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EXHIBIT 10.15
EMPLOYMENT AGREEMENT
AGREEMENT made as of January 28, 1999, by and between New
World Pasta Company, a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxx (the "Executive").
WHEREAS, Hershey Foods Corporation, a Pennsylvania corporation
("Hershey"), the Company and New World Pasta, LLC, a Delaware limited liability
company ("New World"), have entered into a Recapitalization Agreement dated as
of December 15, 1998, as amended (the "Recapitalization Agreement");
WHEREAS, pursuant to the Recapitalization Agreement, prior to
or at the closing of the transactions contemplated thereby, Hershey has, among
other things, (i) transferred, or caused to be transferred, certain assets,
subject to certain liabilities, to the Company and (ii) caused the Company to be
recapitalized (collectively, the "Transactions"), all in accordance with the
terms and conditions set forth in the Recapitalization Agreement;
WHEREAS, the Company desires that Executive serve as Executive
Vice President of the Company ("President") and as a member of the Board of
Directors of the Company upon consummation of the Transactions, and Executive
desires to hold such positions under the terms and conditions of this Agreement;
and
WHEREAS, Executive is currently the Executive Vice President
of Xxxxxx Milling Company and a partner in Xxxxxx Milling Company Limited
Partnership (collectively, "Xxxxxx Milling") and will continue to serve in such
positions following the consummation of the Transactions.
WHEREAS, the Board of Directors of the Company (the "Company
Board") has approved and authorized the Company to enter into this Agreement
with Executive.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and intending to be legally bound hereby, the
parties agree as follows:
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1. Employment. The Company hereby employs Executive, and
Executive hereby accepts employment with the Company, on a part-time basis, upon
the terms and subject to the conditions set forth herein.
2. Term.
(a) Subject to Section 10 hereof, the initial term of
employment by the Company of Executive pursuant to this Agreement (the "Initial
Term") is for a period commencing on the date hereof and terminating on the
third anniversary thereof (the "Initial Termination Date").
(b) Provided that the Agreement has not been earlier
terminated pursuant to Section 10 hereof, the Initial Term shall be extended for
an additional two (2) year period (the "Renewal Term") commencing on the Initial
Termination Date, unless not later than 90 days prior to the Initial Termination
Date, Executive or the Company shall, by written notice, elect not to so extend
the Initial Term. The Initial Term, as may be extended pursuant to this Section
2(b) or earlier terminated is referred to herein as the "Term."
3. Position.
During the Term, Executive shall serve as the Executive Vice
President of the Company and a member of the Company Board.
4. Duties.
During the Term, Executive shall perform such duties as are
commensurate with his position as Executive Vice President of the Company,
taking into consideration Executive's part-time status.
5. Salary and Bonus.
(a) During the Term the Company shall pay to
Executive a base salary at the rate of $100,000 per year, subject to adjustments
pursuant to the terms of Section 5(b) hereof (the "Base Salary").
(b) Commencing on the first anniversary hereof and on
or prior to each anniversary hereof during the Term, the Company Board or the
Compensation Committee of the Company Board (the "Compensation Committee") shall
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review the Base Salary annually and shall increase the Base Salary by an amount
equal to the percentage increase in the Consumer Price Index for the
Minneapolis, Minnesota metropolitan area during the most recently ended calendar
year. The Base Salary shall be payable to Executive in substantially equal
installments in accordance with the Company's normal payroll practices, but in
no event less often than semi-monthly.
(c) For the Company's fiscal year ending December 31, 1999,
and for each fiscal year during the Term thereafter, Executive shall be eligible
to receive an annual cash bonus equal to up to fifty percent (50%) of his Base
Salary, subject to the terms of a Bonus Compensation Plan to be approved by the
Board or the Compensation Committee.
(d) In the event of a material acquisition by the Company of
assets or stock of one or more companies, whether by merger or otherwise (an
"Acquisition"), the Executive and the Company shall negotiate in good faith an
adjustment of the Executive's compensation hereunder such that Executive's
compensation, as adjusted, is commensurate with his duties and responsibilities
after giving effect to the Acquisition.
