) and the denominator of     
which is the total number of shares of DFI Common Stock designated for Cash     
Election by all of the DFI Stockholders. The percentage of the Merger Price     
elected in the aggregate to be received by the DFI Stockholders in cash         
including Option Share Consideration and fractional share payments (after       
adjustment, if any, as provided herein) shall be referred to hereinafter as the 
"Cash Election Percentage."                                                     

    (ii) DFI Stockholders shall effect their respective Cash Elections through
an election mechanism to be provided in connection with the solicitation of     
proxies in respect of the DFI Stockholders Meeting.                             

    (g) Closing Balance Sheet; Net Worth Adjustment. (i) As of a date not more
than 15 days prior to the Closing Date (the "Pre-Closing Balance Sheet Date"),  
DFI, in consultation with SYSCO, shall prepare an unaudited consolidated balance
sheet of DFI (the "Pre-Closing Balance Sheet") prepared from the books and      
records of DFI in accordance with GAAP (as defined in Section 3.01(j)) applied  
on a basis consistent with the balance sheet for the fiscal year ended December 
26, 1998 included in the Financial Statements (as defined in Section 3.01(j)).  
The Pre-Closing Balance Sheet shall be reviewed by PricewaterhouseCoopers in    
accordance with Statements on Standards for Accounting and Review Services      
issued by the AICPA Accounting and Review Services Committee and, after any     
necessary adjustments, shall be delivered to SYSCO. In addition, DFI shall      
prepare a calculation of Pre-Closing Adjusted Net Worth. "Pre-Closing Adjusted  
Net Worth" means Net Worth as of the Pre-Closing Balance Sheet Date calculated  
exclusive of (A) the proceeds of any sale by DFI of the Facility (as defined in 
Section 5.19), the Annex Property (as defined in Section 5.21) or the Maryland  
Property (as defined in Section 6.02(f) prior to Closing (in each case in excess
of the book values thereof) and any other non-recurring event (in connection    
with this Agreement or otherwise), (B) the tax benefit of any deduction in      
respect of payments to holders of Options pursuant hereto and (C) a reserve     
which includes a reasonable estimate of DFI's maximum transaction costs relating
to the Merger not to exceed $750,000.                                           

    (ii) During the period between the date when the Pre-Closing Balance Sheet
is delivered to SYSCO and the Closing Date, SYSCO and DFI shall jointly monitor 
the business and financial performance of DFI and agree upon such adjustments to
the Pre-Closing Adjusted Net Worth as are appropriate to determine the projected
adjusted Net Worth of DFI as of the Closing Date (the "Closing Adjusted Net     
Worth") in accordance with the accounting principles used to prepare the        
Pre-Closing Balance Sheet and to calculate the Pre-Closing Adjusted Net Worth.  

(iii) At all times during the period from the preparation of the      
Pre-Closing Balance Sheet to the determination of the Closing Adjusted Net      
Worth, SYSCO's designated financial officers and representatives shall have the 
opportunity to be physically present at DFI's Facility and to review all of     
DFI's financial books and records as appropriate for SYSCO's monitoring and     
participation in the determination of the Closing Adjusted Net Worth as set     
forth herein.                                                                   

    (iv) If the Closing Adjusted Net Worth is equal to or greater than the Net
Worth reflected on the December 26, 1998 balance sheet included in the Financial
Statements (the "1998 Net Worth"), then the Net Worth Adjustment for all        
purposes under this Agreement shall be zero.                                    

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  (v) If the Closing Adjusted Net Worth is less than the 1998 Net Worth in
violation of the representation and warranty in Section 3.01(gg), then SYSCO    
shall have, as its sole remedy in connection with such breach, the option to    
either (A) terminate this Agreement or (B) proceed to closing of the transaction
with the Merger Price adjusted by the Net Worth Adjustment. "Net Worth          
Adjustment" shall mean the amount (rounded to the nearest cent) equal to (x) the
1998 Net Worth minus the Closing Adjusted Net Worth divided by (y) 1,520,927    
(i.e. 1,495,023 (the number of issued and outstanding shares of DFI Common      
Stock) plus 25,904 (the total number of Options (42,100) times the quotient of  
17.00 less 6.54 (the weighted average exercise price of the Options) divided by 
17.00)).                                                                        

  For purposes hereof, "Net Worth" shall mean total consolidated assets of
DFI less total consolidated liabilities of DFI determined in accordance with    
GAAP, applied as expressly provided for herein.                                 

SECTION 2.02  EXCHANGE OF CERTIFICATES.                                         

 (a) Exchange Agent. As of the Effective Time, SYSCO shall enter into an
agreement with SYSCO's transfer agent or such other bank or trust company as may
be designated by SYSCO and reasonably satisfactory to DFI (the "Exchange Agent")
which shall provide that SYSCO shall deposit with the Exchange Agent as of the  
Effective Time, for the benefit of the DFI Stockholders, for exchange in        
accordance with this Article II through the Exchange Agent, certificates        
representing the shares of SYSCO Common Stock to be issued in the Merger, equal 
to the number of shares of DFI Common Stock times the Exchange Ratio (such      
shares of SYSCO Common Stock, together with any dividends or distributions with 
respect thereto with a record date after the Effective Time as well as cash     
payable in lieu of any fractional shares of SYSCO Common Stock or payable as a  
result of any Cash Election, (collectively, the "Exchange Fund"), less the      
Escrow Cash and the Escrow Shares constituting the Escrow Fund (as defined in   
Section 2.04) which shall be delivered to the Escrow Agent.                     

  (b) Exchange Procedures. (i) As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each DFI Stockholder (A) a     
letter of transmittal (which shall specify that delivery shall be effected, and 
risk of loss and title to the DFI Common Stock shall pass, only upon delivery of
the Certificates representing the shares of DFI Common Stock (the               
"Certificates") to the Exchange Agent, and shall be in such form and have such  
other provisions as SYSCO and DFI may reasonably specify) and (B) instructions  
for use in surrendering the Certificates in exchange for the Merger             
Consideration.                                                                  

(ii) Upon surrender of a Certificate for cancellation to the Exchange 
Agent, together with such letter of transmittal, duly executed, and such other  
documents as may reasonably be required by the Exchange Agent, the holder of    
such Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of SYSCO Common Stock which such holder
has the right to receive pursuant to the provisions of this Article II, certain 
dividends or other distributions in accordance with Section 2.02(c), cash       
payable as a result of any Cash Election and cash in lieu of any fractional     
share of SYSCO Common Stock in accordance with Section 2.02(e), and the         
Certificate so surrendered shall forthwith be cancelled.                        

(iii) If a surrendered Certificate is not registered in the transfer  
records of DFI under the name of the person surrendering such Certificate,      
Merger Consideration may be delivered to the surrendering person only if such   
Certificate has been properly endorsed for transfer and the surrendering person 
pays any applicable transfer or other taxes.                                    

(iv) Until surrendered as contemplated by this Section 2.02, each     
Certificate shall be deemed at any time after the Effective Time to represent   
only the right to receive upon such surrender the Merger Consideration. No      
interest, dividends or distributions shall be paid or will accrue on any Merger 
Consideration payable to holders of unsurrendered Certificates pursuant to the  
provisions of this Article II.                                                  

   (c) Distributions with Respect to Unexchanged Shares. With respect to any
unsurrendered Certificate, any interest, dividends or other distributions       
otherwise payable to the holder therefor shall be included in the Exchange Fund,
in each case until the surrender of such Certificate in accordance with this    
Article II. Subject to the effect of applicable escheat or similar laws,        
following surrender of any such Certificate there shall be paid to the holder of
the Certificate: (i) a certificate representing whole shares of SYSCO Common    
Stock                                                                           

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issued in exchange therefor, (ii) at the time of such surrender, the amount of  
dividends or other distributions without interest, with a record date after the 
Effective Time theretofore paid with respect to such whole shares of SYSCO      
Common Stock, and (iii) the amount of any cash payable as a result of any Cash  
Election and cash payable in lieu of a fractional share of SYSCO Common Stock to
which such holder is entitled pursuant to Section 2.02(e).                      

(d) Further Ownership Rights in DFI Common Stock. All shares of SYSCO 
Common Stock issued and cash paid upon the surrender for exchange of            
Certificates in accordance with the terms of this Article II shall be deemed in 
full satisfaction of all rights pertaining to the shares of DFI Common Stock    
theretofore represented by such Certificates, and there shall be no further     
registration of transfers on the stock transfer books of the Surviving          
Corporation of any shares of DFI Common Stock. If, after the Effective Time,    
Certificates are presented to SYSCO, the Surviving Corporation or the Exchange  
Agent for any reason, they shall be cancelled and exchanged as provided in this 
Article II, except as otherwise provided by law.                                

    (e) No Fractional Shares. No certificates or scrip representing fractional
shares of SYSCO Common Stock shall be issued upon the surrender for exchange of 
Certificates, no dividend or distribution of SYSCO shall relate to such         
fractional share interests and such fractional share interests will not entitle 
the owner thereof to vote or to any rights of a stockholder of SYSCO. In lieu of
the issuance of such fractional shares, SYSCO shall deliver to the Exchange     
Agent, and the Exchange Agent shall distribute to each former DFI Stockholder,  
an amount in cash equal to the product obtained by multiplying (A) the          
fractional share interest to which such former holder would otherwise be        
entitled times (B) the Average SYSCO Price.                                     

  (f) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the holders of the Certificates for six months after   
the Effective Time shall be delivered to SYSCO, upon demand, and any holders of 
the Certificates who have not theretofore complied with this Article II shall   
thereafter look only to SYSCO for payment of their claim for Merger             
Consideration.                                                                  

     (g) No Liability; Escheat. None of SYSCO, DFI, the Surviving Corporation or
the Exchange Agent shall be liable to any person in respect of any shares of    
SYSCO Common Stock, any dividends or distributions with respect thereto, any    
cash payable as a result of any Cash Election, any cash in lieu of fractional   
shares of SYSCO Common Stock or any other cash from the Exchange Fund, in each  
case delivered to a public official pursuant to any applicable abandoned        
property, escheat or similar law.                                               

   (h) Investment of Exchange Fund. The Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by SYSCO, on a daily basis. Any      
interest and other income resulting from such investments shall be paid to      
SYSCO.                                                                          

   (i) Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming  
such Certificate to be lost, stolen or destroyed and, if required by the        
Surviving Corporation, the posting by such person of a bond in such reasonable  
amount as the Surviving Corporation may direct as indemnity against any claim   
that may be made against it with respect to such Certificate, the Exchange Agent
shall issue and pay to such person in exchange for such lost, stolen or         
destroyed Certificate the applicable Merger Consideration.                      

SECTION 2.03  CERTAIN ADJUSTMENTS.                                              

   (a) Pre-Closing Adjustments. If between the date hereof and the Effective
Time, the outstanding shares of DFI Common Stock or of SYSCO Common Stock shall 
be changed into a different number of shares by reason of any reclassification, 
recapitalization, split-up, combination or exchange of shares, or any dividend  
payable in stock or other securities shall be declared thereon with a record    
date within such period, the Exchange Ratio shall be adjusted accordingly to    
provide to the holders of DFI Common Stock the same economic effect as          
contemplated by this Agreement prior to such reclassification, recapitalization,
split-up, combination, exchange or dividend.                                    

    (b) Post-Closing Adjustments. Following Closing, to the extent provided in
Section 2.04, there shall be a reduction (collectively, the "Post-Closing       
Adjustments") of the Merger Price in the amount of:                             

   (i) all claims, liabilities, losses, costs, damages or expenses
 (including, without limitation, reasonable attorneys' fees and expenses
incurred in litigation or otherwise, but net of any identifiable tax  
savings)                                                              

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   arising out of and sustained by SYSCO or the Surviving Corporation due to
or relating to any misrepresentation or breach of any representation, 
warranty, covenant or agreement of DFI contained in this Agreement    
     (including without limitation Section 4.01(a) hereof) or in any document or
instrument delivered pursuant hereto; and                             

   (ii) any adjustment effected pursuant to Sections 5.19 or 5.21.

SECTION 2.04  ESCROW AT CLOSING.                                                

  (a) Escrow Fund. At Closing, in order to give effect to the Post-Closing
Adjustments in Section 2.03(b)(i) in the manner described herein and in the     
escrow agreement in the form of Exhibit C attached hereto (the "Escrow          
Agreement"), a portion of the Aggregate Merger Consideration consisting of      
shares of SYSCO Common Stock (the "Escrow Shares") and cash equal to a value of 
$3 million ( the "Escrow Fund") shall be delivered to Crestar Bank (the "Escrow 
Agent"). The portion of the Escrow Fund to be in cash (the "Escrow Cash") shall 
be equal to the product of $3 million times the Cash Election Percentage. The   
number of Escrow Shares constituting the balance of the Escrow Fund shall be    
equal to the quotient of (A) $3 million less the Escrow Cash divided by (B) the 
Average SYSCO Price. Escrow Shares and the Escrow Cash deposited in the Escrow  
Fund equal to (i) ten percent (10%) of the Escrow Shares and Escrow Cash plus   
(ii) Escrow Shares and Escrow Cash equal to 110% of the aggregate amount of the 
outstanding balance of all of the Closing Accounts Receivable (as hereinafter   
defined) at the second anniversary of the Closing Date shall be referred to     
hereinafter as the "Tax and Receivables Escrow Fund."                           

     (b) Facility Escrow Fund and Annex Escrow Fund. To the extent, if any, that
additional shares of SYSCO Common Stock and cash are deposited in the Escrow    
Fund pursuant to the provisions of Section 5.19 and/or Section 5.21, such shares
and cash shall be referred to hereinafter as the "Facility Escrow Fund" and the 
"Annex Escrow Fund," respectively. Claims on the Facility Escrow Fund and the   
Annex Escrow Fund shall be made only pursuant to Sections 5.19 and 5.21 of this 
Agreement, respectively; the Facility Escrow Fund and the Annex Escrow Fund     
shall not be subject to claims in connection with Post-Closing Adjustments under
Section 2.03(b)(i).                                                             

    (c) Interest and Dividends. The Escrow Cash and cash dividends, if any, on
the Escrow Shares, shall be deposited in a federally insured interest-bearing   
account selected by the Escrow Agent and approved by the Stockholder            
Representative and SYSCO. Earnings on the Escrow Cash and interest accrued      
thereon is referred to hereinafter as the "Escrow Cash Interest." The cash      
dividends on the Escrow Shares and any earnings thereon are referred to         
hereinafter as collectively, the "Escrow Shares Dividends." Any stock dividends 
or other non-cash earnings or distributions attributable to the Escrow Shares   
shall be added to and become part of the Escrow Shares.                         

(d) Voting and Other Rights of Beneficial Owners of Escrow Shares. All
voting and other rights of the beneficial owners of the Escrow Shares shall be  
determined in accordance with the provisions of the Escrow Agreement.           

(e) Notice of Claims. If SYSCO or the Surviving Corporation (an       
"Indemnified Party") believes that it has suffered or incurred any liabilities  
under Section 2.03(b)(i) for which it is entitled to claim against the Escrow   
Fund, such Indemnified Party shall so notify the Stockholder Representative with
reasonable promptness and reasonable particularity in light of the circumstances
then existing, and with a statement in reasonable detail of the factual basis of
such claim. If any action at law or suit in equity is instituted by or against a
third party with respect to which any Indemnified Party intends to claim any    
Post-Closing Adjustments, such Indemnified Party shall promptly notify the      
Stockholder Representative of such action or suit.                              

   (f) Defense of Third Party Claims. (i) With respect to a particular third
party claim, including Tax claims, action or suit, and without limiting any     
adjustment to the Merger Consideration pursuant to Section 2.03(b), the         
Stockholder Representative shall have the right to defend the Indemnified Party 
against the third party claim with counsel of the Stockholder Representative's  
choice reasonably satisfactory to the Indemnified Party so long as (A) the      
Stockholder Representative notifies the Indemnified Party in writing            

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within 15 days after the Indemnified Party has given notice of the third party  
claim that the Stockholder Representative will indemnify the Indemnified Party  
from and against any Post-Closing Adjustments the Indemnified Party may suffer  
resulting from, arising out of, relating to or caused by the third party claim, 
(B) the Escrow Fund is sufficient to defend against the third party claim and   
pay any Post-Closing Adjustments hereunder, (C) the third party claim involves  
only money damages and does not seek an injunction or other equitable relief,   
(D) settlement of, or an adverse judgment with respect to, the third party claim
is not, in the good faith judgment of the Indemnified Party, likely to establish
a precedent, custom or practice materially adverse to the continuing business   
interests of the Indemnified Party, and (E) the Stockholder Representative      
conducts the defense of the third party claim actively and diligently.          

     (ii) So long as the Stockholder Representative is conducting the defense of
the third party claim in accordance with Section 2.04(f)(i), (A) the Indemnified
Party may retain separate co-counsel at its sole cost and expense and           
participate in the defense of the third party claim, (B) the Indemnified Party  
will not consent to the entry of any judgment or enter into any settlement with 
respect to the third party claim without the prior written consent of the       
Stockholder Representative (not to be withheld unreasonably), and (C) the       
Stockholder Representative will not consent to the entry of any judgment or     
enter into any settlement with respect to the third party claim without the     
prior written consent of the Indemnified Party (not to be withheld              
unreasonably).                                                                  

(iii) In the event and during such period that the Stockholder        
Representative is defending the Indemnified Party against any third party claim,
SYSCO shall retransfer to the Stockholder Representative all defenses, causes of
action, choses in action, rights of recovery, rights of setoff and rights of    
recoupment to the extent necessary solely for the purpose of such defense (and  
subject to retransfer to SYSCO in the event the Stockholder Representative does 
not defend) and all original books, records and documents relating to such third
party claim to the extent required for evidentiary purposes.                    

