EX-10 4 form10k_121302exhpotter.htm EXHIBIT 10.9.1 Exhibit 10.9.1 - Employment Agreement between David B. Potter and AIPC


                         AMERICAN ITALIAN PASTA COMPANY

                              EMPLOYMENT AGREEMENT



          THIS EMPLOYMENT AGREEMENT (this "Agreement"), effective September
1, 2002 is by and between American Italian Pasta Company ("Employer"), and David
B. Potter, an individual ("Employee") (collectively "the parties") and
supersedes any and all prior oral or written agreements between the parties with
respect to the subject matter hereof.

                                   WITNESSETH:

          WHEREAS, Employer is engaged in the business of durum wheat milling
and pasta product production/marketing; and

         WHEREAS, in connection with such business, Employer desires to employ
Employee in the capacity of Executive Vice President - Procurement & Industrial
Markets; and

         WHEREAS, Employee desires to be employed by Employer in the aforesaid
capacities.

         NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:

          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 the date hereof (the "Effective Date") and terminate on
September 30, 2005. The provisions of Sections 4, 5 and 6, below, will survive
and 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
     Executive Vice President - Procurement & Industrial Markets, and it is
     further understood and agreed that any 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 10.6 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
     three (3) 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.

          3. Compensation. Employer shall pay Employee, and Employee shall
accept from Employer, in payment for Employee's services rendered to Employer
hereunder an annual base salary ("Base Salary") equal to one hundred seventy six
thousand eight hundred dollars ($176,800). Such Base Salary shall be paid in
equal bi-weekly installments and, in the sole discretion of Employer, shall be
subject to annual merit increase reviews.

          3.1 Bonuses. During the term of this Agreement, Employee will be
     eligible to participate in and bonuses may be awarded to Employee at the
     discretion 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.

          3.2 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.

          3.3 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: automobile allowance, 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.

          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 eighteen
     (18) 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. 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


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     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 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. 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 of
Employee's employment by Employer, Employee has been and will be making use of,
acquiring, and/or adding to confidential information of a special and unique
nature and value relating to such matters as Employer's trade secrets, systems,
procedures, manuals, confidential reports, and lists of customers and/or other
services rendered by Employer, the equipment and methods used and preferred by
Employer's customers, and the prices paid by such customers. As a material
inducement to Employer to enter into this Agreement, and to pay to Employee the
compensation referred to in Section 3 hereof, Employee covenants and agrees
Employee shall not, at any time during or after the Employment Term, directly or
indirectly disclose, divulge, or use for Employee's own benefit or purposes or
the benefit or purposes of any other person, firm, partnership, joint venture,
association, corporation, or other business organization, entity, or enterprise
other 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, sales
activities, promotion, credit and financial data, manufacturing processes,
financing methods, plans, or the business and affairs of


                                      -3-



Employer generally or of any subsidiary or affiliate of Employer, provided,
however, that the foregoing shall not apply to information that is not unique to
Employer or that is generally known to the industry or the public other than as
a result of breach of this covenant. Employee agrees that, upon termination of
Employee's employment with Employer for any reason, Employee will return to
Employer immediately all memoranda, books, manuals, training materials, records,
computer software, papers, plans, contracts, agreements, information, letters,
and other data, and all copies thereof or therefrom, in any way relating to the
business of Employer and its affiliates, except that Employee may retain
personal notes, notebooks, and diaries. Employee further agrees that Employee
will not retain or use for Employee's account at any time any trade names,
trademark, or other proprietary business designation used or owned in connection
with the business of Employer or its affiliates.

          6. Specific Performance and Survival.

          6.1 Employee acknowledges and agrees that Employer's remedies at law
     for a breach or threatened breach of any of the provisions of Section 4
     hereof or Section 5 hereof would be inadequate and, in recognition of this
     fact, Employee agrees that, in the event of such a breach or threatened
     breach, in addition to any remedies at law, Employer, without posting any
     bond, shall be entitled to obtain equitable relief in the form of specific
     performance, temporary restraining order, temporary or permanent
     injunction, or any other equitable remedy that may then be available.

