**Exhibit10.20**

 

**EMPLOYMENT AGREEMENT FOR SENIOR EXECUTIVE**

 

HORIZON ORGANIC HOLDING CORPORATION, a Delawarecorporation (“HOH” or the “Company”), agrees with *Don Gaidano*(“EXECUTIVE”) as follows (“Agreement”) effective the 1st day of May,2001.

 

**1.**             **PURPOSE**. EXECUTIVE is currently serving at willas *ManagingDirector* of HOH, International. The parties desire to set forth the terms of  EXECUTIVE’s employment by HOH in this written agreement.

 

**2.**             **EMPLOYMENT**.  HOH employs EXECUTIVE, and EXECUTIVE agreesto be employed, as *Managing Director*of HOH,International.  HOH may from time totime designate other or additional functions for EXECUTIVE with HOH as deemedappropriate by HOH and its subsidiaries, as applicable.

 

**3.**             **DUTIES**.  During the term hereof, EXECUTIVE willdevote substantially all of his full time and effort to the business of HOH andits subsidiaries.  Upon the approval ofthe CEO of HOH, EXECUTIVE shall have the right to devote reasonable time toparticipation in trade and professional associations, support of communityactivities, and service on boards of directors of other corporations; provided,however, that while employed with HOH, EXECUTIVE shall not be employed by anyother company, individual or entity on a full- or part-time basis, nor shall heserve as an independent contractor or a paid consultant.  The parties intend that EXECUTIVE’s initialduties hereunder shall primarily involve duties of the type normally associatedwith a managerial position in an organization of the size and type of HOH.  HOH may modify, reduce and/or eliminateEXECUTIVE’s duties and objectives at its reasonable discretion from time totime, provided that at no time will EXECUTIVE be required to perform duties orto meet objectives which are inconsistent with or inappropriate for a member ofsenior management of HOH.  EXECUTIVEshall abide by all of HOH’s policies, procedures and code of conduct as adoptedby HOH in its sole discretion from time to time.

**4.**             **BASECOMPENSATION**.  EXECUTIVEshall receive compensation from HOH as follows:

 

(a)                                  Startingon the date hereof, a base salary at an annual rate of £93,000 plus aforeign service premium of $35,000; and

 

(b)                                 Annualincreases in base compensation, if any, shall be established from time to timeby and at the sole discretion of the Board of Directors or CompensationCommittee of HOH.

 

**5.**             **INCENTIVECOMPENSATION**.  EXECUTIVEshall participate in the HOH Bonus Compensation Plan in accordance with Planguidelines established from time to time by the HOH Board of Directors or CompensationCommittee.

 

**6.**             **BENEFITS**.  EXECUTIVE will receive *26*****daysof Paid Time Off (PTO) in accordance with the Horizon PTO Plan during each year in which this Agreement remains ineffect, plus such Company holidays as are recognized by Horizon, not to exceed10 days per year.  EXECUTIVE will beentitled to participate in any Senior Executive benefit plans provided toemployees of HOH. Except as set forth below, all benefits except those providedby law, shall cease at the termination of this Agreement.

 

**7.             STOCKRIGHTS**.  HOH agrees togrant or has granted to EXECUTIVE the following stock option rights under theHOH 1998 Equity Incentive Plan:

 

•                  Stock optiongrant of 20,000 shares on 05/1997 at $4.85/share

 

•                  Stock optiongrant of 10,000 shares on 12/1997  at$6.50/share

 

•                  Stock optiongrant of 8,000 shares on 01/1999 at $17.25/share

 

•                  Stock optiongrant of 10,000 shares on 10/1999 at $10.00/share

 

•                  Stock optiongrant of 7,500 shares on 05/2000 at $9.50/share

 

•                  Stock optiongrant of 2,500 shares on 05/2000 at $9.50/share

 

•                  Stock optiongrant of 7,500 shares on 01/2001 at $4.94/share

In the event EXECUTIVE’S employment with the Company is terminated atany time within a two year period following a Change in Control (as defined inthe 1998 Horizon Organic Holding Corporation Long-term Incentive Plan) eitherby the Company without Cause or by the EXECUTIVE with Reason (as definedbelow), all unvested stock options awarded to EXECUTIVE prior to suchtermination shall immediately vest and become exercisable in full.  As used herein, “Reason” shall mean (I) anyreduction in EXECUTIVE’S annual or incentive pay or benefits in effect fromtime to time which is not part of an overall cost reduction or savings planapplicable to all similarly situated executive officers of the Company, (II)any significant reduction in the nature or status of the EXECUTIVE’S duties orresponsibilities, or (III) a transfer of the EXECUTIVE’S principal place ofemployment to a metropolitan area other than that of the EXECUTIVE’S employmentimmediately prior to the Change of Control without the EXECUTIVE’S consent.