 (iv) If any of the conditions in Section 2.04(f)(i) above is or becomes
unsatisfied, or if the Stockholder Representative does not elect to defend, then
the Indemnified Party shall use its reasonable good faith efforts to minimize   
any claim against the Escrow Fund, but subject to such duty may defend against, 
and consent to the entry of any judgment or enter into any settlement with      
respect to, the third party claim in any manner it reasonably may deem          
appropriate and the Stockholder Representative shall provide reasonable         
cooperation in facilitating the transition of such defense to the Indemnified   
Party.                                                                          

     (g) Release From Escrow. Except as provided in Section 5.19 with respect to
the Facility Escrow Fund and Section 5.21 with respect to the Annex Escrow Fund,
claims timely made by the Indemnified Party against the Escrow Fund with        
reasonable particularity and with statements in reasonable detail of the factual
basis therefor, and which are undisputed by the Stockholder Representative or   
resolved as provided in the Escrow Agreement, shall be paid to the Indemnified  
Party (and release of funds to the Stockholder Representative shall be made) in 
accordance with the principles and procedures set forth in Section 2.04(h) and  
as follows:                                                                     

       (i) Prior to the second anniversary of the Closing, the Indemnified
party may make claims for Post-Closing Adjustment pursuant to Sections
   2.03(b)(i) and 2.04(e) (except for claims related to breaches of Sections
   3.01(l) (Taxes) and 3.01(aa) (Accounts Receivable)) from time to time and
   may receive a return of Merger Consideration in respect thereof as and to
the extent provided in the Escrow Agreement. Promptly after the second
    anniversary of Closing, the Indemnified Party shall be entitled to receive
     from the Escrow Fund a return of Merger Consideration equal in value to the
sum of (A) all valid claims for Post-Closing Adjustments pursuant to  
Section 2.03(b)(i) to which the Indemnified Party has not previously  
  received a return of Merger Consideration, (except for claims related to
   breaches of Sections 3.01(l) (Taxes) and 3.01(aa) (Accounts Receivable)),
   less (B) the amount of the General Basket (hereinafter defined), less (C)
  the amount of any claims in dispute at the second anniversary of Closing
(to be disbursed upon and in accordance with the resolution of such   
disputed claims).                                                     

       (ii) From and after the second anniversary of the Closing until the
     third anniversary of the Closing, the Indemnified Party may make claims for
  Post-Closing Adjustment pursuant to Sections 2.03(b)(i) and 2.04(e) with
    respect to breaches of Section 3.01(l) from time to time and may receive a
return of                                                             
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  Merger Consideration in respect thereof as and to the extent provided in
    the Escrow Agreement. Promptly after the third anniversary of Closing, the
Indemnified Party shall be entitled to receive from the Escrow Fund a 
   return of Merger Consideration equal in value to the sum of (A) all valid
 claims for Post-Closing Adjustments pursuant to Section 2.03(b)(i) with
   respect to breaches of Sections 3.01(l) as to which the Indemnified Party
   has not previously received a return of Merger Consideration and breaches
    of Section 3.01(aa), less (B) the excess of the Tax and Receivables Basket
over the amount of any DFI Tax liabilities paid by the Surviving      
  Corporation from Closing through the third anniversary thereof, less (C)
any amount remaining in the General Basket after performance of the   
 calculation set forth in Section 2.04(g)(i), less (D) the amount of any
   claims in dispute at the third anniversary of Closing, with the remainder
     of the Escrow Fund to be disbursed following the resolution of such dispute
   as provided in the Escrow Agreement. The "Tax and Receivables Basket" (as
  defined below) means the sum of the reserves for Taxes and for bad debts
  shown on the balance sheet prepared pursuant to Section 2.01(g)(ii) less
     $100,000 (which the parties acknowledge equaled $780,000 as of February 22,
1999).                                                                

          (iii) With respect to any amounts payable to the Indemnified Party for
claims under Section 2.03(b)(i), the Indemnified Party shall also be  
    entitled to a "Claims Fee" in an amount equal to the sum of (A) the Claims
   Percentage times the total funds constituting the Escrow Cash Interest at
  the time of payment plus (B) the Claims Percentage times the total funds
 constituting the Escrow Shares Dividends. "Claims Percentage" means the
  percentage resulting from dividing the total amount of claims payable to
     the Indemnified Party under clause (i) or (ii) above, as applicable, by the
combined dollar value of the Escrow Shares and the Escrow Cash in the 
Escrow Fund at the time of payment.                                   

(iv) Immediately after the second anniversary payment to the
   Indemnified Party as provided in the preceding clauses (i) and (iii), the
     Escrow Agent shall release to the Stockholder Representative the balance of
the Escrow Fund except for the Facility Escrow Fund, if any, the Annex
   Escrow Fund, if any, the Tax and Receivables Escrow Fund, and Escrow Cash
Interest and Escrow Cash Dividends attributable to the Facility Escrow
Fund, the Annex Escrow Fund and the Tax and Receivables Escrow Fund.  

          (v) Upon the completion of the third anniversary payment, if any, from
    the Escrow Fund to the Indemnified Party pursuant to the preceding clauses
 (ii) and (iii), the balance of the Escrow Fund shall be released by the
   Escrow Agent to the Stockholder Representative, subject to the provisions
of Section 5.19.                                                      

    (h) Distribution Principles and Procedures. Payments and releases from the
Escrow Fund shall be made in accordance with the following principles and       
procedures:                                                                     

      (i) The amount of the claims payable to the Indemnified Party from
     Escrow Cash shall be equal to the product of the claims amount and the Cash
Election Percentage. The balance of the claims amount shall be paid by
   delivery to the Indemnified Party of the number of Escrow Shares equal to
  the amount of the balance of the claims amount divided by the average of
the closing prices of the SYSCO Common Stock as reported on the NYSE  
  Composite Recording Tape (as reported in The Wall Street Journal, or, if
   not reported therein, any other authoritative source) during the ten (10)
  trading days ending two (2) trading days prior to the applicable payment
date.                                                                 

        (ii) Escrow Cash (plus Escrow Cash Interest) and Escrow Shares (plus
Escrow Shares Dividends) shall be distributed by the Stockholder      
   Representative to each former DFI Stockholder in accordance with any Cash
Election made by each such former DFI Stockholder.                    

(i) Basket. Notwithstanding any other provision of this Agreement, the
Indemnified Party shall have no right to receive proceeds from the Escrow Fund  
for Post-Closing Adjustments under Section 2.03(b)(i) unless the aggregate      
amount of valid claims for such Post-Closing Adjustments exceeds $100,000 (the  
"General Basket"), and then only to the extent that the aggregate amount of such
Post-Closing Adjustments exceeds $100,000.                                      

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SECTION 2.05  EXCLUSIVE REMEDY.                                                 

  Except as provided in Section 7.05 for termination expenses, SYSCO's and
the Surviving Corporation's sole and exclusive right to monetary damages with   
respect to breaches of this Agreement shall be claims against the Escrow Fund as
set out in this Section 2.04.                                                   

ARTICLE III 

REPRESENTATIONS AND WARRANTIES

SECTION 3.01  REPRESENTATIONS AND WARRANTIES OF DFI.                            

  Except as disclosed in the Disclosure Schedule delivered by DFI to SYSCO
and attached hereto prior to the execution of this Agreement as supplemented and
amended (the "DFI Disclosure Schedule"), DFI represents and warrants to SYSCO as
follows:                                                                        

 (a) Organization, Standing and Corporate Power. (i) Each of DFI and its
subsidiaries (as defined in Section 8.03) is a corporation or other legal entity
duly organized, validly existing and (with respect to jurisdictions which       
recognize such concept) in good standing under the laws of the jurisdiction in  
which it is organized, has the requisite corporate or other power, as the case  
may be, and authority to carry on its business as now being conducted and is    
duly qualified to do business as a foreign corporation or other legal entity in 
each jurisdiction in which the character of its activities or ownership of its  
assets requires such qualification, except for those jurisdictions where the    
failure to be so organized, existing, in good standing or qualified individually
or in the aggregate would not have a material adverse effect (as defined in     
Section 8.03) on DFI.                                                           

  (ii) DFI has delivered to SYSCO prior to the execution of this Agreement
complete and correct copies of any amendments to its articles of incorporation  
(the "DFI Certificate") and bylaws not filed as of the date hereof with the DFI 
Filed SEC Documents (as defined in Section 3.01(g)(v)) below.                   

  (b) Subsidiaries. Exhibit 21 to DFI's Annual Report on Form 10-K for the
fiscal year ended December 26, 1998 includes all the subsidiaries of DFI which  
as of the date of this Agreement are Significant Subsidiaries (as defined in    
Rule 1-02 of Regulation S-X of the SEC). Section 3.01(b) of the DFI Disclosure  
Schedule lists all subsidiaries of DFI not listed on said Exhibit 21. All the   
outstanding shares of capital stock of, or other equity interests in, each such 
Significant Subsidiary have been validly issued and are fully paid and          
non-assessable and are owned directly or indirectly by DFI, free and clear of   
all pledges, claims, liens, charges, encumbrances and security interests of any 
kind or nature whatsoever (collectively, "Liens") and free of any other         
restriction (including any restriction on the right to vote, sell or otherwise  
dispose of such capital stock or other ownership interests), other than Liens   
and restrictions imposed by DFI's debt agreements included as exhibits to the   
DFI Filed SEC Documents.                                                        

    (c) Capital Structure. (i) The authorized capital stock of DFI consists of
4,000,000 shares of DFI Common Stock, (A) 1,495,023 shares of which are issued  
and outstanding; and (B) 112,500 shares of which are reserved for issuance      
pursuant to all stock option, restricted stock or other stock-based             
compensation, benefits or savings plans, agreements or arrangements in which    
current or former employees or directors of DFI or its subsidiaries participate 
as of the date hereof (including, without limitation, the DFI Option Plan)      
(collectively, the "DFI Stock Plans"). Section 3.01(c) of the DFI Disclosure    
Schedule lists all DFI Stock Plans, if any, other than the DFI Option Plan.     
Section 3.01(c) of the DFI Disclosure Schedule sets forth a complete and correct
list of the number of shares of DFI Common Stock subject to employee stock      
options or other rights to purchase or receive DFI Common Stock granted under   
the DFI Stock Plans (collectively, "DFI Employee Stock Options"), the dates of  
grant and exercise prices thereof.                                              

 (ii) All outstanding shares of capital stock of DFI are, and all shares
which may be issued will be, when issued, duly authorized, validly issued, fully
paid and non-assessable and not subject to preemptive rights. Except as set     
forth in this Section 3.01(c), (x) there are not issued, reserved for issuance  
or outstanding (A) any shares of capital stock or other voting securities of    
DFI, (B) any securities of DFI or any DFI subsidiary convertible into or        
exchangeable or exercisable for shares of capital stock or voting securities of 

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DFI, (C) any warrants, calls, options or other rights to acquire from DFI or any
DFI subsidiary, and any obligation of DFI or any DFI subsidiary to issue, any   
capital stock, voting securities or securities convertible into or exchangeable 
or exercisable for capital stock or voting securities of DFI, and (y) there are 
no outstanding obligations of DFI or any DFI subsidiary to repurchase, redeem or
otherwise acquire any such securities or to issue, deliver or sell, or cause to 
be issued, delivered or sold, any such securities. There are no outstanding (A) 
securities of DFI or any DFI subsidiary convertible into or exchangeable or     
exercisable for shares of capital stock or other voting securities or ownership 
interests in any DFI subsidiary, (B) warrants, calls, options or other rights to
acquire from DFI or any DFI subsidiary, and any obligation of DFI or any DFI    
subsidiary to issue, any capital stock, voting securities or other ownership    
interests in, or any securities convertible into or exchangeable or exercisable 
for any capital stock, voting securities or ownership interests in, any DFI     
subsidiary or (C) obligations of DFI or any DFI subsidiary to repurchase, redeem
or otherwise acquire any such outstanding securities of DFI subsidiaries or to  
issue, deliver or sell, or cause to be issued, delivered or sold, any such      
securities.                                                                     

(iii) Except as described in Section 3.01(b) of the DFI Disclosure    
Schedule, neither DFI nor any DFI subsidiary is a party to any agreement        
restricting the purchase or transfer of, relating to the voting of, requiring   
registration of, or granting any preemptive or, except as provided by the terms 
of the DFI Employee Stock Options, anti-dilutive rights with respect to, any    
securities of the type referred to in the two preceding sentences. Other than   
the DFI subsidiaries, DFI does not directly or indirectly beneficially own any  
securities or other beneficial ownership interests in any other entity.         

     (d) Authority; Non-contravention. (i) DFI has all requisite corporate power
and authority to enter into this Agreement and, subject to the DFI Stockholder  
Approval (as defined in Section 3.01(m)), to consummate the transactions        
contemplated hereby.                                                            

   (ii) The execution and delivery of this Agreement and the consummation by
DFI of the transactions contemplated hereby have been duly authorized by all    
necessary corporate action on the part of DFI, subject to the DFI Stockholder   
Approval. This Agreement has been duly executed and delivered by DFI and,       
assuming the due authorization, execution and delivery thereof by SYSCO,        
constitutes (or will constitute, as the case may be) the legal, valid and       
binding obligation of DFI, enforceable against DFI in accordance with its terms.

(iii) The execution and delivery of this Agreement does not, and the  
consummation of the transactions contemplated hereby and compliance with the    
provisions of this Agreement will not, give rise to any termination or other    
right under, conflict with, or result in any violation of, or default (with or  
without notice or lapse of time, or both) under, (A) the DFI Certificate or the 
bylaws of DFI or the comparable organizational documents of any of its          
subsidiaries, (B) any loan or credit agreement, note, bond, mortgage, indenture,
trust document, lease or other contract, agreement, instrument, permit,         
concession, franchise, license or similar authorization applicable to DFI or any
of its subsidiaries or their respective properties or assets or (C) subject to  
the governmental filings and other matters referred to in the following         
sentence, any judgment, order, decree, statute, law, ordinance, rule or         
regulation applicable to DFI or any of its subsidiaries or their respective     
properties or assets.                                                           

(iv) No consent, approval, order or authorization of, action by or in 
respect of, or registration, declaration or filing with, any federal, state,    
local or foreign government, any court, administrative, regulatory or other     
governmental agency, commission or authority or any non-governmental            
self-regulatory agency, commission or authority (a "Governmental Entity") is    
required by or with respect to DFI or any of its subsidiaries in connection with
the execution and delivery of this Agreement by DFI or the consummation by DFI  
of the transactions contemplated hereby, except for:                            

     1) the filing of a pre-merger notification and report form by DFI
    under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act");                                                      

       2) the filing with the SEC of (A) a proxy statement relating to the
DFI Stockholders Meeting (as defined in Section 5.01(b)) (such proxy  
statement, as amended or supplemented from time to time, the          

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    "Proxy Statement"), and (B) such reports under Section 13(a), 13(d), 15(d)
  or 16(a) of the Exchange Act, as may be required in connection with this
Agreement and the transactions contemplated hereby;                   

          3) the filing of the Certificate of Merger with the Secretary of State
    of Delaware and the Virginia State Corporation Commission, and appropriate
 documents with the relevant authorities of other states in which DFI is
 qualified to do business and such filings with Governmental Entities to
     satisfy the applicable requirements of state securities or "blue sky" laws;
and                                                                   

        4) such consents, approvals, orders or authorizations the failure of
     which to be made or obtained individually or in the aggregate would not (x)
have a material adverse effect on DFI or (y) reasonably be expected to
    impair the ability of DFI to perform its obligations under this Agreement.

(e) SEC Documents; Undisclosed Liabilities. DFI has filed all DFI SEC 
Documents (as defined in Section 8.03) with the SEC since December 31, 1996. As 
of their respective dates, the DFI SEC Documents complied in all material       
respects with the requirements of the Securities Act, or the Exchange Act, as   
the case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such DFI SEC Documents, and none of the DFI SEC Documents when    
filed contained any untrue statement of a material fact or omitted to state a   
material fact required to be stated therein or necessary in order to make the   
statements therein, in light of the circumstances under which they were made,   
not misleading. The financial statements of DFI included in the DFI SEC         
Documents comply as to form, as of their respective dates of filing with the    
SEC, in all material respects with applicable accounting requirements and the   
published rules and regulations of the SEC with respect thereto, have been      
prepared in accordance with GAAP (except, in the case of unaudited statements,  
as permitted by Form 10-Q of the SEC) applied on a consistent basis during the  
periods involved (except as may be indicated in the notes thereto) and fairly   
present the consolidated financial position of DFI and its consolidated         
subsidiaries as of the dates thereof and the consolidated results of their      
operations and cash flows for the periods then ended (subject, in the case of   
unaudited statements, to normal year-end audit adjustments). DFI has not treated
as restructuring charges any significant expenses that DFI would otherwise have 
expensed against operating income in the ordinary course of business. Except (i)
as reflected in such financial statements or in the notes thereto or (ii) for   
liabilities incurred in connection with this Agreement or the transactions      
expressly contemplated hereby, neither DFI nor any of its subsidiaries has any  
liabilities or obligations which, individually or in the aggregate, would have a
material adverse effect on DFI.                                                 

(f) Information Supplied. None of the information supplied or to be   
supplied by DFI specifically for inclusion or incorporation by reference in (i) 
the registration statement on Form S-4 (as defined in Section 8.03) will, at the
time the Form S-4 becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be  
stated therein or necessary to make the statements therein not misleading or    
(ii) the Proxy Statement will, at the date it is first mailed to DFI's          
stockholders or at the time of the DFI Stockholders Meeting, contain any untrue 
statement of a material fact or omit to state any material fact required to be  
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the requirements of the    
Exchange Act and the rules and regulations thereunder, except that no           
representation or warranty is made by DFI with respect to statements made or    
incorporated by reference therein based on information supplied by SYSCO, if    
any, specifically for inclusion or incorporation by reference in the Proxy      
Statement.                                                                      

   (g) Absence of Certain Changes or Events. Except for liabilities incurred
in connection with this Agreement or the transactions expressly contemplated    
hereby, and except as permitted by Section 4.01(a), since December 26, 1998, DFI
and its subsidiaries have conducted their business only in the ordinary course  
consistent with past practice or as disclosed in any DFI SEC Document filed     
since such date and prior to the date hereof, and there has not been            

        (i) any material adverse change (as defined in Section 8.03) in DFI,

     (ii) any declaration, setting aside or payment of any dividend or
     other distribution (whether in cash, stock or property) with respect to any
of DFI's capital stock,                                               

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    (iii) any split, combination or reclassification of any of DFI's
   capital stock or any issuance or the authorization of any issuance of any
     other securities in respect of, in lieu of or in substitution for shares of
     DFI's capital stock, except for issuances of DFI Common Stock upon exercise
    or conversion of DFI Employee Stock Options, in each case awarded prior to
the date hereof in accordance with their present terms,               

          (iv) (A) any granting by DFI or any of its subsidiaries to any current
   or former director, executive officer or other key employee of DFI or its
subsidiaries of any increase in compensation, bonus or other benefits,
    except for normal increases as a result of promotions, normal increases of
  base pay in the ordinary course of business or as was required under any
 employment agreements in effect as of December 26, 1998 or disclosed in
    Section 3.01(i) of the DFI Disclosure Schedule, (B) any granting by DFI or
   any of its subsidiaries to any such current or former director, executive
     officer or key employee of any increase in severance or termination pay, or
    (C) any entry by DFI or any of its subsidiaries into, or any amendment of,
   any employment, deferred compensation, consulting, severance, termination
or indemnification agreement with any such current or former director,
executive officer or key employee,                                    

        (v) any change in accounting methods, principles or practices by DFI
    materially affecting its assets, liabilities or business except insofar as
   may have been disclosed in DFI SEC Documents filed and publicly available
prior to the date of this Agreement or required by a change in GAAP,  

          (vi) any tax election that individually or in the aggregate would have
a material adverse effect on DFI or any of its tax attributes or any  
settlement or compromise of any material income tax liability except  
insofar as may have been disclosed in the DFI SEC Documents, or       

       (vii) any action taken by DFI or any of the DFI subsidiaries during
    the period from December 26, 1998 through the date of this Agreement that,
if taken during the period from the date of this Agreement through the
Effective Time, would constitute a breach of Section 4.01(a).         

