STERLING SUGARS, INC.
P. O. BOX 572
FRANKLIN, LOUISIANA 70538
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Sterling Sugars, Inc. will be held in
the Conference Room, St. Mary Parish Library, 206 Iberia Street, Franklin
Louisiana, on Thursday, November 30, 2000 at 10:00 a.m. for the following
purposes:
1. Election of directors to serve for one year or until their
successors are elected and qualified.
2. Transaction of such other business as may properly come before the
meeting or any adjournments thereof.
The close of business on October 6, 2000 has been fixed as the record date
for determining stockholders entitled to notice of and to vote at the
meeting.
By order of the Board of Directors
J. Patout Burns, Jr.
Secretary
Franklin, Louisiana
November 15, 2000
YOUR VOTE IS IMPORTANT
Whether or not you expect to attend the meeting, please mark, date, sign
and promptly return the enclosed proxy in the accompanying envelope, which
requires no postage if mailed in the United States. You may, of course
revoke your proxy and vote in person.
<PAGE>
STERLING SUGARS, INC.
P. O. BOX 572
Franklin, Louisiana 70538
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Sterling
Sugars, Inc. ("the Company") for use at the Annual Meeting of Stockholders
to be held at 10:00 a.m. on November 30, 2000 at the St. Mary Parish Library
Conference Room, 206 Iberia Street, Franklin, La. and at any adjournments
thereof. If properly and timely completed and returned, the proxy will be
voted in the manner you specify thereon. If no manner is specified, the
proxy will be voted for election of the nominees for director hereinafter
named.
The proxy may be revoked at any time before it is voted and you may
vote in person if you attend the meeting.
The cost of soliciting proxies will be borne by the Company. In
addition to use of the mails, proxies may be solicited by telephone and
personal contacts.
It is expected that this proxy statement and related materials will
first be mailed to stockholders on or about November 15, 2000.
STOCKHOLDERS' PROPOSALS
In order for proposals by stockholders to be considered for inclusion
in the proxy and proxy statement relating to the year 2001 Annual Meeting of
Stockholders, such proposals must be received at the Company's principal
executive office no later than June 30, 2001.
VOTING SECURITIES
Only stockholders of record as of the close of business on October 6,
2000 are entitled to vote at the meeting. At that time, 2,500,000 shares of
the Company's Common Stock (being the Company's only class of authorized
stock) were outstanding. Each share is entitled to one vote.
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ELECTION OF DIRECTORS
In accordance with the Company's by-laws, seven directors are to be
elected at the annual meeting to serve a term of one year from November 30,
2000 or until their successors are elected and qualified. The election of
directors shall be determined by a majority of the votes actually cast, and
the abstention or failure of any stockholder to vote will not affect this
determination. Each shareholder is entitled to one vote per share. The
Board of Directors recommends a vote for all the director nominees listed
below. Unless you specify otherwise, proxy holders will vote for election
of the management nominees named below. Should any of the nominees become
unavailable for election, which is not anticipated, proxy holders may, in
their discretion, vote for other nominees recommended by the Board.
The following table lists the nominees for election as director and shows
as of September 30, 2000, the beneficial ownership (as determined in
accordance with Rule 13d-3 of the Securities and Exchange Commission) of the
Company's outstanding common stock by each nominee and by all directors and
executive officers as a group:
First Shares
Elected Beneficially Percent of
Name Age Director Owned (1) Class
---------------------------------------------------------------------------
Bernard E. Boudreaux, Jr. 63 1996 1,000 *
Dr. James Patout Burns, Jr. 60 1994 1,547,478(2) 61.90%
Craig P. Caillier 38 1996 100 *
Peter V. Guarisco 72 1986 511,531(3) 20.46%
Victor Guarisco, II (4) 36 1992 18,990 *
Rivers Patout (5) 35 1994 100 *
William S. Patout, III 68 1997 100 *
All directors and named
executive officers as a group 2,079,299 83.17%
---------------------------------------------------------------------------
*Less than 1%
(1) Based on information furnished by nominees. Includes direct and
indirect ownership and unless otherwise indicated includes sole voting
and investment power with respect to reported holdings.
(2) Includes shared voting and investment power with respect to 1,546,978
shares owned by M. A. Patout & Son, Ltd.
(3) Mr. Guarisco's reported holdings reflect shared voting and investment
power with respect to 143,100 shares owned by Hellenic, Inc. and 204,431
shares owned by Capital Management Consultants, Inc. Mr. Guarisco
disclaims beneficial ownership of such shares.
