10-Q

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

     |X|  Quarterly  Report  Pursuant  to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934


          For the quarterly period ended December 28, 2007

          Or

     | |  Transition  Report Pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934

                        Commission file number 001-13403

                         AMERICAN ITALIAN PASTA COMPANY
             (Exact name of registrant as specified in its charter)

                Delaware                               84-1032638
     (State or other jurisdiction         (I.R.S. Employer Identification No.)
   of incorporation or organization)

        4100 N. Mulberry Drive, Suite 200                    64116
              Kansas City, Missouri                        (Zip Code)
    (Address of principal executive offices)

               Registrant's telephone number, including area code:
                                 (816) 584-5000

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                         if changed since last report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes ? No |X|

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated  filer, a non-accelerated  filer, or a smaller reporting company.
See definitions of "large accelerated filer,"  "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

          Large accelerated filer | |               Accelerated filer |X|

           Non-accelerated filer | |             Smaller reporting company | |
(Do not check if a smaller reporting company)

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
                                                      Yes | | No |X|

     As of August 1, 2008, the Registrant had 19,357,415 shares of common stock,
par value $0.001 per share, outstanding.

                         AMERICAN ITALIAN PASTA COMPANY
                                    Form 10-Q
                     Fiscal Quarter Ended December 28, 2007


                                Table of Contents


Part I - Financial Information                                                                            Page

         Item 1.           Consolidated Financial Statements (unaudited)                                     1

                           Consolidated Balance Sheets at December 28, 2007 and September 28, 2007           1

                           Consolidated Statements of Operations for the three months ended                  2
                           December 28, 2007 and December 29, 2006

                           Consolidated Statement of Stockholders' Equity for the
                           three months ended December 28, 2007                                              3

                           Consolidated Statements of Comprehensive Income for the
                           three months ended December 28, 2007 and December 29, 2006                        4

                           Consolidated Statements of Cash Flows for the three months ended
                           December 28, 2007 and December 29, 2006                                           5

                           Notes to Consolidated Financial Statements                                        6

         Item 2.           Management's Discussion and Analysis of Financial Condition
                           and Results of Operations                                                        12

         Item 3.           Quantitative and Qualitative Disclosures About Market Risk                       18

         Item 4.           Controls and Procedures                                                          18

Part II - Other Information

         Item 1.           Legal Proceedings                                                                19

         Item 1A.          Risk Factors                                                                     21

         Item 2.           Unregistered Sales of Equity Securities and Uses of Proceeds                     21

         Item 3.           Defaults Upon Senior Securities                                                  22

         Item 4.           Submission of Matters to a Vote of Security Holders                              22

         Item 5.           Other Information                                                                22

         Item 6.           Exhibits                                                                         22

Signature Page

Exhibit Index

PART I.           FINANCIAL INFORMATION

ITEM 1.           CONSOLIDATED FINANCIAL STATEMENTS


                         AMERICAN ITALIAN PASTA COMPANY
                           CONSOLIDATED BALANCE SHEETS
                                    Unaudited
                      (in thousands, except share amounts)

                                                              December 28, 2007     September 28, 2007
ASSETS
Current assets:
     Cash and cash equivalents                                       $  8,545              $ 16,635
     Short-term investments                                             6,630                     -
     Trade and other receivables, net                                  38,167                38,279
     Inventories                                                       56,444                44,443
     Prepaid expenses and other current assets                          9,364                 7,629
     Deferred income taxes                                              2,323                 2,381
                                                                    ---------             ---------
Total current assets                                                  121,473               109,367
Property, plant and equipment, net                                    313,863               316,109
Brands and trademarks                                                  83,416                83,282
Other assets                                                           18,924                19,205
                                                                    ---------             ---------
Total assets                                                        $ 537,676             $ 527,963
                                                                    =========             =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                               $  25,879             $  19,195
     Accrued expenses                                                  31,884                31,523
     Current portion of deferred revenues                                  99                    99
     Income taxes payable                                                   -                 1,082
     Current maturities of long-term debt                               2,011                 1,963
                                                                    ---------             ---------
Total current liabilities                                              59,873                53,862
Long-term debt, less current maturities                               239,900               240,000
Income taxes payable                                                    1,851                     -
Deferred income taxes                                                  34,913                35,286
Litigation settlement                                                  26,500                26,500
Deferred revenue, less current portion                                    372                   397
                                                                    ---------             ---------
Total liabilities                                                     363,409               356,045
Commitments and contingencies
Stockholders' equity:
     Preferred stock, $.001 par value:
        Authorized shares - 10,000,000                                      -                     -
        Issued and outstanding shares - none
     Class A common stock, $.001 par value:
        Authorized shares - 75,000,000                                     21                    21
        Issued and outstanding shares -
        20,980,710 and 18,822,454, respectively, at
        December 28, 2007; 20,832,627 and 18,674,628,
        respectively, at September 28, 2007
     Class B common stock, par value $.001
        Authorized shares - 25,000,000                                      -                     -
        Issued and outstanding - none
     Additional paid-in capital                                       247,874               247,492
     Treasury stock, 2,158,256 shares at December 28,
        2007 and 2,157,999 shares at
        September 28, 2007, at cost                                  (52,030)              (52,029)
     Accumulated other comprehensive income                            16,594                15,352
     Accumulated deficit                                             (38,192)              (38,918)
                                                                    ---------             ---------
Total stockholders' equity                                            174,267               171,918
                                                                    ---------             ---------
Total liabilities and stockholders' equity                           $537,676             $ 527,963
                                                                    =========             =========

   See accompanying notes to the unaudited consolidated financial statements.

                                       1

                         AMERICAN ITALIAN PASTA COMPANY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                    Unaudited
                    (in thousands, except per share amounts)


                                                                       Three Months Ended
                                                           December 28, 2007        December 29, 2006

      Revenues                                                   $ 111,723               $  94,105
      Cost of goods sold                                            87,388                  69,818
                                                                 ---------               ---------
      Gross profit                                                  24,335                  24,287

      Selling and marketing expense                                  6,020                   4,843
      General and administrative expense                            10,160                   8,302

      Losses related to long-lived assets                                -                      23
                                                                 ---------               ---------
      Operating profit                                               8,155                  11,119
      Interest expense, net                                          7,088                   7,759
      Other income, net                                               (17)                    (58)
                                                                 ---------               ---------

      Income before income taxes                                     1,084                   3,418
      Income tax benefit                                             (310)                   (133)
                                                                 ---------               ---------
      Net income                                                 $   1,394               $   3,551
                                                                 =========               =========

      Net income  per common share (basic)                       $    0.07               $    0.19

      Weighted-average common shares outstanding (basic)            18,727                  18,635
                                                                 =========               =========

      Net income per common share (diluted)                      $    0.07               $    0.19

      Weighted-average common shares outstanding (diluted)          18,938                  18,834
                                                                 =========               =========

   See accompanying notes to the unaudited consolidated financial statements.

                                       2

                         AMERICAN ITALIAN PASTA COMPANY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                    Unaudited
                                 (in thousands)


                                                        Three Months Ended
                                                         December 28, 2007

Class A Common Shares
     Balance, beginning                                         20,833
     Issuance of shares of common stock                            148
                                                             ---------
     Balance, ending                                            20,981
                                                             =========

Class A Common Shares - par value
     Balance, beginning                                      $      21
     Issuance of shares of common stock                              -
                                                             ---------
     Balance, ending                                         $      21
                                                             =========

Additional Paid-in Capital
     Balance, beginning                                      $ 247,492
     Stock based compensation                                      382
                                                             ---------
     Balance, ending                                         $ 247,874
                                                             =========

Treasury Stock, at cost
     Balance, beginning                                      $(52,029)
     Purchases of treasury stock                                   (1)
                                                             ---------
     Balance, ending                                         $(52,030)
                                                             =========

Accumulated Other Comprehensive Income
     Foreign currency translation adjustment:
     Balance, beginning                                      $  15,352
     Change during the period                                    1,242
                                                             ---------
     Balance, ending                                         $  16,594
                                                             =========

Accumulated Deficit
     Balance, beginning                                      $(38,918)
     Additional tax related liabilities upon adoption
     of FIN 48                                                   (668)
     Net income                                                  1,394
                                                             ---------
     Balance, ending                                         $(38,192)
                                                             =========

Total Stockholders' Equity                                   $ 174,267
                                                             =========

    See accompanying notes to the unaudited consolidated financial statements

                                       3

                         AMERICAN ITALIAN PASTA COMPANY
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                    Unaudited
                                 (in thousands)


                                                                      Three Months Ended
                                                           December 28, 2007      December 29, 2006


        Net income                                              $ 1,394                $ 3,551


        Other comprehensive income:

                Foreign currency translation adjustments          1,242                  1,542
                                                                 ------                -------


        Comprehensive income                                    $ 2,636                $ 5,093
                                                                =======                =======

   See accompanying notes to the unaudited consolidated financial statements.

                                       4

                         AMERICAN ITALIAN PASTA COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    Unaudited
                                 (in thousands)

                                                                                   Three Months Ended
                                                                        December 28, 2007      December 29, 2006

OPERATING ACTIVITIES:
Net income                                                                $       1,394           $      3,551
Adjustments to reconcile net income to net cash
       provided by operating activities:
                Depreciation and amortization                                     6,029                  5,816
                Amortization of deferred financing fees                             324                    305
                Losses related to long-lived assets                                   -                     23
                Unrealized loss on short-term investment                             93                      -
                Provision for doubtful accounts                                     109                    128
                Provision for inventory obsolescence                                226                    440
                Stock-based compensation expense                                    382                    359
                Deferred income tax benefit                                       (315)                  (476)
                Changes in operating assets and liabilities:
                    Trade and other receivables                                     221                  (683)
                    Inventories                                                (12,095)                  (854)
                    Prepaid expenses and other current assets                   (1,734)                      9
                    Accounts payable and accrued expenses                         6,842                    551
                    Income taxes payable                                           (18)                     87
                    Other assets                                                  (393)                    138
                                                                          -------------           ------------
Net cash provided by operating activities                                         1,065                  9,394

INVESTING ACTIVITIES:
Additions to property, plant and equipment                                      (2,447)                (1,537)
Short-term investments under orderly liquidation                                (7,379)                      -
Redemption of short-term investments                                                656                      -
                                                                          -------------           ------------
Net cash used in investing activities                                           (9,170)                (1,537)

FINANCING ACTIVITIES:
Principal payments on debt                                                        (100)                (8,000)
Purchase of treasury stock                                                          (1)                   (64)

Deferred financing costs                                                             -                    (7)
                                                                          -------------           ------------
Net cash used in financing activities                                             (101)                (8,071)
Effect of exchange rate changes on cash                                             116                    106
                                                                          -------------           ------------
Net decrease in cash and cash equivalents                                       (8,090)                  (108)
Cash and cash equivalents, beginning of period                                   16,635                 22,805
                                                                          -------------           ------------
Cash and cash equivalents, end of period                                  $       8,545           $     22,697
                                                                          =============           ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
           Cash paid for interest                                         $       6,569           $      7,539
                                                                          =============           ============
           Cash paid for income taxes                                     $           -           $        142
                                                                          =============           ============

   See accompanying notes to the unaudited consolidated financial statements.

                                       5

                         AMERICAN ITALIAN PASTA COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   BASIS OF PRESENTATION

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been  included.  Operating  results for the three months ended December 28, 2007
are not  necessarily  indicative  of the results  that may be  expected  for the
fiscal year ended  September  26, 2008.  For further  information,  refer to the
consolidated   financial  statements  and  footnotes  thereto  included  in  the
Company's  Annual  Report on Form 10-K for the fiscal year ended  September  28,
2007.

American  Italian  Pasta  Company  (the  "Company"  or "AIPC") uses a 52/53 week
financial  reporting  cycle with a fiscal  year that ends on the last  Friday of
September  or the first  Friday of October.  The  Company's  first three  fiscal
quarters end on the Friday last preceding  December 31, March 31, and June 30 or
the first Friday of the  following  month.  For purposes of this Form 10-Q,  all
fiscal quarters presented included 13 weeks of activity.

2.   SHORT TERM INVESTMENTS

As of September 28, 2007, the Company had $9.2 million  invested in the Columbia
Strategic Cash Portfolio Fund (Columbia  Fund),  administered by a subsidiary of
Bank of  America,  which  is an  enhanced  money  fund  that  allowed  immediate
withdrawal of funds. On December 10, 2007, when the investment  balance was $7.4
million, Columbia determined that the underlying securities had liquidity issues
and notified the Company  that the fund would begin an orderly  liquidation  and
dissolution  of assets to its  investors.  The balance in the  Columbia  Fund at
December 28, 2007 was $6.6  million.  The  underlying  assets are valued at fair
value and as of December 28, 2007 the Company has recorded  valuation  losses on
this  investment of $0.1 million.  During the first quarter of 2008, the Company
received $0.2 million of interest from the Columbia Fund. Through June 27, 2008,
the Company has  recovered  approximately  $3.8  million of the  pre-liquidation
investment balance.  The remaining investment of $3.6 million is to be recovered
as the liquidation progresses. The Company believes that the entire balance will
be recovered.  During the nine-month period ended June 27, 2008, the Company has
received $0.3 million of interest  income from the Columbia Fund. The underlying
assets are valued at fair value and as of June 27, 2008 the Company has recorded
valuation losses on this investment of $0.2 million.

3.   INVENTORIES

Inventories  are carried at standard costs adjusted for  capitalized  variances,
which approximate the lower of cost, determined on a first-in,  first-out (FIFO)
basis,  or  market.   The  Company   periodically   reviews  its  inventory  for
slow-moving,  damaged or discontinued items and provides reserves to reduce such
items identified to their recoverable amount.

Inventories consist of the following (in thousands):

                                                                            December 28, 2007       September 28, 2007

   Finished goods                                                               $  39,892               $  30,713
   Raw materials, additives, packaging materials and work-in-process               17,350                  14,373
   Reserves for slow-moving, damaged and discontinued inventory                     (798)                   (643)
                                                                                ---------               ---------
                                                                                $  56,444               $  44,443
                                                                                =========               =========



4.   PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following (in thousands):

                                       6

                                                  December 28, 2007       September 28, 2007

   Land and improvements                              $  11,938               $  11,867
     Buildings                                          112,864                 112,434
   Plant and mill equipment                             351,695                 348,617
   Furniture, fixtures and equipment                     30,890                  30,848
                                                      ---------               ---------
                                                        507,387                 503,766
   Accumulated depreciation                           (205,439)               (199,369)
                                                      ---------               ---------
                                                        301,948                 304,397
   Spare parts, net of reserve                            8,372                   8,154
   Construction in progress                               3,543                   3,558
                                                      ---------               ---------
                                                      $ 313,863               $ 316,109
                                                      =========               =========

5.   SHORT TERM DEBT

As of December  28,  2007,  the Company had  short-term  debt  comprised  of two
revolving credit  facilities at its Italian  subsidiary of $1.4 million and $0.6
million  that bear  interest  at 5.3% and 5.7%,  respectively,  and  matured  in
February and March 2008, respectively.

On January 29, 2008, the Company's Italian subsidiary entered into an additional
revolving  credit facility that provided up to an additional  $0.9 million.  The
new revolving credit agreement  matured on March 31, 2008, was renewed again and
matured in the third  quarter.  The  interest on the credit  facility  was 5.3%.
These revolving credit  facilities are secured by Italian  accounts  receivables
and other assets,  and there is no  additional  borrowing  capacity  under these
three revolving credit facilities.  The Company's U.S. credit facility (see note
6) limits the outstanding debt owed by its Italian subsidiary to $5.0 million in
the aggregate.  The Company is in compliance  with this limit as of December 28,
2007, and with the subsequent revolving credit facility.

6.   LONG-TERM DEBT

As of December 28, 2007,  the Company's term loan balance was $239.9 million and
its  revolving  credit  facility had no  outstanding  balance  (the U.S.  credit
facility).  The U.S. credit facility,  as amended, is comprised of the term loan
and a $30 million revolving credit facility. The Company had outstanding letters
of credit  under its  revolving  credit  facility  totaling  approximately  $4.8
million  and $2.3  million as of  December  28,  2007 and  September  28,  2007,
respectively.  Accordingly,  under the U.S.  facility the Company had additional
borrowing  capacity of $25.2  million and $27.7  million as of December 28, 2007
and September 28, 2007,  respectively.  The U.S.  credit  facility is secured by
substantially  all of our assets and  provides for interest at either LIBOR rate
plus 600 basis points or at an alternate base rate calculated as prime rate plus
500 basis points.  The interest rate in effect at December 28, 2007 was 11.2% on
the U.S. facility.  Under the amended U.S. credit facility,  we were required to
deliver our fiscal year 2005, 2006 and 2007 audited financial  statements to the
lenders by June 30, 2008 at which time the interest  rate would  decrease to 550
points  over LIBOR.  During  June 2008,  the  Company  delivered  the  financial
statements to its lenders in accordance with the amended facility and, effective
July 3, 2008, the interest rate was decreased to 550 points over LIBOR.

The U.S.  credit  facility  expires  in March  2011  and  does not  require  any
scheduled  principal  payments.  Principal  pre-payments are required if certain
events occur in the future,  including the sale of certain  assets,  issuance of
equity  and the  generation  of  "excess  cash  flow" (as  defined in the credit
agreement).

