<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 30, 1997
------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------- ----------
Commission file number 1-11420
------------------
SAVANNAH FOODS & INDUSTRIES, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 58-1089367
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 339, Savannah, Georgia 31402
- -------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (912) 234-1261
--------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
As of March 30, 1997 there were 28,738,196 shares of common stock of Savannah
Foods & Industries, Inc. outstanding for shareholder voting purposes. This
amount includes 2,500,000 shares held by the Registrant's Benefit Trust, which
are not considered outstanding for earnings per share calculations.
The exhibit index is located on page 13 of this filing.
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SAVANNAH FOODS & INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Part I. FINANCIAL INFORMATION: Page
<S> <C> <C>
Item 1. Financial Statements:
Consolidated Balance Sheets at
March 30, 1997 and September 29, 1996 3
Consolidated Statements of Operations
for the quarter and the two quarters
ended March 30, 1997 and March 31, 1996 4
Consolidated Statements of Cash Flows
for the two quarters ended March 30, 1997
and March 31, 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
Part II. OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of
Securities Holders 11
Item 5. Other Information - Statement on
Business Risks and Forward Looking
Information 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
Page 2
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Savannah Foods & Industries, Inc.
Consolidated Balance Sheets
(In thousands except for shares and per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
March 30, September 29,
1997 1996
--------- -------------
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 14,638 $ 15,300
Accounts receivable 64,209 76,109
Inventories (net of LIFO reserve of $7,683 in fiscal
1997 and $8,018 in fiscal 1996) (Note 2) 159,833 83,929
Other current assets 5,929 5,214
--------- ---------
Total current assets 244,609 180,552
Property, plant and equipment (net of accumulated
depreciation of $226,748 in fiscal 1997 and
$220,183 in fiscal 1996) 177,918 186,546
Other assets 29,630 31,163
--------- ---------
$ 452,157 $ 398,261
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings $ 5,000 $ 7,500
Current portion of long-term debt (Note 3) 23,233 2,170
Trade accounts payable 83,338 52,701
Accrued expenses related to beet operations 16,130 -
Other liabilities and accrued expenses 24,552 23,575
--------- ---------
Total current liabilities 152,253 85,946
--------- ---------
Long-term debt (Note 3) 36,683 59,754
--------- ---------
Deferred employee benefits 72,331 78,834
--------- ---------
Stockholders' equity:
Common stock $.25 par value; $.55 stated value;
64,000,000 shares authorized; 31,306,800 shares issued 17,365 17,365
Capital in excess of stated value 29,576 31,764
Retained earnings 210,189 193,524
Treasury stock, at cost (2,568,604 shares) (15,849) (15,849)
Minimum pension liability adjustment (14,038) (14,038)
Stock held by benefit trust, at market (2,500,000 shares) (32,813) (35,000)
Other (3,540) (4,039)
--------- ---------
Total stockholders' equity 190,890 173,727
--------- ---------
$ 452,157 $ 398,261
========= =========
</TABLE>
(The accompanying notes are an integral part of the consolidated financial
statements.)
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Savannah Foods & Industries, Inc.
Consolidated Statements of Operations
(In thousands except for shares and per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the
For the Quarter Ended Two Quarters Ended
------------------------ ------------------------
March 30, March 31, March 30, March 31,
1997 1996 1997 1996
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Net sales $ 276,489 $ 250,804 $ 579,610 $ 555,213
----------- ----------- ----------- -----------
Operating expenses:
Cost of sales and operating expenses 240,134 229,663 505,603 504,621
Selling, general and
administrative expenses 14,139 13,766 29,139 27,551
Depreciation and amortization 5,862 7,213 12,106 14,329
----------- ----------- ----------- -----------
260,135 250,642 546,848 546,501
----------- ----------- ----------- -----------
Income from operations 16,354 162 32,762 8,712
----------- ----------- ----------- -----------
Other income and (expenses):
Interest and other investment income 142 176 322 412
Interest expense (1,922) (3,306) (3,882) (6,665)
Other income (expense) (99) (174) (207) (151)
----------- ----------- ----------- -----------
(1,879) (3,304) (3,767) (6,404)
----------- ----------- ----------- -----------
Income (loss) before income taxes 14,475 (3,142) 28,995 2,308
(Provision for) benefit from income taxes (5,646) 1,099 (11,018) (808)
----------- ----------- ----------- -----------
Net income (loss) $ 8,829 $ (2,043) $ 17,977 $ 1,500
=========== =========== =========== ===========
Per share:
Net income (loss) $ 0.34 $ (0.08) $ 0.69 $ 0.06
=========== =========== =========== ===========
Dividends $ 0.025 $ 0.025 $ 0.05 $ 0.05
=========== =========== =========== ===========
Weighted average shares outstanding 26,238,196 26,238,196 26,238,196 26,238,196
=========== =========== =========== ===========
</TABLE>
(The accompanying notes are an integral part of the consolidated financial
statements.)
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Savannah Foods & Industries, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the Two Quarters Ended
---------------------------
March 30, March 31,
1997 1996
------------ ---------
(In thousands of dollars)
<S> <C> <C>
Cash flows from operations:
Net income $ 17,977 $ 1,500
Adjustments to reconcile net income to
net cash provided by operations -
Depreciation and amortization 12,106 14,329
Net loss on disposal of assets 244 1,846
Decreases (increases) in working capital -
Accounts receivable 11,900 6,278
Inventories (75,904) (92,600)
Other current assets (715) 2,361
Trade accounts payable 30,637 28,893
Accrued expenses related to beet operations 16,130 20,750
Other liabilities and accrued expenses 977 (2,569)
(Decrease) increase in deferred employee benefits (6,503) 1,770
Other 1,314 428
--------- --------
Cash provided by (used for) operations 8,163 (17,014)
--------- --------
Cash flows from investing activities:
Additions to property, plant and equipment (2,839) (3,632)
Proceeds from sale of property, plant and
equipment 261 2,471
Sale of investments - 8,848
Use of escrowed industrial revenue bond funds
for additions to property, plant and equipment - 2,862
Other - 186
--------- --------
Cash (used for) provided by investing activities (2,578) 10,735
--------- --------
Cash flows from financing activities:
(Decrease) increase in short-term borrowings (2,500) 18,950
Payments of long-term debt (2,008) (12,496)
Dividends paid (1,312) (1,312)
Other (427) (259)
--------- --------
Cash (used for) provided by financing activities (6,247) 4,883
--------- --------
Cash flows for period (662) (1,396)
Cash and cash equivalents, beginning of period 15,300 11,574
--------- --------
Cash and cash equivalents, end of period $ 14,638 $ 10,178
========= ========
</TABLE>
(The accompanying notes are an integral part of the consolidated financial
statements.)
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Savannah Foods & Industries, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
(1) The information furnished reflects all adjustments (consisting of only
normal recurring accruals) which are, in the opinion of Management,
necessary for a fair statement of the results for the interim periods.
These consolidated financial statements should be read in conjunction with
the financial statements and the notes thereto included in the Company's
latest Annual Report on Form 10-K. Certain prior year amounts have been
reclassified to conform to the current year presentation.
(2) A summary of inventories by class is as follows:
<TABLE>
<CAPTION>
March 30, September 29,
1997 1996
-------- -------------
(In thousands of dollars)
<S> <C> <C>
Raw materials and work-in-process $ 45,251 $17,693
Packaging materials, parts and supplies 18,207 20,713
Finished goods 96,375 36,049
Payments related to future inventory
purchases - 9,474
-------- -------
$159,833 $83,929
======== =======
</TABLE>
(3) The Company has given notice that it is prepaying in May 1997 $15,000,000
of its Senior Notes. Accordingly, such amount is now included in the
current portion of long-term debt.
(4) Commitments and Contingencies:
The Company has contracted for the purchase of a substantial portion of
its future raw sugar requirements. Prices to be paid for raw sugar under
these contracts are based in some cases on market prices during the
anticipated delivery month. In other cases prices are fixed and, in these
instances, the Company generally obtains commitments from its customers to
buy the sugar prior to fixing the price, or enters into futures
transactions to hedge the commitment.
The Company uses interest rate swap agreements to manage its interest rate
exposure. The Company is exposed to loss in the event of non-performance
by the other party to these swaps. However, the Company does not
anticipate non-performance by the counter-parties to the transactions.
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As of March 30, 1997 approximately $2,500,000 of a claim by the United
States Customs Service (Customs) remains unresolved. Customs has alleged
that drawback claims prepared by the Company for certain export shipments
of sugar during the years 1984 to 1988 are technically and/or
substantively deficient and that the Company, therefore, is not entitled
to amounts previously received under these drawback claims. The Company
disputes Customs' findings and has been vigorously protesting this matter
with Customs. The ultimate resolution of this matter is not expected to
have a materially adverse effect on the Company's financial position or
results of operations.
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
The Company's net income for the second quarter of fiscal 1997 was
$8,829,000, or $.34 per share, compared to a net loss of ($2,043,000), or
($.08) per share, for the same quarter of fiscal 1996. Net income for the six
months ended March 30, 1997 was $17,977,000, or $.69 per share, compared to net
income of $1,500,000, or $.06 per share, for the six months ended March 31,
1996.
Income from operations for both the quarter and six months improved
significantly from the prior year due to increased operating profits in the
cane sugar division. Volumes and margins for cane refiners continue to be
favorably impacted by the reduction of national beet sugar production to more
normal levels. At approximately 4,000,000 tons, production from the 1996 beet
crop is about level with the 1995 beet crop, which was down about 600,000 tons,
or 13%, from the 1994 beet crop's record production. Over the same two years,
domestic consumption of sugar increased by about 400,000 tons. With less beet
sugar on the market and with increased consumption, cane sugar volumes have
expanded to meet the overall demand for refined sugar. Refined sugar selling
prices have risen as a result of the tightened supply. Also, average raw sugar
spot prices have fallen from fiscal 1996 levels. Reduced raw sugar costs and
increased selling prices are resulting in higher operating profit margins for
fiscal 1997 compared to fiscal 1996.
