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EXHIBIT 10(B)
SEVERANCE, CONSULTING AND NON-COMPETE AGREEMENT
This Agreement is made and entered into as of December 5, 1996 by and
between DEAN FOODS COMPANY, a Delaware corporation (the "Company"), and THOMAS
L. ROSE ("Executive").
RECITALS:
A. Executive has for many years served as an executive of the
Company, he is presently serving as President of the Company, he
will continue to hold this office position until his successor shall
have been elected, and he will thereafter remain an employee of the
Company until December 31, 1996 (the "Severance Date") and serve as
Vice-Chairman for such period as the Board of Directors determines
in its sole discretion.
B. The Company desires to continue to make use of Executive's
expertise after the Severance Date on a consulting basis and to
prevent any competitive business from securing or utilizing the
services of Executive to the extent and for the period hereinafter
provided.
C. Executive desires to continue working for the Company on the
terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the recitals and the mutual agreements
herein contained, the parties hereto agree as follows:
1. Severance Benefits. The following severance benefits, which are
required by law or contract, shall be provided to Executive:
(a) Five weeks of vacation compensation.
(b) Any benefits due under the Company's Management
Deferred Compensation Plan, 1989 Stock Awards Plan and any
qualified retirement plan.
(c) Executive has elected to receive a lump-sum retirement
benefit payable on January 2, 1997, such benefit to be
provided to Executive pursuant to the Company's Amended and
Restated Supplemental Benefit Plan.
In addition, the Company will provide the following special severance
benefits to Executive:
(d) Executive's fiscal 1997 incentive bonus, calculated in
accordance with the Company's existing formula and based on
(i) a base pay amount equal to the wages earned by Executive
through the Severance Date plus the consulting fees earned by
Executive until the first to occur of May 25, 1997 or the
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end of the Consulting Term (as hereinafter defined) and
(ii) a personal performance rating of 80%. Such bonus shall
be payable in August, 1997.
(e) A severance payment, payable within 30 days
after the first anniversary of the end of the Consulting
Term, calculated in the manner set forth in clause (d) above,
except that the base pay amount shall be $383,000.00 and
provided that such bonus shall not be less than $197,000.00.
(f) Company life, health and dental insurance
benefits at employee contribution rates until October 13,
2001, or the date on which comparable employer-provided
benefits are available to Executive.
(g) Use of a Company-leased car comparable to the
car currently used by Executive until December 31, 1998 in
accordance with Company policies relating thereto from time
to time in effect.
(h) Payment of up to $6,000 per year for financial
consulting services provided to Executive until April 15,
1999.
(i) Country club dues reimbursement until December
31, 1998 in accordance with Company policies relating thereto
from time to time in effect.
(j) A supplemental lump sum retirement benefit,
payable on January 2, 1997, of $420,562, such benefit to be
provided to Executive in excess of the benefit to be provided
to him under the Company's Amended and Restated Supplemental
Benefit Plan (described in Section 1(c) hereof).
(k) A supplemental lump sum retirement benefit,
payable in September, 1997, equal to 140% of the excess, if
any, of the 1997 fiscal bonus calculated in the manner set
forth in clause (d) above over $197,000.00.
(l) The Company's payment to Executive in fiscal
1998 of the final $55,500 installment of Executive's
relocation allowance previously agreed upon by the parties.
The Company also agrees to amend as of the date hereof all existing
incentive stock option agreements between the Company and Executive pursuant to
the terms of the Amendment to Incentive Stock Option Agreements set forth in
Exhibit A hereto, and further agrees to amend as of the date hereof all
existing Non-Qualified Stock Option Agreements between the Company and
Executive to conform to the terms set forth in the form attached hereto as
Exhibit B.
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2. Nature and Term of Consulting Services. The Company hereby agrees to
engage Executive, and Executive hereby agrees to serve the Company, as a
full-time consultant during the term (the "Consulting Term") commencing on the
Severance Date and ending on the first to occur of (a) Executive's inability,
including as a result of his death or disability, or his refusal in his sole
discretion to serve as a full-time consultant of the Company as described
herein or (b) such date as the Chief Executive Officer of the Company (the
"CEO") shall determine in his sole discretion that the Executive's full-time
consulting services are no longer required. During the Consulting Term,
Executive shall devote his best efforts and his full business time and
attention in rendering such services as reasonably requested by the CEO.
