Exhibit 10.3
SEPARATION AGREEMENT
This SEPARATION AGREEMENT (this "Agreement"), effective upon
expiration of the revocation period set forth herein, is by and between American
Italian Pasta Company ("AIPC") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") (collectively "the
parties").
WITNESSETH:
WHEREAS, AIPC and Potter are parties to a certain Employment Agreement
effective September 1, 2002; and
WHEREAS, the parties wish to terminate Potter's employment with AIPC
on the terms and conditions set forth herein, notwithstanding the provisions of
the Employment Agreement; and
WHEREAS, the parties wish to terminate the Employment Agreement on the
terms and conditions set forth herein and except as expressly provided herein;
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, the parties do hereby agree
as follows:
1. Termination of Employment.
1.1 Resignation Date. Potter agrees to resign his employment
with AIPC on a date between November 26, 2003, and February 27, 2004,
determined by the parties after good faith consultation and
negotiation ("Resignation Date"); provided, however, that if the
parties are unable through good faith negotiation and consultation to
determine and set a Resignation Date, then Potter may determine and
set such Resignation Date by providing thirty (30) days' written
notice thereof to AIPC. In no event will the Resignation Date be later
than February 27, 2004.
1.2 Nature of Resignation. For any and all purposes, including
but not limited to for purposes of the Employment Agreement, Potter's
resignation shall be voluntary and without Good Reason.
1.3 Severance/Other Benefits After Resignation. (a) As
consideration for Potter's resignation and signed release:
(i) AIPC shall provide Potter with severance pay and
benefits in accordance with Section 7.1.1 of the Employment
Agreement (except that Potter shall not be entitled to any bonus
related to fiscal year 2003 or any subsequent period), to which
severance pay and benefits Potter agrees he is not otherwise
entitled; Specifically, AIPC agrees to provide Potter his annual
base salary in bi-weekly severance payments during the 12 months
following the resignation date, subject to mitigation as Potter
gains employment elsewhere. Upon Potter gaining
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employment elsewhere during the 12 months of payments, AIPC
agrees to pay Potter 50% of the mitigated amount within 10 days
of Potter's written notice of new employment, but the payment
shall not exceed $40,000 plus any resulting difference in
bi-weekly salary for the remainder of the 12 month severance
period beginning on the Resignation date.
EXAMPLE: Potter is currently paid $7,235 every 2 weeks. If Potter
gains new employment after 3 months at an annual salary of
$160,000 ($6,154 every 2 weeks), saving AIPC $120,000 in
severance payments over the remaining 9 months, AIPC shall 1)
Issue Potter a payment of $40,000 (calculated as $60,000 but
capped at $40,000) to Potter within 10 days, and 2) Continue to
pay Potter $1,081 every 2 weeks ($7,235 severance commitment -
$6,154 new salary) for the remaining 9 months."
(ii) AIPC shall provide Potter with outplacement assistance
in accordance with AIPC's standard arrangements regarding
outplacement assistance for employees at or near Potter's level
within the organization, up to a maximum cost to AIPC of $5,000;
(iii) AIPC shall reimburse Potter for reasonable costs and
expenses incurred in preparing his individual income tax returns
for tax years 2003 and 2004 in an amount not to exceed $2,865
each year.
(iv) All payments amounts made under this agreement are
gross figures and are subject to applicable withholding amounts.
(v) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and Chief Executive
Officer of AIPC, will provide Potter with a positive employment
reference in a form reasonably to be agreed upon by Potter and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
(b) As a condition of Potter's receipt and retention of any
severance pay and/or benefits under this Agreement, Potter shall
remain subject to and shall comply with the terms of Sections 4, 5, 6,
7.1.1, 7.1.2, 7.1.3, and 7.5 of the Employment Agreement, which are
hereby incorporated by reference as if fully set forth herein.
(i) In addition, by signature, Potter acknowledges that
Section 4.1 would include, but not be limited to, named
employers: Barilla, New World Pasta and Dakota Growers.
