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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
AGREEMENT made as of January 28, 1999, by and between New
World Pasta Company, a Delaware corporation (the "Company"), and C. Xxxxxx
Xxxxxxx (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 the Chair
man of the Board of Directors ("Chairman") and Chief Executive Officer ("CEO")
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, 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:
1. Employment. The Company hereby employs Executive, and
Executive hereby accepts employment with the Company, upon the terms and subject
to the conditions set forth herein.
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2. Term.
(a) Subject to Section 13 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) Not later than 180 days prior to the Initial Termination
Date, and provided that the Agreement has not been earlier terminated pursuant
to Section 13 hereof, Executive shall be entitled, by written notice to the
Company, to extend the Initial Term for an additional two (2) year period (the
"Renewal Term") commencing on the Initial Termination Date on a full-time or a
part-time basis, such election to be set forth in such notice. 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.
(a) During the Initial Term and, in the event that Executive
elects pursuant to Section 2 hereof to be employed on a full-time basis during
the Renewal Term, Executive shall serve as the Chairman and CEO of the Company,
supervising the conduct of the business and affairs of the Company and
performing such other duties as the Company Board shall determine.
(b) During the Renewal Term and, in the event that Executive
elects pursuant to Section 2 hereof to be employed on a part-time basis,
Executive shall serve as Chairman of the Company Board, and in such other
capacity as the Company Board in its discretion, shall determine.
4. Duties.
(a) During the Initial Term and, in the event that Executive
elects pursuant to Section 2 hereof to be employed on a full-time basis during
the Renewal Term, Executive shall devote such time and attention to his duties
as are commensurate with his responsibilities as Chairman and CEO of the
Company.
(b) During the Renewal Term, in the event that Executive
elects pursuant to Section 2 hereof to be employed on a part-time basis,
Executive shall devote such time and attention to the business and affairs of
the Company as shall be agreed upon by Executive and the Company Board.
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(c) Executive may, to the extent feasible and consistent with
the terms of this Agreement, perform his services to the Company in Florida
5. Salary and Bonus.
(a) During the Initial Term and, in the event that Executive
elects pursuant to Section 2 hereof to be employed on a full-time basis during
the Renewal Term, the Company shall pay to Executive a base salary at the rate
of $400,000 per year (the "Base Salary"), subject to adjustments pursuant to the
terms of Section 5(c) hereof.
(b) During the Renewal Term, in the event that Executive
elects pursuant to Section 2 hereof to be employed on a part-time basis, the
Company shall pay to Executive a base salary at the rate of $250,000 per year
(the "Part-Time Base Salary"), subject to adjustments pursuant to the terms of
Section 5(c) hereof.
(c) 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
review the Base Salary or the Part-Time Base Salary, as applicable, annually and
shall adjust the Base Salary or Part-Time Base Salary, as applicable, based upon
performance and merit. The Base Salary or Part-Time Base Salary, as applicable,
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.
(d) 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 or Part-Time Base Salary, as applicable, subject to the terms of a Bonus
Compensation Plan to be approved by the Board or the Compensation Committee.
(e) 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.
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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 111,111 shares of such common stock with an exercise price of $10
per share and an aggregate of 59,102 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. Vacation, Holidays and Sick Leave. During the Term, Executive shall
be entitled to paid vacation, paid holidays and sick leave in accordance with
the Company's standard policies for its senior executive officers, which
policies shall provide Executive with benefits no less favorable than those
provided to any other senior executive officer of the Company; it being
understood that holidays and sick leave provided by the Company shall be no less
favorable in the aggregate than those provided by the Hershey Pasta Group.
8. Business Expenses. Executive shall be reimbursed for all reasonable
and necessary business expenses incurred by (i) him in connection with his
employment (including, without limitation, expenses for first-class air travel
on all Company business) and (ii) his spouse in connection with her
accompaniment of Executive on business trips where it is customary for
Executive's spouse to attend, in each case, upon timely submission by Executive
of receipts and other documentation as required by the Internal Revenue Code of
1986, as amended (the "Code"), and in accordance with the Company's normal
expense reimbursement policies.
9. Health, Welfare and Pension Benefits. During the Term, Executive and
eligible members of his family shall be eligible to participate fully in all (i)
health and dental benefits and insurance programs; (ii) life and short- and
long-term disability benefits and insurance programs and (iii) pension and
retirement benefits, all as available to senior executive officers of the
Company generally, which benefits (excluding all retirement plans other than
Section 401(k) savings plans) shall be no less favorable in the aggregate than
those similar benefits available
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to senior executives of Hershey Pasta Group provided the cost of all such
benefits are within the pro forma budget of the Company at the closing of the
Transactions.
10. Membership Dues; Tax Returns; etc. During the Term, the Company
shall reimburse Executive for (i) annual membership dues and assessments at one
country club of Executive's choice not to exceed $12,000 per year (increased
annually by the increase in the Consumer Price Index for the preceding year),
(ii) the cost of annual personal income tax return preparation in an amount not
to exceed $2,000 per year and (iii) an annual physical.
