exv10w2



 





EXHIBIT 10.2




Mr. Gregg Tanner

3080 South 99th Avenue

Omaha, NE 68124



Dear Gregg:




I am pleased to offer you the position of Executive Vice President, Supply Chain for Dean Foods
Company. This position will report to me. We look forward to having you join our team as soon as
possible.



Here are the specifics of your offer:



Base Salary



You will be paid $21,875 on a semi-monthly basis, which equates to an annual salary of $525,000.
Your salary will be reviewed annually by our Compensation Committee.




Signing Bonus



You will receive a one-time signing bonus of $400,000, less payroll taxes, within 30 days after
January 1, 2008. If you voluntarily leave Dean Foods without good reason during your first year of
employment, you will be responsible for reimbursing Dean Foods on a prorated basis (based on number
of months worked) for this one-time signing bonus.




You will also receive an additional one-time signing bonus of $175,000, less payroll taxes, within
30 days of December 31, 2008. You must be employed on December 31, 2008 to be eligible for this
bonus.



Annual Bonus Opportunity



As Executive Vice President, you will be eligible to earn an annual bonus with a target amount
equal to 70% of your annualized base salary, subject to the achievement of certain operating
targets for the group and certain individual targets. You can earn up to 200% of your targeted
bonus if operating targets are exceeded. For 2007, your bonus payment will be prorated based on
your actual start date and guaranteed to the greater of the actual calculated award or 100% of
target amount.




Annual Long Term Incentive Compensation



Upon commencement of your employment, and subject to Compensation Committee approval, you will be
granted options to purchase 60,000 shares of Dean Foods common stock. The exercise price of the
options will be the closing price of a share of Dean Foods stock on your date of hire. The options
will vest in equal installments over a period of three years, beginning on the first anniversary of
the date of the grant. You will also be awarded 24,000 restricted shares. These restricted shares
will vest in equal installments over a five-year period, beginning on the first anniversary of the
date of grant, or earlier if certain financial performance targets are met. You will be eligible
for future equity grants under the Dean Foods Long Term Incentive Program in the future, commencing
in January 2009. The amount and nature of future long-term incentive awards will be determined by
the Board of Directors.




 









 








Replacement Long Term Incentive Awards



Upon commencement of your employment, and subject to Compensation Committee approval, you will be
granted an additional number of options to purchase shares of Dean Foods common stock having a
Black Scholes value, as determined by Mercer Consulting, of $1,100,000 (representing approximately
110,000 options based on current valuation). These options will have the same terms and conditions
as your annual stock option awards referenced above. In addition, you will be granted restricted
shares having a value of $600,000 (representing approximately 24,000 restricted shares based on
current valuation). These shares will vest in equal installments over a five year period beginning
on the first anniversary of the date of grant.




Additional Long Term Incentives



In addition to your annual long term incentive eligibility, you will also receive 5 annual grants
of 5,000 restricted shares per year until November 1, 2011 (for a total of 25,000 restricted
shares). The first of these annual grants will be within 30 days of your employment date. The
remaining 4 grants will be on the first of the month following the anniversary of your hire date
(the first day of employment with Dean Foods). Each of these 5 grants will vest on November 1,
2012.




You will also receive 5 annual grants of 5,000 restricted shares each year from 2012 through 2016
(for a total of 25,000 restricted shares). You will receive these grants each year on the first of
the month following the anniversary of your employment date. Each of these grants will vest one
year after date of issue.



You must be employed by Dean Foods on the date of issue in order to receive these restricted stock
grants.



Executive Deferred Compensation Plan



You will be eligible to participate in the Executive Deferred Compensation Plan. The plan provides
eligible executives with the opportunity to save on a tax-deferred basis. You will receive general
information and enrollment materials at your home address approximately 30 — 45 days after your
start date.




Paid Time Off (PTO)



You will be granted five (5) weeks of PTO. Unused PTO is not carried forward from year to year.




