ANDERSEN EMPLOYMENT AGREEMENT
Employment Agreement, dated as of October 11, 1995, by and between Van
de Kamp's, Inc. (the "Company"), a Delaware corporation, and Timothy B. Andersen
W I T N E S S E T H:
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WHEREAS, upon the terms and subject to the conditions of this
Agreement, the Company desires to employ the Employee and the Employee desires
to accept employment by the Company:
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Employment. Upon the terms and subject to the conditions of this
Agreement, the Company hereby employs the Employee and the Employee hereby
accepts employment with the Company in the capacities hereinafter set forth.
2. Term of Employment. Except as provided in Article 6, the term (the
"Term") of this Agreement shall commence on October 11, 1995 and shall continue
in effect through September 30, 1998, provided that the Term of this Agreement
shall be automatically extended for successive annual periods of 12 months each
commencing on September 30, 1998.
3. Duties: Extent of Services.
(a) Duties. During the Term, the Employee shall serve in such
executive capacity as may be reasonably designated by the board of directors of
the Company (the "Board"), initially as Vice President-Finance of the Company,
and shall, in accordance with and subject to the provisions of the By-laws (as
amended from time to time) of the Company and as set forth in Schedule A hereto,
perform the duties, undertake the responsibilities and exercise the authority
customarily performed, undertaken and exercised by a person in such position in
the business in which the Company is engaged. The Employee shall report to and
carry out the lawful directions of the Board.
(b) Extent of Services. Except for illness and permitted vacation
periods, during the Term the Employee shall (i) devote his full time and
attention during normal business hours to the businesses of the Company and its
subsidiaries and affiliates; (ii) use
his best efforts to promote the interests of the Company and its subsidiaries
and affiliates; (iii) discharge such executive and administrative duties not
inconsistent with his position as may be assigned to him by the Board; and (iv)
serve, without additional compensation, as a director or officer of any
subsidiary of the Company if elected as such.
(a) Base Salary. In consideration of the services rendered by the
Employee hereunder and provided that the Employee has substantially performed
all of his obligations provided for herein, the Company will pay to the Employee
a base salary (the "Base Salary") at the rate of $125,000 per year during the
Term. The Base Salary shall be paid in accordance with the Company's normal
payroll practice and shall be subject to annual review by the Board.
(b) Base Bonus. The Company shall pay the Employee a bonus with
respect to each fiscal year or portion thereof during the Term in accordance
with the following provisions:
(i) If the Financial Results of the Company for a fiscal year
during the Term are at least 90% but less than 95% of the EBITDA
Target for such year, Employee shall be paid an amount equal to 15% of
so much of his Base Salary as was paid with respect to such year.
(ii) If the Financial Results of the Company for a fiscal year
during the Term are at least 95% but less than 100% of the EBITDA
Target for such year, Employee shall be paid an amount equal to 22.5%
of so much of his Base Salary as was paid with respect to such year.
(iii) If the Financial Results of the Company for a fiscal year
equal or exceed 100% of the EBITDA Target for such year, Employee
shall be paid an amount equal to 30% of so much of his Base Salary as
was paid with respect to such year.
(c) Supplemental Bonus. In addition to the Base Bonus, if any, to
which the Employee may be entitled under Section 4(b), the Company shall pay the
Employee a bonus with respect to such fiscal year or portion thereof during the
Term in accordance with the following provisions:
(i) If the Financial Results of the Company for a fiscal year
during the Term are at least 105%, but less than 110% of the EBITDA
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such year. Employee shall be paid an amount equal to 5% of so much of his
Base Salary as was paid with respect to such year.
(ii) If the Financial Results of the Company for a fiscal year during
the Term are at least 110%, but less than 115% of the EBITDA Target for
such year, Employee shall be paid an amount equal to 10% of so much of his
Base Salary as was paid with respect to such year.
(iii) If the Financial Results of the Company for a fiscal year
during the Term are at least 115% but less than 120% of the EBITDA Target
for such year, the Employee shall be paid an amount equal to 15% of so much
of his Base Salary as was paid with respect to such year.
(iv) If the Financial Results of the Company for a fiscal year during
the Term equal or exceed 120% of the EBITDA Target for such year, the
Employee shall be paid an amount equal to 20% of so much of his Base Salary
as was paid with respect to such year.
(d) For the purpose of this Agreement (1) the term "EBITDA Target" shall
mean the Company's projected earnings before interest, taxes, depreciation and
amortization, as contained in the Company's annual budget which is approved by
the Board (without reference to any adjustments or revision, upwards or
downwards, to such projected earnings which are subsequently approved by the
Board as part of any subsequent revision to such annual budget), (2) the term
"Financial Results" shall mean the Company's annual financial results reflected
in the Company's annual audited financial statements and (3) the Company's
1996 fiscal year shall be deemed to begin as of the date hereof.
(e) The bonus due under Section 4(b) and (c) shall be paid to the Employee
within 30 days of the publication of the Company's annual audited financial
statements for the relevant year.