Our U.S. credit facility  contains  restrictive  covenants which include,  among
other things,  financial  covenants  requiring  minimum and cumulative  earnings
levels and  limitations  on the payment of  dividends,  stock  purchases and our
ability to enter into  certain  contractual  arrangements.  The  Company  was in
compliance with these financial  covenants as of December 28, 2007 and September
28, 2007.

7.   CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000

On October 28, 2000,  the U.S.  government  enacted the  "Continued  Dumping and
Subsidy Offset Act of 2000" (the "Act"),  commonly known as the Byrd  Amendment,
which provided that assessed  anti-dumping and subsidy duties

                                       7

liquidated by the  Department of Commerce on Italian and Turkish  imported pasta
after October 1, 2000 would be distributed to affected domestic  producers.  The
legislation  creating the dumping and subsidy offset payment provides for annual
payments  from the U.S.  government.  The  Company  records  the Byrd  Amendment
payment as revenue in the quarter in which the amount,  and the right to receive
the payment, can be reasonably determined.

During the  three-month  periods ended  December 28, 2007 and December 29, 2006,
the Company received and recognized as revenue $4,640,000 and $2,959,000, all of
which was recorded in the first  quarter of fiscal 2008 and 2007,  respectively.
Effective   October  1,  2007,   the  Act  was   repealed,   resulting   in  the
discontinuation  of future  distributions  to affected  domestic  producers  for
duties  assessed  after such date.  It is not  possible to  reasonably  estimate
amounts,  if any,  to be  received  in the  future on duties  assessed  prior to
October 1, 2007.

8.   INCOME TAXES

In June 2006,  the Financial  Accounting  Standard  Board  ("FASB")  issued FASB
Interpretation No. 48 (FIN 48),  Accounting for Uncertainty in Income Taxes - an
interpretation  of FASB Statement No. 109,  Accounting for Income Taxes.  FIN 48
clarifies the  accounting  for  uncertainty  in income taxes in an  enterprise's
financial  statements in  accordance  with SFAS No. 109,  Accounting  for Income
Taxes. This  interpretation  prescribes a recognition  threshold and measurement
attribute for the  financial  statement  recognition  and  measurement  of a tax
position  taken or expected to be taken in a tax  return.  FIN 48 also  provides
guidance on derecognition of tax benefits,  classification on the balance sheet,
interest  and  penalties,   accounting  in  interim  periods,  disclosures,  and
transition.

The Company  adopted FIN 48 effective  September  29,  2007.  As a result of the
adoption,   the  Company  recognized   additional  tax  related  liabilities  of
approximately  $0.7  million  resulting  in a reduction  to  beginning  retained
earnings.  In addition,  the Company reclassified  approximately $1.2 million of
income tax  liabilities  from a current  liability  classification  to a current
receivable  and a  non-current  liability  classification,  as  payment  of  the
liability  is not  anticipated  within one year of the balance  sheet date.  The
Company also recorded approximately $0.2 million of deferred tax assets relating
to the tax  benefits  associated  with  interest  expense and  federal  benefits
associated  with  state  tax  expenses,  which  was  fully  offset  due  to  the
application of a valuation allowance. As of September 29, 2007, the gross amount
of unrecognized tax benefits,  including  penalty and interest was approximately
$2.3  million.  If  recognized,  approximately  $2.1  million  would  affect the
Company's  effective  tax rate.  As of December  28,  2007,  the gross amount of
unrecognized tax benefits, including penalty and interest was approximately $2.3
million.  If recognized,  approximately  $2.1 million would affect the Company's
effective tax rate.

The Company  files  income tax  returns in the U.S.  federal  jurisdiction,  the
United Kingdom,  the  Netherlands,  Italy and various state  jurisdictions.  The
Company has also made an evaluation of the potential  impact of  assessments  by
state jurisdictions in which it has not filed tax returns.  The Internal Revenue
Service has examined and proposed  adjustments to the tax returns for the fiscal
years ended 2002  through  2004.  This  examination  was  concluded in the third
quarter  of  this  fiscal  year  with  no  material   change  from  the  amounts
anticipated.

As of the  September  29, 2007  adoption date of FIN 48, the federal tax returns
for the fiscal  years ended 2004  through  2007 remain  open,  although  the IRS
completed  an  examination  for the  fiscal  year  ended 2004  during  2008.  In
addition,  state and foreign tax returns for the fiscal years ended 2003 through
2007 are open to audit under the statute of  limitations.  As of the end of each
quarter of the current  fiscal year, it is not  anticipated  that any of the net
unrecognized tax benefits will be recognized in the next twelve months.

As permitted by FIN 48, we have classified interest and penalties as a component
of  income  tax  expense.  Estimated  interest  and  penalties  classified  as a
component  of income tax  expense  totaled $5  thousand  for the  quarter  ended
December 28, 2007.  Accrued  interest and  penalties  were $0.6 million and $0.6
million as of December 28, 2007 and September 29, 2007, respectively.

The Company  recorded an income tax benefit of $0.3 million for the three months
ended December 28, 2007. The benefit is attributable primarily to a reduction in
valuation  allowance  during  the  current  year  against  deductible  temporary
differences related to a tax benefit from foreign operations.

                                       8

9.   EQUITY INCENTIVE PLANS

Effective  October 1, 2005,  fiscal year 2006, the Company adopted  Statement of
Financial  Accounting  Standard No. 123 (revised  2004),  "Share Based  Payment"
(SFAS No. 123R) using the modified  prospective method. Under SFAS No. 123R, the
Company is required to recognize,  as expense,  the estimated  fair value of all
share based payments to employees.

Under SFAS No. 123R,  the Company  recognized  compensation  expense  related to
stock  option  awards and stock  appreciation  rights of $333,000  and  $163,000
during the first three month period ending  December 28, 2007 and the comparable
period in fiscal 2006, respectively.

A summary of the Company's stock option activity, and related information, is as
follows:

                                                                                                   Weighted
                                                                                                   Average
                                                                                                  Remaining
                                                                                Weighted         Contractual
                                                             Number of          Average              Term
                                                              Shares         Exercise Price       (in years)

Outstanding at September 28, 2007                              940,164          $ 30.19               4.3
     Cancelled/Expired                                        (70,815)          $ 18.30
                                                              --------
Outstanding at December 28, 2007                               869,349          $ 31.16               4.4
                                                              ========
Vested or expected to vest at December 28, 2007                860,413          $ 31.18               4.4
Exercisable at December 28, 2007                               799,534          $ 31.33               4.2

A summary of the  Company's  stock  appreciation  rights  activity,  and related
information, is as follows:


                                                                                                     Weighted
                                                                                                     Average
                                                                    Weighted         Aggregate      Remaining
                                                 Number of          Average          Intrinsic   Contractual Term
                                                   Shares        Exercise Price     Value           (in years)

Outstanding at September 28, 2007                 1,230,783          $7.00          $1,894,000         5.8
     Granted                                        928,002          $7.45
                                                -----------
Outstanding at December 28, 2007                  2,158,785          $7.20          $1,018,461         5.6
                                                ===========
Vested or expected to vest at December 28, 2007   1,799,776          $7.26          $  775,387         5.7
Exercisable at December 28, 2007                     94,822          $5.71          $  129,256         5.2

As of December  28,  2007,  the Company had  $4,080,000  of future  unrecognized
compensation costs related to stock options and stock appreciation rights. These
costs are  expected  to be  recognized  over a weighted  average  period of 3.10
years.

10.  RESTRICTED STOCK

During the three months ended  December 28,  2007,  the Company  issued  148,083
shares of restricted  stock to employees of the Company with a  weighted-average
grant date values of $7.78 under the Company's  2000 Equity  Incentive  Plan, as
amended (the "2000 Plan").  The Company has recorded  expense on the  restricted
stock as it vests equal to the fair value at the end of each  reporting  period,
in accordance with SFAS No. 123R. The Company maintains certain restricted stock
compensation  plans for  which  employees  are  allowed  to elect to have  taxes
withheld at amounts greater than minimum  required amounts  triggering  variable
accounting  treatment in fiscal 2007 and prior.  The awards  contained  either a
cliff or straight line vesting provision and,  therefore,  expense is recognized
over the  vesting  period.  The  compensation  expense  is  calculated  under an
accelerated   vesting  method  in  accordance  with  FASB   Interpretation   28,
"Accounting  for Stock  Appreciation  Rights and Other  Variable Stock Option or
Award Plans." The  compensation  cost recognized was $49,000 and $186,000 during
the three months ended December 28, 2007 and December 29, 2006, respectively. At
December 28, 2007,  unrecognized  cost related to restricted  stock awards total
approximately $2,097,000. These costs will be recognized over a weighted average
period of 2.8 years.

                                       9

The Company's restricted stock activity is as follows:

                                                                            Weighted Average
                                                                               Grant Date
                                                       Number of Shares        Fair Value
              Outstanding at September 28, 2007            226,326             $   7.77
              Granted                                      148,083                 7.78
              Vested                                         (450)                27.02
              Forfeited                                      (250)                37.05
                                                          --------             --------

              Balance at December 28, 2007                 373,709             $   7.73
                                                          ========             ========


11.  EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income  available to common
shareholders by the weighted average number of common shares outstanding for the
period.  Diluted earnings per share is computed by dividing net income available
to common shareholders,  increased by the weighted average number of outstanding
common  shares  and  incremental  shares  that may be issued  in future  periods
related to outstanding stock options and stock appreciation rights, if dilutive.
When calculating  incremental  shares related to outstanding  share options,  we
apply the  treasury  stock  method.  The  treasury  stock  method  assumes  that
proceeds,   consisting  of  the  amount  the  employee  must  pay  on  exercise,
compensation  cost  attributed to future  services and not yet  recognized,  and
excess tax  benefits  that would be credited to  additional  paid-in  capital on
exercise of the share options, are used to repurchase  outstanding shares at the
average  market price for the period.  The treasury stock method is applied only
to share grants for which the effect is dilutive.

The  computations  of basic and  diluted  earnings  per share are as follows (in
thousands, except share and per share data):

                                                             Three Months Ended
                                         December 28, 2007                       December 29, 2006
                                 -----------------------------------    -------------------------------------
                                              Weighted                               Weighted
                                              Average       Per                       Average
                                   Net        Shares       Share           Net        Shares         Net
                                  Income    Outstanding    Amount        Income     Outstanding     Amount

Basic earnings per share          $ 1,394       18,727     $ 0.07        $ 3,551       18,635       $ 0.19
                                  =======                  ======        =======                    ======

Effect of dilutive securities:

  Stock options and stock
    appreciation rights               211                                    199
                                                   ---                                --------
Diluted earnings per share        $ 1,394       18,938     $ 0.07        $ 3,551        18,834      $ 0.19
                                  =======   ==========     ======        =======      ========      ======

Anti-dilutive securities consisting of options to purchase the Company's Class A
common stock  accounting for 2,342,540  shares for the three-month  period ended
December  28,  2007,  and  1,095,678  shares for the  three-month  period  ended
December  29, 2006,  were  excluded  from the  calculation  of diluted  weighted
average common shares.

12.  LAWSUITS AND CONTINGENCIES

Governmental Investigations and Other Matters:

•    Beginning  in the  late  summer  of 2005,  the  Company  received  document
     requests  and formal  subpoenas  from the  Enforcement  Division of the SEC
     relating  to  its  accounting   practices,   financial   reporting,   proxy
     solicitation  and other  matters in  connection  with a formal,  non-public
     investigation  by the SEC staff of the  Company  and  certain  persons  and
     entities  employed by or  associated  with the Company.  The United  States
     Attorney's  Office for the Western  District  of Missouri  ("DOJ") has also
     been  investigating  these matters and has been  coordinating  with the SEC
     staff. The Company has had, and is continuing to have, discussions with the
     SEC staff,  and separately with the DOJ,  regarding the conclusion of their
     investigation activities and of their respective views of

                                       10

     appropriate basis on which to reach mutually acceptable  settlements.  Such
     settlements could result in a Deferred Prosecution  Agreement,  which could
     include the assignment of a corporate monitor,  continued  cooperation with
     any ongoing  investigations  and/or a monetary  fine.  Due to the status of
     ongoing discussions with the DOJ and SEC staff, the Company cannot estimate
     a range of possible  loss that could result from a monetary  fine,  if any.
     There can be no  assurance  that any  settlement  would not have a material
     adverse effect on our business,  financial condition, results of operations
     or cash flows. The Company is cooperating with these investigations.

•    On October 28, 2005, the Company  received notice from the Employee Benefit
     Security  Administration of the U.S.  Department of Labor ("EBSA") that the
     EBSA was  commencing an  investigation  regarding its 401(k) plan. The EBSA
     visited  the  Company's  offices on January  18,  2006 to review  requested
     information  and  interview its Director of Human  Resources  regarding the
     401(k) plan. The Company is cooperating  with the EBSA and has provided the
     EBSA with all requested information.

•    During the Company's  ongoing  analysis of financial  matters,  it reviewed
     transactions  reported to the U.S.  Department  of Commerce (the "DOC") for
     the period July 1, 2002 through June 30, 2003 in the antidumping proceeding
     on pasta imported from Italy. Based on the data reported by the Company and
     its  Italian  subsidiary,   Pasta  Lensi,   S.r.l.,  the  DOC  revoked  the
     Anti-Dumping  Order ("AD Order")  with  respect to Pasta Lensi.  During its
     investigation,  information  came to the Company's  attention  that certain
     data reported to the DOC was incorrect and as a result, Pasta Lensi may not
     have been eligible for  revocation of the AD Order.  The Company  disclosed
     the issue to the DOC. Simultaneously, the Company provided this information
     to the DOJ, which requested further information on this matter. As a result
     of the Company's disclosure to the DOC, it published notice on February 22,
     2008 in the Federal Register of its preliminary  determination to reinstate
     Pasta Lensi in the existing  antidumping  duty order at a cash deposit rate
     of 45.6%. The preliminary determination applies, on a prospective basis, to
     all imports of subject  products  from and after  February 22, 2008. A cash
     deposit  rate of 45.6%  would  have a  significant  adverse  impact  to our
     working capital position. The Company has appealed this determination.  The
     Company has  substantially  mitigated  the impact of this order by changing
     its  ingredient to organic  semolina in March 2008,  thereby  manufacturing
     products for import into the U.S. that are exempt from the antidumping duty
     order.  Based on the  Company's  review,  the Company does not believe this
     order will have a material effect on its financial condition.

Each of these matters is ongoing and involves  various  risks and  uncertainties
that could have a material adverse effect on our business, results of operations
and financial condition.

Litigation Claims and Disputes:

•    Beginning in August, 2005, seven lawsuits containing similar allegations of
     misrepresentations   and  omissions   concerning  the  Company's  financial
     statements  and asserting  both  derivative and direct claims were filed in
     the United  States  District  Court for the  Western  District  of Missouri
     against  the  Company,  certain of its  current  and former  directors  and
     officers,  and its former  independent  registered  public accounting firm,
     Ernst & Young,  LLP. These lawsuits were consolidated into a single lawsuit
     asserting both  derivative  and direct claims.  On June 16, 2006, the Court
     dismissed the derivative  claims  because the  plaintiffs  failed to make a
     required  demand on the Company's  Board of Directors.  By  stipulation  of
     settlement  filed with the Court on October 29, 2007, the Company agreed to
     settle  all  claims  alleged  in  the  lawsuit,  including  those  alleging
     violations  of  the  Securities   Exchange  Act  of  1934  and  Rule  10b-5
     thereunder.  On February 12, 2008,  the Court granted final approval of the
     settlement.  The settlement of the federal  securities class action lawsuit
     was for $25 million,  comprised  of $11 million in cash,  to be provided by
     the Company's  insurers,  and $14 million in the Company's  common  shares.
     Under  the  terms of the  settlement,  on March  27,  2008,  class  counsel
     received  527,903 common shares in  satisfaction  of the Court approved fee
     award. The class will receive approximately 930,000 common shares,  subject
     to adjustment  upward or downward,  based upon the Company's stock price as
     provided in the  stipulation of settlement.  The settlement was recorded in
     the fourth quarter of fiscal year 2005.

•    In November 2005, a shareholder  derivative action was filed in the Circuit
     Court of Jackson County,  Missouri.  The plaintiff  alleges that certain of
     the Company's  former  officers and directors are liable to the Company for
     breaches  of  fiduciary  duties  and  aiding and  abetting  such  breaches,
     corporate waste, gross mismanagement,  unjust enrichment,  abuse of control
     based upon the Company's  accounting  practices  and  financial  reporting,

                                       11

     insider selling and  misappropriation  of information,  and that its former
     independent registered public accounting firm, Ernst & Young LLP, is liable
     for professional negligence and accounting malpractice, aiding and abetting
     breaches of fiduciary  duties and breach of contract.  The Company is named
     as a nominal defendant in this matter. The plaintiff seeks equitable relief
     and unspecified  compensatory and punitive damages.  On March 13, 2008, the
     Company reached an agreement in principle,  subject to court  approval,  to
     settle this  action.  The  proposed  settlement  requires  the  adoption of
     certain  governance  reforms by the Company and payment of $1.5  million in
     attorney's fees and costs to counsel for the plaintiff,  which payment will
     be made under our insurance  policies.  The  settlement was recorded in the
     first quarter of fiscal year 2006.