3. Compensation Benefits.
(a) Consulting Fees. During the Consulting Term,
Executive shall be paid consulting fees in the amount of
$31,917.00 per month. In the event that the Consulting Term
ends after May 25, 1997, Executive shall be paid one or more
additional consulting payments, payable within 30 days after
the first to occur of the end of the Consulting Term or the
end of each fiscal year after fiscal 1997, in an amount equal
to 51.4% of the consulting fees earned by Executive during
such fiscal year.
(b) Reasonable Expenses. During the Consulting
Term, the Company will reimburse Executive for his reasonable
expenses necessarily incurred in the performance of his
assigned duties, subject to the Company's policies relating
thereto from time to time in effect.
(c) Performance Bonuses. Executive and the Company
agree that, except as otherwise described herein, all
existing benefits of Executive under any bonus or incentive
compensation plan of the Company shall be terminated and the
benefits described in this Agreement are substituted in lieu
thereof.
4. No Competition; Confidentiality.
In consideration of the payments to be made to Executive hereunder and the
additional non-compete payment of $963,000, payable in 24 monthly installments
of $32,000.00 during the two-year period (the "Non-Compete Period") commencing
immediately after the end of the Consulting Term plus a final installment of
$195,000.00, payable within 30 days after the Non-Compete Period, Executive
agrees that:
(a) During the Consulting Term, Executive will not
in any manner, directly or indirectly, through any person,
firm or corporation, alone or as a member of a partnership or
as an officer, director,
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stockholder, investor or employee of or in any other
corporation or enterprise or otherwise, engage or be engaged
in, or assist any other person, firm, corporation or
enterprise in engaging or being engaged in, the development,
processing, marketing, distribution or sale of any product of
a kind actively being developed, processed, marketed,
distributed or sold by the Company or any of its subsidiaries
or affiliates (collectively, the "Dean Companies"), in any
geographic area in which the Company or any of its
subsidiaries or affiliates is engaged in such development,
processing, marketing, distribution or selling (whether
through production, calling on customers or prospective
customers, or otherwise) at the end of the Consulting Term.
During the Non-Compete Period, in the event that Executive
engages in any of the foregoing activities, all benefits,
consulting fees and other payments to which he would
otherwise be entitled hereunder, other than the benefits
provided in clauses (d), (j) and (k) of Section 1, shall
forthwith cease. Executive further covenants and agrees
that, during the Consulting Term and the Non-Compete Period,
he shall not induce, attempt to induce, or in any way assist
or act in concert with any other person, firm or entity in
inducing or attempting to induce, any employee or agent
of any of the Dean Companies to terminate his, her or its
relationship with any of the Dean Companies. Nothing
contained herein shall preclude Executive from owning less
than 5% of any class of publicly-traded securities of any
corporation.
(b) Executive will not divulge, furnish or make
accessible to anyone, otherwise than in the regular course of
performance of his duties hereunder, or use for his benefit
or for the benefit of any other person, firm, corporation or
other entity, any trade secret, knowledge or other
information with respect to the confidential or secret
processes, plans, devices or materials of any of the Dean
Companies.
(c) All developments, processes, inventions,
equipment or products, except those of a nature totally
unrelated to those utilized by any of the Dean Companies,
whether patentable or unpatentable, made, conceived or
resulting from work done solely by Executive or jointly with
Company employees or agents or acquired by him prior to the
end of the Consulting Term shall be the sole property of the
Dean Companies, irrespective of whether so made, conceived or
resulting from work done, or acquired, during business hours
or after business hours. Executive further agrees to execute
all documents necessary to vest full and unencumbered title
thereto in the Company and to do all things deemed necessary
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by the Company to obtain patent protection thereon in all
countries or to maintain the same as trade secrets, if the
Company so elects, at the Company's expense.