    (h) Compliance with Applicable Laws; Litigation. (i) DFI, its subsidiaries
and employees hold all permits, licenses, variances, exemptions, orders,        
registrations and approvals of all Governmental Entities which are required for 
the operation of the businesses of DFI and its subsidiaries (the "DFI Permits"),
except where the failure to have any such DFI Permits individually or in the    
aggregate would not have a material adverse effect on DFI. Section 3.01(h) of   
the DFI Disclosure Schedule lists all of the Permits. DFI and its subsidiaries  
are in compliance with the terms of the DFI Permits and all applicable statutes,
laws, ordinances, rules and regulations, except where the failure so to comply  
individually or in the aggregate would not have a material adverse effect on    
DFI. As of the date of this Agreement, except as disclosed in the DFI SEC       
Documents, no action, demand, requirement or investigation by any Governmental  
Entity and no suit, action or proceeding by any person, in each case with       
respect to DFI or any of its subsidiaries or any of their respective properties,
is pending or, to the knowledge (as defined in Section 8.03) of DFI, threatened,
other than, in each case, those the outcome of which individually or in the     
aggregate would not (A) have a material adverse effect on DFI or (B) reasonably 
be expected to impair the ability of DFI to perform its obligations under this  
Agreement or prevent or materially delay the consummation of any of the         
transactions contemplated hereby.                                               

(ii) Neither DFI nor any DFI subsidiary is subject to any outstanding 
order, injunction or decree which has had or, insofar as can be reasonably      
foreseen, individually or in the aggregate will have, a material adverse effect 
on DFI.                                                                         

 (i) Absence of Changes in Benefit Plans. (i) DFI has delivered to SYSCO
true and complete copies of (A) all severance and employment agreements of DFI  
with directors, executive officers or key employees, (B) all severance programs 
and policies of each of DFI and each DFI subsidiary, and (C) all plans or       
arrangements of DFI and each DFI subsidiary relating to its employees which     
contain change in control provisions, in each case which has not been filed as  
an exhibit to a DFI SEC Document. DFI has also delivered (in each case which has
not been filed as an exhibit to DFI SEC Document) to SYSCO true and complete    
copies of (x) any "employee benefit plan (as defined by Section 3(3) of the     
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and (y)  
any other material bonus, pension, profit                                       

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sharing, deferred compensation, commission, incentive compensation, stock       
ownership, stock purchase, stock option, phantom stock, retirement, retention,  
vacation, fringe benefit, severance, disability, death benefit, hospitalization,
sick leave, medical or other plan, trust fund, arrangement or understanding     
providing benefits to any current or former employee, officer or director of DFI
or any of its wholly owned subsidiaries or any beneficiary thereof (each such   
plan, agreement, policy, trust fund or arrangement, together with the agreements
and policies described in clauses (A), (B) and (C) of the preceding sentence,   
are referred to herein as a "DFI Benefit Plan", and collectively, the "DFI      
Benefit Plans").                                                                

    (ii) Since December 26, 1998, there has not been any adoption or amendment
in any material respect by DFI or any of its subsidiaries of any collective     
bargaining agreement, employment agreement, consulting agreement, severance     
agreement, or DFI Benefit Plan, or any material change in any actuarial or other
assumption used to calculate funding obligations with respect to any DFI Benefit
Plan which is an 'employee pension benefit plan' (as defined by Section 3(2) of 
ERISA) (a "DFI Pension Plan"), or any material change in the manner in which    
contributions to any DFI Pension Plans are made or the basis on which such      
contributions are determined. Since December 26, 1998, neither DFI nor any DFI  
subsidiary has amended any DFI Employee Stock Options or any DFI Stock Plans to 
accelerate the vesting of, or release restrictions on, awards thereunder, or to 
provide for such acceleration in the event of a change in control.              

     (j) Financial Statements. The financial statements included in DFI's Annual
Report on Form 10-K for the fiscal year ended December 26, 1998 and such other  
periodic reports filed with the SEC under the Exchange Act since such date      
(collectively, together with DFI's Annual Report on Form 10-K for the fiscal    
year ended December 26, 1998, the "Financial Statements") have been prepared in 
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved ("GAAP") (except, in the case of unaudited    
statements, as permitted by Form 10-Q of the SEC and except as may be indicated 
in the notes thereto) and fairly present the consolidated financial position of 
DFI and its subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to year-end audit adjustments).                        

    (k) ERISA Compliance. (i) DFI has delivered to SYSCO, with respect to each
DFI Benefit Plan, true and complete copies of (A) the documents embodying and   
relating to the plan, including, without limitation, the current plan documents 
and documents creating any trust maintained pursuant thereto, all amendments,   
investment management agreements, administrative service contracts, group       
annuity contracts, insurance contracts, collective bargaining agreements, the   
most recent summary plan description with each summary of material modification,
if any, and employee handbooks, (B) annual reports including but not limited to 
Forms 5500, 990 and 1041 for the last three (3) years for the plan and any      
related trust, (C) actuarial valuation reports and financial statements for the 
last three (3) years, and (D) each communication involving the plan or any      
related trust received since December 31, 1995 to or from the Internal Revenue  
Service ("IRS"), Department of Labor ("DOL"), Pension Benefit Guaranty          
Corporation ("PBGC") or any other governmental authority including, without     
limitation, the most recent determination letter received from the IRS          
pertaining to any DFI Benefit Plan intended to qualify under Sections 401(a) or 
501(c)(9) of the Code.                                                          

  (ii) DFI has no obligation to contribute to or provide benefits pursuant
to, and has no other liability of any kind with respect to, (A) a "multiple     
employer welfare arrangement" (within the meaning of Section 3(40) of ERISA), or
(B) a "plan maintained by more than one employer" (within the meaning of Section
413(c) of the Code).                                                            

  (iii) Each DFI Benefit Plan has been administered in accordance with its
terms, except for any failures so to administer any DFI Benefit Plan that       
individually or in the aggregate would not have a material adverse effect on    
DFI. DFI, its subsidiaries, any ERISA Affiliate (hereby defined to include any  
trade or business, whether or not incorporated, other than DFI, which has       
employees who are or have been at any date of determination occurring within the
preceding six (6) years, treated pursuant to Section 4001(a)(14) of ERISA and/or
Section 414 of the Code as employees of a single employer which includes DFI)   
and all the DFI Benefit Plans have been operated, and are in compliance with the
applicable provisions of ERISA, the Code and all other applicable laws and the  
terms of all applicable collective bargaining agreements, except for any        
failures to be in such compliance that individually or in the aggregate would   
not have a material adverse                                                     

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effect on DFI. No fact or event has occurred since the date of any determination
letter from the IRS that is reasonably likely to affect adversely the qualified 
status of any such DFI Benefit Plan or the exempt status of any such trust,     
except for the enactment of legislation that requires changes in any DFI Benefit
Plan the date for adoption of which has not yet passed.                         

   (iv) No DFI Benefit Plan has incurred an "accumulated funding deficiency"
(within the meaning of Section 302 of ERISA or Section 412 of the Code) whether 
or not waived. There are not any facts or circumstances that would materially   
adversely change the funded status of any DFI Benefit Plan that is a "defined   
benefit" plan (as defined in Section 3(35) of ERISA) since the date of the most 
recent actuarial report for such plan.                                          

     (v) With respect to any DFI Benefit Plan that is a "multiemployer plan" (as
defined in Section 3(37) of ERISA), (A) neither DFI nor any of its subsidiaries 
has any contingent liability under Section 4204 of ERISA, and no circumstances  
exist that present a material risk that any such plan will go into              
reorganization, and (B) the aggregate withdrawal liability of DFI and its       
subsidiaries, computed as if a complete withdrawal by DFI and any of its        
subsidiaries had occurred under each such DFI Benefit Plan on the date hereof,  
would not be material.                                                          

(vi) No employee of DFI will be entitled to any material payment,     
additional benefits or any acceleration of the time of payment or vesting of any
benefits under any DFI Benefit Plan as a result of the transactions contemplated
by this Agreement (either alone or in conjunction with any other event such as a
termination of employment), except that substantially all DFI Employee Stock    
Options will vest as of the date on which DFI Stockholder Approval is obtained. 

(vii) All payments required by any DFI Benefit Plan, any collective   
bargaining agreement or by law (including all contributions, insurance premiums,
premiums due the PBGC or intercompany charges) with respect to all periods      
through the date hereof have been made.                                         

(viii) Other than ordinary claims for benefits, no claim, lawsuit,    
arbitration or other action has been asserted or instituted or threatened in    
writing against any DFI Benefit Plan, any trustee or fiduciaries thereof, DFI or
any ERISA Affiliate, any director, officer or employee thereof, or any of the   
assets of a DFI Benefit Plan or any related trust.                              

    (ix) No DFI Benefit Plan is under audit or investigation by the IRS or the
DOL or any other governmental authority and no such completed audit, if any, has
resulted in the imposition of any tax, interest or penalty.                     

    (x) If a DFI Benefit Plan purports to be a voluntary employees beneficiary
association ("VEBA"), a request for a determination letter for the VEBA has been
submitted to and approved by the IRS that the VEBA is exempt from federal income
tax under Section 501(c)(9) of the Code, and nothing has occurred or is expected
to occur that caused or could cause the loss of such qualification or exemption 
or the imposition of any tax, interest or penalty with respect thereto.         

(xi) No DFI Benefit Plan has been terminated under circumstances which
would result in liability to the PBGC.                                          

(xii) In the case of a DFI Benefit Plan that is subject to Title IV of
ERISA, no proceeding has been or is expected to be initiated to terminate the   
plan.                                                                           

 (xiii) DFI is not subject to any liens, and excise or other taxes under
ERISA, the Code or other applicable law relating to any DFI Benefit Plan; has   
not ceased operations at a facility so as to become subject to the provisions of
Section 4062(e) of ERISA; has not withdrawn as a substantial employer so as to  
become subject to the provisions of Section 4063 of ERISA; and has not ceased   
making contributions to any DFI Benefit Plan subject to 4064(a) of ERISA to     
which DFI or any ERISA Affiliate made contributions at any time during the six  
(6) years prior to the date hereof.                                             

    (xiv) No amounts payable under any DFI Benefit Plan or any agreements with
DFI employees will fail to be deductible for federal income tax purposes by     
virtue of Section 280G of the Code;                                             

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   (xv) No DFI Benefit Plan in any way provides for any benefits of any kind
whatsoever (other than under COBRA, the Federal Social Security Act or any DFI  
Benefit Plan qualified under Section 401(a) of the Code) to any DFI Employee    
who, at the time the benefit is to be provided, is a former director or employee
of, or other provider of services to, DFI or an ERISA Affiliate (or a           
beneficiary of any such person), nor have any representations, agreements,      
covenants or commitments been made to provide such benefits. Neither SYSCO nor  
the Surviving Corporation will have any liability with respect to such benefits 
or as a result of any representations, agreements, covenants or commitments to  
provide such benefits offered or made by or on behalf of DFI.                   

   (xvi) Any contribution, insurance premium, excise tax, interest charge or
other liability or charge imposed or required with respect to any DFI Benefit   
Plan which is attributable to any period or any portion of any period prior to  
the Closing shall be reflected as a liability on the Closing Balance Sheet,     
including, without limitation (A) any portion of the matching contribution      
required with respect to the Doughtie's Foods, Inc. Retirement Savings and      
401(k) Plan for the plan year ending after the Closing which is attributable to 
elective contributions made by participants in such plan prior to the Closing   
and assuming that all participants are employed by DFI as of the end of such    
plan year, and (B) an amount equal to a pro rata portion of the quarterly       
contribution requirement with respect to any DFI pension plan for the quarter   
beginning immediately prior to the Closing, based on the number of days that    
will have elapsed from such date through the Closing.                           

(l) Taxes. For purposes of this Agreement, "Income Tax" shall mean any
federal, state, local, or foreign income tax, including any interest, penalty,  
or addition thereto, whether disputed or not; "Income Tax Return" shall mean any
return, declaration, report, claim for refund, or information return or         
statement relating to Income Taxes, including any schedule or attachment        
thereto, and including any amendment thereof. "Tax" shall mean all Income Taxes 
and any other franchise, capital stock, property, personal property, tangible,  
intangible, withholding, FICA, unemployment compensation, disability, transfer, 
sales, use, excise, registration, license, occupation, environmental,           
alternative or add-on minimum, estimated and all other Taxes (including         
interest, penalties or additions associated therewith), for which DFI or any of 
its subsidiaries may have any liability imposed by the United States or any     
State, county, city, or municipality or other governmental subdivision thereof, 
whether disputed or not. Except as disclosed in Section 3.01(1) of the DFI      
Disclosure Schedule:                                                            

          (i) all Income Tax Returns, including estimated returns and reports of
   every material kind which are due to have been filed by DFI or any of its
  subsidiaries in accordance with applicable law, have been duly filed and
are true, correct and complete in all respects;                       

       (ii) all Taxes paid on or before the date hereof, together with any
amounts accrued as liabilities for Taxes (whether accrued as currently
    payable or deferred) on the books of DFI or its subsidiaries and reflected
  in the Closing Balance Sheet will be adequate to satisfy all liabilities
 for Taxes of DFI or any of its subsidiaries in any jurisdiction for all
periods ending on or before the Closing Date (excluding, however, any 
   liability for Taxes attributable to the transactions contemplated by this
Agreement);                                                           

        (iii) no Income Tax claims have been asserted, or to DFI's knowledge
   proposed or threatened against DFI or any of its subsidiaries, and (other
    than the pending audit identified in Section 3.01(1) of the DFI Disclosure
 Schedule) no audit or investigation of any return or report of Taxes is
currently underway, pending or, to DFI's knowledge, threatened;       

        (iv) there are no outstanding waivers or agreements by DFI or any of
    its subsidiaries for an extension of time for the assessment of any Income
  Taxes or deficiencies thereof, nor are there any requests for Income Tax
rulings, outstanding subpoenas, requests for information, or any other
  matter pending between DFI or any of its subsidiaries and any Income Tax
authority;                                                            

        (v) neither DFI nor any of its subsidiaries is a party to any Income
 Tax allocation or sharing agreement, except for agreements which relate
exclusively to DFI and its subsidiaries;                              

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          (vi) neither DFI nor any of its subsidiaries has any liability for the
Income Taxes of any Person (other than DFI or any of its subsidiaries)
    under Treasury Regulation sec.1.1502-6 (or any similar provision of State,
local or foreign law);                                                

(m) Voting Requirements. The affirmative vote at the DFI Stockholders 
Meeting of the holders of a two-thirds majority of all outstanding shares of DFI
Common Stock to adopt this Agreement (the "DFI Stockholder Approval") is the    
only vote of the holders of any class or series of DFI's capital stock necessary
to approve and adopt this Agreement and the transactions contemplated hereby,   
including the Merger.                                                           

 (n) State Takeover Statutes; Certain Provisions of DFI Certificate. The
Board of Directors of DFI has adopted a resolution or resolutions approving this
Agreement and the transactions contemplated hereby and, assuming the accuracy of
SYSCO's representation and warranty contained in Section 3.02(g), such approval 
constitutes approval of the Merger and the other transactions contemplated      
hereby by the DFI Board of Directors under the provisions of Article 14, to the 
extent applicable, of the VSCA such that Article 14 of the VSCA does not apply  
to this Agreement and the transactions contemplated hereby. To the knowledge of 
DFI, except for Article 14 of the VSCA (which has been rendered inapplicable),  
no state takeover statute is applicable to the Merger or the other transactions 
contemplated hereby.                                                            

(o) Brokers. No broker, investment banker, financial advisor or other 
person other than Mann, Armistead & Epperson, Ltd., the fees and expenses of    
which will be paid by DFI, is entitled to any broker's, finder's, financial     
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of  
DFI. DFI has furnished to SYSCO true and complete copies of all agreements under
which any such fees or expenses are payable and all indemnification and other   
agreements related to the engagement of the persons to whom such fees are       
payable.                                                                        

  (p) Opinion of Financial Advisors. DFI has received the opinion of Mann,
Armistead & Epperson, Ltd., dated the date of this Agreement, to the effect     
that, as of such date, the Exchange Ratio for the conversion of DFI Common Stock
into SYSCO Common Stock is fair from a financial point of view to holders of    
shares of DFI Common Stock (other than SYSCO and its affiliates), signed copies 
of which opinion have been delivered to SYSCO on or before the date of this     
Agreement, it being understood and agreed by SYSCO that such opinion is for the 
benefit of the Board of Directors of DFI and may not be relied upon by SYSCO or 
its affiliates.                                                                 

 (q) Intellectual Property. DFI and its subsidiaries own or have a valid
license to use, and Section 3.01(q) of the DFI Disclosure Schedule lists, all   
trademarks, service marks, trade names, patents and copyrights (including any   
registrations or applications for registration of any of the foregoing)         
(collectively, the "DFI Intellectual Property") necessary to carry on its       
business substantially as currently conducted except for such DFI Intellectual  
Property the failure of which to own or validly license individually or in the  
aggregate would not have a material adverse effect on DFI. Neither DFI nor any  
such subsidiary has received any notice of infringement of or conflict with,    
and, to DFI's knowledge, there are no infringements of or conflicts (i) with the
rights of others with respect to the use of, or (ii) by others with respect to, 
any DFI Intellectual Property that individually or in the aggregate, in either  
such case, would have a material adverse effect on DFI.                         

     (r) Certain Contracts. (i) Except as set forth in Section 3.01() of the DFI
Disclosure Schedule, neither DFI nor any of its subsidiaries is a party to or   
bound by (A) any "material contract" (as such term is defined in Item 601(b)(10)
of Regulation S-K of the SEC), (B) any non-competition agreement or any other   
agreement or obligation which purports to limit in any material respect the     
manner in which, or the localities in which, all or any material portion of the 
business of DFI and its subsidiaries, taken as a whole, is or would be          
conducted, (C) any exclusive supply or purchase contracts or any exclusive      
requirements contracts or (D) any contract or other agreement which would       
prohibit or materially delay the consummation of the Merger or any of the       
transactions contemplated by this Agreement (all contracts of the type described
in clauses (A) through (D) being referred to herein as "DFI Material            
Contracts").                                                                    

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  (ii) Section 3.01(r) of the DFI Disclosure Schedule sets forth a list of
the contracts dealing with current or future rights or obligations of DFI and   
meeting any of the criteria set forth in clauses 1) through 13) below and       
denotes which of those are DFI Material Contracts.                              

        1) Any single contract or purchase order (other than purchase orders
for inventory in the ordinary course of business) providing for an    
expenditure by DFI in excess of $5,000.                               

        2) Any contract providing for an expenditure by DFI for the purchase
of real property.                                                     

        3) any contract with respect to any DFI Intellectual Property (other
than licenses for widely available, off-the-shelf software).          

       4) Any contract pursuant to which DFI is the lessee or sublessee of
any real or personal property (other than leases of personal property 
 leased in the ordinary course of business with annual lease payments no
greater than $5,000).                                                 

       5) Any contract pursuant to which DFI is the lessor or sublessor of
any real or personal property.                                        

        6) Any loan agreement, indenture, promissory note, conditional sales
 agreement, security agreement, letter of credit arrangement, guarantee,
indemnity, surety, foreign exchange contract, accommodation or other  
similar type of agreement.                                            

         7) Any written sales agency, sales representation, distributorship or
franchise agreement.                                                  

  8) Any contract providing for the payment of any cash or other
     benefits upon the sale or change of control of DFI or a substantial portion
of its assets.                                                        

        9) Any joint venture, partnership and other contract (however named)
    involving a sharing of profits, losses, costs or liabilities by any of DFI
or its subsidiaries with any other person or entity.                  

    10) Any contract containing covenants that restrict the business
   activity of any of DFI or its subsidiaries or limit the freedom of any of
DFI or its subsidiaries to engage in any line of business.            

          11) Any power of attorney that is currently effective and outstanding.

          12) Any contract with any director, officer, shareholder, employee, or
affiliates of any of the foregoing entered into by any of DFI or its  
subsidiaries.                                                         

        13) any other written or unwritten agreement that is Material to the
business of any of DFI or its subsidiaries.                           

     (iii) DFI has delivered to SYSCO, prior to the execution of this Agreement,
complete and correct copies of all DFI Material Contracts not filed as exhibits 
to the DFI Filed SEC Documents. Each DFI Material Contract is valid and binding 
on DFI (or, to the extent a DFI subsidiary is a party, such subsidiary) and is  
in full force and effect, and DFI and each DFI subsidiary have in all material  
respects performed all obligations required to be performed by them to date     
under each DFI Material Contract, except where such noncompliance, individually 
or in the aggregate, would not have a material adverse effect on DFI. Neither   
DFI nor any DFI subsidiary knows of, or has received notice of, any violation or
default under (nor, to the knowledge of DFI, does there exist any condition     
which with the passage of time or the giving of notice or both would result in  
such a violation or default under) any DFI Material Contract.                   

(s) Environmental Liability. (i) To DFI's knowledge after due         
investigation:                                                                  

        1) All of the real property currently or formerly owned or leased by
   DFI or its subsidiaries along with any other property at which DFI or its
     subsidiaries have operated (the "Property") is (or, as to Property formerly
owned or leased, was during the period of such ownership or lease, and
currently is) free of Hazardous Substances (as defined below) or      
underground storage tanks.                                            

   2) The Property is not and never has been subject to a release,
emission, spill, dislocation or discharge of any Hazardous Substances.