Operating profits in the Company's beet sugar division increased slightly
from the first six months of fiscal 1996 as higher selling prices have been
offset by lower volumes resulting from a smaller sugarbeet crop. Due to the
small sugarbeet crop, the beet sugar division is expected to be only modestly
profitable for fiscal 1997.
The Company is investing more than $4,000,000 in fiscal 1997 in sugarbeet
receiving stations in Michigan to enhance the ability of farmers to deliver
sugarbeets to the Company. This investment, along with the improvement in
sugar prices and corresponding returns to the Company's growers, is expected to
result in an increase in the beet sugar division's sugarbeet supply for the
coming crop year.
The Company's net sales for the second quarter and first six months of
fiscal 1997 are both higher than net sales for the comparable periods of fiscal
1996. Significantly higher net sales in the cane sugar division more than
offset lower net sales in the beet sugar
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division and the loss of net sales form the Company's raw sugar mill, which was
sold in fiscal 1996.
Depreciation and amortization expense is down $1,351,000, or 19%, for the
quarter and $2,223,000, or 16%, for the six months. Depreciation decreased due
to asset sales and write-downs in fiscal 1996.
Interest expense is down $1,384,000, or 42%, for the quarter and
$2,783,000, or 42%, for the six months compared to the prior year due to lower
average outstanding debt. Average short-term borrowings were down about
$30,000,000 for the six months due to higher net income and lower investment in
inventories. Average long-term debt was down about $48,000,000 compared to the
first six months of last year.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 - Earnings per Share, which
the Company is required to adopt in fiscal 1998. Management does not expect
this statement to have a material impact on the Company's earnings per share
calculations.
The profit outlook for the remainder of fiscal 1997 is good. The Company
should continue to realize the benefits of both higher volumes and improved
margins in the cane sugar division.
The outlook for fiscal 1998 is favorable. The Company's beet sugar
division has contracted about 100,000 acres compared to 85,000 acres harvested
last year and, assuming reasonable weather, should have a better crop, produce
more sugar, and therefore be more profitable in the coming fiscal year. The
flooding in the Red River Valley in North Dakota and Minnesota will delay
planting of sugarbeets in this important growing area and may impact the
tonnage of sugar produced there. At this time, it appears that national sugar
production from beets will not increase significantly and therefore current
market conditions should continue into fiscal 1998.
Liquidity and Capital Resources
For the first six months of fiscal 1997, the Company generated $30,327,000
of cash from net income before noncash items, an increase of $12,652,000 over
the first six months of fiscal 1996. This increase is attributable to higher
net income in fiscal 1997. This cash was used primarily to fund a seasonal
increase in the Company's investment in inventory (inventory, net of trade
accounts payable and accrued expenses related to beet operations). The
investment in inventory increased $29,137,000 from September 29, 1996 as a
result of the sugarbeet processing campaign in the Company's beet sugar
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division. This division typically processes sugarbeets from October to
February and builds inventory levels as a result.
The Company maintains a $120,000,000 Revolving Credit Facility. Under
this facility, a Standby Letter of Credit (SLC) is drawn in favor of the Senior
Note lenders. The SLC is maintained at 105% of the balance on the Senior Notes
and is reduced as the Senior Notes are repaid. The remaining balance on the
facility of $93,750,000 is available to provide liquidity for temporary working
capital needs. The available balance will increase by $15,750,000 in early May
when the Company prepays a portion of its Senior Notes. The Company also has
the ability to fund seasonal increases in beet sugar inventory through
borrowings from the Commodity Credit Corporation. These sources of short-term
funds, along with cash generated by the Company's operations, provide ample
liquidity to meet the Company's operating cash requirements.
Since September 29, 1996, long-term debt, including the current portion,
decreased $2,008,000 due to normal scheduled payments. The Company has decided
to prepay $15,000,000 of its Senior Notes ahead of scheduled maturities and has
reclassified this amount to the current portion of long-term debt at March 30,
1997. Since September 29, 1996, the current portion of long-term debt
increased by this amount and by an additional $6,063,000 in scheduled debt
maturities.
Stockholders' equity increased primarily by earnings of $17,977,000 and
decreased by dividends of $1,312,000. Changes in debt and equity resulted in a
decrease in the ratio of long-term debt to total capital from 26% at September
29, 1996 to 16% at March 30, 1997.
At its April 17, 1997 meeting, the Company's Board of Directors approved a
dividend increase from $.10 per share to $.15 per share annually. This will
increase annual dividends by $1,312,000.
Fixed asset additions during the six months ended March 30, 1997 were
$2,839,000 compared to depreciation for the same period of $10,962,000. The
Company anticipates that fixed asset additions will approximate $17,000,000 in
fiscal 1997. Major projects include the development of new sugarbeet receiving
stations in Michigan and the replacement and upgrade of packaging and
production equipment. The investment in sugarbeet receiving stations is
planned to assist in maintaining and expanding sugarbeet acreage. The other
expenditures are expected to benefit the Company through new packaging,
increased efficiency, improved quality control and expanded operational
capabilities.
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PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securities Holders
At the Annual Meeting of Stockholders held on February 20, 1997 in
Savannah, Georgia, 25,848,087 shares, representing 89.9% of the 28,738,196
total eligible shares outstanding, were voted in person or by proxy. The
Directors proposed in the proxy material were elected to serve three-year terms
by the vote shown below:
<TABLE>
<CAPTION>
Outstanding Shares Voted For Abstain
---------------------------- -------------------------
Number % of Eligible Number % of Eligible
of Votes Votes of Votes Votes
--------- ------------- -------- -------------
<S> <C> <C> <C> <C>
R. Eugene Cartledge 25,381,088 88.32 431,837 1.50
Lee B. Durham, Jr. 25,420,604 88.46 392,321 1.37
Robert L. Harrison 25,417,007 88.44 395,918 1.38
James M. Reed 25,376,395 88.30 436,531 1.52
</TABLE>
Other Directors whose term of office continued after the meeting were Dale
C. Critz, Arthur M. Gignilliat, Jr., Robert S. Jepson, Jr., Arnold Tenenbaum,
W. Waldo Bradley, John D. Carswell, F. Sprague Exley, William W. Sprague, III
and Hugh M. Tarbutton.
The amendment of the By-laws to extend the retirement age of Directors
from the age of sixty-eight to the age of seventy was approved. The vote was
as follows:
<TABLE>
<CAPTION>
Outstanding Shares Voted For Against Abstain
- ---------------------------- ----------------------- ------------------------
Number % of Eligible Number % of Eligible Number % of Eligible
of Votes Votes of Votes Votes of Votes Votes
- -------- -------------- -------- ------------- -------- --------------
<S> <C> <C> <C> <C> <C>
25,030,171 87.10 652,602 2.27 130,155 .45
</TABLE>
The adoption of the 1996 Equity Incentive Plan for employees of the
Company was approved. The vote was as follows:
<TABLE>
<CAPTION>
Outstanding Shares Voted For Against Abstain
- ---------------------------- ----------------------- ------------------------
Number % of Eligible Number % of Eligible Number % of Eligible
of Votes Votes of Votes Votes of Votes Votes
- -------- -------------- -------- ------------- -------- --------------
<S> <C> <C> <C> <C> <C>
24,447,220 85.07 1,220,016 4.25 145,689 .51
</TABLE>
The appointment of Arthur Andersen LLP as independent public accountants
was ratified. The vote was as follows:
<TABLE>
<CAPTION>
Outstanding Shares Voted For Against Abstain
- ---------------------------- ----------------------- ------------------------
Number % of Eligible Number % of Eligible Number % of Eligible
of Votes Votes of Votes Votes of Votes Votes
- -------- -------------- -------- ------------- -------- --------------
<S> <C> <C> <C> <C> <C>
25,329,295 88.14 364,034 1.27 119,596 .42
</TABLE>
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Item 5. Other Information - Statement on Business Risks and
Forward Looking Information
Savannah Foods & Industries, Inc. periodically makes statements which
could be considered forward looking. Accordingly, we believe it is appropriate
to outline several key factors which impact the Company's future performance.
All phases of the Company's business are very competitive with the primary
competitors being other sugar cane refiners and beet sugar processors. Because
sugar is a commodity, competition is based primarily upon price, but is also
based upon product quality and customer service. The Company is diversified
into all marketing and production (i.e. cane and beet) phases of the refined
sugar industry, but the majority of its capacity, approximately 85%, is cane
sugar, with the remaining 15% being beet sugar. Thus, its operating results
are influenced primarily by factors which affect the cane sugar industry.
Cane sugar refiners operate on large volumes and small margins.
Consequently, a small percentage change in sales prices or in the cost of raw
materials or manufacturing costs can result in a large percentage change in
income from operations.
In today's market, the primary driver of refined sugar sales prices is the
amount of beet sugar produced. A large amount of beet sugar generally means
lower prices as beet producers sell their larger production by undercutting the
prices of cane sugar refiners. The amount of beet sugar produced not only
affects selling prices, but also affects the per unit manufacturing costs of
the sugar industry. Many of the costs in the manufacturing process, whether
beet or cane, are fixed and must be divided among the actual production. As
volume increases or decreases, per unit manufacturing costs decrease or
increase, respectively. Thus, forecasting the amount of beet sugar which will
be produced is an essential element in predicting the Company's profitability.
In addition to sales prices and per unit manufacturing costs, the other
primary factor in determining operating income is the cost of raw sugar, which
is the largest single cost of producing refined cane sugar. Raw sugar is a
commodity, and while the Company purchases it using many different pricing
methods, the price is always based in some manner on the market price of raw
sugar as determined by the commodities market. Thus, its price is subject to
the numerous variables that affect the price of any agricultural commodity. In
general, however, the price of raw sugar is supported at an
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artificially high level through the sugar program portion of the U.S.