1.4 Stock Options and Restricted Shares.
(a) Prior to the execution of this Agreement, Potter held 1,000
shares of Restricted Stock, with scheduled vesting through 8/27/2005.
Subject to the terms and conditions of Section 1.3(b), above, such
Restricted Shares shall continue to be held by
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Potter and shall continue to vest through the second anniversary of
his Resignation Date. Any Restricted Shares not then vested will
forfeit and be null and void.
(b) Prior to the execution of this Agreement, Potter held
unvested options to acquire 15,000 shares of AIPC common stock. As of
the date hereof, 7,500 of such options are cancelled and null and
void. Subject to the terms and conditions of Section 1.3(b), above,
the remaining 7,500 of such options shall continue to vest until
8/27/04 and can be exercised anytime between 8/27/2004 and through the
second anniversary of his Resignation Date subject to normal terms and
conditions. Any of such options not then vested as of 8/27/2004 will
be cancelled and be null and void. In the event that Potter takes any
action within six months following the end of his 18 month noncompete
period contained in Section 4 of his Employment Agreement that, if
taken during the 18 month noncompetition period would have been a
violation of such Section 4, then immediately upon such action, all
remaining vested but unexercised options and all remaining unvested
options shall expire, be cancelled and be null and void.
2. Release and Waiver of Claims/Other Representations.
2.1 Release and Waiver of Claims. To the maximum extent
permitted by law, Potter hereby RELEASES AND FOREVER DISCHARGES AIPC
and/or any AIPC Affiliates from any and all claims, demands, and/or
causes of action ("claims"), known or unknown, suspected or
unsuspected, that Potter and/or anyone acting on his behalf now holds
or owns or has at any time before this date held or owned against
them, which claims include but are not limited to the following:
claims for breach of the Employment Agreement or any other contract by
and between the parties; claims for attorney's fees; claims under the
U.S. Constitution; claims under any state Constitution; claims under
any federal and/or state common law, including claims sounding in tort
and/or contract; claims under any federal and/or state public policy;
claims under the Employee Retirement Income Security Act; claims under
the Family and Medical Leave Act; claims under the Equal Pay Act;
claims for workers' compensation benefits, discrimination, and/or
retaliation; claims under the Fair Labor Standards Act and/or any
state wage payment law; claims for discrimination (including
harassment) and/or retaliation under any federal, state, and/or local
law, including but not limited to 42 U.S.C. ss. 1981, Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans
with Disabilities Act, the Age Discrimination in Employment Act, the
Kansas Act Against Discrimination, the Missouri Human Rights Act,
and/or the Kansas City Human Rights Ordinance; claims under any and
all other federal, state, and/or local laws, including statutory
and/or common law, without exception; and claims under any AIPC
practice and/or policy, including but not limited to any benefit plan
of AIPC and/or any AIPC Affiliates.
2.2 Confidentiality. Potter agrees this Agreement and the
circumstances and/or the discussions leading to this Agreement are
confidential and, as such, agrees (a) he will not communicate the
contents of this Agreement or the circumstances or the discussions
leading to this Agreement ("Confidential Information") other than to
his immediate family members, his attorney, his accountant, to
governmental taxing
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authorities, or if compelled by a court of competent jurisdiction or
otherwise required by law ("Authorized Persons"); (b) before he
discloses any Confidential Information to any Authorized Persons, he
must inform them that the matter is confidential, that compliance with
this confidentiality provision is a material condition of this
Agreement, and that any disclosure of such Confidential Information to
persons or entities not authorized to receive it is a material breach
of this Agreement; and (c) if he is compelled to disclose any
Confidential Information by a court of competent jurisdiction or
otherwise, then he will give counsel for AIPC (▇▇▇▇▇ ▇▇▇ of ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP) as much notice as is reasonably practicable
before such disclosure in the event AIPC wishes to intervene to
protect its rights under this Agreement.
2.3 Employment/Application. Potter will never be reemployed in
any capacity by AIPC and will not ever be employed by any AIPC
Affiliates; Potter will not apply for reemployment at AIPC or for
employment with any AIPC Affiliates after the date he signs this
Agreement; and if Potter ever applies for reemployment with AIPC or
for employment with any AIPC Affiliates in violation of this
Agreement, then AIPC and/or any AIPC Affiliates may reject his
reapplication/application with impunity solely on the basis of his
breach of this Agreement.