          6.2 The parties agree that the terms of Sections 4, 5 and 6 are
     independent of and separable from the other provisions of this Agreement
     and that the termination of this Agreement for any reason will not affect
     the continued existence and enforceability of Sections 4, 5 and 6. Those
     Sections will survive and continue to be fully binding on and enforceable
     against Employee and Employer after any termination of this Agreement.

          7. Termination of Employment

          7.1 Termination without Cause; Resignation for Good Reason.

               7.1.1 General. (a) Subject to the provisions of Sections 7.1.2
          and 7.1.3 hereof, if Employee's employment is terminated by Employer
          without Cause, as defined in Section 7.3, or if Employee resigns from
          Employee's employment for Good Reason, as defined in Section 7.4, then
          Employer shall pay Employee severance in the amount of (i) Employee's
          accrued unpaid Base Salary to the date of termination or resignation
          and any bonus earned but not paid as of that date, and (ii)
          continuation of Employee's annual Base Salary, as adjusted under
          Section 3, as of the date of termination or resignation for a period
          of twelve (12) months following the date of termination or resignation
          (such period being referred to hereinafter as the "Severance Period").
          In addition, if at the time of such termination or resignation
          Employee has completed ten (10) years of uninterrupted service with
          Employer, the severance will include a payment in the amount of 50% of
          the prorated Normal Bonus level to which Employee would have been
          entitled had Employee remained employed through the then applicable
          bonus period. The Normal Bonus level will be calculated at the end of
          the bonus period and is subject to all adjustments and reductions
          determined by the Board of Directors and made applicable to all bonus
          plan participants. To the extent such calculation results in a bonus
          to be paid, that amount

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          will be prorated for the number of weeks of the bonus period occurring
          prior to the week in which the termination or resignation occurred.
          The Base Salary shall be payable in equal bi-weekly installments
          during the Severance Period, and any bonus shall be payable at the
          conclusion of the Severance Period.

                    (b) 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 health, medical,
               supplemental medical, and life insurance plans or programs
               provided to Employee by Employer pursuant to Section 3.7 hereof
               ("Employee Welfare Plans") at the time of such termination or
               resignation and which are 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 and further provided that if Employee
               participates in the Employee Welfare Plans for a period of
               eighteen (18) months from the date of termination or resignation,
               then Employee's COBRA rights shall commence at the end of such
               eighteen (18) month period. 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 terminate its
               dental insurance plan 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 7.1.1.

               7.1.2 Mitigation. Employee will be required to mitigate the
          amount of any payment provided for in Section 7.1.1 hereof by seeking
          other employment, and the amount of any such payment will be reduced
          by any compensation earned by Employee as the result of Employee's
          employment by another employer or acting as a consultant or in any
          other self-employed capacity subsequent to termination of Employee's
          employment with Employer.

               7.1.3 Death During Severance Period. If Employee dies during the
          Severance Period, then the Severance Period shall immediately cease,
          Employer shall not be obligated to make any further payments pursuant
          to this Section 7, and the provisions of Section 8.1 hereof shall
          apply as though Employee's death had occurred immediately prior to
          termination of Employee's employment hereunder.

               7.1.4 Date of Termination. The date of termination of employment
          without Cause shall be the date specified in a written notice of
          termination to Employee which in no case shall be more than 30 days
          following the date of notice. The date of resignation for Good Reason
          shall be the date specified in the written notice of resignation from
          Employee to Employer which in no case shall be more than 30 days
          following the date of notice.


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          7.2 Termination for Cause; Resignation Without Good Reason.

               7.2.1 General. If Employee's employment hereunder is terminated
          by Employer for Cause, or if Employee resigns from Employee's
          employment hereunder other than for Good Reason (a "Voluntary
          Termination"), then Employee shall be entitled only to payment of
          Employee's Base Salary, as adjusted under Section 3, earned through
          and including the date of termination or resignation. Employee shall
          have no further right to receive any other compensation or to
          participate in any other plan, arrangement, or benefit, after such
          termination for Cause or Voluntary Termination.

               7.2.2 Date of Termination. Subject to Section 7.3 hereof, the
          date of termination for Cause shall be the date of receipt by Employee
          of notice such termination. The date of Voluntary Termination shall be
          the date of receipt by Employer of the notice of resignation.