(d) The provisions of this Section 4(b) and (c)
shall survive the expiration or termination of this
Agreement.
(e) If under the circumstances existing at the time
of enforcement of any of the provisions of this Section 4,
the period, scope or area described therein shall be found or
held to be unreasonable, the parties agree that the maximum
period, scope or area reasonable under the circumstances
shall be substituted for the stated period, scope or area.
5. Tax Consequences. Executive expressly acknowledges and agrees that the
payments to be made hereunder to him by the Company shall be taxed to him as
items of ordinary income and that the Company will withhold from the payments
to be made hereunder as may be required by applicable law.
6. Relief for Breach. Executive recognizes and agrees that his covenants
and undertakings contained herein relate to matters which, for purposes of this
Agreement exclusively, are of a special and unique character and that a breach
thereof by Executive will result in irreparable injury to the Company for which
there is no adequate remedy at law. Executive, therefore, expressly agrees
that if he shall at any time breach or in any manner violate any of the terms
of this Agreement, the Company shall be entitled, at any time after any such
breach, to immediately obtain in any court of competent jurisdiction injunctive
relief against Executive (in addition to, and not in substitution for, any and
all other relief to which the Company may be entitled either at law or in
equity) prohibiting Executive from committing such breach or violation and
compelling compliance by Executive with his obligations hereunder. Executive
agrees that the Company shall be entitled to recover all costs of successfully
enforcing any provision of this Agreement, including reasonable attorneys'
fees. In the event of any breach or violation by Executive of any of his
covenants herein, any applicable non-compete period set forth in Section 4
shall be extended automatically for a period equal to the period during which
Executive committed such breach or violation. In addition, in the event
Executive shall breach this Agreement in any manner, all benefits, consulting
fees and other payments to which he would otherwise be entitled under this
Agreement, other than the benefits provided in clauses (d), (j) and (k) of
Section 1, shall forthwith cease.
7. Waiver and Release. In consideration of the benefits set forth above,
Executive promises to waive and to release the Dean Companies from liability
for all rights and claims, whether or not they are presently known to exist,
that Executive has against the Dean Companies relating in any way to his
employment or separation from employment. For the purposes of this waiver and
release, the Dean Companies should be
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understood to also include all present and former directors, shareholders,
employees and agents of the Dean Companies. It also means successors and
assigns of the Dean Companies.
The rights and claims which Executive waives and releases in this
Agreement, include, to every extent allowed by law, those arising under the
Employee Retirement Income Security Act of 1974, the Civil Rights Acts of 1866,
1871 and 1964, the Rehabilitation Act of 1973, and the Age Discrimination in
Employment Act of 1967, as amended by the Older Worker's Benefit Protection Act
of 1990. This is not a complete list, and Executive waives and releases all
similar rights and claims under all other federal, state and local
discrimination provisions and all other statutory and common law causes of
action relating in any way to his employment or separation from employment.
The Company and Executive each agree that they shall not undertake or make
any disparaging conduct or derogatory statements concerning the other.
Further, the terms and the amounts of the benefits shall remain confidential
and shall not be disclosed by Executive to anyone other than his spouse,
financial advisor and attorney, provided they agree to nondisclosure.
8. Personal Services; Assignment.
(a) Executive shall perform all consulting services as an independent
contractor and not as an employee of the Company. All payments of consulting
fees to Executive hereunder shall be made to him in person or upon his personal
receipt or endorsement, and shall not be grantable, transferable or otherwise
assignable in anticipation of payment thereof, in whole or in part, by his
voluntary or involuntary act, or by operation of law, and shall not be liable
or taken for any obligation to him; it being intended that no right to any such
payment shall occur until the conditions prescribed herein with respect thereto
shall have been complied with.
(b) This Agreement shall be binding upon and inure to the benefit of the
parties, their legal representatives, successors and assigns, and all persons
entitled to benefits hereunder; provided, however, that Executive may not
delegate any of his duties hereunder.
9. No Collateral. The rights of Executive under this Agreement shall be
solely those of an unsecured creditor of the Company.
