STERLING CAPITAL CORPORATION
635 Madison Avenue
New York, New York 10022
(212) 980-3360
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 21, 1998
To the Shareholders of STERLING CAPITAL CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of Sterling Capital Corporation, a New York corporation (the
"Corporation"), will be held on Thursday, October 21, 1998, at 9:30 A.M., New
York City time, at the offices of the Corporation at 635 Madison Avenue, on the
17th Floor, New York, New York, 10022, for the following purposes, all as more
fully described in the accompanying Proxy Statement:
1. To elect five directors of the Corporation;
2. To ratify the selection by the Corporation's Board of
Directors of Stavisky, Knittle, Tocci & Goldstein, L.L.P.,
as the Corporation's independent accountants for the year
ending December 31, 1998; and
3. To transact any other business which may properly come
before the Meeting or any adjournments or postponements
thereof.
The Board of Directors has fixed the close of business on September
16, 1998 as the record date for the determination of shareholders entitled to
notice of and to vote at the Meeting, and only shareholders of record on such
date are entitled to so vote. The transfer books will not be closed.
Please execute and return the enclosed Proxy promptly in the enclosed
envelope, whether or not you intend to be present at the Meeting. If you can
attend and vote in person, you are invited to do so; but if not, you are urged
to submit the enclosed Proxy with your votes marked thereon. You may revoke your
Proxy at any time before it is voted. No postage is required if the Proxy is
mailed in the United States.
By order of the Board of Directors:
/s/RICHARD KAUFMAN
-------------------
Richard Kaufman
Executive Vice-President
New York, New York
October 1, 1998
You are requested to sign, date and return the
accompanying Proxy in the enclosed envelope.
<PAGE>
STERLING CAPITAL CORPORATION
635 Madison Avenue
New York, New York 10022
-------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 21, 1998
------------------
This Proxy Statement is furnished to the shareholders of Sterling
Capital Corporation, a New York corporation (the "Corporation"), in connection
with a solicitation of proxies for use at the Annual Meeting of Shareholders
(the "Meeting") to be held on Thursday, October 21, 1998 at 9:30 A.M., New York
City time, at the offices of the Corporation at 635 Madison Avenue, on the 17th
Floor, New York, New York 10022, and at all adjournments or postponements
thereof, for the purposes set forth in the accompanying Notice of the Meeting.
Only shareholders of record at the close of business on September 16,
1998 will be entitled to notice of and to vote at the Meeting. At such date the
outstanding voting securities of the Corporation consisted of 2,500,000 shares
of Common Stock, par value $1.00 per share, each share having one vote.
This Proxy Statement and the enclosed Proxy are being mailed to
shareholders on or about October 1, 1998.
The enclosed Proxy is solicited by the Board of Directors. Any
shareholder giving such Proxy has the power to revoke it at any time before it
is exercised by giving written notice to the Corporation bearing a later date
than the Proxy, by submission of a later dated proxy, or by voting in person at
the Meeting, which any shareholder may do whether or not he or she has
previously given a proxy. The shares represented by all properly executed
proxies received in time for the Meeting will be voted in accordance with any
specification made thereon, and if no specification is made thereon will be
voted (i) FOR the election of all the nominees for directors, and (ii) FOR the
ratification of the selection by the Corporation's Board of Directors of
Stavisky, Knittle, Tocci & Goldstein, L.L.P., as the Corporation's independent
public accountants for the year ending December 31, 1998.
Mr. Walter Scheuer, the Chairman of the Board of Directors and
controlling shareholder of the Corporation, Mr. Wayne S. Reisner, the President
of the Corporation, Mr. Richard Kaufman, Executive Vice President of the
Corporation, and Gaymark Associates, the largest shareholder of record of the
Corporation, have advised the Corporation that they intend to vote all shares
which they are entitled to vote in favor of the election of all the nominees for
directors and in favor of the ratification of the selection of Stavisky,
Knittle, Tocci & Goldstein, L.L.P., as the Corporation's independent public
accountants, which assures the passage of these proposals since such shares
constitute more than 50% of the Corporation's outstanding Common Stock.
-2-
<PAGE>
See "Security Ownership of Directors and Officers, and Other Principal Holders
of the Corporation's Voting Securities."
