EXHIBIT 10.21
DEAN FOODS COMPANY
DEFERRED STOCK UNIT ("DSU") AWARD AGREEMENT
This AGREEMENT (this "Agreement"), effective as of the date indicated
on the attached Notice of Grant, is made and entered into by and between Dean
Foods Company, a Delaware corporation (the "Company"), and the individual named
on the attached Notice of Grant ("you").
WITNESSETH:
WHEREAS, the Board of Directors of the Company has adopted and approved
the Dean Foods Company Amended and Restated 1989 Stock Awards Plan (the "Plan"),
which Plan was approved as required by the Company's stockholders and provides
for the grant of Options, Restricted Stock and other stock-based Awards to
certain selected Employees and Non-Employee Directors of the Company and its
Subsidiaries. Capitalized terms used and not otherwise defined in this Agreement
shall have the meanings set forth in the Plan; and
WHEREAS, the Awards provided for under the Plan are intended to comply
with the requirements of Rule 16b-3 under the Exchange Act; and
WHEREAS, the Committee has selected you to participate in the Plan and
has awarded the deferred stock units ("DSUs") described in this Agreement to
you.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, and as an inducement to you to
continue as an employee of the Company (or its Subsidiaries), you and the
Company hereby agree as follows:
1. Grant of Award. The Company hereby grants to you and you hereby
accept, subject to the terms and conditions set forth in the Plan and in this
Agreement, the number of DSUs shown on the attached Notice of Grant, effective
as of the date indicated on the attached Notice of Grant (the "Date of Grant").
Each DSU represents the right to receive one share of the Company's Common
Stock, subject to the terms and conditions set forth in the Plan and in this
Agreement. The shares of Common Stock that are issuable upon vesting of the DSUs
granted to you pursuant to this Agreement are referred to in this Agreement as
"the Shares." Subject to the provisions of Sections 2 and 6 hereof, this Award
of DSUs is irrevocable and is intended to conform in all respects with the Plan.
2. Vesting.
(a) Regular Vesting. Except as otherwise provided in the Plan or in
this Section 2, your DSUs will vest ratably in five equal annual increments
commencing on the first anniversary of the Date of Grant.
(b) Accelerated Vesting.
(1) Notwithstanding the vesting schedule in Section 2(a) above,
100% of the unvested DSUs subject to this Award will become fully vested, on the
date specified below, if the Volume Weighted Average Price (as defined below) of
the Company's Common Stock equals or exceeds $56.56 per share for any 60
consecutive trading days (the "Stock Performance Target"). For purposes of this
Agreement, "Volume Weighted Average Price" means, for any given 60 consecutive
trading days:
(i) the aggregate sales price of all trades of Common Stock
during such 60 day period,
divided by
(ii) the total number of shares of Common Stock traded during
such 60 day period.
If the Stock Performance Target is achieved, 100% of your unvested DSUs subject
to this Award will become automatically vested on the later of (i) July 7, 2005,
or (ii) the trading day on which the Stock Performance Target is achieved. The
failure of the Common Stock to achieve the Stock Performance Target will not
prevent your DSUs from vesting in accordance with Section 2(a) or 2(b)(2) of
this Agreement.
(2) In addition to the vesting provisions contained in Sections
2(a) and 2(b)(1) above, your DSUs will automatically and immediately vest in
full upon a Change in Control.
(c) Forfeiture of Unvested DSUs. Notwithstanding the provisions of
Sections 2(a) and 2(b) above or any provisions of the Plan to the contrary, if
your employment with the Company or any Subsidiary terminates for any reason
(including, without limitation, by reason of your death, permanent or total
disability, Qualifying Retirement or other retirement) before all or any portion
of the DSUs subject to this Award have vested, the unvested DSUs will be
immediately forfeited and neither you nor your estate will have any further
rights to such unvested DSUs or the Shares represented by those forfeited DSUs.
3. Distributions of Shares.
(a) Distribution Upon Vesting. Unless you have made a proper
deferral election pursuant to Section 3(b) below, the Company will distribute to
you (or to your estate in the event that your death occurs after a vesting date
but before distribution of the corresponding shares of Common Stock), as soon as
administratively practicable after each vesting date, the Shares of Common Stock
represented by the DSUs that vested on such vesting date.
(b) Deferral of Distributions. Notwithstanding the distribution
dates specified in Section 3(a) above, you may elect, ON OR BEFORE MARCH 22,
2003, to defer receipt of all or a
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portion of the Shares represented by your DSUs until a later date. Specifically,
you may elect to defer receipt of all or a portion of the Shares until one of
the following dates (such election being referred to in this Agreement as your
"Deferral Election"):
(i) the 5th anniversary of the Date of Grant (January 7,
2008),
(ii) the 10th anniversary of the Date of Grant (January 7,
2013),
(iii) the termination of your employment with the Company and
its Subsidiaries,
(iv) the earlier of the 5th anniversary of the Date of Grant
or the termination of your employment with the Company
and its Subsidiaries, or
(v) the earlier of the 10th anniversary of the Date of Grant
or the termination of your employment with the Company
and its Subsidiaries.