10. Entire Agreement; Amendment. This Agreement contains the entire
understanding and agreement between the parties with respect to the subject
matter hereof and may not be amended, modified or supplemented in any respect
except by a subsequent written agreement duly executed by Executive and the CEO
of the Company. Executive expressly agrees that the provisions of this
Agreement supersede and replace completely as of the date hereof all agreements
relating to his compensation from any of the Dean Companies.
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11. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly received or made if mailed by
United States registered or express mail, postage paid, return receipt
requested, addressed as follows:
If to Executive, to:
Thomas L. Rose
If to the Company, to:
Dean Foods Company
3600 North River Road
Franklin Park, Illinois 60131
Attention: Chief Executive Officer
or if delivered in person to either Executive or the CEO of the Company or to
such other person or such other address as either party may hereunder designate
by written notice to the other party. Each such communication shall be deemed
to have been given and received as of the opening of business on the second
business day after so mailed or at the time of delivery if delivered in person.
12. Governing Law. The provisions of this Agreement shall be construed
according to the laws of the State of Illinois, and the invalidity or
unenforceability of any paragraph or portion of this Agreement shall not affect
the remaining parts hereof.
13. Construction. The language used herein shall be deemed to be the
language chosen by all parties to express their mutual understanding with
respect to the subject matter of this Agreement and no rule of strict
construction shall apply to any term or provision hereof.
14. Purchasing Power Not Guaranteed. Except as otherwise specifically
provided herein, the monetary amounts payable pursuant to this Agreement have
been negotiated between the parties, who have taken into account the possible
effects of inflation and have specifically agreed that no adjustments of the
amounts referred to herein shall be required at any time for any reason,
including without limitation depreciation in the purchasing power of the
dollar.
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IN WITNESS WHEREOF, the undersigned have hereunto executed this Agreement
as of the date first above written.
/s/ Thomas L. Rose DEAN FOODS COMPANY
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Thomas L. Rose
By: /s/ Howard M. Dean
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Its: Chairman & CEO
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Exhibit A
AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENTS
This Amendment is made and entered into as of December ___, 1996 by and
between DEAN FOODS COMPANY, a Delaware corporation (the "Company"), and THOMAS
L. ROSE ("Executive").
WHEREAS, the Company, pursuant to authorization of the Compensation
Committee of its Board of Directors, and Executive desire to amend all existing
incentive stock option agreements (collectively, the "ISO Agreements") between
the Company and Executive in the manner set forth herein.
NOW THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto amend each of the ISO Agreements as follows:
1. The first sentence of paragraph 1 of each ISO Agreement is amended by
reducing the aggregate number of Option Shares (as such term is defined in such
ISO Agreement) by 20%, provided that any fraction resulting from such reduction
is rounded up to the next higher whole number of Option Shares.
2. The second sentence of paragraph 1 of each ISO Agreement is deleted in its
entirety and the following sentence is inserted in its place: "Your option is
not intended to be, and will not be treated as, an 'incentive stock option' as
such term is defined in Section 422A(b) of the Internal Revenue Code of 1986,
as amended (the 'Code')."
3. Paragraph 3 of each ISO Agreement is deleted in its entirety and the
following is inserted in its place:
"3. Your option will be exerciseable immediately as to all of the Option
Shares."
Except as otherwise provided in paragraph 4 hereof, your option will
expire on the second business day immediately following the tenth
anniversary of the Grant Date.
Each time you wish to exercise your option to purchase Option Shares, you
must give the Company written notice of exercise (attention Secretary),
which notice must specify the number of full Option Shares to be
purchased and the purchase price to be paid therefor. You may exercise
your option with respect to all or any part of the Option Shares, but you
may not exercise your option as to a fraction of a full share. Your
written notice of exercise must be accompanied by payment in full of the
purchase price, in the form of cash or a check, bank draft or money order
payable to the order of the Company or shares of Company Common Stock
already owned by you (valued at the fair market value thereof on the date
of
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exercise) or a combination thereof. If you are a member of the Board or
an officer of the Company at the time of exercise, your written notice of
exercise must also be accompanied by your signed election pursuant to
Section 83(b) of the Code (on a form acceptable to the Company) to
include in your gross income for your tax year in which the exercise
occurs the excess of the fair market value (at the time of exercise) of
the Option Shares to be purchased over the purchase price to be paid
therefor. Fair market value for all purposes of this Agreement will be
determined by the Committee."