(4) Peter V. Guarisco is the father of Victor Guarisco, II.
(5) William S. Patout, III is the father of Rivers Patout.
(6) See "Information Concerning Management - Executive Officers".
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Business Experience of Directors
--------------------------------
The following paragraphs describe all Company offices held by nominees
and their principal occupations for the last five years.
Bernard E. Boudreaux, Jr. is Chairman of the Board and general counsel of
the Company and formerly District Attorney, Sixteenth Judicial District of
Louisiana.
Dr. James Patout Burns, Jr., Secretary of the Company, is the Edward A.
Malloy Professor of Catholic Studies at Vanderbilt Divinity School,
Nashville, Tennessee. Dr. Burns was formerly Thomas and Alberta White
Professor of Christian Thought and Chair of the Program in Religious Studies
at Washington University, St. Louis, Missouri.
Craig P. Caillier, President and Chief Executive Officer of the Company.
Peter V. Guarisco is Chairman of the Board and President of Hellenic,
Inc., a privately owned company having diverse business interests, Morgan
City, Louisiana.
Victor Guarisco, II is President of Cottonwood, Inc., a privately owned
real estate management and development company, Morgan City, Louisiana.
Rivers Patout is Vice President for Property Development of the Company
and Assistant General Manager of M. A. Patout & Son, Ltd., Jeanerette,
Louisiana.
William S. Patout, III is President and Chief Executive Officer of M. A.
Patout & Son, Ltd., Jeanerette, Louisiana.
Directors' Compensation
-----------------------
Directors, excepting the President & CEO, receive an annual retainer
of $5,000 and an attendance fee of $500 per meeting plus reimbursement for
travel and related expenses incurred in attending board and committee
meetings.
Compensation Policies of the Board of Directors
-----------------------------------------------
The Board of Directors does not have a compensation committee and
executive compensation determinations are made by the entire Board. Mr.
Caillier's compensation is based on his performance and the overall
profitability of the Company, as well as the Board's forecasted future
performance as determined in the best judgment of the Board. Mr. Caillier's
compensation is not directly tied to one specific factor such as an increase
in the price of the Company's stock, return on equity or net profit and
there are no specific formulas used in the calculation of compensation.
Committees of the Board
------------------------
The Company has no standing nominating or compensation committees or
committees performing similar functions. The Company's Audit and Ethics
Committee is empowered to engage and evaluate the performance of the
Company's public accountants and review year-end and other financial
statements when appropriate. The Committee, which consisted of Messrs.
Boudreaux, R. Patout and P. Guarisco, did not meet during fiscal 2000.
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Meetings of the Board of Directors
----------------------------------
Three meetings of the Board of Directors were held during the last fiscal
year. All directors attended all meetings with exception of one meeting
missed by Mr. Victor Guarisco.
The following table provides information as of September 30, 2000
concerning each stockholder known by the Company to be the beneficial owner
(as determined by Rule 13d-3 of the Securities and Exchange Commission) of
more than five percent (5%) of its outstanding stock:
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned (1) Class
---------------------------------------------------------------------------
M. A Patout & Son, Ltd. 1,546,978 61.88%
3512 J. Patout Burns Road
Jeanerette, Louisiana 70544
Peter V. Guarisco 511,531(2) 20.46%
P. O. Box 2588
Morgan City, Louisiana 70380
Capital Management Consultants, Inc. 204,431(2) 8.18%
P. O. Box 2588
Morgan City, Louisiana 70380
Hellenic, Inc. 143,100(2) 5.72%
P. O. Box 2588
Morgan City, Louisiana 70380
---------------------------------------------------------------------------
(1) Based on information furnished by beneficial owners. Includes direct
and indirect ownership and, unless otherwise indicated, also includes
sole voting and investment power with respect to reported holdings.
(2) Includes 143,100 shares owned by Hellenic, Inc. and 204,431 shares owned
of record by Capital Management Consultants, Inc. Mr. Guarisco shares
voting and investment power with respect to such shares. Mr. Guarisco
disclaims beneficial ownership of these shares.
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INFORMATION CONCERNING MANAGEMENT
Executive Officers
------------------
The table below sets forth the beneficial ownership of the named
executive officers.
Shares Beneficially
Name Age Owned Percent of Shares
--------------------------------------------------------------------------
Craig P. Caillier 38 100 .004%
Chief Executive Officer and
Director
--------------------------------------------------------------------------
Business Experience of Executive Officers
-----------------------------------------
Craig P. Caillier, for five years prior to his association with the
Company, was Assistant General Manager and Secretary/Treasurer of M. A.