Government's Farm Bill. This sugar program results in raw sugar costs for cane
refiners that often approximate or exceed the cost of refined sugar produced by
sugarbeet processors and raw sugar cane processors who also refine sugar.
Forward looking information affecting the Company and the sugar industry
should be considered within this context.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Description
------- --------------------
<S> <C>
3-1 Amendment to By-Laws
3-2 By-Laws, as amended, including amendment in
Exhibit 3-1
10-1* 1996 Equity Incentive Plan
27-1 Financial Data Schedule (For SEC use only)
</TABLE>
* Indicates exhibits which are management contracts or compensatory
agreements.
(b) Reports on Form 8-K, not applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SAVANNAH FOODS & INDUSTRIES, INC.
By: /s/John M. Tatum
------------------------------
John M. Tatum
Date: April 25, 1997 Secretary
By: /s/Gregory H. Smith
------------------------------
Gregory H. Smith
Senior Vice President
Chief Financial Officer
Date: April 24, 1997 and Treasurer
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EXHIBIT 3-1
AMENDMENT TO THE
BY-LAWS
OF
SAVANNAH FOODS & INDUSTRIES, INC.
(A DELAWARE CORPORATION)
An amendment to the By-Laws of the Corporation was approved by
stockholders at the February 20, 1997 Annual Meeting of Stockholders. Article
III, Section 2 of the By-laws was amended to extend a person's eligibility to
serve as Director to December 31 of the year in which such person reaches the
age of 70. The second paragraph of Article III, Section 2, as amended, reads
in pertinent part:
No person shall be eligible to serve as Director beyond
December 31 of the year in which he reaches the age of seventy....
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EXHIBIT 3-2
BY-LAWS
OF
SAVANNAH FOODS & INDUSTRIES, INC.
(A DELAWARE CORPORATION)
ARTICLE I.
OFFICES
SECTION 1. Registered Office in Delaware. The registered office of
SAVANNAH FOODS & INDUSTRIES, INC. (hereinafter called the "Corporation") in the
State of Delaware shall be in the City of Wilmington, County of New Castle, and
the registered agent in charge thereof shall be The Corporation Trust Company,
100 West Tenth Street, Wilmington, Delaware 19801.
SECTION 2. Other Offices. The Corporation may have such other office or
offices at such other place or places, either within or without the State of
Delaware, as the Board of Directors may from time to time determine or as shall
be necessary or appropriate for the conduct of the business of the Corporation.
ARTICLE II.
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meeting. Meetings of stockholders may be held at
such place or places, either within or without the State of Delaware, as the
Board of Directors may from time to time determine, or as shall be necessary or
appropriate for the conduct of the business of the Corporation.
SECTION 2. Annual Meetings. The annual meeting of stockholders for the
election of directors and the transaction of other business shall be held on
the third Thursday in February in each year commencing with the year 1994. At
each annual meeting the stockholders entitled to vote shall elect a Board of
Directors and may transact such other business as may properly come before the
meeting.
Section 2 Amended 7/21/93
SECTION 3. Special Meetings. A special meeting of the stockholders, or
of any class thereof entitled to vote, for any purpose or purposes, may be
called at any time by the Chairman of the Board, the President, or by order of
the Board of Directors.
SECTION 4. Notice of Meeting. Except as otherwise expressly required
by law, written notice of each meeting of stockholders, whether annual or
special, stating the place, date and hour of the meeting, shall be given not
less than ten days nor more than fifty days before the date on which the
meeting is to be held, to each stockholders of record entitled to vote thereat
by delivering a notice thereof to him personally or by mailing such notice in a
postage prepaid envelope directed to him at his address as it appears on the
stock ledger of the Corporation, unless he shall have filed with the Secretary
of the Corporation a written request that notices intended for him be directed
to another address, in which case
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such notice shall be directed to him at the address designated in such
request. Every notice of a special meeting of the stockholders, besides
stating the time and place of the meeting, shall state briefly the objects or
purposes thereof.
Notices of any meeting of stockholders shall not be required to be given
to any stockholder who shall attend such meeting in person or by proxy unless
such attendance is for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened; and, if any stockholder shall, in person or by
attorney thereunto authorized, in writing or by telegraph, cable or wireless,
waive notice of any meeting of the stockholders, whether prior to or after such
meeting, notice thereof need not be given to him.
If a meeting is adjourned to another time or place and if any announcement
of the adjourned time and place is made at the meeting, it shall not be
necessary to give notice of the adjourned meeting unless the adjournment is for
more than thirty days or the Board of Directors, after adjournment, fixes a new
record date for the adjourned meeting.
SECTION 5. List of Stockholders. It shall be the duty of the Secretary
or other officer of the Corporation who shall have charge of the stock ledger
to prepare and make, at least ten days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote thereat,
arranged in alphabetical order, and showing the address of each stockholder and
the number of shares registered in his name. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall be
kept and produced at the time and place of the meeting during the whole time
thereof and subject to the inspection of any stockholder who may be present.
The original or duplicate stock ledger shall be the only evidence as to who are
the stockholders entitled to examine such list or the books of the Corporation
or to vote in person or by proxy at such meeting.
SECTION 6. Quorum. At each meeting of the stockholders, the holders of
record of a majority of the issued and outstanding stock of the Corporation
entitled to vote at such meeting, present in person or by proxy, shall
constitute a quorum for the transaction of business, except where otherwise
provided by law, the Certificate of Incorporation or these By-Laws. In the
absence of a quorum, any officer entitled to preside at, or act as Secretary
of, such meeting shall have the power to adjourn the meeting from time to time
until a quorum shall be constituted. At any such adjourned meeting at which a
quorum shall be present any business may be transacted which might have been
transacted at the meeting as originally called, but only those stockholders
entitled to vote at the meeting as originally noticed shall be entitled to vote
at any adjournment or adjournments thereof.
SECTION 7. Voting. Except as otherwise provided in the Certificate of
Incorporation, at every meeting of stockholders each holder of record of the
issued and outstanding stock of the Corporation entitled to vote at such
meeting shall be entitled to one vote, in person or by proxy, for each such
share of stock entitled to vote held by such stockholder, but no proxy shall be
voted after three years from its date unless the proxy provides for a longer
period. Shares of its own stock belonging to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such corporation is held by the corporation, shall neither be
entitled to vote nor counted for quorum purposes. Nothing in this Section
shall be construed as limiting the right of the Corporation to vote its own
stock
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held by it in a fiduciary capacity. At all meetings of the stockholders, a
quorum being present, all matters shall be decided by majority vote of
the shares of stock entitled to vote held by stockholders present in person or
by proxy, except as otherwise required by the Certificate of Incorporation or
the laws of the State of Delaware.
Unless demanded by a stockholder of the corporation present in person or
by proxy at any meeting of the stockholders and entitled to vote thereat, or so
directed by the Chairman of the meeting or required by the laws of the State of
Delaware, the vote thereat on any question need not be by ballot. On a vote by
ballot, each ballot shall be signed by the stockholder voting, or in his name
by his proxy, if there by such proxy, and shall state the number of shares
voted by him and the number of votes to which each share is entitled.
SECTION 8. Inspectors at Shareholders' Meetings. The Board of Directors,
in advance of any shareholders' meeting may appoint one or more inspectors to
act at the meeting or any adjournment thereof. If inspectors are not so
appointed, the person presiding at the shareholders' meeting may, and on the
request of any shareholder entitled to vote thereat shall, appoint one or more
inspectors. In case any person appointed fails to appear or act, the vacancy
may be filled by appointment made by the Board of Directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector,
before entering the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability.
The inspectors shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all shareholders. On request of the person presiding at
the meeting or any shareholder entitled to vote thereat, the inspectors shall
make a report in writing of any challenge, question or matter determined by
them and execute a certificate of any fact found by them. Any report or
certificate made by them shall be prima facia evidence of the facts stated and
the vote as certified by them.
SECTION 9. Nominations of Directors. Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
directors of the Corporation. Nominations of persons for election to the Board
of Directors may be made at any annual meeting of stockholders, or at any
special meeting of stockholders called in the manner set forth in Article II,
Section 3 hereof for the purpose of electing directors, (a) by or at the
direction of the Board of Directors (or any duly authorized committee thereof)
or (b) by any stockholder of the Corporation (i) who is a stockholder of record
on the date of the giving of the notice provided for in this Section 9 and on
the record date for the determination of stockholders entitled to vote at such
meeting and (ii) who complies with the notice procedures set forth in this
Section 9.
In addition to any other applicable requirements, for a nomination to be
made by a stockholder, such stockholder must have given timely notice thereof
in proper written form to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation
(a) in the case of an annual meeting, not less than sixty
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(60) days nor more than ninety (90) days prior to the anniversary date of the
immediately preceding annual meeting of stockholders; provided, however, that
in the event that the annual meeting is called for a date that is not within
thirty (30) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not later than the close
of business on the tenth (10th) day following the day on which such notice of
the date of the annual meeting was mailed or such public disclosure of the date
of the annual meeting was made, whichever first occurs; and (b) in the case of
a special meeting of stockholders called in the manner set forth in Article II,
Section 3 hereof for the purpose of electing directors, not later than the
close of business on the tenth (10th) day following the day on which notice of
the date of the special meeting was mailed or public disclosure of the date of
the special meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary must
set forth (a) as to each person whom the stockholder proposes to nominate for
election as a director (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by the person and (iv)
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder; and (b) as to the
stockholder giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be made by
such stockholder, (iv) a representation that such stockholder intends to appear
in person or by proxy at the meeting to nominate the persons named in its
notice and (v) any other information relating to such stockholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent
of each proposed nominee to being named as a nominee and to serve as a director
if elected.