The Corporation will furnish, without charge, a copy of the
Corporation's most recent Annual Report and the most recent Semi-Annual Report
succeeding the Annual Report, if any, to any shareholder upon request. Requests
should be directed to Sterling Capital Corporation, 635 Madison Avenue, New
York, New York 10022, telephone number (800) 949-3456, Attention: Elizabeth A.
Acton.
ELECTION OF DIRECTORS
A board of five directors is to be elected at the Meeting to serve
until the next annual meeting of shareholders and thereafter until their
successors shall have been elected and qualified. To be elected, each nominee
for director must receive a plurality of the votes cast at the Meeting by the
holders of shares entitled to vote, provided that a quorum (consisting of
one-third of the total number of outstanding shares of Common Stock) is present.
Under applicable New York law, in tabulating the vote with regard to the
election of directors, broker non-votes, if any, will be disregarded and will
have no effect on the outcome of the vote.
Each of the nominees listed below has advised the Corporation that he
will serve if elected. The Corporation does not expect that any of such nominees
will be unavailable for election, but if that should occur before the Meeting,
the persons named in the proxy will have the right to vote for a substitute
nominee if designated by the Corporation's Board of Directors.
Set forth below are the names and ages of the nominees, their
positions in the Corporation, if any, and their principal occupations at present
and during the past five years. Mr. Eliasberg, Mr. Floor and Mr. Scheuer have
been directors since 1980; Mr. Kingsley has been a director since 1984; and Mr.
Scherl has been a Director since 1994. The terms of each of the present
directors will expire upon the election of the directors at the Meeting.
<TABLE>
<CAPTION>
Name and Position
with the Corporation Present Principal Occupation Age
- -------------------- ---------------------------- ---
<S> <C> <C>
Jay Eliasberg*+ Independent Market 78
Director Research Consultant (1)
Arthur P. Floor+ Program Director, Energetics Corporation, 74
Director an energy consulting firm (2)
Nathan Kingsley+ President, Total Communications 71
Director International, a media consulting firm (3)
Archer Scherl Private Investor (4) 67
Director
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Walter Scheuer*++** Private Investor and Chairman of the 76
Chairman of the Board Board of the Corporation (5)
</TABLE>
- -----------------------
* Member of the Executive Committee.
** Member of the Investment Committee.
+ Member of the Audit Committee.
++ Mr. Scheuer may be deemed an "interested person" of the Corporation as that
term is defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
(1) Mr. Eliasberg has been an independent market research consultant
for more than the past five years.
(2) Mr. Floor has held his present position for more than the last
five years.
(3) Mr. Kingsley has held his present position for more than the last
five years.
(4) Mr. Scherl has been a private investor for more than the past
five years.
(5) Mr. Scheuer has held his present position with the Corporation
since October 28, 1980. Mr. Scheuer since March, 1989 has been the controlling
shareholder of Manchester Capital Corporation ("Manchester"), an investment
adviser registered under the Investment Advisers Act of 1940.
None of the nominees is a director of any public corporation other
than the Corporation.
The Audit Committee is charged with, among other things, the duties
of recommending to the Board of Directors the selection, retention or
termination of the independent auditors, reviewing the overall scope of the
audit of the Corporation's financial statements with the Corporation's
independent public accountants, reviewing the Corporation's financial statements
and results of audit and examining the Corporation's internal financial and
operational controls and organization. The Audit Committee met once in 1997.
The Corporation has no standing nomination, compensation or similar
committee.
During the year ended December 31, 1997, four meetings of the Board
of Directors were held. Each Director attended at least seventy-five percent of
the aggregate number of meetings of the Board and any committee on which he
served.
-4-
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS
AND OFFICERS, AND OTHER PRINCIPAL HOLDERS
OF THE CORPORATION'S VOTING SECURITIES
The table below sets forth information concerning the shares of the
Corporation's Common Stock beneficially owned by the directors, all directors
and officers of the Corporation as a group without naming them, and each person
who is known by the Corporation to be the beneficial owner of more than five
percent of the Corporation's Common Stock as at August 31, 1998. The address of
each of the directors is c/o Sterling Capital Corporation, 635 Madison Avenue,
New York, New York 10022. The address of Gaymark Associates is 635 Madison
Avenue, New York, New York 10022. The address of each of Marge P. Scheuer,
Jeffrey Scheuer, Susan Scheuer and Judith Scheuer is c/o Walter Scheuer, 635
Madison Avenue, New York, New York 10022.
