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Filed pursuant to Rule 424(b)(3)
Registration No. 333-69059
PROSPECTUS
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5,006,770 Shares
Imperial Sugar Company
Common Stock
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This prospectus covers the offer and sale of common stock by the selling
shareholders identified on page 7 of this prospectus. We will not receive any
proceeds from these sales.
The selling shareholders may offer and sell the common stock from time to
time. The selling shareholders may offer the shares at prevailing market
prices, at prices related to such prevailing market prices, at negotiated
prices or at fixed prices.
The common stock trades on the American Stock Exchange under the symbol IHK.
On May 4, 1999, the American Stock Exchange reported a closing price of $6 3/4
per share for our common stock.
You should consider carefully the risk factors beginning on page 3 of this
prospectus before purchasing any of the common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this Prospectus is May 4, 1999.
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Table of Contents
<TABLE>
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Page
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<S> <C>
Imperial Sugar Company..................................................... 3
Risk Factors............................................................... 3
Forward-Looking Statements................................................. 6
Use of Proceeds............................................................ 6
Selling Shareholders....................................................... 7
Plan of Distribution....................................................... 9
Description of Capital Stock............................................... 10
Legal Matters.............................................................. 12
Experts.................................................................... 12
Where You Can Find More Information........................................ 13
</TABLE>
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You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with different information. You should
assume that the information appearing in this prospectus is accurate as of the
date on the front cover of this prospectus only. Our business, financial
condition, results of operations and prospects may have changed since that
date.
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Imperial Sugar Company
Imperial Sugar Company is the largest, most geographically diverse and most
balanced producer and marketer of refined sugar in the United States. We refine
raw cane sugar at four refineries located in Texas, Georgia, Florida and
Louisiana and produce beet sugar at 11 beet sugar factories located in
California, Wyoming, Montana and Michigan.
We offer a broad product line and sell to a wide range of customers,
including retail grocers, food service companies and industrial customers. Our
sugar products include granulated, powdered, liquid , liquid blends and brown
sugars sold in a variety of packaging options under various brands or private
market labels. Complementary non-sugar products that we market include salt,
pepper and other seasonings, non-nutritive sweeteners, non-dairy creamers,
nutritional dry mixes, sauces, drink mixes, desserts and packets containing
plastic cutlery, seasonings, paper napkins and other items. In addition, we
produce selected specialty sugar products.
Imperial was incorporated in 1924 and is the successor to a cane sugar
plantation and milling operation begun in Sugar Land in the early 1800s that
began producing granulated sugar in 1843. In 1988, we acquired Holly Sugar
Corporation. In April 1996, we acquired Spreckels Sugar Company. We completed
acquisitions of Savannah Foods & Industries, Inc. in December 1997, Wholesome
Foods L.L.C. in September 1998 and Diamond Crystal Specialty Foods, Inc. in
November 1998.
Our principal executive offices are located at One Imperial Square, 8016
Highway 90-A, Sugar Land, Texas 77478, and our telephone number at that
location is (281) 491-9181. Our mailing address is P. O. Box 9, Sugar Land,
Texas 77487-0009.
Risk Factors
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing our company.
If any of the following risks actually occur, our business, financial
condition or results of operations could be materially adversely affected. In
such case, the trading price of the common stock could decline, and you may
lose all or part of your investment.
Sales of Large Number of Shares May Lower Our Share Price
The average weekly trading volume for our common stock for the three months
ended April 30, 1999 was approximately 90,000 shares. This prospectus covers
the offer and sale by selling shareholders of 5,006,770 shares of common stock.
These shares previously were not freely tradeable in the market. Our share
price may decline if selling shareholders sell a large number of shares over a
short time period.
High Debt Level Causes Operating Restrictions
As of December 31, 1998, our long-term debt was $679.3 million, compared to
shareholders' equity of $401.2 million. This level of indebtedness reduces our
flexibility to respond to changing business and economic conditions and limits
our capital expenditures and acquisitions. During January 1999, as a result of
seasonal working capital requirements for beet purchases and inventory, from $0
to $12 million remained available to us for borrowing under our $200 million
revolving credit facility. The terms of our major debt agreements include
significant operating restrictions that limit our ability to incur additional
indebtedness, make investments or repurchase shares of common stock. These debt
agreements also place liens on most of our assets.
