Document:

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                                                                   EXHIBIT 10.7

                          FORM OF EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") is made as of the ___ day
of ____________, 2004 (the "Effective Date"), by and between Texas United
Bancshares, Inc. (hereinafter called the "Employer") and Riley C. Peveto
(hereinafter called the "Executive"), an individual who resides in Fort Worth,
Texas.

         WHEREAS, the Board of Directors of the Employer (the "Board") has
proposed a merger between Employer and GNB Bancshares, Inc., ("GNB Bancshares")
such that GNB Financial, n.a. ("GNB Bank"), a wholly-owned subsidiary of GNB
Bancshares, will become a wholly-owned subsidiary of Employer;

         WHEREAS, the Board believes it is in the best interest of the Employer
to enter into this Agreement in order to attempt to assure management
continuity of GNB Bank; and

         WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions of the employment relationship between the Employer
and the Executive as set forth herein;

         NOW, THEREFORE, the parties, intending to be legally bound, for the
consideration set forth in this Agreement and for other good and valuable
consideration, agree as follows:

         1. EMPLOYMENT. Employer agrees to employ the Executive as Chairman of
the Board of GNB Bank, and Executive Vice President of Employer. Additionally,
Employer shall nominate or appoint the Executive to be a member of the Board of
Employer. The Executive shall have responsibilities, duties and authority
customarily accorded to and expected of an executive holding such position. The
Executive agrees to devote full time, attention and efforts to promote and
further the business of the Employer. The Executive shall report to the Board
and shall perform his duties under this Agreement in accordance with such
reasonable standards established from time to time by the Board.

         2. COMPENSATION AND BENEFITS. For all services rendered by the
Executive to the Employer and its subsidiaries, the Employer shall compensate
the Executive as follows:

            (a) Base Salary. Commencing the Effective Date, the Employer agrees
         to pay the Executive a base salary of $275,000 per annum, less
         applicable statutory deductions (the "Base Salary"), payable on a
         regular basis in accordance with the Employer's standard payroll
         procedures, but not less frequently than monthly. The amount of Base
         Salary shall be reviewed by the Board no less often than annually and
         may be increased from time to time by such amounts as the Board in its
         discretion may decide.

            (b) Benefits. Executive shall be entitled to coverage, subject to
         contributions required of executives of the Employer generally, for
         the Executive and dependent family members under health,
         hospitalization, disability, dental, life and other insurance plans
         that the Employer may have in effect from time to time for the benefit
         of similarly situated employees of the Employer. Employer expressly
         agrees that GNB Bank shall

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         maintain the existing life insurance policy for the Executive which
         provides a death benefit in the amount of $750,000.00 and that GNB
         Bank and/or its successors shall pay the entire premium associated
         with such policy.

            (c) Reasonable Executive Expenses. The Executive shall be eligible
         to participate in any fringe benefit plan or program which may be or
         become applicable to the Employer's executive employees, which shall
         include use of an automobile, a reasonable expense account, the
         payment of expenses related to club memberships (including initiation
         fees, annual dues and monthly fees and charges) the payment of
         reasonable expenses for attending annual and periodic meetings of
         trade associations, and any other benefits which are commensurate with
         the fringe benefits provided to similarly situated executive employees
         of Employer. The Executive shall be entitled to receive prompt
         reimbursement for all reasonable expenses incurred by him (in
         accordance with the policies and practices of the Employer or as may
         be established by the Board for its senior executives) in performing
         services under this Agreement, provided that the Executive properly
         accounts for such expenses in accordance with the Employer's policies.

            (d) Vacation. The Executive shall be entitled to annual vacation
         time determined in accordance with the Employer's standard practices,
         and equal to the vacation time granted other similarly situated
         executive employees of Employer.

            (e) Fort Worth Office. Employer shall continue to maintain the
         executive office of GNB in Fort Worth, Texas from which the Executive
         will provide services to Employer and its subsidiaries.