11. Car Allowance. During the Term, the Executive shall be entitled to
an allowance of $1200 per month, for an automobile to be used by Executive in
conducting or promoting business for the Company.
12. 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.
13. 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 13.
(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
or Part-Time Base Salary, as applicable, and benefits to be paid or provided to
Executive under this Agreement through the Date of Termination and (ii) the Base
Salary or Part-Time Base Salary, as applicable, and benefits pursuant to Section
9 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
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(12) consecutive month period, or (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 13(c), Executive shall be
entitled to receive (i) all Base Salary or Part-Time Base Salary, as applicable,
and benefits to be paid or provided to Executive under this Agreement through
the Date of Termination and (ii) the Base Salary or Part-Time Base Salary, as
applicable, and benefits pursuant to Section 9 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 13(c) shall be reduced by
the proceeds of any short- and/or long-term disability payments under the
Company plans referred to in Section 9 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 13(d), Executive
shall be entitled to receive all Base Salary or Part-Time Base Salary, as
applicable, 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 13(e), Executive shall be entitled to receive (i) all Base
Salary or Part-Time Base Salary, as applicable, 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; provided, however, that if employment
by the Company of Executive is terminated during the Initial Term pursuant to
this Section 13(e), Executive shall be entitled to receive the Part-Time Base
Salary and benefits to be paid or provided to Executive under this Agreement
during the two years following the Initial Term.
Notwithstanding the foregoing and subject to Section 14
hereof, in the event the employment by the Company of Executive is terminated
pursuant to this Section 13(e) following a determination, in good faith, by the
Company Board after notice to Executive and a reasonable opportunity to cure
(not
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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
or Part-Time Base Salary, as applicable, 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 13(f), Executive shall be
entitled to receive (i) all Base Salary or Part-Time Base Salary, as applicable,
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;
provided, however, that if employment by the Company of Executive is terminated
during the Initial Term pursuant to this Section 13(f), Executive shall be
entitled to receive the Part-Time Base Salary and benefits to be paid or
provided to Executive under this Agreement during the two years following the
Initial 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 13(g), Executive shall be entitled to receive all Base
Salary or Part-Time Base Salary, as applicable, 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
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to this Section 13(h), whether automatically or by Executive, Executive shall be
entitled to receive all Base Salary or Part-Time Base Salary, as applicable, 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 13(a) hereof, the date designated by the parties in such
agreement; (ii) if Executive's employment by the Company is terminated pursuant
to Section 13(b), the date of Executive's death; (iii) if Executive's employment
by the Company is terminated pursuant to Section 13(c), the last day of the
applicable period referred to in Section 13(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 13(c)(ii) hereof; (iv) if
Executive's employment by the Company is terminated pursuant to Section 13(d),
the date on which a Notice of Termination is given; (v) if Executive's
employment by the Company is terminated pursuant to Section 13(e) or 13(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
Executive's employment by the Company is terminated pursuant to Section 13(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 13(h), the date of
the Change of Control; provided, however, that if Executive terminates the
Agreement pursuant to Section 13(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 13(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.
14. 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 13(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
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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 or Part-Time Base Salary, as applicable, 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 13(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.
15. 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.
16. 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,
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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.
17. 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, 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.
(c) Notwithstanding the provisions of Sections 17(a) and
17(b), in the event that this Agreement is terminated pursuant to Section 13(h)
(whether automatically or by Executive), then the provisions of Sections 17(a)
and 17(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 17 are reasonable and
necessary for the protection of the business and goodwill of the Company; and it
is the intention of
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the parties hereto that this Section 17 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 22 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 17 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 17 as
so modified.
18. 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
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Company and the Executive and as and to the extent such disclosure or any other
disclosure is required by law.
19. 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.
20. 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.
21. 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:
Mr. C. Xxxxxx Xxxxxxx
0000 Xxxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
with copies to:
Xxxxxx Xxxxxxx Xxxxxx & Brand LLP
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
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To the Company at:
New World Pasta Company
000 Xxxxxxx X. Xxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: General Counsel
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 21;
provided, however, that such change shall be effective when received.
22. 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
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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.
23. 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.
24. 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.
25. 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.
26. Withholding. All payments to Executive under this
Agreement shall be reduced by all applicable withholding required by federal,
state or local law.
27. 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.
28. Counterparts. This Agreement may be executed in counter
parts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
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29. Definitions.
(a) "Cause" means the determination, in good faith, by the
Company Board, after notice to Executive and a reasonable opportunity to cure of
no 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.
(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.
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(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
(i) become the registered or beneficial owner of up to one percent (1%) of any
class or series of the capital stock of a publicly traded corporation that is
engaged in Competition or (ii) acquire up to one percent (1%) of any issue of
publicly traded debt securities of a corporation that is engaged in Competition,
it being understood that Executive may not actively participate in the business
of any such corporation, by reason of such ownership or acquisition or
otherwise, until such time as this covenant expires.
(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 or sale of pasta or egg noodle products or any other
business which constitutes more than 10% of the consolidated revenues of the
Company during 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: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
President and Director
EXECUTIVE
By: /s/ C. Xxxxxx Xxxxxxx
C. Xxxxxx Xxxxxxx
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