6. Equity Interest in the Company. On or promptly after the Closing
Date, the Company will establish a stock option plan (the "Plan") substantially
in the form of Exhibit A hereto pursuant to which the Company may grant to
employees of the Company options to purchase up to 910,166 shares of common
stock of the Company. Pursuant to the Plan and subject to the terms of the stock
option agreement between Executive and the Company, substantially in the form of
Exhibit B hereto, the Company shall grant Executive options to purchase an
aggregate of 92,778 shares of such common stock with an exercise price of $10
per share and an aggregate of 49,054 shares of such common stock with an
exercise price of $73.50 per share. The Company shall cause its principal
stockholders to enter into an agreement with the Executive substantially in the
form of Exhibit C hereto providing for certain payments to the Executive with
respect to the preferred stock of the Company.
7. Business Expenses. Executive shall be reimbursed for all reasonable
and necessary business expenses incurred by him in connection with his
employment (including, without limitation, expenses for first-class air travel
on all Company business), upon timely submission by Executive of receipts and
other documentation as required by the Internal Revenue Code of 1986, as amended
(the
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"Code"), and in accordance with the Company's normal expense reimbursement
policies.
8. Welfare and Other Benefits. During the Term, Executive shall be
eligible to participate fully in all life and short- and long-term disability
benefits and insurance programs available to senior executive officers of the
Company generally. Executive shall be entitled to participate in, and receive
Company contributions to, any Section 401(k) savings plan available to senior
executive officers of the Company generally.
9. D&O Coverage. During the Term, the Company shall maintain directors
and officers liability insurance for its directors and officers, in such amounts
as the Company Board believes is reasonably necessary.
10. Termination of Agreement. The employment by the Company of
Executive pursuant to this Agreement shall not be terminated prior to the end of
the then applicable Term, except as set forth in this Section 10.
(a) By Mutual Consent. The employment by the Company of
Executive pursuant to this Agreement may be terminated at any time by the mutual
written agreement of the Company and Executive.
(b) Death. The employment by the Company of Executive pursuant
to this Agreement shall be terminated upon the death of Executive, in which
event Executive's spouse or heirs shall receive the (i) Executive's Base Salary
and benefits to be paid or provided to Executive under this Agreement through
the Date of Termination and (ii) the Base Salary and benefits pursuant to
Section 8 hereof to be paid or provided to Executive under this Agreement for
one (1) year after the Date of Termination.
(c) Disability. The employment by the Company of Executive
pursuant to this Agreement may be terminated by written notice to Executive at
the option of the Company in the event that (i) Executive becomes unable to
perform his normal duties by reason of physical or mental illness or accident
for any twelve (12) consecutive month period, (ii) the Company receives written
opinions from both a physician for the Company and a physician for Executive
that Executive will be so disabled. In the event the employment by the Company
of Executive is terminated pursuant to this Section 10(c), Executive shall be
entitled to receive (i) all Base Salary and benefits to be paid or provided to
Executive under this Agreement
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through the Date of Termination and (ii) the Base Salary and benefits pursuant
to Section 8 hereof to be paid or provided to Executive for one (1) year after
the Date of Termination; provided, however, that amounts payable to Executive
under this Section 10(c) shall be reduced by the proceeds of any short- and/or
long-term disability payments under the Company plans referred to in Section 8
hereof to which Executive may be entitled during such period.
(d) By the Company for Cause. The employment of the Executive
pursuant to this Agreement may be terminated by the Company by written notice to
Executive ("Notice of Termination") for Cause. In the event the employment by
the Company of Executive is terminated pursuant to this Section 10(d), Executive
shall be entitled to receive all Base Salary and benefits to be paid or provided
to Executive under this Agreement through the Date of Termination.
(e) By the Company Without Cause. The employment by the
Company of Executive pursuant to this Agreement may be terminated by the Company
at any time without Cause by delivery of a Notice of Termination to Executive.
In the event the employment by the Company of Executive is terminated pursuant
to this Section 10(e), Executive shall be entitled to receive (i) all Base
Salary and benefits to be paid or provided to Executive under this Agreement
through the Date of Termination and (ii) the Base Salary and benefits to be paid
or provided to Executive under this Agreement for the remainder of the Term.
