EXHIBIT
10.56
SPECIALTY FOODS CORPORATION
ANNUAL BONUS PLAN
2000
ANNUAL BONUS PLAN
1. PURPOSES
Specialty Foods Corporation ("SFC") has established the Annual
Bonus Plan (the "Plan") as a vehicle for motivating and rewarding
designated executives whose responsibilities have a significant
impact on the key short-term business objectives of SFC. Annual
incentive awards are determined by the relative success of SFC
and in achieving specific annual business objectives. The Plan
provides the opportunity for participants to receive incentive
compensation when results meet or exceed these pre-established
goals.
2. DEFINITION OF TERMS
The following defined terms will have the meanings set forth
below for purposes of the Plan:
a. Annual Salary shall mean the annualized base salary in
effect for a Participant on December 31, 2000.
b. Approval Date shall mean the date of approval of the Plan by
the Compensation Committee.
c. Award shall mean the cash payment made to Participants under
the Plan.
d. Cause shall mean the Participant's admission or conviction
of a felony, the Participant's commission of an act of dishonesty
in the course of his or her duties, the Participant's repeated
disregard of policy directives of SFC or the Subsidiaries, or the
Participant's breach of his or her fiduciary responsibilities or
duties as an employee of SFC or the Subsidiaries.
e. Compensation Committee shall mean the committee designated
as such by the Board of Directors of SFC.
f. Change of Control shall mean the date, if any, at which (i)
with respect to SFAC, a person or group (as such term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) other than Acadia Partners, L.P., Keystone, Inc., HWP
Partners, L.P. and their respective Affiliates (as defined in
Section 2.1(a) of the Principal Stockholders Agreement) (such
person or group being a "Non-Affiliate") has the collective
ability to directly or indirectly designate a majority of the
members of the SFAC Board (whether by contract or otherwise) or
(ii) with respect to SFC, a transaction is consummated (including
a sale, merger or other similar transaction, but excluding any
transaction among only SFAC, SFC and or their subsidiaries) (x)
pursuant to which all or substantially all of the assets of SFC
are sold or otherwise transferred to Non-Affiliates (the sale of
Mother's Cake and Cookie Co. and Archway Cookies, Inc. to be
deemed such a sale) (y) pursuant to which Non-Affiliates acquire
the collective ability to designate directly or indirectly a
majority of the Board of Directors of SFC (by contract or
otherwise) or (z) which the Compensation Committee of the Board
of Directors of SFC determines, in its discretion, to be a change
of control.
g. Participant shall mean an employee designated by the
Compensation Committee to participate in the Annual Bonus Plan,
provided the authority to designate Participants may be delegated
by the Compensation Committee to SFC.
h. Performance Objectives shall mean the performance objective
of SFC determined by the Compensation Committee for the Plan
Year.
i. Plan shall mean this Annual Bonus Plan.
j. Plan Year shall mean January 1, 2000 through December 31,
2000.
k. SFC shall mean Specialty Foods Corporation.
l. Subsidiary shall mean a direct or indirect subsidiary of SFC
which is included in SFC's consolidated tax return.
3. ELIGIBILITY FOR PARTICIPATION
An Award may be granted for the Plan Year to each Participant who
is in active service during the Plan Year and shall include the
employees identified on Annex A.
4. PERFORMANCE OBJECTIVES
Performance Objectives shall be recommended by the Chief
Executive Officer of SFC and approved by the Compensation
Committee for the Plan Year and will be reflected in the attached
Annex B entitled "2000 Annual Bonus Plan Performance Objectives."
5. ADMINISTRATIVE GUIDELINES
a. Adjustments in Financial Performance Measurements
In order to effectuate the purpose of the Plan, the Compensation
Committee may make adjustments in the criteria established for
the Plan Year which reflect any extraordinary changes that may
have occurred during the Plan Year or which significantly alter
the basis upon which such performance levels were determined.
