Vice President, Sales Employment Agreement

AMERICAN ITALIAN PASTA COMPANY EMPLOYMENT AGREEMENT DANIEL W. TROTT THIS EMPLOYMENT AGREEMENT (this "Agreement"), effective August 25,2003, is by and between American Italian Pasta Company ("Employer"), and DanielW. Trott, an individual ("Employee") (collectively "the parties") and supersedesany and all prior oral or written agreements between the parties with respect tothe subject matter hereof. WITNESSETH: WHEREAS, Employer is engaged in the business of durum wheat millingand pasta product production/marketing; and WHEREAS, in connection with such business, Employer desires to employEmployee in the capacity of Executive Vice President, Sales and Marketing ofAIPC and President of AIPC Sales Co.; and WHEREAS, Employee desires to be employed by Employer in the aforesaidcapacities. NOW, THEREFORE, in consideration of the promises and mutual covenantscontained herein and other good and valuable consideration, the receipt andsufficiency of which is hereby acknowledged, the parties hereby agree asfollows: 1. Term of Employment . Subject to the provisions of Section 7 hereof,the term of Employee's employment under this Agreement (the "Employment Term")will commence as of August 25, 2003 (the "Effective Date") and terminate onSeptember 30, 2006. The provisions of Sections 4, 5 and 6, below, will surviveand continue to be enforceable regardless of any termination of this Agreement. 2. Duties of Employee . 2.1 In accepting such employment, Employee shall undertake and assume the responsibility of performing for and on behalf of Employer such duties as shall be assigned to Employee by Employer at any time and from time to time and in accordance with all of Employer's policies, practices and procedures. It is understood and agreed that Employee's principal duties on behalf of Employer at the date of execution hereof are and shall be as described on attached Exhibit B - Job Description - as adjusted from time to time and it is further understood and agreed that any significant modification in or expansion of Employee's duties hereunder shall not, unless specifically agreed to by Employee and Employer in a duly-executed amendment of this Agreement in accordance with Section 10.5 hereof, result in any modification in Employee's compensation referred to in Section 3 hereof. 2.2 Employee will to the reasonable satisfaction of Employer at all times faithfully, industriously, and to the best of Employee's ability, experience, and talents perform all of the duties that may be required of and from Employee pursuant to the express and implicit terms hereof. 2.3 Employee shall devote substantially all of Employee's professional time, attention, knowledge, and skills solely to the business and interests of Employer; provided , however , that Employee shall be entitled annually to four (4) weeks vacation, and Employer shall be entitled to all of the benefits, profits, and other issues arising from or incident to all professional work, services, and advice of Employee. Employee will not serve as a member (or advisory member) of the board of directors or similar body of any organization, whether or not for profit, without the prior approval of the Chief Executive Officer of Employer. 3. Compensation . Employer shall pay Employee, and Employeeshall accept from Employer, in payment for Employee's services rendered toEmployer hereunder an annual base salary ("Base Salary") equal to Two HundredEighty Five Thousand Dollars ($285,000.00) through December 31, 2003 andthereafter equal to Three Hundred Thousand Dollars ($300,000.00). Such BaseSalary shall be paid in equal bi-weekly installments and, in the sole discretionof the Compensation Committee of the Board of Directors of Employer, shall besubject to annual merit increase reviews. 3.1 Bonuses . Employer shall pay Employee a one-time signing bonus of Twenty Five Thousand Dollars ($25,000.00) on October 1, 2003, provided Employee is employed by Employer as of that date. Thereafter during the term of this Agreement, Employee will be eligible to participate in and bonuses may be awarded to Employee at the sole discretion of the Compensation Committee of the Board of Directors in accordance with the terms of Employer's 1998 Salaried Bonus Plan (the "Bonus Plan"), as the same may be amended, modified, or terminated from time to time, and at the target levels shown on Exhibit A, and in accordance with the compensation strategy set by the Compensation Committee as described in Employer's proxy statement from time to time. 3.2 Auto Allowance . Employer agrees to lease, for the benefit of Employee, an automobile of the same general category as provided to the CEO. Employer agrees to be responsible for all expenses of the automobile. Employee agrees to be responsible for income taxes associated with the personal use of the automobile. 3.3 Reimbursement of Business Expenses . Employer agrees to reimburse Employee for reasonable travel, entertainment, and other business expenses incurred in the performance of Employee's duties hereunder in accordance with Employer's policies on terms no less favorable than those policies in effect immediately prior to the date hereof. 3.4 Benefits . Employee shall be entitled to participate in an equitable manner with other senior executive employees of Employer in all welfare benefit, incentive compensation, or other plans or arrangements authorized, adopted, and maintained from time to time by Employer, including, without limitation, the following: profit sharing plan, medical reimbursement plan, group life insurance plan, medical and dental insurance plan, and long-term disability income plan, if in effect with Employer. -2- 3.5 Stock Options and Restricted Shares . In addition to the stock options and restricted shares to be provided Employee per Schedule A, Employer agrees that Employee will participate proportionately in future general grants of stock options or restricted shares by employer to the executive level group of employees (i.e. Senior VP and above). Employer further agrees that Employee will be eligible to receive additional stock options and/or restricted shares, upon promotions, if any, commensurate with the type and nature of the promotion. 3.6 Benefit Schedule . As further clarification of the compensation and benefits to be provided to Employee hereunder, Employee will receive the benefits shown on Exhibit A. 4. Non-Competition, Nonsolicitation and Nondisparagement . 