Approximately $401.7 million of our indebtedness outstanding at December 31,
1998 bore interest at variable rates. We have entered into interest rate swap
agreements with major financial institutions to effectively fix the interest
rate on $214.4 million of this indebtedness at a weighted average annual rate
of 7.96%. Increases in floating interest rates could increase our interest
costs to the extent we are unhedged.
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Interest rates also affect the value of our swap agreements. As a result of
decreased interest rates, if we were required to settle the interest rate swap
agreements on December 31, 1998, we would have been required to pay $6.1
million. While we may continue to enter into agreements to limit our exposure
to interest rate increases, these agreements will not completely eliminate our
exposure.
Our high level of indebtedness may have important consequences, including the
following:
. our ability to obtain financing for acquisitions, working capital,
capital expenditures or other purposes may be impaired or such financing
may be on terms unfavorable to us
. we will use a substantial portion of our cash flow to make debt service
payments, which will reduce the funds that would otherwise be available
for operations and future business opportunities
. a substantial decrease in our operating cash flow or an increase in our
expenses could make it difficult for us to meet debt service requirements
and require us to modify operations
. we may become more vulnerable to downturns in our business or the economy
generally
. certain of our debt agreements restrict dividends to our stockholders
Over the 12 months ended December 31, 1998, we used approximately two-thirds of
our operating cash flow to pay principal and interest on our outstanding debt.
Our ability to service additional indebtedness will depend on our future
performance, including our ability to manage cash flow and working capital. See
"--Restrictions on Our Ability to Pay Dividends."
History of Net Losses
We have incurred net losses in four of our last five fiscal years. These
losses have been attributable to a number of factors, including low sugar
prices, high beet sugar costs, abnormal weather affecting crop yields, beet
quality and factory start-ups, plant closure costs and debt retirement costs.
The following table describes our net income (loss) in recent periods (in
thousands of dollars, except per share data):
<TABLE>
<CAPTION>
Six Months Six Months
Ended Year Ended Ended Year Ended March 31,
March 31, September 30, September 30, ---------------------------------
1999 1998 1997 1997 1996 1995 1994
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<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) before
extraordinary item..... $(16,194) $(5,835) $9,951 $11,518 $(3,218) $(5,365) $(7,965)
Net income (loss)....... (16,194) (7,834) 9,951 11,518 (2,614) (5,365) (7,965)
Diluted income (loss)
per share before
extraordinary item..... $ (0.52) $ (0.24) $ 0.69 $ 0.90 $ (0.31) $ (0.52) $ (0.78)
Diluted net income
(loss) per share....... (0.52) (0.32) 0.69 0.90 (0.25) (0.52) (0.78)
</TABLE>
There can be no assurance that we will not incur net losses in the future.
Future Results Will Depend on Ability to Integrate Operations of Acquired
Companies
We recently completed a number of strategic acquisitions that have more than
doubled our revenues. In December 1997, we completed our two-step acquisition
of Savannah Foods. We acquired Wholesome Foods in September 1998. In November
1998, we acquired Diamond Crystal. Our future results will depend in part on
our ability to integrate our operations with those of the acquired companies.
These integration activities include implementing common accounting and
management information systems, coordinating marketing, sales and customer
service efforts, and consolidating logistics, purchasing and similar support
functions. While we have made significant achievements in many of these areas,
we do not expect to substantially complete all these initiatives until fiscal
2000. This integration may require a substantial amount of our attention.
Our inability to integrate our operations with those of the acquired
companies in a timely and efficient manner would adversely impact our ability
to realize the planned benefits of the acquisitions, including synergies and
cost savings.