If you elect to defer receipt of all or a portion of your Shares until one of
the above dates, you must also specify how you wish your Shares to be
distributed in the event of a Change in Control. Specifically, you must indicate
whether, in the event of a Change in Control, you wish to override your previous
Deferral Election and receive your Shares upon the Change in Control, or
continue to receive your Shares in accordance with your initial Deferral
Election.
Your election to defer receipt of all or a portion of the Shares
represented by vested DSUs must be made using the Deferral Election Form
attached to this Agreement and MUST BE RECEIVED BY THE COMPANY ON OR BEFORE
MARCH 22, 2003.
If you elect to defer receipt of less than 100% (the "Deferred
Distribution Percentage") of the Shares represented by your vested DSUs, you
will receive as soon as practicable after each vesting date the remaining
percentage of the Shares represented by the DSUs that vested on such date. If
such number would result in the right to receive a fractional share, the number
of shares to be issued shall be decreased to the next lower number of whole
shares.
For purposes of this Agreement, (i) the deferred distribution date that
you elect is referred to as the "Deferred Distribution Date," and (ii) the
period between the date that any DSU vests and the Deferred Distribution Date
for the Shares represented by that DSU is referred to as a "Deferral Period".
(c) Forfeiture of Shares. Notwithstanding any provision of
this Agreement or the Plan to the contrary, if you are discharged from the
employment of the Company or any of its Subsidiaries due to your willful or
intentional fraud, embezzlement or other conduct seriously detrimental to the
Company or any Subsidiary, your rights in your DSUs (whether vested or unvested)
and your right to receive any undistributed Shares (whether the distribution has
been
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deferred or not) will be immediately and permanently forfeited. The
determination of whether you have been discharged for any of the reasons
specified in the preceding sentence (which will be referred to in this Agreement
as "Cause") will be determined by the Board or the Committee.
(d) Compliance With Law. The Company shall not be obligated to issue
your Shares upon the vesting of any DSU or on any Deferred Distribution Date (or
otherwise) unless the issuance and delivery of such Shares shall comply with all
relevant provisions of law and other legal requirements including, without
limitation, any applicable federal or state securities laws and the requirements
of any stock exchange upon which shares of the Company's Common Stock may then
be listed. As a condition to the distribution of your Shares, the Company may
require you to make such representations and warranties as may be necessary to
assure the availability of an exemption from the registration requirements of
applicable federal or state securities laws. The Company shall not be liable for
refusing to issue your Shares if the Company cannot obtain authority from the
appropriate regulatory bodies deemed by the Company to be necessary to lawfully
distribute your Shares. In addition, the Company shall have no obligation to
you, express or implied, to list, register or otherwise qualify any of your
Shares of Common Stock.
4. Other Rights.
(a) Dividends. If at any time during a Deferral Period (as defined
in Section 3 above), the Company pays a dividend on its Common Stock, then on
each such dividend payment date (each, a "Dividend Payment Date"), you will
automatically receive an additional number of DSUs equal to the Total Dividend
Value divided by the Fair Market Value of the Company's Common Stock on the
Dividend Payment Date. The additional DSUs paid on each Dividend Payment Date
pursuant to the immediately preceding sentence are referred to in this Agreement
as "Dividend DSUs." For each dividend paid during a Deferral Period, the "Total
Dividend Value" will be an amount equal to (i) the per share value of such
dividend, multiplied by (ii) the number of Shares that you have deferred
(pursuant to a valid Deferral Election) and not yet received (such Shares being
referred to in this Agreement as the "Deferred Shares"). Shares represented by
Dividend DSUs will vest and be distributed on the same date as the underlying
Deferred Shares.
(b) Other Shareholder Rights. Except as set forth in Section 4(a)
above and in the Plan, neither you nor any person claiming under or through you
shall be, or have any of the rights or privileges of, a stockholder of the
Company in respect of the Shares issuable pursuant to this Award unless and
until your Shares shall have been delivered to you.
5. Tax Withholding. Any provision of this Agreement to the contrary
notwithstanding, the Company may take such steps as it deems necessary or
desirable for the withholding of any taxes that it is required by law or
regulation of any governmental authority, federal, state or local, domestic or
foreign, to withhold in connection with vesting of any DSU or issuance of any of
the Shares subject thereto.
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6. Transfer of DSUs. The DSUs granted herein are not transferable
except in accordance with the provisions of the Plan.