          7.3 Cause. Terminate for "Cause" means termination of Employee's
     employment because, in Employer's good faith belief, (i) Employee willfully
     and continually failed substantially to perform Employee's duties under the
     Agreement (other than as a result of Permanent Disability, as defined
     below), (ii) Employee failed to comply with any of the material term(s) of
     this Agreement, including, but not limited to, Sections 4 and 5 hereof,
     (iii) Employee committed an act or acts that constituted a misdemeanor
     (other than a minor traffic violation) or a felony under the law of the
     United States (including any subdivision thereof) or any country to which
     Employee is assigned (including any subdivision thereof), including, but
     not limited to, Employee's conviction for or plea of guilty or no contest
     ("nolo contrendre") to any such misdemeanor or felony, (iv) Employee
     committed an act or acts in violation of Employer's policies and/or
     practices applicable to employees at the level of Employee within
     Employer's organization, (v) Employee willfully acted, or willfully failed
     to act, in a manner that was injurious to the financial condition or
     business reputation of Employer or any of its subsidiaries or affiliates,
     (iv) Employee acted in a manner that is unbecoming of Employee's position
     with Employer, regardless of whether such action or inaction occurs in the
     course of the performance of Employee's duties with Employer, or (v)
     Employee was subject to any fine, censure, or sanction of any kind,
     permanent or temporary, issued by the Securities and Exchange Commission or
     the New York Stock Exchange.

          7.4 Good Reason. For purposes of this Agreement, "Good Reason" means
     any of the following actions taken by Employer without Employee's prior
     written consent: (i) the continued failure of Employer to pay compensation
     due to Employee under this Agreement, which failure is uncorrected for a
     period of 15 days following receipt by Employer of written notice thereof
     from Employee; (ii) a material diminution in Employee's position,
     authority, duties, or responsibilities, excluding for this purpose an
     isolated, insubstantial, or inadvertent action not taken in bad faith and
     that is remedied by Employer promptly after receipt of written notice
     thereof given by Employee; provided, however, that a mere change of
     Employee's title shall not constitute Good Reason so long as Employee
     continues to perform duties, functions, and responsibilities substantially
     equivalent to those performed by Employee prior to such change of title;
     (iii) Employer's material failure or refusal to comply with the provisions
     of this Agreement, which failure or refusal to comply is uncorrected for a
     period of 15 days following receipt by Employer of written notice thereof
     from Employee. It is expressly understood and

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     agreed by the parties hereto that Employer's failure to deliver a
     notification extending the Initial Employment Term as referred to in
     Section 1 hereof shall not constitute a termination without Cause.

          7.5 Conditions to Severance Payments. Employer's obligation to make
     any severance payments due hereunder or to provide any benefits to Employee
     after any termination or resignation hereunder (other than COBRA benefits)
     is expressly conditioned on Employee complying in full with the obligations
     under Sections 4, 5 and 6. In the event Employee does not fully comply with
     such obligations or in the event any such obligations are determined by any
     court to be unenforceable to any extent, Employer shall be relieved of all
     obligations to provide any severance or post-termination benefits.

          8. Death or Permanent Disability.

          8.1 Death. If Employee's employment hereunder is terminated by death,
     then Employer shall, within 90 days of the date of death, make a lump sum
     payment to Employee's estate (or other beneficiary designated by Employee
     in writing) equal to all Base Salary and bonuses, if any, earned and
     accrued through the date of death. Thereafter, Employer shall have no
     further obligation to Employee under the Agreement.

          8.2 Permanent Disability. If Employee becomes physically or mentally
     disabled while employed by Employer under this Agreement so that Employee
     is--with or without reasonable accommodation--unable to render the services
     provided for by this Agreement for a period of six consecutive months or
     for shorter periods aggregating six months during any 24-month period, or
     so that Employee has a Disability (as defined under Employer's then-current
     disability policy), then Employer may, at any time after the last day of
     the six consecutive months of disability, the day on which the shorter
     periods of disability equal an aggregate of six months, or the day on which
     Employee is determined to have a Disability, terminate Employee's
     employment hereunder for "Permanent Disability" by written notice to
     Employee. Following such termination, Employee shall be entitled to receive
     from Employer (i) all Base Salary and bonuses, if any, accrued through the
     date of termination and (ii) any other benefits payable under Employer's
     then-current disability policy, but all other rights of Employee hereunder
     shall terminate as of the date of Employee's termination.

