Exhibit
10.20


 


EMPLOYMENT AGREEMENT FOR SENIOR EXECUTIVE


 


HORIZON ORGANIC HOLDING CORPORATION, a Delaware
corporation (“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 will
as Managing
Director 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 agrees
to be employed, as Managing Director  of HOH,
International.  HOH may from time to
time designate other or additional functions for EXECUTIVE with HOH as deemed
appropriate by HOH and its subsidiaries, as applicable.


 


3.             DUTIES.  During the term hereof, EXECUTIVE will
devote substantially all of his full time and effort to the business of HOH and
its subsidiaries.  Upon the approval of
the CEO of HOH, EXECUTIVE shall have the right to devote reasonable time to
participation in trade and professional associations, support of community
activities, and service on boards of directors of other corporations; provided,
however, that while employed with HOH, EXECUTIVE shall not be employed by any
other company, individual or entity on a full- or part-time basis, nor shall he
serve as an independent contractor or a paid consultant.  The parties intend that EXECUTIVE’s initial
duties hereunder shall primarily involve duties of the type normally associated
with a managerial position in an organization of the size and type of HOH.  HOH may modify, reduce and/or eliminate
EXECUTIVE’s duties and objectives at its reasonable discretion from time to
time, provided that at no time will EXECUTIVE be required to perform duties or
to meet objectives which are inconsistent with or inappropriate for a member of
senior management of HOH.  EXECUTIVE
shall abide by all of HOH’s policies, procedures and code of conduct as adopted
by HOH in its sole discretion from time to time.








4.             BASE
COMPENSATION.  EXECUTIVE
shall receive compensation from HOH as follows:


 


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


 


(b)                                 Annual
increases in base compensation, if any, shall be established from time to time
by and at the sole discretion of the Board of Directors or Compensation
Committee of HOH.


 


5.             INCENTIVE
COMPENSATION.  EXECUTIVE
shall participate in the HOH Bonus Compensation Plan in accordance with Plan
guidelines established from time to time by the HOH Board of Directors or Compensation
Committee.


 


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


 


7.             STOCK
RIGHTS.  HOH agrees to
grant or has granted to EXECUTIVE the following stock option rights under the
HOH 1998 Equity Incentive Plan:


 


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


 


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


 


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


 


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


 


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


 


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


 


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








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


 


8.             TERMINATION
OF EMPLOYMENT. 
EXECUTIVE and HOH each acknowledge that either Party has the right to
terminate EXECUTIVE’s employment with HOH pursuant to the following:


 


(a)           Termination
by the Company for cause.  HOH will
have the right to terminate EXECUTIVE’s employment with HOH at any time for
“Cause”.  “Cause” for termination will
mean only, in the reasonable judgment of HOH: (i) EXECUTIVE has committed any
material act of embezzlement, fraud and/or is convicted of a felony; (ii)
EXECUTIVE in any material respect, breaches his obligations under this
Agreement; (iii) EXECUTIVE causes material damage to HOH through intentional
misconduct or gross neglect of the duties customary to his office.  No activities or inactivities covered by
items (ii) and (iii) will be deemed to be “cause” unless HOH has notified
EXECUTIVE of such activity or inactivity in writing and EXECUTIVE has failed to
cure the same within 30 days of the notification.  In the event EXECUTIVE is terminated for cause, he will not be
entitled to Severance Pay (as defined below), pay in lieu of notice, or any
other such compensation set forth in paragraphs 4-7 herein, but he will be
entitled to all compensation, all benefits, and all unreimbursed expenses
accrued through the date of termination.


 


(b)           Termination
by the Company without cause.  HOH
will have the right to terminate 
EXECUTIVE’s employment with HOH at any time without cause. In the event
EXECUTIVE is terminated without cause, HOH shall pay EXECUTIVE Severance Pay on
the conditions set forth below.








(c)           Voluntary
termination.  EXECUTIVE may
voluntarily terminate his employment with HOH at any time, after which no
further compensation will be paid to   EXECUTIVE.  To permit HOH to make arrangements to fill
the vacancy created by  EXECUTIVE’s
departure, EXECUTIVE agrees to give HOH 30 days advance notice of any intended
resignation.  In the event EXECUTIVE
voluntarily terminates his employment, he will not be entitled to Severance
Pay, pay in lieu of notice, or any other such compensation set forth in
paragraphs 4-7 herein, except as provided for in the next paragraph, but he
will be entitled to all compensation, all benefits, and all unreimbursed expenses
accrued through the date of termination.


 


If after December 31,
2002, EXECUTIVE is still on foreign assignment, the EXECUTIVE may request to
return to the USA for continued employment within HOH.  If a HLT Officer level position is not
available, EXECUTIVE will then receive severance pay for a period of six
months.  This severance pay will be
reduced by any compensation he may receive as a result of his employment
outside the company. EXECUTIVE agrees to give company at least 90 days notice
for this provision to apply.


 


Per previous agreement,
company will also pay cost of repatriation to any state in the U.S. whether or
not termination is voluntary or involuntary. Such costs are limited to packing,
insurance, temporary storage, transportation of household goods (including air
transportation for up to 500 pounds) and cost of one way air transportation for
EXECUTIVE and spouse.”


 


(d)           Termination
by change of control.  In the event
of a Change of Control in which the controlling person does not offer to retain
EXECUTIVE’s employment in a similar capacity on comparable terms for at least
one year, HOH shall pay EXECUTIVE Severance Pay on the conditions set forth
below.