<TABLE>
<CAPTION>
Amount and Nature Percent
Name of Beneficial Owner of Beneficial Owner of Class
------------------------ ------------------- --------
<S> <C> <C>
Jay Eliasberg* None -
Arthur P. Floor* None -
Gaymark Associates 1,890,296 (a) 75.6%
Nathan Kingsley* None -
Archer Scherl* None -
Walter Scheuer* 2,046,896 (b) 81.9%
Wayne S. Reisner 406,393 (c) 16.3%
Richard Kaufman 492,493 (d) 19.7%
Marge P. Scheuer 221,397 (e) 8.9%
Jeffrey Scheuer 653,644 (f) 26.1%
Susan Scheuer 439,822 (g) 17.6%
Judith Scheuer 341,604 (h) 13.7%
Edwin Robbins Family
and Foundation 166,632 (i) 6.6%
All Directors and Executive Officers
as a Group consisting of 7 persons 2,046,896 (j) 81.9%
</TABLE>
- ---------------
* Member of the Board of Directors of the Corporation.
(a) Of the 1,890,296 shares (approximately 75.6% of the Corporation's
outstanding Common Stock) owned of record by Gaymark Associates ("Gaymark"), a
limited partnership, of which Windy Gates Corporation ("Windy Gates") is the
general partner and Mr. Walter Scheuer is a limited partner, 18,032 shares are
held for Windy Gates, 346,529 shares are held for Mr. Scheuer (see note (b)
below), 166,797 shares are held for Marge P. Scheuer, Mr. Scheuer's wife (see
note (e) below), 34,068, 482,976, 204,097 and 200,904 shares, respectively, are
held for the four children of Mr. Scheuer (see notes (f), (g), and (h) below),
54,600 shares are held for a revocable trust for the benefit of three of Mr.
Scheuer's children, 281,293 shares are held for five trusts for the benefit of
five of Mr. Scheuer's grandchildren, and 101,000 shares are held for Mrs.
-5-
<PAGE>
Marcelle Halpern. The shares of the Corporation's Common Stock that are
reflected in the table as being beneficially owned by Gaymark do not include the
166,632 shares which Gaymark has an option to acquire. See note (i) below. Windy
Gates is a New York corporation of which Mr. Scheuer is President, a director
and a shareholder. The other shareholders of Windy Gates are Mr. Scheuer's wife
and four children. Mr. Reisner and Mr. Kaufman are each Vice Presidents and
directors of Windy Gates. Mr. Scheuer acts as attorney-in-fact for the persons
for whom the aforementioned shares of the Corporation's Common Stock are held by
Gaymark, and Mr. Scheuer is a trustee of each of the aforementioned trusts.
Windy Gates, as the general partner of Gaymark, has the sole power to vote the
aforementioned shares of the Corporation's Common Stock owned by Gaymark.
(b) Of the 2,046,896 shares of which Mr. Scheuer may be deemed to be
a beneficial owner, 346,529 shares (approximately 13.9% of the Corporation's
outstanding Common Stock) are held for his account by Gaymark as described in
note (a) above. Also as described in note (a) above, Gaymark holds 18,032 shares
for the account of Windy Gates, an aggregate of 922,045 shares for the accounts
of Mr. Scheuer's four children, 54,600 shares for the account of a revocable
trust, the beneficiaries of which are three of Mr. Scheuer's children, 281,293
shares for the account of five trusts, the beneficiaries of which are Mr.
