UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 28, 2005
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AMERICAN ITALIAN PASTA COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 001-13403 84-1032638
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4100 N. Mulberry Drive, Suite 200, Kansas City, Missouri 64116
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 584-5000
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Not Applicable
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On September 28, 2005, American Italian Pasta Company (the "Company")
entered into a letter agreement with Alvarez & Marsal, LLC ("A&M"), a management
consulting firm. Under the terms of the letter agreement, James Fogarty, a
managing director of A&M, will serve as co-chief executive officer of the
Company and additional A&M personnel (the "Additional Personnel") will provide
services at the Company's request. Mr. Fogarty and the Additional Personnel will
evaluate the Company's business, make recommendations to improve its operating
and financial performance and assist in the execution of these recommendations.
At the end of a 90 to 120 day review period (the "Phase One Review"), A&M will
present its findings to the Company's board of directors.
The Company will pay A&M $600 per hour for the services of Mr. Fogarty, and
hourly rates ranging from $200 to $500 for the services of the Additional
Personnel. The Company will also compensate A&M for reasonable out-of-pocket
expenses. In addition, A&M will be entitled to receive, as incentive
compensation, (i) up to $2 million upon satisfactory completion of certain
enumerated financial targets and (ii) warrants to purchase 472,671 shares of the
Company's stock at the "current market price," as defined in Item 3.02 below.
The warrants will vest upon completion of the Phase One Review.
The Company will pay A&M a retainer fee of $500,000, to be credited against
amounts due at termination of the engagement and returned upon the satisfaction
of all obligations under the letter agreement.
The letter agreement may be terminated by either party without cause upon
thirty days prior written notice. If, prior to the completion of the Phase One
Review, the Company terminates the letter agreement without cause or A&M
terminates the letter agreement for good reason, or if the Company terminates
the letter agreement for cause at any time, the Company will be relieved of all
of its payment obligations thereunder, except for the payment of fees and
expenses incurred by A&M through the effective date of termination, the
maintenance of director and officer liability insurance for two years following
termination, and the obligation to indemnify A&M against certain claims or
losses arising out of its performance of services for the Company. If, following
the Phase One Review, the Company terminates the letter agreement without cause
or A&M terminates the letter agreement for good reason, A&M will also be
entitled to retain the warrants and to receive, upon completion of the
enumerated financial targets discussed above, either (i) a pro rata share of the
$2 million incentive compensation (if termination occurs prior to June 30, 2006)
or (ii) the $2 million incentive compensation (if termination occurs after June
30, 2006).
A copy of the letter agreement is hereby incorporated by reference and
attached hereto as Exhibit 10.1.
Item 2.02 Results of Operations and Financial Condition.
On September 29, 2005, the Company issued a press release relating in part
to its cash flow and certain costs incurred during the fiscal quarter ended
September 30, 2005. A copy of the press release is hereby incorporated by
reference and attached hereto as Exhibit 99.1.
Item 3.02 Unregistered Sales of Equity Securities.
As part of the incentive compensation that may be payable to A&M as
described in Item 1.01, the Company has agreed to grant to A&M warrants (with
customary anti-dilution provisions) to purchase, at the current market price,
472,671 shares of the Company's common stock. For these purposes, the "current
market price" is equal to the forty-six trading day average of the period
beginning five trading days prior to the first public announcement or report of
the engagement of A&M and including all trading days until forty trading days
after such announcement or report. The warrants will vest upon completion of the
Phase One Review (as defined in Item 1.01 above), and will expire on September
28, 2010.
The warrants will be issued by the Company in reliance upon the exemption
from registration provided by Section 4(2) of the Securities Act of 1933.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
On September 28, 2005, the Company appointed James Fogarty of A&M as
co-chief executive officer of the Company, pursuant to the letter agreement
described in Item 1.01 above.
Mr. Fogarty joined A&M in 1994 and currently serves as a managing director.
He has worked in a variety of management and advisory service roles in several
industries, most recently serving as the chief financial officer of Levi Strauss
& Co. Prior to Levi Strauss & Co., he served as senior vice president and chief
financial officer of The Warnaco Group.
There are no family relationships between Mr. Fogarty and any director or
executive officer of the Company. Under the terms of the letter agreement
described in Item 1.01 above, Mr. Fogarty will continue to be employed by A&M as
a managing director and, while rendering services to the Company, will continue
to work with A&M personnel in connection with the internal governance of A&M.
On September 29, 2005, the Company issued a press release announcing the
appointment of Mr. Fogarty. A copy of the press release is hereby incorporated
by reference and attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
10.1 Letter agreement between the Company and Alvarez & Marsal, LLC
dated September 28, 2005.
99.1 Press release dated September 29, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 4, 2005 AMERICAN ITALIAN PASTA COMPANY
By: /s/ George D. Shadid
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George D. Shadid
Chief Financial Officer
EXHIBIT INDEX
Exhibit Number Description
10.1 Letter Agreement between the Company and Alvarez & Marsal,
LLC dated September 28, 2005.
99.1 Press release dated September 29, 2005.
