Exhibit 10.16
January 24, 2008
Xxxxx X. Xxxxxxx
Managing Director
Xxxxxxx & Marsal, LLC
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Re: Letter Agreement of September 28, 2005, as amended
Dear Xxx:
This letter (the "Third Amendment") addresses various matters related to
the engagement letter dated September 28, 2005, as amended March 10, 2006 and
March 21, 2007, (the "Letter") between Xxxxxxx & Marsal, LLC ("A&M") and
American Italian Pasta Company (the "Company"). Upon execution hereof by each of
the parties below, this Third Amendment will amend the Letter.
1. Paragraph 1(a) (iii) of the Letter states that the staffing levels,
after the Phase One Review (as defined herein), will be agreed with the
Company's board of directors (the "Board") or its designees. From and after
January 16, 2008, A&M will no longer have any dedicated or minimum staffing
level commitment to the Company, but instead will make available Xxxxx X.
Xxxxxxx and others of its professional staff only on an hourly consulting basis
as requested by the Company. The hourly rates charged by A&M for such requested
consultation services shall be $600 for Xx. Xxxxxxx, $375 for Xx. Xxxxxxxx and
$275 for Xx. Xxxxx. The hourly rates for other A&M personnel, by position held
at A&M, shall be Director -- $375-500; Associate -- $275-375; and Analyst --
$200-275.
2. In the event the Company so requests, Xx. Xxxxxxx agrees to accept
designation as the Company's principal executive officer, and to serve in that
capacity without compensation other than as contemplated in paragraph 1, above,
at the time the Company is prepared to file with the SEC its Annual Report on
Form 10-K for its fiscal year ended September 30, 2005 (the "2005 10-K"), and
agrees that he will sign and deliver such Report, and all required
certifications and related documents, in such capacity.
3. A&M has submitted herewith its final statement for all amounts due it
for services, expenses and expense reimbursements through January 16, 2008, with
the exception of expense reimbursements, which A&M will submit to the Company no
later than forty-five (45) days from the date of this Third Amendment. No
further amounts are or will be due by the Company to A&M except with respect to
(1) services rendered pursuant to paragraph 1, above, (2) the remaining balance
of the incentive fee as described in paragraph 4, below, and (3) the expense
reimbursements submitted pursuant to this paragraph. The retainer of $500,000
remitted by the Company to A&M, including accrued interest thereon, shall be
offset against that portion of the incentive payment due A&M upon execution of
this Third Amendment as set forth in paragraph 4 below. The Company may, in its
sole discretion, require the return of any excess funds. The payment obligations
set forth in this paragraph 3 and in paragraph 4 below shall survive the
termination of the Letter.
4. The parties agree that the total amount of the incentive payment due A&M
pursuant to the Second Amendment dated March 21, 2007, is $1,040.000. Of this
amount, $520,000 is paid herewith, the receipt of which is acknowledged, and the
remaining $520,000 of which will be paid upon the earlier to occur of (1) the
second business day after the date on which the Company files with the SEC its
2005 10-K, (2) October 31, 2008, or (3) a "change of control". For purposes of
this paragraph, a "change of control" means if "any person," as such term is
used in Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934, as
amended (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company),
is or becomes the "beneficial owner" (as defined in Rule 13(d)(3) under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the Company's then outstanding securities or
more than fifty percent (50%) of the combined voting power of the Company's then
outstanding securities.
The Company and A&M also agree that the Letter is terminable by the Company
at any time and with or without reason, and that the Letter, including the
Indemnification Agreement, as amended hereby, is hereby ratified and approved in
all other respects.
If the foregoing is acceptable to you, please sign this letter to
acknowledge your agreement with its terms.
Sincerely,
American Italian Pasta Company
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxxx
Chairman
Accepted and Agreed:
Xxxxxxx & Marsal, LLC
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Managing Director
