Exhibit 10.1
AMENDMENT TO SEVERANCE AGREEMENT
XXXXXX X. XXXXXX
This agreement is entered into by and between American Italian Pasta
Company, a Delaware corporation, (the "Employer") and Xxxxxx X. Xxxxxx
("Employee").
WHEREAS, the parties entered into an Severance Agreement effective October
1, 2005 (the "Severance Agreement"); and
WHEREAS, the parties now desire to amend the Severance Agreement to comply
with Section 409A of the Internal Revenue Code of 1986, as amended and the
regulations and other guidance issued thereunder ("409A").
NOW, THEREFORE, the Severance Agreement is amended as follows:
A. Section 4.1.1(b) is amended to read as follows:
(b) Subject to the provisions of Sections 4.1.2 and 4.1.3
hereof, if Employee's employment is terminated by Employer without
Cause, as defined in Section 4.3, or if Employee resigns from
Employee's employment for Good Reason, as defined in Section 4.4, then
the following provisions (i) and (ii) shall apply.
(i) During the Severance Period and for a period of six (6) months
thereafter, Employee shall also be eligible to participate on the same
terms and conditions as in effect immediately prior to such termination
or resignation in all life insurance plans or programs provided to
Employee by Employer ("Employee Welfare Plans") at the time of such
termination or resignation and which continue to be provided by
Employer to its employees following the date of such termination or
resignation; provided, however, that Employee's eligibility to
participate in these Employee Welfare Plans shall end at such time as
Employee becomes eligible to receive coverage under comparable programs
of a subsequent employer. If, during the Severance Period, Employee is
precluded from participating in any Employee Welfare Plan by its terms
or applicable law, then Employer will provide Employee with benefits
that are reasonably equivalent to those Employee would have received
under such plan had Employee been eligible to participate therein.
Anything to the contrary herein notwithstanding, Employer shall have no
obligation to continue to maintain any Employee Welfare Plan during the
Severance Period solely as a result of this Agreement. As an example
and solely for purposes of illustration: If Employer were to cease
providing dental insurance to its senior executives prior to or during
the Severance Period, then Employer would have no obligation to
maintain such plan or provide to Employee individual dental insurance
to satisfy its obligations under this Section 4.1.1.
(ii) The Employer shall provide to Employee the benefits set forth in
sub-paragraphs 3 and 4 of the first paragraph of the Employer's
Severance Plan for Senior Vice Presidents and Above (which benefits are
the "Health Plan Severance Benefit" and which Plan is the "SVP Plan");
provided that the "Severance Period" for purposes of the Health Plan
Severance Benefit shall be the Severance Period defined in this
Agreement; and provided further that the provision in the SVP Plan that
terminates such coverage upon Employee being hired by another employer
shall be disregarded and the Health Plan Severance Benefit shall end
before the end of the Severance Period if it would end under the
immediately preceding clause (i) if the Health Plan Severance Benefit
were an Employee Welfare Plan.
B. A new Section 4.6 is added to read as follows:
4.6 6-month Delay. Notwithstanding anything contained in this Agreement
to the contrary, if the Employee is a "specified employee" (determined
in accordance with Code Section 409A and
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Treasury Regulation Section 1.409A-3(i)(2)) as of the date of the
Employee's termination of employment (other than due to the Employee's
death), then any payment, benefit or entitlement provided for in this
Agreement that constitutes "deferred compensation" within the meaning
of Section 409A and that is payable during the first six months
following the date of the Employee's termination of employment shall
be paid or provided to the Employee in a lump sum cash payment to be
made on the earlier of (a) the Employee's death or (b) the first
business day (or within 30 days after such first business day) of the
seventh calendar month immediately following the month in which the
date the Employee's termination of employment occurs.
C. Section 4.4 is amended by deleting therefrom the phrase, ", which
failure or refusal to comply is uncorrected for a period of 15 days
following receipt by Employer of written notice thereof from Employee"
and by inserting the following at the end thereof:
Employee shall be required to provide notice to the Employer of the
existence of either condition (ii) or (iii) within 90 days of the
initial existence of the condition, upon the notice of which the
Employer shall have a period of 30 days during which it may remedy the
condition.
D. A new Section 8 is added to read as follows:
8. Compliance with Section 409A of the Internal Revenue Code.
Notwithstanding any provision in the Severance Agreement to the
contrary, the Severance Agreement and this Amendment shall be
interpreted, construed, operated and conformed in accordance with
409A. For purposes of determining whether any payment results in a
"deferral of compensation" within the meaning of 409A, the exemptions
available under 409A shall be maximized, and each installment payment
to be made under the Agreement shall be treated as a separate payment
for purposes of 409A. It is intended by the Employer that all
compensation and benefits payable or provided to Employee under this
Agreement or otherwise shall either be exempt from or fully comply
with the provisions of 409A so as not to subject Employee to the
additional tax, interest or penalties which may be imposed under 409A.
The parties acknowledge that 409A is ambiguous in certain respects.
The Employer agrees that it will attempt in good faith not to take any
action, and will attempt in good faith to refrain from taking any
action, that would result in the imposition of tax, interest and/or
penalties upon Employee under 409A. To the extent the Employer has
acted or refrained from acting in good faith as required by this
Section, neither it nor its employees, officers, directors,
contractors or agents will be responsible for any consequences of
failure to comply with 409A, and Employee shall not be entitled to any
damages related to any such failure even though the Employment
Agreement and this Amendment require certain actions to be taken in
conformance with 409A. "Separation from service," "termination of
employment" and similar phrases shall mean Employee's separation from
service with the Employer (within the meaning of 409A) for any reason.
Generally, a permanent decrease to no more than 20% of the average
level of bona fide services performed during the immediately preceding
36-month period is considered a separation from service for purposes
of 409A. For this purpose, Employee's employment relationship shall be
treated as continuing intact while Employee is on military leave, sick
leave or other bona fide leave of absence if the period of such leave
does not exceed six months, or if longer, so long as Employee retains
the right to reemployment under applicable statue or by contract. For
purposes of determining whether a separation from service has
occurred, the "Employer" shall be determined by applying Internal
Revenue Code Sections 414(b) and (c), and substituting 50% for the 80%
ownership level.
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IN WITNESS WHEREOF, the undersigned have executed this agreement this
30th day of December, 2008.
AMERICAN ITALIAN PASTA COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
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Title: EVP & General Counsel
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XXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
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