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Market Risk for Sugar and Impact of Government Regulation
Domestic prices for refined sugar and raw cane sugar and the quality and
quantity of sugar beets available to us substantially affect our results of
operations. Based on available data from the United States Department of
Agriculture, average annual prices for sugar have fluctuated over a range of
approximately 20% over the past eight years. A variety of external forces that
we are unable to predict influence these market factors, including the number
of domestic acres contracted to grow sugar beets, prices of competing crops,
weather conditions and United States farm and trade policy. Legislative and
regulatory actions also substantially influence the domestic sugar industry.
The Federal Agricultural Improvement and Reform Act of 1996 limits the
importation of raw cane sugar, affecting the supply of raw cane sugar available
to our cane sugar refineries.
Historically, we have made over three-quarters of our industrial sales under
fixed price, forward sales contracts, which extend for up to one year. As a
result, changes in our realized sales prices tend to lag market price changes.
To mitigate our exposure to future price changes, we enter into forward
purchase contracts to buy raw cane sugar at fixed prices and use futures
contracts and other pricing techniques to fix the price for part of the sugar
we buy. We purchase sugar beets under participatory contracts which provide for
a percentage sharing of the net selling price realized on refined beet sugar
sales between our company and the grower. Use of participatory contracts also
reduces our exposure to refined sugar price risk by causing the price we pay
for sugar beets to vary with the price we receive for refined sugar.
Results Subject to Sugar Beet Crop and Storage Risks
Our beet sugar operations are dependent on the quantity, quality and
proximity of sugar beets available to our factories. Sugar beet acreage varies
depending on factors such as prices anticipated by growers for sugar beets
versus alternative crops, prior crop quality, availability of irrigation and
weather conditions. In addition, the quantity of refined sugar subsequently
produced from the sugar beet crop may be affected materially by, among other
things, the acreage harvested, diseases, insects and weather conditions during
the growing, harvesting, processing and storage seasons. Sugar beets are
purchased from the growers after the harvest and, in some locations, stored in
piles until processed. Under sugar beet contracts we use in Michigan and the
Rocky Mountain region, the beet grower shares the risk of deterioration of the
stored sugar beets with us. We contractually accept about one-half of the risk
with respect to stored sugar beets in these areas and all of the risk in other
areas. We believe that the geographic diversity of our growing areas reduces
the risk that adverse conditions will occur company-wide; however, there can be
no assurance that our results of operations will not be adversely affected in
future years by such risks.
Termination of Supply Contract and Need to Obtain Raw Sugar Supply
The United States Sugar Corporation ("U.S. Sugar"), a supplier of raw sugar
which supplies approximately 14% of our supply of raw cane sugar, has notified
us that it intends to terminate its supply contract with us effective October
31, 2001. We expect that adequate supplies of raw cane sugar from other sources
will be available on the expiration of the contract. No assurance can be given,
however, that the replacement supplies will be available. We do not expect the
expiration of the U.S. Sugar contract to significantly affect our cost of raw
sugar since this contract provides for market-based pricing. The amount of raw
sugar available from offshore suppliers to all United States cane sugar
refiners, including our company, is directly dependent on quotas set by the
United States Department of Agriculture.
Inability to Predict Future Demand for Refined Sugar
U.S. demand for refined sugar has increased each year since 1986, and the
average rate of growth for the five-year period ended September 30, 1998 was
1.6%, according to USDA data. However, we cannot predict future rates of
growth. Demand for refined sugar in the future could be adversely affected by
numerous factors including the impact of changes in the availability,
development or potential use of various types of sweeteners or future changes
in consumer sweetener preferences or in population size. If demand for sugar
decreases in the future, lower sales volumes and lower prices could result,
which could have an adverse effect on us.
5
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Restrictions on Our Ability to Pay Dividends
Our ability to pay dividends on the common stock will depend primarily on our
future performance and liquidity. In addition, our debt agreements restrict us
from paying dividends if we would not be in compliance with certain financial
tests. The principal tests require us to maintain certain ratios of cash flow
to debt and cash flow to fixed charges and to maintain a certain minimum
working capital ratio and minimum level of net worth. Under the most
restrictive test, we had the ability to pay $8 million of dividends as of March
31, 1999. While we have paid cash dividends of $0.03 per share of common stock
for each of the past seven quarters and we have no present plan or intention to
adjust this dividend, there can be no assurance that we will continue paying
cash dividends in this amount, with this frequency or at all.