4. Subparagraph 4(a) of each ISO Agreement is deleted in its entirety and
replaced with the following:
"4.(a) Except as hereinafter set forth in this paragraph 4, if your
employment with the Company terminates for any reason, your option may be
exercised within five (5) years after the date of such termination (in
the event of your death, by your estate or by the person who acquired the
right to exercise your option by bequest or inheritance or by reason of
the laws of descent and distribution), but not beyond the second business
day immediately following the tenth anniversary of the Grant Date."
5. Paragraph 5 of each ISO Agreement is deleted in its entirety and replaced
with the following:
"5. Promptly after an effective exercise of your option in whole or in
part, the Company will make a cash payment to you equal to the percentage
determined as provided below of the excess of the fair market value (at
the time of the option exercise) of the Option Shares as to which you are
then exercising your option over their option price. The percentage
referred to above will be determined by (a) dividing (i) the Tax Rate
derived from the federal income tax rates in effect for your tax year in
which the option exercise occurs by (ii) the quantity one minus such Tax
Rate, and (b) multiplying the result by 100; subject to the limitation
that such percentage may not exceed 100%. The Tax Rate, for such
purpose, will be the total (expressed as a decimal) of your individual
state income tax rate (reduced by any federal income tax deduction
therefor) plus the maximum marginal federal income tax rate for
individuals such that there does not exist a lower marginal federal
income tax rate which would be applicable if adjusted gross income or
taxable income were increased, disregarding any alternative minimum tax
or other alternative or add-on tax based on tax preference items."
6. Paragraph 7 of each ISO Agreement is deleted in its entirety and replaced
with the following:
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"7. In the event of any Change of Control prior to the expiration of
your option, you may, at any time during the 90 days following such event
(but not after the expiration of your option), in lieu of exercising your
option, surrender your option to the Company and receive therefor a cash
payment equal to the sum of:
(a) an amount equal to the excess of (i) the highest aggregate
fair market value, during the period beginning 30 days before and
ending 30 days after such event, of the Option Shares as to which
your option is surrendered, over (ii) the option price of such
Options Shares, plus
(b) the percentage of the amount set forth in (a) above determined
as provided in paragraph 5 hereof based on the federal income tax
rates in effect for your tax year in which the surrender occurs,
subject to the limitation that such percentage may not exceed
100%.
If you wish to so surrender your option, you must give the Company
written notice of surrender (attention Secretary), which notice must
specify the number of Option Shares which then remain subject to your
option. A "Change of Control" will be deemed to have occurred if: (i)
there is a change in control of the Company that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A,
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); or (ii) any person or entity (which includes any "group"
as such term is used in Section 13(d)(3) of the Exchange Act) is,
directly or indirectly, the "beneficial owner" (as such term is used in
Rule 13d-3 under the Exchange Act) of securities of the Company
representing 20% or more of the combined voting power of the Company's
then outstanding securities (computed as described in such Rule); or
(iii) a majority of the members of any class of directors of the Company
are persons who were neither nominated by the Board for election by the
stockholders nor elected by the Board to fill vacancy(ies) on the Board;
or (iv) the Company (or any substantial portion of its assets) is
combined with or acquired by another person or other entity; provided,
however, that (v) no "Change of Control" shall be deemed to have occurred
with respect to any transaction (or series of transactions) which shall
have been approved in advance by a majority of the Board, exclusive of
members who are employed by or otherwise affiliated with the person or
other entity seeking to effect the Change of Control; (vi) a "Change of
Control" shall not include any acquisition of voting stock by any
underwriting syndicate or underwriter for so long as such syndicate or
underwriter holds the voting stock for distribution to the public
pursuant to an underwriting agreement between the Company and such
syndicate or underwriter; and (vii) a "Change of Control" shall not
include any acquisition by any defined contribution plan which is
qualified pursuant to the applicable provisions of the Code and is
maintained for the benefit of the employees of the Company and/or its
subsidiaries."