 


(e)           Severance
pay.  “Severance Pay” means payment
or 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 same
amounts as if EXECUTIVE’s employment had continued;  (ii) substantially equivalent health, medical, life, and
disability to the extent permitted by HOH insurance policies or plans, for the
same 12-month
period; and (iii) any incentive bonuses which become due under paragraph 5, for
the year in which termination occurs, prorated for the portion of the year
during which EXECUTIVE continued to be employed by HOH to be paid with the same
Bonus Plan calculations and  at the same time as bonuses are paid to
other employees who participate in the Incentive Plan.  Severance Pay is conditioned on EXECUTIVE’s
execution of a full and final release in form satisfactory to HOH and
performance of EXECUTIVE’s covenants in paragraphs 9, 10 and 11 of this
Agreement.








9.             NON-COMPETITION
OBLIGATIONS.  In
consideration of his employment by HOH and the Severance Pay to be paid to
EXECUTIVE, EXECUTIVE agrees that during his employment, and for a period (the
“Restrictive Covenant Period”) after the termination or expiration of his
employment with HOH, he will not, without first obtaining the express written
consent of HOH, own more than 5% of the outstanding stock of a publicly-traded
Competitive Company (as defined below) or any stock of a privately held
Competitive Company, or participate in the financing, operation, management or
control of, any Competitive Company.  A
“Competitive Company” is a person, firm, corporation, or business located in
the United States that is primarily engaged in the production or wholesale
distribution of organic products. 
EXECUTIVE further agrees that he will not induce any employee of HOH to
leave the employ of HOH for a period of twenty-four months after the
termination or expiration of his employment with HOH.  The Restrictive Covenant Period shall be a period of time equal
to 1
multiplied by the period of time for which Severance Pay is to be paid.  This paragraph 9 shall survive the termination
or expiration of this Agreement for any reason.


 


10.          ASSIGNMENT
OF INTELLECTUAL PROPERTY. 
All processes, inventions, patents, copyrights, trademarks, and other
intangible rights (collectively “Intellectual Property”) that may be conceived
or developed by EXECUTIVE, either alone or with others, during the term  EXECUTIVE’s employment whether or not
conceived or developed during EXECUTIVE’s working hours, and with respect to
which the equipment, supplies, facilities, products, or trade secret information
of Company was used, or that relate at the time of conception or reduction to
practice of the Intellectual Property to the business of the Company or to
Company’s actual or demonstrably anticipated research and development, or that
result from any work performed by EXECUTIVE for Company, will be the sole
property of Company and EXECUTIVE hereby assigns to the Company all of
EXECUTIVE’s right, title, and interest in and to such Intellectual
Property.   EXECUTIVE must disclose to
Company all inventions conceived during the term of employment, whether or not
the Intellectual Property constitutes property of Company under the terms of
the preceding sentence, but such disclosure shall be received by Company in
confidence.  EXECUTIVE must execute all
documents, including patent applications and assignments, required by Company
to establish Company’s rights under this paragraph 10.








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


 


12.          ENFORCEMENT.  HOH and 
EXECUTIVE agree that any violation or threatened violation of paragraphs
9, 10, and 11 of this Agreement could cause immediate and irreparable harm to
HOH for which monetary damages would be inadequate and difficult to
ascertain.  The parties therefore agree
that, 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 option
rights, if any, HOH may cease any further severance payments and benefits
participation, obtain a temporary restraining order, preliminary injunction, or
other appropriate form of equitable relief from any court of competent
jurisdiction.  Such relief shall be in
addition to and not substitution for any monetary damages to which HOH might
otherwise be entitled.


 


13.          CONTROLLING
AGREEMENT.  This Agreement
supersedes and replaces in its entirety all prior agreements and understandings
between HOH and EXECUTIVE relating to EXECUTIVE’s employment by HOH.








14.          MISCELLANEOUS.


 


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


 


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


 


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


 


(d)           Any
action to enforce or requiring interpretation of this Agreement must be brought
in a forum located within the State of Colorado.


 


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


 


(f)            This
Agreement may be amended or modified only by written agreement subscribed to by
both of the parties hereto.


 


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


 


(h)           The
section headings contained herein are for reference purposes only and will in
no way affect the meaning or interpretation of this Agreement.








(i)            All
notices which are required or may be given under this Agreement shall be given
by certified mail, return receipt requested, registered mail, or personal
service 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 a
different address by giving the other party notice in writing of the new
address.


 


(j)            To
ensure rapid and economical resolution of any and all disputes directly or
indirectly arising out of or in any way connected with  EXECUTIVE’s employment with HOH or the
termination of that employment or this Employment Agreement, with the sole
exception of disputes which arise under EXECUTIVE’s obligations pursuant to
paragraph 12 above (collectively, the “Arbitrable Claims”), HOH and EXECUTIVE
each agree that any such dispute, whether of law or fact of any nature
whatsoever, will be resolved by final and binding arbitration under the then
existing American Arbitration Association (“AAA”) arbitration procedures.  The Arbitrable Claims will include, but will
not 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, or
any other form of compensation; claims pursuant to any federal, state or local
law or cause of action including, but not limited to, the federal Civil Rights
Act of 1964, as amended; the federal Age Discrimination in Employment Act, as
amended (“ADEA”); the federal Americans with Disabilities Act of 1990; the
Colorado 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 the
implied covenant of good faith and fair dealing.  EXECUTIVE and HOH acknowledge and agree that any and all rights
they may otherwise have to resolve such Arbitrable Claims by jury trial, by a
court, or in any forum other than the AAA, are hereby expressly waived.  The arbitrators shall be authorized, in
addition to any other action they may take, to award reasonable attorneys’ fees
and costs of arbitration in favor of the prevailing party.








 


Executed
effective 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