         3. TERM, TERMINATION AND RIGHTS UPON TERMINATION.

            (a) Term. The term of this Agreement shall begin on the Effective
         Date and continue for three (3) years (the "Term") unless terminated
         sooner as herein provided, and such Term shall be automatically
         extended to a period of three (3) years commencing on each anniversary
         of the Effective Date (except for any such anniversary occurring after
         the Executive's termination in accordance with this Agreement) on the
         same terms and conditions contained herein in effect as of the time of
         renewal, unless either party delivers written notice to the other of
         its intention not to renew this Agreement at least ninety (90) days
         prior to any such anniversary date. This Agreement and the Executive's
         employment may be terminated in any one of the following ways:

            (b) Termination as a Result of the Executive's Death. The death of
         the Executive shall immediately terminate this Agreement, and the
         Executive's estate shall be entitled to a lump sum cash amount
         representing all compensation and benefits earned by the Executive and
         unpaid as of the date of termination, less applicable statutory
         deductions, and any other benefits under insurance programs and other
         employee plans in accordance with the terms of such arrangements.

            (c) Termination on Account of Disability. If, as a result of
         incapacity due to physical or mental illness or injury, the Executive
         shall have been absent from his full-time duties hereunder for six (6)
         consecutive months, and the Employer has in effect

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         disability insurance for the Executive with coverage at least as
         beneficial to the Executive as is currently provided to the Executive
         by GNB, the Employer may terminate the Executive's employment provided
         Executive is unable to resume his full-time duties with reasonable
         accommodation, and the Executive shall be entitled to a lump sum cash
         amount representing all compensation and benefits earned by the
         Executive and unpaid as of the date of termination, less applicable
         statutory deductions, and any other benefits under insurance programs
         and other employee plans in accordance with the terms of such
         arrangements.

            (d) Termination by the Employer for Cause. The Employer may
         terminate this Agreement for "Cause," which shall mean: (i) the
         Executive's acts of dishonesty; (ii) the Executive's acts of willful
         misconduct; (iii) the Executive's acts that breach his fiduciary
         duties to the Employer (or any subsidiary); or (iv) the Executive's
         acts which breach his obligations pursuant to this Agreement. Prior to
         termination for "Cause," the Employer shall (i) provide the Executive
         with written notice describing in detail the actions taken by the
         Executive and the reasons why Employer believes that such actions
         constitute "Cause," (ii) afford the Executive with the opportunity to
         attend a meeting of the entire Board of Employer at which he may make
         a presentation challenging the Employer's determination that "Cause"
         exists, which meeting shall not occur until 10 business days after
         Executive receives the written notice, and (iii) if, after such
         meeting, the Employer continues to believe that "Cause" exists, give
         Executive thirty (30) days to cure the basis for the Employer's
         determination that "Cause" exists. If the basis for the Employer's
         determination that "Cause" exists has not been cured within such 30
         day period, or if not practicable to be cured within 30 days, the
         Executive has not made reasonable efforts to cure, then Employer may
         terminate this Agreement for "Cause" by giving written notice of
         termination to the Executive, specifically stating the grounds upon
         which the termination is based.

            (e) Termination Without Cause. At any time after the commencement
         of employment, either the Executive or the Employer may, voluntarily
         or without Cause, respectively, terminate this Agreement and the
         Executive's employment, effective thirty (30) days after written
         notice is provided to the other.

         4. CHANGE IN CONTROL. A Change in Control shall not occur by reason of
any transaction in which the Executive, or a group of individuals or entities
including the Executive, participates as an Acquiring Person, or owns, directly
or indirectly, a majority of a corporation described in this paragraph.