COBRA Support



Should you elect COBRA (health insurance) coverage from your previous employer, Dean Foods will pay
your COBRA premiums (minus your normal Dean Foods contribution) until you become eligible for Dean
Foods benefits (approximately 60 days following hire).




Benefits Plan Reference



Attached to this letter is an overview of Dean Foods’ Health Benefits, savings and 401k programs,
and all other benefits. Additionally, you are eligible for executive benefits that include a
Supplemental Executive Retirement Plan (SERP), a supplemental executive LTD program, and company
paid annual physical. If you have questions regarding these programs or eligibility, please call
Fanny Sheumaker at 214-721-3657.




 









 








Home Office



Dean Foods will provide you with the equipment for a home office in Omaha until you and your family
relocate to the Dallas area.




Relocation Benefits



Dean Foods wants your move to Dallas to be a positive one. The relocation benefits provided to you
include: household goods move; temporary housing; home visits; in-transit expenses; home sale
assistance; duplicate housing costs; and, new home closing assistance. The policy describing these
benefits is enclosed. If you have questions regarding these programs or eligibility, please call
Doug Johnson at 214-721-1258.




Insider Trading



As an executive officer, you will have access to sensitive business and financial information.
Accordingly, you will be prohibited from trading Dean Foods securities (or, in some circumstances,
the securities of companies doing business with Dean Foods) from time to time in accordance with
the company’s Insider Trading Policy.




Severance



As a corporate officer, you will also be eligible for benefits under the Dean Foods Company
Executive Severance Plan (“Severance Plan”). In summary, according to the Severance Plan, if your
employment is terminated at any time as a result of a “qualifying termination,” meaning any
termination as a result your voluntary termination for good reason, or your involuntary termination
without cause, all as defined in the Severance Plan, you will receive payment of all base salary
accrued through the date of termination, prior year’s bonus to the extent earned but not paid,
target bonus through the date of termination and all unused vacation/PTO. In addition, you will be
eligible to receive a severance payment equivalent to two years of your base salary and target
bonuses, less lawful deductions. You will be required to execute a release of all claims and such
other agreements as the company may deem necessary or appropriate in order to receive such
severance pay. The actual terms of the Severance Plan will govern your rights to severance and not
this letter.




Change-In-Control Provisions



You will be provided a Change in Control agreement comparable to that currently provided to other
Dean Foods executive officers. In general, this agreement provides benefits of three times your
annual salary and target bonus, plus vesting of all equity awards and continued health coverage for
a two-year period in certain circumstances following a Change in Control. As stated in the Change
in Control Agreement, in order to receive these benefits, your employment must be terminated,
either by the company within two years after a Change in Control, or by you for good reason within
such two-year period, or by you for any reason during the 13th month after a Change in
Control. The details of these provisions are set forth more fully in the enclosed Change of
Control Agreement.




New Hire Processes



You are required to comply with the Dean Foods Code of Ethics, drug screen, and background check as
a condition of employment. You are required to sign the Compliance Certificate contained within
the Code of Ethics at the time your employment begins and periodically thereafter.



Your position also requires that you sign a Non-Compete Agreement (enclosed).




 









 








Conclusion




Gregg, I am very excited about the opportunities at Dean Foods and very excited to have you be a
part of our team. I am confident that with your experience, skills, vision and standards, you will
make significant contributions to our company in the years to come.



	 	 	 	 	 
	 	Best regards,

/s/ Gregg Engles

Gregg Engles

Chairman & CEO

 	 
	 	 	 
	 	 	 
	 	 	 
	 




	 	 	 	 	 	 	 
	Agreed and accepted:	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Gregg Tanner
	 	 	 	 
	Gregg Tanner	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Date	 	 	 	 
	 
	 	 	 	 	 	 
	cc:

	 	Paul Moskowitz	 	 	 	 
	 

	 	Doug Johnson	 	 	 	 
	 

	 	Fanny Sheumaker