EXHIBIT 10.22
EMPLOYMENT AGREEMENT
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AGREEMENT made as of February 4, 2000, by and between New World Pasta
Company, a Delaware corporation (the "Company"), and Xxxx Xxxxxx (the
"Executive").
WHEREAS, the Company desires that Executive serve as the Chairman of
the Board of Directors ("Chairman") and Chief Executive Officer ("CEO") of the
Company, 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
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hereby accepts employment with the Company, upon the terms and subject to the
conditions set forth herein.
2. Term.
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(a) Subject to Section 14 hereof, the term of the employment by
the Company of Executive pursuant to this Agreement (as the same may be
extended, the "Term") shall commence on February 28, 2000 (the "Effective
Date"), and terminate on the second anniversary thereof.
(b) Commencing on the first anniversary of the Effective Date
and on each subsequent anniversary thereof, the Term shall automatically be
extended for one (1) additional year unless, not later than ninety days (90)
prior to any such anniversary date, either party hereto shall have notified the
other party hereto in writing that such extension shall not take effect.
3. Position. During the Term, Executive shall serve as the Chairman
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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.
4. Duties. During the Term, Executive shall devote his full time and
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attention during normal business hours to the business and affairs of the
Company, except vacations in accordance with the Company's policies and for
illness or incapacity, in accordance with Section 8 hereof.
5. Salary and Bonus.
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(a) During the 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(b) hereof.
(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 review the
Base Salary and may increase the Base Salary based upon performance and merit.
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, 2000, and
for each fiscal year during the Term thereafter, Executive shall be eligible to
receive an annual cash bonus equal to up to one hundred percent (100%) of his
Base Salary subject to the terms of a Bonus Compensation Plan to be approved by
the Company Board or the Compensation Committee.
6. Stock Option. Pursuant to the New World Pasta Company 1999 Stock
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Option Plan (the "Plan") and subject to the terms of the stock option agreement
to be entered into between Executive and the Company, attached hereto as Exhibit
A, within 90 days following the date hereof (the "Grant Date"), the Company
shall grant Executive (i) options, with an exercise price of $10 per share, to
purchase an aggregate of three and one-half percent (3.5%) of the outstanding
shares of common stock of the Company on the Grant Date (assuming for such
purposes that all options with an exercise price of $10 per share are deemed to
be outstanding on such date) and (ii) options with an exercise price of $73.50
per share to purchase an
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aggregate of 1.75% of the outstanding shares of common stock of the Company on
the Grant Date (assuming for such purposes that all options are deemed to be
outstanding on such date).
7. Stock Grant.
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(a) On or promptly following the date hereof, the Company shall
issue to Executive 29,286 shares of common stock (the "Common Grant Shares") and
792 shares of preferred stock of the Company (the "Preferred Grant Shares," and
together with the Common Grant Shares, the "Grant Shares"), subject to (i) the
terms of Articles IV and V of the Stockholders' Agreement, dated as of January
28, 1999 and (ii) the provisions of Section 7(b) hereof.
(b) 11, 714 of the Common Grant Shares and 317 of the Preferred
Grant Shares shall be subject to forfeiture in accordance with the following
sentence. Commencing on the first anniversary hereof and on each subsequent
anniversary hereof during the Term, so long as Executive remains employed by the
Company on such anniversary, the forfeiture restrictions on 2,929 Common Grant
Shares and 80 Preferred Grant Shares shall lapse; provided, however, that in the
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event of a Change of Control (as defined herein) of the Company, the forfeiture
restrictions on any of the Grant Shares which are then in existence shall
automatically lapse.
(c) Executive shall possess all incidents of ownership of the
Grant Shares issued hereunder, including the right to receive dividends with
respect to such Grant Shares and the right to vote such Grant Shares; provided,
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however, common stock distributed in connection with a stock split or stock
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dividend, and other property distributed as a dividend, shall be subject to
restrictions and risk of forfeiture to the same extent as the Grant Shares with
respect to which such capital stock or other property has been distributed.
(d) In the event that the employment of the Executive pursuant to
this Agreement is terminated pursuant to Section 14(b), (c), (e) or (f) hereof,
for one hundred and twenty days following the applicable Date of Termination,
Executive or his heirs may require the Company to repurchase any Grant Shares
which are no longer subject to forfeiture for $10 per Common Grant Share and
$1000 per Preferred Grant Share.
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(e) In the event that the employment of the Executive pursuant to
this Agreement is terminated pursuant to Section 14(d) or 14(g) hereof, for one
hundred and twenty days following the applicable Date of Termination, Executive
may require the Company to repurchase up to 17,572 Common Grant Shares and 475
Preferred Grant Shares for $10 per Common Grant Share and $1000 per Preferred
Grant Share.
8. Vacation, Holidays and Sick Leave. During the Term, Executive
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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.
9. Business Expenses. Executive shall be reimbursed for all
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reasonable and necessary business expenses incurred by him in connection with
his employment, including, without limitation, expenses for travel and
entertainment incurred in conducting or promoting business for the Company 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.
10. Health, Welfare and Pension Benefits.
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(a) 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. In addition to life
insurance provided to the Company's senior executive officers, Executive shall
be provided with supplemental (i) term life insurance coverage to the extent
necessary to provide Executive with aggregate death benefits equal to twice his
Base Salary and (ii) disability insurance coverage to the extent necessary to
provide Executive with aggregate disability benefits equal to his Base Salary.
(b) During the Term, the Company shall reimburse Executive for
all reasonable expenses incurred by him in connection with an annual physical
examination by a licensed physician at a medical center of Executive's choice.