•    In September  2006,  another action was filed in the United States District
     Court  for  the  Western  District  of  Missouri.   The  plaintiff  asserts
     derivative  claims  against  certain of the  Company's  former and  current
     officers and directors for breaches of their  fiduciary  duties relating to
     the Company's accounting practices and financial reporting.  Plaintiff also
     asserts claims on behalf of a putative class against the Company's  current
     directors for failing to schedule or hold an annual  meeting for 2006.  The
     Company is named as a nominal  defendant.  The plaintiff seeks  unspecified
     monetary  damages on the Company's  behalf and an order  requiring  that an
     annual  meeting be scheduled  and held.  On February  12,  2007,  the Court
     stayed all further  proceedings in the suit until forty-five days after the
     Company's issuance of restated financial results,  and required the Company
     to provide monthly reports regarding the status of its restatement process.
     On March 13, 2008, the Company  reached an agreement in principle,  subject
     to court approval,  to settle this action on a consolidated  basis with the
     November 2005 shareholders derivative action described above.

•    On March 7,  2007,  a lawsuit  was  filed in the  Delaware  Chancery  Court
     against the Company  alleging that no annual  meeting of  shareholders  had
     been held  since  February  7, 2005,  and  requesting  that the  Company be
     compelled  to convene an annual  meeting.  Proceedings  in that  matter are
     currently  stayed by  agreement  of the  parties.  On March 13,  2008,  the
     Company reached an agreement in principle,  subject to court  approval,  to
     settle this action as part of the  resolution  of the other two  derivative
     actions.

Each of these  actions is  ongoing,  and the  Company  continues  to defend them
vigorously.  Although  the  Company  cannot  predict the outcome of any of these
actions,  an adverse result in one or more of them could have a material adverse
effect on its business, results of operations and financial condition.

From time to time and in the  ordinary  course of its  business,  the Company is
named as a defendant in legal proceedings  related to various issues,  including
worker's  compensation claims, tort claims and contractual  disputes.  While the
resolution of such matters may have an impact on the Company's financial results
for the  period  in which  they are  resolved,  the  Company  believes  that the
ultimate  disposition  of  these  matters  will  not,  individually  or  in  the
aggregate,  have a material  adverse  effect upon its  business or  consolidated
financial statements.

Indemnification and Pending Litigation Obligations:

The Company has  incurred  and will  continue  to incur  significant  expense on
behalf  of the  Company  and on behalf of the  several  individuals  to whom the
Company  has   indemnification   obligations   related  to  certain  claims  and
investigations  involving the Company and these  individuals.  In addition,  the
Company continues to incur significant  expense related to the completion of its
historical audits and SEC reporting  requirements.  The expenses the Company has
incurred  through  December 28, 2007, in connection  with all of these  matters,
including those  associated with its restatement and pending legal matters,  net
of insurance  proceeds,  were approximately $ 36.0 million,  which includes $4.0
million incurred during the three-month period ended December 28, 2007.

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The  discussion  set forth below,  as well as other  portions of this  quarterly
report  on  Form  10-Q  ("Quarterly  Report"),  contains  statements  concerning
potential  future  events.  Such  forward-looking   statements  are  based  upon
assumptions  by our  management,  as of  the  date  of  this  Quarterly  Report,
including  assumptions about risks and uncertainties  faced by AIPC. Readers can
identify these forward-looking statements by their use of such verbs as expects,
anticipates,  believes or similar verbs or conjugations of such verbs. If any of
our assumptions prove

                                       12

incorrect or should unanticipated  circumstances arise, our actual results could
materially differ from those anticipated by such forward-looking statements. The
differences  could be caused by a number of  factors or  combination  of factors
including,  but not limited to, those factors identified in our Annual Report on
Form 10-K for our fiscal year ended  September  28,  2007.  That report has been
filed  with  the   Securities  and  Exchange   Commission   (the  "SEC"  or  the
"Commission")  in  Washington,  D.C. and can be obtained by contacting the SEC's
public reference  operations or through the SEC's web site on the World Wide Web
at http://www.sec.gov. Readers are strongly encouraged to consider those factors
when  evaluating  any such  forward-looking  statements.  We will not update any
forward-looking  statements in this Quarterly Report to reflect future events or
developments.

The following table sets forth certain data from our Consolidated  Statements of
Operations,  expressed  as a  percentage  of  revenues,  for each of the periods
presented.

                                              ---------------------------------------------
                                                           Three Months Ended
                                              ---------------------------------------------
                                                December 28, 2007      December 29, 2006
          Revenues:
             Retail                                    78.1%                 76.4%
             Institutional                             21.9                  23.6
                                                   ---------             ---------

          Total revenues                              100.0                 100.0
          Cost of goods sold                           78.2                  74.2
                                                   ---------             ---------

          Gross profit                                 21.8                  25.8
          Selling and marketing expense                 5.4                   5.2
          General and administrative expense            9.1                   8.8
          Losses related to long-lived assets             -                     -
                                                   ---------             ---------

          Operating profit                              7.3                  11.8
          Interest expense, net                         6.3                   8.2
          Other income, net                               -                 (0.1)
                                                   ---------             ---------
          Income before income taxes                    1.0                   3.7
          Income tax benefit                          (0.2)                 (0.1)
                                                   ---------             ---------

          Net income                                    1.2%                  3.8%
                                                   =========             =========

Overview

We are a Delaware  Corporation and we were incorporated and commenced operations
in 1988.  We believe we are the largest  producer  and  marketer of dry pasta in
North America, by volume,  based on data available from A.C. Nielsen,  published
competitor  financial  information,  industry sources such as the National Pasta
Association,  suppliers, trade magazines and our own market research. We believe
our vertically-integrated  facilities and highly efficient production facilities
focused  primarily on specific market segments and our highly skilled  workforce
make us an  efficient  company  and enable us to produce  high-quality  pasta at
competitive  costs.  We believe that our product  strategy of offering  branded,
private  label,  imported  and  specialty  products,   our  scalable  production
facilities and our key customer relationships create competitive advantages.

We generate revenues in two customer markets:  retail and institutional.  Retail
market revenues  include the sales of our pasta products to customers who resell
the pasta in retail channels (including sales to grocery retailers, club stores,
mass merchant,  drug and discount stores) and encompasses  sales of our branded,
private label and imported products.  These revenues represented 78.1% and 76.4%
of our total  revenue for the three month  periods  ended  December 28, 2007 and
December 29, 2006,  respectively.  The  Institutional  market includes both food
service distributors that supply restaurants,  hotels, schools and hospitals, as
well as food  processors  that use  pasta  as a food  ingredient.  Food  service
customers   include   businesses  and   organizations   that  sell  products  to
restaurants,  healthcare facilities, schools, hotels and industrial caterers and
multi-unit  restaurant  chains that procure directly.  The institutional  market
represented  21.9% and 23.6% of our total  revenue for the three  month  periods
ended December 28, 2007 and December 29, 2006, respectively.

                                       13

Average  sales  prices  for  our   non-branded   products   vary   depending  on
customer-specific packaging and raw material requirements, product manufacturing
complexity  and other  service  requirements.  Average  prices  for our  branded
products  are also  based on  competitive  market  factors.  Average  retail and
institutional  prices  will also vary due to  changes in the  relative  share of
customer  revenues and item specific  sales volumes  (i.e.,  product sales mix).
Generally,  average  retail  sales  prices are higher than  institutional  sales
prices. Selling prices of our branded products are higher than selling prices in
our other business units,  including private label. Revenues are reported net of
cash discounts, product returns, and promotional and slotting allowances.

We have several  arrangements with institutional  customers that provide for the
"pass-through" of direct material cost and certain other cost changes as pricing
adjustments.  The  pass-throughs are generally limited to actual changes in cost
and, as a result,  impact margins in periods of changing  costs and prices.  The
pass-throughs are generally  effective 30 to 90 days following such cost changes
and  thereby  reduce the  long-term  exposure  of our  operating  results to the
volatility of raw material costs. These  pass-through  arrangements also require
us to pass on the benefits of any price decreases in raw material costs.

Our  cost  of  goods  sold  consists  primarily  of  raw  materials,  packaging,
manufacturing  costs  (including   depreciation)  and  distribution   (including
transportation)  costs. A significant portion of our cost of goods sold is durum
wheat.  We purchase  durum wheat on the open  market  and,  consequently,  those
purchases are subject to fluctuations in cost. Since mid-2006, durum prices have
increased  substantially  and we  anticipate  these  costs to remain at or above
these  historically  high levels  throughout  fiscal 2008. We manage some of our
durum wheat cost risk  through  cost  "pass-through"  arrangements  in long-term
contracts  as discussed  above and advance  purchase  contracts  for durum wheat
which are generally a few months.  For our non pass-through  customers,  we seek
price increases to cover our costs.

We  seek  to  achieve  low-cost  production  through  vertical  integration  and
investment  in the  most  current  pasta-making  assets  and  technologies.  The
manufacturing- and distribution-related capital assets that have been or will be
acquired to support this strategy are depreciated over their respective economic
lives.  Depreciation  expense is a component of inventory cost and cost of goods
sold.

Critical Accounting Policies

This  discussion and analysis  encompass our results of operations and financial
condition as reflected in our consolidated financial statements, which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United  States.  The  preparation  of financial  statements in  conformity  with
accounting  principles  generally  accepted in the United  States  requires  our
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the  financial  statements  and  reported  amounts of  revenues  and
expenses  during the reporting  periods.  On an ongoing  basis,  our  management
evaluates its estimates and judgments, including those related to the impairment
of long-lived and intangible  assets,  the method of accounting for  share-based
compensation, and the estimates used to record allowances for doubtful accounts,
reserves  for  slow-moving,  damaged and  discontinued  inventory,  reserves for
obsolete  spare  parts,   promotional   allowances,   income  tax  accruals  and
derivatives.  Our  management  bases its  estimates  and  judgments  on relevant
factors,  the  results of which form the basis for  making  judgments  about the
carrying  values of assets and  liabilities  that are not readily  apparent from
other sources. See the critical accounting policies section in our Annual Report
on Form 10-K for the fiscal year ended September 28, 2007 for a complete listing
of our significant accounting policies. In addition to those critical accounting
policies, we adopted the following new critical accounting policy.

Income Taxes:  Effective September 29, 2007, we adopted the Financial Accounting
Standard Board (FASB) Interpretation No. 48 (FIN 48), Accounting for Uncertainty
in Income Taxes - an  interpretation  of FASB Statement No. 109,  Accounting for
Income Taxes.  FIN 48 prescribes a comprehensive  model for how companies should
recognize,   measure,  present,  and  disclose  in  their  financial  statements
uncertain tax positions taken or expected to be taken on a tax return. Under FIN
48, tax positions are initially  recognized in the financial  statements when it
is more likely than not the position will be sustained  upon  examination by the
tax authorities.  Such tax positions are initially and subsequently  measured as
the  largest  amount of tax  benefit  that is  greater  than 50% likely of being
realized upon ultimate settlement with the tax authority assuming full knowledge
of the position and all relevant facts.  Application of FIN 48 requires numerous
estimates  based  on  available  information.  We  consider  many  factors  when
evaluating and estimating our tax positions and tax benefits,  which may require
periodic  adjustments and which may not accurately  anticipate  actual

                                       14

outcomes.  The  cumulative  effect  of  applying  the  provisions  of FIN 48 was
reported as an  adjustment  to the opening  balance of  retained  earnings.  The
cumulative effect adjustment does not include items that would not be recognized
in  earnings,   such  as  the  effect  on  tax  positions  related  to  business
combinations.  For additional information related to our adoption of FIN 48, see
note 8 of these consolidated financial statements.

QUARTER ENDED DECEMBER 28, 2007 COMPARED TO QUARTER ENDED DECEMBER 29, 2006

Revenues:  Revenues increased $17.6 million, or 18.7%, to $111.7 million for the
three months ended December 28, 2007,  from $94.1 million for three months ended
December 29, 2006.  Revenues  increased  $0.8  million,  or 0.8%,  due to volume
increase,  and increased $15.1 million,  or 16.1%, due to higher average selling
prices.  Revenues  increased  by $1.7  million  due to an  increase  in payments
received from the U.S. government under the Continued Dumping and Subsidy Offset
Act of 2000.

Revenues for the Retail  market  increased  $15.3  million,  or 21.3%,  to $87.2
million for the three months ended December 28, 2007, from $71.9 million for the
three months ended December 29, 2006.  Revenues increased $2.4 million, or 3.3%,
due to volume  increase,  and  increased  $11.2  million  or 15.6% due to higher
average selling prices. Revenues increased by $1.7 million due to an increase in
payments  received  from the U.S.  government  under the  Continued  Dumping and
Subsidy Offset Act of 2000.

Revenues for the  Institutional  market increased $2.3 million or 10.3% to $24.5
million for the three months ended December 28, 2007, from $22.2 million for the
three months ended December 29, 2006.  Revenues decreased $1.3 million,  or 5.8%
due to volume losses and increased $3.6 million,  or 16.1% due to higher average
selling prices and changes in sales mix.

Cost of goods sold: Cost of goods sold increased $17.6 million or 25.2% to $87.4
million for the three months ended  December 28, 2007 from $69.8 million for the
three months ended December 29, 2006. As a percentage of revenues, cost of goods
sold increased to 78.2% for the three-month period ended December 28, 2007, from
74.2% for the three-month  period ended December 29, 2006. The cost increase was
primarily due to significantly higher durum,  commodity and transportation costs
as compared to the first quarter of fiscal year 2007.

Gross  profit:  Gross profit was $24.3 million for the three month periods ended
December 28, 2007 and December 29, 2006,  while gross profit as a percentage  of
revenues  decreased to 21.8% for the three month period ended  December 28, 2007
from 25.8% for the three month period ended  December 29, 2006.  The decrease in
gross  profit as a percent of revenue is directly  related to an increase in raw
material  and other  production  costs that were not  entirely  offset by higher
prices.  In addition,  we  experienced  a sales mix change  resulting in greater
growth in private label and ingredient versus branded  products.  This mix shift
lowered our gross profit.

Selling and marketing  expense:  Selling and marketing  expense  increased  $1.2
million, or 25.0%, to $6.0 million for the three-month period ended December 28,
2007,  from $4.8 million for  three-month  period ended  December 29, 2006.  The
increase  was due  principally  to the timing of  consumer  spending  and higher
brokerage costs.  Consumer  spending  increased $0.3 million or 68.3% during the
three-month  period  ending  December 28, 2007 from the  comparable  three-month
period ending December 29, 2006, while the total annual anticipated expenditures
is  consistent.  Brokerage  expenses  increased  $0.4  million  or 35%  for  the
three-month  period ended December 28, 2007 from the comparable period of fiscal
2007.  This change is due to an increase in broker  commissions  resulting  from
higher selling prices.

General and administrative expense: General and administrative expense increased
$1.9  million,  or 22.9%,  to $10.2  million  for the three month  period  ended
December  28,  2007,  from $8.3  million  for the  comparable  period last year.
General and  administrative  expenses as a percentage  of revenues  increased to
9.1% for the  three-month  period ended  December  28,  2007,  from 8.8% for the
three-month  period  ended  December 29,  2006.  This  increase is due to higher
workers compensation claims of $0.4 million and higher professional fees of $1.5
million.  During the  three-month  periods ending December 28, 2007 and December
29, 2006,  the Company was continuing to undergo the  investigation  process and
restatement of its historical financial statements. As a result of this process,
the  Company  incurred  certain  professional  fees  including  legal,  forensic
accounting, independent registered public accounting firm fees, public relations
and Alvarez & Marsal fees.  During the  three-month  period  ended  December 28,
2007, $4.0 million of  professional  fees related to the restatement and pending
legal  matters  were  recorded  compared to $3.1

                                       15

million  during the  comparable  quarter of fiscal  2006.  The  remainder of the
increase  in  professional  fees  is for  general  operations  unrelated  to the
restatement and pending legal matters.

Operating profit: Operating profit for the three-month period ended December 28,
2007,  was $8.2 million,  a decrease of $3.0 million as compared to an operating
profit of $11.1  million for the  three-month  period  ended  December 29, 2006.
Operating  profit  decreased as a percentage of revenues to 7.3% for three-month
period  ended  December 28, 2007,  from 11.8% for the  three-month  period ended
December 29, 2006, as a result of the factors discussed above.

Interest  expense,  net:  Interest  expense  for the  three-month  period  ended
December 28, 2007, was $7.1 million,  decreasing  8.6% from the $7.8 million for
the three-month  period ended December 29, 2006. The decrease is attributable to
lower average  borrowings  outstanding  and lower  interest  rates.  The average
interest rate in effect during the  three-month  period ended  December 28, 2007
and the  three-month  period  ended  December  29,  2006 was  11.2%  and  11.4%,
respectively.

Income tax benefit: Income tax benefit for the three-month period ended December
28, 2007 and December 29, 2006 was $0.3 million and $0.1 million,  respectively,
and reflects effective income tax rates of (28.6%) and (3.9%), respectively. The
effective  rate  is  substantially  below  statutory  rates  primarily  due to a
reduction in  valuation  allowance  during the current  year against  deductible
temporary differences related to a tax benefit from foreign operations.

Net income:  Net income for the three-month  period ended December 28, 2007, was
$1.4 million,  a decrease of $2.2 million from $3.6 million for the  three-month
period ended December 29, 2006, as a result of the factors  discussed above. Net
income as a percentage  of net  revenues was 1.2% versus 3.8% in the  comparable
three-month prior.

Diluted  income  per common  share was $0.07 for the  three-month  period  ended
December 28, 2007,  compared to $0.19 for the three-month  period ended December
29, 2006.

Liquidity and Capital Resources

Our primary  sources of liquidity are cash provided by operations and borrowings
under our credit facility.  Cash and cash  equivalents  totaled $8.5 million and
net working capital totaled $61.6 million at December 28, 2007.

