Exhibit 10.3
SEVERANCE AND CHANGE OF CONTROL
AGREEMENT
THIS SEVERANCE AND CHANGE OF CONTROL
AGREEMENT (“Agreement”), made and entered into as of
the 10 th
day of August, 2009
(“Effective Date”), by and between IMPERIAL SUGAR
COMPANY , a Texas corporation (the “Company”),
and Louis T. Bolognini (“Executive”), an employee of
the Company.
WHEREAS, the Company and Executive
previously entered into a Severance Agreement dated as of
June 9, 2008 and a Change of Control Agreement, dated as of
June 9, 2008 (collectively, the “Prior
Agreements”), which were amended for purposes of compliance
with Section 409A of the Internal Revenue Code of 1986, as
amended, and the regulations and other guidance issued thereunder
(collectively referred to herein as “Code
Section 409A”); and
WHEREAS, the Company and Executive
desire to enter into this Agreement in order to combine the Prior
Agreements and continue to provide certain benefits to Executive in
the event of Executive’s Involuntary Termination of
Employment (as defined in Section 1(i) of this Agreement);
and
WHEREAS, the parties acknowledge and
agree that this Agreement shall replace and supersede the Prior
Agreements in their entirety.
NOW , THEREFORE, in
consideration of the promises and other good and valuable
consideration set forth herein, the parties agree as
follows:
1. Definitions . For purposes
of this Agreement, the following terms shall have the following
meanings:
(a) “Affiliate” means
(i) any corporation in which the shares owned or controlled,
directly or indirectly, by the Company represent eighty percent
(80%) or more of the voting power of the issued and
outstanding capital stock of such corporation, (ii) any
corporation which owns or controls, directly or indirectly, eighty
percent (80%) or more of the voting power of the issued and
outstanding capital stock of the Company, or (iii) any
corporation in which eighty percent (80%) or more of
the
voting power of the issued and outstanding
capital stock is owned or controlled, directly or indirectly, by
any corporation which owns or controls, directly or indirectly,
eighty percent (80%) or more of the voting power of the issued
and outstanding capital stock of the Company.
(b) “Board” means the
Board of Directors of Imperial Sugar Company, or its
successor.
(c) The Company shall have
“Cause” to terminate Executive’s employment with
the Company (i) if Executive fails to make a good faith effort
to carry out any lawful directive of the Board or Executive’s
supervisor which failure is not cured within five days of notice
thereof; (ii) if Executive engages in any act which results in
or may reasonably be expected to result in the Executive’s
conviction, plea of guilty or no contest, or imposition of
un-adjudicated probation, for a crime (other than minor traffic
violations) involving moral turpitude; (iii) if Executive uses
alcohol, narcotics or other controlled substances which use is, or
could reasonably be expected to become, materially injurious to the
reputation or business of the Company or which impairs, or could
reasonably be expected to impair, the Executive’s performance
of Executive’s duties to the Company; (iv) if Executive
engages in an act or acts of dishonesty which adversely affects or
could reasonably be expected to adversely affect the Company; or
(v) for any reason which constitutes “cause” under
any written employment agreement between the Executive and the
Company that was entered into prior to the effective date of a
Change of Control.
(d) “Change of Control”
means the occurrence of any of the following: (i) any
“person” (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), other than (A) the Company or
any of its Affiliates or subsidiaries; (B) an employee benefit
plan of the Company or trustee or other fiduciary holding
securities under an employee benefit plan of the Company or person
or entity organized, appointed or established by the Company for or
pursuant to the terms of any such employee benefit plan;
(C) an underwriter temporarily holding securities pursuant to
an offering of such securities; or (D) an entity owned,
directly or indirectly,
by the Company’s stockholders in
substantially the same proportions as their ownership of the
Company’s common stock; is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing
forty percent (40%) or more of the combined voting power of
the Company’s then outstanding securities; (ii) the
Company has sold substantially all of its assets to an unrelated
third party; or (iii) following the election or removal of
directors, a majority of the Board of Directors consists of
individuals who were neither members of the Board of Directors one
(1) year before such election or removal nor approved in
advance by directors representing at least a majority of the
directors then in office who were directors at the beginning of the
one-year period or were similarly approved.
(e) “Company” means
Imperial Sugar Company, a Texas corporation, and its Affiliates, or
any successor to the Company, and its affiliates.
(f) “Confidential
Information” means and includes, without limitation,
information related to the business affairs, property, methods of
operation, future plans, financial information, customer or client
information, or other data which relates to the business or
operations of the Company or any of its affiliated entities, and
other information obtained by Executive which concerns the affairs
of the Company or any of its affiliated entities and which the
Company has requested be held in confidence or could reasonably
expect to be held in confidence by Executive, or the disclosure of
which would likely be materially embarrassing, detrimental or
disadvantageous to the Company or any of its affiliated entities,
or its and their directors, officers, employees or shareholders.