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11. Membership Dues and Car Allowance. During the Term, the Company
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shall reimburse Executive up to an aggregate of $20,000 per year for (i) annual
membership dues and assessments at one country club of Executive's choice and
(ii) 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
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directors and officers liability insurance for its directors and officers, in
such amounts as the Company Board believes is reasonably necessary.
13. Relocation Expenses. Executive shall be reimbursed for all
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reasonable and necessary expenses incurred by him in connection with his commute
from Executive's residence to the Company, including reasonable costs for meals,
lodging and transportation during such trips. If Executive relocates his
personal residence to the Harrisburg, Pennsylvania area, the Company shall pay
the Executive $50,000 to cover all reasonable costs and expenses incurred by
Executive in connection therewith.
14. Termination of Agreement. The employment by the Company of
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Executive pursuant to this Agreement shall not be terminated prior to the end of
the Term, except as set forth in this Section 14.
(a) By Mutual Consent. The employment by the Company of Executive
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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
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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 health and welfare benefits
pursuant to Section 10(a)(i) 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
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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 six (6) consecutive month period, or (ii) the Company receives written
opinions from both a
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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 14(c), 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 health and welfare benefits pursuant to Section 10(a) hereof to be paid or
provided to Executive for one (1) year after the Date of Termination; provided,
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however, that amounts payable to Executive under this Section 14(c) shall be
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reduced by the proceeds of any short- and/or long-term disability payments under
the Company plans referred to in Section 10(a) hereof to which Executive may be
entitled during such period.
(d) By the Company for Cause. The employment of Executive
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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 14(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
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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 14(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 health and welfare benefits
pursuant to Section 10(a) and (b) hereof to be paid or provided to Executive
under this Agreement for the remainder of the Term; notwithstanding the
foregoing, in the event of the termination by the Executive pursuant to this
Section 14(e) prior to the second anniversary hereof, Executive shall be
entitled to receive Base Salary and health and welfare benefits pursuant to
Section 10(a) hereof to be paid or provided to Executive until two years from of
such Date of Termination.
(f) By Executive for Good Reason. The employment by Executive
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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 14(f), 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, (ii) the Base Salary and
health and welfare benefits
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pursuant to Section 10(a) and (b) hereof 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
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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 14(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) Date of Termination. Executive's Date of Termination shall
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be: (i) if the parties hereto mutually agree to terminate this Agreement
pursuant to Section 14(a) hereof, the date designated by the parties in such
agreement; (ii) if Executive's employment by the Company is terminated pursuant
to Section 14(b), the date of Executive's death; (iii) if Executive's employment
by the Company is terminated pursuant to Section 14(c), the last day of the
applicable period referred to in Section 14(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 14(c)(ii) hereof; (iv) if
Executive's employment by the Company is terminated pursuant to Section 14(d),
the date on which a Notice of Termination is given; (v) if Executive's
employment by the Company is terminated pursuant to Section 14(e) or 14(g), 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); and (vi) if Executive's employment by the Company
is terminated pursuant to Section 14(f), the date on which a Notice of
Resignation is given. If, within thirty (30) days after any Notice of
Termination is given pursuant to Section 14(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
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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.
15 Representations.
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(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
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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.
17 Non-Competition Covenants.
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(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 expiration of the Term, the restriction
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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
expiration of the Term; (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 preparation by the Company
with a view to making such a bid,
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proposal or offer, provided that, after the Termination Date, the restriction
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set forth in this clause (ii) shall be limited to such bids, offers and
proposals by the Company, in any case, during the twelve 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 14(d) or (g)
(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 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.
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(a) 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
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disclosing any of the confidential information required by law, Executive will
promptly notify the Company so that the Company
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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
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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
Executive to any person including, but not limited to, the reason for any
termination of employment of Executive, provided however, that the Company may
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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
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such information as and to the extent necessary and relevant to any dispute
between the Company and 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
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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
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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.
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21 Notices. All notices and other communications required or
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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. Xxxx Xxxxxx
000 Xxxxxxxx Xxxxx
Xxxx, Xxxxxxxxxxxx 00000
with copies to:
Xxxxxxx Xxxxxxxxx, Esq.
0000 Xxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
To the Company at:
New World Pasta Company
00 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: General Counsel
with copies to:
Xxxxxx Xxxxxxxxxx & Levy
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
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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,
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that such change shall be effective when received.
22 Severability. If any provision or clause of this Agreement or the
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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.
23 Survivorship. The respective rights and obligations of the
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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; Arbitration.
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(a) This Agreement will be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
it conflicts of law principles.
(b) In the event a dispute arises out of or pertaining to this
Agreement, either party may, by written notice to the other party, require that
such dispute be submitted to binding arbitration pursuant to the rules of the
American Arbitration Association in Harrisburg, 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.
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25 Headings. All descriptive headings of sections and paragraphs in
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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
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be reduced by all applicable withholding required by federal, state or local
law.
27 Specific Performance. Each party hereto acknowledges that money
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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 counterparts,
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each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
29 Definitions.
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(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 act of gross negligence, fraud or willful misconduct 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;
(iii) any misappropriation or embezzlement of the property of the Company, or
any of its parents, subsidiaries or affiliates; or (iv) any material breach by
Executive of this Agreement, including, without limitation, a material breach of
Sections 17 and 18 hereof, which breach remains uncorrected for a period of
thirty (30) days after receipt by Executive of written notice from the Company
setting forth such breach.
(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 Pasta, LLC, a Delaware limited liability company,
or its
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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 February 1, 2000, 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
February 1, 2000 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
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(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.
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(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; (iv)
material breach by the Company of this Agreement, which breach remains uncured
for a period of thirty days after receipt by the Company of written notice from
Executive; or (v) failure to extend the Term pursuant to Section 2(b) hereof.
(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
fifty-two week period 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/ Xxxxx X. Xxxx
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Name:
Title:
EXECUTIVE
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
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