As of September 28, 2007, we had $9.2 million invested in the Columbia Strategic
Cash  Portfolio Fund (Columbia  Fund),  administered  by a subsidiary of Bank of
America,  which is an enhanced money fund that allowed  immediate  withdrawal of
funds.  On December  10, 2007,  when the  investment  balance was $7.4  million,
Columbia  determined  that the underlying  securities  had liquidity  issues and
notified us that the fund would begin an orderly  liquidation and dissolution of
assets to its  investors.  The balance in the Columbia Fund at December 28, 2007
was $6.6  million.  The  underlying  assets  are  valued at fair value and as of
December  28,  2007 we  recorded  valuation  losses on this  investment  of $0.1
million.  During the first quarter of 2008, we received $0.2 million of interest
from the Columbia Fund.  Through June 27, 2008, we have recovered  approximately
$3.8 million of the pre-liquidation investment balance. The remaining investment
of $3.4  million is to be recovered as the  liquidation  progresses.  We believe
that the entire balance will be recovered.  During the  nine-month  period ended
June 27,  2008,  we have  received  $0.3  million of  interest  income  from the
Columbia Fund. The underlying assets are valued at fair value and as of June 27,
2008 we have recorded valuation losses on this investment of $0.2 million.

As of December 28, 2007, we had a $239.9 million term loan facility that matures
in March 2011.  In addition,  we had a $30 million  revolving  credit  facility.
There was no  principal  balance  outstanding  on the  revolving  facility as of
December  28,  2007.  However,  we had  outstanding  letters of credit  totaling
approximately   $4.8  million.   Both  of  these   facilities   are  secured  by
substantially all of our assets.

Our credit facility contains  restrictive  covenants which include,  among other
things, financial covenants requiring minimum and cumulative earnings levels and
limitations  on the payment of  dividends,  stock  purchases  and our ability to
enter into certain  contractual  arrangements.  We do not currently expect these
limitations to have a material  effect on business or results of operations.  We
were in compliance with the restrictive covenants at December 28, 2007.

                                       16

At this time, the current and projected  borrowings under our credit facility do
not exceed the facility's available commitment. Absent any significant increases
in our historical  levels of professional fees and  indemnification  obligations
expenditures,  we believe  that net cash  expected to be  provided by  operating
activities and the cash available  through our existing  credit facility will be
sufficient to meet our expected  capital and liquidity needs for the foreseeable
future.

Our net cash provided by operating activities totaled $1.1 million for the three
months  ended  December  28, 2007  compared to $9.4 million for the three months
ended  December  29,  2006,  a decrease of $8.3  million.  This  decrease is due
principally  to an increase in our  investment in inventory of $12.1 million due
to increased  production  and higher raw  material  costs.  In addition,  we had
increased advance payments on durum shipments of $2.7 million as of December 28,
2007 as compared to the comparable period in the prior fiscal year. The increase
in these  inventories is offset by higher accounts  payable and accrued expenses
of $6.8 million.

Cash  used  in  investing  activities  principally  relates  to  investments  in
production,  distribution,  milling and  management  information  system assets.
Capital  expenditures  were $2.4  million and $1.5  million for the three months
ended  December 28, 2007 and December 29, 2006,  respectively.  In addition,  we
received $0.7 million from the redemptions of short term investments  during the
three-month period ended December 28, 2007.

Net cash used in financing  activities  was $0.1 million during the three months
ended  December 28, 2007 and $8.1 million during the three months ended December
29, 2006.  The $0.1 million of cash used during the three months ended  December
28, 2007  represents a mandatory  principal  payment under the provisions of our
credit  facility.  The $8.1  million of cash used during the three  months ended
December 29, 2006 is primarily a result of an $8.0 million  voluntary  principal
payment on our long-term debt from excess cash reserves.

We currently use cash  generated from  operations to fund capital  expenditures,
repayment of debt and working capital requirements.

Impact of Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." SFAS
No. 157 defines fair value,  establishes a framework for measuring fair value in
generally accepted accounting principles ("GAAP"), and expands disclosures about
fair  value  measurements.  SFAS No.  157 does not  require  any new fair  value
measurements  in financial  statements,  but  standardizes  its  definitions and
guidance in GAAP. Thus, for some entities, the application of this statement may
change current  practice.  SFAS No. 157 will be effective  beginning  January 1,
2008.  Management  believes the adoption of this  pronouncement  will not have a
material impact on its consolidated financial statements.

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial  Assets and Financial  Liabilities".  SFAS No. 159 permits entities to
choose to measure many financial  instruments,  and certain other items, at fair
value.  SFAS No. 159 applies to reporting  periods  beginning after November 15,
2007.  Management  believes the adoption of this  pronouncement  will not have a
material impact on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141R, "Business  Combinations".  This
statement   establishes  a  framework  to  disclose  and  account  for  business
combinations.  The  adoption  of the  requirements  of  SFAS  No.  141R  applies
prospectively  to business  combinations for which the acquisition date is on or
after  fiscal  years  beginning  after  December  15,  2008 and may not be early
adopted.  Management believes the adoption of this pronouncement will not have a
material impact on its consolidated financial statements.

In March  2008,  the FASB issued SFAS No.  161,  "Disclosures  about  Derivative
Instruments and Hedging Activities - An Amendment of SFAS No. 133". SFAS No. 161
requires  enhanced   disclosures  about  an  entity's   derivative  and  hedging
activities,  including how an entity uses derivative instruments, how derivative
instruments  and  related  hedged  items are  accounted  for under SFAS No. 133,
"Accounting  for  Derivative  Instruments  and  Hedging  Activities",   and  how
derivative  instruments  and related  hedged items affect an entity's  financial
position,  financial performance, and cash flows. The provisions of SFAS No. 161
are effective for financial  statements  issued for fiscal years beginning after
November 15, 2008,  and interim  periods  within those fiscal  years.  We do not
expect  the  adoption  of  SFAS  No.  161  to  have  a  material  impact  on its
consolidated financial statements.

                                       17

In December 2007, the SEC issued the Staff Accounting  Bulletin ("SAB") No. 110,
which amends SAB No. 107 by extending  the usage of a  "simplified"  method,  as
discussed in SAB No. 107, in  developing  an estimate of expected term of "plain
vanilla"  share  options  in  accordance  with  SFAS  No.  123  (revised  2004),
Share-Based  Payment.  This simplified  method continues to be permitted,  under
certain  circumstances,  for  companies  that do not  have  access  to  adequate
historical data about employee  exercise  behavior to estimate  expense on stock
options. Management believes that it has sufficient historical exercise data and
has  historically  recorded  expenses based on expectations of future  behavior.
Accordingly,  Management  does not  believe  SAB 110 will  have an impact on its
financial statements.

In May 2008,  the Financial  Accounting  Standards  Board  ("FASB")  issued FASB
Statement No. 162, "The Hierarchy of Generally Accepted Accounting  Principles."
This statement identifies the sources of accounting principles and the framework
for selecting the principles used in the preparation of financial  statements of
nongovernmental  entities  that  are  presented  in  conformity  with  generally
accepted  accounting  principles  ("GAAP") in the United States.  This statement
will be effective 60 days  following  the SEC's  approval of the Public  Company
Accounting  Oversight Board ("PCAOB") amendments to AU Section 411, "The Meaning
of Present Fairly in Conformity with Generally Accepted Accounting  Principles."
We do not expect the adoption of this statement to have a material impact on its
financial statements.

In  April  2008,  the  FASB  issued  FASB  Staff  Position  ("FSP")  FAS  142-3,
"Determination  of the Useful Life of  Intangible  Assets."  This FSP amends the
factors that should be considered in developing renewal or extension assumptions
used to determine  the useful life of a recognized  intangible  asset under FASB
Statement No. 142,  "Goodwill and Other  Intangible  Assets." The intent of this
FSP is to  improve  the  consistency  between  the useful  life of a  recognized
intangible  asset under Statement 142 and the period of expected cash flows used
to measure the fair value of the asset under FASB  Statement No. 141R, and other
U.S. generally  accepted  accounting  principles.  This FSP is effective for our
interim and annual financial statements beginning in fiscal 2010. The Company is
in the process of  evaluating  the impact,  if any, that the adoption of FSP No.
FAS 142-3 will have on its financial statements

Effect of Inflation

We continued to  experience  inflationary  cost  increases in certain  operating
costs, including raw materials,  utilities, freight, insurance and benefit costs
during the three month period ended December 28, 2007.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For  quantitative  and qualitative  disclosures  about market risk, see Item 7A,
"Quantitative  and  Qualitative  Disclosures  About Market  Risk," of our Annual
Report on Form 10-K for the year ended  September  28,  2007.  Our  exposures to
market risk have not changed materially since September 28, 2007.

ITEM 4. CONTROLS AND PROCEDURES

    (a)  Disclosure Controls and Procedures

         We maintain disclosure controls and procedures (as such term is defined
         in Rules  13a-15(e)  and  15d-15(e)  under the  Exchange  Act) that are
         designed to provide reasonable  assurance that information  required to
         be disclosed in the reports we file or submit under the Exchange Act is
         recorded,  processed,  summarized and reported  within the time periods
         specified in the SEC's rules and forms,  and that such  information  is
         accumulated and  communicated  to our  management,  including our Chief
         Executive Officer and our Chief Financial Officer,  as appropriate,  to
         allow timely decisions regarding required disclosure.  In designing and
         evaluating  the   disclosure   controls  and   procedures,   management
         recognized  that  any  controls  and  procedures,  no  matter  how well
         designed  and  operated,  can  provide  only  reasonable  assurance  of
         achieving the desired control  objectives,  and management  necessarily
         was  required to apply its  judgment  in  evaluating  the  cost-benefit
         relationship of possible controls and procedures.

         Our management,  with the  participation of our Chief Executive Officer
         and Chief Financial  Officer,  has evaluated the  effectiveness  of our
         disclosure  controls and  procedures as of December 28, 2007.  Based on

                                       18

         that evaluation and due to the existence of material  weaknesses in our
         internal control over financial reporting,  our Chief Executive Officer
         and Chief Financial Officer have concluded that our disclosure controls
         and procedures were not effective as of December 28, 2007.

         Management  believes all of the material  weaknesses,  except  internal
         audit, described under the caption "Item 9A -- Controls and Procedures"
         in the  Company's  Annual Report on Form 10-K for the fiscal year ended
         September  28,  2007  existed  as of  December  28,  2007,  and  we are
         continuing to address  deficiencies in the Company's internal controls.
         Certain of these  remediation  actions are described  under the caption
         "Item 9A -- Controls and Procedures" in the Company's  Annual Report on
         Form 10-K for the fiscal  year ended  September  28,  2007.  Efforts to
         remediate and test our internal  control over  financial  reporting are
         continuing  and are  expected  to continue  throughout  fiscal 2008 and
         beyond.

    (b)  Changes in Internal Control Over Financial Reporting

         There were no changes in our internal control over financial  reporting
         during the quarterly  period ended December 28, 2007,  that  materially
         affected,  or is reasonably expected to materially affect, our internal
         control over financial reporting, except as described below:

         During the first  quarter of fiscal 2008,  the Company hired a Director
         of Internal  Audit who reports  directly  to the Audit  Committee.  The
         Director  attends the Audit  Committee  meetings and is a member of the
         corporate hotline monitoring oversight.

         We have  engaged  in,  and are  continuing  to engage  in,  substantial
         efforts to improve our internal  control over  financial  reporting and
         disclosure  controls  and  procedures  related  to  many  areas  of our
         financial  statements and disclosures.  We continue to establish policy
         statements and process overviews in appropriate areas of accounting and
         financial  reporting  controls,   as  well  as  continuing  to  develop
         implementation procedures under each policy statement.


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Pending Litigation; Indemnification Obligations

Since August, 2005, a number of substantially similar class action lawsuits have
been filed and  consolidated  into a single action in the United States District
Court for the Western  District of Missouri styled In re American  Italian Pasta
Company  Securities  Litigation  (Case No.  05-CV-0725-W-ODS).  The consolidated
amended  complaint names us as a defendant and certain of our former and current
officers and directors,  and our former independent registered public accounting
firm,  Ernst & Young LLP. It generally  alleges that the defendants  made public
statements concerning our financial results that were false and misleading.  The
plaintiffs seek unspecified  monetary damages for alleged  violations of Section
10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder,
and alleged violations of Section 20(a) of the Securities  Exchange Act of 1934.
The  consolidated   amended  complaint  also  asserted   purported   shareholder
derivative  claims  against  various  of our  current  and former  officers  and
directors for breaches of their fiduciary duties and unjust enrichment,  against
certain of our former  officers  for  violation of the  Sarbanes-Oxley  Act, and
against Ernst & Young LLP for professional  negligence,  accounting malpractice,
and aiding and abetting breaches of fiduciary duty. These allegations  generally
related to our accounting practices and financial reporting,  as well as claimed
improper insider trading and the claimed improper award of bonuses to certain of
our officers and  directors.  The court  subsequently  dismissed the  derivative
claims.  The  case  has  been  certified  as a class  action  on  behalf  of all
purchasers of our common stock on or after January 23, 2002, and who held shares
on August 9, 2005.

By a stipulation of settlement with us and our named former and current officers
and directors  ("settling  defendants"),  executed on October 26, 2007 and filed
with the Court on October 29,  2007,  lead counsel for  plaintiffs  and settling
defendants  agreed to settle the consolidated  action. On February 12, 2008, the
Court gave final  approval

                                       19

to the settlement. The settlement of the federal securities class action lawsuit
was for $25  million,  comprised  of $11 million in cash,  to be provided by our
insurers,  and  $14  million  in our  common  shares.  Under  the  terms  of the
settlement,  on March 27, 2008,  class counsel received 527,903 common shares in
satisfaction   of  the  Court  approved  fee  award.   The  class  will  receive
approximately  930,000 common shares,  subject to adjustment upward or downward,
based  upon  the  Company's  stock  price  as  provided  in the  stipulation  of
settlement.  The  settlement  was recorded in the fourth  quarter of fiscal year
2005.

In November 2005, a shareholder derivative action styled Haag v. Webster, et al.
(Case  No.  05-CV-33137)  was  filed in the  Circuit  Court of  Jackson  County,
Missouri.  The petition names as defendants  certain of our former  officers and
directors and our former independent  registered public accounting firm, Ernst &
Young LLP. We are named as a nominal  defendant.  The petition  alleges that the
defendants  are liable to us for  breaches  of  fiduciary  duties and aiding and
abetting such breaches, corporate waste, gross mismanagement, unjust enrichment,
and  abuse  of  control  based  upon  our  accounting  practices  and  financial
reporting; that certain former and current officers and directors are liable for
breaches  of  fiduciary  duties for  insider  selling  and  misappropriation  of
information;  and that Ernst & Young is liable for  professional  negligence and
accounting  malpractice,  aiding and abetting  breaches of fiduciary  duty,  and
breach  of  contract.  The  petition  seeks  equitable  relief  and  unspecified
compensatory and punitive damages. The proposed settlement requires the adoption
of certain  governance  reforms by the Company  and  payment of $1.5  million in
attorney's  fees and costs to counsel for the  plaintiff,  which payment will be
made under our  insurance  policies.  The  settlement  was recorded in the first
quarter of fiscal year 2006.

On  September  6, 2006,  an action  styled  Chaiet v.  Allen,  et al.  (Case No.
06-744-CV-W-DW)  was filed in the United States  District  Court for the Western
District of Missouri. The complaint asserts claims against certain of our former
and current  officers  and  directors  for  breaches of their  fiduciary  duties
relating to our  accounting  practices and financial  reporting.  Plaintiff also
asserts claims on behalf of a putative  class against our current  directors for
failing  to  schedule  or hold an annual  meeting  for  2006.  We are named as a
nominal  defendant.  The complaint  seeks  unspecified  monetary  damages on our
behalf and an order  requiring that an annual meeting be scheduled and held. The
defendants have moved to dismiss this lawsuit as well. On February 12, 2007, the
court stayed all future proceedings in the matter until forty-five days after we
issue restated  financial  results,  and required us to provide  monthly reports
regarding the status of its restatement  process.  On March 13, 2008, we reached
an agreement, in principle,  subject to court approval, to settle this action on
a consolidated basis with the Haag action.

On March 7, 2007, a suit styled Zaleon v.  American  Italian Pasta Company (C.A.
No. 2775-N) was filed in the Delaware Chancery Court against us alleging that no
annual  meeting of  shareholders  had been held  since  February  7,  2005,  and
requesting  that we be compelled to convene an annual  meeting.  Proceedings  in
that matter are currently stayed by agreement of the parties. The agreement,  in
principle, to settle the other two derivative actions will resolve this action.

SEC and DOJ Investigations

Since July 2005, we have been in communication with the staff of the Enforcement
Division  of the  SEC  about  the  matters  under  investigation  by  our  Audit
Committee. In late July 2005, the SEC staff issued a voluntary request to us for
a wide range of  documents  relating  to,  among other  things,  our  accounting
practices,  financial reporting and other public disclosures, 2004 restructuring
program,  internal control weaknesses  identified in our prior SEC filings,  and
compensation  and  benefits  information  for  certain  persons  employed  by or
associated  with us during  the time  period  under  investigation  by the Audit
Committee.