Confidential Information, however, shall not include:
(i) Information that is at the time
of receipt by Executive in the public domain or is otherwise
generally known in the industry or subsequently enters the public
domain or becomes generally known in the industry through no fault
of Executive; or
(ii) Information that at any time is
received in good faith by Executive from a third party who was
lawfully in possession of the same and had the right to disclose
the same.
(g) “Disability” means
Executive’s inability to fulfill Executive’s duties and
responsibilities as an officer of the Company due to physical or
mental disability that continues for 180 consecutive days or more,
or for an aggregate of 180 days in any period of twelve months.
Evidence of such disability shall be certified by a physician
acceptable to both the Company and Executive.
(h) “Effective Date of a
Change of Control” means the date of occurrence of the
specified event constituting a Change of Control.
(i) “Involuntary Termination
of Employment” means an involuntary termination of
Employee’s employment by the Company without Cause and shall
also include Employee’s Termination for Good Reason;
provided, an Involuntary Termination of Employment shall not be
deemed to have occurred unless it constitutes a separation from
service within the meaning of Treasury Regulations
Section 1.409A-1(h); provided further, Involuntary Termination
of Employment for purposes of this Agreement shall not include
termination of Employee’s employment by reason of death,
Disability or termination for Cause.
(j) “Protected Period”
means the period (i) commencing on the earlier of
(A) ninety (90) days prior to the Effective Date of a
Change of Control; or (B) the execution by all parties of a
definitive agreement for a transaction, the consummation of which
would constitute a Change of Control; and (ii) ending (A), if
the period commenced under Section (j)(i)(A) above, eighteen
(18) months after the Effective Date of a Change of Control;
or (B) if the period commenced under Section (j)(i)(B) above,
the earlier of (I) eighteen (18) months after the
Effective Date of a Change of Control; or (II) the date of
termination of the definitive agreement which would constitute a
Change of Control; provided, in the event any 18-month period
referenced herein expires during the Company’s Cure Period
(as defined in Section 3(c) of this Agreement), the 18-month
period shall be extended by thirty (30) days beyond the last
day of such Cure Period.
(k) “Salary” means
Executive’s annual base salary, which is $291,200.00 as of
the date of this Agreement, as such amount may be changed and in
effect from time to time. Notwithstanding the foregoing, Salary
shall be determined without regard to any change that would
constitute a Good Reason Event (as defined in
Section 1(l)).
(l) “Termination for Good
Reason” means Executive’s termination of employment
with the Company within the two- (2) year period following the
initial occurrence of any of the following events (each a
“Good Reason Event”) without Executive’s prior
written consent, provided that, for purposes of termination
pursuant to Section 3(c) of the Agreement, following the
Effective Date of a Change of Control, the existence of a Good
Reason Event for purposes of (i), (ii) and (iii) below,
shall be determined by reference to the Executive’s duties
and responsibilities, base salary and primary office location as in
effect immediately prior to the Effective Date of a Change of
Control:
(i) a material diminution of
Executive’s duties and responsibilities;
(ii) a material reduction in
Executive’s base salary;
(iii) a material relocation of the
primary office at which Executive performs services; or
(iv) any action or inaction that
constitutes a material breach of this Agreement by the Company or
its successor.
2. Term of Agreement .
Subject to Executive’s earlier termination of employment with
the Company, as provided in Section 3(a), this Agreement shall
remain in effect for a period of twelve (12) months following
the Effective Date (the “Initial Term”). Upon
expiration of the Initial Term, the Agreement shall be
automatically renewed and extended for successive twelve
(12) month terms thereafter, unless the Board gives Executive
notice of its decision not to renew this Agreement for another
term, provided that such notice is delivered to Executive at least
90 days before expiration of the
then-current term. Notwithstanding the
foregoing, if the expiration date of the Initial Term or a
subsequent term occurs on or after (a) the date that the
Company or an Affiliate publicly announces its intention to enter
into a transaction that, if consummated, would result in a Change
of Control; (b) the date that the Company or an Affiliate
enters into a written understanding relating to a transaction that,
if consummated, would result in a Change of Control, whether or not
such written understanding is binding; or (c) the date the
Company enters into discussions with any party pursuant to a
written confidentiality and/or standstill agreement relating to a
transaction that, if consummated, would result in a Change of
Control, any Board notice of non-renewal shall not be effective and
this Agree
