VOLUME SERVICES AMEPICA
John T Dee
Chairman
Chief Executive Officer
January 5, 2001
Mr. Kenneth R. Frick
2 Laurel Lane
Campobello, SC 29322
Re: Enhanced Severance Benefits
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Dear Mr. Frisk:
As you know, the shareholders of Volume Services America Holdings, Ins. are
exploring the possible sale of all or substanially all of the business of
Holdings and its subsidiaries (the "Company") to a person or entity
unaffiliated with Blackstone Capital Partners II Merchant Banking Fund L.P. (the
"Purchaser"), by means of a disposition of stock, assets or otherwise (the
"Disposition").
It is not yet certain that any transaction will occur. However, the Company
recognizes that the uncertainties surrounding this event may result in the
loss or distraction of a limited number of key employees, including you, to the
detriment of the Company.
Therefore, the Company has decided to enhance the benefits that you will
receive under your Employment Agreement dated as of November 17, 1995 (the
"Employment Agreement"), in the event that the following two conditions are
satisfied: (a) the Disposition closes on or before December 31, 2001 and (b)
your employment terminates in connection with, or within the twelve (12) month
period following, the closing of the Disposition because the Company or the
Purchaser materially breaches your Employment Agreement or terminates your
employment for any reason other than Just Cause (which for purposes of this
enhancement only is limited to those acts or omissions enumerated in subsections
(i) through (v) of Section 5 (b) (4) of your Employment Agreement), permanent
disability or death. The two conditions described in this paragraph are referred
to as the "Enhanced Severance Conditions." (Please note that the termination of
your employment under any other circumstances, including, but not limited to,
your rejection of an offer of continued employment by the Purchaser under the
terms of the Employment Agreement, as modified herein, will be governed by your
Employment Agreement.)
Mr. Kenneth R. Frick
January 5, 2001
Page 2
Enhanced Severance Benefits
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In the event the Enhancef Severance Conditions occur, you shall be entitled
to receive, from the Company or, if applicable, the Purchaser, in lieu of any
and all other notice (including notice under Section 5(a) of your Employment
Agreement), payments, and benefits to which you would otherwise be entitled upon
termination, under your Employment Agreement or otherwise, the following: (1) a
lump sum payment equal to three (3) years of your base salary (excluding all
forms of extra compensation), plus the Company subsidy for eighteen (18) months
of COBRA coverage, less withholdings for taxes, but up to a maximum gross
payment equal to two and ninety-nine one hundredths times (2.99x) your average
W-2 compensation for the five (5) calendar years preceding the Disposition; (2)
payment for the accrued but unused part of your vacation in the year the
termination of your employment occurs; (3) notwithstanding anything to the
contrary in any bonus plan, payment for any accrued, but unpaid, bonus at the
time of termination or a pro-rated amount of your bonus in the event the
termination occurs prior to the end of the Company's fiscal year, but in either
case payable at the end of the second month following the end of the fiscal year
to which the bonus applies; (4) reimbursement of expenses incurred through the
date of termination; and (5) outplacement counseling and the support services of
an Executive outplacement firm until you are re-employed, but no longer than
eighteen (18) months after termination.
Payment of these Enhanced Severance Benefits shall be conditioned upon your
execution of a full release of all claims against the Company and/or the
Purchaser (other than claims with respect to vested retirement benefits,
deferred compensation, stock options and limited partnership interests; and
other than with respect to workers compensation claims) in a form acceptable to
the Company or, if applicable, the Purchaser.
This correspondence contains the entire agreement concerning its subject
matter and replaces any other compensation Plan, promise or arrangement you may
have or may be eligible for concerning its subject matter except that it shall
only amend and replace your Employment Agreement to the extent of enhancing the
severance available under the Enhanced Severance Conditions as described herein.
Your Employment Agreement shall otherwise remain in full force and effect. These
Enhanced Severance Benefits shall expire if the closing of the Disposition of
the Company has not occurred by December 31, 2001.
Sincerely,
VOLUME SERVICES AMERICA, INC.
/s/ John T. Dee
John T. Dee
Chairman and Chief Executive
Officer