Exhibit 10.2

 

GRAPHIC [g25851kui001.jpg]

 

January 9, 2018

 

Jody L. Macedonio

 

RE:         Letter Agreement regarding Severance Benefits (“Letter Agreement”)

 

Dear Jody,

 

This letter sets forth the agreement between you and Dean Foods Company (the
“Company”) regarding certain terms and conditions of your employment.

 

1.              Certain Definitions. In addition to definitions set forth
elsewhere herein, for purposes of this Letter Agreement, the following terms
shall be defined as set forth below:

 

“Cause” means (i) your conviction of any crime deemed by the Company to make
your continued employment untenable; (ii) your willful and intentional
misconduct or negligence that has caused or could reasonably be expected to
result in material injury to the business or reputation of the Company;
(iii) your conviction of, or entering a plea of guilty or nolo contendere to, a
crime constituting a felony; (iv) your breach of any written covenant or
agreement with the Company or (v) your failure to comply with or breach of the
Company’s “code of conduct” in effect from time to time.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Good Reason” means a termination of your employment by you following the
occurrence of one or more of the following events: (i) a material reduction in
your annual base salary or target annual bonus opportunity (unless a similar
reduction is applied broadly to similarly situated employees), (ii) a material
reduction in the scope of your duties and responsibilities, or (iii) the
relocation of your principal place of employment to a location that is more than
50 miles from such prior location of employment.

 

In order for a termination by you to constitute a termination for Good Reason,
(i) you must notify the Company of the circumstances claimed to constitute Good
Reason in writing not later than the 90th day after it has arisen or occurred,
(ii) the Company must not have cured such circumstances within 30 days of
receipt of such notice and (iii) you terminate employment within 6 months of
such occurrence.

 

“Qualifying Termination” means (i) the involuntary termination of your
employment by the Company (other than for Cause) or (ii) the voluntary
termination of your employment with the Company for Good Reason. For all
purposes under this Letter Agreement, you shall not have a “termination of
employment” (and corollary terms) from the Company unless and until you have a

 

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“separation from service” from the Company (as determined under Treas. Reg.
Section 1.409A-1(h), as uniformly applied in accordance with such rules as shall
be established by the Company from time to time).

 

2.              Severance Benefits. In the event you experience a Qualifying
Termination, subject to the conditions imposed pursuant to Section 4 hereof, you
will be entitled to receive the following “Severance Benefits:”

 

(a)         Cash Severance Payment:  The Company shall pay you a lump sum cash
severance payment equal to twelve months of your then current annual base
salary.

 

(b)         Short-Term Incentive (STI) Compensation.  You will be eligible to
receive a pro-rata portion of your annual cash bonus under the applicable
Company plan for the calendar year in which the Qualifying Termination occurred
(“Pro Rata Bonus”).  The pro-rata portion shall be equal to a fraction, the
numerator of which is the number of full months worked during such year through
(and including) the date of the Qualifying Termination and the denominator of
which is twelve, with such pro-rata portion earned in an amount based on the
degree to which the applicable performance criteria are ultimately achieved, as
determined by the Compensation Committee on a basis applied uniformly to you as
to other senior executives of the Company.

 

(c)          Long-Term Incentive (LTI) Compensation.

 

(i)             Restricted Stock Units (“RSUs”).  Unvested RSU awards will vest
on a pro-rated basis through (and including) the date of the Qualifying
Termination.

 

(ii)          Performance Stock Units (“PSUs”).  Shares earned and accrued with
respect to completed PSU performance periods (as set forth in the applicable PSU
award agreement) will vest and be issued to you as provided in Section 3
hereof.  Additionally, you will be eligible to receive a pro-rata portion of
your PSU awards related to the performance period in which the Qualifying
Termination occurred, subject to actual performance results through the end of
the performance period.

 

All other outstanding and unvested LTI awards shall terminate effective as of
the date of the Qualifying Termination.

 

The provisions of this Letter Agreement are in lieu of any severance benefits
otherwise provided under the Dean Foods Company Amended and Restated Executive
Severance Pay Plan (as amended November 8, 2017), and you acknowledge that you
shall not participate in such plan.

 

Severance Benefits shall be reduced by such amounts as may be required under all
applicable federal, state, local or other laws or regulations to be withheld or
paid over with respect to such payment.

 

You shall not (i) receive any Severance Benefits upon a termination of
employment other than a Qualifying Termination or (ii) be entitled to duplicate
benefits pursuant to this Letter Agreement and any other plan or agreement.