No person shall be eligible for election as a director of the Corporation
unless nominated in accordance with the procedures set forth in this Section 9.
If the Chairman of the meeting determines that a nomination was not made in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the nomination was defective nomination shall be disregarded.
Section 9 Inserted 12/6/91
SECTION 10. Action at Meetings of Stockholders. No business may be
transacted at an annual meeting of stockholders, other than business that is
either (a) specified in the notice of meeting (or any duly authorized committee
thereof), (b) otherwise properly brought before the annual meeting by or at the
direction of the Board of Directors (or any duly authorized committee
thereof) or (c) otherwise properly brought before the annual meeting by any
stockholder of the Corporation (i) who is a stockholder of record on the date
of the giving of the notice provided for in this Section 10 and on the record
date for the determination of stockholders entitled to vote at such annual
meeting and (ii) who complies with the notice procedures set forth in this
Section 10.
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In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary
of the Corporation.
To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation
not less than sixty (60) days nor more than ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting of stockholders;
provided, however, that in the event that the annual meeting is called for a
date that is not within thirty (30) days before or after such anniversary date,
notice by the stockholder in order to be timely must be so received not later
than the close of business on the tenth (10th) day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary must
set forth as to each matter such stockholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought
before the annual meeting, (ii) the name and record address of such
stockholder, (iii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iv) a description of all arrangements or understandings between such
stockholder and any other person or persons (including their names) in
connection with the proposal of such business by such stockholder and any
material interest of such stockholder in such business and (v) a representation
that such stockholder intends to appear in person or by proxy at the annual
meeting to bring such business before the meeting.
No business shall be conducted at the annual meeting of stockholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 10, provided, however, that, once business
has been properly brought before the annual meeting in accordance with such
procedures, nothing in this Section 10 shall be deemed to preclude discussion
by any stockholder of any such business. If the Chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.
The business transacted at any special meeting of stockholders called in
the manner set forth in Article II, Section 3 hereof shall be confined to the
business stated in the notice of meeting, as determined by the person or
persons calling such meeting.
Section 10 Inserted 12/6/91
ARTICLE III.
BOARD OF DIRECTORS
SECTION 1. General Powers. The property, business and affairs of the
Corporation shall be managed by the Board of Directors.
SECTION 2. Number, Term of Office, and Qualifications. The number of
Directors shall not be less than three nor more than fifteen as fixed from time
to time by resolution of the Board of Directors;
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provided however, that the number of Directors to be elected at the annual
meeting in 1987 shall be four, to be elected for three-year terms expiring in
1990. And, upon approval of this amendment by the stockholders, the Directors
then in office will elect a fifth member for a three-year term expiring in
1990.
Section 2 amended 2/16/95
Commencing in the year 1988, all Directors to be elected shall be elected
for three-year terms except as hereinafter provided in Section 9 of Article III
of these By-Laws with respect to Directors elected to fill certain vacancies;
provided, however, that the director elected by the Board of Directors in 1990
to fill the vacancy created by the increase in the number of Directors to 13
will serve until the annual meeting in 1991. No person shall be eligible to
serve as a Director beyond December 31 of the year in which he reaches the age
of seventy, and no person shall be eligible to serve as a Director beyond
December 31 of the third year following retirement from his principal
occupation of employment at the time he first became a Director. Each Director
shall continue in office until the annual meeting in the year in which his term
expires and until his successor shall have been elected and qualified, or until
his death, resignation, or removal.
Section 2 Amended 2/1/91
Section 2 Amended 2/20/97
SECTION 3. Quorum and Manner of Acting. Unless otherwise provided by
law, the presence of one-third of the whole Board of Directors shall be
necessary to constitute a quorum for the transaction of business. In the
absence of a quorum, a majority of the directors present may adjourn the
meeting from time to time until a quorum shall be present. Notice of any
adjourned meeting need not be given. At all meetings of directors, a quorum
being present, all matters shall be decided by the affirmative vote of a
majority of the directors present, except as otherwise required by the laws of
the State of Delaware.
SECTION 4. Place of Meetings, etc. The Board of Directors may hold its
meetings and keep the books and records of the Corporation at such place or
places within or without the State of Delaware, as the Board may from time to
time determine.
SECTION 5. Annual Meeting. As promptly as practicable after each annual
meeting of stockholders for the election of directors, the Board of Directors
shall meet in Savannah, Georgia, for the purpose of organization, the election
of officers and the transaction of other business. Notice of such meeting need
not be given. If such meeting is held at any other time, notice thereof must
be given as hereinafter provided for special meetings of the Board of Directors
or a consent and waiver of notice thereof must be signed by all the directors.
SECTION 6. Regular Meetings. The Board of Directors shall hold six
regular meetings annually at such time and place, within or without the State
of Delaware, as determined by the President and specified in the notice of call
thereof. The President shall endeavor to schedule the regular meetings during
a calendar year at approximately even intervals if practicable. Notice of call
of such meetings shall specify the time and date and be given each director in
writing mailed no less than five (5) days nor more than thirty (30) days before
such meeting.
Section 6 Amended 3/4/88
SECTION 7. Special Meetings. Special meetings of the Board of Directors
may be called at any time by the Chairman of the Board, when there is such an
officer, or by the President, and shall be called
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at the request in writing of any three directors, on not less than three hours'
notice to each director personally or by telegram, or on not less than three
days' written notice to each director by mail. Notice of call of each special
meeting shall state the date, time and place of the meeting. In lieu of the
notice to be given as set forth above, a waiver thereof in writing, signed by
the director or directors entitled to said notice, whether prior to or after
the meeting in question, shall be deemed equivalent thereto for purposes of
this Section 7. No notice to or waiver by any director with respect to any
special meeting shall be required if such director shall be present at said
meeting.
SECTION 8. Resignation. Any director of the Corporation may resign at
any time by giving written notice to the Chairman of the Board, when there is
such an officer, or to the President or the Secretary of the Corporation. The
resignation of any director shall take effect upon receipt of notice thereof or
at such later time as shall be specified in such notice; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective. When one or more directors shall resign from the Board,
effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective.
(A). Any director or the entire Board of Directors may be removed, with
or without cause, by an affirmative vote of 75% of the holders of the
outstanding stock of the Corporation entitled to vote in the election of
directors, considered for this purpose as one class, taking such action at an
annual meeting of stockholders or at a special meeting of stockholders duly
called for such purpose. Alternatively, any director may be removed for cause
at any time by the affirmative vote of a majority of the directors then in
office.
SECTION 9. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum,
unless otherwise provided by the Certificate of Incorporation or the laws of
the State of Delaware. Each director so chosen shall hold office for the
unexpired term of the director whose place shall be vacant, provided that each
director so chosen to fill the vacancy created by increase in the number of
directors shall be elected for a term to be designated by the Directors at the
time of his election and shall continue in office for such term and until his
successor shall have been elected and qualified, and until his death,
resignation or removal.
SECTION 10. Compensation of Directors. Directors, by resolutions of the
Board, may be appropriately compensated for their work as directors, and for
attendance at each regular or special meeting of the Board, or any Committee
thereof. Nothing herein contained shall be construed to preclude any director
from servicing the Corporation or any subsidiary thereof in any other capacity
and receiving compensation therefore.
SECTION 11. Executive Committee and Other Committees. The Board of
Directors, by resolution adopted by a majority of the entire Board, may
designate from among its members an Executive Committee and other committees to
serve at the pleasure of the Board. Each committee shall consist of three or
more directors. Except as set forth below and as otherwise limited by the
General Corporation Law of the State of Delaware, the Executive Committee shall
have all of the authority of the Board of Directors. Each other committee
shall be empowered to perform such functions as may, by resolution, be
delegated to it by the Board.
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The Board of Directors may designate one or more directors as alternate
members of any such committee, who may replace any absent member or members at
any meetings of such committee. Vacancies in any committee, whether caused by
resignation or by increase in the number of members constituting said
committee, shall be filled by a majority of the entire Board of Directors. The
Executive Committee may fix its own quorum and elect its own Chairman. In the
absence or disqualification of any member of such committee, the member or
members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in place of any such
absent or disqualified member.
The Board of Directors shall have power to change the membership of any
such committee at any time and to discharge any such committee, either with or
without cause, at any time. Each member of any such committee shall be paid
such fee, if any, as shall be fixed by the Board of Directors for each meeting
of such committee which he shall attend and, in addition, such transportation
and other expenses actually incurred by him in going to the meeting of such
committee and returning therefrom as the Board of Directors shall approve.
SECTION 12. Action Without Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if a written consent thereto is signed by all
members of the Board or of such committee, as the case may be, and such written
consent is filed with the minutes or proceedings of the Board or committee.
ARTICLE IV.
OFFICERS
SECTION 1. Number. The principal officers of the Corporation shall be a
President, one or more Vice Presidents, a Secretary and a Treasurer. The
Corporation may also have, at the discretion of the Board of Directors, a
Chairman of the Board of Directors, an Executive Vice President, and such other
officers as may be appointed in accordance with the provisions of these
By-Laws. The offices of Executive Vice President, or of a Vice President, the
Secretary and the Treasurer or any of them may be held by the same persons in
the discretion of the Board of Directors. The offices of President and
Treasurer may also be held by the same person.
SECTION 2. Election and Term of Office. The principal officers of the
Corporation shall be chosen annually by the Board of Directors at the annual
meeting thereof. Each such officer shall hold office until his successor shall
have been duly chosen and shall qualify, or until his death, or until he shall
resign or shall have been removed in the manner hereinafter provided.