Scheuer's grandchildren, and 166,797 shares for the account of Mr. Scheuer's
wife. In addition, an aggregate of 156,600 shares are held directly by two
trusts, the beneficiaries of which are two of Mr. Scheuer's grandchildren. Since
Mr. Scheuer acts as attorney-in-fact for such persons and as trustee for such
trusts and is President of Windy Gates, he also may be deemed to be a beneficial
owner of such 1,599,367 shares. In addition, Gaymark holds 101,000 shares for
Mrs. Halpern, for whom Mr. Scheuer acts as attorney-in-fact. Mr. Scheuer may be
deemed to be a beneficial owner of all of such shares. Except to the extent that
Mr. Scheuer may be deemed to be a beneficial owner by virtue of voting or shared
investment power as set forth above, Mr. Scheuer disclaims any beneficial
ownership in the 1,489,167 shares owned of record by Gaymark and not held for
his account and for the account of the revocable trust identified above, and in
the 156,600 shares held directly by two trusts for the benefit of two of his
grandchildren. The shares of the Corporation's Common Stock that are reflected
in the table as being beneficially owned by Mr. Scheuer do not include the
166,632 shares which Gaymark has an option to acquire. See note (i) below.
(c) Of the 406,393 shares of which Mr. Reisner may be deemed to be a
beneficial owner, 195,193 shares are held by Gaymark for the accounts of certain
of the trusts for the benefit of Mr. Scheuer's four grandchildren as identified
in note (b) above, 54,600 shares are held by Gaymark for the account of the
revocable trust identified in note (b) above, and 156,600 shares are directly
held by two trusts for the benefit of two of Mr. Scheuer's grandchildren, as
identified in note (b) above. Since Mr. Reisner acts as trustee for such trusts,
he may be deemed a beneficial owner of such 406,393 shares. Except to the extent
that Mr. Reisner may be deemed to be a beneficial owner by virtue of shared
investment power as set forth above, Mr. Reisner disclaims any beneficial
ownership in all such shares.
(d) Of the 492,493 shares of which Mr. Kaufman may be deemed to be a
beneficial owner, 281,293 shares are held by Gaymark
-6-
<PAGE>
for the accounts of five trusts for the benefit of Mr. Scheuer's five
grandchildren as identified in note (b) above, 54,600 shares are held by Gaymark
for the account of the revocable trust identified in note (b) above, and 156,600
shares are directly held by two trusts for the benefit of two of Mr. Scheuer's
grandchildren, as identified in note (b) above. Since Mr. Kaufman acts as
trustee for such trusts, he may be deemed a beneficial owner of such 492,493
shares. Except to the extent that Mr. Kaufman may be deemed to be a beneficial
owner by virtue of shared investment power as set forth above, Mr. Kaufman
disclaims any beneficial ownership in all such shares.
(e) Of the 221,397 shares of which Mrs. Scheuer may be deemed to be a
beneficial owner, 166,797 shares are held for her account by Gaymark and 54,600
shares are held by Gaymark for the account of a revocable trust for the benefit
of three of her children, which trust's shareholdings in the Corporation are
described in note (b) above, of which trust Mrs. Scheuer is a trustee. Mrs.
Scheuer disclaims any beneficial ownership in the shares held by Gaymark for the
account of such trust.
(f) Of the 653,644 shares of which Jeffrey Scheuer, a son of Mr.
Scheuer, may be deemed to be a beneficial owner, 482,976 shares are held for his
account by Gaymark and (i) 111,668 shares are held by Gaymark for the account of
two trusts for the benefit of Jeffrey Scheuer's children and (ii) 59,000 shares
are held directly by a trust for the benefit of one of Jeffrey Scheuer's
children, which trusts' shareholdings in the Corporation are described in note
(b) above, of which trusts Jeffrey Scheuer and his wife are trustees. Jeffrey
Scheuer and his wife each disclaims any beneficial ownership in the shares held
by Gaymark for the account of such trusts.
(g) Of the 439,822 shares of which Susan Scheuer, a daughter of Mr.
Scheuer, may be deemed to be a beneficial owner, 204,097 shares are held for her
account by Gaymark, 54,600 shares are held by Gaymark for the account of a
revocable trust for the benefit of Susan Scheuer and two of her siblings, and
(i) 83,525 shares are held by Gaymark for the account of two trusts for the
benefit of Susan Scheuer's children and (ii) 97,600 shares are held directly by
a trust for the benefit of one of Susan Scheuer's children, which trust's
shareholdings in the Corporation are described in note (b) above, of which
trusts Susan Scheuer is a trustee. Susan Scheuer disclaims any beneficial
ownership in the shares held by Gaymark for the account of such trusts.
(h) Of the 341,604 shares of which Judith Scheuer, a daughter of Mr.