 

**8.             TERMINATIONOF EMPLOYMENT**. EXECUTIVE and HOH each acknowledge that either Party has the right toterminate EXECUTIVE’s employment with HOH pursuant to the following:

 

(a)           Terminationby the Company for cause.  HOH willhave the right to terminate EXECUTIVE’s employment with HOH at any time for“Cause”.  “Cause” for termination willmean only, in the reasonable judgment of HOH: (i) EXECUTIVE has committed anymaterial act of embezzlement, fraud and/or is convicted of a felony; (ii)EXECUTIVE in any material respect, breaches his obligations under thisAgreement; (iii) EXECUTIVE causes material damage to HOH through intentionalmisconduct or gross neglect of the duties customary to his office.  No activities or inactivities covered byitems (ii) and (iii) will be deemed to be “cause” unless HOH has notifiedEXECUTIVE of such activity or inactivity in writing and EXECUTIVE has failed tocure the same within 30 days of the notification.  In the event EXECUTIVE is terminated for cause, he will not beentitled to Severance Pay (as defined below), pay in lieu of notice, or anyother such compensation set forth in paragraphs 4-7 herein, but he will beentitled to all compensation, all benefits, and all unreimbursed expensesaccrued through the date of termination.

 

(b)           Terminationby the Company without cause.  HOHwill have the right to terminate EXECUTIVE’s employment with HOH at any time without cause. In the eventEXECUTIVE is terminated without cause, HOH shall pay EXECUTIVE Severance Pay onthe conditions set forth below.

(c)           Voluntarytermination.  EXECUTIVE mayvoluntarily terminate his employment with HOH at any time, after which nofurther compensation will be paid to   EXECUTIVE.  To permit HOH to make arrangements to fillthe vacancy created by  EXECUTIVE’sdeparture, EXECUTIVE agrees to give HOH 30 days advance notice of any intendedresignation.  In the event EXECUTIVEvoluntarily terminates his employment, he will not be entitled to SeverancePay, pay in lieu of notice, or any other such compensation set forth inparagraphs 4-7 herein, except as provided for in the next paragraph, but hewill be entitled to all compensation, all benefits, and all unreimbursed expensesaccrued through the date of termination.

 

If after December 31,2002, EXECUTIVE is still on foreign assignment, the EXECUTIVE may request toreturn to the USA for continued employment within HOH.  If a HLT Officer level position is notavailable, EXECUTIVE will then receive severance pay for a period of sixmonths.  This severance pay will bereduced by any compensation he may receive as a result of his employmentoutside the company. EXECUTIVE agrees to give company at least 90 days noticefor this provision to apply.

 

Per previous agreement,company will also pay cost of repatriation to any state in the U.S. whether ornot termination is voluntary or involuntary. Such costs are limited to packing,insurance, temporary storage, transportation of household goods (including airtransportation for up to 500 pounds) and cost of one way air transportation forEXECUTIVE and spouse.”

 

(d)           Terminationby change of control.  In the eventof a Change of Control in which the controlling person does not offer to retainEXECUTIVE’s employment in a similar capacity on comparable terms for at leastone year, HOH shall pay EXECUTIVE Severance Pay on the conditions set forthbelow.

 

(e)           Severancepay.  “Severance Pay” means paymentor provision of: (i) EXECUTIVE’s then applicable base salary for a period of *12*months after the termination date to be paid at the same times and in the sameamounts as if EXECUTIVE’s employment had continued;  (ii) substantially equivalent health, medical, life, anddisability to the extent permitted by HOH insurance policies or plans, for thesame *12***-**monthperiod; and (iii) any incentive bonuses which become due under paragraph 5, forthe year in which termination occurs, prorated for the portion of the yearduring which EXECUTIVE continued to be employed by HOH to be paid with the sameBonus Plan calculations and****at the same time as bonuses are paid toother employees who participate in the Incentive Plan.  Severance Pay is conditioned on EXECUTIVE’sexecution of a full and final release in form satisfactory to HOH andperformance of EXECUTIVE’s covenants in paragraphs 9, 10 and 11 of thisAgreement.

