exv10w14



 





Exhibit 10.14




DEAN FOODS COMPANY

EXECUTIVE SEVERANCE PAY PLAN




Article 1. PURPOSE OF THE PLAN




     The purpose of the Dean Foods Company Executive Severance Pay Plan (the “Plan”) is to
provide severance benefits to executive officers and certain other designated officers or employees
of Dean Foods Company (the “Company”) and its Subsidiaries whose employment terminates
under the circumstances described below on or after September 4, 2006.



Article 2.  DEFINITIONS



Certain Definitions. Whenever used herein, the following terms shall have the respective
meanings set forth below:





“Administrator” means a committee comprised of the following officers of the
Company: the Chief Executive Officer, the General Counsel and the senior HR officer or, if
at any time no person serves in any such office or is then acting in such capacity, the
person fulfilling a substantially similar role; provided, however,
that no such officer shall be authorized to act with respect to any manner that
relates to his or her specific entitlements under the Plan.




“Board” means the Board of Directors of the Company.




“Cause” means (i) Participant’s conviction of any crime deemed by the
Company to make the Participant’s continued employment untenable; (ii) Participant’s
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) a Participant’s conviction of, or entering a plea of guilty or nolo
contendere to, a crime constituting a felony; (iv) the breach by a
Participant of any written covenant or agreement with the Company or (v) Participant’s
failure to comply with or breach of the Company’s “code of conduct” in effect from time to
time.




“Equity Awards” means any grants or awards of stock options, restricted stock and
restricted stock units made to any Participant.




“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.




“Good Reason” means a termination of a Participant’s employment by such Participant
following the occurrence of one or more of the following events: (i) a reduction in
the Participant’s 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 a Participant’s duties and responsibilities, or (iii) the
relocation of the Participant’s principal place of employment to a location that is more
than 50 miles from such prior location of employment.




“Participant” means any employee who satisfies the eligibility requirements of
Section 3.



 









 






“Qualifying Termination” means (i) the involuntary termination of a
Participant by the Company (other than for Cause) or (ii) the voluntary termination
of a Participant’s employment with the Company for Good Reason.




“Severance Benefits” means the amounts and benefits provided in Exhibit A.




“Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations (other than the last
corporation in the unbroken chain) owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the chain.




Gender and Number. Except when otherwise indicated by the context, words in the
masculine gender used in the Plan shall include the feminine gender, the singular shall
include the plural, and the plural shall include the singular.



Article 3. ELIGIBILITY




     Eligibility under the Plan is limited to the executives and officers of the Company and its
Subsidiaries identified on Exhibit A hereto.



Article 4. SEVERANCE BENEFITS





	4.1	 	Severance Benefits. Each Participant who experiences a Qualifying Termination
and who satisfies any additional conditions imposed pursuant to Section 4.2 shall receive the
applicable Severance Benefits as provided in Exhibit A. Except as otherwise expressly set
forth herein, Severance Benefits (other than “Base Pay/Salary” and “Incentive Pay/Bonus”) will
be paid in a single lump sum within thirty (30) business days after the Participant’s
termination date (but no earlier than eight (8) days after the Participant returns the
executed waiver and release). “Base Pay/Salary” and “Incentive Pay/Bonus” shall be paid
pro-rata, monthly or semi-monthly over the term of the applicable Severance Period as provided
in Exhibit A. 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. No Participant shall be entitled to duplicate benefits pursuant
to this Plan and any other plan or agreement and no Participant shall receive any Severance
Benefits upon a termination of employment other than a Qualifying Termination.
Notwithstanding anything to the contrary, to the extent Section 409A of the Code is applicable
to any benefits hereunder, the Company shall delay payment of Severance Benefits to avoid
application of Section 409A. The aggregate amount of payment(s) otherwise payable during the
delay period (plus interest thereon at the short-term Applicable Federal Rate, provided that
such interest does not cause the Plan to violate Section 409A of the Code) shall be payable to
the specified employee as soon as practicable after the expiration of the delay period.
	 
	4.2	 	Conditions to Payment. Notwithstanding anything contained in the Plan to the
contrary, the Administrator may impose the following conditions on a Participant’s receipt of
Severance Benefits as the Administrator may deem necessary or appropriate to promote the
interests of the Company: (i) the execution by Participant of a release in a form and
in substance reasonably satisfactory to the Administrator and (ii) the execution by
Participant of an agreement not to




2









 






	 	 	compete with, solicit employees or customers from, or use or disclose confidential information
of, the Company and its Subsidiaries during the Severance Period.
	 
	4.3	 	Other Benefits. A Participant’s benefits under this Plan shall be reduced by
any severance, separation or early retirement incentive pay or other similar benefits the
Participant receives under any other plan, program, agreement or arrangement so that there
shall be no duplication of benefits. Except as provided in this Plan, a Participant’s rights
under any employee benefit plans maintained by the Company shall be determined in accordance
with the provisions of such plans.





Article 5. METHOD OF FUNDING




          Nothing in the Plan shall be interpreted as requiring the Company to set aside any of its
assets for the purpose of funding its obligations under the Plan. No person entitled to benefits
under the Plan shall have any right, title or claim in or to any specific assets of the Company,
but shall have the right only as a general creditor to receive benefits on the terms and conditions
provided in the Plan.



