Exhibit 10(a)(1)

December 4, 2008

Mr. John C. Sheptor

8016 Hwy 90A

Sugar Land, TX 77478

Re: Revised Term Sheet

Dear John:

As you may know, Section 409A was added to the Internal Revenue Code of 1986, as
amended (the “Code”) and governs deferred compensation provided for under
employment agreements. Generally, employment agreements that are subject to Code
Section 409A must be revised for compliance with or exemption from Code
Section 409A by December 31, 2008.

On October 21, 2007, you signed a Term Sheet that outlines the terms of your
employment with respect to your transition from COO to CEO/President of Imperial
Sugar (the “Term Sheet”). The Term Sheet with the cover letter created a legally
binding agreement. Attached as Exhibit A to this letter, please find a revised
version of the Term Sheet (the “Revised Term Sheet”). The Revised Term Sheet
reflects the revisions we believe are necessary to ensure that the benefits
provided thereunder fall within an exception to or comply with Code
Section 409A.

The Revised Term Sheet reflects the following changes:

 

  •  

Compensation Upon Termination Without Cause. The Code Section 409A Regulations
provide an exemption for compensation paid upon an involuntary termination
without cause. Out of an abundance of caution, the Revised Term Sheet uses the
“involuntary” language.

 

  •  

Compensation Upon Resignation with Good Reason. Pursuant to the “short term
deferral” exception to Code Section 409A, compensation paid on or prior to the
15th day of the third month following the year in which the compensation is no
longer subject to a substantial risk of forfeiture (the “Short Term Deferral
Period”) is exempt from Code Section 409A. The Code Section 409A Regulations
provide a “safe harbor” whereby compensation is considered subject to a
substantial risk of forfeiture notwithstanding the fact that it is payable upon
a resignation for good reason, so long as the good reason resignation is
considered an “involuntary termination” under the Code Section 409A Regulations.
The Code Section 409A Regulations provide that, to be considered an involuntary
termination, the good reason resignation must include a “notice and cure” period
and the good reason events must involve material adverse change. The Revised
Term Sheet has been updated to fall within the safe harbor good reason
resignation under the Code Section 409A Regulations. To that end, the notice and
cure period set forth in the Code Section 409A Regulations has been incorporated
into the Revised Term Sheet and one of the good reason events was modified to be
consistent with the safe harbor. Thus, the good reason resignation provision of
the Revised Term Sheet is intended to fall within the safe harbor definition of
good reason resignation and takes advantage of the “short term deferral”
exception to Code Section 409A.

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  •  

Outplacement. Payment of reasonable outplacement expenses incurred by an
employee as a result of an involuntary termination will be exempt from Code
Section 409A so long as certain time restrictions are met. The Revised Term
Sheet mirrors the “involuntary” language and incorporates the time restrictions.

 

  •  

Delay of Severance Payments. The Code Section 409A Regulations provide that Code
Section 409A-compliant payments made to a “specified employee” (which would
include you) upon a separation from service must be delayed until the earlier of
(1) the specified employee’s death or (2) a date that is no later than six
months from the date of the specified employee’s separation from service. The
Revised Term Sheet reflects this language. As a practical matter, this “Delay of
Severance Payments” provision will likely never be used, as most of the benefits
paid under the Revised Term Sheet have been drafted to be exempt from Code
Section 409A. (The only compensation/benefits that may be subject to Code
Section 409A is the last 6 months of the 2 years of health benefits provided to
you upon a termination without cause or a good reason quit.)

*            *            *

Please indicate your acceptance of the terms and provisions of the Revised Term
Sheet by signing both copies of this letter and returning one copy to me. The
other copy is for your files. By signing below, you acknowledge and agree that
you have carefully read the Revised Term Sheet in its entirety; fully understand
and agree to its terms and provisions; and intend and agree that it be final and
legally binding on you, and the Company. The Revised Term Sheet shall be
governed and construed under the internal laws of the state of Texas to the
extent not governed by federal law.

For your protection (in order to assure Code Section 409A compliance), the
Revised Term Sheet must be signed and returned to me by December 31, 2008.

This letter may be executed in several counterparts. One or more counterparts of
this letter may be delivered by facsimile, with the intention that delivery by
such means shall have the same effect as delivery of an original counterpart
thereof.