Notwithstanding the foregoing and subject to Section 11
hereof, in the event the employment by the Company of Executive is terminated
pursuant to this Section 10(e) following a determination, in good faith, by the
Company Board after notice to Executive and a reasonable opportunity to cure
(not less than 30 days), that one or both of the following events has occurred:
(i) Executive has failed to perform his material duties in a reasonably
satisfactory manner; or (ii) Executive has breached any material provision of
this Agreement, then Executive shall only be entitled to receive all Base Salary
and benefits to be paid or provided to Executive under this Agreement through
the Date of Termination and no more.
(f) By Executive for Good Reason. The employment by the
Executive pursuant to this Agreement may be terminated by Executive by written
notice to the Company of his resignation ("Notice of Resignation") for Good
Reason (as defined herein). In the event the employment by the Company of
Executive is terminated pursuant to this Section 10(f), Executive shall be
entitled to receive (i) all Base Salary and benefits to be paid or provided to
Executive under this Agreement
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through the Date of Termination and (ii) the Base Salary and benefits to be paid
or provided to Executive under this Agreement for the remainder of the Term.
(g) By Executive Without Good Reason. The employment of
Executive by the Company pursuant to this Agreement may be terminated by
Executive by delivery of a Notice of Resignation at any time without Good
Reason. In the event the employment by the Company of Executive is terminated
pursuant to this Section 10(g), Executive shall be entitled to receive all Base
Salary and benefits to be paid or provided to Executive under this Agreement
through the Date of Termination.
(h) Change of Control. The employment by the Company of
Executive pursuant to this Agreement shall terminate, without any further action
required by either the Company or Executive, upon the occurrence of a Change of
Control (as defined herein); provided, however, that if in connection with such
Change of Control, Executive does not have the right to receive cash or
marketable securities with respect to his equity investment in the Company, his
options under the Plan and under the Agreement attached as Exhibit C hereto,
this Agreement shall not terminate upon such Change of Control but shall become
terminable by the Executive at any time within sixty (60) days following such
Change of Control. In the event that the employment by the Company of Executive
is terminated pursuant to this Section 10(h), whether automatically or by
Executive, Executive shall be entitled to receive all Base Salary and benefits
to be paid or provided to Executive under this Agreement through the Date of
Termination.
(i) Date of Termination. Executive's Date of Termination shall
be: (i) if the parties hereto mutually agree to terminate this Agreement
pursuant to Section 10(a) hereof, the date designated by the parties in such
agreement; (ii) if Executive's employment by the Company is terminated pursuant
to Section 10(b), the date of Executive's death; (iii) if Executive's employment
by the Company is terminated pursuant to Section 10(c), the last day of the
applicable period referred to in Section 10(c)(i) hereof or the date upon which
the Company receives written opinions from both a physician for the Company and
a physician for Executive referred to in Section 10(c)(ii) hereof; (iv) if
Executive's employment by the Company is terminated pursuant to Section 10(d),
the date on which a Notice of Termination is given; (v) if Executive's
employment by the Company is terminated pursuant to Section 10(e) or 10(g),
sixty (60) days after the date the Notice of Termination or Notice of
Resignation, as the case may be, is given (provided, that the Company, in its
sole discretion may waive all or any part of such 60-day period); (vi) if Execu-
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tive's employment by the Company is terminated pursuant to Section 10(f), the
date on which a Notice of Resignation is given; and (vii) if Executive's
employment by the Company is terminated pursuant to Section 10(h), the date of
the Change of Control; provided, however, that if Executive terminates the
Agreement pursuant to Section 10(h) within sixty (60) days following the Change
of Control, the Date of Termination shall be the date on which the Notice of
Resignation is given. If, within thirty (30) days after any Notice of
Termination is given pursuant to Section 10(c), Executive notifies the Company
that a dispute exists concerning Executive's termination, the Date of
Termination shall be the date on which the dispute is finally determined in
favor of termination of Executive's employment by the Company hereunder, either
by mutual written agreement of the parties or by a binding and final arbitration
award; provided, however, that Executive's Date of Termination shall be extended
by a notice of dispute only if such notice is given in good faith and Executive
pursues the resolution of such dispute with reasonable diligence.
