AMERICAN ITALIAN PASTA COMPANY
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT
(this
"Agreement"),
effective October 1, 2005 is
by and
between
American
Italian
Pasta
Company
("Employer"),
and Walter N.
George, an individual ("Employee") (collectively "the parties).
WITNESSETH:
In consideration of the promises and mutual covenants
contained herein and
other good and valuable
consideration,
the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:
1.
Non-Competition, Nonsolicitation and Nondisparagement
.
1.1
Employee
acknowledges
and
recognizes
the
highly
competitive
nature of the business of Employer and its affiliates and
accordingly
agrees as
follows:
while he is employed
by Employer
and until the date that is eighteen
(18) months
after any
termination
of such
employment
with
Employer for any
reason (the period of employment and such 18 month post-employment
period being
the "Noncompetition Period"),
Employee will not, in any area in the world where
Employer
conducts
business,
directly
or
indirectly
own,
manage,
operate,
control,
be employed by,
consult
with, or be connected in any manner with the
ownership
(other than passive
investments
of not more than one percent of the
outstanding
shares of, or any other
equity
interest in, any company or entity
listed or traded on a national
securities
exchange
or in an
over-the-counter
securities market), management, operation, or control of any
business engaged in
the
production
and/or
marketing
of pasta
products
for
human
consumption.
Notwithstanding any provision of this Agreement to the contrary,
if Employee is
employed by
Employer,
then any breach of the
provisions
of this
Section 1.1
shall permit
Employer to
terminate
the
employment
of Employee for Cause (as
defined below),
and, whether or not Employee is employed by Employer,
from and
after any
breach by
Employee
of the
provisions
of this
Section
1.1,
then
Employer shall cease to have any
obligations to make payments to Employee under
this Agreement.
1.2
During the Noncompetition
Period,
Employee will not directly or
indirectly
induce or attempt to induce any
employee
of Employer or any of its
affiliates
to engage in any
activity
in which
Employee
is
prohibited
from
engaging
by
Section
1.1 hereof or to
terminate
his or her
employment
with
Employer or any of its
affiliates,
will not directly or
indirectly
assist or
attempt to assist others in engaging in any of the
activities in which Employee
is
prohibited
from
engaging by Section 1.1 hereof,
and will not
directly or
indirectly employ or offer employment to any person who was
employed by Employer
or any of its affiliates
unless such person shall have ceased to be employed by
Employer or any of its affiliates for a period of at least 12
months.
1.3
During the Noncompetition
Period,
Employee will not directly or
indirectly
induce or attempt to induce any
customer or supplier of Employer or
any of its
affiliates
to move,
reduce or not increase its trade or business with Employer
or any of its affiliates.
1.4
Employee
acknowledges
and agrees that
disparaging
or critical
statements
made by Employee about
Employer or its board
members,
officers or
employees
would be
uniquely
detrimental
to the
interests
of both
parties.
Therefore,
during the
Noncompetition
Period,
Employee agrees to refrain from
making any
disparaging
or
critical
statements
about
Employer
or its board
members, officers or employees.
1.5
Employee acknowledges that the restrictions contained in Sections
1.1, 1.2, 1.3 and 1.4 are reasonable and appropriate. However, in
the event that
a court of competent
jurisdiction
determines
that such
restrictions
are not
reasonable
and therefore
unenforceable,
the parties agree that such court may
modify the
restrictions
in order for, but only to the least
extent
necessary
for,
the
restrictions
to be enforced
by such court.
In the event such court
finds that any such restriction cannot be modified so as to make it
enforceable,
such
restriction
may be deleted by such
court and the
enforceability
of all
other restrictions will be unaffected by such deletion.
2.
Confidentiality
.
Employee
acknowledges
that,
in and as a result of
Employee's employment by Employer,
Employee has been and will be making use of,
acquiring,
and/or adding to
confidential
information
of a special and unique
nature and value relating to such matters as Employer's trade
secrets,
systems,
procedures,
manuals,
confidential reports, and lists of customers and/or other
services
rendered by Employer,
the equipment and methods used and preferred by
Employer's
customers,
and the
prices
paid by such
customers.