Competition from Sugar, Sweetener and Food Service Companies and Impact on
Market Prices
We compete with other cane sugar refiners and beet sugar processors and, in
certain product areas, with producers of other nutritive and non-nutritive
sweeteners. We also compete with food service companies in providing bag sugar,
individual packets of sugar, salt, pepper, non-dairy creamers and plastic
cutlery, nutritional dry mixes, sauces, seasonings, drink mixes, desserts and
packets containing plastic cutlery, seasonings, paper napkins and other items.
Selling price and the ability to meet timely customer quality and quantity
requirements are important competitive factors. Certain competing beet sugar
processors have expanded their production capacity in the past few years. The
additional sugar marketed as a result of this expansion has acted to reduce
sugar market prices at times during this period.
Possible Increased Cost of Environmental Compliance
Various federal, state and local environmental regulations govern our
operations. These regulations impose limitations on releases of effluents and
emissions from our facilities. They also impose requirements on our management
of water resources, air resources, toxic substances and solid waste and
emergency planning. Our permitting, monitoring and remediation expenses (on a
pro forma combined basis) have ranged from $2 million to $3 million per year
over the last three fiscal years. Capital expenditures for environmental
projects have constituted up to 5% of our total capital budget over the last
three fiscal years. We do not believe that compliance with environmental
regulations will have a material adverse impact on our capital resources,
operating results or financial condition.
Forward-Looking Statements
This prospectus includes forward-looking statements. We based these forward-
looking statements on current expectations and projections about future events.
These forward-looking statements are subject to risks, uncertainties, and
assumptions, including, among other things:
. market factors
. weather and economic conditions
. farm and trade policy
. our ability to realize synergies and cost savings from acquisitions
. our ability and the ability of our customers and vendors to address Year
2000 computer issues
. available supply and price of raw sugar
. available quantity and quality of sugar beets
We undertake no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this prospectus might not occur.
Use of Proceeds
We will not receive any proceeds from sales of common stock by the selling
shareholders.
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Selling Shareholders
This prospectus covers the offer and sale of up to 5,006,770 shares of common
stock by the selling shareholders listed in the following table. We originally
issued these shares as a part of the purchase price for our acquisition of DSLT
Inc. (the parent of Diamond Crystal Specialty Foods, Inc.) completed on
November 2, 1998. As part of the DSLT acquisition, we obtained a 45-day option
from the former shareholders of DSLT to buy back the shares we issued to them
for an exercise price of $7.00 per share. In mid-November 1998, we assigned our
rights under the option to repurchase 2,147,978 shares of the common stock to
three of our existing shareholders (Greencore Group plc, H. Kempner Trust
Association, and Fayez Sarofim) for an aggregate of approximately $270,000.
After the assignment, the three existing shareholders exercised the assigned
portion of the option and acquired an aggregate of 2,147,978 shares of the
common stock from the former shareholders of DSLT.
In connection with the acquisition of DSLT, 1,759,697 shares of the common
stock issued were placed in escrow as security for post-closing adjustments and
indemnity obligations under the DSLT acquisition agreement. These shares will
remain in escrow until November 2, 1999 or the resolution of any pending escrow
claims we may have at that time. In the following table, these shares have been
included pro rata in the share amounts for each selling shareholder who was a
shareholder of DSLT. However, such shares are not expected to be available for
sale under this prospectus unless they are released from the escrow to the
former shareholders of DSLT.
The following table sets forth certain information known to us regarding
beneficial ownership of common stock by the selling shareholders as of February
28, 1999, and as adjusted to reflect solely the sale of the shares of common
stock offered by this prospectus.