SECTION 3. Subordinate Officers. In addition to the principal officers
enumerated in Section I of this Article IV, the Corporation may have one or
more Assistant Secretaries, one or more Assistant Treasurers, and such other
officers, agents and employees as the Board of Directors may deem necessary,
each of whom shall hold office for such period, have such authority, and
perform such duties as the President or the Board of Directors may from time to
time determine. The Board of Directors may delegate to any principal officer
the power to appoint and to remove any such subordinate officers, agents or
employees.
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SECTION 4. Removal. Any officer may be removed, either with or without
cause, at any time, by resolution adopted by the Board of Directors at any
regular meeting of the Board, or at any special meeting of the Board called for
that purpose at which a quorum is present.
SECTION 5. Resignations. Any officer may resign at any time by giving
written notice to the Board of Directors or to the President or to the
Secretary. Any such resignation shall take effect upon receipt of such notice
or at any later time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 6. Vacancies. A vacancy in any office may be filled for the
unexpired portion of the term in the manner prescribed in these By-Laws for
election or appointment to such office for such term.
SECTION 7. Chairman of the Board. When there is a Chairman of the Board
he shall preside at all meetings of stockholders and at all meetings of the
Board of Directors. He shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
SECTION 8. President. The President shall be the Chief Executive Officer
of the Corporation, and as such shall have general supervision of the affairs
of the Corporation, subject to the control of the Board of Directors. He shall
be an ex officio member of all standing committees. In the absence of the
Chairman of the Board, or whenever the office is vacant, the President shall
preside at all meetings of stockholders and at all meetings of the Board of
Directors. Subject to the control and direction of the Board of Directors the
President may enter into any contract or execute and deliver any instrument in
the name and on behalf of the Corporation. In general, he shall perform all
duties incident to the office of President, as herein defined, and all such
other duties as from time to time may be assigned to him by the Board of
Directors.
SECTION 9. Vice Presidents. When there is an Executive Vice President,
he shall, in the absence or disability of the President, perform the duties and
exercise the powers of the President. He shall perform such other duties and
have such other powers as the President or the Board of Directors
may from time to time prescribe. In the absence or disability of the Executive
Vice President, the Board of Directors shall determine the Vice President or
other officer to perform the duties and exercise the powers of the President.
Vice Presidents shall perform such duties and have such other powers as
the President or the Board of Directors may from time to time prescribe.
SECTION 10. Secretary. The Secretary, if present, shall act as secretary
at all meetings of the Board of Directors and of the stockholders, and keep the
minutes thereof in a book or books to be provided for that purpose; shall see
that all notices required to be given by the Corporation are duly given and
served; shall have charge of the stock records of the Corporation; shall see
that all reports, statements and other documents required by law are properly
kept and filed; and in general, shall perform all the duties incident to the
office of Secretary and such other duties as from time to time may be assigned
to him by the President or the Board of Directors.
SECTION 11. Treasurer. The Treasurer shall have charge and custody of,
and be responsible for, all funds and securities of the Corporation, and shall
deposit all such funds in the name of the Corporation in such banks or other
depositories as shall be selected by the Board of Directors. He shall
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exhibit at all reasonable times his books of account and records to any of the
directors of the Corporation upon application during business hours at the
office of the Corporation where such books and records shall be kept; when
requested by the Board of Directors, shall render a statement of the condition
of the finances of the Corporation at any meeting of the Board or at the annual
meeting of stockholders; shall receive, and give receipts for, moneys due and
payable to the Corporation from any source whatsoever; and in general, shall
perform all the duties incident to the office of the Treasurer and such other
duties as from time to time may be assigned to him by the President or the
Board of Directors. The Treasurer shall give such bond, if any, for the
faithful discharge of his duties as the Board of Directors may require.
SECTION 12. Salaries. The salaries of the principal officers shall be
fixed from time to time by the Board of Directors, and the salaries of any
other officers may be fixed by the President.
ARTICLE V.
SHARES AND THEIR TRANSFER
SECTION 1. Certificate for Stock. Every stockholder of the Corporation
shall be entitled to a certificate or certificates, to be in such form as the
Board of Directors shall prescribe, certifying the number of shares of the
capital stock of the Corporation owned by him.
SECTION 2. Stock Certificate Signature. The certificates for such stock
shall be numbered in the order in which they shall be issued and shall be
signed by the President or any Vice President and the Secretary or Treasurer of
the Corporation, and its seal shall be affixed thereto. If such certificate is
countersigned (1) by a transfer agent other than the Corporation or its
employee, or, (2) by a registrar other than the Corporation or its employee,
the signatures of such officers of the Corporation may be facsimiles. In case
any officer of the Corporation who has signed, or whose facsimile signature has
been placed upon any such certificate shall have ceased to be such officer
before such certificate is issued, it may be issued by the Corporation with
the same effect as if he were such officer at the date of issue.
SECTION 3. Stock Ledger. A record shall be kept by the Secretary,
transfer agent or by any other officer, employee or agent designated by the
Board of Directors of the name of the person, firm or corporation holding the
stock represented by such certificates, the number of shares represented by
such certificates, respectively, and the respective dates thereof, and in case
of cancellation, the respective dates of cancellation.
SECTION 4. Cancellation. Every certificate surrendered to the
Corporation for exchange or registration of transfer shall be canceled, and no
new certificate or certificates shall be issued in exchange for any existing
certificate until such existing certificate shall have been so cancelled,
except in cases provided in Section 7 of this Article V.
SECTION 5. Registrations of Transfers of Stock. Registrations of
transfers of shares of the capital stock of the Corporation shall be made on
the books of the Corporation by the registered holder thereof, or by his
attorney thereunto authorized by power of attorney duly executed and filed with
the Secretary of the Corporation, or with a transfer clerk or a transfer agent
appointed as in Section 6 of this Article V
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provided, and on surrender of the certificate or certificates for such shares
properly endorsed and the payment of all taxes thereon. The person in whose
name shares of stock stand on the books of the Corporation shall be deemed the
owner thereof for all purposes as regards the Corporation; provided,however,
that whenever any transfer of shares shall be made for collateral security,
and not absolutely, it shall be so expressed in the entry of thetransfer
if, when the certificates are presented to the Corporation fortransfer, both
the transferor and the transferee request the Corporation to do so.
SECTION 6. Regulations. The Board of Directors may make such rules and
regulations as it may deem expedient, not inconsistent with the Certificate of
Incorporation or these By-Laws, concerning the issue, transfer and registration
of certificates for shares of the stock of the Corporation. It may appoint, or
authorize any principal officer or officers to appoint, one or more transfer
clerks or one or more transfer agents and one or more registrars, and may
require all certificates of stock to bear the signature or signatures of any of
them.
SECTION 7. Lost, Stolen, Destroyed or Mutilated Certificates. As a
condition of the issue of a new certificate for shares of stock in the place of
any certificate theretofore issued and alleged to have been lost, stolen,
mutilated or destroyed, the Board of Directors, in its discretion, may require
the owner of any such certificate, or his legal representatives, to file with
the Corporation a bond in such sum and in such form as it may deem sufficient
to indemnify the Corporation against any claim that may be made against it on
account of the alleged loss, theft, mutilation or destruction of any such
certificate or the issuance of such new certificate. Proper evidence of such
loss, theft, mutilation or destruction shall be procured for the Board of
Directors, if it so requires. The Board of Directors, in its discretion, may
authorize the issuance of new certificates without any bond when in its
judgment it is proper to do so.
SECTION 8. Record Dates. For the purpose of determining the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a date as
a record date for any such determination of stockholders. Such record date
shall not be more than sixty nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action.
Section 8 Amended 12/6/91
ARTICLE VI.
INDEMNIFICATION
The Corporation shall, to the fullest extent permitted by Section 145 of
the General Corporation Law of the State of Delaware, indemnify any and all
persons whom it shall have power to indemnify under said Section from and
against any and all of the expenses, liabilities or other matters referred to
in, or covered by said Section.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
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SECTION 1. Corporate Seal. The Board of Directors shall provide a
corporate seal, which shall be in the form of a circle, and shall bear the name
of the Corporation and words and figures showing that it was incorporated in
the State of Delaware in the year 1969. The Secretary shall be the custodian
of the seal. The Board of Directors may authorize a duplicate seal to be kept
and used by any other officer.
SECTION 2. Fiscal Year. The fiscal year of the Corporation shall end on
the Sunday nearest September 30 in each year commencing with the year 1993.
Section 2 Amended 7/21/93
SECTION 3. Voting of Stocks Owned by the Corporation. The Board of
Directors may authorize any person in behalf of the Corporation to attend, vote
and grant proxies to be used at any meeting of stockholders of any corporation
(except this Corporation) in which the Corporation may hold stock.
SECTION 4. Dividends. Subject to the provisions of the Certificate of
Incorporation, the Board of Directors may, out of funds legally available
therefor, at any regular or special meeting declare dividends upon the capital
stock of the Corporation as and when they deem expedient. Before declaring any
dividend, there may be set apart out of any funds of the Corporation available
for dividends such sum or sums as the directors from time to time in their
discretion deem proper for working capital, or as a reserve fund to meet
contingencies, or for equalizing dividends, or for such other purposes as the
Board of Directors shall deem conducive to the interests of the Corporation.
ARTICLE VIII.
AMENDMENTS
The Board of Directors may alter, amend or repeal the By-laws of the
Corporation at any regular or special meeting of the Board of Directors.
Except as may otherwise be provided in the Certificate of Incorporation,
stockholders may alter, amend or repeal the By-laws of the Corporation at any
annual or special meeting of stockholders only upon the affirmative vote of a
majority of the stock of the Corporation issued and outstanding and entitled to
vote in respect thereof, provided that notice of the proposed alteration,
amendment or repeal is contained in the notice of such meeting. By-laws,
whether made or altered by the stockholders or by the Board of Directors, shall
be subject to alteration or repeal by the stockholders as in this Article VIII
above provided.