11. Arbitration. Notwithstanding any other provision of this
Agreement, in the event that this Agreement is terminated following a
determination by the Company Board as described in the second paragraph of
Section 10(e), the Executive may, by written notice to the Company within ten
business days following the delivery of the Notice of Termination to Executive,
require to submit such determination to binding arbitration pursuant to the
rules of the American Arbitration Association in Philadelphia, Pennsylvania
(including reasonable discovery as determined by the arbitrator) and the order
of such arbitrator shall be conclusive, final and binding on all parties hereto
and may be entered as a judgment in any court having jurisdiction over the
parties. In the event that Executive timely requires the Company to submit such
determination to arbitration as provided in the immediately preceding sentence
and diligently pursues such arbitration, the Company shall continue to pay
Executive his Base Salary and benefits to be paid or provided to Executive under
this Agreement until the earlier of (i) a determination by the arbitrator and
(ii) the period provided for payment pursuant to the first paragraph of Section
10(e) hereof; provided, however, that Executive shall promptly repay to the
Company all amounts paid to him pursuant to this sentence (including the cost of
all benefits provided) in the event that the Executive does not prevail in such
arbitration. Executive acknowledges and agrees that in the event that he does
not comply with his obligations pursuant to the immediately preceding sentence,
the Company may set off such amount against any obligations owed to Executive.
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12. Representations.
(a) The Company represents and warrants that this Agreement
has been authorized by all necessary corporate action of the Company and is a
valid and binding agreement of the Company enforceable against the Company in
accordance with its terms.
(b) Executive represents and warrants that he is not a party
to any agreement or instrument which would prevent him from entering into or
performing his duties in any way under this Agreement and that this Agreement is
a valid and binding agreement of Executive enforceable against Executive in
accordance with its terms.
13. Successors. This Agreement is a personal contract and the rights
and interests of Executive hereunder may not be sold, transferred, assigned,
pledged, encumbered, or hypothecated by him, except as otherwise expressly
permitted by the provisions of this Agreement. This Agreement shall inure to the
benefit of and be enforceable by Executive and his personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amount would still be
payable to him hereunder had Executive continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to his devisee, legatee or other designee or, if there is no such
designee, to his estate.
14. Non-Competition Covenants.
(a) Executive will not, during the Term and for any period
during which Executive is receiving payments from the Company pursuant to this
Agreement, engage in Competition (as defined herein) with the Company.
(b) Without limiting the generality of foregoing, during the
Term and for any period during which Executive is receiving payments from the
Company pursuant to this Agreement, Executive will not, directly or indirectly,
for his benefit or for the benefit of any other person or entity, do any of the
following: (i) solicit Restricted Business from any customer doing business with
the Company, provided that, after the Termination Date, the restriction set
forth in this clause (i) shall be limited to such customers with which the
Company has done business during the twelve months immediately preceding the
Date of Termination; (ii) solicit Restricted Business from any potential
customer of the business of the Company,
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which has been the subject of a written or oral bid, offer or proposal by the
Company, or of substantial preparation by the Company with a view to making such
a bid, proposal or offer, provided that, after the Termination Date, the
restriction set forth in this clause (ii) shall be limited to such bids, offers
and proposals by the Company, in any case, during the three months immediately
preceding the Date of Termination; (iii) solicit the employment or services of
any person who is employed by or is a consultant to the Company; or (iv)
otherwise wrongfully interfere with the business or accounts of the Company,
including through the making of any false statements or comments of a defamatory
or disparaging nature to third parties regarding the Company or any of its
officers, directors, personnel, stockholders, products or services. Nothing
contained herein shall be construed to (i) restrict Executive from continuing to
serve as an officer, director and shareholder of Xxxxxx Milling, so long as
Xxxxxx Milling does not, directly or through Affiliates it controls, engage in
Competition with the Company, (ii) restrict Xxxxxx Milling from providing
milling and related services to any entity engaged in Competition with the
Company or (iii) prevent Xxxxxx Milling or the Executive from continuing its or
his ownership in TABLEX-XXXXXX X.X. de CV.
(c) Notwithstanding the provisions of Sections 14(a) and
14(b), in the event that this Agreement is terminated pursuant to Section 10(h)
(whether automatically or by Executive), then the provisions of Sections 14(a)
and 14(b) shall remain in effect for a period of two (2) years thereafter.