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3) Section 3.01(s) of the DFI Disclosure Schedule lists any 
environmental site assessments or similar reports pertaining to the   
     Property commissioned or controlled by DFI or in its possession, and copies
of same have been provided to SYSCO.                                  

4) DFI has not caused or permitted, nor is it aware that any
    predecessor in interest has caused or permitted the generation, treatment,
  handling, production, storage, disposal, release, refinement, dumping or
burying of any Hazardous Substances, disposal in, on, or under the    
   Property, nor has DFI caused any of such materials to be delivered to any
   other property for dumping, burying or any other purpose which was not in
    accordance with the Environmental Laws (as defined below) in such a manner
  or to such a location that has or will cause DFI, SYSCO or the Surviving
    Corporation to incur any liability under the Environmental Laws, including
with regard to the handling of Hazardous Substances, and is not a     
"notifier" under CERCLA or "generator" under RCRA.                    

   5) Except as set forth in Section 3.01(s) of the DFI Disclosure
Schedule, any underground storage tank on the Property currently or   
formerly used in the operations of DFI complies with all Environmental
Laws.                                                                 

     6) The information which DFI has provided SYSCO pertaining to the
environmental history of the Property for the period during which the 
     Property has been owned or used by DFI is true, correct and complete in all
material respects.                                                    

     (ii) There are no agreements between DFI and any governmental agency or any
private party concerning the Environmental Laws or relating to Hazardous        
Substances.                                                                     

 (iii) There are no Environmental Laws applicable to DFI or the Property
that would require DFI to obtain the approval of or provide notice to any       
governmental authority which has not been obtained or provided as a condition to
the consummation of the transactions contemplated by this Agreement.            

     (iv) DFI has not given, nor, to DFI's knowledge after due investigation, is
it required to give, notice of the presence or detection of Hazardous Substances
pursuant to any of the Environmental Laws, except as required generally by such 
laws, nor has DFI received notice that any property currently or formerly owned 
or operated by DFI is on any state or federal list of "Superfund" sites, or any 
list of inactive hazardous substance sites.                                     

 (v) There is no pending or, to DFI's knowledge after due investigation,
threatened claim, litigation or proceeding before any court or any governmental 
or administrative body in which any person or entity alleges the presence,      
disposal, transportation, arranging for disposal, discharge, spill, release, or 
threat of release of any Hazardous Substances at or from the Property which, if 
determined adversely, could create liability on the part of DFI, SYSCO or the   
Surviving Corporation, nor is DFI aware of any facts or circumstances that would
reasonably lead it to believe that any person or governmental authority may     
allege any of the foregoing. To DFI's knowledge after due investigation, the    
Property and the business of DFI and its subsidiaries are and have been in      
material compliance with all Environmental Laws, and neither DFI, its           
subsidiaries nor the Property has incurred any liability thereunder.            

    (vi) For the purposes of this Agreement, "Hazardous Substances" shall mean
petroleum products, flammable explosives, radioactive materials, asbestos or any
material containing polychlorinated biphenyls and/or any hazardous, toxic or    
dangerous waste, substance or any similar item so defined by and as regulated   
under Environmental Laws. Excepted from such definition are those building      
materials within, or on or a part of structures on the Property in compliance   
with the Environmental Laws and Hazardous Substances typically used in a        
business such as DFI's, but only to the extent that of such quantities normally 
used in such a business, and only to the extent that such Hazardous Substances  
have been used, stored and disposed of in accordance with all Environmental     
Laws.                                                                           

   (vii) For the purposes of this Agreement, "Environmental Laws" shall mean
all applicable federal, state and local rules, laws, statutes, ordinances and   
regulations that govern health, safety and the environment, including without   
limitation, the Resource Conservation and Recovery Act of 1976, as amended (42  
U.S.C.A. sec.sec. 6901 et seq.) ("RCRA"), the Comprehensive Environmental       
Response, Compensation and Liability Act,                                       

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as amended (42 U.S.C.A. sec.sec. 9601 et seq.)("CERCLA"), the Emergency Planning
and Community Right-to-Know Act of 1986 (42 U.S.C.A. sec.sec. 11001 et seq.),   
the Clean Air Act, as amended (42 U.S.C.A. sec.sec. 7401), the Federal Water    
Pollution Control Act, as amended (33 U.S.C.A. sec.sec. 1251 et seq.), the Toxic
Substances Control Act and the Occupational Health & Safety Act of 1970, as     
amended (29 U.S.C.A. sec.sec. 651 et seq.).                                     

    (viii) For the purposes of this Section 3.01(s), "to DFI's knowledge after
due investigation" means that officers of DFI have reviewed or caused the review
of internal files regarding the environmental condition and compliance with     
Environmental Laws of the Property or DFI and have interviewed employees of DFI 
who are known to such officers to have knowledge regarding the environmental    
condition and compliance with Environmental Laws of the Property or DFI.        

     (t) Inventory. The inventory of DFI and its subsidiaries, net of reasonable
(in accordance with past practices of DFI and industry standards) reserves,     
consists of Salable inventory of a quality and quantity generally maintained and
sold in the ordinary course of business. For purposes hereof, inventory is      
"Salable" only if it (including its packaging) is in the physical condition to  
be sold to customers in the ordinary course of business and in accordance with  
industry standards and applicable government regulations; provided, however,    
that "Salable" inventory does not include                                       

        (i) any item whose supplier notifies either SYSCO, Merger Sub or DFI
    prior to the Closing that such item may not be distributed by SYSCO or the
Surviving Corporation following Closing,                              

     (ii) any items which are private label products for customers who
immediately prior to the Closing are no longer customers of DFI,      

        (iii) items which are, pursuant to industry or government standards,
including, without limitations, U.S.D.A. standards, out-of-date (or   
   perishable product in excess, in days supply, of the normal shelf life of
such product) or                                                      

(iv) items of obsolete inventory.                           

     (u) Collective Bargaining Agreements. Section 3.01(u) of the DFI Disclosure
Schedule sets forth a true and complete list of all labor union contracts       
covering any current employees of DFI or its subsidiaries.                      

 (v) Title to and Condition of Assets. (i) DFI and its subsidiaries have
good and marketable title to all assets used or held for use in its respective  
business (and a valid and enforceable leasehold interest in all assets subject  
to leases, if any) free and clear of all encumbrances, claims, security         
interests, liens, charges, or restrictions of any kind (including those, if any,
arising in respect of the Perishable Agricultural Commodities Act).             

   (ii) All items of tangible personal property of DFI and its subsidiaries,
including each item of equipment, used in the day-to-day business of DFI and its
subsidiaries are in good working condition, ordinary wear and tear excepted.    

  (iii) Section 3.01(v) of the DFI Disclosure Schedule contains a true and
correct listing of all items of machinery, trucks, tractors, trailers and other 
vehicles, personal and laptop computers, refrigeration units and other warehouse
and materials handling equipment owned or leased (as denoted thereon) by DFI or 
its subsidiaries.                                                               

(w) Internet Presence. Section 3.01(w) of the DFI Disclosure Schedule 
describes DFI's public, private or reserved presence on the world wide web,     
multi-party extranet, virtual private network, or similar internet based, linked
system, if any, ("Internet Presence"). DFI's domain name(s), if any, are        
currently registered with the currently authorized Internet Domain Name         
Registrar and are in good standing. DFI warrants that its Internet Presence, if 
any, is wholly passive and informational in nature and involves no interactivity
between third parties and DFI including purchases, sales, leases or other       
commercial transactions conducted in any degree by or through the Internet      
Presence.                                                                       

(x) Year 2000 Compliance. For the purposes of this Section 3.01(x),   
"Computer Systems" means all computer software, hardware, related systems and   
equipment, and all other devices containing or utilizing embedded computer      
chips, which are owned, leased, or used by DFI or its subsidiaries and which are
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reasonably necessary for the performance of the business obligations and        
operations of DFI and its subsidiaries. Section 3.01(x) of the DFI Disclosure   
Schedule summarizes the actions taken and to be taken by DFI (collectively, the 
"Y2K Actions") to ensure that the Computer Systems will function normally       
before, during, and after the change from the year 1999 to the year 2000.       
Subject to the uncertainties set forth in Section 3.01(x) of the Disclosure     
Schedule, upon completion of the Y2K Actions, the Computer Systems will, to     
DFI's knowledge, process data which includes date values from, into and between 
the twentieth (20th) and the twenty-first (21st) centuries and all uses in any  
manner of such date values ("Calendar Related Data") with such accuracy so as   
not to have a material adverse effect on the day to day operation of DFI's      
business taken as a whole or the servicing of its customers in the ordinary     
course of its business.                                                         

   (y) Immigration Matters. (i) With respect to all employees (as defined in
Section 274a.1(g) of Title 8, Code of Federal Regulations) of DFI and its       
subsidiaries, DFI and its subsidiaries have complied with the Immigration Reform
and Control Act of 1986, as amended, and all regulations promulgated thereunder 
("IRCA") with respect to the completion, maintenance and other documentary      
requirements of Forms I-9 (Employment Eligibility Verification Forms) for all   
current and former employees and the reverification of the employment status of 
any and all employees whose employment authorization documents indicated a      
limited period of employment authorization.                                     

 (ii) Section 3.01(y) of the DFI Disclosure Schedule contains a true and
complete list of all employees of DFI who are not citizens of the United States 
of America and who are not permanent residents of the United States of America, 
together with a true and complete list of the visa status and visa expiration   
dates of such employee.                                                         

  (iii) DFI has employed only individuals authorized to work in the United
States, DFI has not received any written notice of any inspection or            
investigation relating to its alleged noncompliance with or violation of IRCA,  
nor has it been warned, fined, or otherwise penalized by reason of any failure  
to comply with IRCA.                                                            

  (iv) The consummation of the transactions contemplated by this Agreement
will not, (i) give rise to any liability for the failure to properly complete   
and update Forms I-9, (ii) give rise to any liability for the employment of     
individuals not authorized to work in the United States and (iii) or cause any  
current employee to become unauthorized to work in the United States.           

     (z) Books and Records; Copies of Documents. (i) DFI has provided SYSCO with
reasonable access to its books and records. DFI has maintained all books and    
records in the ordinary course of its business and has not disposed of or       
destroyed any books and records other than in the ordinary course of its        
business.                                                                       

   (ii) DFI has delivered or made available to SYSCO true and correct copies
of each agreement or other document listed or referred to herein or in the DFI  
Disclosure Schedule not previously filed as an exhibit to the DFI Filed SEC     
Documents.                                                                      

    (aa) Accounts Receivable. (i) All of DFI's accounts receivable outstanding
at the date hereof and those arising from and after the date hereof prior to the
Effective Time (collectively, the "Closing Accounts Receivable") are and will be
bona fide, and arose or will arise in the ordinary course of business. No person
has any liens on such Closing Accounts Receivable, or any part thereof, and no  
agreement for deduction or discount has been made with respect to any such      
accounts receivable which is not reflected in the outstanding balance thereof.  
Section 3.01(aa) of the DFI Disclosure Schedule sets forth all receivables of   
DFI as of March 31, 1999 and at Closing will set forth all Closing Accounts     
Receivable, showing the face amount of each and denoting which such accounts    
are, by their terms, past due (the "Past Due Accounts"). All Closing Accounts   
Receivable are fully collectible within three years from the Closing Date.      

     (ii) For purposes of measuring DFI's compliance with the representation and
warranty set forth in clause (i): (A) the measure of DFI's non-compliance with  
clause (i) above shall equal the excess of the face amount of the Closing       
Accounts Receivable as of the Closing Date over the collections received by the 
Surviving Corporation on the Closing Accounts Receivable from the Closing Date  
through the third anniversary thereof and applied as provided in clause (B)     
immediately following; (B) all collections received by the Surviving Corporation
on Past Due Accounts shall be applied to the latest invoice of the respective   
payor account debtor except to the extent otherwise expressly directed in       
writing by such account debtor and all collections received                     
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by the Surviving Corporation on the Closing Accounts Receivable which are not   
Past Due Accounts shall be applied in accordance with the past practices of DFI;
and (C) SYSCO and the Surviving Corporation shall use their customary accounts  
receivable collection practices in respect of the Closing Accounts Receivable   
and shall be entitled to make all decisions as to credit-worthiness of Closing  
Accounts Receivable account debtors in their sole discretion.                   

 (iii) Following Closing, SYSCO shall control collections of the Closing
Accounts Receivable until the first anniversary of the Closing Date, from and   
after which time SYSCO shall, upon request of the Stockholder Representative,   
transfer responsibility for such collections to Stockholder Representative      
provided that Stockholder Representative agrees at the time of such request to  
continue any legal proceedings that may have been initiated prior thereto in    
connection with such collections. At any time from and after the first          
anniversary of the Closing Date, the Stockholder Representative shall have the  
right to buy from SYSCO or the Surviving Corporation any one or more of the     
Closing Accounts Receivable for the face amount of its outstanding balance at   
the time of such purchase and a Claims Fee as provided in an undisputed or      
resolved claim to SYSCO or the Surviving Corporation. Funds for any such        
purchase before the second anniversary of the Closing shall be provided from the
Representative's Fund or such other funding arrangements as may be arranged by  
and at the discretion of the Stockholder Representative; funds for any such     
purchase after the second anniversary of the Closing Date shall be provided from
the Tax and Receivables Escrow Fund.                                            

     (iv) SYSCO and the Stockholder Representative shall provide each other with
periodic (no less often than quarterly) reports of the status and results of the
collection activities of each of them with respect to the Closing Accounts      
Receivable under their respective control as well as the then-current           
outstanding balance of each of such accounts.                                   

    (bb) Insurance. Section 3.01(bb) of the DFI Disclosure Schedule contains a
list of all current policies of insurance, including without limitation, workers
compensation, vehicular, general liability, casualty, medical, dental and       
disability, maintained by DFI or any of its subsidiaries. None of such policies 
provides for a retroactive adjustment based on DFI's claims experience. True and
complete copies of all such policies have been delivered to SYSCO. Section      
3.01(bb) of the DFI Disclosure Schedule includes a list of the policies, the    
name of the insurer, the nature of the insurance coverage, the policy limits and
the deductible, all of which policies are in full force and effect and there is 
no delinquency in the payment of all applicable premiums thereon.               

   (cc) Liabilities as Guarantor. Neither DFI nor any subsidiary is directly
or indirectly (i) liable by guaranty, indemnity, surety or similar obligation   
upon or with respect to, (ii) obligated in any way to make investments in or    
loans to, or (iii) obligated to guarantee or assume any debt, liability or other
obligation of, any person, corporation, association, partnership or other       
entity.                                                                         

(dd) Bank Accounts; Powers of Attorney. Section 3.01 (dd) of the DFI  
Disclosure Schedule sets forth a complete and accurate list of:                 

   (i) the name of each financial institution in which DFI has any
account or safe deposit box;                                          

(ii) the names in which the accounts or boxes are held;     

(iii) the type of account;                                  

     (iv) the name of each person authorized to draw thereon or having
access thereto; and                                                   

          (v) the name of each person, corporation, firm or other entity holding
  a general or special power of attorney from DFI and a description of the
terms of such power.                                                  

(ee) Unlawful Payments. Neither DFI nor to the knowledge of DFI any   
director, officer, agent, employee, or other person associated with or acting on
behalf of DFI has, directly or indirectly                                       

   (i) used any corporate funds for unlawful contributions, gifts,
   entertainment, or other unlawful expenses relating to political activity;

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    (ii) made any unlawful payment to domestic or foreign government
officials or employees, or to domestic or foreign political parties or
campaigns, from corporate funds;                                      

        (iii) violated any provision of the Foreign Corrupt Practices Act of
1977, as amended;                                                     

     (iv) established or maintained any unlawful or unrecorded fund of
corporate monies or other assets;                                     

          (v) made any false or fictitious entry on the books or records of DFI;

        (vi) made any bribe, rebate, payoff, influence payment, kickback, or
other unlawful payment;                                               

     (vii) given any favor or gift which is not deductible for federal
income tax purposes; or                                               

    (viii) made any bribe, kickback or other payment of a similar or
    comparable nature, whether lawful or not, to any person or entity, private
    or public, regardless of form, whether in money, property, or services, to
obtain favorable treatment in securing business or to obtain special  
    concessions, or to pay for favorable treatment for business secured or for
special concessions already obtained.                                 

  (ff) Labor and Employment Matters. (i) DFI has been and is in compliance
with all applicable laws respecting employment and employment practices, terms  
and conditions of employment and wages and hours, including without limitation  
any such laws respecting employment discrimination, workers' compensation,      
family and medical leave, the non-compliance with which would have a material   
adverse effect and occupational safety and health requirements, and has not and 
is not engaged in any unfair labor practice that would have a material adverse  
effect;                                                                         

    (ii) there is not now, nor within the past three years has there been, any
unfair labor practice complaint against DFI pending, or to DFI's knowledge      
threatened, before the National Labor Relations Board or any other comparable   
authority;                                                                      

     (iii) there is not now, nor within the past three (3) years has there been,
any labor strike, slowdown or stoppage actually pending, or to DFI's knowledge  
threatened, against or directly affecting DFI;                                  

     (iv) to DFI's knowledge, no labor representation organization effort exists
nor has there been any such activity within the past three years; and           

(v) no grievance or arbitration proceeding arising out of or under    
collective bargaining agreements is pending and, to DFI's knowledge, no claims  
therefor exist or have been threatened.                                         

 (gg) Closing Adjusted Net Worth. The Closing Adjusted Net Worth of DFI,
determined as provided in Section 2.01(g)(ii), will equal or exceed the Net     
Worth of DFI as reflected on the audited consolidated balance sheet of DFI as of
December 26, 1998, contained in the Financial Statements.                       

  (hh) No Dissenters' Rights. Neither the execution and delivery hereof by
the parties hereto nor the consummation of the transactions contemplated hereby 
will give rise to any dissenters' rights under the VSCA.                        

SECTION 3.02  REPRESENTATIONS AND WARRANTIES OF SYSCO AND MERGER SUB.           

    SYSCO and Merger Sub jointly and severally represent and warrant to DFI as
follows:                                                                        

   (a) Organization, Standing and Corporate Power. (i) Each of SYSCO and its
subsidiaries is a corporation or other legal entity duly organized, validly     
existing and (with respect to jurisdictions which recognize such concept) in    
good standing under the laws of the jurisdiction in which it is organized and   
has the requisite corporate or other power, as the case maybe, and authority to 
carry on its business as now being conducted, except, as to subsidiaries, for   
those jurisdictions where the failure to be so organized, existing or in good   
standing individually or in the aggregate would not have a material adverse     
effect on SYSCO.                                                                

  (ii) SYSCO has delivered to DFI prior to the execution of this Agreement
complete and correct copies of any amendments to its certificate of             
incorporation (the "SYSCO Certificate") and bylaws not filed as of the date     
hereof with the SYSCO SEC Documents.                                            

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  (b) Capital Structure. The authorized capital stock of SYSCO consists of
500,000,000 shares of SYSCO Common Stock and 1,500,000 shares of preferred      
stock, par value $1.00 per share ("SYSCO Preferred Stock"), and shares of SYSCO 
Common Stock issued and outstanding (including shares of restricted SYSCO Common
Stock) and held by SYSCO in its treasury are as disclosed in the appropriate    
SYSCO SEC Documents; no shares of SYSCO Preferred Stock are issued and          
outstanding. Other than the SYSCO subsidiaries, SYSCO does not directly or      
indirectly beneficially own any securities or other beneficial ownership        
interests in any other entity except for non-controlling investments made in the
ordinary course of business in entities which are not individually or in the    
aggregate material to SYSCO and its subsidiaries as a whole.                    