2.4 Review/Revocation. Potter had twenty-one (21) calendar days
from the date he received this Agreement to consider it, although he
could sign it sooner if he wished; Potter has been advised/is hereby
advised to consult with independent legal counsel before signing this
Agreement; Potter may revoke this Agreement after he signs it by
delivering a written notice of revocation via telecopier ((816)
983-8080) and certified mail to counsel for AIPC (▇▇▇▇▇ ▇▇▇ of
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP) within seven (7) calendar days
after he signs this Agreement; and (iv) absent revocation, this
Agreement will become effective and enforceable on the eighth (8th)
calendar day following the date set forth in the execution Section
hereof.
2.4 Assistance. Potter will, upon AIPC's reasonable request,
assist AIPC in any investigation and/or litigation instituted/brought
by or against AIPC and/or any AIPC Affiliates; provided, however, that
AIPC shall reimburse Potter for expenses incurred and approved by AIPC
in rendering such assistance.
2.5 Nondisparagement. Potter will not disparage AIPC and/or any
AIPC Affiliates.
2.6 Mitigation. Potter shall have the duty to attempt to
mitigate the amounts and benefits payable to him hereunder and AIPC
shall be entitled to set off against the amounts and benefits payable
hereunder any amounts or benefits received by Potter from any other
employment source.
3. Miscellaneous Terms.
3.1 Effect on Employment Agreement. Other than as provided
herein, the Employment Agreement is hereby terminated and is of no
force or effect; provided,
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however, that Potter remains bound by Sections 4-6 of the Employment
Agreement, which are hereby incorporated by reference as if fully set
forth herein.
3.2 Binding Effect. This Agreement shall be binding upon, and
shall inure to the benefit of, AIPC and Potter, their respective
heirs, personal, and legal representatives, successors, and assigns.
3.3 Choice of Law/Forum/Jurisdiction. In view of the fact that
the principal office of AIPC is located in the State of Missouri, the
parties understand and agree that the construction and interpretation
of this Agreement shall at all times and in all respects be governed
by the laws of the State of Missouri, that the state and federal
courts situated in the State of Missouri shall have exclusive
jurisdiction over any claims arising under or in relation to this
Agreement, and that the parties consent to personal jurisdiction in
such state and federal courts.
3.4 Headings. The headings of the Sections of this Agreement are
for reference only and not to limit, expand, or otherwise affect the
contents of this Agreement.
3.5 Entire Agreement. This Agreement contains the entire
agreement and understanding by and between the parties with respect to
the subject matter hereof, and any representations, promises,
agreements, or understandings, written or oral, not herein contained
shall be of no force or effect. No change, waiver, or modification of
any provision of this Agreement shall be valid or binding unless the
same is in writing and duly executed by the parties, and no evidence
of any waiver or modification shall be offered or received in evidence
of any proceeding, arbitration, or litigation between the parties
hereto arising out of or affecting this Agreement, or the rights or
obligations of the parties hereunder, unless such waiver or
modification is in writing, duly executed as aforesaid, and the
parties further agree that the provisions of this Section 3.4 may not
be waived except as set forth herein.
3.6 Waiver. The waiver by AIPC of a breach of any provision of
this Agreement by Potter shall not operate or be construed as a waiver
of any subsequent breach by Potter.
3.7 Notice. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth on the
execution page of this Agreement; provided, however, that all notices
to AIPC shall be directed to the attention of the Board of Directors
of AIPC with a copy to the Secretary of AIPC, or to such other address
as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be
effective only upon receipt.
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3.8 Withholdings. AIPC shall withhold from any amounts payable
under this Agreement such federal, state, and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.
3.8 Counterparts. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, Potter and AIPC have duly executed this Agreement
as of this 12th day of December 2003.
BY OR ON BEHALF OF POTTER:
Signature: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AMERICAN ITALIAN PASTA COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
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