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[LOGO] SAVANNAH FOODS & INDUSTRIES, INC.
WILLIAM W. SPRAGUE III EXHIBIT 10-9
PRESIDENT AND TELEPHONE (912) 234-1261
CHIEF EXECUTIVE OFFICER FAX (912) 232-3469
May 19, 1995
Mr. David H. Roche
Vice President
Savannah Foods & Industries, Inc.
c/o Michigan Sugar, Inc.
Post Office Box 1348
Saginaw, Michigan 48605
Dear Mr. Roche:
Savannah Foods & Industries, Inc. (the "Company") considers the
establishment and maintenance of a sound and vital management to be essential
to protecting and enhancing the best interests of the Company and its
shareholders. In this connection, the Company recognizes that, as is the case
with many publicly held corporations, the possibility of a change in control
may exist and that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders.
Accordingly, the Company's Board of Directors has determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including yourself, to their
assigned duties without distraction in the face of the potentially disturbing
circumstances arising from the possibility of a change in control of the
Company.
In order to induce you to remain in the employ of the Company, this
letter agreement sets forth the severance benefits which the
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Company agrees will be provided to you in the event your employment with the
Company is terminated subsequent to a "change in control of the Company" (as
defined in Section 2 hereof) under the circumstances described below.
1. TERM. This Agreement shall commence on the date hereof and
shall continue until END OF YEAR DATED ABOVE; provided, however, that
commencing on January 1, 1995, and each January 1st thereafter, the terms of
this Agreement shall automatically be extended for one additional year unless
at least thirty (30) days prior to such January 1st date, the Company shall
have given notice that it does not wish to extend this Agreement. In the event
of a change in control, as referred to in Section 2 of this Agreement, your
rights thereafter under this Agreement shall become permanent, are not
terminable, and cannot be affected by any corporate action without your
consent, except as is provided for in Section 3 of this Agreement with respect
to death or normal retirement, termination by the Company for cause, or your
disability.
2. CHANGE IN CONTROL. No benefits shall be payable
hereunder unless there shall have been a change in control of the Company, as
set forth below, and your employment by the Company shall thereafter have been
terminated in accordance with Section 3 below. For purposes of this Agreement,
a "change in control of the Company" shall mean a change in control of a nature
that would be required to be reported in response to Item 5(f) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended ("Exchange Act"); provided that, without
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limitation, such a change in control shall be deemed to have occurred if (i)
any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities; or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company (the "Board") cease for any reason to
constitute at least a majority thereof unless the election, or the nomination
for election by the Company's shareholders, of each new Director was approved
by a vote of at least two-thirds of the Directors then still in office who were
Directors at the beginning of the period.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the
events described in Section 2 hereof constituting a change in control of the
Company shall have occurred, you shall be entitled to the benefits provided in
Section 4 hereof upon the subsequent termination of your employment unless such
termination is (a) because of your death or retirement, (b) by the Company for
cause or disability, or (c) by you other than for good reason.
(i) DISABILITY; RETIREMENT.
(A) If, as a result of your incapacity due to physical or
mental illness, you have been absent from your duties with the Company on a
full-time basis for 180 consecutive days, and within thirty (30) days after
written notice of termination is given you shall not have returned to the
full-time performance of your
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duties, the Company may terminate this Agreement for "disability."
(B) Termination by the Company or by you of your
employment based on "retirement" shall mean termination in accordance with the
Company's retirement policy, including early retirement, generally applicable
to its salaried employees or in accordance with any retirement arrangement
established with your consent with respect to you.
(ii) CAUSE. The Company may terminate your employment for cause.