5. Other Employee Benefits. During the Term, the Employee shall be
entitled (i) to vacation time in accordance with the Company's policy from time
to time in effect; (ii) to participate in all employee insurance and other
fringe benefit programs, including, without limitation, life, health, dental and
accident insurance plans and long term disability now or hereafter maintained by
the Company for senior executive or other salaried personnel for which the
Employee is eligible; (iii) to participate in a pension plan with terms similar
to those applicable to executives of the Company; and (iv) to participate in a
long-term incentive plan that will be adopted by VDK Holdings, Inc., the
6. Termination Provisions.
(a) Termination for Cause. The Board may terminate the Employee's
employment hereunder for Cause, as hereinafter defined, immediately upon written
notice to the Employee. For purposes of this Agreement, "Cause" shall mean (A)
dishonesty of the Employee detrimental to the best interests of either the
Company or any of its subsidiaries or affiliates or conviction of the Employee
of a crime which constitutes a felony, (B) any material act or omission by the
Employee during the Term involving willful malfeasance or gross negligence in
the performance of his duties hereunder, or (C) repeated failure of the Employee
to follow the reasonable instructions of the Board (other than inattention or
neglect resulting from illness or disability of the Employee) which inattention
and neglect does not cease within fifteen days after written notice thereof
specifying the details of such conduct is given by the Board to the Employee.
During the Term, the Employee shall be entitled to only one such notice and
right to cure for any single act or event. If the Employee's employment is
terminated for Cause, the Employee shall be entitled to receive only the unpaid
portion of the Base Salary then in effect which has accrued to the date of
(b) Termination By Reason of Permanent Disability. If at any time during
the Term the Board reasonably determines that the Employee has been or will be
unable, as a result of physical or mental illness or incapacity, to perform his
duties hereunder for a period of four consecutive months or for an aggregate of
more than six months in any 12-month period (a "Permanent Disability"), the
Employee's employment hereunder may be terminated by the Board upon 30 days'
written notice to the Employee. If the Employee's employment is terminated by
reason of Permanent Disability, the Employee shall be entitled to receive only
the unpaid portion of the Base Salary then in effect which has accrued to the
date of termination plus an amount equal to six months of Employee's Base
(c) Termination By Reason of Death. The Employee's employment hereunder
shall automatically terminate on the date of his death. If the Employee's
employment is so terminated by his death, the Company shall pay to the
Employee's estate in addition to the unpaid portion of the Base Salary then in
effect through the date of Employee's death an amount equal to six months of
Employee's Base Salary. Such amount shall be paid within 30 days after the date
of his death if a personal representative has been appointed by the end of such
30-day period or, if a personal representative has not been appointed by the end
of such 30-day period, promptly after a personal representative has been
(d) Termination Without Cause. The Board may terminate the Employee's
employment hereunder at any time for any reason without Cause in which case the
Employee shall be entitled to receive an amount (the "Severance Amount") equal
to the greater of (i) one year's Base Salary then in effect, or (ii) the Base
Salary would have been
entitled to receive through the end of the Term. The Severance Amount shall be
in lieu of any other severance payment to which Employee may be otherwise
entitled under any other severance plan maintained by the Company. The Severance
Amount shall be paid within 30 days of such termination. If Employee's
employment is terminated without cause after a Change of Control, the Severance
Amount shall be paid within 30 days of such termination. Employee shall be
entitled to receive an amount equal to the greater of (i) one year's Base Salary
then in effect or (ii) the Base Salary the Employee would have been entitled to
receive through the rest of the term. As used herein, "Change of Control"
shall mean a merger, consolidation, sale of all or substantially all of the
assets, or other change of control of the company.
7. Covenants of the Employee.
(a) Non-Competition. Except with respect to a termination described in
Section 6(d) hereof, until the first anniversary of the date of the termination
of the Employee's employment hereunder, the Employee shall not, directly or
indirectly, be associated with any entity which competes with the Company and
whose primary business is, or personally engage in, the same or similar line of
business of the Company, whether as a director, officer, employee, agent,
consultant, partner, owner, independent contractor or otherwise.
(b) Non-Solicitation of Employees of the Employer. Until the first
anniversary of the date of the termination of the employment of the Employee
hereunder, the Employee shall not, and shall cause each business or entity with
which he shall become associated in any capacity not to, solicit for employment
or employ any person who is then, or who was at any time after the date four
months prior to the date of such termination, employed in a professional or
managerial position by the Company, its subsidiaries or affiliates.