 

Very truly yours, IMPERIAL SUGAR COMPANY By:     Name: LOUIS T. BOLOGNINI Title:
Senior Vice President, Secretary and General Counsel

Agreed and Accepted:

   JOHN C. SHEPTOR

 

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Exhibit A

REVISED TERM SHEET

December 4, 2008

The terms of this Revised Term Sheet reflect changes made to clarify the intent
of Imperial Sugar Inc. (the “Company”) and John C. Sheptor (“Executive”) to
comply with or fall within an exception to Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) and the applicable guidance issued
thereunder. The Revised Term Sheet supersedes the prior Term Sheet entered into
on October 31, 2007 and the Change in Control Agreement by and between the
Company and Executive entered into on December 3, 2008.

 

Company:

Imperial Sugar Company (the “Company”)

 

Executive:

John C. Sheptor

 

Position/Title:

President and Chief Executive Officer responsible for the day to day operations
of the Company and reporting to the Board of Directors.

 

Term of Employment:

Executive will be an “at will” employee.

 

Compensation:

Annual Base Salary: $550,000 payable in accordance with normal payroll practices
and procedures of the Company, subject to normal withholdings. Executive’s
salary will be reviewed at least annually and may be increased on the basis of
such reviews. Executive’s salary, however, may not be decreased without his
written consent.

Annual Performance Bonus: Target bonus equal to 100 percent of salary paid
during the year. The actual bonus earned and paid will be dependent on
achievement of Company and individual performance objectives. The maximum bonus
opportunity will be set at two (2) times the target. Thus, actual bonuses may
range from zero to 200 percent of salary depending on performance achievement.
Bonuses will be governed under a bonus plan that has been approved by the Board
of Directors and shareholders. The bonus plan will be administered by the
Executive Compensation Committee, the Board of Directors or another committee
thereof, which will have full and final authority regarding the plan including
the establishment of annual performance measures and goals and the assessment of
performance results.

Periodic Long-Term Incentive Grants: The Executive will be eligible for periodic
grants of long-term incentives. Such grants will be made at the discretion of
the Executive Compensation Committee of the Board of Directors and will be made
pursuant to a long-term incentive plan (the “Long Term Incentive Plan”) that has
been approved by shareholders. The terms and conditions of grants will be
established by the Committee at the time of each such grant.

 

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CONFIDENTIAL

 

 

While recent grants have been in the form of restricted stock, future awards, at
the discretion of the Committee, may be in any form permitted under the
Long-Term Incentive Plan. The Long Term Incentive Plan permits the use of stock
options, stock appreciation rights, stock, restricted stock, conditional stock
units and cash.

Benefits: Executive will be provided with health and disability insurance and
life insurance, retirement, vacation and similar non-cash and non-equity
benefits available to other senior executives.

 

Compensation Upon Voluntary Termination:

Accrued but unpaid annual cash compensation and vacation days paid within thirty
(30) days of the date of termination. All unvested equity grants and/or awards,
including but not limited to, restricted stock will be cancelled. Vested but
unexercised stock options, if any, shall also be cancelled. No provision will be
made for severance.

 

Compensation Upon Involuntary Termination Without Cause:

Accrued but unpaid annual cash compensation and vacation days, plus a pro rata
bonus for the year of termination, plus two (2) times the annual salary rate
then in effect, all paid within thirty (30) days of the date of termination,
plus continuation of Company-paid health insurance for up to two (2) years.

 

Compensation Upon Resignation
with Good Reason:

Accrued but unpaid annual cash compensation and vacation days, plus a pro rata
bonus for the year of termination, plus two (2) times the annual salary rate
then in effect, all paid within thirty (30) days of the date of termination,
plus continuation of Company-paid health insurance for up to two (2) years.

“Good Reason” means (i) any material breach by the Company of the provisions of
this Revised Term Sheet or (ii) a material, adverse change in Executive’s
authority, duties or responsibilities. Notwithstanding the foregoing, no
compensation shall be paid with respect to a resignation for Good Reason unless
Executive provides the Company written notice of the “Good Reason” event
described in (i) or (ii) of the preceding sentence within ninety (90) days of
the initial existence of the condition. Further, if the Company remedies the
Good Reason event within thirty (30) days of such written notice, no
compensation shall be paid for resignation for Good Reason.