**9.**             **NON-COMPETITIONOBLIGATIONS**.  Inconsideration of his employment by HOH and the Severance Pay to be paid toEXECUTIVE, EXECUTIVE agrees that during his employment, and for a period (the“Restrictive Covenant Period”) after the termination or expiration of hisemployment with HOH, he will not, without first obtaining the express writtenconsent of HOH, own more than 5% of the outstanding stock of a publicly-tradedCompetitive Company (as defined below) or any stock of a privately heldCompetitive Company, or participate in the financing, operation, management orcontrol of, any Competitive Company.  A“Competitive Company” is a person, firm, corporation, or business located inthe United States that is primarily engaged in the production or wholesaledistribution of organic products. EXECUTIVE further agrees that he will not induce any employee of HOH toleave the employ of HOH for a period of twenty-four months after thetermination or expiration of his employment with HOH.  The Restrictive Covenant Period shall be a period of time equalto *1*multiplied by the period of time for which Severance Pay is to be paid.  This paragraph 9 shall survive the terminationor expiration of this Agreement for any reason.

 

**10.          ASSIGNMENTOF INTELLECTUAL PROPERTY**. All processes, inventions, patents, copyrights, trademarks, and otherintangible rights (collectively “Intellectual Property”) that may be conceivedor developed by EXECUTIVE, either alone or with others, during the term  EXECUTIVE’s employment whether or notconceived or developed during EXECUTIVE’s working hours, and with respect towhich the equipment, supplies, facilities, products, or trade secret informationof Company was used, or that relate at the time of conception or reduction topractice of the Intellectual Property to the business of the Company or toCompany’s actual or demonstrably anticipated research and development, or thatresult from any work performed by EXECUTIVE for Company, will be the soleproperty of Company and EXECUTIVE hereby assigns to the Company all ofEXECUTIVE’s right, title, and interest in and to such IntellectualProperty.   EXECUTIVE must disclose toCompany all inventions conceived during the term of employment, whether or notthe Intellectual Property constitutes property of Company under the terms ofthe preceding sentence, but such disclosure shall be received by Company inconfidence.  EXECUTIVE must execute alldocuments, including patent applications and assignments, required by Companyto establish Company’s rights under this paragraph 10.

**11.          CONFIDENTIALITY**.  By virtue of EXECUTIVE’s employment byCompany,  EXECUTIVE will have access totrade secrets and confidential information about Company, its products, itscustomers, its costs, its pricing, and its methods of doing business (the“Confidential Information”).  During andafter the termination of EXECUTIVE’s employment by the Company, EXECUTIVE maynot directly or indirectly disclose or use any such Confidential Information;provided, that EXECUTIVE will not incur any liability for disclosure ofinformation which (i) is required in the course of EXECUTIVE’s employment bythe Company, (ii) was permitted in writing by the Company’s CEO, or (iii) iswithin the public domain or comes within the public domain without any breachof this Agreement.

 

**12.**          **ENFORCEMENT**.  HOH and EXECUTIVE agree that any violation or threatened violation of paragraphs9, 10, and 11 of this Agreement could cause immediate and irreparable harm toHOH for which monetary damages would be inadequate and difficult toascertain.  The parties therefore agreethat, upon the existence of any such violation or threatened violation,provided that HOH has paid and continues to pay  EXECUTIVE his salary, bonus, and benefits as required hereunder,and to honor  EXECUTIVE’s stock optionrights, if any, HOH may cease any further severance payments and benefitsparticipation, obtain a temporary restraining order, preliminary injunction, orother appropriate form of equitable relief from any court of competentjurisdiction.  Such relief shall be inaddition to and not substitution for any monetary damages to which HOH mightotherwise be entitled.

 

**13.**          **CONTROLLINGAGREEMENT**.  This Agreementsupersedes and replaces in its entirety all prior agreements and understandingsbetween HOH and EXECUTIVE relating to EXECUTIVE’s employment by HOH.

**14.**          **MISCELLANEOUS**.

 

(a)           Therights and duties of the parties shall not be assignable by either party,except that HOH may assign its rights but shall continue to guarantee itsobligations, to any corporation or other business entity which is controlled byHOH, which controls HOH, or which is a successor by purchase, merger or otherwiseto HOH.  The heirs, successors, personalrepresentatives, and assigns of EXECUTIVE shall have the right to collect anyaccrued benefits due EXECUTIVE hereunder.