(c) Confidentiality. The Employee agrees and acknowledges that the
Confidential Information (as hereinafter defined) of the Company and its
subsidiaries and affiliates, is valuable, special and unique to their business;
that such business depends on such Confidential Information; and that the
Company wishes to protect such Confidential Information by keeping it
confidential for the use and benefit of the Company and its subsidiaries and
affiliates. Based on the foregoing, the Employee agrees to undertake the
following obligations with respect to such Confidential Information:
(i) the Employee agrees to keep any and all Confidential
Information in trust for the use and benefit of the Company and its
subsidiaries and affiliates;
(ii) the Employee agrees that, except as required by applicable
law or as authorized in writing by the Board, he will not at any time
during or after the termination of his employment hereunder, disclose,
directly or indirectly, any Confidential Information of the Company or
any of subsidiaries or affiliates;
(iii) the Employee agrees to take all reasonable steps necessary, or
reasonably requested by the Company, to ensure that all Confidential
Information is kept confidential for the use and benefit of the Company and
its subsidiaries and affiliates; and
(iv) the Employee agrees that, upon termination of his employment
hereunder or at any other time the Company may in writing so request, he
will promptly deliver to the Company all materials constituting
Confidential Information (including all copies thereof) that are in his
possession or under his control. The Employee further agrees, that if
requested by the Company, to return any Confidential Information pursuant
to this subparagraph (iv), he will not make or retain any copy or extract
from such materials.
For purposes of paragraph (c) of this Section 7, "Confidential Information"
means any and all information developed by or for the Company or any of its
subsidiaries or affiliates of which the Employee gains or has acquired knowledge
during or prior to the Term by reason of his employment with the Company that is
(A) not generally known in any industry in which the Company or any of its
subsidiaries or affiliates is or may become engaged or (B) not publicly
available. Confidential Information includes, but is not limited to, any and all
information developed by or for the Company or any of its subsidiaries or
affiliates concerning plans, marketing and sales methods, customer lists,
materials, processes, business forms, procedures, devices, plans for development
of products, services or expansion into new areas or markets, internal
operations, and any trade secrets and proprietary information of any type owned
by the Company or any of its subsidiaries or affiliates, together with all
written, graphic and other materials relating to all or any part of the same.
8. Successors; Assignment.
(a) The Company. The Company may assign any of its rights and obligations
hereunder, without the written consent of the Employee, in connection with a
Change of Control. This Agreement shall be binding upon and shall inure to the
benefit of the Company and its successors and assigns.
(b) The Employee. Neither this Agreement nor any right or interest
hereunder may be assigned by the Employee, his beneficiaries, or legal
representatives without the prior written consent of the Board; provided,
however, that nothing in this Section 8 shall preclude (i) the Employee from
designating a beneficiary to receive any benefit payable hereunder upon his
death, or (ii) the executors, administrators, or other legal representatives of
the Employee or his estate from assigning any rights hereunder to
distributees, legatees, beneficiaries, testamentary trustees or other legal
heirs of the Employee.
9. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given when delivered by hand, mailed by
first-class registered or certified mail, postage prepaid and return receipt
requested, or delivered by overnight courier addressed as follows:
(i) If to the Company:
Van de Kamp's, Inc.
1000 St. Louis Union Street
St. Louis, MO 63103
with a copy to:
VDK Foods LLC
c/o Dartford Partnership, L.L.C.
801 Montgomery Street, Suite 400
San Francisco, CA 94133
(ii) If to the Employee:
Timothy B. Andersen
18699 Magenta Bay
Minneapolis, MN 55347
or, in each case, at such other address as may from time to time be specified to
the other party in a notice similarly given.
10. Governing Law: Expenses.
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
conflicts of law principles thereof.
(b) Expenses. All costs and expenses (including attorneys' fees) incurred
in connection with any claim, dispute or litigation pertaining to this Agreement
shall be paid by the party incurring such expenses.
11. Entire Agreement. This Agreement contains the entire agreement of the
parties and their affiliates relating to the subject matter hereof and
supersedes all prior agreements, representations, warranties and understandings,
written or oral, with respect thereto.
12. Severability. If any term or provision of this Agreement or the
application thereof to any person, property or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons, property or circumstances other than those
as to which it is invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall remain valid and enforceable to
the fullest extent permitted by law.
(a) Injunctive Relief. The Employee acknowledges and agrees that the
covenants and obligations of the Employer contained in subsections (a), (b) and
(c) of Section 7 hereof relate to special, unique and extraordinary matters and
are reasonable and necessary to protect the legitimate interests of the Company
and its subsidiaries and affiliates and that a breach of any of the terms of
such covenants and obligations will cause the Company irreparable injury for
which adequate remedies at law are not available. Therefore the Employee agrees
that the Company shall be entitled to an injunction, restraining order, or other
equitable relief from any court of competent jurisdiction, restraining the
Employee from any such breach.
(b) Remedies Cumulative. The Company's rights and remedies under this
Section 13 are cumulative and are in addition to any other rights and remedies
the Company may have at law or in equity.
14. Withholding Taxes. The Company may deduct any federal, state or local
withholding or other taxes from any payments to be made by the Company hereunder
in such amounts which the Company reasonably determine are required to deduct
under applicable law.
15. Amendments, Miscellaneous, Etc. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by an instrument
in writing signed by the party against which such change, waiver, discharge or
termination is sought to be enforced. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
VAN DE KAMPS'S, INC.
By: /s/ T. O. Ellinwood
Name: T. O. Ellinwood
/s/ Timothy B. Andersen
TIMOTHY B. ANDERSEN
RESPONSIBILITIES OF VICE PRESIDENT-FINANCE
Reporting to the President, the Vice President-Finance [to be completed]