(c) Authority; Non-contravention. Each of SYSCO and Merger Sub has all
requisite corporate power and authority to enter into this Agreement and to     
consummate the transactions contemplated hereby. The execution and delivery of  
this Agreement by each of SYSCO and Merger Sub and the consummation by SYSCO and
Merger Sub of the transactions contemplated hereby have been duly authorized by 
all necessary corporate action on the part of SYSCO and Merger Sub. This        
Agreement has been duly executed and delivered by SYSCO and Merger Sub and,     
assuming the due authorization, execution and delivery thereof by DFI,          
constitute (or will constitute, as the case may be) the legal, valid and binding
obligation of SYSCO and Merger Sub enforceable against SYSCO and Merger Sub in  
accordance with its terms. The execution and delivery of this Agreement does    
not, and the consummation of the transactions contemplated hereby and compliance
with the provisions of this Agreement will not, conflict with, or result in any 
violation of, or default (with or without notice or lapse of time, or both)     
under, (i) the SYSCO Certificate or the bylaws of SYSCO or the comparable       
organizational documents of any of its subsidiaries, (ii) any loan or credit    
agreement, note, bond, mortgage, indenture, trust document, lease or other      
agreement, instrument, permit, concession, franchise, license or similar        
authorization applicable to SYSCO or any of its subsidiaries or their respective
properties or assets or (iii) subject to the governmental filings and other     
matters referred to in the following sentence, any judgment, order, decree,     
statute, law, ordinance, rule or regulation applicable to SYSCO or any of its   
subsidiaries or their respective properties or assets. No consent, approval,    
order or authorization of, action by, or in respect of, or registration,        
declaration or filing with, any Governmental Entity is required by or with      
respect to SYSCO or any of its subsidiaries in connection with the execution and
delivery of this Agreement by SYSCO and Merger Sub or the consummation by SYSCO 
or Merger Sub of the transactions contemplated hereby, except for (1) the filing
of a pre-merger notification and report form by SYSCO under the HSR Act; (2) the
filing with the SEC of (A) the Form S-4 and (B) such reports under Section      
13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may be required in          
connection with this Agreement and the transactions contemplated hereby; (3) the
filing of the Certificate of Merger with the Secretary of State of Delaware and 
the Virginia State Corporation Commission and appropriate documents with the    
relevant authorities of other states in which SYSCO is qualified to do business 
and such filings with Governmental Entities to satisfy the applicable           
requirements of state securities or "blue sky" laws; (4) such filings with and  
approvals of the NYSE to permit the shares of SYSCO Common Stock that are to be 
issued in the Merger to be listed on the NYSE; and (5) such consents, approvals,
orders or authorizations the failure of which to be made or obtained            
individually or in the aggregate would not (x) have a material adverse effect on
SYSCO or (y) reasonably be expected to impair the ability of SYSCO or Merger Sub
to perform its obligations under this Agreement.                                

(d) SEC Documents; Undisclosed Liabilities. SYSCO has filed all       
registration statements, prospectuses, reports, schedules, forms, statements and
other documents (including exhibits and all other information incorporated      
therein) required to be filed with the SEC since December 31, 1996 (the "SYSCO  
SEC Documents"). As of their respective dates, the SYSCO SEC Documents complied 
in all material respects with the requirements of the Securities Act or the     
Exchange Act, as the case may be, and the rules and regulations of the SEC      
promulgated thereunder applicable to such SYSCO SEC Documents, and none of the  
SYSCO SEC Documents when filed contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary  
in order to make the statements therein, in light of the circumstances under    
which they were made, not misleading.                                           

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(e) Information Supplied. None of the information supplied or to be   
supplied by SYSCO specifically for inclusion or incorporation by reference in   
(i) the Form S-4 will, at the time the Form S-4 becomes effective under the     
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the        
statements therein not misleading or (ii) the Proxy Statement will, at the date 
it is first mailed to DFI's stockholders or at the time of the DFI Stockholders 
Meeting, contain any untrue statement of a material fact or omit to state any   
material fact required to be stated therein or necessary in order to make the   
statements therein, in light of the circumstances under which they are made, not
misleading. The Form S-4 will comply as to form in all material respects with   
the requirements of the Securities Act and the rules and regulations thereunder,
except that no representation or warranty is made by SYSCO with respect to      
statements made or incorporated by reference therein based on information       
supplied by DFI specifically for inclusion or incorporation by reference in the 
Form S-4.                                                                       

(f) Brokers. No broker, investment banker, financial advisor or other 
person, the fees and expenses of which will be paid by SYSCO, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in   
connection with the transactions contemplated by this Agreement based upon      
arrangements made by or on behalf of SYSCO.                                     

  (g) Continuity of Business. SYSCO will continue at least one significant
historic business line of DFI, will use at least a significant portion of DFI's 
historic business assets in a business, and will otherwise satisfy the          
continuity of business enterprise requirement set forth within Treasury         
Regulations sec.1.368-1(d).                                                     

ARTICLE IV

COVENANTS RELATING TO CONDUCT OF BUSINESS 

SECTION 4.01  CONDUCT OF BUSINESS.                                              

(a) Conduct of Business by DFI. (i) Except (A) as otherwise expressly 
contemplated by this Agreement or the transactions contemplated hereby, or (B)  
as expressly consented to by SYSCO in writing, such consent not to be           
unreasonably withheld or delayed, during the period from the date of this       
Agreement to the Effective Time,                                                

     1) DFI shall, and shall cause its subsidiaries to, carry on their
    respective businesses in the ordinary course consistent with past practice
 and in compliance in all material respects with all applicable laws and
regulations, and, to the extent consistent therewith, use good faith  
     reasonable efforts to preserve intact their current business organizations,

         2) except as may be required by law or any plan, program, contract or
     arrangement in effect on the date of this Agreement, during the period from
    the date of this Agreement to the Effective Time, DFI shall not, and shall
   not permit any of its subsidiaries to, (A) grant to any current or former
     director, officer, any regional vice president or president of any division
 of DFI or its subsidiaries any increase in compensation, bonus or other
   benefits, except as required by employment agreements in effect as of the
     date hereof; (B) grant to any such current or former director, officer, any
regional vice president or president of any division any increase in  
    severance or termination pay; or (C) enter into, or amend, any employment,
deferred compensation, consulting, severance, termination or          
indemnification agreement with any such current or former director,   
officer, regional vice president or president of any division, or     

         3) except as may be required by law or any plan, program, contract or
     arrangement in effect on the date of this Agreement, during the period from
  the date hereof through the Effective Time, DFI shall not, and shall not
  permit any of its subsidiaries to adopt or amend (and to DFI's knowledge
since December 26, 1998, DFI has not and has not permitted any of its 
     subsidiaries to, adopt or amend) any collective bargaining agreement (other
    than renegotiations required by any such collective bargaining agreement),
     or other DFI Benefit Plans, in any manner. Anything in this Section 4.01(a)
  to the contrary notwithstanding, DFI and any DFI subsidiary shall not be
   deemed in violation of this Section 4.01(a) if such violation is cured to
the satisfaction of SYSCO prior to the Effective Time.                

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   (ii) Without limiting the generality of the foregoing (but subject to the
above exceptions), during the period from the date of this Agreement to the     
Effective Time, DFI shall not, and shall not permit any of its subsidiaries to: 

     1) other than dividends and distributions declared by a direct or
 indirect wholly owned subsidiary of DFI to its parent, or declared by a
subsidiary that is partially owned by DFI or any of its subsidiaries, 
provided that DFI or any such subsidiary receives or is to receive its
   proportionate share thereof, or regular quarterly dividends not to exceed
  $.03 per share, (x) declare, set aside or pay any dividends on, make any
     other distributions in respect of, or enter into any agreement with respect
to the voting of, any of its capital stock, (y) split, combine or     
   reclassify any of its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for 
    shares of its capital stock, except for issuances of DFI Common Stock upon
the exercise of DFI Employee Stock Options, outstanding as of the date
     hereof in accordance with their present terms (including cashless exercise)
     or (z) purchase, redeem or otherwise acquire any shares of capital stock of
DFI or any of its subsidiaries or any other securities thereof or any 
    rights, warrants or options to acquire any such shares or other securities
 (except, in the case of clause (z), for the deemed acceptance of shares
 upon cashless exercise of DFI Employee Stock Options outstanding on the
date hereof, or in connection with withholding obligations relating   
thereto);                                                             

       2) issue, deliver, sell, pledge or otherwise encumber or subject to
  any Lien any shares of its capital stock, any other voting securities or
any securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities.

       3) amend its articles of incorporation, by-laws or other comparable
organizational documents;                                             

          4) acquire or agree to acquire by merging or consolidating with, or by
    purchasing a substantial portion of the assets of, or by any other manner,
 any business or any person, or, except for transactions in the ordinary
   course of business consistent with past practice pursuant to contracts or
agreements in force at the date of this Agreement or pursuant to DFI's
     current capital and operating budgets (in each case, as previously provided
   to SYSCO), make any investment either by purchase of stock or securities,
   contributions to capital, property transfers, or purchase of any property
     or assets of any other individual, corporation or other entity other than a
subsidiary of DFI;                                                    

         5) sell, lease, license, mortgage or otherwise encumber or subject to
     any Lien or otherwise dispose of any of its properties or assets (including
    securitizations), other than in the ordinary course of business consistent
with past practice;                                                   

        6) make any tax election that individually or in the aggregate would
have a material adverse effect on DFI or any of its tax attributes or 
settle or compromise any income tax liability;                        

  7) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an        
accommodation become responsible for the obligations of any person for
borrowed money, other than pursuant to a revolving credit facility or 
receivables facility in effect as of the date hereof, in the ordinary 
course of business consistent with past practice;                     

        8) settle any claim, action or proceeding involving money damages in
  excess of $10,000, except with the prior written consent of SYSCO, which
shall not be unreasonably withheld;                                   

          9) enter into or terminate any material contract or agreement, or make
any change in any of its material leases or contracts, other than     
 amendments or renewals of contracts and leases without material adverse
changes of terms; or                                                  

   10) authorize, or commit or agree to take, any of the foregoing
actions;                                                              

11) provided that the limitations set forth in this Section 
4.01(a)(ii) (other than clause 3)) shall not apply to any transaction 
 between DFI and any wholly owned subsidiary or between any wholly owned
subsidiaries of DFI.                                                  

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    (b) Other Actions. Except as required by law, DFI and SYSCO shall not, and
shall not permit any of their respective subsidiaries to, voluntarily take any  
action that would, or that could reasonably be expected to, result in (i) any of
the representations and warranties of such party set forth in this Agreement    
that are qualified as to materiality becoming untrue at the Effective Time, (ii)
any of such representations and warranties that are not so qualified becoming   
untrue in any material respect at the Effective Time, or (iii) any of the       
conditions to the Merger set forth in Article VI not being satisfied.           

    (c) Advice of Changes. DFI and SYSCO shall promptly advise the other party
orally and in writing to the extent it has knowledge of (i) any representation  
or warranty made by it contained in this Agreement that is qualified as to      
materiality becoming untrue or inaccurate in any respect or any such            
representation or warranty that is not so qualified becoming untrue or          
inaccurate in any material respect, (ii) the failure by it to comply in any     
material respect with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by it under this Agreement and    
(iii) any change or event having, or which, insofar as can reasonably be        
foreseen, could reasonably be expected to have a material adverse effect on such
party or on the truth of such party's representations and warranties or the     
ability of the conditions set forth in Article VI to be satisfied; provided,    
however, that no such notification shall affect the representations, warranties,
covenants or agreements of the parties (or remedies with respect thereto) or the
conditions to the obligations of the parties under this Agreement.              

SECTION 4.02  NO SOLICITATION OR NEGOTIATIONS.                                  

   DFI shall not, directly or indirectly, solicit or encourage (including by
way of furnishing information), or authorize any individual, corporation or     
other entity to solicit or encourage (including by way of furnishing            
information), from any third party any inquiries or proposals relating to, or   
conduct negotiations or discussions with any third party with respect to, or    
take any other action to facilitate any inquiries or the making of any proposal 
that constitutes, or that may reasonably be expected to lead to, any proposal or
offer relating to the disposition of its business or assets, or the acquisition 
of its voting securities, or the merger or consolidation of it or any of its    
subsidiaries with or into any corporation or other entity other than as provided
in this Agreement (and DFI shall promptly notify SYSCO of all of the relevant   
details relating to all inquiries and proposals which it may receive relating to
any such matters). Nothing contained in this Section 4.02 or Section 5.01 shall 
prohibit DFI from taking and disclosing to its stockholders a position          
contemplated by Rule 14e-2(a) promulgated under the Exchange Act.               

ARTICLE V 

ADDITIONAL AGREEMENTS 

SECTION 5.01  S-4 AND PROXY STATEMENT.                                          

As soon as practicable following the date of this Agreement, DFI shall
prepare and file with the SEC the Proxy Statement, and SYSCO shall prepare and  
file with the SEC the Form S-4, in which the Proxy Statement will be included as
a prospectus. Each of DFI and SYSCO shall use reasonable good faith efforts to  
have the Form S-4 declared effective under the Securities Act as promptly as    
practicable after such filing. DFI will use best efforts to cause the Proxy     
Statement to be mailed to DFI's stockholders as promptly as practicable after   
the Form S-4 is declared effective under the Securities Act. SYSCO shall also   
take any action (other than qualifying to do business in any jurisdiction in    
which it is not now so qualified or to file a general consent to service of     
process) required to be taken under any applicable state securities laws in     
connection with the issuance of SYSCO Common Stock in the Merger and DFI shall  
furnish all information concerning DFI and the holders of DFI Common Stock as   
may be reasonably requested in connection with any such action. No filing of, or
amendment or supplement to, the Form S-4 will be made by SYSCO without DFI's    
prior consent (which shall not be unreasonably withheld or delayed) and without 
providing DFI the opportunity to review and comment thereon. SYSCO will advise  
DFI, promptly after it receives notice thereof, of the time when the Form S-4   
has become effective or any supplement or amendment has been filed, the issuance
of any stop order, the suspension of the qualification of the SYSCO Common Stock
issuable in                                                                     

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connection with the Merger for offering or sale in any jurisdiction, or any     
request by the SEC for amendment of the Form S-4 or comments thereon and        
responses thereto or requests by the SEC for additional information. If at any  
time prior to the Effective Time any information relating to DFI or SYSCO, or   
any of their respective affiliates, officers or directors, should be discovered 
by DFI or SYSCO which should be set forth in an amendment or supplement to      
either the Form S-4 or the Proxy Statement, so that either of such documents    
would not include any misstatement of a material fact or omit to state any      
material fact necessary to make the statements therein, in light of the         
circumstances under which they were made, not misleading, the party which       
discovers such information shall promptly notify the other parties hereto and an
appropriate amendment or supplement describing such information shall be        
promptly filed with the SEC and, to the extent required by law, disseminated to 
the stockholders of DFI.                                                        

SECTION 5.02  DFI STOCKHOLDERS MEETING.                                         

DFI shall, as promptly as practicable after the Form S-4 is declared  
effective under the Securities Act, duly call, give notice of, convene and hold 
a meeting of its stockholders (the "DFI Stockholders Meeting") in accordance    
with the VSCA for the purpose of obtaining the DFI Stockholder Approval and     
shall, through its Board of Directors, recommend to its stockholders the        
approval and adoption of this Agreement, the Merger and the other transactions  
contemplated hereby. DFI will use reasonable good faith efforts to hold the DFI 
Stockholders Meeting as soon as reasonably practicable after the date hereof.   

SECTION 5.03  LETTERS OF DFI'S ACCOUNTANTS.                                     

 DFI shall use reasonable good faith efforts to cause to be delivered to
SYSCO two letters from DFI's independent accountants, one dated a date within   
two business days before the date on which the Form S-4 shall become effective  
and one dated a date within two business days before the Closing Date, each     
addressed to SYSCO, in form and substance reasonably satisfactory to SYSCO and  
customary in scope and substance for comfort letters delivered by independent   
public accountants in connection with registration statements similar to the    
Form S-4.                                                                       

SECTION 5.04  LETTERS OF SYSCO'S ACCOUNTANTS.                                   

  SYSCO shall use best efforts to cause to be delivered to DFI two letters
from SYSCO's independent accountants, one dated a date within two business days 
before the date on which the Form S-4 shall become effective and one dated a    
date within two business days before the Closing Date, each addressed to DFI, in
form and substance reasonably satisfactory to DFI and customary in scope and    
substance for comfort letters delivered by independent public accountants in    
connection with registration statements similar to the Form S-4.                

SECTION 5.05  ACCESS TO INFORMATION; CONFIDENTIALITY.                           

     From and after the date hereof through the earlier of the Effective Time or
the date of termination hereof, SYSCO and its officers, employees, accountants, 
counsel and other representatives may perform a continuing due diligence review 
of DFI and its subsidiaries, which review may include full Phase I and Phase II 
environmental investigations by an independent environmental engineering and    
consulting firm. Subject to the Confidentiality Agreement dated November 17,    
1998 between SYSCO and DFI (the "Confidentiality Agreement"), and subject to    
applicable law, DFI shall, and shall cause each of its subsidiaries to, afford  
to SYSCO and to the officers, employees, accountants, counsel, financial        
advisors and other representatives of SYSCO, reasonable access during normal    
business hours during the period prior to the Effective Time to all their       
respective properties, books, contracts, commitments, personnel and records     
(provided that such access shall not interfere with the business or operations  
of such party) and, during such period, DFI shall, and shall cause each of its  
subsidiaries to, furnish promptly to SYSCO (a) a copy of each report, schedule, 
registration statement and other document filed by it during such period        
pursuant to the requirements of federal or state securities laws and (b) all    
other information concerning its business, properties and personnel as such     
other party may reasonably request. No review pursuant to this Section 5.05     
shall affect any representation or warranty given by DFI. SYSCO will hold, and  
will cause its officers,                                                        
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employees, accountants, counsel, financial advisors and other representatives   
and affiliates to hold, any nonpublic information in accordance with the terms  
of the Confidentiality Agreement.                                               

SECTION 5.06  REASONABLE GOOD FAITH EFFORTS.                                    

(i) Upon the terms and subject to the conditions set forth in this    
Agreement, each of the parties agrees to use reasonable good faith efforts to   
take, or cause to be taken, all actions, and to do, or cause to be done, and to 
assist and cooperate with the other parties in doing, all things necessary,     
proper or advisable to consummate and make effective, in the most expeditious   
manner practicable, the Merger and the other transactions contemplated by this  
Agreement, including (A) the obtaining of all necessary actions or non-actions, 
waivers, consents and approvals from Governmental Entities and the making of all
necessary registrations and filings and the taking of all steps as may be       
necessary to obtain an approval or waiver from, or to avoid an action or        
proceeding by, any Governmental Entity, (B) the obtaining of all necessary      
consents, approvals or waivers, and any necessary or appropriate financing      
arrangements, from third parties, (C) the defending of any lawsuits or other    
legal proceedings, whether judicial or administrative, challenging this         
Agreement or the consummation of the transactions contemplated by this          
Agreement, including seeking to have any stay or temporary restraining order    
entered by any court or other Governmental Entity vacated or reversed, and (D)  
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by, and to fully carry out the purposes of, this  
Agreement.                                                                      

   (ii) In connection with and without limiting the foregoing, DFI and SYSCO
shall (A) take all action necessary to ensure that no state takeover statute or 
similar statute or regulation is or becomes applicable to this Agreement or any 
of the transactions contemplated hereby and (B) if any state takeover statute or
similar statute or regulation becomes applicable to such agreements or          
transactions, take all action necessary to ensure that such transactions may be 
consummated as promptly as practicable on the terms contemplated by this        
Agreement and otherwise to minimize the effect of such statute or regulation on 
the Merger and the other transactions contemplated by this Agreement.           