7. Covenant Not to Compete. In consideration of this Award, you agree
that, during the term of your employment with the Company and its Subsidiaries,
and for a period of two years after termination of your employment with the
Company and its Subsidiaries, you will not, directly or indirectly, become
associated with (whether as owner, partner, stockholder, joint venturer,
manager, investor, employee, consultant, independent contractor or agent) any
business engaged in the manufacture, distribution or sale of fluid dairy
products anywhere in the United States with gross annual revenues equal to or
greater than $500 million; provided that you shall not be restricted hereby from
owning or acquiring 5% or less of the outstanding voting securities of a public
company, and further provided that, the foregoing restriction will terminate
immediately if your employment with the Company or any Subsidiary is
involuntarily terminated by the Company or any Subsidiary without Cause. The
foregoing provision is not intended to override, supercede, reduce, modify or
affect in any manner any other non-competition covenant or agreement entered
into between you and the Company or any of its Subsidiaries. Any such covenant
or agreement shall remain in full force and effect in accordance with its terms.
8. Plan Incorporated. You accept the DSU subject to all the provisions
of the Plan, which, except as expressly contradicted by the terms hereof, are
incorporated into this Agreement, including the provisions that authorize the
Committee to administer and interpret the Plan and which provide that the
Committee's decisions, determinations and interpretations with respect to the
Plan are final and conclusive on all persons affected thereby.
9. Miscellaneous.
(a) No Guaranteed Employment. Nothing contained in this Agreement
shall affect the right of the Company to terminate your employment at any time,
with or without Cause, or shall be deemed to create any rights to employment on
your part. The rights and obligations arising under this Agreement are not
intended to and do not affect the employment relationship that otherwise exists
between the Company and you, whether such employment relationship is at will or
defined by an employment contract. Moreover, this Agreement is not intended to
and does not amend any existing employment contract between the Company and you.
To the extent there is a conflict between this Agreement and such an employment
contract, the employment contract shall govern and take priority.
(b) Notices. Any notice to be given to the Company under the terms
of this Agreement shall be addressed to the Company at its principal executive
offices, and any notice to be given to you shall be addressed to you at the
address set forth on the attached Notice of Grant, or at such other address for
a party as such party may hereafter designate in writing to the other. Any such
notice shall be deemed to have been duly given if mailed, postage prepaid,
addressed as aforesaid.
(c) Binding Agreement. Subject to the limitations in this Agreement
on the transferability by you of the Award granted herein, this Agreement shall
be binding upon and
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inure to the benefit of the representatives, executors, successors or
beneficiaries of the parties hereto.
(d) Governing Law. THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT
OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE AND THE
UNITED STATES, AS APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
(e) Severability. If any provision of this Agreement is declared or
found to be illegal, unenforceable or void, in whole or in part, then the
parties shall be relieved of all obligations arising under such provision, but
only to the extent that it is illegal, unenforceable or void, it being the
intent and agreement of the parties that this Agreement shall be deemed amended
by modifying such provision to the extent necessary to make it legal and
enforceable while preserving its intent or, if that is not possible, by
substituting therefor another provision that is legal and enforceable and
achieves the same objectives.
(f) Interpretation. All section titles and captions in this
Agreement are for convenience only, shall not be deemed part of this Agreement,
and in no way shall define, limit, extend or describe the scope or intent of any
provisions of this Agreement.
(g) Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
(h) No Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
(i) Counterparts. This Agreement may be executed in counterparts,
all of which together shall constitute one agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart.
(j) Relief. In addition to all other rights or remedies available at
law or in equity, the Company shall be entitled to injunctive and other
equitable relief to prevent or enjoin any violation of the provisions of this
Agreement.
END OF AGREEMENT
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DEFERRAL ELECTION FORM
The undersigned hereby elects pursuant to Section 3 of this Agreement
to defer receipt of _____% [INSERT NOT MORE THAN 100] (which percentage will
constitute the Deferred Distribution Percentage under Section 3) of the shares
of Common Stock represented by my vested DSUs until [select (i), (ii), (iii),
(iv) or (v)]:
(i) The 5th anniversary of the Date of Grant (January 7,
------ 2008);
(ii) The 10th anniversary of the Date of Grant (January 7,
------ 2013);
(iii) The termination of my employment with the Company and
------ its Subsidiaries;
(iv) The earlier of the 5th anniversary of the Date of Grant
------ (January 7, 2008) or the termination of my employment
with the Company and its Subsidiaries; or
(v) The earlier of the 10th anniversary of the Date of Grant
------ (January 7, 2013) or the termination of my employment
with the Company and its subsidiaries.
Notwithstanding my election above, if a Change in Control occurs prior
to the date indicated above, I elect for my Deferred Distribution Date to
[select (i) or (ii)]:
(i) remain the same; or
------
(ii) be accelerated to the effective date of such Change in
------ Control.
SIGNATURE:
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PRINTED NAME:
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ADDRESS:
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SOCIAL SECURITY #:
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DATED:
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