Scheuer, may be deemed to be a beneficial owner, 200,904 shares are held for her
account by Gaymark and 54,600 shares are held by Gaymark for the account of a
revocable trust for the benefit of Judith Scheuer and two of her siblings, and
86,100 shares are held by Gaymark for the account of a trust for the benefit of
Judith Scheuer's child, which trust's shareholdings in the Corporation are
described in note (b) above, of which trusts Judith Scheuer is a trustee. Judith
Scheuer disclaims any beneficial ownership in the shares held by Gaymark for the
account of such trusts.
(i) According to information supplied to the Corporation by Mr.
Robbins. Gaymark has an option to acquire all such shares. Mr. Robbins' business
address is 919 Third Avenue, New York, New York 10022.
(j) The computation of 2,046,896 shares reported in this column
includes all shares which may be deemed to be beneficially owned by Messrs.
Scheuer, Reisner and Kaufman as
-7-
<PAGE>
described in the foregoing notes, as well as by all other officers and directors
of the Corporation, but eliminates the duplication that would arise from
including more than one beneficial owner of the same shares. Such shares do not
include the 166,632 shares owned by Mr. and Mrs. Robbins family and foundation,
as described in note (i) above.
EXECUTIVE OFFICERS
The following table sets forth the names and ages of all executive
officers of the Corporation and their positions with the Corporation.
<TABLE>
<CAPTION>
Name Position Age
---- -------- ---
<S> <C> <C>
Walter Scheuer Chairman of the Board of Directors (1) 76
Wayne S. Reisner President (2) 48
Richard I. Kaufman Executive Vice President (3) 44
</TABLE>
- ------------------
(1) For additional information as to Mr. Scheuer see "Election of
Directors".
(2) Mr. Reisner has been President since March 15, 1993. Mr. Reisner
was Executive Vice President of the Corporation from July, 1988 to March, 1993
and was Vice President from November, 1985 to July, 1988. He has been employed
by the Corporation since August, 1985. Mr. Reisner also has been a Vice
President and a Director of Windy Gates since March 15, 1993. Mr. Reisner has
been a Director and President of Manchester since December 9, 1988 and
March 1, 1989, respectively.
(3) Mr. Kaufman has been Executive Vice President since March 15,
1993. Mr. Kaufman has been employed by the Corporation since October 28, 1980,
has been Treasurer since January 21, 1981 and was Vice President from April 2,
1987 until March 15, 1993. Mr. Kaufman has been a member of the Corporation's
Investment Committee since November 20, 1989. Mr. Kaufman has been a Vice
President and a Director of Windy Gates since March 15, 1993. Mr. Kaufman has
been a Director, Secretary-Treasurer and Vice President of Manchester since
December 9, 1988, March 1, 1989 and March 2, 1992, respectively.
The officers of the Corporation are elected or appointed by the Board
of Directors to hold office until the meeting of the Board of Directors
following the next annual meeting of shareholders. Subject to the right of the
Corporation to remove officers pursuant to its By-Laws, officers serve until
their successors are chosen and have qualified.
-8-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation paid or
accrued by the Corporation during its fiscal year ended December 31, 1997 to the
executive officers of the Corporation whose aggregate compensation for such year
exceeded $60,000 and to all executive officers as a group.
<TABLE>
<CAPTION>
COMPENSATION TABLE
Pension or Retirement
Benefit Accrued Estimated
Capacities in which Aggregate During Registrant's Annual Benefit
Name of Person Remuneration Received Remuneration Last Fiscal Year Upon Retirement
- -------------- --------------------- ------------ ---------------- ---------------
<S> <C> <C> <C> <C>
Wayne S. Reisner President $78,000 N/A $54,600
Richard I. Kaufman Executive Vice President $68,250 N/A $47,775
</TABLE>
- ---------------
* The officers received certain benefits from the Corporation not disclosed in
this Table in an amount equal to less than 10% of the amount received by such
officers as cash compensation.
For the year ended December 31, 1997, Mr. Eliasberg, Mr. Floor, Mr.
Kingsley and Mr. Scherl were each paid $10,000 for their services as directors.
Mr. Scheuer was not compensated separately for his duties as a director of the
Corporation. Each director of the Corporation was also paid his expenses, if
any, for attendance at each meeting of the Board of Directors.