4.1 Employee acknowledges and recognizes the highly competitive nature of the business of Employer and its affiliates and accordingly agrees as follows: during the Employment Term and until the date that is twenty-four (24) months after the date that Employee ceases employment with Employer for any reason (the Employment Term and such period hereinafter referred to as the "Noncompetition Period"), Employee will not, in any area in the world where Employer conducts business, directly or indirectly own, manage, operate, control, be employed by, consult with, or be connected in any manner with the ownership (other than passive investments of not more than one percent of the outstanding shares of, or any other equity interest in, any company or entity listed or traded on a national securities exchange or in an over-the-counter securities market), management, operation, or control of any business engaged in the production and/or marketing of pasta products for human consumption, including, without limitation, the following (together with any of their affiliates and successors): Barilla, New World Pasta, Dakota Growers Pasta Company, A. Zerega & Sons, and to the extent they may become engaged in such production and/or marketing, General Mills and Kraft Foods. Notwithstanding any provision of this Agreement to the contrary, if Employee is employed by Employer, then any breach of the provisions of this Section 4.1 shall permit Employer to terminate the employment of Employee for Cause (as defined below), and, whether or not Employee is employed by Employer, from and after any breach by Employee of the provisions of this Section 4.1, then Employer shall cease to have any obligations to make payments to Employee under this Agreement. 4.2 During the Noncompetition Period, Employee will not directly or indirectly induce or attempt to induce any employee of Employer or any of its affiliates to engage in any activity in which Employee is prohibited from engaging by Section 4.1 hereof or to terminate Employee's or her employment with Employer or any of its affiliates, will not directly or indirectly assist or attempt to assist others in engaging in any of the activities in which Employee is prohibited from engaging by Section 4.1 hereof, and will not directly or indirectly employ or offer employment to any person who was employed by Employer or any of its affiliates unless such person shall have ceased to be employed by Employer or any of its affiliates for a period of at least 12 months. 4.3 During the Noncompetition Period, Employee will not directly or indirectly induce or attempt to induce any customer or supplier of Employer or any of its -3- affiliates to move, reduce or not increase its trade or business with Employer or any of its affiliates. 4.4 Employee acknowledges and agrees that disparaging or critical statements made by Employee about Employer or its board members, officers or employees would be uniquely detrimental to the interests of both parties. Therefore, during the Noncompetition Period, Employee agrees to refrain from making any disparaging or critical statements about Employer or its board members, officers or employees. 4.5 Employee acknowledges that the restrictions contained in Sections 4.1, 4.2, 4.3 and 4.4 are reasonable and appropriate. Employee also acknowledges that the compensation paid to him under this Agreement, including specifically, the grant of restricted shares described on Exhibit A, is partially in consideration for Employee's covenants under this Section 4. However, in the event that a court of competent jurisdiction determines that such restrictions are not reasonable and therefore unenforceable, the parties agree that such court may modify the restrictions in order for, but only to the least extent necessary for, the restrictions to be enforced by such court. In the event such court finds that any such restriction cannot be modified so as to make it enforceable, such restriction may be deleted by such court and the enforceability of all other restrictions will be unaffected by such deletion. 5. Confidentiality . Employee acknowledges that, in and as a result ofEmployee's employment by Employer, Employee has been and will be making use of,acquiring, and/or adding to confidential information of a special and uniquenature and value relating to such matters as Employer's trade secrets, systems,procedures, manuals, confidential reports, and lists of customers and/or otherservices rendered by Employer, the equipment and methods used and preferred byEmployer's customers, and the prices paid by such customers. As a materialinducement to Employer to enter into this Agreement, and to pay to Employee thecompensation referred to in Section 3 hereof, Employee covenants and agreesEmployee shall not, at any time during or after the Employment Term, directly orindirectly disclose, divulge, or use for Employee's own benefit or purposes orthe benefit or purposes of any other person, firm, partnership, joint venture,association, corporation, or other business organization, entity, or enterpriseother than Employer and any of its subsidiaries or affiliates any trade secrets,information, data, or other confidential information relating to customers,development programs, costs, prices, marketing, trading, investment, salesactivities, promotion, credit and financial data, manufacturing processes,financing methods, plans, or the business and affairs of Employer generally orof any subsidiary or affiliate of Employer, provided , however , that theforegoing shall not apply to information that is not unique to Employer or thatis generally known to the industry or the public other than as a result ofbreach of this covenant. Employee agrees that, upon termination of Employee'semployment with Employer for any reason, Employee will return to Employerimmediately all memoranda, books, manuals, training materials, records, computersoftware, papers, plans, contracts, agreements, information, letters, and otherdata, and all copies thereof or therefrom, in any way relating to the businessof Employer and its affiliates, except that Employee may retain personal notes,notebooks, and diaries. Employee further agrees that Employee will not retain oruse for Employee's account at any time any trade names, trademark, or otherproprietary business designation used or owned in connection with the businessof Employer or its affiliates. -4- 6. Specific Performance and Survival . 6.1 Employee acknowledges and agrees that E ...