<TABLE>
<CAPTION>
Percent of Percent of
Shares Outstanding Shares Outstanding
Beneficially Shares Owned Beneficially Shares Owned
Owned Before Before Shares Owned After After
Selling Shareholder Offering Offering Offered Offering Offering**
- ------------------- ------------ ------------ --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Greencore Group plc
Earlsfort Holdings
B.V.................... 4,900,000 14.7% 1,100,000 3,800,000 11.4%
H. Kempner Trust
Association ............ 1,408,373 4.2 698,652 709,721 2.1
Fayez Sarofim........... 1,030,468 3.1 349,326 681,142 2.0
C. F. Moore Q-Tip Trust
dated 02/05/74......... 825,170 2.5 825,170 -- --
Harriet Engelgau
Trusts(1).............. 372,827 1.1 372,827 -- --
Frederick S. Moore
Trusts(2).............. 312,677 * 312,677 -- --
Eleanor W. Moore & F.
Raymond Moore
Trusts(3).............. 194,278 * 194,278 -- --
Caroline M. Stewart
Trust dated 04/11/90... 118,532 * 118,532 -- --
Jonathan Moore
Trusts(4).............. 89,250 * 89,250 -- --
Bruce Bennet Bookout
Trust U/A dated
09/03/91............... 84,250 * 84,250 -- --
Alice Moore Trust U/A
dated 06/20/80......... 81,287 * 81,287 -- --
Caroline Stewart Trust
Agency................. 65,041 * 65,041 -- --
Barbara W. Moore Trust
U/A dated 02/05/74..... 56,008 * 56,008 -- --
Lindsey Moore
Trusts(5).............. 52,759 * 52,759 -- --
Mary Anne Moore
Trusts(6).............. 52,759 * 52,759 -- --
R. Stephen Moore........ 46,570 * 46,570 -- --
Mary S. Gourley Trust
U/A dated 01/14/93..... 37,513 * 37,513 -- --
Alexandra Moore
Trusts(7).............. 36,639 * 36,639 -- --
Lezlynne Moore Trust U/A
dated 06/23/98......... 36,147 * 36,147 -- --
Trust U/A Fourth of the
Will of William R
Bonthron DEC........... 33,314 * 33,314 -- --
C. Nicholas Moore....... 29,259 * 29,259 -- --
Richard R. Moore Trust
U/A dated 02/27/90..... 27,572 * 27,572 -- --
Other Former DSLT
Shareholders(8)........ 306,902 * 306,902 -- --
</TABLE>
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* Less than 1% of outstanding shares.
** Assumes all shares offered are sold.
(1) Consists of shares held by the following trusts: Harriet Engelgau Trust U/A
dated 01/17/62 (240,009 shares); Harriet Engelgau Trust U/A dated 09/03/85
(128,318 shares); Harriet Engelgau Q-Tip Trust U/A dated 10/03/95 (4,500
shares).
(2) Consists of shares held by the following trusts: Frederick S. Moore Trust
U/A dated 01/17/62 (227,571 shares); Frederick S. Moore Trust U/A dated
02/24/92 (85,106 shares).
(3) Consists of shares held by the following trusts: Eleanor W. Moore & F.
Raymond Moore Trust U/A dated 01/24/86 (133,544 shares); F. Raymond Moore
Trust U/A dated 01/24/86 (34,824 shares); Eleanor W. Moore Trust U/A dated
01/24/86 (25,910 shares).
(4) Consists of shares held by the following trusts: Jonathon Moore Trust U/A
dated 11/10/77 (80,618 shares); Jonathon Moore Q-Tip Trust U/A dated
11/10/77 (8,632 shares).
(5) Consists of shares held by the following trusts: Lindsey E. Moore Trust
U/A dated 12/28/84 (19,042 shares); Lindsey Moore Trust U/A dated 12/30/92
(33,717 shares).
(6) Consists of shares held by the following trusts: Mary Anne Moore Trust U/A
dated 12/28/84 (19,042 shares); Mary Anne Moore Trust U/A dated 12/30/92
(33,717 shares).
(7) Consists of shares held by the following trusts: Alexandra Moore Trust U/A
dated 2/8/80 (17,624 shares); Alexandra Moore Trust U/A dated 12/30/92
(19,015 shares).
(8) Consists of 41 former shareholders of DSLT who in the aggregate own less
than 1% of the outstanding common stock before the offering.