Article VIII Amended 12/6/91
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EXHIBIT 10-1
SAVANNAH FOODS & INDUSTRIES, INC.
1996 EQUITY INCENTIVE PLAN
SECTION 1
PURPOSE
The purpose of this Plan is to promote the interests of the Company, its
Subsidiaries and its shareholders by enabling the Company and its Subsidiaries
to attract, retain and motivate employees or those who will become employees,
and to align the interests of those individuals and the Company's shareholders.
To do this, the Plan offers equity-based opportunities providing such
employees with a proprietary interest in maximizing the growth, profitability
and overall success of the Company and its Subsidiaries.
SECTION 2
DEFINITIONS
Each term set forth in this Section shall have the meaning set forth
opposite such term for purposes of this Plan and, for purposes of such
definitions, the singular shall include the plural and the plural shall include
the singular.
2.1 Award means an award or grant of an Option or Restricted Stock made to
a Participant under this Plan.
2.2 Award Agreement means the agreement executed by a Participant pursuant
to this Plan in connection with the granting of an Award.
2.3 Board means the Board of Directors of the Company, as constituted
from time to time.
2.4 Change in Control has the meaning set forth in Section 15.
2.5 Code means the Internal Revenue Code of 1986, as amended.
2.6 Committee means the committee of the Board established to administer
the Plan, as appointed under Section 5 of the Plan.
2.7 Common Stock means the $.25 par value common stock of the Company.
2.8 Company means Savannah Foods & Industries, Inc., a Delaware
corporation, and any successor to such organization.
2.9 Disability means disability as defined in the Participant's then
effective employment agreement, or if the Participant is not then a party to an
effective employment agreement with the Company which defines disability,
"Disability" means disability as determined by the Committee in accordance with
standards and procedures similar to those under the Company's long-term
disability plan, if any. Subject to the first sentence of this Section 2.9, at
any time that the Company does not maintain a long-term disability plan,
"Disability" shall mean any physical or mental disability which is determined
to be total and permanent by a physician selected in good faith by the Company.
2.10 Employee means an employee of the Company, a Subsidiary or a Parent.
2.11 Exchange Act means the Securities Exchange Act of 1934, as amended.
2.12 Fair Market Value means on, or with respect to, any given date(s),
the average of the highest and lowest market prices of the Common Stock, as
reported on the consolidated reporting system for the New York Stock Exchange
for
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such date(s) or, if the Common Stock was not traded on such date(s), on the
next preceding day or days on which the Common Stock was traded. If at any
time the Common Stock is not traded on such exchange, the Fair Market Value of
a share of the Common Stock shall be determined in good faith by the Board.
2.13 Option means an option to purchase Shares granted under this Plan.
2.14 Option Price means the price which shall be paid to purchase one (1)
Share upon the exercise of an Option granted under this Plan.
2.15 Parent means any corporation which is a parent corporation of the
Company within the meaning of Section 424(e) of the Code.
2.16 Participant means any individual who is selected from time to time to
receive an Award under the Plan.
2.17 Plan means the Savannah Foods & Industries, Inc. 1996 Equity
Incentive Plan, as amended from time to time.
2.18 Restricted Stock means Shares granted pursuant to Section 9.
2.19 Retirement means the voluntary retirement by the Participant from
active employment with the Company and its Subsidiaries on or after the
attainment of (i) age 65, or (ii) 60, with the consent of the Board.
2.20 Share means a share of the Common Stock of the Company.
2.21 Subsidiary means any corporation which is a subsidiary corporation of
the Company within the meaning of Section 424(f) of the Code.
2.22 Surrendered Shares means the Shares described in Section 8.7 which
(in lieu of being purchased) are surrendered for cash or Shares, or for a
combination of cash and Shares, in accordance with Section 8.7.
SECTION 3
SHARES SUBJECT TO PLAN
The total number of Shares that may be issued pursuant to Options or
Restricted Stock Grants granted under this Plan shall not exceed One Million
Two Hundred and Fifty Thousand (1,250,000) Shares, as adjusted below and
pursuant to Section 12. Such Shares shall be reserved to the extent that the
Company deems appropriate from authorized but unissued Shares and from Shares
which have been reacquired by the Company. Furthermore, any Shares subject to
an Award granted hereunder which remain after the cancellation, expiration or
exchange of such Award shall again become available for use under this Plan,
but any Surrendered Shares which remain after the surrender of an Option under
Section 8.7 shall not again become available for use under this Plan.
SECTION 4
EFFECTIVE DATE
The effective date of this Plan shall be the date it is adopted by the
Board, provided the shareholders of the Company approve this Plan within twelve
(12) months after such effective date. If such effective date comes before
such shareholder approval, any Awards granted under this Plan before the date
of such approval shall automatically be granted subject to such approval.
SECTION 5
ADMINISTRATION
5.1 The Committee. This Plan shall be administered by the Committee. The
Committee shall be appointed from time to time by the Board and shall consist
of not less than three (3) of the then members of the Board who are
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Non-Employee Directors (within the meaning of Rule 16b-3(b)(3) promulgated
pursuant to the Exchange Act) of the Company. No member of the Committee shall
be eligible to receive Awards under the Plan. Consistent with the Bylaws
of the Company, members of the Committee shall serve at the pleasure of the
Board and the Board, subject to the immediately preceding sentence, may at any
time and from time to time remove members from, or add members to, the
Committee.
5.2 Powers of the Committee. The Committee, acting in its absolute
discretion, shall exercise such powers and take such action as expressly called
for under this Plan. The Committee shall have the power to interpret this Plan
and, subject to Section 14, to take such other action in the administration and
operation of the Plan as it deems equitable under the circumstances. The
Committee's actions shall be binding on the Company, on each affected
Participant, and on each other person directly or indirectly affected by such
action.
5.3 Liability Limitation. Neither the Board nor the Committee, nor any
member of either, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan
(or any Award Agreement), and the members of the Board and the Committee shall
be entitled to indemnification and reimbursement by the Company in respect of
any claim, loss, damage or expense (including, without limitation, attorneys'
fees) arising or resulting therefrom to the fullest extent permitted by law
and/or under any directors and officers liability insurance coverage which may
be in effect from time to time.
SECTION 6
ELIGIBILITY
Only Employees, or those who will become Employees, shall be eligible for
the grant of an Award under this Plan, but no Employee shall have the right to
be granted an Award under this Plan merely as a result of his or her status as
an Employee.
SECTION 7
GRANT OF AWARDS
7.1 Selection by Committee. The Committee, in its absolute discretion,
may grant Awards under this Plan from time to time and shall have the right to
grant new Awards in exchange for outstanding Awards. Awards shall be granted
to Employees selected by the Committee and the Committee shall be under no
obligation whatsoever to grant Awards to all Employees, to grant Awards
uniformly or to grant all Awards subject to the same terms and conditions. In
determining Employee(s) to whom an Award shall be granted and the number of
Shares to be covered by such Award, the Committee may take into account the
recommendations of the President of the Company and its other officers, the
duties of the Employee, the present and potential contributions of the Employee
to the success of the Company, the anticipated number of years of service
remaining before the attainment by the Employee of retirement age, and other
factors deemed relevant by the Committee, in its sole discretion, in connection
with accomplishing the purpose of this Plan. An Employee who has been granted
an Award, whether under this Plan or otherwise, may be granted one or more
additional Awards.
7.2 Award Agreements. Each grant of an Award shall be evidenced by an
Award Agreement and shall incorporate such terms and conditions as the
Committee, acting in its absolute discretion, deems consistent with the terms
of this Plan.
SECTION 8
STOCK OPTIONS
8.1 Terms and Conditions. Options granted under the Plan shall be in
respect of Common Stock. Such Options shall be subject to the terms and
conditions set forth in this Section 8 and any additional terms and conditions,
not inconsistent with the express terms and provisions of the Plan, as the
Committee shall set forth in the relevant Award Agreement. Options granted
hereunder shall not be intended to satisfy the requirements of Section 422 of
the Code as incentive stock options.
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8.2 Option Price. The Option Price for each Share subject to such Option
shall be no less than the Fair Market Value of a Share on the date such Option
is granted. The Option Price shall be payable in full upon the exercise of any
Option, and an Award Agreement, at the discretion of the Committee may provide
for the payment of the Option Price either in cash or in Shares acceptable to
the Committee or in any combination of cash and Shares acceptable to the
Committee. Any payment made in Shares shall be treated as equal to the Fair
Market Value of such Shares on the date the properly endorsed certificate for
such Shares is delivered to the Committee (or to its delegate).
Notwithstanding the above, and in the sole discretion of the Committee, an
Option may be exercised as to a portion or all (as determined by the Committee)
of the number of Shares specified in the Award Agreement by delivery to the
Company of a secured promissory note to be executed by the Optionee. The
promissory note shall include, along with such other terms and conditions as
the Committee shall determine, provisions in a form approved by the Committee
under which (a) the balance of the aggregate purchase price shall be payable in
equal installments over such period and shall bear interest at such rate (which
shall not be less than the prime bank loan rate as determined by the Committee)
as the Committee shall approve and (b) the Optionee shall be personally liable
for payment of the unpaid principal balance and all accrued but unpaid
interest.
8.3 Option Exercise Period.
(a) Each Option granted under this Plan shall be exercisable in whole or
in part at such time or times as set forth in the related Award Agreement, but
no Award Agreement shall:
(i) make an Option exercisable before the date such Option is granted or;
(ii) make an Option exercisable after the earlier of the:
(A) the date such Option is exercised in full; or
(B) the date which is the tenth
(10th) anniversary of the date such Option is
granted.
(b) If a Participant's employment with the Company and/or any Parent or
Subsidiary shall be terminated for any reason, except death, Disability or
Retirement, the Option shall terminate upon the date of such termination of
employment, unless the Award Agreement for the Option expressly provides
otherwise, except as otherwise provided herein.