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Except as otherwise provided herein, each of the ISO Agreements shall
remain in full force and effect unamended.
IN WITNESS WHEREOF, the undersigned have hereunto executed this Amendment
as of the date first above written.
DEAN FOODS COMPANY
_______________________________ By: _________________________
Thomas L. Rose
Its: _________________________
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[DEAN FOODS LETTERHEAD] Exhibit B
AMENDED AND RESTATED
NON-QUALIFIED STOCK OPTION AGREEMENT
[Grant Date]
[Name]
[Address]
[City, State]
Dear [Name]:
I am pleased to advise you that on [Grant Date], (the "Grant Date"), the
Committee for the Company's 1989 Stock Awards Plan (which Plan, as the same
may hereafter be amended from time to time, is referred to as the "Plan")
granted the following option, effective and speaking as of the Grant Date:
1. You are hereby granted the right and option to purchase, on the
terms and conditions hereinafter set forth, all or any part of an
aggregate of shares of the Company's Common Stock, par value $1 per
share (herein the "Option Shares") at a purchase price of $______ per
Option Share. Your option is not intended to be, and will not be
treated as, an "incentive stock option" as such term is defined in
Section 422A(b) of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Your option is irrevocable and is intended to conform in all
respects with the Plan as presently written. Inconsistencies between
your option and the Plan will be resolved according to the terms of
the Plan, a copy of which has been supplied to you.
3. Your option will be exercisable immediately as to all of the
Option Shares. Except as otherwise provided in paragraph 4 hereof,
your option will expire on the tenth anniversary of the Grant Date.
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Each time you wish to exercise your option to purchase Option
Shares, you must give the Company written notice of exercise
(attention Secretary), which notice must specify the number of full
Option Shares to be purchased and the purchase price to be paid
therefor. You may exercise your option with respect to all or any
part of the Option Shares as to which your option has become
exercisable, but you may not exercise your option as to a fraction
of a full share. Your written notice of exercise must be accompanied
by payment in full of the purchase price, in the form of cash or a
check, bank draft or money order payable to the order of the Company
or shares of Company Common Stock already owned by you (valued at the
fair market value thereof on the date of exercise) or a combination
thereof. If you are a member of the Board or an officer of the
Company at the time of exercise, your written notice of exercise must
also be accompanied by your signed election pursuant to Section 83(b)
of the Code (on a form acceptable to the Company) to include in your
gross income for your tax year in which the exercise occurs the
excess of the fair market value (at the time of exercise) of the
Option Shares to be purchased over the purchase price to be paid
therefor. Fair market value for all purposes of this Agreement will
be determined by the Committee.
4. (a) Except as hereinafter set forth in this paragraph, if your
employment with the Company terminates because of your
death or disability or terminates for any other reason after you
have reached age sixty, your option must be exercised within
five (5) years after the date of such termination (in the event
of your death, by your estate or by the person who acquired the
right to exercise your option by bequest or inheritance or by
reason of the laws of descent and distribution), to the extent
to which your option is exercisable at the date of such
termination, but not beyond the tenth anniversary of the Grant
Date. If at any time you take an authorized leave of absence,
the Committee may (but
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need not) determine that for this purpose you will be deemed to
continue in the Company's or a subsidiary's employment.
(b) You may not under any circumstances exercise your
option following termination of employment if you are discharged
because of fraud, embezzlement, insubordination or other
misconduct seriously detrimental to the Company or any
subsidiary of the Company. The determination of whether or not
you have been discharged for any of the reasons specified in the
preceding sentence will be made by the Committee, and the
Committee's determination will be binding and conclusive on the
Company and you.
(c) In any event, if you are a member of the Board or an
officer of the Company, your option may not be exercised during
the first six months after it is granted, except in the event of
your death or disability prior to the expiration of such
six-month period.