          9. Change of Control.

          9.1 Notwithstanding anything to the contrary contained herein, if
     Employer terminates Employee without Cause upon or within six months
     following a Change of Control (as defined below), then Employer shall pay
     Employee Employee's accrued unpaid Base Salary to the date of termination
     and any bonus earned but not paid and shall continue to pay Employee
     Employee's annual Base Salary as of the date such termination occurs for a
     period of one (1) year following the date of termination as severance pay
     (such period being referred to hereinafter as the "Change of Control
     Severance Period") and bonus for the year in which the termination occurs
     (calculated as if the Normal Bonus for that year is earned). Any severance
     payable pursuant to this Section 9.1 will be in substitution for and not in
     addition to any severance that might be payable pursuant to Section 7
     hereof. To the extent Employer makes payments pursuant to this Section 9.1,
     it will have no additional obligations under Section 7 hereof. The


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     Base Salary shall be payable in bi-weekly payments during the Change of
     Control Severance Period, and the bonus shall be paid at the conclusion of
     the Change of Control Severance Period.

          9.2 Upon a Change in Control, all options to purchase stock of
     Employer held by Employee, to the extent not then exercisable, will
     immediately become fully vested and exercisable and all restrictions on any
     stock grants will immediately be removed.

          9.3 For purposes of this Agreement, "Change of Control" means any one
     of the following:

               (a) any person or group (as defined in Section 13(d)(3) of the
          Securities Exchange Act of 1934, as amended (the "Exchange Act"))
          acquiring beneficial ownership of more than 50% of Employer's then
          outstanding Common Stock or 51 % or more of the combined voting power
          of Employer's then outstanding securities entitled generally to vote
          for the election of Employer's Directors;

               (b) the consummation of the merger or consolidation of Employer
          with any other corporation, other than a merger with a wholly-owned
          subsidiary, the sale of substantially all of the assets of Employer,
          or the liquidation or dissolution of Employer, unless, in the case of
          a merger or consolidation, (x) the Directors in office immediately
          prior to such merger or consolidation will constitute at least
          majority of the Board of Directors of the surviving corporation of
          such merger or consolidation and any parent (as such term is defined
          in Rule 12b-2 under the Exchange Act) of such corporation, or (y) the
          voting securities of Employer outstanding immediately prior thereto
          represent (either by remaining outstanding or by being converted into
          voting securities of the surviving entity) more than 66 2/3% of the
          combined voting power of the voting securities of Employer or such
          surviving entity and are owned by all or substantially all of the
          persons who were the holders of the voting securities of Employer
          immediately prior to the transaction in substantially the same
          proportions as such holders owned such voting securities immediately
          prior to the transaction; or

               (c) Continuing Directors (as defined below) no longer constitute
          at least a majority of the Board or a similar body of any successor to
          Employer. For purposes of this Agreement, "Continuing Directors" means
          any individual who either (i) is a member of Employer's Board of
          Directors on the Effective Date, (ii) who becomes a director after the
          Effective Date whose election or nomination for election by Employer's
          shareholders, was approved by a vote of at least a majority of the
          Continuing Directors (either by a specific vote or by approval of the
          proxy statement of Employer in which such person is named as nominee
          for director, without objection to such nomination), or (iii) is
          designated by any party pursuant to its rights under Section 2.1 of
          Employer's Amended and Restated Shareholders' Agreement dated as of
          October 4, 1997, as amended.

          9.4 Excess Parachute Payments. If any payment or the receipt of any
     benefit under this Agreement shall be deemed to constitute an "excess
     parachute payment" as such term is described in Section 280G of the
     Internal Revenue Code of 1986, as amended (the "Code"), so as to result in
     the loss of a deduction to Employer under Code Section 280G or in the
     imposition of an excise tax on the Employee under Code Section 4999, or any
     successor sections thereto, then the amounts payable or the benefits
     provided under this Agreement shall be reduced to the

                                      -8-


     minimum extent necessary so that no such deduction will be lost by Employer
     and no such excise tax will be imposed on the Employee. Employer, in its
     sole discretion, shall determine whether or not an "excess parachute
     payment" would otherwise occur and shall determine the amount and method of
     the foregoing reduction.

