Exhibit 10.2
AMERICAN ITALIAN PASTA COMPANY
INDEPENDENT CONTRACTOR AGREEMENT
THIS AGREEMENT (this "Agreement"), dated December 18, 2003 is by and
between American Italian Pasta Company ("AIPC"), and Xxxxx X. Xxxxxx, an
individual ("Xxxxxx") (collectively "the parties") and supersedes any and all
prior oral or written agreements between the parties with respect to Xxxxxx'x
employment by AIPC other than Sections 4, 5 and 6 of his Employment Agreement
dated September 1, 2002.
WITNESSETH:
WHEREAS, AIPC is engaged in the business of durum wheat milling and pasta
product production/marketing; and
WHEREAS, Xxxxxx is currently employed by AIPC, but Xxxxxx and AIPC desire
to terminate Xxxxxx'x employment and AIPC desires to engage Xxxxxx to consult on
strategic planning and development resources; and
WHEREAS, Xxxxxx desires to be engaged by AIPC in the aforesaid capacity.
NOW, THEREFORE, 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. Term.
1.1 Subject to the provisions of Section 7 and Section 1.2 hereof, the
term of this Agreement (the "Term") will commence as of January 1, 2004 (the
"Effective Date") and terminate on December 31, 2005.
1.2 This Agreement will renew automatically for successive one (1)
year terms beginning January 1, 2006, unless either party gives the other
written notice of non-renewal at least six (6) months prior to the end of any
term.
1.3 The provisions of Sections 4, 5 and 6, below, will survive and
continue to be enforceable regardless of any termination of this Agreement.
2. Services.
2.1 Xxxxxx shall consult with AIPC on such matters as may be requested
by the Chief Executive Officer of AIPC from time to time.
2.2 Xxxxxx will, to the reasonable satisfaction of AIPC, at all times
faithfully, industriously, and to the best of Xxxxxx'x ability, experience, and
talents perform all of the services that may be required of and from Xxxxxx
pursuant to the terms hereof.
3. Compensation.
3.1 Cash Compensation. AIPC shall pay Xxxxxx, and Xxxxxx shall accept
from AIPC, in full payment for Xxxxxx'x services hereunder, an annual fee of
$25,000. In addition, the Company agrees to utilize Xxxxxx'x services under a
consulting arrangement which will provide to Xxxxxx an additional amount for
consulting services that when combined with the annual retainers of $25,000 (for
two years) equals, but does not exceed $250,000. In the event that all or any
part of the additional $200,000 is not paid to Xxxxxx by December 31, 2005, it
shall be paid to Xxxxxx on January 3, 2006.
3.2 Employee Benefits. AIPC agrees to cover the cost of COBRA benefit
continuation under AIPC's health, medical, supplemental medical and life
insurance plans or programs provided to the Employee by Employer pursuant to
Section 3.7 hereof ("Employee Welfare Plans") at the time of such termination
for a period of up to 18 months. Should the cost of this coverage be
characterized as taxable income to Xxxxxx, an additional payment will be made to
cover the individual taxation on this taxable amount. Should this contract
terminate prior to the 18-month period of time, benefit eligibility ceases
immediately.
3.3 Reimbursement of Business Expenses. AIPC agrees to reimburse
Xxxxxx for reasonable travel and meal expenses incurred in the performance of
Xxxxxx'x services.
3.4 Stock Options and Restricted Shares.
(a) Prior to the execution of this Agreement, Xxxxxx held 2,500
shares of Restricted Stock, with scheduled vesting through
August 27, 2005. Subject to Xxxxxx'x compliance with the
terms of this Agreement, such Restricted Shares shall
continue to be held by Xxxxxx and shall continue to vest
equally over an extended time period until August 27, 2007.
(b) Prior to the execution of this Agreement, Xxxxxx held
unvested options to acquire 25,000 shares of AIPC common
stock. Subject to Xxxxxx'x compliance with the terms of this
Agreement, these 25,000 options shall continue to vest
during the "Term" of this agreement (December 31, 2005). Any
of such options not vested during the "Term" will be
cancelled and be null and void.
(c) Any options that have vested prior to or during the Term
will be eligible for exercise throughout the Term as well as
through the Noncompetition Period (January 1, 2008). Any
vested options not exercised by January 1, 2008 will be
cancelled.
4. Non-Competition, Nonsolicitation and Nondisparagement.
4.1 Xxxxxx acknowledges and recognizes the highly competitive nature
of the business of AIPC and its affiliates and accordingly agrees as follows:
from the day hereof
-2-
through January 1, 2008 (the "Noncompetition Period"), Xxxxxx will not, in any
area in the world where AIPC 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. Such said businesses shall include, but not be limited to, Barilla,
New World Pasta and Dakota Growers.
4.2 During the Noncompetition Period, Xxxxxx will not directly or
indirectly induce or attempt to induce any employee of AIPC or any of its
affiliates to engage in any activity in which Xxxxxx is prohibited from engaging
by Section 4.1 hereof or to terminate his or her employment with AIPC 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 Xxxxxx is prohibited from
engaging by Section 4.1 hereof, and will not directly or indirectly employ or
offer employment to any person who was employed by AIPC or any of its affiliates
unless such person shall have ceased to be employed by AIPC or any of its
affiliates for a period of at least 12 months.
