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                                                                    EXHIBIT 10.3


                               DEAN FOODS COMPANY
                         1996 DIRECTOR STOCK AWARDS PLAN


         1. Purpose. The purpose of this Plan (the "Plan") is to promote the
long- term financial interests of the Company and its subsidiaries by:

            (a) providing an incentive for all non-employee members of the Board
            of Directors (the "Non-Employee Directors") to maximize the
            long-term value of the Company's Common Stock and otherwise act in
            the best interest of the Company's stockholders;

            (b) providing Non-Employee Directors with the opportunity to acquire
            a greater stake in the future of the Company and its subsidiaries
            through stock ownership; and

            (c) attracting and retaining highly qualified Non-Employee Directors
            who will contribute in exceptional ways to the long-term financial
            success of the Company and its subsidiaries.

         2. Definitions. The following definitions are applicable to the Plan:

            "Board of Directors" means the Board of Directors of the Company.

            "Code" means the Internal Revenue Code of 1986, as amended, and any
            successor statute.

            "Common Stock" means Common Stock, $1.00 par value, of the Company
            or such other securities as may be substituted therefor pursuant to
            paragraph 5(c).

            "Company" means Dean Foods Company, a Delaware corporation, and its
            successors.

            "Eligible Director" means any present or future member of the Board
            of Directors who, on the date of an award pursuant to the Plan, (a)
            is a member of the Board of Directors, and (b) is not an employee of
            the Company or any of its subsidiaries.

            The "fair market value" of the Common Stock on any date means the
            closing price of Common Stock on that date (or, if such date is not
            a trading date, on the next preceding date which was a trading date)
            on the


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            New York Stock Exchange Composite Transactions list, as subsequently
            reported in The Wall Street Journal.

                  "participant" means any Eligible Director who has been granted
            an award pursuant to the Plan.

         3. Limitation on Aggregate Shares. Subject to adjustment as provided in
paragraph 5(c), the number of shares of Common Stock which may be issued upon
the exercise or payment of awards granted under the Plan shall not exceed, in
the aggregate, 100,000 shares; it being understood that to the extent any awards
expire unexercised or unpaid or are cancelled, terminated or forfeited in any
manner without the issuance of shares of Common Stock thereunder, such shares
shall again be available under the Plan. Such 100,000 shares of Common Stock
shall be treasury shares.

         4. Awards. The Board of Directors may grant to Eligible Directors, in
accordance with this paragraph 4 and the other provisions of the Plan, stock
options and restricted stock.

                  (a)      Options.

                           (i) Options granted under the Plan shall not qualify
                  as incentive stock options within the meaning of Section 422A
                  of the Code or any successor provision.

                           (ii) The option price per share of Common Stock shall
                  be 100% of the fair market value of a share of Common Stock on
                  the date of grant and not less than the par value of a share
                  of Common Stock.

                           (iii) Options shall be exercisable at such time or
                  times as the Board of Directors shall determine at or
                  subsequent to grant.

                           (iv) An option shall be exercised in whole or in part
                  by written notice to the Company (to the attention of the
                  Secretary) at any time prior to its stated expiration and
                  payment in full of the option price for the shares as to which
                  the option is being exercised. Payment of the option price may
                  be made, at the discretion of the optionee, and to the extent
                  permitted by the Board of Directors, (A) in cash (including
                  check, bank draft, or money order), (B) in Common Stock
                  already owned by the optionee (valued at the fair market value
                  thereof on the date of exercise), (C) by a combination of cash
                  and Common Stock, or (D) with any other consideration.




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                  (b) Restricted Stock.

                           (i) The Board of Directors may award to any Eligible
                  Director shares of Common Stock, subject to this paragraph
                  4(b) and such other terms and conditions as the Board of
                  Directors may prescribe (such shares being called "restricted
                  stock"). Each certificate for restricted stock shall be
                  registered in the name of the participant and deposited,
                  together with a stock power endorsed in blank, with the
                  Company.