          10. Miscellaneous.

          10.1 Assignment of Employee Benefits. Absent the prior written consent
     of Employer, and subject to will and the laws of descent and distribution,
     Employee shall have no right to exchange, convert, encumber, or dispose of
     the rights of Employee to receive benefits and payments under this
     Agreement, which payments, benefits, and rights thereto are non-assignable
     and non-transferable.

          10.2 Burden and Benefit. This Agreement shall be binding upon, and
     shall inure to the benefit of, Employer and Employee, their respective
     heirs, personal, and legal representatives, successors, and assigns.

          10.3 Governing Law. In view of the fact that the principal office of
     Employer is located in the State of Missouri, the parties understand and
     agree that the construction and interpretation of this Agreement shall at
     all times and in all respects be governed by the laws of the State of
     Missouri, that the state and federal courts situated in the State of
     Missouri shall have exclusive jurisdiction over any claims arising under or
     in relation to this Agreement, and that the parties consent to personal
     jurisdiction in such state and federal courts.

          10.4 Headings. The headings of the Sections of this Agreement are for
     reference only and not to limit, expand, or otherwise affect the contents
     of this Agreement.

          10.5 Entire Agreement; Modification. Except as to Employer's Stock
     Option Plans, any instrument relating to an Option granted thereunder and
     written agreements signed by both of the parties hereto from time to time
     after the date hereof, this Agreement contains the entire agreement and
     understanding by and between Employer and Employee with respect to the
     subject matter hereof, and any representations, promises, agreements, or
     understandings, written or oral, not herein contained shall be of no force
     or effect. No change, waiver, or modification of any provision of this
     Agreement shall be valid or binding unless the same is in writing and duly
     executed by both parties and no evidence of any waiver or modification
     shall be offered or received in evidence of any proceeding, arbitration, or
     litigation between the parties hereto arising out of or affecting this
     Agreement, or the rights or obligations of the parties hereunder, unless
     such waiver or modification is in writing, duly executed as aforesaid, and
     the parties further agree that the provisions of this Section 10.6 may not
     be waived except as set forth herein.

          10.6 Waiver of Breach. The waiver by Employer of a breach of any
     provision of this Agreement by Employee shall not operate or be construed
     as a waiver of any subsequent breach by Employee.

          10.7 Notice. For the purpose of this Agreement, notices and all other
     communications provided for in the Agreement shall be in writing and shall
     be deemed to have been duly given when delivered or mailed by United States
     registered mail, return receipt


                                      -9-


     requested, postage prepaid, addressed to the respective addresses set forth
     on the execution page of this Agreement, provided, however, that all
     notices to Employer shall be directed to the attention of the Board of
     Directors of Employer with a copy to the Secretary of Employer, or to such
     other address as either party may have furnished to the other in writing in
     accordance herewith, except that notice of change of address shall be
     effective only upon receipt.

          10.8 Withholding Taxes. Employer may withhold from any amounts payable
     under this Agreement such federal, state, and local taxes as may be
     required to be withheld pursuant to any applicable law or regulation.

          10.9 Counterparts. This Agreement may be signed in counterparts, each
     of which shall be an original, with the same effect as if the signatures
     thereto and hereto were upon the same instrument.

          IN WITNESS WHEREOF, Employer and Employee have duly executed this
Agreement as of the day and year first hereof written.


                                    EMPLOYEE:



                                     Signature: /s/ David B. Potter
                                                --------------------------------
                                     Printed Name: David B. Potter
                                     Address:      8400 Allman
                                                   Lenexa, KS  66219



                                     AMERICAN ITALIAN PASTA COMPANY



                                     By:   /s/ Timothy S. Webster
                                         ---------------------------------------
                                     Printed Name: Timothy S. Webster
                                     Address:      4100 North Mulberry Drive
                                                   Suite 200
                                                   Kansas City MO 64116-0696





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