The selling shareholders listed above, or persons who obtain common stock
from selling shareholders as a gift, on foreclosure of a pledge or in another
private transaction (who also are selling shareholders for this prospectus),
may sell up to all of the shares of the common stock shown above under the
heading "Shares Offered" pursuant to this prospectus in one or more
transactions from time to time as described below under "Plan of Distribution."
However, the selling shareholders are not obligated to sell any of the shares
of common stock offered by this prospectus.
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Plan of Distribution
The selling shareholders may offer and sell shares of common stock offered by
this prospectus from time to time in one or more of the following transactions:
. on the American Stock Exchange or any other securities exchange that
lists the common stock for trading
. in the over-the-counter market
. in transactions other than on such exchanges or in the over-the-counter
market
. in short sales of the common stock, in transactions to cover short sales
or otherwise in connection with short sales
. by pledge to secure debts and other obligations or on foreclosure of a
pledge
. through put or call options, including the writing of exchange-traded
call options, or other hedging transactions related to the common stock
. in a combination of any of the above transactions
The selling shareholders may sell their shares at market prices prevailing at
the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices. The transactions listed above may include
block transactions.
The selling shareholders may use broker-dealers to sell their shares or may
sell their shares to broker-dealers acting as principals. If this happens,
broker-dealers will either receive discounts or commissions from the selling
shareholders, or they will receive commissions from purchasers of shares for
whom they acted as agents, or both. If a broker-dealer purchases shares as a
principal, it may resell the shares for its own account under this prospectus.
We will pay all registration fees and expenses for the common stock offered by
this prospectus.
We have informed the selling shareholders that the anti-manipulation
provisions of Regulation M under the Securities Exchange Act of 1934 may apply
to their sales of common stock.
The selling shareholders and any agent, broker or dealer that participates in
sales of common stock offered by this prospectus may be deemed "underwriters"
under the Securities Act of 1933 and any commissions or other consideration
received by any agent, broker or dealer may be considered underwriting
discounts or commissions under the Securities Act. We have agreed to indemnify
certain selling shareholders against certain liabilities arising under the
Securities Act of 1933 from sales of common stock. Selling shareholders may
agree to indemnify any agent, broker or dealer that participates in sales of
common stock against liabilities arising under the Securities Act of 1933 from
sales of common stock.
Instead of selling common stock under this prospectus, selling shareholders
may sell common stock in compliance with the provisions of Rule 144 under the
Securities Act of 1933, if available.
The term "selling shareholders" also includes persons who obtain common stock
from selling shareholders as a gift, on foreclosure of a pledge or in another
private transaction.
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Description of Capital Stock
The following descriptions provide a summary of our capital stock.
Common Stock
We are authorized to issue 50,000,000 shares of common stock. The holders of
common stock are entitled to one vote for each share on all matters submitted
to a vote of shareholders. Holders of common stock are entitled to the
dividends that may be declared from time to time by our Board of Directors out
of funds legally available for dividends. Shareholders' rights to dividends are
subject to the dividend and liquidation rights of any preferred stock that may
be issued and to any dividend restrictions contained in debt agreements. In the
event of our liquidation, holders of common stock will share pro rata in any
assets that remain after payment of our debts and satisfaction of any
liquidation preference on any outstanding preferred stock. The holders of
common stock have no preemptive, subscription, redemptive or conversion rights.
The outstanding shares of common stock are fully paid and nonassessable.
Rights to Purchase Preferred Stock
On September 14, 1998, we entered into a rights agreement with the Bank of
New York, as rights agent, regarding the issuance of purchase rights to holders
of common stock. Each share of common stock currently includes one purchase
right. The purchase rights will be issuable with respect to all shares of
common stock issued before the earlier of:
. ten days following a public announcement that a person or group of
affiliated persons has acquired or obtained the right to acquire
beneficial ownership of 15% or more of the then outstanding shares of
common stock; or
. ten business days following the announcement of a tender offer or
exchange offer that would result in a person's becoming a 15%
shareholder.
Each purchase right entitles the registered holder to purchase from us a unit
consisting of two three-hundredths of a share of Series A junior participating
preferred stock, at a purchase price of $60 per unit, subject to adjustment, or
if a person becomes a 15% shareholder, the right to purchase shares of common
stock at one-half their market price. The rights are redeemable by our board of
directors before any person becomes a 15% shareholder for 2/3 cents per right.