                           (ii) Restricted stock may be awarded without any
                  consideration other than services rendered and/or (to the
                  extent permitted by applicable corporate law on the date of
                  award) services to be rendered.

                           (iii) There shall be established for each restricted
                  stock award a restriction period (the "restriction period") of
                  such length as shall be determined by the Board of Directors.
                  Shares of restricted stock may not be sold, assigned,
                  transferred, pledged or otherwise encumbered, except as
                  hereinafter provided, during the restriction period. Except
                  for such restrictions on transfer and such other restrictions
                  as the Board of Directors may impose, the participant shall
                  have all the rights of a holder of Common Stock as to such
                  restricted stock. The Board of Directors, in its sole
                  discretion, may permit or require the payment of cash
                  dividends to be deferred and, if the Board of Directors so
                  determines, reinvested in additional restricted stock or
                  otherwise invested or accruing a yield. At the expiration of
                  the restriction period, the Company shall redeliver to the
                  participant (or the participant's legal representative or
                  designated beneficiary) the certificate deposited pursuant to
                  this paragraph.

                           (iv) Except as provided by the Board of Directors at
                  or subsequent to the time of grant, upon termination of
                  service of a participant as a member of the Board of Directors
                  for any reason (including, without limitation, expiration of
                  term without reelection, resignation, retirement, total
                  disability or death) during the restriction period, all shares
                  still subject to restriction shall be forfeited by the
                  participant.

                  (c) Cash Payments. Options may, in the Board of Directors'
                  discretion, provide that in connection with exercises thereof
                  the holders will receive cash payments based on formulas
                  designed to reimburse holders for their income tax liability
                  resulting from such exercise and the payment made pursuant to
                  this paragraph 4(c).




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                  (d) Surrender. If so provided by the Board of Directors at or
                  subsequent to the time of grant, an award may be surrendered
                  to the Company on such terms and conditions, and for such
                  consideration, as the Board of Directors shall determine.

                  (e) Award Forms. The form of each award (and of the
                  documentation evidencing each award) shall be determined by
                  the Board of Directors.

         5. Miscellaneous Provisions.

                  (a) Administration. The Plan shall be administered by the
                  Board of Directors. Subject to the limitations of the Plan,
                  the Board of Directors shall have the sole and complete
                  authority: (i) to select participants, (ii) to make awards in
                  such forms and amounts as it shall determine, (iii) to impose
                  such limitations, restrictions and conditions upon such awards
                  as it shall deem appropriate, (iv) to interpret the Plan and
                  to adopt, amend and rescind administrative guidelines and
                  other rules and regulations relating to the Plan, (v) to
                  correct any defect or omission or to reconcile any
                  inconsistency in the Plan or in any award granted hereunder
                  and (vi) to make all other determinations and to take all
                  other actions necessary or advisable for the implementation
                  and administration of the Plan. The Board of Directors'
                  determinations on matters within its authority shall be
                  conclusive and binding upon the Company and all other persons.
                  All expenses associated with the Plan shall be borne by the
                  Company.

                  (b) Non-Transferability. No award under the Plan, and no
                  interest therein, shall be transferable by a participant
                  otherwise than by will or the laws of descent and
                  distribution. All awards shall be exercisable or received
                  during a participant's lifetime only by the participant or the
                  participant's legal representative. Any purported transfer
                  contrary to this provision will nullify the award.

                  (c) Adjustments Upon Certain Changes. 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 Common Stock are entitled to
                  receive securities or other assets with respect to or in
                  exchange for Common Stock (an "Organic Change"), the Board of
                  Directors shall make appropriate changes to insure that each
                  outstanding award involving the right to acquire Common Stock
                  thereafter represents the right to acquire, in lieu of or in
                  addition to the shares of Common Stock immediately theretofore
                  acquirable upon exercise or payment, such securities or assets
                  as may be issued or payable with respect to or in exchange for
                  an equivalent number of shares of Common Stock; and in the