 

(b)           ThisEmployment Agreement and all provisions hereof shall bind and inure to thebenefit of HOH, EXECUTIVE, and their respective personal representatives,heirs, successors, and permitted assigns, but EXECUTIVE is not entitled toassign his rights and obligations hereunder.

 

(c)           ThisAgreement will be deemed to have been entered into, and it will be construedand enforced in accordance with the laws of the State of Colorado as applied tocontracts made and to be performed entirely within Colorado.

 

(d)           Anyaction to enforce or requiring interpretation of this Agreement must be broughtin a forum located within the State of Colorado.

 

(e)           Inthe event that any provision of this Agreement shall be held to be invalid,illegal, or unenforceable, such provision may be severed, modified, or enforcedto the extent possible, and such invalidity, illegality, or unenforceabilityshall not affect the remainder of this Agreement, unless such severance woulddefeat the fundamental purposes of this Agreement.

 

(f)            ThisAgreement may be amended or modified only by written agreement subscribed to byboth of the parties hereto.

 

(g)           Thewaiver by either party of a breach of any provision of this Agreement by theother party shall not operate or be construed as a waiver of any subsequentbreach of the same provision or any other provision of this Agreement.

 

(h)           Thesection headings contained herein are for reference purposes only and will inno way affect the meaning or interpretation of this Agreement.

(i)            Allnotices which are required or may be given under this Agreement shall be givenby certified mail, return receipt requested, registered mail, or personalservice to the following address:

 
| (a)  If  intended for HOH:             |
|--------------------------------------------------|
|                                             |
|                                             |
| Horizon Organic  Holding Corporation             |
| P. O. Box 17577                                  |
| Boulder,  Colorado 80308                         |
| Attn:    CEO                 |
|                                             |
| (b)  with  a copy to:                  |
| Shughart,  Thomson & Kilroy, PC              |
| 1050 Seventeenth  Street, #2350                  |
| Denver, Colorado  80265                          |
|                                             |
| (c)  If  intended for  EXECUTIVE: |
| Horizon  Organic Holding Corporation             |
| P. O. Box 17577                                  |
| Boulder,  Colorado 80308                         |

 

A party may direct from time to time that notices be sent to adifferent address by giving the other party notice in writing of the newaddress.

 

(j)            Toensure rapid and economical resolution of any and all disputes directly orindirectly arising out of or in any way connected with  EXECUTIVE’s employment with HOH or thetermination of that employment or this Employment Agreement, with the soleexception of disputes which arise under EXECUTIVE’s obligations pursuant toparagraph 12 above (collectively, the “Arbitrable Claims”), HOH and EXECUTIVEeach agree that any such dispute, whether of law or fact of any naturewhatsoever, will be resolved by final and binding arbitration under the thenexisting American Arbitration Association (“AAA”) arbitration procedures.  The Arbitrable Claims will include, but willnot be limited to: any and all such claims related to salary, bonuses,commissions, stock, stock options, or any other ownership interests in HOH,vacation pay, fringe benefits, expense reimbursements, severance benefits, orany other form of compensation; claims pursuant to any federal, state or locallaw or cause of action including, but not limited to, the federal Civil RightsAct of 1964, as amended; the federal Age Discrimination in Employment Act, asamended (“ADEA”); the federal Americans with Disabilities Act of 1990; theColorado Anti-Discrimination Act of 1957, as amended; the Wage Claim Act,C.R.S. §§ 8-4-101, et seq., tort law; contract law; wrongful discharge;discrimination; fraud; defamation; and emotional distress; and breach of theimplied covenant of good faith and fair dealing.  EXECUTIVE and HOH acknowledge and agree that any and all rightsthey may otherwise have to resolve such Arbitrable Claims by jury trial, by acourt, or in any forum other than the AAA, are hereby expressly waived.  The arbitrators shall be authorized, inaddition to any other action they may take, to award reasonable attorneys’ feesand costs of arbitration in favor of the prevailing party.

 

Executedeffective the day and year first set forth above.

 

 
| HORIZON ORGANIC HOLDING |                 | EXECUTIVE |           |
|-------------------------|----------------------|-----------|----------------|
| CORPORATION             |                 |      |           |
|                    |
| By:                     | /s/ Charles F. Marcy |      | /s/ D. Gaidano |   |
|                    |                 |      |           |
| Title:                  | President and CEO    |      | Date:          | September 9, 2001 |   |
|                    |                 |      |           |
| Date:                   | August 13, 2001      |      |           |   |
|                         |                      |           |                |  |  |  |  |