For the purposes of this Agreement, the Company shall have "cause" to terminate
your employment hereunder upon (A) the willful and continued failure by you to
substantially perform your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness), after a
demand for substantial performance is delivered to you by the Board which
specifically identifies the manner in which the Board believes that you have
not substantially performed your duties, or (B) the willful engaging by you in
gross misconduct materially and demonstrably injurious to the Company. For
purposes of this paragraph, no act, or failure to act, on your part shall be
considered "willful" unless done, or omitted to be done, by you not in good
faith and without reasonable belief that your action or omission was in the
best interest of the Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board at
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a meeting of the Board called and held for the purpose (after reasonable notice
to you and an opportunity for you, together with your counsel, to be heard
before the Board), finding that in good faith opinion of the Board you were
guilty of conduct set forth in clauses (A) or (B) of the first sentence of this
paragraph and specifying the particulars thereof in detail.
(iii) GOOD REASON. You may terminate your employment for good
reason. For purposes of this Agreement "good reason" shall mean:
(A) without your express written consent, the assignment
to you of any duties inconsistent with your positions, duties, responsibilities
and status with the Company immediately prior to a change in control, or a
change in your reporting responsibilities, titles or offices as in effect
immediately prior to a change in control, or any removal of you from or any
failure to re-elect you to any of such positions, except in connection with the
termination of your employment for cause, disability or retirement, or as a
result of your death, or by you other than for good reason;
(B) a reduction by the Company in your base salary as in
effect on the date hereof or as the same may be increased from time to time; or
the failure by the Company to increase such base salary each year after 1988 by
an amount which at least equals, on a percentage basis, the mean average
percentage increase in base salary for all officers of the Company during the
two full calendar years immediately preceding a change in control of the
Company (the
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"annual salary adjustment");
(C) The Company's requiring you to be based anywhere
other than the executive offices in Saginaw County, Michigan, except for
required travel on the Company's business to an extent substantially consistent
with your present business travel obligations, or, in the event you consent to
a relocation of your place of employment, the failure by the Company to pay (or
reimburse you for) all reasonable moving expenses incurred by you relating to a
change of your principle residence in connection with such relocation and to
indemnify you against any loss (defined as the difference between the actual
sales price of such residence and the higher of (a) your aggregate investment
in such residence or (b) the fair market value of such residence as determined
by a real estate appraiser designated by you and reasonably satisfactory to the
Company) realized in the sale of your principal residence in connection with
any such change of residence;
(D) the failure of the Company to continue in effect any
benefit or compensation plan, pension plan, life insurance plan,
health-and-accident plan, 401(k) plan, Employee Stock Ownership Plan,
Supplemental Employee Retirement Plan, and Deferred Compensation Plan for Key
Employees, or disability plan in which you are participating at the time of a
change in control of the Company (or plans providing you with substantially
similar benefits), the taking of any action by the Company which would
adversely affect your participating in or materially reduce your benefits under
any of such plans or deprive you of a material
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fringe benefit enjoyed by you at the time of the change in control, or the
failure by the Company to provide you with the number of paid vacation days to
which you are then entitled on the basis of years of service with the Company
in accordance with the Company's normal vacation policy in effect on the date
hereof;
(E) the failure of the Company to obtain the assumption
of the agreement to perform this Agreement by any successor as contemplated in
paragraph 5 hereof; or
(F) any purported termination of your employment which is
not effected pursuant to a Notice of Termination satisfying the requirements of
subparagraph (iv) below (and, if applicable, subparagraph (ii) above); and for
purposes of this Agreement, no such purported termination shall be effective.
(iv) NOTICE OF TERMINATION. Any termination by the Company
pursuant to subparagraphs (i) or (ii) above or by you pursuant to subparagraph
(iii) above shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your employment
under the provision so indicated.
(v) DATE OF TERMINATION. "Date of Termination" shall mean (A)
if this Agreement is terminated for disability, thirty (30) days after Notice
of Termination is given (provided that you shall not have returned to the
performance of your duties on a full-time
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basis during such thirty (30) day period), (B) if your employment is terminated
pursuant to subparagraph (iii) above, the date specified in the Notice of
Termination, and (C) if your employment is terminated for any other reason, the
date on which a Notice of Termination is given; provided that if within thirty
(30) days after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute exists concerning
the termination, the Date of Termination shall be the date on which the dispute
is finally determined, either by mutual written agreement of the parties, or by
a final judgment, order or decree of a Court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected).