The rights expire October 31, 2007 unless earlier redeemed. The description and
terms of the purchase rights are set forth in the rights agreement. The
purchase rights may have certain anti-takeover effects, including deterring
someone from acquiring control of our company in a manner or on terms not
approved by our board of directors. The purchase rights should not interfere
with any merger or other business combination approved by our board of
directors. The trigger level of the rights agreement is increased to 25% with
respect to certain holders of 10% or more of the shares of common stock on
January 27, 1995.
In connection with the sale of common stock to Greencore Group plc in 1996,
our board of directors took action under the rights agreement to increase the
ownership percentage that would trigger the rights agreement with respect to
Greencore to 30% during the term of an investor agreement between Greencore and
us. The investor agreement will terminate no later than August 29, 2001. After
termination of the investor agreement, the trigger level of the rights
agreement with respect to Greencore would be increased to 35%, until such time
as Greencore's ownership of common stock falls below 15%, at which time the
trigger level would become 15% for Greencore.
Preferred Stock
We are authorized to issue 5,000,000 shares of preferred stock, of which
333,333 shares have been designated as Series A preferred stock and which may
be issued in connection with exercise of purchase rights. No shares of
preferred stock were outstanding at the date of this prospectus. Our board of
directors has the authority, without shareholder approval, to issue shares of
preferred stock in one or more series and to determine the number of shares,
designations, dividend rights, conversion rights, voting power, redemption
rights, liquidation preferences and other terms of any such series. The
issuance of preferred stock, while
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providing flexibility in connection with possible acquisitions and other
corporate purposes, could adversely affect the voting power of holders of
common stock and the likelihood that such holders will receive dividend
payments and payments upon liquidation and could have the effect of delaying,
deferring or preventing a change in control of our company. We have no present
plans for the issuance of preferred stock, other than the shares of Series A
preferred stock issuable pursuant to purchase rights. Each two three-hundredths
of a share of Series A preferred stock that may be issued on the exercise of
the purchase rights will be redeemable in whole or in part for cash in an
amount equal to the market price of a share of common stock and will otherwise
be economically similar to a share of common stock.
Certain Provisions of Our Restated Articles of Incorporation
Restrictions on Our Ability to Repurchase Common Stock
Our restated articles of incorporation provide that we may not purchase or
otherwise acquire for value in any twelve-month period more than 8% of the
outstanding shares of any class of our capital stock unless:
. the purchase or acquisition has been approved by the holders of a
majority of the shares of the class that will remain outstanding;
. the purchase or acquisition is in accordance with an offer made to the
holders of all outstanding shares of such class; or
. solely in the case of stock ranking prior to the common stock in respect
of dividends or the distribution of assets on liquidation, such purchase
or acquisition is in accordance with mandatory redemption provisions
expressly applicable to such stock.
Staggered Board and Certain Potential Anti-takeover Effects
Our restated articles of incorporation provide that directors are to be
elected in three classes of as nearly an equal number as possible for staggered
terms and that no director may be removed by the shareholders except for cause.
In general, the restated articles of incorporation also require the affirmative
vote of the holders of at least 75% of the voting stock and the affirmative
vote of the holders of a majority of the voting stock not owned, directly or
indirectly, by any person beneficially owning 10% or more of any class of
voting stock (a related person) prior to any merger, consolidation, sale or
lease of all or substantially all of our assets or certain other transactions
involving any related person. The voting requirement is not applicable to
certain transactions, including those that are approved by continuing directors
(as defined in the restated articles of incorporation). The foregoing
provisions may have certain anti-takeover effects in that a person gaining
voting control of Imperial may be prevented from or delayed in taking actual
control.
