EMPLOYMENT AGREEMENT
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AGREEMENT made as of May 8, 2000, by and between New World Pasta
Company, a Delaware corporation (the "Company"), and Xxxxx Xxxxxxx (the
"Executive").
WHEREAS, the Company desires that Executive serve as the Vice President
of Finance and Chief Financial Officer, and Executive desires to hold such
positions under the terms and conditions of this Agreement; and
WHEREAS, the Company is authorized 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 9 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 May 8, 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 Vice
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President, Finance and Chief Financial Officer of the Company, performing duties
commensurate with such title and position.
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.
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 $200,000 per year (the "Base Salary"), subject to annual
adjustments as determined by the Chief Executive Officer of the Company.
(b) 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 fifty percent (50%) of his Base
Salary subject to the terms of the Annual Incentive Plan of the Company.
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
governing the grant of such options, the Company shall grant Executive (i)
46,111 options, with an exercise price of $10 per share, and (ii) 24,823 options
with an exercise price of $73.50 per share.
7. Vacation, Holidays and Sick Leave. During the Term, Executive
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shall be entitled to paid vacation, paid holidays, reimbursement of business
expenses and sick leave in accordance with the Company's standard policies for
its senior executive officers.
8. Health, Welfare and Pension Benefits. During the Term, Executive
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and eligible members of his family shall be eligible to participate in the
Company provided (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.
9. Relocation Expenses. Executive shall be reimbursed by the Company
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for normal relocation expenses, including selling commissions on his home in
California, closing costs to sell his current home and to purchase a new home
and costs of moving his belongings from California to Pennsylvania. In addition,
the Company will pay Executive a lump sum amount of $60,000 to cover all
temporary living expenses related to his relocation to Pennsylvania.
10. Termination of Agreement.
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(a) The employment by the Company of Executive pursuant to this
Agreement shall not be terminated prior to the end of the Term, except (i) by
mutual consent, (ii) death, (iii) disability, (iv) by the Company for cause, (v)
by the Company without cause, (vi) by Executive for good reason, or (vii) by
Executive without good reason. In the event of the Executive's termination of
employment with the Company by mutual consent, death, disability, by the Company
for cause or by the Executive without good reason, the Company's obligation's
under this Agreement shall terminate as of the Executive's last day of
employment with the Company. The Executive shall be entitled to receive any
benefits or compensation to
which he may be entitled under the benefit plans and policies of the Company, as
then in effect. In the event the Executive's employment with the Company is
terminated by the Company without cause or by the Executive with good reason,
the Executive shall be entitled to a payment equal to twenty-six (26) weeks of
the Executive's then current base salary, which shall be paid in accordance with
the terms of the Company's Severance Benefits Plan. This payment shall be in
lieu of any other obligation of the Company under this Agreement
(b) For purposes of this Agreement, the term "cause" shall mean
the determination, in good faith, by the Company 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, 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. The term
"good reason" shall mean the occurrence of any of the 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; or (iii) 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.
11. 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.
12. Confidentiality and Non-Competition Covenants.
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(a) Executive will not, directly or indirectly, 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. 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. Confidential
information does not include any information (i) available to or already in the
hands of the public, (ii) known to Executive prior to the date hereof, (iii)
disclosed to Executive by a third
party who is not under a duty of confidentiality with respect to such
information, or (iv) independently developed by Executive without the use of
confidential information of the Company.
(b) Executive will not, during the Term and for any period during
which Executive is receiving payments from the Company pursuant to this
Agreement, perform services for any entity that competes with the Company in the
dry pasta category.
(c) Each party hereto acknowledges that money damages would be
both incalculable and an insufficient remedy for any breach of this section of
the Agreement and 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 this provision of the 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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.
18. 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.
19. 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.
20. 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.
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 Xxxxxx
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Name: Xxxx Xxxxxx
Title: Chief Executive Officer
EXECUTIVE
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