 

3.              Timing of Payments.

 

(a)         The lump sum cash severance payment will be made as soon practicable
after the conditions set forth in Section 4 hereof have been satisfied, and in
no event later than 60 days after the date of the Qualifying Termination.

 

(b)         Subject to the satisfaction of the conditions set forth in Section 4
hereof:

 

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(i)             The Pro Rata Bonus will be paid at the same time as generally
applicable under the Company’s annual STI plan, after certification of
performance results by the Compensation Committee, and in no event later than
March 15 of the following year.

 

(ii)          All Severance Benefits that are not contingent on the achievement
of performance criteria shall be payable within 75 days of the date of your
Qualifying Termination.

 

(iii)       All Severance Benefits that are contingent on the achievement of
performance criteria other than (or in addition to) the value of the Company’s
common stock shall be paid or, in the case of stock-settled incentive awards,
issued not later than 75 days after the end of the applicable performance
measurement period, unless the award agreement under which such performance
based compensation is awarded requires payment to be made at a different date
(e.g., such as to comply with any six month delay required on the payment of
deferred compensation to any Participant who is a specified employee within the
meaning of Section 409A of the Code).

 

Notwithstanding the foregoing, to the extent that any portion of the Severance
Benefits hereunder is deferred compensation subject to the provisions of
Section 409A of the Code, in no event shall such portion of such Severance
Benefits be paid prior to the last date by which you would be required to
deliver the release required under, or to agree to comply with any additional
conditions imposed pursuant to, Section 4 hereof.

 

4.              Conditions to Payment of Severance Benefits.  Notwithstanding
any provision herein to the contrary, payment of the Severance Benefits provided
above are conditioned upon (i) your execution and non-revocation of a separation
and release agreement in a form and in substance reasonably satisfactory to the
Company within 60 days after your termination of employment, which may include
such additional conditions as the Company may deem necessary or appropriate to
protect and/or promote the interests of the Company, including your agreement
not to compete with, not to solicit employees or customers from, and/or not to
use or disclose confidential information of, the Company and its Subsidiaries
for an agreed period of time.  Any additional conditions imposed by the Company
under the immediately preceding sentence shall be communicated to you not later
than five business days after your termination date, and must be agreed to by
you within 60 days following your termination of employment in order for you to
be eligible to receive the Severance Benefits subject to such condition.

 

5.              Section 409A.  This letter is intended to comply with
Section 409A of the Code or an exemption thereto, and, to the extent necessary
in order to avoid the imposition of an additional tax on you under Section 409A
of the Code, payments may only be made under this letter upon an event and in a
manner permitted by Section 409A of the Code. Any payments or benefits that are
provided upon a termination of employment shall, to the extent necessary in
order to avoid the imposition of any additional tax on you under Section 409A of
the Code, not be provided unless such termination constitutes a “separation from
service” within the meaning of Section 409A of the Code. The Company makes no
representations that the payments and benefits provided under this letter comply
with Section 409A of the Code and in no event shall the Company or any of its
directors, officers or employees have any liability to you in the event such
Section 409A applies to any benefit provided pursuant to this letter in a manner
that results in adverse tax consequences for you or any of your beneficiaries or
transferees.

 

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6.              General.

 

(a)         This Letter Agreement represents the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings of the parties in connection
therewith.

 

(b)         This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, personal
representatives, successors, and assigns whether such succession is, in the case
of the Company, direct or indirect by purchase, merger, consolidation, change in
control or otherwise.

 

(c)          This Agreement is made pursuant to and shall be governed,
construed, and enforced in all respects and for all purposes in accordance with
the laws of the state of Texas without regard to the law of conflicts.  Should
any provision of this Agreement be declared or determined by any court to be
illegal or invalid, the validity of the remaining parts, terms or provisions
shall not be affected thereby, and said illegal or invalid part, term, or
provision shall be deemed not to be a part of this Letter Agreement.

 

7.              Signatures and Counterparts.  This Letter Agreement may be
executed in counterparts.  A facsimile of this Agreement and signatures shall be
as effective as an original.

 

 

 

Dean Foods Company

 

 

 

By:

/s/ Jose A. Motta

 

Name:

Jose A. Motta

 

Title:

SVP, Human Resources

 

 

Acknowledge and Agreed:

 

 

 

/s/ Jody L. Macedonio

 

Jody L. Macedonio

 

 

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