(c) If a Participant shall become Disabled while an employee of the
Company or any Parent or Subsidiary or after the date of termination of
employment but prior to the expiration of the Option, or if a Participant shall
Retire, the Retired Participant, the transferee of the Option pursuant to
Section 8.6 or the Disabled Participant shall have the right to exercise the
Option, and the right to exercise the Option shall terminate as provided by the
terms of the Award Agreement for the Option. If a Participant shall die while
an employee of the Company or any Parent or Subsidiary or after the date of
termination of employment but prior to the expiration of the Option, the
executor or administrator of the Participant's estate or a transferee of the
Option pursuant to Section 8.6 shall have the right to exercise the Option, and
the right to exercise the Option shall terminate upon the earliest of (i) the
expiration of twelve (12) months from the date of such termination of
employment, (ii) the expiration of twelve (12) months from the date of the
Participant's death, or (iii) as otherwise provided by the terms of the Award
Agreement for the Option. The occurrence of a Change in Control shall have no
effect on the duration of the exercise period.
(d) Whether military or other government or eleemosynary service or other
leave of absence will constitute termination of employment shall be determined
in each case by the Committee in its sole discretion.
(e) Notwithstanding the foregoing termination provisions, the Committee
may, in its sole discretion, establish different terms and conditions
pertaining to the effect of an Participant's termination on the expiration or
exercisability of newly granted options or (with the consent of the affected
Participant) outstanding options. However, no Option can have a term of more
than ten (10) years.
8.4 Vesting. In respect of any Option granted under this Plan, unless
otherwise (a) determined by the Committee (in its sole discretion) at any time
and from time to time in respect of any such Option, or (b) provided in the
Award Agreement or in the Participant's employment agreement in respect of any
such Option, such Option shall become
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exercisable as to the aggregate number of shares of Common Stock underlying
such Option, as determined on the date of grant, as follows:
(a) 33 1/3%, on the first anniversary of the date of
grant of the Option, provided the Participant is then employed
by the Company and/or one of its Subsidiaries;
(b) 66 2/3%, on the second anniversary of the date of
grant of the Option, provided the Participant is then employed
by the Company and/or one of its Subsidiaries; and
(c) 100%, on the third anniversary of the date of grant
of the Option, provided the Participant is then employed by the
Company and/or one of its Subsidiaries.
8.5 Acceleration of Vesting upon Death, Disability or Retirement.
Notwithstanding anything to the contrary contained in Section 8.4, such Option
shall become one hundred percent (100%) exercisable as to the aggregate number
of shares of Common Stock underlying such Option upon the death, Disability or
Retirement of the Participant. Death or Disability of the Participant
occurring after termination of employment with the Company and/or any Parent or
Subsidiary shall not cause any Options to become exercisable.
8.6 Non-Transferable. No Option granted under this Plan shall be
transferable by a Participant other than by will or by the laws of descent and
distribution, and such Option shall be exercisable during a Participant's
lifetime only by the Participant. The person or persons to whom an Option is
transferred by will or by the laws of descent and distribution thereafter shall
be treated as the Participant.
8.7 Surrender of Options.
(a) General Rule. The Committee, acting in its absolute discretion, may
incorporate a provision in an Award Agreement to allow a Participant to
surrender his or her Option in whole or in part in lieu of the exercise in
whole or in part of that Option on any date that:
(i) the Fair Market Value of the Shares subject to such Option
exceeds the Option Price for such Shares; and
(ii) the Option to purchase such Shares is otherwise
exercisable.
(b) Procedure. The surrender of an Option in whole or in part shall be
effected by the delivery of the Award Agreement to the Committee (or to its
delegate) together with a statement signed by the Participant which specifies
the number of Shares ("Surrendered Shares") as to which the Participant
surrenders his or her Option and how he or she desires payment be made for such
Surrendered Shares.
(c) Payment. A Participant in exchange for his or her Surrendered Shares
shall receive Shares equal in amount on the date such surrender is effected to
the excess of the Fair Market Value of the Surrendered Shares on such date over
the Option Price for the Surrendered Shares. If any exercise under this
Section 8.7 creates a right to acquire a fractional Share, such fractional
Share shall be disregarded and the number of Shares to be issued shall be the
next lower number of Shares, rounding all fractions downward.
(d) Restrictions. Any Award Agreement for an Option which incorporates a
provision to allow a Participant to surrender his or her Option in whole or in
part also shall incorporate such additional restrictions on the exercise or
surrender of such Option as the Committee deems necessary to satisfy the
conditions to the exemption under Rule 16b-3 (or any successor exemption) to
Section 16(b) of the Exchange Act.
SECTION 9
RESTRICTED STOCK
9.1. Terms and Conditions. Awards of Restricted Stock shall be subject to
the terms and conditions set forth in this Section 9 and any additional terms
and conditions, not inconsistent with the express terms and provisions of the
Plan, as
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the Committee shall set forth in the relevant Award Agreement. Restricted
Stock may be granted alone or in addition to any other Awards under the Plan.
Subject to the terms of the Plan, the Committee shall determine the number of
Shares of Restricted Stock to be granted to a Participant and the Committee
may provide or impose different terms and conditions on any particular
Restricted Stock Award made to any Participant. With respect to each
Participant receiving an Award of Restricted Stock, there shall be issued a
stock certificate (or certificates) in respect of such Restricted Stock. Such
stock certificate(s) shall be registered in the name of such Participant, shall
be accompanied by a stock power duly executed by such Participant, and shall
bear, among other required legends, the following legend:
"The transferability of this certificate and the shares
of stock represented hereby are subject to the terms and
conditions (including, without limitation, forfeiture
events) contained in the Savannah Foods & Industries,
Inc. 1996 Equity Incentive Plan and an Award Agreement
entered into between the registered owner hereof and
Savannah Foods & Industries, Inc. Copies of such Plan
and Award Agreement are on file in the office of the
Secretary of Savannah Foods & Industries, Inc.,
Savannah, Georgia. Savannah Foods & Industries, Inc.
will furnish to the record holder of the certificate,
without charge and upon written request at its principal
place of business, a copy of such Plan and Award
Agreement. Savannah Foods & Industries, Inc. reserves
the right to refuse to record the transfer of this
certificate until all such restrictions are satisfied,
all such terms are complied with and all such conditions
are satisfied."
Such stock certificate evidencing such shares shall, in the sole discretion of
the Committee, be deposited with and held in custody by the Company until the
restrictions thereon shall have lapsed and all of the terms and conditions
applicable to such grant shall have been satisfied.
9.2 Restricted Stock Award. An Award of Restricted Stock is an Award of
shares of Common Stock granted to a Participant, subject to such restrictions,
terms and conditions as the Committee deems appropriate, including, without
limitation, (a) restrictions on the sale, assignment, transfer, hypothecation
or other disposition of such shares, (b) the requirement that the Participant
deposit such shares with the Company while such shares are subject to such
restrictions, and (c) the requirement that such shares be forfeited upon
termination of employment for specified reasons within a specified period of
time or for other reasons (including, without limitation, the failure to
achieve designated performance goals).
9.3 Restriction Period. In accordance with Sections 9.1 and 9.2 of the
Plan and unless otherwise determined by the Committee (in its sole discretion)
at any time and from time to time, Restricted Stock shall only become
unrestricted and vested in the Participant in accordance with such vesting
schedule relating to such Restricted Stock, if any, as the Committee may
establish in the relevant Award Agreement (the "Restriction Period").
Notwithstanding the preceding sentence, in no event shall the Restriction
Period be less than six (6) months after the date of grant of the Award.
During the Restriction Period, such stock shall be and remain unvested and a
Participant may not sell, assign, transfer, pledge, encumber or otherwise
dispose of or hypothecate such Award. Upon satisfaction of the vesting
schedule and any other applicable restrictions, terms and conditions, the
Participant shall be entitled to receive payment of the Restricted Stock or a
portion thereof, as the case may be, as provided in Section 9.4 of the Plan.
9.4 Payment of Restricted Stock. After the satisfaction and/or lapse of
the restrictions, terms and conditions established by the Committee in respect
of an Award of Restricted Stock, a new certificate, without the legend set
forth in Section 9.1 of the Plan, for the number of shares of Common Stock
which are no longer subject to such restrictions, terms and conditions shall,
as soon as practicable thereafter, be delivered to the Participant.
9.5 Shareholder Rights. A Participant shall have, with respect to the
shares of Common Stock underlying an Award of Restricted Stock, all of the
rights of a shareholder of such stock (except as such rights are limited or
restricted under the Plan or in the relevant Award Agreement). Any stock
dividends paid in respect of unvested Restricted Stock shall be treated as
additional Restricted Stock and shall be subject to the same restrictions and
other terms and conditions that apply to the unvested Restricted Stock in
respect of which such stock dividends are issued.
SECTION 10
SECURITIES REGISTRATION
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Each Award Agreement may provide that, upon the receipt of Shares as a
result of the surrender or exercise of an Award, the Employee shall, if so
requested by the Company, hold such Shares for investment and not with a view
of resale or distribution to the public and, if so requested by the Company,
shall deliver to the Company a written statement satisfactory to the Company to
that effect. Each Award Agreement also may provide that, if so requested by
the Company, the Employee shall make a written representation to the Company
that he or she will not sell or offer to sell any of such Shares unless a
registration statement shall be in effect with respect to such Shares under the
Securities Act of 1933, as amended ("1933 Act") and any applicable state
securities law or unless he or she shall have furnished to the Company an
opinion, in form and substance satisfactory to the Company, of legal counsel
acceptable to the Company, that such registration is not required.