On January 31,  2006,  as part of a formal,  non-public  investigation,  the SEC
staff  issued a subpoena to us,  expressly  incorporating  its earlier  document
requests and requesting additional documents and information  concerning,  among
other things, actual or potential errors in our financial statements,  budgeting
process,  communications  with investors,  and  compensation  for and securities
transactions  by certain  persons  employed by or associated  with us during the
time period under investigation by the Audit Committee. Since that time, the SEC
staff has issued  additional  subpoenas  to us,  seeking  additional  documents,
testimony,  and  information  relating to the same or similar  subject  matters.
Representatives  of the DOJ have  been  coordinating  with the SEC staff in this
investigation.

We are cooperating with these  investigations  and have provided  information to
the SEC staff and the DOJ in response to the  subpoenas  and  requests.  We have
had, and are continuing to have,  discussions with the SEC staff,

                                       20

and separately  with the DOJ,  regarding the  conclusion of their  investigation
activities and of their respective views of appropriate  bases on which to reach
mutually  acceptable  settlements.  Such settlements  could result in a Deferred
Prosecution  Agreement,  which  could  include  the  assignment  of a  corporate
monitor, continued cooperation with any ongoing investigations and/or a monetary
fine. Due to the status of ongoing  discussions  with the DOJ and SEC staff, the
Company  cannot  estimate  a range of  possible  loss that could  result  from a
monetary fine, if any.  There can be no assurance that any settlement  would not
have a material adverse effect on our business,  financial condition, results of
operations or cash flows. We have been cooperating with these investigations.

Department of Commerce Matter

In 1996, an investigation by the International  Trade  Administration of the DOC
revealed  that  Italian  and Turkish  producers  were  engaging in unfair  trade
practices  by  selling  pasta at less than fair  value in the U.S.  markets  and
benefiting from subsidies from their respective  governments.  The International
Trade Commission ("ITC") subsequently determined that the unfair trade practices
caused or would cause material injury to U.S.  manufacturers.  As a result,  the
ITC imposed anti-dumping duties (the "AD Order") and countervailing  duties (the
"CV Order") on certain imported pasta from Italy and Turkey  (collectively,  the
"AD/CV  Orders").  In 2001,  the AD/CV Orders were  extended  five years through
2006.  In  September  2007,  the ITC  extended the AD/CV Orders for another five
years through 2011. Under the AD/CV Orders, U.S. importers of certain pasta from
Italian and Turkish  producers  are  assessed  anti-dumping  and  countervailing
duties at rates  determined by the DOC for the relevant foreign  producer.  Each
foreign producer may undergo an annual administrative review which may result in
an increase or decrease of the producer's rate.

During its  ongoing  analysis of  financial  matters,  we reviewed  transactions
reported  to the DOC for the period  July 1, 2002  through  June 30, 2003 in the
antidumping  proceeding on pasta imported from Italy. Based on the data reported
by us and our Italian  subsidiary,  Pasta Lensi,  S.r.l., the DOC revoked the AD
Order with respect to Pasta Lensi. During our investigation, information came to
our  attention  that certain  data  reported to the DOC was  incorrect  and as a
result,  Pasta Lensi may not have been eligible for  revocation of the AD Order.
We  disclosed  the  issue  to the  DOC  and  simultaneously,  we  provided  this
information to the DOJ, which requested further information on this matter. As a
result of our disclosure to the DOC, it published notice on February 22, 2008 in
the Federal  Register of its preliminary  determination to reinstate Pasta Lensi
in the existing  antidumping  duty order at a cash  deposit  rate of 45.6%.  The
preliminary  determination  applies,  on a prospective  basis, to all imports of
subject  products from and after February 22, 2008. A cash deposit rate of 45.6%
would have a significant adverse impact to our working capital position. We have
appealed this determination.  We have substantially mitigated the impact of this
order by changing  our  ingredient  to organic  semolina in March 2008,  thereby
manufacturing  products  for  import  into the U.S.  that  are  exempt  from the
antidumping duty order.  Based on our review,  we do not believe this order will
have a material adverse effect on our financial condition.

ITEM 1A. RISK FACTORS

There have been no material  changes from the risk factors  disclosed in Part I,
Item 1A, of the  company's  Annual Report on Form 10-K for the fiscal year ended
September 28, 2007.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides the  information  with respect to purchases made by
the Company of shares of its common  stock  during the first  fiscal  quarter of
2008:

                                                                                Total Number of
                                          Total Number of                      Shares Purchased
                                              Shares         Average Price    as Part of Publicly
Period                                     Purchased(1)      Paid per Share     Announced Plan

September 29 - October 26                            97            $ 9.00                   -
October 27 - November 23                              -                 -                   -
November 24 - December 28                             -                 -                   -
                                            -----------      ------------        ------------
Total                                                97            $ 9.00                   -
                                            ===========      ============        ============

                                       21

(1)  Shares  received  as payment  for taxes  related  to vesting of  restricted
     stock.

On October 4, 2002 the Company's Board of Directors authorized up to $20 million
to implement a common stock  repurchase  plan. There were no purchases under the
plan during the first  fiscal  quarter of 2008.  There is  $7,881,000  available
under the Common Stock repurchase plan.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        Not applicable.

ITEM 5. OTHER INFORMATION

        Not applicable.

ITEM 6.                            EXHIBITS
- -------  -----------------------------------------------------------------------

3.1      Amended and Restated Bylaws dated October 7, 2007, as amended.

4.8.3    Second  Amendment to Amended and Restated Credit Agreement, dated as of
         December  27,  2007 (incorporated  by reference to  Exhibit  4.1 to the
         Company's 8-K filed December 31, 2007).

10.5.11  Employment  agreement  dated  November 6, 2007 between  the Company and
         John P.  Kelly   (incorporated  by  reference  to  Exhibit  10/1 to the
         Company's Form 8-K filed November 8, 2007).

31.1     Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley  Act
         of 2002.

31.2     Certification  of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act
         of 2002.

32.      Certification  of the CEO  and  CFO  Pursuant  to  Section  906 of  the
         Sarbanes-Oxley Act of 2002.

                                       22

                                   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 thereunto duly authorized.

                                       American Italian Pasta Company



Date:  August 6, 2008                  /s/ John P. Kelly
                                       -----------------------------------------
                                       John P. Kelly
                                       President and Chief Executive Officer





Date:  August 6, 2008                  /s/ Paul R. Geist
                                       -----------------------------------------
                                       Paul R. Geist
                                       Executive Vice President and Chief
                                       Financial Officer

                         AMERICAN ITALIAN PASTA COMPANY
                                  EXHIBIT INDEX



Exhibit
Number                       Description of Exhibit
- -------  -----------------------------------------------------------------------

3.1      Amended and Restated Bylaws dated October 7, 2007, as amended.

4.8.3    Second  Amendment to Amended and Restated Credit Agreement, dated as of
         December  27,  2007 (incorporated  by reference to  Exhibit  4.1 to the
         Company's 8-K filed December 31, 2007).

10.5.11  Employment  agreement  dated  November 6, 2007 between  the Company and
         John P.  Kelly   (incorporated  by  reference  to  Exhibit  10/1 to the
         Company's Form 8-K filed November 8, 2007).

31.1     Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley  Act
         of 2002.

31.2     Certification  of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act
         of 2002.

32.      Certification  of the CEO  and  CFO  Pursuant  to  Section  906 of  the
         Sarbanes-Oxley Act of 2002.

EX-3.1

                                                                     Exhibit 3.1


                         AMERICAN ITALIAN PASTA COMPANY
                          AMENDED AND RESTATED BY-LAWS

                                    ARTICLE I
                                     OFFICES

SECTION 1.  REGISTERED OFFICE IN DELAWARE.

     The registered office of American Italian Pasta Company (the "Corporation")
in the State of  Delaware  is  located  at 1209  Orange  Street,  in the City of
Wilmington,  in the County of New Castle.  The name of its  registered  agent at
that address is The Corporation Trust Company.

SECTION 2.  OTHER OFFICES.

     The Corporation  may, in addition to its registered  office,  establish and
maintain  such an office or offices,  at such place or places  within or without
the State of Delaware,  as the Board of Directors may deem necessary,  desirable
or expedient from time to time.

                                   ARTICLE II
                                  STOCKHOLDERS

SECTION 1.  PLACE OF MEETINGS.

     Each meeting of the  stockholders  shall be held at the principal office of
the Corporation or at such other place, within or without the State of Delaware,
as shall be designated by the Board of Directors in the notice of meeting.

SECTION 2.  ANNUAL MEETING.

     The annual meeting of the stockholders shall be held pursuant to notice and
at such date and time as shall be  designated  by the Board of  Directors in the
notice of meeting for the purpose of electing  directors and for the transaction
of such other business as may come before the meeting.

SECTION 3.  SPECIAL MEETINGS.

     Special meetings of the stockholders of the Corporation may be called,  for
any purpose or  purposes,  only by (i) the  Chairman of the Board of  Directors,
(ii) the Chief Executive  Officer or (iii) the Board of Directors  pursuant to a
resolution  adopted by a majority of the members of the Board of Directors  then
in office.  Special  meetings of the  stockholders of the Corporation may not be
called  by any other  person or  persons.  Special  meetings  may be held at any
place,  within or without the State of Delaware,  as determined by the person or
persons calling such meeting.  The only business that may be conducted at such a
meeting,  other than procedural  matters and matters  relating to the conduct of
the meeting,  shall be matters relating to the purpose or purposes stated in the
notice of meeting.

SECTION 4.  NOTICE OF MEETINGS.

     The  Secretary or an  Assistant  Secretary  of the  Corporation  shall give
written  notice of every  meeting of the  stockholders  to each  stockholder  of
record entitled to vote at the meeting. Such notice shall be given not less than
10 days, nor more than 60 days, prior to the day named for the meeting, unless a
different period of notice is required by law. Such notice shall be given either
by regular mail, overnight courier,  telegram or facsimile  transmission,  or by
any other means  comparable to any of the foregoing,  to each stockholder at his
address  appearing  on the books of the  Corporation  or  supplied by him to the
Corporation for the purpose of notice.  Such notice shall specify the place, day
and hour of the meeting  and, in the case of a special  meeting,  the purpose or
purposes  for which the meeting is held.  When a meeting is adjourned to another
date, hour or place in accordance with the Delaware General  Corporation Law, as
amended (the "DGCL"),  notice need not be given of the adjourned  meeting if the
date,  hour and  place  thereof  are  announced  at the  meeting  at  which  the
adjournment is taken unless otherwise required by the DGCL.

SECTION 5.  WAIVER OF NOTICE.

     A waiver of notice in writing  signed by the person or persons  entitled to
such notice,  whether before or after the time stated  therein,  shall be deemed
equivalent  to the giving of such notice.  Neither the business to be transacted
nor the purpose of the meeting need be specified in the waiver of notice of such
meeting.  Attendance  of the person  either in person or by proxy at any meeting
shall  constitute a waiver of notice of such  meeting,  except where such person
attends a meeting for the express purpose of objecting to the transaction of any
business because the meeting was not lawfully called or convened.

SECTION 6.  RECORD DATE.

     In order that the Corporation may determine the  stockholders  entitled (i)
to notice  of or to vote at any  meeting  of  stockholders  or any  adjournments
thereof,  (ii) to receive  payment of any  dividend  or other  distribution,  or
allotment  of any  rights,  or (iii) to  exercise  any  rights in respect of any
change,  conversion or exchange of stock, or for the purpose of any other lawful
action,  the Board of Directors,  in advance,  may fix a date as the record date
for any such  determination,  which  record date shall not precede the date upon
which  the  resolution  fixing  the  record  date is  adopted  by the  Board  of
Directors, and which record date shall not be more than 60 days nor less than 10
days before the date of such meeting, nor more than 60 days prior to the date of
any other action.  A  determination  of the  stockholders  of record entitled to
notice  of or to  vote at a  meeting  of the  stockholders  shall  apply  to any
adjournment  of the  meeting  taken  pursuant  to Article  I,  Section 8 hereof;
provided, however, that the Board of Directors, in its discretion, may fix a new
record  date for an  adjourned  meeting  in  accordance  with the DGCL and these
By-laws.  If the Board of directors  fixes a record date in accordance  with the
DGCL and these  By-laws,  only  stockholders  determined to be  stockholders  of
record on the record  date so fixed  shall be  entitled to notice of, or to vote
at, such  meeting and any  adjournment  thereof,  or to receive  payment of such
dividend or other  distribution,  or  allotment of rights,  or to exercise  such
rights in  respect  of such  change,  conversion  or  exchange  of stock,  or to
participate in any such other


                                       2

lawful action, as the case may be,  notwithstanding any transfer of any stock on
the books of the Corporation after any such record date fixed as aforesaid.

SECTION 7.  LIST OF STOCKHOLDERS.

     At least 10 days before any  meetings of the  stockholders,  the officer or
transfer agent in charge of the stock transfer  books of the  Corporation  shall
prepare and make a complete  alphabetical  list of the stockholders  entitled to
vote at such meeting,  which list shall show the address of each stockholder and
the number of shares  registered  in the name of each  stockholder.  The list so
prepared  shall be maintained at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or, if not
so  specified,  at the place where the meeting is to be held,  and shall be open
for  inspection  by any  stockholder,  for any purpose  germane to the  meeting,
during ordinary business hours during a period of not less than 10 days prior to
the  meeting.  The list  shall  also be  produced  and kept open at the  meeting
(during the entire duration  thereof) and, except as otherwise  provided by law,
may be inspected by any  stockholder or proxy of a stockholder who is present at
such meeting.

SECTION 8.  QUORUM.

     The  presence  in person or by proxy of the  holders of a  majority  of the
votes  represented  by  issued  and  outstanding  shares  entitled  to vote at a
stockholders'  meeting  shall  constitute a quorum,  except that the presence in
person or by proxy of the  holders of a majority  of the issued and  outstanding
shares of each class or series of stock  which is entitled to vote as a class or
series at a  stockholders'  meeting  shall  constitute  a quorum for any vote in
which a vote of such class or series is required.

     When any  meeting is convened  the  presiding  officer,  if directed by the
Board,  may adjourn the meeting if (a) no quorum is present for the  transaction
of  business,  or (b) the Board  determines  that  adjournment  is  necessary or
appropriate to enable the stockholders (i) to consider fully  information  which
the Board  determines  has not been made  sufficiently  or timely  available  to
stockholders or (ii) otherwise to exercise  effectively  their voting rights. At
any such  adjourned  meeting at which  there is a quorum,  any  business  may be
transacted that might have been transacted at the meeting originally called.

SECTION 9.  STOCKHOLDER PROPOSALS.

     Proposals for a stockholder vote for consideration at any annual meeting or
any  special  meeting  of  stockholders  of the  Corporation  may be made by any
stockholder of the Corporation (x) who is a stockholder of record on the date of
the giving of the notice  provided for in this Article II,  Section 9 and on the
record  date for the  determination  of  stockholders  entitled  to vote at such
meeting and (y) who complies with the procedures and  requirements  set forth in
subparagraphs (a) and (b) of this Article II, Section 9.

     (a) Condition of Submission to Stockholders.  No proposal for a stockholder
vote shall be submitted  by a  stockholder  (a  "Stockholder  Proposal")  to the
Corporation's  stockholders unless the stockholder submitting such proposal (the
"Proponent")  is a stockholder of record on


                                       3

the date of the giving of the notice  provided for in this Article II, Section 9
and on the record date for the determination of stockholders entitled to vote at
such meeting and has filed a written notice (a "Proposal  Notice") setting forth
with particularity (i) the names and business addresses of the Proponent and all
persons or entities  (collectively,  the "Persons" and  singularly,  a "Person")
acting in concert with the Proponent; (ii) the name and address of the Proponent
and the Persons  identified  in clause (i), as they appear on the  Corporation's
books  (if they so  appear);  (iii)  the  class  and  number  of  shares  of the
Corporation  beneficially  owned by the Proponent and the Persons  identified in
clause (i);  (iv) a  description  of the  Stockholder  Proposal  containing  all
material  information  relating  thereto;  and (v) such other information as the
Board of Directors  reasonably  determines is necessary or appropriate to enable
the Board of  Directors  and  stockholders  of the  Corporation  to consider the
Stockholder Proposal.

     (b) Stockholder  Proposal  Notice.  To be timely,  Proposal Notices must be
delivered to the Secretary and received at the  principal  executive  offices of
the Corporation (1) in the case of an annual meeting,  not less than 60 days nor
more than 90 days prior to the  anniversary  date of the  immediately  preceding
annual meeting of stockholders;  provided,  however,  that in the event that the
annual  meeting is called for a date that is not within 30 days  before or after
such  anniversary  date, the Proposal  Notice by the  stockholder in order to be
timely must be so received not later than the close of business on the tenth day
following  the day on which  such  notice of the date of the  annual  meeting is
mailed or such  public  disclosure  of the date of the  annual  meeting is made,
whichever first occurs,  or (2) in the case of a special meeting of stockholders
called  for the  purpose  of  electing  directors,  not later  than the close of
business on the 10th day  following  the day on which  notice of the date of the
special  meeting  is  mailed  or public  disclosure  of the date of the  special
meeting is made, whichever first occurs.

     (c) Effect of  Noncompliance.  The presiding  officer at any  stockholders'
meeting may determine that any  Stockholder  Proposal was not made in accordance
with the procedures  prescribed in these By-laws (the "By-laws") or is otherwise
not in accordance  with law, and if it is so  determined,  such officer shall so
declare at the meeting and the Stockholder Proposal shall be disregarded.

SECTION 10.  VOTING POWER.