Patout & Son, Ltd., Jeanerette, La. Before his election as President and
CEO of the Company, he was Senior Vice President and General Manager of
the Company.
Executive Compensation
----------------------
Mr. Caillier, the Company's President and Chief Executive Officer,
became an executive officer of the Company in fiscal 1994. The following
table sets forth information concerning Mr. Caillier's compensation during
the Company's last three fiscal years.
Annual Compensation
-------------------
Name and Principal Other Annual
Position Year Salary Bonus Compensation (1)
---------------------------------------------------------------------------
Craig P. Caillier 2000 $90,000 $38,684 $3,861
President and CEO 1999 86,033 28,684 3,442
1998 79,583 63,474 4,292
---------------------------------------------------------------------------
(1) Company contributions to 401(k) savings plan.
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As amended in 1986, the Company's Retirement Plan provides benefits
at retirement to full-time salaried and hourly factory employees and to
full-time agricultural employees (other than those hired at age 60 or older)
who are at least 21 years of age and have at least one year of service.
Contributions to the plan, which are funded entirely by the Company, are
computed on an actuarial basis. The plan classifies employees as agricultural
and factory employees. Benefits for factory employees (a classification
that includes the Company's executive officers) are determined by multiplying
the employee's years of service by the sum of (i) .60 percent times Final
Average Earnings up to Covered Compensation and (ii) 1.20 percent times
Final Average Earnings in excess of Covered Compensation. The term "Covered
Compensation" means the average annual earnings used to calculate the
participant's social security benefit. This average covers his entire
employment history including employment prior to employment by Sterling
Sugars, if any), and assumes continued employment to age 65. It also
assumes that, during each year of employment, the participant always earned
the maximum amount subject to social security withholding (the Taxable Wage
Base). Each year, the Plan's actuaries provide a table that determines the
Covered Compensation level for participants reaching age 65 in each of the
succeeding years. The Covered Compensation level increases over time
(generally every year) as the Taxable Wage Base itself increases. As a
result, Covered Compensation is relatively low for participants nearing the
average retirement age of 65 and increases for younger participants. The
actual final determination of a Participant's Covered Compensation amount
is therefore made at the time of termination of employment or retirement.
Mr. Caillier is 38 years old and has approximately six years of
credited service. Set out below is a table that shows the estimated annual
pension benefits for employees retiring at age 65 with varying years of
credited service and final earnings.
Pension Table
-------------
Years of Service
---------------------------------------
Final Earnings 10 15 20 25
-----------------------------------------------------------------------
$ 50,000 $ 4,632 $ 6,948 $ 9,264 $ 11,580
$ 75,000 7,632 11,448 15,264 19,080
$ 100,000 11,632 15,948 21,264 26,580
-----------------------------------------------------------------------
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<PAGE>
Effective February 1, 1992 the Company established the Sterling Sugars,
Inc. Employee's Savings Plan and Trust for the benefit of all eligible
full-time salaried and hourly employees and full-time salaried agricultural
employees who are at least 21 years old and have completed at least one year
of service with the Company. The Plan is referred to as a 401(k) retirement
plan, a form of a defined contribution plan. Through elective deferrals,
employees may contribute from one to six percent of their annual gross
compensation into the Plan. The Company is obligated to match contributions
to the extent of fifty percent of the first six percent of an employee's
elective deferrals. Any additional Company contributions are discretionary.
The Plan was amended effective February 1, 1994 to change eligibility
requirements and investment election dates and to credit service for a
related employer. Newly hired employees are now eligible to participate on
the first day of the calendar month following completion of age and service
requirements. Investment changes will be made effective April 1 instead of
February 1 and October 1 instead of August 1 of each year. Credited service
was also amended to include service with M. A. Patout & Son, Ltd., a
related employer.
Stock Performance Graph
-----------------------
The following graph presents the cumulative total return on the
Company's common stock for the five year period ended July 31, 2000 compared
to the cumulative total return assuming reinvestment of dividends for
all stocks quoted on the NASDAQ Market Value Index. Because there is no
published industry or line of business index comparable to Sterling, a peer
group was selected based on similar publicly traded companies with market
capitalization of $17.4 million to $17.5 million as of July 31, 2000. This
peer group consists of the following five companies: Chad Therapeutics,
Glasaire Industries, Multi-Color Corp, Ridgewood Financial, Inc. and The
Unimark Group, Inc.