Limitation of Liability of Our Directors
Our restated articles of incorporation contain a provision that limits that
liability of our directors as permitted by the Texas Miscellaneous Corporation
Laws Act. The provision limits the personal liability of a director to our
company and shareholders for monetary damages for an act or omission in the
directors capacity as a director. As a result, shareholders may be unable to
recover monetary damages against directors for negligent or grossly negligent
acts or omissions in violation of their duty of care. The provision does not
change the liability of a director for breach of his duty of loyalty to our
company or to shareholders, acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, any transaction from
which a director received an improper benefit (whether or not the benefit
resulted from an action taken within the scope of the director's office), acts
or omissions for which the liability of a director is expressly provided for by
statute or an act related to an unlawful stock repurchase or payment of a
dividend.
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Business Combination Law
Part Thirteen (the "Business Combination Law") of the Texas Business
Corporation Act applies to our company. The Business Combination Law generally
prevents an "affiliated shareholder" (defined generally as a person that is or
was within the preceding three-year period the beneficial owner of 20% or more
of a corporation's outstanding voting shares) or its affiliates or associates
from entering into or engaging in a "business combination" with an "issuing
public corporation" during the three-year period immediately following the
affiliated shareholder's acquisition of shares unless certain conditions are
satisfied. The three-year restriction does not apply if either:
. before the date such person became an affiliated shareholder, the board
of directors of the issuing public corporation approves the business
combination or the acquisition of shares made by the affiliated
shareholder on such date; or
. not less than six months after the date such person became an affiliated
shareholder, the business combination is approved by the affirmative vote
of holders of at least two-thirds of the issuing public corporation's
outstanding voting shares not beneficially owned by the affiliated
shareholder or its affiliates or associates.
The business combinations subject to the restriction generally include:
. mergers or share exchanges;
. dispositions of assets having an aggregate value equal to 10% or more of
the market value of the assets or of the outstanding common stock or
representing 10% or more of the earning power or net income of the
corporation;
. certain stock issuances or transactions by the corporation that would
increase the affiliated shareholder's proportionate interest in the
corporation;
. certain liquidations or dissolutions; and
. the receipt of tax, guarantee, loan or other financial benefits by an
affiliated shareholder other than proportionately as a shareholder of the
corporation.
In discharging the duties of director under the Business Combination Act or
otherwise, a director, in considering the best interests of our company, may
consider the long-term as well as the short-term interests of our company and
shareholders, including the possibility that those interests may be best served
by our continued independence.
Legal Matters
Certain legal matters in connection with the common stock offered by this
prospectus will be passed on for us by our outside counsel, Baker & Botts,
L.L.P., Houston, Texas.
Experts
The consolidated financial statements incorporated in this prospectus by
reference from our Annual Report on Form 10-K for the fiscal year ended
September 30, 1998 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated in this prospectus
by reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements of DSLT Inc. incorporated in this
prospectus by reference from our Form 8-K dated November 2, 1998 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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The consolidated financial statements of Savannah Foods & Industries, Inc.
incorporated in this prospectus by reference from our Form 8-K dated December
22, 1997 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, and Arthur Andersen LLP,
independent accountants, to the extent and for the periods indicated in their
reports, given on the authority of each firm as experts in auditing and
accounting.
Where You Can Find More Information
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Our SEC filings also are available to the public at the SEC's
web site at http://www.sec.gov. We maintain a website containing company
information at http://www.imperialholly.com.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934:
. our Annual Report on Form 10-K for the fiscal year ended September 30,
1998
. our Quarterly Report on Form 10-Q for the quarter ended December 31, 1998
. our Current Report on Form 8-K dated May 3, 1999
. our Current Report on Form 8-K dated November 2, 1998
. our Current Report on Form 8-K dated December 22, 1997, as amended by
Form 8-K/A filed January 13, 1998
. description of common stock contained in our Registration Statement on
Form 8-A filed on April 7, 1988, and description of rights to purchase
preferred stock contained in our Registration Statement on Form 8-A/A
filed on March 19, 1999
You may obtain a copy of these filings, at no cost, by writing or telephoning:
William F. Schwer
Managing Director and General Counsel
Imperial Sugar Company
One Imperial Square
P.O. Box 9
Sugar Land, Texas 77478-0009
(281) 491-9181
This prospectus is part of a registration statement we filed with the SEC.
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