     Unless otherwise provided in a resolution or resolutions  providing for any
class or series of  Preferred  Stock  pursuant  to Article IV of the Amended and
Restated Certificate of Incorporation (the "Certificate of Incorporation") or by
the DGCL, every stockholder of record of the Corporation  (other than holders of
Class B Convertible  Non-Voting Common Stock, par value $.001 per share,  except
as set forth in the  Certificate of  Incorporation  or as otherwise  required by
law)  shall be  entitled  to vote,  in person or by proxy,  the shares of voting
stock of every share of each class or series held of record by such stockholder.
All  questions  shall  be  decided  by the  vote of the  majority  of the  votes
represented by issued and outstanding  shares of capital stock present in person
or represented by proxy and entitled to vote at any meeting, or if the voting is
by class or series,  a majority  of the votes of each class or series of capital
stock  present in person or  represented  by proxy and  entitled  to vote at any
meeting,  unless  otherwise  specially  provided by law or by the Certificate of
Incorporation or these By-laws.  Abstentions shall not be considered to be votes
cast.


                                       4

SECTION 11.  PROXIES.

     Every stockholder may vote either in person or by proxy.  Every proxy shall
be  executed  in  writing  by  the   stockholder  or  by  his  duly   authorized
attorney-in-fact  and filed  with the  Secretary  of the  Corporation.  A proxy,
unless coupled with an interest, shall be revocable at will, notwithstanding any
other  agreement  or  any  provision  in the  proxy  to the  contrary,  but  the
revocation of a proxy shall not be effective until notice thereof has been given
to the Secretary of the Corporation. No proxy shall be valid after eleven months
from  the date of its  execution  unless a  longer  time is  expressly  provided
therein,  but in no event shall a proxy,  unless  coupled with an  interest,  be
voted on after three years from the date of its execution.  A proxy shall not be
revoked  by the death or  incapacity  of the  maker  unless  before  the vote is
counted  or the  authority  is  exercised,  written  notice  of  such  death  or
incapacity is given to the Secretary of the Corporation.

SECTION 12.  INSPECTORS.

     Elections for directors need not be by ballot, except upon demand made by a
stockholder  at the  election  and before the voting  begins.  In advance of any
meeting of stockholders,  the Board of Directors shall appoint  inspectors,  who
need not be  stockholders,  to act at such  meeting  and make a  written  report
thereof.  Such  inspectors may include  individuals who serve the Corporation in
other capacities,  including, without limitation, as officers, employees, agents
or representatives of the Corporation.  The number of inspectors shall be one or
three.  One or more  persons  may be  designated  by the Board of  Directors  as
alternate  inspectors  to replace  any  inspector  who fails to act. In case any
person  appointed as  inspector  fails to appear or fails or refuses to act, the
vacancy may be filled by  appointment  made by the Board of Directors in advance
of the  convening  of the  meeting,  or at the  meeting by the person or officer
acting as chairman. Each inspector,  before discharging his or her duties, shall
take and sign an oath  faithfully to execute the duties of inspector with strict
impartiality  and  according to the best of his or her ability.  The  inspectors
shall have the duties prescribed by the DGCL.

SECTION 13.  PRESIDING OFFICERS AND ORDER OF BUSINESS.

     All meetings of stockholders  shall be called to order and presided over by
the Chairman of the Board, or in his absence,  by the Chief  Executive  Officer,
President or highest ranking Vice  President,  or in the absence of all of them,
by the Chief  Financial  Officer,  or if none of these be  present by a chairman
designated by the Board of Directors. The Secretary of the Corporation shall act
as secretary,  but in the absence of the  Secretary,  the presiding  officer may
appoint a secretary.

SECTION 14.  PROCEDURAL MATTERS.

     At each meeting of stockholders,  the chairman of the meeting shall fix and
announce  the date and time of the opening and the closing of the polls for each
matter upon which the stockholders  will vote at the meeting and shall determine
the order of business and all other matters of  procedure.  Except to the extent
inconsistent  with any such  rules and  regulations  as


                                       5

adopted by the Board of  Directors,  the  chairman of the meeting may  establish
rules,  which need not be in writing,  to maintain  order for the conduct of the
meeting,  including,  without  limitation,  restricting  attendance to bona fide
stockholders  of record and their proxies and other persons in attendance at the
invitation of the chairman and making rules governing speeches and debates.  The
chairman of the meeting  acts in his or her absolute  discretion  and his or her
rulings are not subject to appeal.

SECTION 15.  ABILITY OF STOCKHOLDERS TO ACT BY WRITTEN CONSENT.

     Any  action  required  or  permitted  to be taken at any  annual or special
meeting of  stockholders  may be taken only upon the vote of  stockholders at an
annual or special  meeting duly noticed and called in  accordance  with the DGCL
and these By-Laws of the  Corporation and may not be taken by written consent of
stockholders  without a meeting,  unless the  action to be  effected  by written
consent of  stockholders  and the taking of such action by such written  consent
have  expressly  been  approved  in  advance  by the Board of  Directors  of the
Corporation.  Notwithstanding the preceding sentence, so long as the Amended and
Restated  Shareholders'  Agreement  dated as of October 6, 1997 (as amended from
time to time, the "Shareholders Agreement") remains in effect, actions to remove
directors  designated  in  accordance  with  Section  2.1  of  the  Shareholders
Agreement may be taken by written consent of  stockholders  without a meeting if
but only if the person who nominated  such  director  pursuant to Section 2.1 of
the  Shareholders  Agreement  votes its  shares of voting  stock in favor of the
removal of such director pursuant to such written consent.

                                   ARTICLE III
                               BOARD OF DIRECTORS

SECTION 1.  POWERS; QUALIFICATIONS; NUMBER AND TERM.

     The  business and affairs of the  Corporation  shall be managed by or under
the direction of the Board of Directors of the Corporation.  A director need not
be a stockholder,  a citizen of the United States, or a resident of the State of
Delaware.  The Board of  Directors  shall  initially  consist of eight  persons;
provided,  however,  that  such  number  of  directors  may from time to time be
increased and  decreased by a duly adopted  resolution of the Board of Directors
but shall in no event be  reduced  to less than  three.  The Board of  Directors
shall be divided into three classes, as nearly equal in number as the then total
number of  directors  constituting  the entire Board  permits,  with the term of
office of one class  expiring  each year.  The initial  division of the Board of
Directors  shall be made by the  decision of a majority  of the entire  Board of
Directors.  The initial  Class I directors  elected by the  stockholders  of the
Corporation  shall hold office for a term expiring at the 1998 annual meeting of
stockholders and until their successors shall be elected and qualified,  subject
to prior  death,  retirement,  resignation  or  removal;  the  initial  Class II
directors elected by the stockholders of the Corporation shall hold office for a
term  expiring  at the 1999  annual  meeting  of  stockholders  and until  their
successors shall be elected and qualified,  subject to prior death,  retirement,
resignation  or removal;  and the  initial  Class III  directors  elected by the
stockholders  of the  Corporation  shall hold office for a term  expiring at the
2000 annual meeting of stockholders  and until their successors shall be elected
and qualified,  subject to prior death,  retirement,  resignation or removal. At
each such annual meeting of stockholders


                                       6

and at each annual  meeting  thereafter,  successors  to the class of  directors
whose term expires at that meeting  shall be elected for a term  expiring at the
third annual meeting  following their election and until their  successors shall
be elected and  qualified,  subject to prior death,  retirement,  resignation or
removal.

     Notwithstanding  the  foregoing,  whenever  the  holders of any one or more
classes or series of Preferred  Stock issued by the  Corporation  shall have the
right,  voting separately by class or series, to elect directors at an annual or
special  meeting of  stockholders,  the  election,  term of  office,  filling of
vacancies  and other  features  of such  directorships  shall be governed by the
terms of the  Certificate  of  Incorporation  or the  resolution or  resolutions
adopted by the Board of Directors  pursuant to Section 4.3 of the Certificate of
Incorporation  applicable  thereto,  and such  directors so elected shall not be
divided into classes pursuant to this Section unless expressly  provided by such
terms.

SECTION 2.  VACANCIES.

     Subject to the rights of the  holders of any series of  preferred  stock or
any other class of capital  stock of the  Corporation  (other than common stock)
then  outstanding,  any vacancy in the Board of  Directors,  arising from death,
retirement,  resignation, removal, an increase in the number of directors or any
other cause, may be filled by the Board of Directors (excluding for this purpose
directors  designated by affiliates of Morgan Stanley Dean Witter Discover & Co.
pursuant to the Shareholders'  Agreement to the extent,  but only to the extent,
that such directors  would  constitute a majority of such remaining  directors),
acting by a majority of the remaining  directors  then in office,  although less
than a quorum, or by a sole remaining  director,  the stockholders  acting at an
annual  meeting  or, if the vacancy is with  respect to a director  elected by a
voting group, by action of any other  directors  elected by such voting group or
such  voting  group.  Notwithstanding  the  preceding  sentence,  so long as the
Shareholders  Agreement  between  the  Company  and the  stockholders  specified
therein  remains in  effect,  the person who  designated  any  director  nominee
pursuant  to Section  2.1 of the  Shareholders  Agreement  shall be  entitled to
designate  another  director  nominee to be appointed by the Board of Directors,
provided  a vacancy  occurs as a result of the  death,  disability,  retirement,
resignation, removal or otherwise of the director so designated.

     Each  director  chosen to fill a vacancy in the Board of Directors  arising
from the death, retirement,  resignation, removal of a director shall be elected
to complete the term of office of the director  who is being  succeeded.  In the
event of any increase or decrease in the  authorized  number of  directors,  (a)
each  director then serving as such shall  nevertheless  continue as director of
the class of which he or she is a member until the expiration of such director's
current term or his or prior death,  retirement,  resignation or removal and (b)
the newly created or eliminated  directorships  resulting  from such increase or
decrease shall be apportioned by the Board of Directors  among the three classes
of directors  so as to ensure that no one class has more than one director  more
than any other  class,  and each  director so elected  shall hold office for the
same term as the other  members of the class to which the  director is assigned.
No decrease in the number of directors constituting the whole Board of Directors
shall shorten the term of an incumbent director.


                                       7

SECTION 3.  REMOVAL OF DIRECTORS.

     Except as may be provided in a resolution or resolutions  providing for any
class or series of Preferred  Stock pursuant to Article IV of the Certificate of
Incorporation with respect to any directors elected by the holders of such class
or series, any director,  or the entire Board of Directors,  may be removed from
office at any time, but only for cause and only by the  affirmative  vote of the
holders  of at least  two-thirds  (66  2/3%) of the  voting  power of all of the
shares of capital stock of the  Corporation  then entitled to vote  generally in
the election of directors,  voting  together as a single class.  Notwithstanding
the  preceding  sentence,  so long as the  Shareholders  Agreement  between  the
Company and the stockholders  specified therein remains in effect and the person
who designated any director  nominee pursuant to Section 2.1 of the Shareholders
Agreement  requests the removal of the director so designated in accordance with
Section 2.2 of the  Shareholders  Agreement,  such  director may be removed from
office at any time with or without cause by the affirmative  vote of the holders
of at least a majority of the voting power of all of the shares of capital stock
of the corporation then entitled to vote generally in the election of directors.
The provisions of this subsection  shall be the exclusive method for the removal
of directors.

SECTION 4. NOMINATION OF DIRECTORS.

     Only persons who are selected and  recommended by the Board of Directors or
the committee of the Board of Directors  designated to make nominations,  or who
are nominated by  stockholders  in accordance  with the  procedures set forth in
this Article III,  Section 4, shall be eligible  for  election,  or qualified to
serve, as directors,  except as may be otherwise  provided in the Certificate of
Incorporation  with  respect to the right of holders of  Preferred  Stock of the
Corporation  to nominate  and elect a specified  number of  directors in certain
circumstances. Nominations of individuals for election to the Board of Directors
of the  Corporation at any annual meeting or any special meeting of stockholders
at which  directors  are to be  elected  may be made by any  stockholder  of the
Corporation  (x) who is a stockholder of record on the date of the giving of the
notice  provided  for  in  this  Section  4 and  on  the  record  date  for  the
determination  of  stockholders  entitled  to vote at such  meeting  and (y) who
complies with the procedures and requirements set forth in subparagraphs (a) and
(b) this Article III, Section 4.

     (a)  Nominations  by  stockholders  shall  be made  by  written  notice  (a
"Nomination Notice"), which shall set forth the following information: (i) as to
each individual  nominated,  (a) the name, date of birth,  business  address and
residence  address of such individual,  (b) the business  experience  during the
past five years of such nominee,  including his or her principal occupations and
employment  during  such  period,   the  name  and  principal  business  of  any
corporation or other  organization in which such occupations and employment were
carried  on,  and  such  other  information  as to  the  nature  of  his  or her
responsibilities  and level of  professional  competence as may be sufficient to
permit  assessment  of his or her prior  business  experience,  (c)  whether the
nominee  is or has ever been at any time a  director,  officer or owner of 5% or
more of any  class of  capital  stock,  partnership  interests  or other  equity
interest of any corporation,  partnership or other entity, (d) any directorships
held by such  nominee  in any  company  with a class  of  securities  registered
pursuant to Section 12 of the  Securities  Exchange Act of 1934, as amended (the
"Exchange Act"), or subject to the requirements of Section 15(d) of the Exchange



                                       8

Act or any company  registered  as an investment  company  under the  Investment
Company  Act of 1940,  as amended,  (e)  whether,  in the last five years,  such
nominee has been  convicted  in a criminal  proceeding  or has been subject to a
judgment,  order, finding or decree of any federal,  state or other governmental
entity,  concerning  any  violation  of  federal,  state  or other  law,  or any
proceeding in bankruptcy, which conviction, order, finding, decree or proceeding
may be material to an  evaluation of the ability or integrity of the nominee and
(f) any other  information  relating  to the person that would be required to be
disclosed  in a  proxy  statement  or  other  filings  required  to be  made  in
connection with  solicitations of proxies for election of directors  pursuant to
Section  14 of the  Exchange  Act,  and the  rules and  regulations  promulgated
thereunder;  and (ii) as to the Person  submitting the Nomination Notice and any
Person acting in concert with such Person,  (a) the name and business address of
such  Person,  (b) the name and  address  of such  Person as they  appear on the
Corporation's  books, (c) the class and number of shares of the Corporation that
are beneficially  owned by such Person, (d) a description of all arrangements or
understandings  between such stockholder and each proposed nominee and any other
person or persons  (including  their names) pursuant to which the  nomination(s)
are to be made by such  stockholder  and (e) any other  information  relating to
such  stockholder that would be required to be disclosed in a proxy statement or
other filings  required to be made in connection with  solicitations  of proxies
for  election of  directors  pursuant to Section 14 of the  Exchange Act and the
rules and regulations promulgated  thereunder.  A written consent to being named
in a proxy statement as a nominee, and to serve as a director if elected, signed
by the nominee, shall be filed with any Nomination Notice.

     (b) To be timely, Nomination Notices must be delivered to the Secretary and
received at the principal  executive  offices of the Corporation (1) in the case
of an annual  meeting,  not less than 60 days nor more than 90 days prior to the
anniversary  date of the immediately  preceding  annual meeting of stockholders;
provided,  however,  that in the event that the  annual  meeting is called for a
date that is not  within 30 days  before or after  such  anniversary  date,  the
Nomination  Notice by the  stockholder in order to be timely must be so received
not later than the close of business on the tenth day following the day on which
such  notice  of the  date of the  annual  meeting  is  mailed  or  such  public
disclosure of the date of the annual meeting is made, whichever first occurs, or
(2) in the case of a special meeting of  stockholders  called for the purpose of
electing  directors,  not  later  than  the  close of  business  on the 10th day
following  the day on which notice of the date of the special  meeting is mailed
or public disclosure of the date of the special meeting is made, whichever first
occurs.

     (c)  No  person  shall  be  eligible  for  election  as a  director  of the
Corporation  unless nominated in accordance with the procedures and requirements
set forth in this Section  this  Article III,  Section 4. If the chairman of the
meeting  determines  that a  nomination  was not  made in  accordance  with  the
foregoing procedures and requirements, the chairman of the meeting shall declare
to the meeting that the nomination  was defective and such defective  nomination
shall be disregarded.


                                       9

SECTION 5.  PLACE OF MEETINGS.

     The Board of Directors may hold annual,  regular and special meetings,  and
have an office or offices,  either  within or outside the State of Delaware,  at
such place as the Board of Directors from time to time deems advisable.

SECTION 6.  ANNUAL AND REGULAR MEETINGS.

     The Board of  Directors  shall,  without  notice,  hold an  annual  meeting
immediately  after the  annual  meeting of the  stockholders,  or after the last
adjournment  thereof,  and shall hold other  regular  meetings  at such time and
place as it may  determine.  No notice to the newly  elected  directors  of such
annual  meeting  shall be necessary  for such  meeting to be lawful,  provided a
quorum is present.

SECTION 7.  SPECIAL MEETINGS.

     The Board of Directors shall hold such special  meetings as shall be called
by the  Chairman  of the Board,  Chief  Executive  Officer,  President,  or Vice
President, or Secretary,  or any two directors.  Each such meeting shall be held
at such time and place as shall be designated in the notice of meeting.

SECTION 8.  NOTICE OF MEETINGS.