Year Sterling NASDAQ Peer Group
------------------------------------------------------
1995 100 100 100
1996 121 140 260
1997 146 184 273
1998 160 217 153
1999 156 339 58
2000 136 507 49
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Certain Transactions
---------------------
On November 15, 1994, the Company entered into a technical service
contract with M. A. Patout & Son, Ltd. ("Patout"). The contract provides
that Patout will provide technical and engineering services to the Company
in return for a fee equal to ten percent of the Company's net income before
income taxes from the manufacture, production and sale of raw sugar and
molasses each year, provided that net income from the foregoing exceeds
$500,000. The agreement was to expire on January 31, 1999 but because of
the change in the Company's fiscal year end, the agreement was extended to
July 31, 1999. The agreement also provides Patout an option to acquire
50,000 shares of treasury stock owned by the Company on or before December
31, 1998, at a price of $3.25 per share. Patout exercised its option on
April 12, 1995 and acquired 50,000 shares of treasury stock for $162,500.
There was no technical service fee due for the year ended July 31, 2000 or
July 31, 1999.
Mr. Bernard E. Boudreaux, Jr., Chairman of the Board of the Company,
served in fiscal 2000 and will serve in fiscal 2001, as general counsel for
the Company on a retainer basis.
Other Information
------------------
Persons who are directors or executive officers of the Company, and
persons who beneficially own more than 10% of the Company's common stock,
are required to file with the Securities and Exchange Commission periodic
reports of changes in their ownership of the Company's stock. Based solely
on a review of the forms furnished to the Company pursuant to the rules of
the Securities and Exchange Commission, such persons complied with the
filing requirements during the last three fiscal years of the Company
except M. A. Patout & Son, Ltd. was late filing four reports covering nine
transactions, and Mr. Boudreaux was late in filing Form 3.
INDEPENDENT ACCOUNTANTS
It is anticipated that Broussard, Poche, Lewis & Breaux, will be asked to
serve as the Company's independent public accountants for the fiscal year
ending July 31, 2001. A representative of the firm is expected to be
present at the annual meeting and to be available to respond to appropriate
questions. He will have the opportunity to make a statement if he desires.
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<PAGE>
OTHER MATTERS
The matters to be acted upon at the Annual Meeting of Stockholders are
set forth in the accompanying notice. The Board knows of no other business
to come before the meeting, but if other matters requiring a vote are
properly presented to the meeting or any adjournments thereof, proxy holders
will vote, or abstain from voting hereon in accordance with their best
judgment.
By Order of the Board of Directors
J. Patout Burns, Jr.
Secretary
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<PAGE>
STERLING SUGARS, INC. (Solicited by the Board of Directors)
The undersigned hereby appoints J. Patout Burns, Jr., Craig P. Caillier
and Peter V. Guarisco and each of them, proxies with full power of
substitution, to represent and vote all shares of Common Stock of Sterling
Sugars, Inc. which the undersigned is entitled to vote at the Annual Meeting
of Stockholders of said corportation to be held in the Conference Room, St.
Mary Parish Library, 206 Iberia Street, Franklin, Louisiana on Monday,
November 30, 2000 at 10:00 a.m. and at any adjournment thereof (1) as
hereinafter specified upon the election of directors and (2) in their
disretion upon such other business as may properly come before the meeting
or any adjournment thereof.
A VOTE FOR THE FOLLOWING NOMINEES IS RECOMMENDED BY THE BOARD OF DIRECTORS
1. Election of Directors
For all nominees listed below ______Withhold authority to vote for all
nominees listed below________
(Except as indicated to the contrary below)
Bernard E. Boudreaux, Jr., Dr. J. Patout Burns, Jr., Craig P. Caillier,
Peter V. Guarisco, Victor Guarisco, II, Rivers Patout and William S.
Patout, III
INSTRUCTION:
(To withhold authority to vote for any individual nominee, write that
nominee's name in the space provided below)
___________________________________________________________________________
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE
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<PAGE>
When properly executed and returned, this proxy will be voted in the manner
specified. If no manner is specified, the shares represented hereby will be
voted for election of the nominees named on the reverse hereof.
DATE____________________________,2000
_____________________________________
SIGNATURE OF HOLDER
NOTE: Please sign as your name appears
hereon. When signed as attorney-in-fact
executor, administrator, trustee or
guardian, please give your full title as
such. If a corporation, please sign in
full corporate name by authorized
officer. If a partnership, please sign
in full partnership name by authorized
person.
PLEASE MARK, DATE, SIGN AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES
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