(d) Executive further acknowledges and agrees that due to the
uniqueness of his services and the confidential nature of the information he
will possess, the covenants set forth in this Section 14 are reasonable and
necessary for the protection of the business and goodwill of the Company; and it
is the intention of the parties hereto that this Section 14 shall be enforceable
to the fullest extent permissible under the laws and public policies applied in
each jurisdiction in which such enforcement is sought. Accordingly, without
limiting the generality of Section 19 hereof, it is the intention of the parties
hereto that if, in the opinion of any court of competent jurisdiction, any
provision or clause set forth in this Section 14 is not reasonable in any
respect, including, without limitation, with respect to the scope of the time,
place or manner restrictions set forth herein, such court shall have the right,
power and authority to modify any and all such provisions and clauses as to such
court shall appear not unreasonable and to enforce the remainder of this Section
14 as so modified.
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15. Confidentiality Covenant. (a) During the Term and for a period of
seven years thereafter, Executive will not, directly or indirectly, whether
individually, as a director, stockholder, owner, partner, member, officer,
employee, principal or agent of any business, or in any other capacity, make
known, disclose, furnish, make available or utilize any of the Company's
confidential information, other than in the proper performance of the duties
contemplated by the Agreement, or as required by law; provided that, prior to
disclosing any of the confidential information required by law, Executive will
promptly notify the Company so that the Company may seek a protective order or
other appropriate remedy. Executive will return all confidential information,
including all photocopies, extracts and summaries thereof, and any such
information stored electronically on tapes, computer disks or in any other
manner to the Company at any time upon request by the Company and, in any event,
promptly after the termination of his employment for any reason; provided,
however, that Executive may retain one copy of such information and may use such
information in connection with (i) any dispute with the Company or (ii) any
action brought against Executive where such information is relevant.
Confidential information does not include any information available to or
already in the hands of the public, any information known to Executive prior to
the date hereof, any information disclosed to Executive by a third party who is
not under a duty of confidentiality with respect to such information, any
information independently developed by Executive without the use of confidential
information of the Company.
(b) Company will not disclose any information concerning the
Executive to any person including but not limited to the reason for any
termination of employment of the Executive, provided however, that the Company
may disclose such information to its insurers as and to the extent they have a
need to know such information and provided further that the Company may disclose
such information as and to the extent necessary and relevant to any dispute
between the Company and the Executive and as and to the extent such disclosure
or any other disclosure is required by law.
16. Entire Agreement. This Agreement contains all the understandings
between the parties hereto pertaining to the matters referred to herein, and
supersedes any other undertakings and agreements, whether oral or in writing,
previously entered into by them with respect thereto. Executive represents that,
in executing this Agreement, he does not rely and has not relied upon any
representation or statement made by the Company not set forth herein with regard
to the subject matter or effect of this Agreement or otherwise.
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17. Amendment or Modification; Waiver. No provision of this
Agreement may be amended or waived unless such amendment or waiver is agreed to
in writing, signed by Executive and by a duly authorized officer of the Company.
No waiver by any party hereto of any breach by another party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.
18. Notices. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be (i) delivered
by hand, (ii) delivered by a nationally recognized commercial overnight delivery
service, (iii) mailed postage prepaid by first class mail or (iv) transmitted by
facsimile transmitted to the party concerned at the address or telecopier number
set forth below:
To Executive at:
Xx. Xxxxxxx X. Xxxx
Xxxxxx Milling Company
880 Grain Exchange Building
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
with copies to:
Xxxxxx Xxxxxxx Xxxxxx & Brand LLP
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
To the Company at:
New World Pasta Company
000 Xxxxxxx X. Xxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: General Counsel
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with copies to:
Xxxxxx, Xxxxxxxxxx & Xxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile (000) 000-0000
Attention: Xxxxx X. Xxxx
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
Such notices shall be effective: (i) in the case of hand
deliveries when received; (ii) in the case of an overnight delivery service, on
the next business day after being placed in the possession of such delivery
service, with delivery charges prepaid; (iii) in the case of mail, seven (7)
days after deposit in the postal system, first class mail, postage prepaid; and
(iv) in the case of facsimile notices, when electronic confirmation of receipt
is received by the sender. Any party may change its address and telecopy number
by written notice to the other given in accordance with this Section 18;
provided, however, that such change shall be effective when received.