     Notice  of the date,  time and place of each  meeting,  except  the  annual
meeting,  of the Board of  Directors  shall be mailed  by  regular  mail to each
director,  at his address  appearing on the books of the Corporation or supplied
by the  director  to the  Corporation  for the  purpose  of notice  ("designated
address"), at least six days before the meeting; or sent by overnight courier to
each  director  at his  designated  address at least two days before the meeting
(with delivery scheduled to occur no later than the day before the meeting);  or
given  orally  by  telephone  or  other  means,  or by  telegraph  or  facsimile
transmission,  or by any other means comparable to any of the foregoing, to each
director  at his  designated  address  not later  than the day before the day on
which  such  meeting  is to be held or on such  shorter  notice as the person or
persons   calling  such  meeting  may  deem  necessary  or  appropriate  in  the
circumstances;  provided,  however,  that if less  than  five  days'  notice  is
provided and one-third of the  directors  then in office object in writing prior
to or at the commencement of the meeting,  such meeting shall be postponed until
five days after such notice was given pursuant to this sentence (or such shorter
period to which a majority  of those who  objected in writing  agree),  provided
that notice of such  postponed  meeting shall be given in  accordance  with this
Article  III,  Section  8. The notice of the  meeting  shall  state the  general
purpose of the  meeting,  but other  routine  business  may be  conducted at the
meeting without such matter being stated in the notice.

SECTION 9.  WAIVER OF NOTICE.

     A waiver of  written  notice in  writing  signed by the  person or  persons
entitled to such notice,  whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice. Attendance of a person at any
meeting shall  constitute a waiver of notice of such


                                       10

meeting,  except where such person attends a meeting for the express  purpose of
objecting  to the  transaction  of any  business  because  the  meeting  was not
lawfully  called or  convened,  and any such  person so states  his  purpose  in
attending  such meeting and refrains from  participation  in the business of the
meeting.

SECTION 10.  QUORUM.

     Except as otherwise  provided in the  Certificate of  Incorporation,  these
By-laws and the DGCL,  a majority of the  directors in office shall be necessary
at any meeting of the Board in order to constitute a quorum for the  transaction
of business at such  meeting,  and the  affirmative  vote of a majority of those
directors  present at any such  meeting  at which a quorum is  present  shall be
necessary for the passage of any resolution or act of the Board.  In the absence
of a quorum for any such meeting,  a majority of the directors  present  thereat
may  adjourn  such  meeting  from time to time  until a quorum  shall be present
thereat. Notice of any adjourned meeting need not be given.

SECTION 11.  PRESIDING OFFICER AND ORDER OF BUSINESS.

     All  meetings  of the  Board of  Directors  shall be  called  to order  and
presided  over by the Chairman of the Board,  or in his absence,  by a member of
the Board of Directors  selected by the members  present.  The  Secretary of the
Corporation  shall act as secretary,  but in the absence of the  Secretary,  the
presiding officer may appoint a secretary.

SECTION 12.  ACTION BY BOARD WITHOUT FORMAL MEETING.

     Unless  otherwise  restricted by the Certificate of  Incorporation or these
By-laws,  any action  required  or  permitted  to be taken at any meeting of the
Board of Directors,  or of any committee thereof, may be taken without a meeting
if all members of the Board of Directors or of such  committee,  as the case may
be, consent  thereto in writing,  and the writing or writings are filed with the
minutes of proceedings  of the Board of Directors or committee,  as the case may
be.

SECTION 13.  COMPENSATION.

     Directors,  as such, shall receive such  compensation and reimbursement for
expenses as the Board of Directors may by resolution allow. Directors shall also
be  entitled  to  receive  such   compensation  for  services  rendered  to  the
Corporation  in any capacity  other than as  directors,  as may be provided from
time to time by resolution of the Board of Directors.

SECTION 14.  RESIGNATION.

     Any  director,  member of a committee,  or other  officer may resign at any
time by giving  written  notice to the Board of  Directors,  the Chairman of the
Board or Secretary of the Corporation.  Such  resignation  shall be effective at
the time  specified  therein,  or, if no time be  specified,  at the time of its
receipt by the Board of Directors or such  officer,  and the  acceptance  of the
resignation  shall  not be  necessary  to make it  effective.  Resignations  not
submitted in writing may be evidenced  by a written  acknowledgement  of receipt
thereof  signed by the


                                       11

receiving  director  or  officer of the  Corporation  or by  acknowledgement  of
receipt  thereof in the  minutes of a  subsequent  stockholders'  or  directors'
meeting.

SECTION 15.  TELEPHONIC MEETINGS AND PARTICIPATION.

     Members of the Board of Directors or any committee  designated  thereby may
participate  in any meeting of such Board of  Directors or committee by means of
conference  telephone or similar  communications  equipment by which all persons
participating  can hear each other.  Participation in a meeting pursuant to this
section shall constitute presence in person at such meeting.

                                   ARTICLE IV
                                   COMMITTEES

SECTION 1.  COMMITTEES GENERALLY.

     The Board of  Directors  may,  by  resolutions  passed by a majority of the
members of the Board of Directors then in office, designate members of the Board
of Directors to  constitute  committees  that,  except as otherwise  provided in
Sections 2 and 3 of this Article IV, in each case,  shall consist of such number
of directors, and shall have and may execute such powers, as is permitted by law
and specified in the respective  resolutions appointing them. Any such committee
may fix its rules of procedure,  determine its manner of acting and the time and
place,  whether  within or without the State of  Delaware,  of its  meetings and
specify what notice thereof,  if any, shall be given,  unless these By-laws,  or
the Board of Directors by resolution,  shall provide otherwise. Unless otherwise
provided by the Board of Directors  or such  committee,  the quorum,  voting and
other  procedures  shall be the same as those applicable to actions taken by the
Board of Directors.  A majority of the members of the Board of Directors then in
office shall have the power to change the  membership  of any such  committee at
any time, to fill  vacancies  therein and to discharge any such  committee or to
remove any member thereof, either with or without cause, at any time.

         SECTION 2. AUDIT COMMITTEE.

     The Audit  Committee  shall consist of such number of directors,  who shall
not be officers or employees of the  Corporation or any of its  affiliates,  not
less  than  two,  as  shall  from  time to time be  determined  by the  Board of
Directors. The Audit Committee shall each year make a recommendation, based on a
review of  qualifications,  to the Board of  Directors  for the  appointment  of
independent  public  accountants  to  audit  the  financial  statements  of  the
Corporation  and to perform such other duties as the Board of Directors may from
time to time  prescribe.  As part of such  review of  qualifications,  the Audit
Committee shall consider  management's plans for engaging the independent public
accountants for management  advisory services to determine whether such services
could impair the public  accountants'  independence.  The Audit  Committee shall
examine and make  recommendations  to the Board of Directors with respect to the
scope of audits conducted by the Corporation's  independent  public  accountants
and internal auditors. The Audit Committee shall review all recommendations made
by the Corporation's independent public accountants and internal auditors to the
Audit Committee or


                                       12

the Board of Directors with respect to the accounting  methods and the system of
internal  control  used by the  Corporation,  and  shall  advise  the  Board  of
Directors with respect  thereto.  The Audit  Committee shall review reports from
the  Corporation's   independent   public   accountants  and  internal  auditors
concerning  compliance by management with  governmental laws and regulations and
with the Corporation's  policies  relating to ethics,  conflicts of interest and
disbursements  of funds.  The Audit Committee shall meet with the  Corporation's
independent  public  accountants  and/or internal  auditors  without  management
present whenever the Audit Committee shall deem it appropriate.

         SECTION 3. COMPENSATION COMMITTEE.

     The Compensation  Committee shall consist of such number of directors,  not
less  than  two,  as  shall  from  time to time be  determined  by the  Board of
Directors.  As authorized by the Board of Directors,  the Compensation Committee
shall  make  recommendations  to the  Board of  Directors  with  respect  to the
administration of the salaries,  bonuses,  and other  compensation to be paid to
key  employees  and  officers  of  the  Corporation,  including  the  terms  and
conditions of their employment,  and shall administer all stock option and other
benefit plans (except with respect to  participation  by executive  officers and
unless  otherwise  specified in plan  documents)  affecting key  employees'  and
officers' direct and indirect remuneration.

         SECTION 4. STOCK OPTION COMMITTEE.

     The Stock Option  Committee shall consist of such number of directors,  who
shall not be officers or employees of the  corporation or any of its affiliates,
not less than two,  as shall  from  time to time be  determined  by the Board of
Directors.  As authorized by the Board of Directors,  the Stock Option Committee
shall  administer  all stock option and other benefit  plans  (unless  otherwise
specified in plan documents) with respect to participation by executive officers
of the Corporation.

                                    ARTICLE V
                               OFFICERS AND AGENTS

SECTION 1.  OFFICERS.

     The officers of the  Corporation  shall be a Chairman of the Board, a Chief
Executive Officer, a President,  a Chief Financial Officer and a Secretary,  all
of whom shall be elected by the Board of  Directors.  In addition,  the Board of
Directors  may elect  one or more  Vice  Presidents,  Assistant  Secretaries  or
Assistant  Treasurers,  or appoint such other additional  officers and agents as
they may deem advisable.  Any two or more offices may be held by the same person
except the offices of President  and  Secretary.  The officers  shall be elected
each year at the annual  meeting of the Board of  Directors  which shall be held
each year pursuant to Article III, Section 6 hereof.

     The Board of  Directors  may  appoint,  or may empower the Chief  Executive
Officer to appoint,  such other officers as the business of the  Corporation may
require,  each of whom shall hold


                                       13

office for such  period,  have such  authority,  and perform  such duties as are
provided  in these  By-laws or as the Board of  Directors  may from time to time
determine.

SECTION 2.  TERM.

     Each  officer  and each agent  shall hold  office  until his  successor  is
elected or appointed and qualified or until his death, resignation or removal by
the Board of Directors.

SECTION 3.  AUTHORITY, DUTIES AND COMPENSATION.

     All elected or appointed  officers and agents shall have such authority and
perform such duties as may be provided in the By-laws or as may be determined by
the Board of  Directors or the  Chairman of the Board.  They shall  receive such
compensation  for their services as may be determined by the Board of Directors,
or by the  Chairman  of the  Board  with  respect  to all  officers  and  agents
subordinate to him.  Notwithstanding any other provisions of these By-laws,  the
Board of Directors shall have power from time to time by resolution to prescribe
by what officers or agents  particular  documents or  instruments  or particular
classes of documents or instruments shall be signed, countersigned,  endorsed or
executed,  provided,  however,  that any person,  firm or  corporation  shall be
entitled  to  accept  and  to  act  upon  any  document  or  instrument  signed,
countersigned,  endorsed  or  executed  by  officers  or agents  of the  company
pursuant to the  provisions  of these  By-laws  unless  prior to receipt of such
document or instrument such person,  firm or corporation has been furnished with
a  certified  copy of a  resolution  of the  Board of  Directors  prescribing  a
different signature, countersignature, endorsement or execution.

  SECTION 4.  CHAIRMAN OF THE BOARD.

     The  Chairman of the Board,  if such an officer be elected,  shall serve as
the Corporation's general manager, and shall have general supervision, direction
and control of the  Corporation's  business and its  officers,  and, if present,
preside at meetings of the  stockholders and the Board of Directors and exercise
and perform such other powers and duties as may from time to time be assigned to
him by the Board of Directors or as may be prescribed by these By-laws. If there
is no Chief Executive Officer,  then the Chairman of the Board shall also be the
Chief Executive  Officer of the Corporation and shall have the powers and duties
prescribed in Article V, Section 5 of these  By-laws.  The Chairman of the Board
shall report to the Board of Directors.

SECTION 5.  CHIEF EXECUTIVE OFFICER.

     Subject to such supervisory powers, if any, as may be given by the Board of
Directors to the Chairman of the Board,  if there be such an officer,  the Chief
Executive Officer of the Corporation shall,  subject to the control of the Board
of Directors,  have general supervision,  direction, and control of the business
and the  officers of the  Corporation.  He shall  preside at all meetings of the
stockholders  and, in the absence or nonexistence of a Chairman of the Board, at
all  meetings of the Board of  Directors.  He shall have the general  powers and
duties  of  management  usually  vested  in the  chief  executive  officer  of a
corporation, and shall have such other powers and duties as may be prescribed by
the Board of Directors or these By-laws.


                                       14

SECTION 6.  PRESIDENT.

     The  president  may assume and  perform  the duties of the Chief  Executive
Officer in the absence or disability of the Chief Executive  Officer or whenever
the  office of the Chief  Executive  Officer  is vacant.  The  president  of the
Corporation  shall  exercise and perform such powers and duties as may from time
to time be assigned to him by the Board of Directors or as may be  prescribed by
these By-laws.  The president shall have authority to execute in the name of the
corporation bonds, contracts,  deeds, leases and other written instruments to be
executed by the  Corporation.  In the absence or nonexistence of the Chairman of
the Board and Chief Executive  Officer,  he shall preside at all meetings of the
stockholders  and, in the absence or nonexistence of a Chairman of the Board and
the Chief Executive Officer, at all meetings of the Board of Directors and shall
perform  such  other  duties  as the  Board of  Directors  may from time to time
determine.

SECTION 7.  CHIEF FINANCIAL OFFICER.

     The chief  financial  officer shall keep and maintain,  or cause to be kept
and  maintained,  adequate  and  correct  books and  records of  accounts of the
properties and business  transactions of the Corporation,  including accounts of
its  assets,  liabilities,  receipts,  disbursements,  gains,  losses,  capital,
retained earnings and shares. The books of account shall at all reasonable times
be open to inspection by any director. The chief financial officer shall deposit
all money and other  valuables in the name and to the credit of the  Corporation
with such depositaries as may be designated by the Board of Directors. He or she
shall  disburse the funds of the  Corporation  as may be ordered by the Board of
Directors,  shall render to the Chief Executive Officer and directors,  whenever
they request it, an account of all of his or her transactions as chief financial
officer and of the financial  condition of the Corporation,  and shall have such
other powers and perform such other duties as may be  prescribed by the Board of
Directors or these By-laws.

SECTION 8.  VICE PRESIDENTS.

     In the absence or disability of the president, the vice presidents, if any,
in order of their rank as fixed by the Board of Directors  or, if not ranked,  a
vice  president  designated  by the Board of  Directors,  shall  perform all the
duties of the  president and when so acting shall have all the powers of, and be
subject to all the restrictions  upon, the president.  The vice presidents shall
have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the Board of Directors,  these By-laws,  the
Chairman of the Board or the Chief Executive Officer.

SECTION 9.  SECRETARY.

     The  Secretary  shall  give or cause to be given all  required  notices  of
meetings  of  stockholders  and of the Board of  Directors,  shall  attend  such
meetings  when  practicable,  shall  record and keep the  minutes  and all other
proceedings  thereof,  shall  attest such  records  after  every  meeting by his
signature,  shall safely keep all documents and papers which shall come into his
possession  and  shall  truly  keep the books and  accounts  of the  Corporation
appertaining to his


                                       15

office. In the absence or disability of the Secretary,  any Assistant  Secretary
shall have authority and perform the duties of the Secretary.

SECTION 10.  RESIGNATION AND REMOVAL OF OFFICERS.

     Any executive  officer of the Corporation may be removed,  either for cause
or without  cause,  by the  affirmative  vote of a majority of the full Board of
Directors.  Other officers and agents may be removed either for cause or without
cause  by the  Board of  Directors,  the  Chairman  of the  Board  or the  Chief
Executive Officer.  Removal of an executive officer or other officer or agent in
accordance  herewith shall be without  prejudice to the contract rights, if any,
of the person so removed.  Any officer may resign at any time by written  notice
to the Corporation.  Unless otherwise stated in such notice of resignation,  the
acceptance  thereof  shall  not be  necessary  to make it  effective;  and  such
resignation  shall take effect at the time specified  therein or, in the absence
of such specification, it shall take effect upon the receipt thereof.

SECTION 11.  VACANCIES.

     Vacancy in any office or position by reason of death, resignation, removal,
disqualification  or any other cause  shall be filled in the manner  provided in
Article V,  Section  1hereof  for regular  appointment  to such  office.  Unless
earlier removed pursuant to Article V, Section 10, any officer  appointed by the
Board to fill any such vacancy shall serve only until such time as the unexpired
term of his predecessor expires unless reappointed by the Board.

                                   ARTICLE VI
                                 INDEMNIFICATION

     The  Corporation  shall  indemnify,  in  accordance  with  Article V of its
Certificate of Incorporation,  its directors, officers, delegates (as defined in
such Article V), agents and employees.

                                   ARTICLE VII
                             SHARES OF CAPITAL STOCK

SECTION 1.  SHARE CERTIFICATES.

     Every holder of stock in the Corporation shall be entitled to a certificate
or  certificates,  to be in such form as the Board of Directors may from time to
time prescribe, signed by the President or a Vice President and by the Secretary
or Treasurer or an Assistant Secretary or Assistant Treasurer,  and where signed
by a transfer agent or an assistant  transfer agent by a registrar the signature
of such  officers of the  Corporation  may be facsimile.  Each such  certificate
shall exhibit the name of the registered holder thereof, the number and class of
shares  and the  designation  of the  series,  if  any,  which  the  certificate
represents and the number of shares represented  thereby. The Board of Directors
may, if it so determines,  direct that  certificates  for shares of stock of the
Corporation be signed by a transfer agent and/or  registered by a registrar,  in
which  case  such  certificates  shall  not be  valid  until  so  signed  and/or
registered.  In case any officer of the  Corporation  who shall have signed,  or
whose facsimile  signature shall have been


                                       16

used on any certificate for shares of stock of the  Corporation,  shall cease to
be such officer, whether because of death, resignation or otherwise, before such
certificate shall have been delivered, it may be delivered by the Corporation as
though the person who signed such certificate or whose facsimile signature shall
have been used thereon had not ceased to be such officer.