4. COMPENSATION UPON TERMINATION OR DURING DISABILITY
(i) During any period that you fail to perform your duties
hereunder as a result of incapacity due to physical or mental illness, you
shall continue to receive your full base salary at the rate then in effect and
any other compensation then payable to you until this Agreement is terminated
pursuant to paragraph 3(i) hereof. Thereafter, your benefits shall be
determined in accordance with the Company's disability plan then in effect.
(ii) If your employment shall be terminated for cause, the Company
shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given and the Company shall have
no further obligation to you under this Agreement.
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(iii) If the Company shall terminate your employment other than
pursuant to paragraph 3(i) or 3(ii) hereof or if you shall terminate your
employment for good reason, then the Company shall pay to you as severance pay
in a lump sum on the fifth day following the Date of Termination, the following
amounts:
(A) your full base salary through the Date of Termination
at the rate in effect at the time Notice of Termination is given;
(B) in lieu of any further salary payments to you for
periods subsequent to the Date of Termination an amount equal to the product of
2.99 times your average annual compensation paid by the Company and included in
your gross income for federal income tax purposes for the most recent 5 taxable
years ending before the date on which a change in control occurs (or such
portion of such period during which you performed personal services for the
Company, if less than 5 years); such amount shall be less than the amount
defined as a parachute payment by 280G(b)(2) of the Internal Revenue Code of
1986;
(C) the Company shall pay other damages to which you may
be entitled as a result of the Company's termination of your employment under
this Agreement, including damages for any and all loss of benefits to you under
the Company's employee benefit plans which you would have received if the
Company had not breached this Agreement and had your employment continued for
the full term provided in this Agreement (including specifically but without
limitation the benefits which you would have been entitled to
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receive pursuant to the Company's Pension Plan had your employment continued
for the full term provided herein at the rate of compensation specified
herein), and including all legal fees and expenses incurred by you as a result
of such termination.
(iv) Unless you are terminated for cause, the Company shall
maintain in full force and effect for the continued benefit of you for three
years after the Date of Termination, the equivalent of all employee benefit
plans and programs or arrangements in which you were entitled to participate
immediately prior to the Date of Termination provided that your continued
participation is possible under the general terms and provisions of such plans
and programs. In the event that your participation in any such plan or program
is barred, the Company shall arrange to provide you with benefits substantially
similar to those which you are entitled to receive under such plans and
programs.
(v) Upon your termination for any reason, the Company shall enable
you to purchase the automobile, if any, which the Company was providing for
your use at the time Notice of Termination was given at the wholesale value of
such automobile at such time.
(vi) You shall not be required to mitigate the amount of any
payment provided for in this paragraph 4 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this paragraph 4
be reduced by any compensation earned by you as the result of employment by
another employer after the Date of Termination, or otherwise.
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5. SUCCESSORS: BINDING AGREEMENT
(i) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to you, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession has taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle you
to compensation from the Company in the same amount and on the same terms as
you would be entitled hereunder if you terminated your employment for good
reason, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
paragraph 5 or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
(ii) This Agreement shall insure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If you
should die while any amounts would still be payable to you hereunder if you had
continued to live, all such
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amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your designee or, if there be no such designee, to
your estate.
6. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention of
the Chief Executive Officer of the Company with a copy to the Secretary of the
Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
7. MISCELLANEOUS. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by you and such officer as may be specifically
designated by the Board of Directors of the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any time prior to subsequent time. No agreements
or representations, oral or otherwise, express or implied, with respect to the
subject matter
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hereof have been made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Georgia.
8. VALIDITY. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
If this letter correctly sets forth our agreement on the subject
matter hereof, kindly sign and return to the Company the enclosed copy of this
letter which will then constitute our agreement on this Matter.
Sincerely,
SAVANNAH FOODS & INDUSTRIES, INC.
By: /s/ William W. Sprague, III
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William W. Sprague, III
President and Chief Executive Officer
Agreed to this 24th day
of May, 1995.
/s/ D.L.H. Roche
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Employee
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