19. Severability. If any provision or clause of this Agreement
or the application of any such provision or clause to any party or circumstances
shall be determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision or clause to such person or circumstances other than those to
which it is so determined to be invalid and unenforceable, shall not be affected
thereby, and each provision or clause hereof shall be validated and shall be
enforced to the fullest extent permitted by law.
20. Survivorship. The respective rights and obligations or the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
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21. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without regard to it
conflicts of law principles.
22. Headings. All descriptive headings of sections and paragraphs in
this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.
23. Withholding. All payments to Executive under this Agreement shall
be reduced by all applicable withholding required by federal, state or local
law.
24. Specific Performance. Each party hereto acknowledges that money
damages would be both incalculable and an insufficient remedy for any breach of
this Agreement by such party and that any such breach would cause the other
parties, irreparable harm. Accordingly, each party hereto also agrees that, in
the event of any breach or threatened breach of the provisions of this Agreement
by such party, the other parties shall be entitled to equitable relief without
the requirement of posting a bond or other security, including in the form of
injunctions and orders for specific performance, in addition to all other
remedies available to such other parties at law or in equity.
25. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
26. Definitions.
(a) "Cause" means the determination, in good faith, by the
Company Board, after notice to Executive and a reasonable opportunity to cure of
not less than 30 days, that one or more of the following events has occurred:
(i) any reckless or grossly negligent act by Executive materially injuring the
interest, business or reputation of the Company, or any of its parents,
subsidiaries or affiliates; (ii) Executive's commission of any felony; or (iii)
any misappropriation or embezzlement of the property of the Company, or any of
its parents, subsidiaries or affiliates.
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(b) "Change of Control" includes the occurrence of any of the
following events: (i) any "Person" (within the meaning of Section 12(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), other than New World or its affiliates, becomes a Beneficial Owner
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more
than fifty percent (50%) of the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors; (ii) there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other Company, other
than a merger or consolidation that would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) at least fifty percent
(50%) of the combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger
or consolidation; (iii) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets; or (iv) the following individuals cease for any reason
to constitute a majority of the number of directors then serving: individuals
who, as of January 30, 1999, constitute the Company Board and any new director
(other than a director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Company Board or nomination for election by the
Company's stockholders was approved or recommended by a vote of at least a
majority of the directors then still in office who either were directors on
January 30, 1999 or whose appointment, election or nomination for election was
previously so approved or recommended.
(c) "Competition" means engaging in, or otherwise directly or
indirectly being employed by or acting as a consultant or lender to, or being a
director, officer, employee, principal, licensor, trustee, broker, agent,
stockholder, member, owner, joint venturer or partner of, or permitting a name
to be used in connection with the activities of any other business or
organization which engages, directly or through Affiliates it controls, in the
Restricted Business, provided that, it will not be a violation for Executive to
become the registered or beneficial owner of up to seven and one-half percent (7
1/2%) of any class or series of capital stock or indebtedness of an entity
engaged in Competition; it being understood that Executive may not actively
participate in the business of any such entity, by reason of such
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ownership or acquisition or otherwise, until such time as this covenant expires.
An entity shall not be deemed to be engaged in Competition with the Company if
less than 10% of its consolidated revenues are derived from the Restricted
Business.
(d) "Good Reason" for termination includes the occurrence of
any of following events without the prior consent of Executive: (i) removal of
Executive from Executive's then current position; (ii) material reduction by the
Company of Executive's then current duties, responsibilities or authority or the
assignment to Executive of duties materially inconsistent with his then current
position; (iii) relocation of the Company's headquarters to a location more than
25 miles from the greater Harrisburg, Pennsylvania metropolitan area; or (iv)
material breach by the Company of Employment Agreement, which breach remains
uncured for a period of thirty days after receipt by the Company of written
notice from Executive.
(e) "Restricted Business" means the manufacturing,
distribution, marketing and sale of pasta or egg noodle products in the United
States and any other business within the United States which constitutes more
than 10% of the consolidated revenues of the Company in the fiscal year ending
immediately prior to any such determination or the Date of Termination, as the
case may be.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Employment Agreement as of the date first above written.
NEW WORLD PASTA COMPANY
By: C. Xxxxxx Xxxxxxx
C. Xxxxxx Xxxxxxx
Chairman, Chief Executive Officer
and Director
EXECUTIVE
By: Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
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