Article 6. ADMINISTRATION OF THE PLAN




          The Plan shall be administered by the Administrator, who shall have full authority, consistent
with the Plan, to administer the Plan, including authority to interpret, construe and apply any
provisions of the Plan. Any decisions of the Administrator shall be final and binding on all
parties.



          The Administrator shall be the Plan Administrator and named fiduciary of the Plan for purposes
of ERISA. The Administrator may delegate to any person, committee or entity any of his or her
respective duties hereunder and the decisions of any such person with respect to such delegated
matters shall be final and binding in accordance with the first paragraph of this section. This
section shall constitute the Plan’s procedures for the allocation of responsibilities for the
operation and administration of the Plan (within the meaning of Section 405(c) of ERISA).



Article 7. AMENDMENT OR TERMINATION OF PLAN




          Notwithstanding anything in the Plan to the contrary, the Company’s Board of Directors may
amend, modify or terminate the Plan at any time by written instrument; and further, shall not
deprive any Participant of any payment or benefit that the Plan Administrator previously has
determined is payable to such Participant under the Plan, except as set forth herein.
Notwithstanding the foregoing, the Plan Administrator reserves the right to make any amendments to
the Plan, including the timing and payment of all or any portion of Severance Benefits or other
payments described herein, at any time if, in the sole discretion of the Plan Administrator, any
such amendment become necessary or advisable as a result of changes in law, including but not
limited to the American Jobs Creation Act of 2004 and regulations promulgated thereunder, provided
that no such amendment shall result in the loss of any material or substantive rights for
Participants as a whole or any Participant.



3









 





Article 8. MISCELLANEOUS





	8.1	 	Headings. Headings of sections in this instrument are for convenience only,
and do not constitute any part of the Plan.
	 
	8.2	 	Severability. If any provision of this Plan or the rules and regulations made
pursuant to the Plan are held to be invalid or illegal for any reason, such illegality or
invalidity shall not affect the remaining portions of this Plan.
	 
	8.3	 	Effect on Prior Plans. With respect to any employee who is eligible to receive
benefits under the Plan, the Plan supersedes any and all prior severance plans, agreements,
programs and policies to the extent applicable to such employees.
	 
	8.4	 	Successors and Assigns. This Plan shall be binding upon and inure to the
benefit of the Company, and its respective successors and assigns and shall be binding upon
and inure to the benefit of a Participant and his or her legal representatives, heirs and
assigns. No rights, obligations or liabilities of a Participant hereunder shall be assignable
without the prior written consent of the Company.
	 
	8.5	 	Governing Law. The Plan shall be construed and enforced in accordance with
ERISA and the laws of the State of Delaware to the extent such laws are not preempted by
ERISA.




4









 






EXHIBIT A




SEVERANCE BENEFITS




	 	 	 	 	 	 	 
	 	 	Executive Vice President,	 	 	 	 
	 	 	Corporate Senior Vice	 	 	 	 
	 	 	President, Division	 	 	 	 
	 	 	Presidents, and Chief	 	 	 	 
	 	 	Operating Officers	 	Divisional Senior Vice Presidents	 	Corporate Vice Presidents
	 	 	(2 Year Severance Period)	 	(1.5 Year Severance Period)	 	(1 Year Severance Period)
	Base Pay/Salary

	 	2 x current base salary
	 	1.5 x current base salary
	 	1 x current base salary
	 
	 	 	 	 	 	 
	Incentive Pay/Bonus

	 	2 x current annual bonus target
	 	1.5 x current annual bonus target
	 	1 x current annual bonus target
	 
	 	 	 	 	 	 
	Equity Awards

	 	Cash payment made for the
in-the-money value of stock
option awards and the fair
market value of restricted
shares that would vest over
the 24 months following the
date of severance based on
average closing price of Dean
Foods stock for 45 days
preceding the date of
severance
	 	Cash payment made for the
in-the-money value of stock
option awards and the fair
market value of restricted
shares that would vest over the
18 months following the date of
severance based on average
closing price of Dean Foods
stock for 45 days preceding the
date of severance
	 	Cash payment made for the
in-the-money value of stock
option awards and the fair
market value of restricted
shares that would vest over
the 12 months following the
date of severance based on
average closing price of Dean
Foods stock for 45 days
preceding the date of
severance
	 
	 	 	 	 	 	 
	Healthcare

	 	Cash payment of $25,000 which
may be used to pay COBRA
expenses
	 	Cash payment of $20,000 which
may be used to pay COBRA
expenses
	 	Cash payment of $15,000 which
may be used to pay COBRA
expenses
	 
	 	 	 	 	 	 
	Outplacement

	 	Either a cash payment or
payment of invoice up to
$25,000
	 	Either a cash payment or payment
of invoice up to $20,000
	 	Either a cash payment or
payment of invoice up to
$15,000
	 
	 	 	 	 	 	 
	Current Year Bonus

	 	Payment of a pro-rata bonus
based on months employed
during the year and actual
results
	 	Payment of a pro-rata bonus
based on months employed during
the year and actual results
	 	Payment of a pro-rata bonus
based on months employed
during the year and actual
results