5. Promptly after an effective exercise of your option in whole or
in part, the Company will make a cash payment to you equal to the
percentage determined as provided below of the excess of the fair
market value (at the time of the option exercise) of the Option
Shares as to which you are then exercising your option over their
option price. The percentage referred to above will be determined by
(a) dividing (i) the Tax Rate derived from the federal income tax
rates in effect for your tax year in which the option exercise occurs
by (ii) the quantity one minus such Tax Rate, and (b) multiplying the
result by 100; subject to the limitation that such percentage may not
exceed 100%. The Tax Rate, for such purpose, will be the total
(expressed as a decimal) of your individual state income tax rate
(reduced by any federal income tax deduction therefor) plus the
maximum marginal federal income tax rate for individuals such that
there does not exist a lower marginal federal income tax rate which
would be applicable if adjusted gross income or taxable income were
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increased, disregarding any alternative minimum tax or other
alternative or add-on tax based on tax preference items.
6. Exercise of your option may be suspended if the Board of
Directors or the Committee determines that securities exchange
listing or registration or qualification under any securities laws is
required in connection therewith and has not been completed on terms
acceptable to the Board of Directors or the Committee.
7. In the event of any Change of Control prior to the expiration
of your option, you may, at any time during the 90 days following
such event (but not after the expiration of your option), in lieu of
exercising your option, surrender your option to the Company and
receive therefor a cash payment equal to the sum of:
(a) an amount equal to the excess of (i) the highest
aggregate fair market value, during the period beginning 30 days
before and ending 30 days after such event, of the Option Shares
as to which your option is surrendered, over (ii) the option
price of such Option Shares, plus
(b) the percentage of the amount set forth in (a) above
determined as provided in paragraph 5 hereof based on the
federal income tax rates in effect for your tax year in which
the surrender occurs, subject to the limitation that such
percentage may not exceed 100%.
If you wish to so surrender your option, you must give the
Company written notice of surrender (attention Secretary), which
notice must specify the number of Option Shares which then remain
subject to your option. A "Change of Control" will be deemed to have
occurred if: (i) there is a change in control of the Company that
would be required to be reported in response to Item 5(f) of Schedule
14A of Regulation 14A, promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"); or (ii) any person or
entity (which includes any "group" as such term is used in Section
13(d)(3) of the Exchange Act) is, directly or indirectly, the
"beneficial owner" (as such term is used in Rule 13d-3 under the
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Exchange Act) of securities of the Company representing 20% or more
of the combined voting power of the Company's then outstanding
securities (computed as described in such Rule); or (iii) a majority
of the members of any class of directors of the Company are persons
who were neither nominated by the Board for election by the
stockholders nor elected by the Board to fill vacancy(ies) on the
Board; or (iv) the Company (or any substantial portion of its assets)
is combined with or acquired by another person or other entity;
provided, however, that (v) no "Change of Control" shall be deemed to
have occurred with respect to any transaction (or series of
transactions) which shall have been approved in advance by a majority
of the Board, exclusive of members who are employed by or otherwise
affiliated with the person or other entity seeking to effect the
Change of Control; (vi) a "Change of Control" shall not include any
acquisition of voting stock by any underwriting syndicate or
underwriter for so long as such syndicate or underwriter holds the
voting stock for distribution to the public pursuant to an
underwriting agreement between the Company and such syndicate or
underwriter; and (vii) a "Change of Control" shall not include any
acquisition by any defined contribution plan which is qualified
pursuant to the applicable provisions of the Code and is maintained
for the benefit of the employees of the Company and/or its
subsidiaries.
8. The issuance of Company Common Stock to you in the event you
exercise your option has been registered by the Company under the
Securities Act of 1933 on the Company's Form S-8 Registration
Statement, No. 33-33775 (the "Registration Statement"). By executing
this Agreement, you acknowledge that you have received a copy of the
Company's Prospectus dated March 28, 1990 (including the Appendix
thereto giving information as of May 24, 1991), which is a part of
the Registration Statement, and a copy of the Company's Annual Report
to its stockholders for the year ended May __, 199_. By executing
this Agreement you agree that you will not reoffer, resell or
otherwise dispose of any Option Shares in any manner which would
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violate the Securities Act of 1933 or any other federal or state
securities law, and further agree to reimburse the Company for any
loss, damage or expense of any kind which it may suffer by reason of
any breach at any time of such agreement, including but not limited
to any liabilities which the Company may have under the Securities
Act of 1933 or any other federal or state securities law. You hereby
agree that the Company will have no obligation to you to keep
effective or current its existing Registration Statement, or to file
or keep effective or current any additional registration statement
concerning any Option Shares.