Such changes may include, without limitation, changes in
acquisitions, accounting practices, tax, regulatory or other laws
or regulations, divestitures, financings, or economic changes not
in the ordinary course of business cycles. Any adjustments made
by the Compensation Committee can be made at any time and in any
manner that the Compensation Committee in its sole discretion
deems appropriate, and any and all such adjustments shall be
conclusive and binding upon all parties concerned.
b. Vesting of Awards
As of the Approval Date, the Participant shall have earned and
shall be fully vested in his or her Award, which Award shall be
paid to the Participant at the time that such payment is to be
made if all conditions with respect to the payment of such
amount, as set forth in this Plan, are met. If such conditions
are not met, no Award payment shall be made.
c. Payment of Bonus Awards
Award payments will normally occur concurrently with payment for
the last pay period in February of the year following the Plan
Year. Payments will normally be made by ordinary payroll
methods.
d. Payment of Award Upon Change of Control
Upon a Change of Control, a Participant shall receive his or her
Award under the Plan. Award payments shall be made no later than
one day following a Change of Control and such payments shall be
pro rated on the basis of the portion of the Plan Year having
actually elapsed through the date of the Change of Control.
6. GENERAL RULES
a. Effective Date. This Plan shall have an effective date of
January 1, 2000.
b. Amendment. The Plan has been adopted by the Board of
Directors of SFC and may be amended from time to time, in
any respect, by such Board. Any such amendment may add to,
amend, reduce or cancel any and all rights in regard to the
Plan.
c. Administration. The Compensation Committee shall be
responsible for the general operation and administration of the
Plan and shall have the authority to interpret the Plan and to
adopt administrative rules and regulations governing its
operation, provided that the Compensation Committee may delegate
this responsibility to any officer of SFC.
d. Termination. The Plan may be terminated at any time by the
Board of Directors of SFC. Upon such termination, all
rights of a Participant to amounts not then awarded to
Participants shall be null and void. However, amounts
previously accrued through the date of the Plan termination
shall not be affected.
e. Continued Employment. Participation in the Plan shall not
give any employee any right to remain in the employment of
SFC. The Plan is not to be construed as a contract of
employment for any period and does not alter the "employee-
at-will" employment status or employment agreement of any
Participant.
f. Employment Taxes. Award payments under the Plan shall be
treated as wages and shall be subject to income, FICA and
any other applicable withholding taxes and deductions at the
time received as required by applicable law or regulation,
as in effect from time to time.
g. Employment Agreements. If a Participant is party to an
employment agreement, the terms of which relate to annual
bonuses and which are inconsistent with the terms of this
Plan, the terms of such employment agreement shall govern to
the extent of such inconsistency.
h. Unfunded Plan. The obligations under this Plan shall be
unfunded. Neither SFC nor any of the Subsidiaries shall be
required to establish any special or separate fund or to
make any other segregation of assets to assure the payment
of any Award under this Plan.
i. Successors Bound. The rights and obligations of the Company
hereunder shall inure to the benefit of and be binding upon
the successors of the Company.
j. Assignment. Participants shall not assign any rights
granted to them by the terms of this Plan or encumber in any
way their interests herein; provided, however, that in the
event of a Participant's death, any payments then due and
owing will be made when due prorated to the date of death.
k. Effect of Plan. This Plan shall have a term expiring on the
earlier of (1) the date on which all Awards earned under the
Plan, if any, are paid to Participants and (2) the date on
which a determination is made by the Compensation Committee
that no Awards have been earned under the Plan (provided
that the authority to determine that no Awards have been
earned under the Plan may be delegated by the Compensation
Committee to SFC). At such time, the Plan shall expire and
be of no further force or effect.
l. Governing Law/Jurisdiction. The substantive law (and not
the law of conflicts) of the State of Illinois will govern
all questions concerning the construction, validity and
interpretation of this Plan and the performance of the
obligations imposed by this Plan. The parties hereby waive
their rights to request or demand a trial by jury in the
event controversy arises under this Plan.
m. Headings. The headings used herein are for reference
purposes only and shall not in any way affect the meaning or
interpretation of this Plan.