As a material
inducement
to Employer to enter into this
Agreement,
Employee
covenants
and
agrees
that
Employee
shall not,
at any time
during or after the
Employee's
employment by Employer,
directly or indirectly
disclose,
divulge,
or use for
Employee's
own
benefit or
purposes
or the
benefit or
purposes of any other
person, firm, partnership,
joint venture,
association,
corporation,
or other
business organization,
entity, or enterprise other than Employer and any of its
subsidiaries
or
affiliates
any trade
secrets,
information,
data,
or other
confidential
information relating to customers,
development
programs,
costs,
prices, marketing, trading, investment, sales activities,
promotion, credit and
financial
data,
manufacturing
processes,
financing
methods,
plans,
or the
business and affairs of Employer
generally or of any subsidiary or affiliate of
Employer,
provided,
however, that the foregoing shall not apply to information
that is not unique to Employer or that is generally known to the
industry or the
public other than as a result of breach of this covenant.
Employee agrees that,
upon termination of Employee's employment with Employer for any
reason, Employee
will return to Employer
immediately
all memoranda,
books,
manuals,
training
materials,
records,
computer software,
papers, plans, contracts,
agreements,
information,
letters,
and other data, and all copies thereof or therefrom,
in
any way
relating to the business of Employer
and its
affiliates,
except that
Employee may retain personal notes,
notebooks,
and diaries.
Employee
further
agrees that Employee will not retain or use for
Employee's
account at any time
any trade names,
trademark,
or other proprietary
business designation used or
owned in connection with the business of Employer or its
affiliates.
3.
Specific Performance and Survival
.
3.1
Employee
acknowledges and agrees that Employer's remedies at law
for a breach or threatened
breach of any of the
provisions of Section 1 hereof
or
Section 2 hereof
-2-
would be inadequate
and, in recognition of this fact,
Employee agrees that, in
the event of such a breach or threatened
breach, in addition to any remedies at
law,
Employer,
without posting any bond, shall be entitled to obtain equitable
relief
in the
form
of
specific
performance,
temporary
restraining
order,
temporary or permanent
injunction,
or any other equitable remedy that may then
be available.
3.2
The
parties
agree
that the
terms of
Sections
1, 2 and 3 are
independent
of and separable
from the other
provisions of this
Agreement and
that the
termination
of this
Agreement
for any
reason
will not
affect the
continued
existence and
enforceability
of Sections 1, 2 and 3. Those Sections
will
survive
and
continue
to be fully
binding
on and
enforceable
against
Employee and Employer after any termination of this Agreement.
4.
Termination of Employment
4.1
Termination without Cause; Resignation for Good Reason
.
4.1.1
General
.
(a) Subject to the
provisions of Sections
4.1.2
and 4.1.3
hereof,
if Employee's
employment is terminated by Employer
without
Cause,
as
defined in Section
4.3,
or if
Employee
resigns
from
Employee's
employment
for Good Reason,
as defined in Section 4.4, then Employer shall pay
Employee severance in the amount of (i) Employee's accrued unpaid
base salary to
the date of termination
or resignation
and any bonus earned but not paid as of
that date,
and (ii)
continuation
of Employee's
base salary as of the date of
termination or resignation for a period of twelve (12) months
following the date
of termination or resignation
(such period being referred to hereinafter as the
"Severance
Period").
In
addition,
if at the
time
of
such
termination
or
resignation Employee has completed ten (10) years of uninterrupted
service with
Employer,
the
severance
will
include a payment
in the
amount of 50% of the
prorated
Normal
Bonus level to which
Employee
would have been
entitled
had
Employee remained employed through the then applicable bonus
period.
The Normal
Bonus level will be
calculated at the end of the bonus period and is subject to
all
adjustments
and
reductions
determined by the Board of Directors and made
applicable
to all bonus
plan
participants.
To the
extent
such
calculation
results in a bonus to be paid,
that amount
will be prorated
for the number of
weeks of the bonus period
occurring
prior to the week in which the termination
or
resignation
occurred.
The base salary shal