9. (a) In the event of any reorganization, recapitalization,
reclassification, merger, consolidation, or sale of all or
substantially all of the Company's assets followed by
liquidation, which is effected in such a way that holders of the
Company's Common Stock are entitled to receive securities or
other assets with respect to or in exchange for the Company's
Common Stock (an "Organic Change"), the Committee shall make
appropriate changes to insure that your option thereafter
represents the right to acquire, in lieu of or in addition to
the shares of the Company's Common Stock immediately theretofore
acquirable upon exercise, such securities or assets as may be
issued or payable with respect to or in exchange for an
equivalent number of shares of the Company's Common Stock; and
in the event of any stock dividend, stock split or combination
of shares, the Board of Directors shall make appropriate changes
in the number of shares authorized by the Plan to be delivered
thereafter, and the Committee shall make appropriate changes in
the number of shares covered by your option and the exercise
price specified herein (and in the event of a spinoff, the
Committee may make similar changes), in order to prevent the
dilution or enlargement of your option rights. However, no right
to purchase or receive a fraction of a share shall be created;
and if, as a result of any such change, a fractional share would
result or the right to purchase or
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receive the same would result, the number of shares in question
shall be decreased to the next lower whole number of shares.
(b) As used in this Agreement, the term "Option Shares"
includes, in addition to the shares described in the first
paragraph hereof as the shares subject to your option, any other
shares or other securities which may be issued as a result of
subparagraph (a).
10. Your option will not be assignable or transferable by you other
than by will or by the laws of descent and distribution, and during
your lifetime will be exercisable only by you or your legal
representative.
11. Any notice to be given to the Company under the terms of this
Agreement will be addressed to the Company in care of its Secretary
at 3600 North River Road, Franklin Park, Illinois 60131, and any
notice to be given to you will be addressed to you at the address
given beneath your signature hereto, or at such other address as you
may direct in writing. Any such notice will be deemed to have been
duly given if and when enclosed in a properly sealed envelope
addressed as aforesaid, registered and deposited, postage and
registry fee prepaid, in a post office or branch post office
regularly maintained by the United States Government.
12. The Company may withhold from any amount owed to you by the
Company (or may require a subsidiary or other Affiliate [as defined
in the Plan] to withhold from any amount owed to you by it and remit
to the Company), or may require you to remit to the Company, an
amount sufficient to satisfy any withholding or other tax due with
respect to any shares to be issued by the Company upon the exercise
of your option and/or any payment to be made by the Company upon
exercise or surrender of your option, and the Committee may defer the
issuance of such shares and/or the making of such payment unless
indemnified to its satisfaction.
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13. Nothing in this Agreement confers any right on you to continue
in the employ of the Company or any subsidiary or other Affiliate or
affects in any way the right of the Company or any subsidiary or
other Affiliate, as the case may be, to terminate your employment at
any time.
14. This Agreement will be binding upon and inure to the benefit of
any successor or successors of the Company.
In order to evidence the grant of your option, please execute the extra
copy of this Agreement in the space provided and return the same to the
Company, whereupon this Agreement will constitute a binding option agreement
between us.
Very truly yours,
DEAN FOODS COMPANY
By_________________________
Howard M. Dean, Chairman
The undersigned hereby acknowledges that the undersigned has carefully
read all of the provisions in this Agreement, including, without limitation,
the provision of paragraph 8 hereof regarding the effect of the undersigned's
execution of this Agreement. The undersigned hereby agrees to be bound by all
provisions set forth in this Agreement and the Plan.
NAME: _____________________________________
ADDRESS: _____________________________________
_____________________________________
SOCIAL SECURITY #: _____________________________________
DATED: _____________________________________
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