Certificates representing the Shares transferred upon the grant, exercise or
surrender of an Award granted under this Plan may at the discretion of the
Company bear a legend to the effect that such Shares have not been registered
under the 1933 Act or any applicable state securities law and that such Shares
may not be sold or offered for sale in the absence of an effective registration
statement as to such Shares under the 1933 Act and any applicable state
securities law or an opinion, in form and substance satisfactory to the
Company, of legal counsel acceptable to the Company, that such registration is
not required.
SECTION 11
LIFE OF PLAN
No Award shall be granted under this Plan on or after the tenth (10th)
anniversary of the effective date of the Plan, in which case the Plan otherwise
shall continue in effect until the later of (i) all outstanding Options have
been terminated, surrendered or exercised in full or no longer are exercisable
or (ii) all restrictions on Shares transferred as Restricted Stock have lapsed.
SECTION 12
ADJUSTMENT
The number of Shares reserved under Section 3 of this Plan and the number
of Shares subject to Awards granted under this Plan and the exercise price or
other price per Share relating to outstanding Awards shall be adjusted by the
Committee in an equitable manner to reflect any change in the capitalization of
the Company, including, but not limited to, such changes as stock dividends or
stock splits. Furthermore, the Committee shall have the right to adjust the
number of Shares reserved under Section 3 of this Plan and the number of Shares
subject to Awards granted under this Plan and the exercise price or other price
per Share relating to outstanding Awards in the event of any merger,
consolidation, division, acquisition, reorganization or liquidation which
provides for the substitution or assumption of such Awards. If any adjustment
under this Section 12 creates a fractional Share or a right to acquire a
fractional Share, such fractional Share shall be disregarded and the number of
Shares reserved under this Plan and the number subject to any Awards granted
under this Plan shall be the next lower number of Shares, rounding all
fractions downward. An adjustment made under this Section 12 by the Committee
shall be conclusive and binding on all affected persons and, further, shall not
constitute an increase in the number of Shares reserved under Section 3 of this
Plan.
SECTION 13
SALE OR MERGER OF THE COMPANY
If the Company agrees to sell substantially all of its assets for cash or
property or for a combination of cash and property or agrees to any merger,
consolidation, reorganization, division or other transaction in which Shares
are converted into another security or into the right to receive securities or
property and such agreement does not provide for the assumption or substitution
of the Options granted under this Plan, each Option, at the direction and
discretion of the Committee, or as is otherwise provided in the Award
Agreements, may be canceled unilaterally by the Company in exchange for the
whole Shares which each Participant otherwise would receive if he or she had
the right to surrender his or her outstanding Option in full under Section 8.7
of this Plan and he or she exercised that right exclusively for Shares on a
date fixed by the Committee which comes before such sale or other corporate
transaction.
SECTION 14
AMENDMENT OR TERMINATION
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This Plan may be amended by the Board from time to time to the extent that
the Board deems necessary or appropriate; provided, however, no such amendment
shall be made absent the approval of the shareholders of the Company (1) to
increase the number of Shares reserved under Section 3, except as set forth in
Section 12, (2) to extend the maximum life of the Plan under Section 11 or the
maximum exercise period under Section 8.3, (3) to decrease the Option Price
under Section 8.2, or (4) to change the designation of Employees eligible for
Awards under Section 6. The Board also may suspend the granting of Awards
under this Plan at any time and may terminate this Plan at any time; provided,
however, the Company shall not have the right to modify, amend or cancel any
Award granted before such suspension or termination unless (i) the Participant
consents in writing to such modification, amendment or cancellation or (ii)
there is a dissolution or liquidation of the Company or a transaction described
in Section 12 or Section 13 of this Plan.
SECTION 15
CHANGE IN CONTROL
15.1 Acceleration of Awards Vesting. Anything in the Plan to the contrary
notwithstanding, if a Change in Control of the Company occurs (a) all Options
then unexercised and outstanding shall become fully vested and exercisable as
of the date of the Change in Control, and (b) all restrictions, terms and
conditions applicable to all Restricted Stock then outstanding shall be deemed
lapsed and satisfied as of the date of the Change in Control. The immediately
preceding sentence shall apply to only those Participants (i) who are employed
by the Company and/or one of its Subsidiaries as of the date of the Change in
Control, or (ii) to whom Section 15.3 below is applicable.
15.2 Payment After Change in Control. Notwithstanding anything to the
contrary in the Plan, within thirty (30) days after a Change in Control occurs,
(a) the holder of an Award of Restricted Stock vested under Section
15.1(b) above shall receive a new certificate for such shares without the
legend set forth in Section 9 of the Plan and, in the case only of a Change in
Control under Section 15.4(a) of the Plan, such holder shall have the right,
but not the obligation, to elect, within ten (10) business days after the
Participant has actual or constructive knowledge of the occurrence of such
Change in Control, to require the Company to purchase such shares from the
Participant at their then Fair Market Value, and (b) in the case only of a
Change in Control under Section 15.4(a) of the Plan, the holders of any Options
shall have the right, but not the obligation, to elect, within ten (10)
business days after the Participant has actual or constructive knowledge of the
occurrence of such Change in Control, to require the Company to purchase such
Options from the Participant for an aggregate amount equal to the then
aggregate Fair Market Value of the Common Stock underlying such Awards
tendered, less the aggregate exercise price of such tendered Awards.
15.3 Termination as a Result of a Change in Control. Anything in the Plan
to the contrary notwithstanding, if a Change in Control occurs and if the
Participant's employment is terminated before such Change in Control and it is
reasonably demonstrated by the Participant that such employment termination (a)
was at the request, directly or indirectly, of a third party who has taken
steps reasonably calculated to effect the Change in Control, or (b) otherwise
arose in connection with or in anticipation of the Change in Control, then for
purposes of this Section 15, the Change in Control shall be deemed to have
occurred immediately prior to such Participant's employment termination.
15.4 Change in Control. For purposes of this Plan, a Change in Control
shall be deemed to have occurred when and only when the first of the following
events occurs:
(a) Any "person" (as that 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 (1) any employee plan established by the Company, (2) the Company, (3) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (4) a corporation owned, directly or indirectly, by stockholders
of the Company in substantially the same proportions as their ownership of the
Company) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding voting securities; or
(b) During any period of two consecutive years, individuals who at the
beginning of such period constituted the Board and any new director (other than
an individual whose nomination for election is in connection with an actual or
threatened election contest relating to the election of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) whose appointment, election, or nomination for election by the
Company's shareholders, was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either
Page 35
<PAGE> 9
were directors at the beginning of the period or whose appointment, election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board; or
(c) There is consummated a merger or consolidation of the Company or a
subsidiary thereof with or into any other corporation, other than a merger or
consolidation which would result in the holders of the voting securities of the
Company outstanding immediately prior thereto holding securities which
represent immediately after such merger or consolidation more than 80% of the
combined voting power of the voting securities of either the Company or the
other entity which survives such merger or consolidation or the parent of the
entity which survives such merger or consolidation; or
(d) There is consummated a sale or disposition by the Company of all or
substantially all of the Company's assets.
SECTION 16
MISCELLANEOUS
16.1 Shareholder Rights. No Participant shall have any rights as a
shareholder of the Company as a result of the grant of an Award to him or to
her under this Plan or his or her exercise or surrender of such Award pending
the actual delivery of Shares subject to such Award to such Participant.
16.2 No Contract of Employment. The grant of an Award to an Employee
under this Plan shall not constitute a contract of employment or other
association with the Company, and shall not confer on an Employee any rights
upon his or her termination of employment or other association with the
Company, in addition to those rights, if any, expressly set forth in the
applicable Award Agreement.
16.3 Withholding. The Company shall have the right to deduct from any
payment or settlement under the Plan, including, without limitation, the
exercise of any Option, or the delivery, transfer or vesting of any Common
Stock or Restricted Stock, any federal, state, local or other taxes of any kind
which the Committee, in its sole discretion, deems necessary to be withheld to
comply with the Code and/or any other applicable law, rule or regulation. If
the Committee, in its sole discretion, permits shares of Common Stock to be
used to satisfy any such tax withholding, such Common Stock shall be valued
based on the Fair Market Value of such stock as of the date the tax withholding
is required to be made, such date to be determined by the Committee. The
Committee may establish rules limiting the use of Common Stock to meet
withholding requirements by Participants who are subject to Section 16 of the
Exchange Act. The exercise or surrender of any Option granted under this Plan
shall constitute an Employee's full and complete consent to whatever action the
Committee directs to satisfy the federal and state tax withholding
requirements, if any, which the Committee in its discretion deems applicable to
such exercise or surrender.
16.4 Transfer. The transfer of an Employee between or among the Company,
a Subsidiary or a Parent shall not be treated as a termination of his or her
employment under this Plan.
16.5 Construction. This Plan shall be construed under the laws of the
State of Georgia.
Page 36
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SAVANNAH FOODS & INDUSTRIES, INC. FOR THE PERIOD ENDED
MARCH 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-28-1997
<PERIOD-START> SEP-30-1996
<PERIOD-END> MAR-30-1997
<CASH> 14,638
<SECURITIES> 0
<RECEIVABLES> 64,209
<ALLOWANCES> 0
<INVENTORY> 159,833
<CURRENT-ASSETS> 244,609
<PP&E> 404,666
<DEPRECIATION> 226,748
<TOTAL-ASSETS> 452,157
<CURRENT-LIABILITIES> 152,253
<BONDS> 36,683
0
0
<COMMON> 17,365
<OTHER-SE> 173,525
<TOTAL-LIABILITY-AND-EQUITY> 452,157
<SALES> 579,610
<TOTAL-REVENUES> 579,610
<CGS> 505,603
<TOTAL-COSTS> 505,603
<OTHER-EXPENSES> 12,106
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,882
<INCOME-PRETAX> 28,995
<INCOME-TAX> 11,018
<INCOME-CONTINUING> 17,977
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,977
<EPS-PRIMARY> .69
<EPS-DILUTED> 0
</TABLE>