4.3 During the Noncompetition Period, Xxxxxx will not directly or
indirectly induce or attempt to induce any customer or supplier of AIPC or any
of its affiliates to move, reduce or not increase its trade or business with
AIPC or any of its affiliates.
4.4 (a) Xxxxxx acknowledges and agrees that disparaging or critical
statements made by Xxxxxx about AIPC or its board members, officers or employees
would be uniquely detrimental to the interests of both parties. Therefore,
during the Noncompetition Period, Xxxxxx agrees to refrain from making any
disparaging or critical statements about AIPC or its board members, officers or
employees.
(b) AIPC acknowledges and agrees that disparaging or critical
statements made by AIPC, its board members, officers or employees about Xxxxxx
would be uniquely detrimental to the interests of both parties. Therefore,
during the Non-competition period, AIPC, its board members, officers and
employees agree to refrain from making any disparaging or critical statements
about Xxxxxx.
4.5 Notwithstanding any provision of this Agreement to the contrary,
from and after any breach by Xxxxxx of the provisions of Section 4.1, 4.2, 4.3
or 4.4, AIPC shall cease to have any obligations to make payments to Xxxxxx
under this Agreement. Xxxxxx acknowledges that the restrictions contained in
Sections 4.1, 4.2, 4.3 and 4.4 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.
-3-
5. Confidentiality. Xxxxxx acknowledges that, in and as a result of
Xxxxxx'x engagement by AIPC, Xxxxxx 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 AIPC's trade secrets, systems,
procedures, manuals, confidential reports, and lists of customers and/or other
services rendered by AIPC, the equipment and methods used and preferred by
AIPC's customers, and the prices paid by such customers. As a material
inducement to AIPC to enter into this Agreement, and to pay to Xxxxxx the
compensation referred to in Section 3 hereof, Xxxxxx covenants and agrees Xxxxxx
shall not, at any time during or after the Term, directly or indirectly
disclose, divulge, or use for Xxxxxx'x 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
AIPC 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 AIPC generally or of any
subsidiary or affiliate of AIPC, provided, however, that the foregoing shall not
apply to information that is not unique to AIPC or that is generally known to
the industry or the public other than as a result of breach of this covenant.
Xxxxxx agrees that, upon termination of Xxxxxx'x engagement by AIPC for any
reason, Xxxxxx will return to AIPC 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 AIPC and its affiliates,
except that Xxxxxx may retain personal notes, notebooks, and diaries. Xxxxxx
further agrees that Xxxxxx will not retain or use for Xxxxxx'x account at any
time any trade names, trademark, or other proprietary business designation used
or owned in connection with the business of AIPC or its affiliates.
6. Specific Performance and Survival.
6.1 Xxxxxx acknowledges and agrees that AIPC's remedies at law for a
breach or threatened breach of any of the provisions of Section 4 hereof or
Section 5 hereof would be inadequate and, in recognition of this fact, Xxxxxx
agrees that, in the event of such a breach or threatened breach, in addition to
any remedies at law, AIPC, 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.
6.2 The parties agree that the terms of Sections 4, 5 and 6 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 4, 5 and 6. Those Sections
will survive and continue to be fully binding on and enforceable against Xxxxxx
and AIPC after any termination of this Agreement.
-4-
7. Termination.
7.1 AIPC may terminate this Agreement at any time and with or without
any cause or reason. If AIPC does so, any remaining compensation will be due and
payable within 30 days of said termination date. Thereafter, AIPC shall have no
payment or other obligation to Xxxxxx.
7.2 Xxxxxx may terminate this Agreement at any time and with or
without any cause or reason. If Xxxxxx does so, AIPC shall have no further
payment or other obligation to Xxxxxx.
7.3 In the event of any termination of this Agreement, the provisions
of Sections 4, 5 and 6 shall survive and remain enforceable.
8. Miscellaneous.
8.1 Burden and Benefit. This Agreement shall be binding upon, and
shall inure to the benefit of, AIPC and Xxxxxx, their respective heirs,
personal, and legal representatives, successors, and assigns.
8.2 Governing Law. 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.
8.3 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.
8.4 Entire Agreement; Modification. Except as to AIPC's Stock Option
Plans, any instrument relating to an Option or Restricted Share granted
thereunder and written agreements signed by both of the parties hereto from time
to time after the date hereof, this Agreement contains the entire agreement and
understanding by and between AIPC and Xxxxxx 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 both 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 8.4
may not be waived except as set forth herein.
8.5 Waiver of Breach. The waiver by AIPC of a breach of any provision
of this Agreement by Xxxxxx shall not operate or be construed as a waiver of any
subsequent breach by Xxxxxx.
-5-
8.6 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.
8.7 Withholding Taxes. AIPC may 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.
8.8 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, AIPC and Xxxxxx have duly executed this Agreement as of
the day and year first hereof written.
XXXXXX:
Signature: /s/ Xxxxx X. Xxxxxx
-------------------------------
Printed Name: Xxxxx X. Xxxxxx
Address: 0000 X.X. Xxxxxxxxxx Xxxxxxx
Xxxxxx Xxxx, XX 00000
AMERICAN ITALIAN PASTA COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Printed Name: Xxxxxxx X. Xxxxxxx
Address: 0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx XX 00000-0000
-6-