 

Compensation in the Event Of a
Change of Control:

In the event of a Change of Control as defined in the December 3, 2008 Change of
Control Agreement, all equity grants previously made to the Executive will vest
immediately. In addition, if within one year following the Change in Control,
Executive resigns his employment with Good Reason or the Company terminates his
employment without “Cause” (as defined below), he shall receive his Accrued but
unpaid annual cash compensation and vacation days, plus a pro rata bonus for the
year of termination, plus three (3) times

 

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CONFIDENTIAL

 

  the annual salary rate then in effect, all paid within thirty (30) days of the
date of termination, plus continuation of Company-paid health insurance for up
to two (2) years; notwithstanding the foregoing, in the event of a resignation
for Good Reason, no compensation shall be paid unless Executive provides the
Company with notice of the Good Reason event (as defined above) within ninety
(90) days of the initial existence of the Good Reason event; provided further,
no compensation shall be paid for resignation for Good Reason if the Company
remedies the Good Reason event within thirty (30) days of the written notice
from Executive of the existence of a Good Reason condition. If any payments
under this provision would otherwise trigger the excise tax under Section 4999
of the Internal Revenue Code of 1986 (the “Code”), associated with “parachute
payments” under code Section 280G, then such payments shall be reduced to an
amount that equals one dollar less than the amount that would otherwise trigger
such excise tax.

 

Compensation Upon Termination For Cause:

Accrued but unpaid annual cash compensation and vacation days, all paid within
thirty (30) days of the date of termination. All options (if any) and restricted
stock, whether or not vested, will be forfeited. The Company shall have “Cause”
to terminate Executive’s employment with the Company: (i) if Executive fails to
make a good faith effort to carry out any lawful directive of the Board or
Executive’s supervisor which failure is not cured within five days of notice
thereof, (ii) if Executive engages in any act which results in or may reasonably
be expected to result in the Executive’s conviction, plea of guilty or no
contest, or imposition of unadjudicated probation, for a felony or a crime
(other than minor traffic violations) involving moral turpitude; (iii) if
Executive uses alcohol, narcotics or other controlled substances which use is,
or could reasonably be expected to become, materially injurious to the
reputation or business of the Company or which impairs, or could reasonably be
expected to impair, the Executive’s performance of Executive’s duties to the
Company; or (iv) if Executive engages in an act or acts of dishonesty which
adversely affects or could reasonably be expected to adversely affect the
Company.

 

Outplacement:

In the event Executive’s employment is involuntarily terminated without Cause or
Executive resigns for Good Reason, the Company will provide outplacement
assistance to the Executive through a nationally recognized firm such as Lee
Hecht Harrison LLC; Challenger, Gray & Christmas, Inc.; or Drake Beam Morin,
Inc. at a cost not to exceed $30,000. The assistance will be consistent with the
standard program offered by the selected firm for top executives in transition
and will include transition and job search coaching and counseling, resume
preparation and temporary office facilities and support for use by the
Executive. The outplacement expenses must be incurred by Executive no later than
the December 31 of the second calendar year following the calendar year in which
Executive’s termination occurs and must be paid by the Company no later than

 

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CONFIDENTIAL

 

  the last day of the third fiscal year following the fiscal year in which
Executive’s termination occurs.

 

Delay of Severance Payments:

To the extent (i) any post-termination payments to which Executive becomes
entitled under this Agreement or any agreement or plan referenced herein
constitute deferred compensation subject to Code Section 409A and (ii) Executive
is deemed at the time of such termination of employment to be a “specified
employee” under Section 409A of the Code, then such payment will not be made or
commence until the earliest of (x) the expiration of the six (6) month period
measured from the date of Executive’s “separation from service” (as such term is
defined in Treasury Regulations under Section 409A of the Code and any other
guidance issued under Section 409A of the Code) with the Company; or (y) the
date of Executive’s death following such separation from service. Upon the
expiration of the applicable deferral period, and payments which would have
otherwise been made during that period (whether in a single sum or in
installments) in the absence of this provision (together with reasonable accrued
interest) will be paid to Executive or Executive’s beneficiary in one lump sum.

 

Compliance with Code Section 409A:

All references herein to Executive’s termination or resignation shall also
constitute a “separation from service” within the meaning of Treasury Regulation
Section 1.409A-1(h). In addition, the terms of this Revised Term Letter shall be
construed and shall be paid in such as manner as to satisfy an exception to or
be in compliance with Code Section 409A and the applicable guidance issued
thereunder.

 

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