SECTION 2.  TRANSFERS OF SHARES.

     Transfers of shares of stock of the  Corporation  shall be made only on the
books of the  Corporation  by the  registered  holder thereof or by his attorney
thereunto authorized by an instrument duly executed and witnessed and filed with
the  Corporation,  and on surrender of the certificate or certificates  for such
shares  properly  endorsed and evidence of the payment of all taxes imposed upon
such transfer. Every certificate surrendered for transfer shall be cancelled and
no new certificate or certificates  shall be issued in exchange for any existing
certificate until such existing certificate shall have been so cancelled.

SECTION 3.  TRANSFER AGENTS AND REGISTRARS.

     The Board of Directors may appoint any one or more qualified  banks,  trust
companies  or other  corporations  organized  under  any law of any state of the
United  States or under the laws of the United States as agent or agents for the
Corporation  in the  transfer of the stock of the  Corporation  and likewise may
appoint any one or more qualified banks,  trust companies or other  corporations
as registrar or registrars of the stock of the Corporation.

SECTION 4.  LOST, STOLEN, DESTROYED OR MUTILATED CERTIFICATES.

     New certificates for shares of stock may be issued to replace  certificates
lost, stolen,  destroyed or mutilated upon such terms and conditions,  which may
but need not  include the giving of a  satisfactory  bond of  indemnity,  as the
Board of Directors may from time to time determine.

SECTION 5.  HOLDERS OF RECORD.

     The  Corporation  shall be  entitled  to treat the  holder of record of any
share or shares of stock as the holder and owner in fact  thereof  and shall not
be bound to recognize any equitable or other claim to or interest in such shares
on the part of any other  person,  whether or not it shall have express or other
notice thereof,  except as otherwise expressly provided by the laws of the State
of Delaware.

SECTION 6.  TREASURY SHARES.

     Shares of the Corporation's  stock held in its treasury shall not be voted,
directly or indirectly, at any meeting.


                                       17

SECTION 7.  STOCKHOLDER AGREEMENTS.

     Shares of stock of the Corporation may be subject to one or more agreements
abridging, limiting or restricting the rights of any one or more stockholders to
sell, assign, transfer,  mortgage, pledge or hypothecate any or all of the stock
of the  Corporation  held by them,  or may be subject to one or more  agreements
providing  a  purchase  option  with  respect  to any  shares  of  stock  of the
Corporation.  If such agreements  exist, all certificates  evidencing  shares of
stock subject to such abridgements,  limitations,  restrictions or options shall
have reference  thereto  endorsed on such  certificate  and such stock shall not
thereafter be transferred on the books of the  Corporation  except in accordance
with the terms and conditions of such  agreement or  agreements.  Copies of such
agreement or agreements shall be maintained at the offices of the Corporation.

                                  ARTICLE VIII
                               GENERAL PROVISIONS

SECTION 1.  CORPORATE SEAL.

     The Board of Directors  shall  prescribe  the form of a suitable  corporate
seal,  which  shall  contain the full name of the  Corporation  and the year and
state of  incorporation.  Such seal may be used by causing it or a facsimile  or
reproduction thereof to be affixed to or placed upon the document to be sealed.

SECTION 2.  FISCAL YEAR.

     The  fiscal  year  of the  Corporation  shall  end on the  last  Friday  in
September  in each year or shall  begin and end on such  other  days as shall be
fixed by resolution of the Board of Directors.

SECTION 3.  CORPORATE RECORDS.

     The  Corporation may maintain its corporate books and records at such place
or places  within or without the State of Delaware as the Board of Directors may
deem necessary, desirable or expedient from time to time.

SECTION 4.  CHECKS, DRAFTS AND NOTES.

     All checks,  drafts and other  orders for the  payment of money,  notes and
other evidences of indebtedness  issued in the name of the Corporation  shall be
signed by such officer or officers,  agent or agents of the  Corporation  and in
such manner as shall be  determined,  from time to time,  by  resolution  of the
Board.

SECTION 5.  EXECUTION OF PROXIES.

     The Chairman of the Board or Chief Executive  Officer or, in the absence or
disability of both of them,  any Vice  President,  may  authorize,  from time to
time,  the  execution  and  issuance of proxies to vote shares of stock or other
securities  of other  corporations  held of  record by the


                                       18

Corporation  and the execution of consents to action taken or to be taken by any
such corporation.  All such proxies and consents, unless otherwise authorized by
the Board, shall be signed in the name of the Corporation by either the Chairman
of the Board, Chief Executive Officer or any Vice President.

SECTION 6.  CONSTRUCTION.

     Unless the context requires  otherwise,  the general  provisions,  rules of
construction,  and definitions in the General  Corporation Law of Delaware shall
govern the  construction  of these By-laws.  Without  limiting the generality of
this  provision,  the singular  number  includes the plural,  the plural  number
includes  the  singular,  and the term  "person"  includes  both an entity and a
natural person.

                                   ARTICLE IX
                                   AMENDMENTS

SECTION 1.  AMENDMENTS.

     The Board of Directors  shall have power  without the assent or vote of the
stockholders to make, alter, amend,  change, add to or repeal the By-laws of the
Corporation.  The stockholders shall also have the power to make, alter,  amend,
change, add to or repeal the Bylaws of the Corporation;  provided, however, that
in addition  to any vote of the holders of any class or series of capital  stock
of the Corporation  required by law or by the Certificate of Incorporation,  the
affirmative  vote of the  holders of at least 80% of the voting  power of all of
the then outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to make, alter,  amend,  change, add to or repeal the By-laws of the
Corporation.


                                       19



                                AMENDMENTS TO THE
                          AMENDED AND RESTATED BY-LAWS
                                       OF
                         AMERICAN ITALIAN PASTA COMPANY


         The Amended and Restated By-laws of American Italian Pasta Company are
amended as follows:

1. A new Section 16 is added to Article III to read as follows:

         "SECTION 16. CHAIRMAN OF THE BOARD

         The Chairman of the Board, if one is elected, shall, if present,
preside at meetings of the stockholders and the Board of Directors and exercise
and perform such other powers and duties as may from time to time be assigned to
him by the Board of Directors or as may be prescribed by these By-laws. The
Chairman of the Board shall report to the Board of Directors."

2. Section 1 of Article V is amended by striking out "a Chairman of the Board,"
from the first sentence, which, as so amended, reads as follows: "The officers
of the Corporation shall be a Chief Executive Office, a President, a Chief
Financial Officer and a Secretary, all of whom shall be elected by the Board of
Directors."

3. Section 3 of Article V is amended by striking out "or the Chairman of the
Board" from the first sentence, which, as so amended, reads as follows: "All
elected or appointed officers and agents shall have such authority and perform
such duties as may be provided in the By-laws or as may be determined by the
Board of Directors."

4. Section 3 of Article V is amended by striking out ", or by the Chairman of
the Board with respect to all officers and agents subordinate to him" from the
second sentence, which, as so amended, reads as follows: "They shall receive
such compensation for their services as may be determined by the Board of
Directors."

5. Section 4 of Article V is removed in its entirety.

6. Section 5 of Article V is amended by striking out "Subject to such
supervisory powers, if any, as may be given by the Board of Directors to the
Chairman of the Board, if there be such an officer, the" from the first
sentence, which, as so amended, reads as follows: "The Chief Executive Officer
of the Corporation, shall, subject to the control of the Board of Directors,
have general supervision, direction, and control of the business and the
officers of the Corporation."

7. Section 5 of Article V is amended by striking out "SECTION 5" and
substituting "SECTION 4."

8. Section 6 of Article V is amended by striking out "SECTION 6" and
substituting "SECTION 5."

9. Section 7 of Article V is amended by striking out "SECTION 7" and
substituting "SECTION 6."

10. Section 8 of Article V is amended by striking out "SECTION 8" and
substituting "SECTION 7."

11. Section 9 of Article V is amended by striking out "SECTION 9" and
substituting "SECTION 8."

12. Section 10 of Article V is amended by striking out ", the Chairman of the
Board" from the second sentence, which, as so amended, reads as follows: "Other
officers and agents may be removed either for cause or without cause by the
Board of Directors or the Chief Executive Officer.

13. Section 10 of Article V is amended by striking out "SECTION 10" and
substituting "SECTION 9."

14. Section 11 of Article V is amended by striking out "SECTION 11" and
substituting "SECTION 10."

                                AMENDMENTS TO THE
                          AMENDED AND RESTATED BY-LAWS
                                       OF
                         AMERICAN ITALIAN PASTA COMPANY


     The Amended and  Restated  By-laws of American  Italian  Pasta  Company are
amended as follows:

1. Article VII is amended in its entirety to read as follows:

     1.  Stock.   The  shares  of  the  Corporation   shall  be  represented  by
certificates or shall be uncertificated.  Each registered holder of shares, upon
request  to the  Corporation,  shall be  provided  with a  certificate  of stock
representing  the number of shares owned by such  holder.  The  certificates  of
stock  of the  Corporation  shall  be in the  form or  forms  from  time to time
approved by the Board of  Directors.  Such  certificates  shall be numbered  and
registered,  shall exhibit the holder's name and the number of shares, and shall
be  signed  in the name of the  Corporation  by the  following  officers  of the
Corporation:  the  President  or a Vice  President;  and by the  Treasurer or an
Assistant Treasurer,  or the Secretary or an Assistant Secretary.  Any or all of
the  signatures  may be a  facsimile.  In case any  officer,  transfer  agent or
registrar  who has signed or whose  facsimile  signature  has been placed upon a
certificate  shall have ceased to be such officer,  transfer  agent or registrar
before such certificate is issued,  it may be issued by the Corporation with the
same effect as if he or she were such  officer,  transfer  agent or registrar at
the date of issue.

     2.  Lost  Certificates.  The  Board  of  Directors  or any  officer  of the
Corporation to whom the Board of Directors has delegated authority may authorize
any  transfer  agent of the  Corporation  to  issue,  and any  registrar  of the
Corporation  to  register,  at any time and from time to time  unless  otherwise
directed,  a new  certificate  or  certificates  of  stock  in  the  place  of a
certificate or certificates  theretofore  issued by the Corporation,  alleged to
have been lost or destroyed,  upon receipt by the transfer  agent of evidence of
such loss or  destruction,  which may be the affidavit of the applicant;  a bond
indemnifying  the  Corporation and any transfer agent and registrar of the class
of stock involved  against claims that may be made against it or them on account
of the lost or destroyed  certificate or the issuance of a new  certificate,  of
such kind and in such amount as the Board of Directors shall have authorized the
transfer agent to accept generally or as the Board of Directors or an authorized
officer  shall  approve  in  particular   cases;  and  any  other  documents  or
instruments  that the Board of  Directors or an  authorized  officer may require
from time to time to protect  adequately the interest of the Corporation.  A new
certificate  may be issued  without  requiring any bond when, in the judgment of
the directors, it is proper to do so.

     3.  Transfers of Stock.  Transfers of stock shall be made upon the books of
the  Corporation:  (1) upon  presentation of the  certificates by the registered
holder in person or by duly authorized attorney,  or upon presentation of proper
evidence of succession,  assignment or authority to transfer the stock, and upon
surrender   of  the   appropriate   certificate(s),   or  (2)  in  the

case of uncertificated shares, upon receipt of proper transfer instructions from
the registered owner of such  uncertificated  shares,  or from a duly authorized
attorney  or  from an  individual  presenting  proper  evidence  of  succession,
assignment or authority to transfer the stock.

     4. Holder of Record.  The Corporation shall be entitled to treat the holder
of record of any share or  shares  of stock as the  holder in fact  thereof  and
accordingly  shall not be bound to recognize  any equitable or other claim to or
interest in such share on the part of any other  person  whether or not it shall
have express or other notice thereof,  save as expressly provided by the laws of
the State of Delaware.

EX-31.1

                                                                    Exhibit 31.1
                                 CERTIFICATIONS

I, John P. Kelly, certify that:

1.       I have  reviewed  this  report on Form 10-Q of American  Italian  Pasta
         Company;

2.       Based  on my  knowledge,  this  report  does  not  contain  any  untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included in this  report,  fairly  present in all material
         respects the financial condition,  results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying  officer(s) and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules  13a-15(e)  and  15d-15(e))  and internal
         control  over  financial  reporting  (as defined in Exchange  Act Rules
         13a-15(f) and 15d-15(b)) for the registrant and have:

         a.       Designed such disclosure  controls and  procedures,  or caused
                  such  disclosure  controls and procedures to be designed under
                  our supervision to ensure that material  information  relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

         b.       Designed such internal  control over financial  reporting,  or
                  caused such internal  control over  financial  reporting to be
                  designed  under  our   supervision,   to  provide   reasonable
                  assurance regarding the reliability of financial reporting and
                  the preparation of financial  statements for external purposes
                  in accordance with generally accepted accounting principles;

         c.       Evaluated the  effectiveness  of the  registrant's  disclosure
                  controls  and  procedures  and  present  in  this  report  our
                  conclusions about the effectiveness of the disclosure controls
                  and  procedures,  as of the end of the period  covered by this
                  report based on such evaluation; and

         d.       Disclosed  in  this  report  any  change  in the  registrant's
                  internal control over financial reporting that occurred during
                  the registrant's  most recent fiscal quarter (the registrant's
                  fourth  fiscal  quarter in the case of an annual  report) that
                  has materially affected, or is reasonably likely to materially
                  affect,  the  registrant's  internal  control  over  financial
                  reporting; and

5.       The  registrant's  other  certifying  officer(s) and I have  disclosed,
         based on our most recent  evaluation of internal control over financial
         reporting,  to the  registrant's  auditors  and the audit  committee of
         registrant's  board of directors (or persons  performing the equivalent
         functions):

         a.       All significant  deficiencies  and material  weaknesses in the
                  design  or  operation  of  internal   control  over  financial
                  reporting which are reasonably  likely to adversely affect the
                  registrant's ability to record, process,  summarize and report
                  financial information; and

         b.       Any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal control over financial reporting.


Date: August 6, 2008                   /s/ John P. Kelly
                                       -----------------
                                       John P. Kelly
                                       President and Chief Executive Officer

EX-31.2

                                                                    Exhibit 31.2
                                 CERTIFICATIONS

I, Paul R. Geist, certify that:

1.       I have  reviewed  this  report on Form 10-Q of American  Italian  Pasta
         Company;

2.       Based  on my  knowledge,  this  report  does  not  contain  any  untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included in this  report,  fairly  present in all material
         respects the financial condition,  results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying  officer(s) and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules  13a-15(e)  and  15d-15(e))  and internal
         control  over  financial  reporting  (as defined in Exchange  Act Rules
         13a-15(f) and 15d-15(b)) for the registrant and have:

         a.       Designed such disclosure  controls and  procedures,  or caused
                  such  disclosure  controls and procedures to be designed under
                  our supervision to ensure that material  information  relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

         b.       Designed such internal  control over financial  reporting,  or
                  caused such internal  control over  financial  reporting to be
                  designed  under  our   supervision,   to  provide   reasonable
                  assurance regarding the reliability of financial reporting and
                  the preparation of financial  statements for external purposes
                  in accordance with generally accepted accounting principles;

         c.       Evaluated the  effectiveness  of the  registrant's  disclosure
                  controls  and  procedures  and  present  in  this  report  our
                  conclusions about the effectiveness of the disclosure controls
                  and  procedures,  as of the end of the period  covered by this
                  report based on such evaluation; and

         d.       Disclosed  in  this  report  any  change  in the  registrant's
                  internal control over financial reporting that occurred during
                  the registrant's  most recent fiscal quarter (the registrant's
                  fourth  fiscal  quarter in the case of an annual  report) that
                  has materially affected, or is reasonably likely to materially
                  affect,  the  registrant's  internal  control  over  financial
                  reporting; and

5.       The  registrant's  other  certifying  officer(s) and I have  disclosed,
         based on our most recent  evaluation of internal control over financial
         reporting,  to the  registrant's  auditors  and the audit  committee of
         registrant's  board of directors (or persons  performing the equivalent
         functions):

         a.       All significant  deficiencies  and material  weaknesses in the
                  design  or  operation  of  internal   control  over  financial
                  reporting which are reasonably  likely to adversely affect the
                  registrant's ability to record, process,  summarize and report
                  financial information; and

         b.       Any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal control over financial reporting.


Date:  August 6, 2008                  /s/ Paul R. Geist
                                       ------------------
                                       Paul R. Geist
                                       Executive Vice President and Chief
                                       Financial Officer

EX-32

                                                                      Exhibit 32

                            CERTIFICATION PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection  with the Quarterly  Report on Form 10-Q of American  Italian
Pasta Company (the  "Company") for the quarterly  period ended December 28, 2007
(the "Report"),  the  undersigned,  in the capacities and dates indicated below,
hereby certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of
the  Sarbanes-Oxley  Act of 2002,  that, to our knowledge:  (1) the Report fully
complies  with the  requirements  of  Section  13(a) or 15(d) of the  Securities
Exchange Act of 1934;  and (2) the  information  contained in the Report  fairly
presents,  in all material  respects,  the  financial  condition  and results of
operations of the Company.


Date:  August 6, 2008                  /s/ John P. Kelly
                                       -----------------------------------------
                                       John P. Kelly
                                       President and Chief Executive Officer





Date:  August 6, 2008                  /s/ Paul R. Geist
                                       -----------------------------------------
                                       Paul R. Geist
                                       Executive Vice President and Chief
                                       Financial Officer