RETIREMENT PLANS
The foregoing Summary Compensation Table does not include any
contribution, payment or accrual under a qualified non-contributory retirement
plan (the "Retirement Plan") maintained by the Corporation, as such amounts
cannot readily be separately or individually calculated. Messrs. Reisner and
Kaufman participate in the Retirement Plan. An eligible employee or his survivor
will be entitled under the Retirement Plan to receive, upon retirement, death or
disability, monthly payments based upon formulas relating benefits to salary and
years of credited service, which is generally determined by averaging the final
three years of compensation prior to retirement. Salaries reported in the
foregoing Summary Compensation Table are substantially identical to compensation
covered by the Retirement Plan ("Covered Compensation").
-9-
<PAGE>
The following table sets forth, for purposes of illustration, the
estimated annual retirement benefit payable under the Retirement Plan as a
straight life annuity, upon retirement to participants of specified Covered
Compensation and years of credited service who are fully vested (seven years of
service). Messrs. Reisner and Kaufman had 11 and 18 years, respectively, of
credited service under the plan as of December 31, 1997. All calculations assume
retirement at age 65 (normal retirement age).
<TABLE>
<CAPTION>
Total Covered Estimated Annual Benefits Upon Retirement
Compensation Based on Service of:
------------ --------------------
25 Years
15 Years 20 Years and over
-------- -------- --------
<S> <C> <C> <C>
$ 50,000...................................... $21,000 $28,000 $ 35,000
$ 75,000...................................... 31,500 42,000 52,500
$100,000...................................... 42,000 56,000 70,000
$125,000...................................... 52,500 70,000 87,500
$150,000....................................... 63,000 84,000 105,000
$175,000...................................... 67,200 89,600 112,000
$200,000 or more.............................. 67,200 89,600 112,000
</TABLE>
CERTAIN TRANSACTIONS
Effective July 1, 1994, Windy Gates, a privately held corporation
owned by Mr. Scheuer and members of his family and General Partner of Gaymark,
entered into a lease on premises at 635 Madison Avenue, New York, N.Y. Gaymark
owns 1,890,296 shares (approximately 75.6%) of the Corporation's Common Stock.
Messrs. Reisner and Kaufman are officers and directors of Windy Gates. Windy
Gates entered into a sublease with the Corporation for a portion of its leased
office space. The term of the sublease expires on June 30, 2004.
The rental obligations for the aforementioned premises are allocated
between the Corporation, on the one hand, and Mr. Scheuer and Windy Gates, on
the other hand, on the basis of each such party's use of this space. For the use
of their respective portions of such space, the Corporation and Mr. Scheuer paid
or accrued approximately $22,500 and $320,500, respectively, for 1997, and paid
or accrued approximately $11,000 and $161,000 respectively, for the six months
ended June 30, 1998.
Incidental to the sublease arrangements described above, the
Corporation and Mr. Scheuer have allocated certain of the expenses incurred in
connection with each of such party's use of various services located thereat,
including office equipment and secretarial, administrative and internal
accounting personnel. In connection with the allocation of expenses incurred
with
-10-
<PAGE>
respect to the use of such services, the Corporation and Mr. Scheuer paid or
accrued approximately $97,000 and $503,000, respectively, for 1997, and $50,000
and $263,000, respectively, for the six months ended June 30, 1998. In addition,
during such period certain persons who were also officers of the Corporation
rendered services to Mr. Scheuer personally for which they received compensation
directly from Mr. Scheuer. See "Election of Directors" and "Security Ownership
of Directors and Officers, and Other Principal Holders of the Corporation's
Voting Securities".
RATIFICATION OR REJECTION
OF SELECTION OF ACCOUNTANTS
The Board of Directors of the Corporation has selected Stavisky,
Knittle, Tocci & Goldstein, L.L.P., to act as the independent public accountants
to audit and report on the financial statements of the Corporation for the year
ending December 31, 1998. Pursuant to the provisions of the 1940 Act, a majority
of those members of the Board of Directors who are not "interested persons" of
the Corporation have, by a vote cast in person at a meeting of said Board, voted
in favor of such selection of Stavisky, Knittle, Tocci & Goldstein, L.L.P., as
the Corporation's independent public accountants. This selection is being
submitted for ratification or rejection by shareholders and, to be effective,
must be approved by a majority of the issued and outstanding shares of the
Corporation's Common Stock.