SECTION 5.07  EMPLOYMENT ARRANGEMENTS AND BENEFITS.                             

    For the purpose of any DFI Benefit Plan or other agreement that contains a
provision relating to a change in control of DFI and that is disclosed as such  
on Section 5.07 of the DFI Disclosure Schedule, SYSCO acknowledges that the     
consummation of the Merger constitutes such a change in control. DFI and SYSCO  
will cooperate on and after the date of this Agreement to develop appropriate   
employee benefit arrangements, including, but not limited to, executive and     
incentive compensation, stock option and supplemental executive retirement      
plans, for employees and directors of the Surviving Corporation and its         
subsidiaries from and after the Effective Time. Nothing in this Section 5.07    
shall be interpreted as preventing the Surviving Corporation from amending,     
modifying or terminating any DFI Benefit Plans, or other contracts,             
arrangements, commitments or understandings, in accordance with their terms and 
applicable law, or be deemed to constitute an employment contract between SYSCO 
or the Surviving Corporation and any individual, or a waiver of SYSCO's or the  
Surviving Corporation's right to discharge any employee at any time, with or    
without cause. Any employees of DFI as of Closing shall be given credit, under  
and in accordance with applicable employee benefit plans of SYSCO, toward       
eligibility and vesting but not benefit accrual for the period of time prior to 
Closing during which such persons were employees of DFI if such period of time  
would otherwise qualify for eligibility and vesting under SYSCO's plans. SYSCO  
will not waive pre-existing conditions limitations in any of its applicable     
employee welfare benefit plans for employees of DFI as of Closing but will      
recognize service with DFI in meeting the pre-existing conditions limitations of
SYSCO's employee welfare benefit plans.                                         

SECTION 5.08  DIRECTOR AND OFFICER INDEMNIFICATION, EXCULPATION, AND INSURANCE. 

   (i) SYSCO agrees to maintain in effect in accordance with their terms all
rights to indemnification and exculpation from liabilities for acts or omissions
occurring at or prior to the Effective Time existing as of the date of this     
Agreement in favor of the current or former directors or officers of DFI and its
subsidiaries. The certificate of incorporation and bylaws of the Surviving      
Corporation shall contain the provisions (and the                               

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Surviving Corporation's Certification of Incorporation and bylaws may be amended
to incorporate such provisions) with respect to indemnification that are set    
forth in the articles of incorporation and bylaws of DFI (in each case in effect
as of the Effective Time and as provided to SYSCO prior to such date), which    
provisions shall not be amended, repealed or otherwise modified, except as      
required by law, for a period of six years from the Effective Time in any manner
that would affect adversely the rights thereunder of individuals who at (or at  
any time prior to) the Effective Time were directors or officers of DFI or its  
subsidiaries (or any of its predecessors). In addition, from and after the      
Effective Time, directors and officers of DFI, if any, who become directors or  
officers of SYSCO will be entitled to the same indemnity rights and protections,
and directors' and officers' liability insurance, as are afforded from time to  
time to other directors and officers of SYSCO.                                  

 (ii) In the event that SYSCO, the Surviving Corporation or any of their
respective successors or assigns (A) consolidates with or merges into any other 
person and is not the continuing or surviving corporation or entity of such     
consolidation or merger or (B) transfers or conveys all or substantially all of 
its properties and assets to any person, then, and in each such case, proper    
provision will be made so that the successors and assigns of SYSCO or the       
Surviving Corporation (as the case may be) assume the obligations set forth in  
this Section 5.08.                                                              

     (iii) SYSCO shall use its reasonable good faith efforts to provide to DFI's
current directors and officers, for six years after the Effective Time,         
liability insurance covering acts or omissions occurring prior to the Effective 
Time with respect to those persons who are currently covered by DFI's directors'
and officers' liability insurance policy on terms with respect to such coverage 
and amount no less favorable than those of such policy in effect on the date    
hereof, provided that in no event shall SYSCO be required to expend more than   
200% of the current amount expended by DFI to maintain such coverage.           

     (iv) The provisions of this Section 5.08 are intended to be for the benefit
of, and will be enforceable by, each indemnified party, his or her heirs and his
or her representatives and are in addition to, and not in substitution for, any 
other rights to indemnification or contribution that any such person may have by
contract or otherwise.                                                          

 (v) Without limiting the generality of the foregoing, the provisions of
this Section 5.08 shall apply to any litigation, action, suit, claim,           
investigation or proceeding described in the DFI Disclosure Schedule.           

SECTION 5.09  FEES AND EXPENSES.                                                

All fees and expenses incurred in connection with the Merger, this    
Agreement, and the transactions contemplated by this Agreement shall be paid by 
the party incurring such fees or expenses, whether or not the Merger is         
consummated, except (x) to the extent set forth in Section 7.05 hereof and (y)  
that each of SYSCO and DFI shall bear and pay one-half of the costs and expenses
incurred in connection with (1) the filing, printing and mailing of the Form S-4
and the Proxy Statement (including SEC filing fees) and (2) the filings of the  
pre-merger notification and report forms under the HSR Act (including filing    
fees).                                                                          

SECTION 5.10  PUBLIC ANNOUNCEMENTS.                                             

     SYSCO and DFI will consult with each other before issuing, and provide each
other the opportunity to review, comment upon and concur with, and use          
reasonable efforts to agree on, any press release or other public statements    
with respect to the transactions contemplated by this Agreement, including the  
Merger, and shall not issue any such press release or make any such public      
statement prior to such consultation, except as either party may determine is   
required by applicable law, court process or by obligations pursuant to any     
listing agreement with any national securities exchange or stock market. The    
parties agree that the initial press release issued with respect to the         
transactions contemplated by this Agreement was in the form heretofore agreed to
by the parties.                                                                 

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SECTION 5.11  AFFILIATES.                                                       

    As soon as practicable after the date hereof, DFI shall deliver to SYSCO a
letter identifying all persons who may be deemed to be, at the time this        
Agreement is submitted for adoption by the stockholders of DFI, "affiliates" of 
DFI for purposes of Rule 145 under the Securities Act, and such list shall be   
updated as necessary to reflect changes from the date hereof. DFI shall use     
reasonable good faith efforts to cause each person identified on such list to   
deliver to SYSCO not less than 30 days prior to the Effective Time, a written   
agreement substantially in the form attached as Exhibit D hereto.               

SECTION 5.12  NYSE LISTING.                                                     

     SYSCO shall use best efforts to cause the SYSCO Common Stock issuable under
Article II to be approved for listing on the NYSE, subject to official notice of
issuance, as promptly as practicable after the date hereof, and in any event    
prior to the Closing Date.                                                      

SECTION 5.13  TAX TREATMENT.                                                    

    Each of SYSCO and DFI shall use reasonable good faith efforts to cause the
Merger to qualify as a reorganization under the provisions of Section 368 of the
Code and to obtain the opinions of counsel referred to in Section 6.01(g). The  
parties will characterize the Merger as such a reorganization for purposes of   
all tax returns and other filings.                                              

SECTION 5.14  STANDSTILL AGREEMENTS; CONFIDENTIALITY AGREEMENTS.                

 During the period from the date of this Agreement through the Effective
Time, except as SYSCO and DFI otherwise mutually agree pursuant to a written    
instrument, DFI shall not terminate, amend, modify or waive any provision of any
confidentiality or standstill agreement to which it or any of its subsidiaries  
is a party. Except as SYSCO and DFI otherwise mutually agree pursuant to a      
written instrument, during such period, DFI shall enforce, to the fullest extent
permitted under applicable law, the provisions of any such agreement, including 
by obtaining injunctions to prevent any breaches of such agreements and to      
enforce specifically the terms and provisions thereof in any court of the United
States of America or of any state having jurisdiction.                          

SECTION 5.15  CONVEYANCE TAXES.                                                 

   SYSCO and DFI shall cooperate in the preparation, execution and filing of
all returns, questionnaires, applications or other documents regarding any real 
property transfer or gains, sales, use, transfer, value added, stock transfer   
and stamp taxes, any transfer, recording, registration and other fees or any    
similar taxes which become payable in connection with the transactions          
contemplated by this Agreement that are required or permitted to be filed on or 
before the Effective Time.                                                      

SECTION 5.16  CERTAIN TAX MATTERS.                                              

    (a) Tax Returns. SYSCO will cause to be prepared and filed all Tax returns
for DFI and its subsidiaries (the "DFI Group"). The Tax returns shall be        
prepared in a manner consistent with the Tax returns previously filed by the DFI
Group and shall be filed by the due date of such returns (taking into account   
any extensions). All Taxes due and payable by the DFI Group shall be paid by the
Surviving Corporation, and SYSCO shall allow the Stockholder Representative or  
his designee a reasonable period of time to review and comment on each such Tax 
return prior to filing. SYSCO shall make such revisions to such Tax returns as  
are reasonably requested by the Stockholder Representative or its designee that 
are consistent with DFI's past practice and that in the reasonable judgment of  
counsel to SYSCO will not result in the imposition of any penalty as a result of
taking such position. If the amount of Taxes paid by the Surviving Corporation  
exceeds the amounts specifically accrued as such on the Closing Balance Sheet,  
the amount of such excess shall be released from the Escrow Fund and paid to    
SYSCO as provided in the Escrow Agreement, subject, however, to the limitations 
provided in Section 2.04 of this Agreement.                                     

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     (b) Tax Audits. Tax audits for any period ending on or prior to the Closing
Date shall be treated as third party claims pursuant to Section 2.04(f) provided
that with respect to any audits of DFI for income Taxes, including the federal  
income Tax audit currently pending, the Stockholder Representative will keep    
SYSCO informed on a current basis of all communications from the Internal       
Revenue Service and of any meetings and communications with the Internal Revenue
Service so that SYSCO will have a full opportunity to participate in the process
through its counsel as provided in Section 2.04(f)(ii).                         

SECTION 5.17  STOCKHOLDER REPRESENTATIVE.                                       

(a) Appointment; Authority. If the Merger is approved by the DFI      
Stockholders, the DFI Stockholders and the DFI Optionholders shall, without any 
further action on the part of any DFI Stockholders, be deemed to have consented 
to the appointment of Vernon W. Mules (or at his election, a limited liability  
company formed and which shall be wholly-owned by him during the term of the    
Escrow Agreement) as their representative (the "Stockholders' Representative"), 
as the attorney-in-fact for and on behalf of each DFI Stockholder, and the      
Stockholders' Representative shall be authorized thereby to take any and all    
actions and make any decisions required or permitted to be taken by him under   
this Agreement or the Escrow Agreement in connection with the consummation of   
the transactions contemplated herein and therein, including, without limitation,
the exercise of the power to (i) execute the Escrow Agreement, (ii) receive or  
give any notice on behalf of DFI Stockholders pursuant to this Agreement or the 
Escrow Agreement, (iii) authorize delivery to SYSCO or the Surviving Corporation
of the Escrow Fund, or any portion thereof, in satisfaction of claims as        
provided in Section 2.04 and Section 5.19 of this Agreement and the Escrow      
Agreement, (iv) agree to, negotiate, enter into settlements and compromises of, 
and demand arbitration and comply with orders of courts and awards of           
arbitrators with respect to such claims, (v) to vote the Escrow Shares as       
provided in the Escrow Agreement, (vi) resolve any claims and (vii) take all    
actions necessary in the judgment of the Stockholders' Representative for the   
accomplishment of the foregoing and all of the other terms, conditions and      
limitations of this Agreement and the Escrow Agreement. Each of the DFI         
Stockholders and the DFI Optionholders will be bound by all actions taken by the
Stockholders' Representative in connection with this Agreement and the Escrow   
Agreement; SYSCO, the Surviving Corporation and the Escrow Agent shall be       
entitled to rely on any action or decision of the Stockholders' Representative  
evidenced by a written document executed by the Stockholders' Representative as 
the action or decision of each of the DFI Stockholders and the DFI Optionholders
and SYSCO and the Surviving Corporation shall be held harmless from and         
indemnified out of the Escrow Fund against any claim of any DFI Stockholder in  
respect of this Section 5.17.                                                   

     (b) No Liability; Indemnification. (i) The Stockholders' Representative (in
his capacity as Stockholders' Representative and not as DFI Stockholder) shall  
not be liable with respect to any action taken or suffered by him in reliance   
upon any notice, direction, instruction, consent, statement or other document   
believed by him to be genuine and to have been signed by the proper person (and 
shall have no responsibility to determine the authenticity thereof), nor for any
other action or inaction, except his own willful misconduct or gross negligence.
In all questions arising under this Agreement or the Escrow Agreement, the      
Stockholders' Representative may rely on the advice of counsel, and for anything
done, omitted or suffered in good faith by the Stockholders' Representative     
based on such advice, the Stockholders' Representative shall not be liable to   
anyone.                                                                         

    (ii) By approval of the Merger, the DFI Stockholders and DFI Optionholders
shall be deemed to have agreed, jointly and severally, to indemnify the         
Stockholders' Representative (but only to the extent funds are available in the 
Escrow Fund after satisfaction of all claims made by SYSCO or the Surviving     
Corporation) from and against any and all liabilities, obligations, losses,     
damages, penalties, actions, judgments, suits, costs, expenses or disbursements 
of any kind or nature whatsoever which may be imposed on, incurred by, or       
asserted against the Stockholders' Representative by SYSCO or the Surviving     
Corporation, DFI, other DFI Stockholders, DFI Optionholders or any other person 
in connection with this Agreement or the Escrow Agreement.                      

(c) Appointment of Successors. The Stockholders' Representative may be
changed by the DFI Stockholders from time to time upon not less than 30 days'   
prior written notice to SYSCO or the Surviving Corporation and the Escrow Agent,
if the holders of at least a majority in interest of the Escrow Fund agree to   
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such removal and to the identity of the substituted agent. In the event that the
Stockholders' Representative dies, becomes unable to perform his or her         
responsibilities hereunder or resigns from such position, the DFI Stockholders  
holding, prior to Closing, a majority in interest of the Escrow Fund shall      
select another representative to fill such vacancy and such substituted         
representative shall be deemed to be the Stockholders' Representative for all   
purposes of this Agreement and the documents delivered pursuant hereto. No      
provision of this Agreement shall restrict in any way the ability or right of   
the Stockholders' Representative to voluntarily resign from such position at any
time, and any such resignation shall be done without any liability on the part  
of the Stockholders' Representative.                                            

   (d) Representative's Fund. Approval of the Merger by the DFI Stockholders
shall also be deemed to be approval of the establishment of a fund (the         
"Representative's Fund") to compensate the Stockholders' Representative for his 
services hereunder and to pay all expenses and fees incurred by or on behalf of 
the Stockholders' Representative in connection with the performance of his      
duties hereunder, including without limitation, the cost of suitable insurance  
coverage for the Stockholders' Representative and the fees and costs of         
attorneys, financial consultants, and other experts consulted by the            
Stockholders' Representative pursuant to his duties hereunder. The              
Representative's Fund shall be funded from the Merger Consideration by reducing 
the Merger Consideration otherwise payable to each DFI Stockholder and DFI      
Optionholder by twenty cents ($ .20) per share of DFI Common Stock exchanged    
pursuant to the Merger and transfer at Closing of the Representative's Fund to, 
or as directed in writing by, the Stockholder Representative. Upon the          
completion of the duties of the Stockholders' Representative hereunder and      
satisfaction or final resolution of all claims against the Escrow Fund and      
satisfaction of all compensation, fees, expenses, and other obligations to be   
paid out of the Representative's Fund, any funds remaining in the               
Representative's Fund shall be distributed to the DFI Stockholders and the DFI  
Optionholders in the same proportion as initially withheld.                     

     (e) Compensation; Fees and Expenses. (i) No fidelity bond shall be required
of the Stockholders' Representative, and the Stockholders' Representative shall 
receive compensation for his or her services in the amount of $50,000 per annum,
payable monthly.                                                                

    (ii) All fees and expenses incurred by the Stockholders' Representative in
carrying out his functions under this Agreement shall be paid (A) from the      
Representative's Fund, and if the Representative's Fund becomes exhausted, (B)  
from amounts, remaining in the Escrow Fund after satisfaction of all claims of  
SYSCO or the Surviving Corporation against the Escrow Fund. Upon application by 
the Stockholders' Representative to the Escrow Agent and SYSCO prior to the     
satisfaction of all claims of SYSCO or the Surviving Corporation against the    
Escrow Fund, SYSCO may in its sole and absolute discretion authorize the Escrow 
Agent to release a portion of the Escrow Fund to the Stockholders'              
Representative in reimbursement of fees and expenses incurred prior to such     
time. It is the intent of the parties hereto that such funds be released only   
if, and only to the extent that, at the time of the application by the          
Stockholders' Representative, SYSCO determines in its sole and absolute         
discretion that the Escrow Fund is more than adequate to provide such funds to  
the Stockholder Representative after full payment of all claims then made,      
pending, or threatened against the Escrow Fund.                                 

   (iii) If the Representative's Fund has been exhausted and immediate funds
are not available from the Escrow Fund, the Stockholder's Representative shall  
not be required to take any further action hereunder but shall be permitted, in 
his discretion, to borrow from any person or commercial lender of his choice,   
and on terms as negotiated by and at the discretion of the Stockholder          
Representative, funds in an amount sufficient to cover the anticipated expenses 
associated with any necessary or appropriate act hereunder. The repayment of any
such loans from the Escrow Fund shall be at the discretion of SYSCO until the   
final disbursement of the Escrow Fund has occurred as provided in the Escrow    
Agreement, shall be subordinate to claims of SYSCO and the Surviving Corporation
against the Escrow Fund and shall have priority over any distributions to the   
DFI Stockholders and the DFI Optionholders under Section 2.04.                  

(f) Reports; Audits. (i) The Stockholders' Representative shall issue 
periodic reports to the DFI Stockholders no less than once every twelve months  
beginning fourteen months after the Closing Date, in which the Stockholders'    
Representative shall summarize the status of the Escrow Fund, any claims filed  

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against the Escrow Fund, disbursements from the Representative's Fund, and any  
other matters deemed by the Stockholders' Representative to be material to the  
DFI Stockholders in connection with the Escrow Fund.                            

    (ii) Upon the written request of holders of more than ten percent (10%) in
interest of the former DFI Stockholders, the accounts and records of the        
Stockholders' Representative with respect to his duties and performance         
hereunder shall be audited at the expense of the DFI Stockholders by            
PricewaterhouseCoopers for an evaluation of compliance with the terms of this   
Agreement and the Escrow Agreement.                                             

    (g) Acceptance. The Stockholder Representative has executed this Agreement
as acknowledgment and acceptance of the provisions of this Section 5.17.        

SECTION 5.18  NON-COMPETITION AGREEMENTS.                                       

   DFI shall use its reasonable good faith efforts to cause Mules to execute
and deliver at Closing a three (3) year (from the Effective Time) covenant not  
to compete substantially in the form of Exhibit E attached hereto and to cause  
Houfek to execute and deliver at Closing a two (2) year (from the Effective     
Time) covenant not to compete substantially in the form of Exhibit E-2 attached 
hereto (which Exhibit E-2 provides that the restrictions contained therein shall
lapse in the event that during such two-year period Houfek's employment with the
Surviving Corporation is terminated by the Surviving Corporation other than for 
cause as provided therein)                                                      

SECTION 5.19  SALE/LEASEBACK.                                                   

   (i) DFI shall use its reasonable good faith efforts prior to Closing, and
the Stockholder Representative shall use his reasonable good faith efforts      
following Closing (with the reasonable cooperation of SYSCO) to bring about a   
sale of the warehouse and associated realty (other than the Annex Property (as  
hereinafter defined)) currently owned by DFI located in Portsmouth, Virginia    
(the "Facility"), and the lease of the Facility back to the Surviving           
Corporation substantially in accordance with the terms contained in the         
sale/leaseback agreement attached hereto as Exhibit F as modified by such other 
terms (including completion of the blanks in such agreement) as may be          
commercially reasonable in the area of Portsmouth, Virginia (the "Sale/Leaseback
Agreement") which provides for a purchase price of not less than $2.91 million. 