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                  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 in the numbers of shares covered by outstanding
                  awards and the exercise prices specified therein (and in the
                  event of a spin-off, the Board of Directors may make similar
                  changes), in order to prevent the dilution or enlargement of
                  award 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 receive the same would result, the number of
                  shares in question shall be decreased to the next lower whole
                  number of shares. The Board of Directors may provide, in the
                  agreement evidencing any award, for adjustments to such award
                  in order to prevent the dilution or enlargement of rights
                  thereunder or for acceleration of benefits thereunder and/or
                  cash payments in lieu of benefits thereunder in the event of a
                  change in control (or tender offer or accumulation of Common
                  Stock), merger, consolidation, reorganization,
                  recapitalization, sale or exchange of all or substantially all
                  of the assets or dissolution of the Company.

                  (d) Tax Withholding. The Board of Directors shall have the
                  power to withhold, or require a participant to remit to the
                  Company, an amount sufficient to satisfy any withholding or
                  other tax due with respect to any amount payable and/or shares
                  issuable under the Plan, and the Board of Directors may defer
                  such payment or issuance unless indemnified to its
                  satisfaction. Subject to the consent of the Board of
                  Directors, a participant may make an irrevocable election to
                  have shares of Common Stock otherwise issuable under an award
                  withheld, tender back to the Company shares of Common Stock
                  received pursuant to an award or deliver to the Company shares
                  of Common Stock already owned by the participant having a fair
                  market value sufficient to satisfy all or part of the
                  participant's estimated tax obligations associated with the
                  transaction. Such election must be made by a participant prior
                  to the date on which the relevant tax obligation arises. The
                  Board of Directors may disapprove of any election and may
                  limit, suspend or terminate the right to make such elections.

                  (e) Listing and Legal Compliance. The Board of Directors may
                  suspend the exercise or payment of any award if it 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.

                  (f) Rights of Participants. Nothing in the Plan shall confer
                  on any Eligible Director any right to continue to serve as a
                  member of the Board of Directors or affect in any way the
                  right of the Company to terminate such service at any time. No
                  Eligible Director shall have a right to be




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                  selected as a participant, or, having been so selected, to be
                  selected again as a participant.

                  (g) Amendment, Suspension and Termination of Plan. The Board
                  of Directors may suspend or terminate the Plan or any portion
                  thereof at any time and may amend it from time to time in such
                  respects as the Board of Directors may deem advisable;
                  provided, however, that no such amendment shall be made
                  without stockholder approval to the extent such approval is
                  required by law, agreement or the rules of any exchange upon
                  which the Common Stock is listed. No such amendment,
                  suspension or termination shall impair the rights of
                  participants under outstanding awards without the consent of
                  the participants affected thereby.

                           The Board of Directors may amend or modify any award
                  in any manner to the extent that the Board of Directors would
                  have had the authority under the Plan to initially grant the
                  award as so amended or modified. No such amendment or
                  modification shall impair the rights of the participant under
                  such award without the consent of such participant.

         6. Effective Date. The effective date of the Plan shall be October 1,
1996, the date of its adoption by the Board of Directors.




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    FIRST AMENDMENT TO THE DEAN FOODS COMPANY 1996 DIRECTOR STOCK AWARDS PLAN


         This First Amendment to the Dean Foods Company 1996 Director Stock
Awards Plan (the "Plan") is effective as of May 26, 2000.

         1. Paragraph 3 of the Plan shall be deleted in its entirety and
         replaced by the following paragraph:

         Limitation on Aggregate Shares. Subject to adjustment as provided in
         paragraph 5(c), the number of shares of Common Stock which may be
         issued upon the exercise or payment of awards granted under the Plan
         shall not exceed, in the aggregate, 200,000 shares; it being understood
         that to the extent any awards expire unexercised or unpaid or are
         cancelled, terminated or forfeited in any manner without the issuance
         of shares of Common Stock thereunder, such shares shall again be
         available under the Plan. Such 200,000 shares of Common Stock shall be
         treasury shares.

         2. The Plan shall continue in full force and effect in accordance with
         its terms, as amended hereby.




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