A representative of Stavisky, Knittle, Tocci & Goldstein, L.L.P., is
expected to be present at the Meeting with an opportunity to make a statement if
he desires to do so, and is expected to be available to respond to appropriate
questions.
SHAREHOLDER PROPOSALS
Proposals by shareholders intended to be presented at the next Annual
Meeting (to be held in 1999) must be received by the Corporation on or before
June 3, 1999 in order to be included in the Proxy Statement and Proxy for that
meeting.
ADDITIONAL INFORMATION
Decisions to buy and sell securities for the Corporation are made by
its Investment Committee, pursuant to policies approved by its Board of
Directors, which periodically reviews investment decisions. The officers and
Investment Committee of the Corporation are also responsible for placing orders
for the purchase and sale of securities and placing its brokerage business.
Research services furnished by brokers through which the Corporation
effects securities transactions may be used by employees and directors in
connection with their duties to Mr. Scheuer, members of his family and
associates and to Manchester. Research services furnished to employees by
brokers in connection with their duties to Mr. Scheuer, members of his family
and
-11-
<PAGE>
associates and to Manchester may be used by such employees in connection with
their duties to the Corporation.
GENERAL
The Corporation will bear the entire expense of the solicitation of
proxies by use of the mails, and some of the officers and employees of the
Corporation may solicit proxies personally or by telephone, telegraph or cable,
the cost of which will be nominal. Arrangements will also be made with brokerage
firms and other custodians, nominees and fiduciaries to forward solicitation
material to the beneficial owners of the stock held of record by such persons,
and the Corporation will reimburse them for reasonable out-of-pocket expenses
incurred by them in so doing.
The Board of Directors knows of no business that will be presented
for action at the Meeting in addition to the matters specified in the
accompanying notice of the Meeting. If other matters do come before the Meeting,
it is intended that proxies will be voted in accordance with the judgment of the
person or persons exercising at the Meeting the authority conferred by the
proxy.
It is important that proxies be returned promptly. Therefore,
shareholders are requested to complete, sign and date the accompanying proxies
and to return them promptly in the enclosed envelope.
By order of the Board of Directors:
/s/RICHARD KAUFMAN
-------------------
Richard Kaufman
Executive Vice-President
New York, New York
October 1, 1998
-12-
<PAGE>
REVOCABLE PROXY
STERLING CAPITAL CORPORATION
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
PROXY Solicited by the Board of Directors for Annual
Meeting of Shareholders, October 21, 1998
The undersigned hereby appoints Walter Scheuer, Wayne Reisner and
Richard Kaufman and each of them, each with power to appoint a substitute, and
with authority to each to act in the absence of the other, the Proxies and Proxy
of the undersigned to vote all shares the undersigned is entitled to vote at the
Annual Meeting of Shareholders of Sterling Capital Corporation (the
"Corporation") to be held on October 21, 1998 and all adjournments or
postponements thereof.
The Board of Directors recommends a vote FOR the election of Directors
and FOR Item 2 below.
1. ELECTION OF DIRECTORS
[ ] FOR [ ] WITHHOLD [ ] EXCEPT
J. Eliasberg A.P. Floor
N. Kingsley A. Scherl
W. Scheuer
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. The ratification of the selection by the Board of Directors of Stavisky,
Knittle, Tocci & Goldstein, L.L.P., as the Corporation's independent public
accountants for the year ending December 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, upon any other matter which may properly come before
said Meeting or any adjournments or postponements thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares represented by this Proxy are to be voted in accordance
with any specification made above. Where no specification is given, Proxies will
be voted FOR the election of all nominees for directors and FOR the proposal in
item 2.
Receipt of the Notice of said Meeting and the related Proxy
Statement, and the Annual Report is hereby acknowledged.
<PAGE>
Please be sure to sign and date this Proxy in the box below.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
(Please sign exactly as name appears hereon. Joint owners should each
sign. Executors, administrators, trustees, etc. should so indicate when signing
and where more than one is named, a majority should sign.)