(ii) In the event that (a) a contract for such sale and leaseback     
substantially in accordance with the Sale/Leaseback Agreement has not been fully
executed at or prior to the Closing or (b) as of Closing such contract has been 
executed but (A) the purchaser named therein has the right to terminate the     
contract without forfeiture of any monetary deposit or (B) SYSCO does not have  
the right to specifically enforce such contract, an additional number of shares 
of SYSCO Common Stock (and cash payable in lieu thereof in the same proportion  
as the Cash Election Percentage) otherwise constituting Merger Consideration    
equal in value to $1.13 million (the "Facility Escrow Fund") will be placed in  
the Escrow Fund at Closing for a period of up to three (3) years as provided in 
Section 2.04.                                                                   

    (iii) If the transactions contemplated by the Sale/Leaseback Agreement are
consummated on or before the end of such period, the Facility Escrow Fund and   
interest thereon will be released from escrow to the Stockholder Representative 
for distribution to the former DFI stockholders.                                

   (iv) If such transaction is not consummated (through no fault of SYSCO or
failure by SYSCO to reasonably cooperate with the Stockholder Representative) on
or before the end of such period (or is so effected but on terms (other than    
purchase price) which are not substantially in accordance with those contained  
in the Sale/Leaseback Agreement) the Facility Escrow Fund and interest thereon  
shall be forfeited and returned to SYSCO.                                       

  (v) If such transaction is timely consummated at a price lower than that
specified in the Sale/Leaseback Agreement but otherwise substantially in        
accordance with the terms and provisions of the Sale/Leaseback Agreement, a     
portion of the Facility Escrow Fund equal to the amount of such deficiency and  
interest thereon will be forfeited and returned to SYSCO, and the balance of the
Facility Escrow Fund and interest thereon will be released to the Stockholder   
Representative for distribution to the former DFI Stockholders.                 

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(vi) All payments and distributions made pursuant to this Section 5.19
shall be in accordance with the principles and procedures set forth in Section  
2.04(h).                                                                        

   (vii) Notwithstanding the foregoing, the Stockholder Representative shall
be entitled, with the cooperation of SYSCO, to bring about the sale of the      
Facility on such terms and conditions as it shall deem appropriate (generally in
accordance with the Sale/Leaseback Agreement) if the terms of such sale are such
that SYSCO may occupy the Facility until at least ninety (90) days after the    
second anniversary of the Closing Date.                                         

SECTION 5.20  UNDERGROUND STORAGE TANK OR PORTSMOUTH FACILITY.                  

  Prior to Closing DFI shall cause the underground storage tank located at
the Facility to be removed in compliance with applicable law and (i) SYSCO and  
DFI shall share equally the cost of such tank removal and (ii) DFI shall be     
solely responsible for all costs of remediation arising in connection with said 
tank and/or such removal.                                                       

SECTION 5.21  SALE OF ANNEX PROPERTY.                                           

   (i) DFI shall use its reasonable good faith efforts prior to Closing, and
the Stockholder Representative shall use his reasonable good faith efforts      
following Closing (with the reasonable cooperation of SYSCO) to bring about a   
sale of the annex property and improvements currently owned by DFI and commonly 
identified as 2413 and 2415 Wesley Street, Portsmouth, Virginia (the "Annex     
Property"), substantially in accordance with the terms contained in the sale    
agreement attached hereto as Exhibit G (the "Sale Agreement") which provides for
a purchase price of not less than $190,000.00.                                  

(ii) In the event that (a) a contract for such sale substantially in  
accordance with the Sale Agreement has not been fully executed at or prior to   
the Closing or (b) as of Closing such contract has been executed but (A) the    
purchaser named therein has the right to terminate the contract without         
forfeiture of any monetary deposit or (B) SYSCO does not have the right to      
specifically enforce such contract, an additional number of shares of SYSCO     
Common Stock (and cash payable in lieu thereof in the same proportion as the    
Cash Election Percentage) otherwise constituting Merger Consideration equal in  
value to $70,000 (the "Annex Escrow Fund") will be placed in the Escrow Fund at 
Closing for a period of up to three (3) years as provided in Section 2.04.      

(iii) If the transactions contemplated by the Sale Agreement are      
consummated on or before the end of such period, the Annex Escrow Fund and      
interest thereon will be released from escrow to the Stockholder Representative 
for distribution to the former DFI stockholders.                                

   (iv) If such transaction is not consummated (through no fault of SYSCO or
failure by SYSCO to reasonably cooperate with the Stockholder Representative) on
or before the end of such period (or is so effected but on terms (other than    
purchase price) which are not substantially in accordance with those contained  
in the Sale Agreement) the Annex Escrow Fund and interest thereon shall be      
forfeited and returned to SYSCO.                                                

  (v) If such transaction is timely consummated at a price lower than that
specified in the Sale Agreement but otherwise substantially in accordance with  
the terms and provisions of the Sale Agreement, a portion of the Annex Escrow   
Fund equal to such deficiency and interest thereon will be released to the      
Stockholder Representative for distribution to the former DFI Stockholders.     

(vi) All payments and distributions made pursuant to this Section 5.22
shall be in accordance with the principles and procedures set forth in Section  
2.04(h).                                                                        

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ARTICLE VI

CONDITIONS PRECEDENT

SECTION 6.01  CONDITIONS TO ALL PARTIES' OBLIGATION TO EFFECT THE MERGER.       

    The respective obligation of each party to effect the Merger is subject to
the satisfaction or waiver on or prior to the Closing Date of the following     
conditions:                                                                     

(a) Stockholder Approval. The DFI Stockholder Approval shall have been
obtained.                                                                       

   (b) HSR Act. The waiting period (and any extension thereof) applicable to
the Merger under the HSR Act shall have been terminated or shall have expired.  

   (c) Governmental and Regulatory Approvals. Other than the filing provided
for under Section 1.03 and filings pursuant to the HSR Act (which are addressed 
in Section 6.01(b)), all consents, approvals and actions of, filings with and   
notices to any Governmental Entity required of DFI, SYSCO or any of their       
subsidiaries to consummate the Merger and the other transactions contemplated   
hereby (together with the matters contemplated by Section 6.01(b), the          
"Requisite Regulatory Approvals") shall have been obtained.                     

     (d) No Injunctions or Restraints. No judgment, order, decree, statute, law,
ordinance, rule or regulation, entered, enacted, promulgated, enforced or issued
by any court or other Governmental Entity of competent jurisdiction or other    
legal restraint or prohibition (collectively, "Restraints") shall be in effect  
preventing the consummation of the Merger; provided, however, that each of the  
parties hereto shall have used its reasonable good faith efforts to prevent the 
entry of any such Restraints and to appeal as promptly as possible any such     
Restraints that may be entered.                                                 

     (e) Form S-4. The Form S-4 shall have become effective under the Securities
Act prior to the mailing of the Proxy Statement by DFI to its stockholders and  
no stop order or proceedings seeking a stop order shall be threatened by the SEC
or shall have been initiated by the SEC.                                        

(f) NYSE Listing. The shares of SYSCO Common Stock issuable to DFI's  
stockholders as contemplated by Article II shall have been approved for listing 
on the NYSE subject to official notice of issuance.                             

   (g) Tax Opinions. SYSCO shall have received from Arnall Golden & Gregory,
LLP, counsel to SYSCO, and DFI shall have received from McGuire, Woods, Battle &
Boothe LLP, counsel to DFI, an opinion, dated the Closing Date, substantially to
the effect that: (i) the Merger will constitute a "reorganization" within the   
meaning of Section 368(a) of the Code, and SYSCO and DFI will each be a party to
such reorganization within the meaning of Section 368(b)of the Code; (ii) no    
gain or loss will be recognized by SYSCO or DFI as a result of the Merger; (iii)
no gain or loss will be recognized by the stockholders of DFI upon the exchange 
of their shares of DFI Common Stock for shares of SYSCO Common Stock pursuant to
the Merger, except with respect to any cash, if any, received in the Merger;    
(iv) the aggregate tax basis of the shares of SYSCO Common Stock received solely
in exchange for shares of DFI Common Stock pursuant to the Merger (including    
fractional shares of SYSCO Common Stock for which cash is received) will be the 
same as the aggregate tax basis of the shares of DFI Common Stock exchanged     
therefor increased by any gain recognized and decreased by any cash received;   
and (v) the holding period for shares of SYSCO Common Stock received in exchange
for shares of DFI Common Stock pursuant to the Merger will include the holding  
period of the shares of DFI Common Stock exchanged therefor, provided such      
shares of DFI Common Stock were held as capital assets by the stockholder at the
Effective Time. In rendering such opinions, each of counsel for SYSCO and DFI   
shall be entitled to receive and rely upon representations of fact contained in 
certificates of officers of SYSCO, DFI and stockholders of DFI, which           
representations shall be in form and substance satisfactory to such counsel.    

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SECTION 6.02  CONDITIONS TO OBLIGATIONS OF SYSCO AND MERGER SUB.                

The obligation of SYSCO and Merger Sub to effect the Merger is further
subject to satisfaction or waiver of the following conditions:                  

   (a) Representations and Warranties. The representations and warranties of
DFI set forth herein shall be true and correct both when made, and at and as of 
the Closing Date, as if made at and as of such time (except to the extent       
expressly made as of an earlier date, in which case such representations and    
warranties shall be true and correct as of such date, except where the failure  
of such representations and warranties to be so true and correct (without giving
effect to any limitation to "materiality" or "material adverse effect" set forth
therein) does not have, and is not likely to have, individually or in the       
aggregate, a material adverse effect on DFI.                                    

(b) Performance of Obligations of DFI. DFI shall have performed in all
material respects all obligations required to be performed by it under this     
Agreement at or prior to the Closing Date.                                      

     (c) Consents. DFI shall have obtained and delivered to SYSCO and Merger Sub
all consents and approvals set forth in Section 3.01(d) of the DFI Disclosure   
Schedule (other than Requisite Regulatory Approvals), each of which consent and 
approvals shall be in full force and effect at and as of the Closing.           

    (d) Closing Deliveries. All Closing deliveries required by Section 1.08(a)
to be effected by DFI shall have been effected.                                 

 (e) No Material Adverse Event. There shall not have occurred a material
adverse change or an event having a material adverse effect (as such terms are  
defined in Section 8.03).                                                       

     (f) SYSCO shall be satisfied in its sole discretion with the results of the
environmental due diligence investigation, and the financial, regulatory and    
contractual resolution of any issues which arise therefrom, in respect to (i)   
any release from the Annex Property relating to the property's use as a         
petroleum storage facility and any matter, whether or not related thereto,      
discovered after the date hereof and prior to Closing as a result of the        
investigation of such presence or use, and (ii) any underground storage tank or 
other source of the releases discovered prior to the date hereof at the property
owned by DFI located at 3051 Monroe Street, Manchester, Maryland consisting of  
approximately 48 acres (the "Maryland Property") and any matters discovered     
after the date hereof and prior to Closing as a result of the investigation of  
such tank or other source, whether or not related thereto.                      

SECTION 6.03  CONDITIONS TO OBLIGATIONS OF DFI.                                 

The obligation of DFI to effect the Merger is further subject to      
satisfaction or waiver of the following conditions:                             

   (a) Representations and Warranties. The representations and warranties of
SYSCO set forth herein shall be true and correct both when made, and at and as  
of the Closing Date, as if made at and as of such time (except to the extent    
expressly made as of an earlier date, in which case such representations and    
warranties shall be true and correct as of such date, except where the failure  
of such representations and warranties to be so true and correct (without giving
effect to any limitation to "materiality" or "material adverse effect" set forth
therein) does not have, and is not likely to have, individually or in the       
aggregate, a material adverse effect on SYSCO.                                  

   (b) Performance of Obligations of SYSCO and Merger Sub. Each of SYSCO and
Merger Sub shall have performed in all material respects all obligations        
required to be performed by it under this Agreement at or prior to the Closing  
Date.                                                                           

    (c) Closing Deliveries. All Closing deliveries required by Section 1.08(b)
to be effected by SYSCO and Merger Sub shall have been effected.                

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ARTICLE VII 

TERMINATION, AMENDMENT AND WAIVER 

SECTION 7.01  TERMINATION.                                                      

   This Agreement may be terminated at any time prior to the Effective Time,
and (except in the case of 7.01(b)(ii) or 7.01(c)(ii)) whether before or after  
the DFI Stockholder Approval:                                                   

   (a) By SYSCO and DFI Jointly. By mutual written consent of SYSCO and DFI,
if the Board of Directors of each so determines by a vote of a majority of its  
entire Board;                                                                   

     (b) By SYSCO or DFI. By either the Board of Directors of SYSCO or the Board
of Directors of DFI:                                                            

      (i) if the Merger shall not have been consummated by September 30,
1999; provided, however, that the right to terminate this Agreement   
 pursuant to this Section 7.01(b)(i) shall not be available to any party
whose failure to perform any of its obligations under this Agreement  
results in the failure of the Merger to be consummated by such time;  

          (ii) if the DFI Stockholder Approval shall not have been obtained at a
  DFI Stockholders Meeting duly convened therefor or at any adjournment or
postponement thereof;                                                 

         (iii) if any Restraint having any of the effects set forth in Section
   6.01(d) shall be in effect and shall have become final and nonappealable,
or if any Governmental Entity that must grant a Requisite Regulatory  
     Approval has denied approval of the Merger and such denial has become final
and nonappealable; provided, that the party seeking to terminate this 
    Agreement pursuant to this Section 7.01(b)(iii) shall have used reasonable
    good faith efforts to prevent the entry of and to remove such Restraint or
to obtain such Requisite Regulatory Approval, as the case may be;     

(c) By SYSCO. By the Board of Directors of SYSCO:                     

  (i) (provided that SYSCO is not then in material breach of any
     representation, warranty, covenant or other agreement contained herein), if
     DFI shall have breached or failed to perform in any material respect any of
     its representations, warranties, covenants or other agreements contained in
   this Agreement, or if DFI shall have breached or failed to perform in any
respect its covenants and agreements set forth in Section 4.01(a)(ii),
    which breach or failure to perform (A) would give rise to the failure of a
condition set forth in Section 6.02(a) or (b), and (B) is incapable of
being cured by DFI or is not cured within 45 days of written notice   
thereof;                                                              

      (ii) at any time prior to the DFI Stockholders Meeting, if the DFI
     Board of Directors shall have (A) failed to make, no later than the date of
the first mailing of the Proxy Statement to the DFI Stockholders, its 
recommendation referred to in Section 5.01(b), (B) withdrawn such     
   recommendation or (C) modified or changed such recommendation in a manner
adverse to the interests of SYSCO; and                                

         (iii) in the event that the Closing Net Worth as shown on the Closing
Balance Sheet is less than the 1998 Net Worth in breach of Section    
3.01(gg).                                                             

     (d) By DFI. By the Board of Directors of DFI (provided that DFI is not then
in material breach of any representation, warranty, covenant or other agreement 
contained herein), if SYSCO shall have breached or failed to perform in any     
material respect any of its representations, warranties, covenants or other     
agreements contained in this Agreement.                                         

SECTION 7.02  EFFECT OF TERMINATION.                                            

 In the event of termination of this Agreement by either DFI or SYSCO as
provided in Section 7.01, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of SYSCO or DFI, other  
than the provisions of the last sentence of Section 5.05, Section 5.09, this    
Section 7.02, Section 7.05 and Article VIII, which provisions shall survive such
termination, and except that, notwithstand-                                     

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ing anything to the contrary contained in this Agreement, neither SYSCO nor DFI 
shall be relieved or released from any liabilities or damages arising out of its
willful breach of any provision of this Agreement.                              

SECTION 7.03  AMENDMENT.                                                        

     Subject to compliance with applicable law, this Agreement may be amended by
the parties at any time before or after the DFI Stockholder Approval; provided, 
however, that after such approval, there may not be, without further approval of
such by the stockholders of DFI, any amendment of this Agreement that changes   
the amount or the form of the consideration to be delivered to the holders of   
DFI Common Stock hereunder, or which by law otherwise requires the further      
approval of such stockholders. This Agreement may not be amended except by an   
instrument in writing signed on behalf of each of the parties hereto and duly   
approved by the parties' respective Boards of Directors or a duly designated    
committee thereof.                                                              

SECTION 7.04  EXTENSION; WAIVER.                                                

At any time prior to the Effective Time, a party may, subject to the  
proviso of Section 7.03, (a) extend the time for the performance of any of the  
obligations or other acts of the other parties, (b) waive any inaccuracies in   
the representations and warranties of the other parties contained in this       
Agreement or in any document delivered pursuant to this Agreement or (c) waive  
compliance by the other party with any of the agreements or conditions contained
in this Agreement. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on   
behalf of such party. Any extension or waiver given in compliance with this     
Section 7.04 or failure to insist on strict compliance with an obligation,      
covenant, agreement or condition shall not operate as a waiver of, or estoppel  
with respect to, any subsequent or other failure.                               

SECTION 7.05  TERMINATION EXPENSES.                                             

    (i) In the event of a termination of this Agreement and the abandonment of
the Merger at any time (A) by SYSCO pursuant to Section 7.01(c) or (B) by SYSCO 
or DFI pursuant to Section 7.01(b)(ii), and in order to compensate SYSCO for the
expenses associated with the negotiation of this Agreement and the other matters
contemplated hereby, DFI shall, within one business day following such          
termination, pay SYSCO a fee equal to the actual cost of such reasonable and    
customary expenses, in immediately available funds.                             

     (ii) In the event of a termination of this Agreement and the abandonment of
the Merger at any time (i) by DFI pursuant to Section 7.01(d) and in order to   
compensate DFI for the expenses associated with the negotiation of this         
Agreement and the other matters contemplated hereby, SYSCO shall, within one    
business day following such termination, pay DFI a fee equal to the actual cost 
of such reasonable and customary expenses, in immediately available funds.      

     (iii) A party's right to receive the fee contemplated by this Section 7.05,
and its ability to enforce the provisions this Section 7.05, shall not be       
subject to approval by the stockholders of DFI.                                 

ARTICLE VIII

GENERAL PROVISIONS

SECTION 8.01  SURVIVAL OF AGREEMENTS.                                           

DFI's representations, warranties, covenants, other agreements and all
other obligations in this Agreement or in any document, disclosure schedule or  
instrument attached to or delivered pursuant to this Agreement shall survive the
Effective Time until the second (2nd) anniversary of the Closing, except for    
representation, warranties, covenants and obligations with respect to tax       
matters, accounts receivable, and the provisions of Section 5.19 and Section    
5.21, which shall survive until the third (3rd) anniversary of the Closing, in  
each case, at which time they shall expire and be of no further force or effect,
with the sole exception of claims theretofore made against the Escrow Fund with 
particularity and with a statement in                                           
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reasonable detail of the factual basis for such claim. (See Section 2.04). This 
Section 8.01 shall not limit any covenant or agreement of the parties which     
contemplates performance after the Effective Time.                              

SECTION 8.02  NOTICES.                                                          

    All notices, requests, claims, demands and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed in writing) or sent by overnight courier         
(providing proof of delivery) to the parties at the following addresses (or at  
such other address for a party as shall be specified by like notice):           

                                                                [Download Table]
                                                                      
if to SYSCO, to:                  SYSCO Corporation                   
                                  1390 Enclave Parkway                
                                  Houston, Texas 77077-2099           
                                  Attn: General Counsel               
                                  Facsimile: (281) 584-2510           

with a copy to:                   Robert P. Finch, Esq.               
                                  Arnall Golden & Gregory, LLP        
                                  1201 West Peachtree Street          
                                  Atlanta, Georgia 30309-3450         
                                  Facsimile: (404) 873-8617           

if to DFI, to:                    Doughtie's Foods, Inc.              
                                  2410 Wesley Street                  
                                  Portsmouth, Virginia 23707          
                                  Attn: Steven C. Houfek              
                                  Facsimile: (757) 399-3558           

with a copy to:                   William R. Waddell, Esq.            
                                  McGuire, Woods, Battle & Boothe, LLP
                                  World Trade Center, Suite 9000      
                                  101 West Main Street                
                                  Norfolk, VA 23510-1655              
                                  Facsimile: (757) 640-3972           

SECTION 8.03  DEFINITIONS.                                                      

For purposes of this Agreement:                                       

         (i) except for purposes of Section 5.11, an "affiliate" of any person
means another person that directly or indirectly, through one or more 
intermediaries, controls, is controlled by, or is under common control
    with, such first person, where "control" means the possession, directly or
     indirectly, of the power to direct or cause the direction of the management
   policies of a person, whether through the ownership of voting securities,
by contract, as trustee or executor, or otherwise;                    

         (ii) "material adverse change" or "material adverse effect" means any
change, effect, event, occurrence or state of facts that is or could  
    reasonably be expected to be materially adverse to the business, financial
     condition or results of operations of such party and its subsidiaries taken
 as a whole; provided, however, that it shall not be a "material adverse
     change" or "material adverse effect" with respect to DFI in connection with
 any change, effect, event, occurrence or state of facts relating to, or
   arising or resulting from (A) any actions taken or omitted to be taken by
  DFI with the prior written approval of SYSCO in anticipation or reliance
upon the consummation of the Merger or the transactions contemplated  
     thereby, or (B) the loss, despite the reasonable good faith efforts of DFI,
of the services of up to twenty percent (20%) of the sales employees  
    employed by DFI, of the Chief Executive Officer, Senior Vice President and
     Chief Financial Officer of DFI or of up to 20% of the other officers of DFI
as of the date of this Agreement;                                     

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         (iii) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated  
organization or other entity;                                         

        (iv) a "subsidiary" of any person means another person, an amount of
the voting securities, other voting ownership or voting partnership   
    interests of which is sufficient to elect at least a majority of its Board
of Directors or other governing body (or, if there are no such voting 
    interests, 50% or more of the equity interests of which) is owned directly
or indirectly by such first person;                                   

    (v) "knowledge" of any person means the actual knowledge of such
person after reasonable inquiry;                                      

       (vi) "Securities Act" means the Securities Act of 1933, as amended;

    (vii) "DFI SEC Documents" means all required reports, schedules,
 forms, statements and other documents (including exhibits and all other
    information incorporated therein) filed with the SEC by DFI since December
  31, 1996, and the Form S-4 as filed prior to the date of this Agreement;

       (viii) "SYSCO SEC Documents" means all required reports, schedules,
 forms, statements and other documents (including exhibits and all other
information incorporated therein) filed with the SEC by SYSCO since   
December 31, 1996, and the Form S-4 as filed prior to the date of this
Agreement;                                                            

       (ix) "To DFI's knowledge" means the knowledge of Mules, Houfek, and
Michael S. LaRock;                                                    

          (x) "To SYSCO's knowledge" means the knowledge of John K. Stubblefield
and Robert G. Culak;                                                  

      (xi) "Form S-4" means the registration statement on Form S-4 to be
     filed with the SEC by SYSCO in connection with the issuance of SYSCO Common
Stock in the Merger; and                                              

      (xii) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.                                                              

SECTION 8.04  INTERPRETATION.                                                   

When a reference is made in this Agreement to an Article, Section or  
Exhibit, such reference shall be to an Article or Section of, or an Exhibit to, 
this Agreement unless otherwise indicated. Whenever the words "include",        
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The words "hereof", "herein" and    
"hereunder" and words of similar import when used in this Agreement shall refer 
to this Agreement as a whole and not to any particular provision of this        
Agreement. All terms defined in this Agreement shall have the defined meanings  
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement   
are applicable to the singular as well as the plural forms of such terms and to 
the masculine as well as to the feminine and neuter genders of such term. Any   
agreement, instrument or statute defined or referred to herein or in any        
agreement or instrument that is referred to herein means such agreement,        
instrument or statute as from time to time amended, modified or supplemented,   
including (in the case of agreements or instruments) by waiver or consent and   
(in the case of statutes) by succession of comparable successor statutes and    
references to all attachments thereto and instruments incorporated therein.     
References to a person are also to its permitted successors and assigns.        

SECTION 8.05  COUNTERPARTS.                                                     

  This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when  
one or more counterparts have been signed by each of the parties and delivered  
to the other parties.                                                           

SECTION 8.06  ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.                   

This Agreement (including the documents and instruments referred to   
herein), the Escrow Agreement and the Confidentiality Agreement (a) constitute  
the entire agreement, and supersede all prior agreements and understandings,    
both written and oral, between the parties with respect to the subject matter of
this Agreement and (b) except for the provisions of Section 5.07, are not       
intended to confer upon any person other than the parties any rights or         
remedies.                                                                       
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SECTION 8.07  GOVERNING LAW.                                                    

    This Agreement shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Virginia, regardless of the laws that might         
otherwise govern under applicable principles of conflict of laws thereof.       

SECTION 8.08  ASSIGNMENT.                                                       

Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part, by operation of law
or otherwise by either of the parties hereto without the prior written consent  
of the other party; provided, however, that without the consent of DFI, Merger  
Sub may assign all of its respective rights, interests and obligations hereunder
to any other wholly owned subsidiary of SYSCO. Any assignment in violation of   
the preceding sentence shall be void. Subject to the preceding two sentences,   
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.                    

SECTION 8.09  CONSENT TO JURISDICTION.                                          

  Each of the parties hereto (a) consents to submit itself to the personal
jurisdiction of any federal court located in the Commonwealth of Virginia or any
Virginia state court in the event any dispute arises out of this Agreement or   
any of the transactions contemplated by this Agreement, (b) agrees that it will 
not attempt to deny or defeat such personal jurisdiction by motion or other     
request for leave from any such court, and (c) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated by    
this Agreement in any court other than a federal court sitting in the           
Commonwealth of Virginia or a Virginia state court.                             

SECTION 8.10  HEADINGS.                                                         

The headings and table of contents contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or          
interpretation of this Agreement.                                               

SECTION 8.11  SEVERABILITY.                                                     

 If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other      
conditions and provisions of this Agreement shall nevertheless remain in full   
force and effect, insofar as the foregoing can be accomplished without          
materially affecting the economic benefits anticipated by the parties to this   
Agreement. Upon such determination that any term or other provision is invalid, 
illegal or incapable of being enforced, the parties hereto shall negotiate in   
good faith to modify this Agreement so as to effect the original intent of the  
parties as closely as possible to the fullest extent permitted by applicable law
in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.                                               

SECTION 8.12  DISPUTE RESOLUTION                                                

Notwithstanding any provision of this Agreement to the contrary, all  
disputes, controversies or claims arising out of or relating to this Agreement  
and the transactions contemplated hereby shall be resolved by agreement among   
the parties, or, if not so resolved within forty-five (45) days following       
written notice of dispute given by either party hereto to the other, and if     
written notice of desire to arbitrate is given by either of the parties as      
provided below and the matter is not then otherwise resolved by the parties     
hereto, by resort to arbitration in accordance with Title 9 of the United States
Code (the United States Arbitration Act), the Commercial Arbitration Rules, and 
the Optional Rules for Emergency Measures of Protection, all as amended from    
time to time (the "Rules") of the American Arbitration Association and the      
following provisions; provided, however, that the provisions of this Section    
shall prevail in the event of any conflict with such Rules. The parties agree   
that they shall use their best efforts to cause the matter to be presented to a 
panel of three arbitrators (at least one of whom shall have at least ten years  
of industry experience relating to the subject matter of the dispute) within    
thirty (30) days after the establishment of such panel. Such selection          
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of arbitrators shall be made in accordance with the Rules. There shall be no    
discovery. Pending the arbitration hearing, any provisional remedy that would be
available to a party from a court of law shall be available from the arbitration
panel. The decision of a majority of the arbitration panel with respect to the  
matters referred to them pursuant hereto shall be final and binding upon the    
parties to the dispute, and confirmation and enforcement thereof may be rendered
thereon by any court having jurisdiction upon application of any person who is a
party to the arbitration proceeding. The costs and expenses incurred in the     
course of such arbitration shall be borne by the party or parties against whose 
favor the decisions and conclusions of the arbitration panel are rendered;      
provided, however, that if the arbitration panel determines that its decisions  
are not rendered wholly against the favor of one party or parties or the other, 
the arbitration panel shall be authorized to apportion such costs and expenses  
in the manner that it deems fair and just in light of the merits of the dispute 
and its resolution. The arbitration panel shall have no power or authority under
this Agreement or otherwise to award or provide for the award of punitive or    
consequential damages against any party.                                        

(Signatures on following page)

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     IN WITNESS WHEREOF, SYSCO, Merger Sub and DFI have caused this Agreement to
be signed by their respective duly authorized officers as of the date first     
written above.                                                                  

SYSCO:                                                                          
SYSCO CORPORATION:                                                              

/s/ KENT R. BERKE                                                   
--------------------------------                                                

By:       Kent R. Berke                                                         
Its:              Assistant Vice                                                
President                                                                       

MERGER SUB:                                                                     
SYSCO FOOD SERVICES OF EASTERN VIRGINIA, INC.                                   

/s/ KENT R. BERKE                                                   
--------------------------------                                                

By:       Kent R. Berke                                                         
Its:      Vice President                                                        

DFI:                                                                            
DOUGHTIE'S FOODS, INC.:                                                         

/s/ STEVEN C. HOUFEK                                                    
--------------------------------                                                

By:      Steven C. Houfek                                                       
Its: President and Chief                                                        
Executive Officer                                                               

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                                                                      APPENDIX B
                   May 5, 1999

Board of Directors                                                              
Doughtie's Foods, Inc.                                                          
2410 Wesley Street                                                              
Portsmouth, Virginia 23707                                                      

Gentlemen:                                                                      

   You have requested our opinion as to the fairness, from a financial point
of view, to the stockholders of Doughtie's Foods, Inc. (the "Company") of the   
Merger Consideration, as defined below, in the proposed merger (the "Merger") of
the Company with and into SYSCO MERGER, INC. (the "Purchaser"), which is a      
wholly-owned subsidiary of SYSCO CORPORATION ("SYSCO"). Pursuant to the         
Agreement And Plan Of Merger dated as of May 5, 1999 (the "Agreement"), the     
Company will merge with and into Purchaser and each share of the Company's      
common stock, par value $1.00 per share, shall be converted into the right to   
receive (i) $17.00 in cash, (ii) the equivalent value paid in shares of SYSCO   
common stock, or (iii) a combination of cash and SYSCO common stock, all subject
to possible adjustments under certain circumstances as set forth in the         
Agreement (the "Merger Consideration").                                         

In arriving at our opinion, we, among other things: (i) reviewed the  
Agreement; (ii) solicited the interest of selected outside third parties as to  
their level of interest in pursuing a possible transaction with the Company;    
(iii) met with directors, officers and certain members of management of the     
Company to discuss the respective business, financial condition, operating      
results and future prospects for the Company; (iv) reviewed the Company's Annual
Reports to Shareholders, Annual Reports on Form 10-K and related financial      
information for the two years ended December 31, 1997; (v) reviewed the         
Company's quarterly reports on Form 10-Q for the quarterly periods ended March  
31, 1998, June 30, 1998 and September 30, 1998 and the press release announcing 
earnings for the quarterly period and year ended December 31, 1998; (vi) SYSCO'S
Annual Reports to Shareholders, Annual Reports on Form 10-K and related         
financial information for the two years ended June 27, 1998; (vii) SYSCO'S      
Quarterly Reports on Form 10-Q and related financial information for the        
quarterly periods ended September 26, 1998 and December 26, 1998; (viii) certain
publicly available information with respect to historical market prices and     
trading activities for the Company's common stock, SYSCO's common stock and for 
certain publicly traded food service industry companies which we deemed         
relevant; (ix) certain publicly available information with respect to selected  
food industry companies; (x) certain other merger and acquisition transactions  
which we deemed relevant; and (xi) such other financial studies, analyses,      
inquiries and other matters as we deemed reasonable and appropriate.            

In rendering this opinion, we have relied upon the accuracy and       
completeness of all financial and other information furnished to us by, or on   
behalf of, the Company and SYSCO, and other information that we considered in   
our review and we have not assumed any responsibility for independent           
verification of such information. We have relied upon the Company's management  
as to the reasonableness and achievability of its financial and operational     
forecasts and projections, and the assumptions and bases thereof and assumed    
that such forecasts and projections reflect the best currently available        
estimates and judgements of the Company's management and that such forecasts and
projections will be realized in the amounts and in the time periods currently   
estimated. We also assumed, without independent verification, that the Company's
aggregate reserves for losses, litigation and other contingencies are adequate  
to cover such losses. Additionally, we did not undertake any independent        
valuation or appraisal of the real estate owned by the Company.                 

   Our opinion is necessarily based on economic, market, financial and other
conditions as they exist on, and on the information made available to us as of, 
the date of this letter. Although subsequent developments may affect this       
opinion, we do no have any obligation to update or revise this opinion.         
Furthermore, we are not expressing any opinion herein as to the range of value  
or prices at which SYSCO'S common stock will trade in the public markets        
subsequent to the consummation of the Merger.                                   

Mann, Armistead & Epperson, Ltd., as part of its investment banking   
services, is regularly engaged in the valuation of private and public businesses
and their securities in connection with mergers and acquisitions,               
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competitive biddings and valuations for estate, corporate and other purposes,   
and acting as financial advisor in connection with other forms of strategic     
corporate transactions. Pursuant to our engagement in connection with this      
fairness opinion, we will receive a fee for our services in rendering said      
opinion, a substantial portion of which is contingent upon the consummation of  
the Merger.                                                                     

The opinion expressed herein is provided solely for the benefit of the
Board of Directors of the Company and the opinion, and any supporting analyses  
or other material supplied by us may not be quoted, referred to, or used in any 
public filing or in any written document or for any other purpose without the   
prior written approval of Mann, Armistead & Epperson, Ltd. This letter is not   
intended to, and shall not, confer any rights or remedies upon any security     
holder of the Company or any other person or entity.                            

   Based upon the foregoing considerations, it is our opinion that as of May
5, 1999, the Merger Consideration to be received by the stockholders of the     
Company upon consummation of the Merger is fair, from a financial point of view,
to the stockholders of the Company.                                             

                    Truly yours,

                                            /s/ MANN, ARMISTEAD & EPPERSON, LTD.

                                        MANN, ARMISTEAD & EPPERSON, LTD.

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                                                                         ANNEX 1

DOUGHTIE'S FOODS, INC.

PROXY FOR SPECIAL MEETING AUGUST 23, 1999 

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS 

The undersigned hereby appoints William R. Waddell and Michael S.   
LaRock, or any one of them, acting in the absence of the other, as attorneys
and proxies of the undersigned, with full power of substitution, for and in 
the name of the undersigned, to represent the undersigned at the Special    
Meeting of Shareholders of Doughtie's Foods, Inc., to be held in the Board  
Room of Crestar Bank, 500 Main Street, Norfolk, Virginia, at 10:00 A.M.,    
local time August 23, 1999, and at any adjournments thereof, and to vote as 
indicated below all shares of stock of Doughtie's standing in the name of   
the undersigned, with all of the powers the undersigned would possess if    
personally present at the special meeting.                                  

THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED.       

This proxy, when properly executed, will be voted as directed on the
reverse side. If no direction is made, this proxy will be voted FOR the     
proposals listed. If any incidental matters to the business to be conducted 
are properly presented at the special meeting, this proxy will be voted by  
the proxies in their discretion.                                            

   Please sign and date on reverse side and return the proxy card promptly
using the enclosed blue envelope.                                           

(CONTINUED ON THE REVERSE SIDE) 

[X] Please mark votes as in this example.                                   

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL AND ADOPTION OF THE 
MERGER AGREEMENT.                                                           

1. PROPOSAL to approve and adopt the Agreement and Plan of Merger, pursuant 
   to which Doughtie's Foods, Inc. will merge with a wholly-owned subsidiary
of SYSCO Corporation.                                                 

FOR  [ ]            AGAINST  [ ]            ABSTAIN  [ ]

In their discretion, the proxies are authorized to vote upon any    
incidental matters to the business to be conducted as may properly come     
before the special meeting or at any adjournments or postponements thereof. 

  The undersigned hereby acknowledges receipt of the accompanying Notice
of Special Meeting of Shareholders dated July 23, 1999, and the Proxy       
Statement/Prospectus.                                                       

  This Proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this Proxy will be voted FOR adoption of   
the proposal listed above.                                                  

                                         PLEASE SIGN EXACTLY AS YOUR
                                             NAME APPEARS ON THIS CARD. WHEN
                                            SIGNING AS ATTORNEY, EXECUTOR,
                                       ADMINISTRATOR, TRUSTEE OR
                                             GUARDIAN, PLEASE GIVE YOUR FULL
                                       TITLE. IF SHARES ARE HELD
                                         JOINTLY, EACH HOLDER SHOULD
                              SIGN PERSONALLY.

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                Signature                          Date                         Signature                          Date       

YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE ABOVE PROXY
CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING BLUE ENVELOPE.              

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEFM14A’ Filing		Date		First		Last			Other Filings
		5/31/06		67
		12/31/04		26		61
		7/1/01		79
		1/1/01		58		79
		7/1/00		14
		6/15/00		59
		12/25/99		14
		9/30/99		11		122
		8/31/99		40
		8/23/99		2		131
		7/30/99		54
Filed on:		7/23/99		2		131
		7/21/99		13		17
		7/19/99		3		68			10-K/A
		7/9/99		54
		7/7/99		69					8-K
		7/3/99		14
		6/30/99		14		61
		6/26/99		21		59			10-Q
		6/15/99		78
		6/9/99		36
		5/25/99		12		32			10-K/A
		5/17/99		54
		5/10/99		36
		5/5/99		3		130
		4/28/99		25
		3/31/99		105
		3/27/99		12		79			10-Q
		3/10/99		68
		2/22/99		93
		2/16/99		13
		2/10/99		72
		2/8/99		25		82
		2/5/99		25		29
		2/1/99		25
		1/28/99		24		25
		1/27/99		24		25
		1/25/99		24
		1/20/99		24
		1/5/99		69					8-K
		1/4/99		24					8-K
		1/3/99		29
		12/31/98		29		129
		12/26/98		12		129			10-K,  10-K/A
		12/18/98		24
		11/17/98		24		112
		10/8/98		23		24
		9/30/98		129
		9/26/98		23		129			10-Q
		9/14/98		23		29
		9/2/98		23
		8/3/98		23
		6/30/98		129
		6/27/98		12		129			10-Q
		6/16/98		62					S-8
		4/15/98		82
		3/31/98		129
		3/28/98		15		77			10-Q
		3/20/98		14		15
		1/12/98		14		78
		12/31/97		129
		12/27/97		14		79			10-K
		12/12/97		78
		11/25/97		78
		6/29/97		12
		6/28/97		14		67			10-Q
		4/14/97		82
		2/28/97		82
		12/31/96		96		125
		12/28/96		23		79			10-K
		9/6/96		82
		8/28/96		57		82
		12/31/95		98
		12/30/95		75		79			10-K
		2/23/95		26		61
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