            (a) Definition of Change in Control. For purposes of this
         Agreement, "Change in Control" shall mean:

                (i) any "person" (as such term is used in Sections 13(d) and
         14(d) of the Securities Exchange Act of 1934, as amended (the
         "Exchange Act"), an "Acquiring Person") becomes the "beneficial owner"
         (as such term is defined in Rule 13d-3 promulgated under the Exchange
         Act, a "Beneficial Owner"), directly or indirectly, of securities of
         the Employer representing 50% or more of the combined voting power of
         the Employer's then outstanding securities;

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                (ii) the Employer's stockholders approve an agreement to merge
         or consolidate the Employer with another corporation (other than a
         corporation 50% or more of which is controlled by, or is under common
         control with, the Employer) in which the Employer is not the surviving
         entity;

                (iii) the Employer sells 80% or more of its assets to an
         Acquiring Person; or

                (iv) the persons who were members of the Board of Directors of
         the Employer immediately prior to a tender offer, exchange offer,
         contested election, or any combination of the foregoing, cease to
         constitute a majority of the Board of Directors.

            (b) Effect of Change in Control. In the event the Executive's
         employment is terminated by the Employer without Cause, or by the
         Executive for any reason, within one (1) year following a Change in
         Control, the Executive shall be entitled to the following:

                (i) A lump sum cash amount representing all compensation and
         benefits earned by the Executive and unpaid as of the date of
         termination, less applicable statutory deductions, to be paid within
         thirty (30) days of termination;

                (ii) A lump sum cash amount equal to three (3) times the
         Executive's annual base salary at the highest rate earned by him at
         any time during the twelve (12) months immediately preceding the date
         of determination; provided, however, that such payment shall be
         limited to an amount that, when added to all other amounts to be
         received by the Executive from the Employer that could constitute
         "parachute payments" (as defined in Section 280G(b)(2) of the Internal
         Revenue Code of 1986, as amended (the "Code")), shall not exceed one
         dollar ($1.00) less than three (3) times the Executive's "base amount"
         (as defined in Section 280G of the Code), so that no portion of such
         amounts shall constitute a non-deductible payment under Section 280G
         of the Code.

                (iii) The Employer shall maintain in full force and effect for
         the Executive's continued benefit: all life, medical, dental and
         prescription drug insurance plans, programs or arrangements in which
         the Executive was entitled to participate at any time during the
         twelve (12) month period prior to the date of termination, provided
         that the Executive's continued participation is possible under the
         general terms and provisions of such plans, programs or arrangements,
         until the earlier of the expiration of eighteen (18) months after
         termination, or the Executive's commencement of full time employment
         with a new employer. The Executive shall pay all premiums associated
         with the level of coverage elected by the Executive.

                (iv) The Employer shall reimburse to the Executive the cost, in
         an amount not to exceed 10% of the Executive's annual base salary, of
         professional out-placement services rendered to the Executive within
         six (6) months following termination of the employment of the
         Executive as and when such costs are incurred.

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         5. TERMINATION WITHOUT CAUSE OR EXECUTIVE TERMINATION FOR GOOD REASON.

            (a) If, at any time during the Term other than the one-year period
         following a Change in Control, the Executive is terminated by the
         Employer without Cause or the Executive terminates this Agreement for
         Good Reason (as defined below), the Executive shall be entitled to
         continuation of the Base Salary (or a lump sum payment, at Employer's
         option), less applicable statutory deductions, plus all of the fringe
         benefits provided to the Executive at the time of termination,
         expressly including, without limitation, the life insurance policy set
         forth in Paragraph 2(b) and the maintenance of the Fort Worth office
         set forth in Paragraph 2(e), for the remainder of the Term and
         continued participation in all life, medical, dental and prescription
         drug insurance plans, programs or arrangements in which the Executive
         was entitled to participate prior to the date of termination, until
         the expiration of the Term or the Executive begins full-time
         employment with a new employer. The Employer shall pay all premiums
         associated with the level of coverage elected by the Executive.

            (b) For purposes of this Agreement, the Executive shall have "Good
         Reason" to terminate this Agreement and his employment hereunder if,
         without the Executive's prior written consent, (i) the Executive is
         demoted by means of a reduction in authority, responsibilities, duties
         or title to a position of materially less stature or importance within
         the Employer than as described in Paragraph 1 hereof; (ii) the
         Employer breaches this Agreement in any material respect and fails to
         cure such breach within ten (10) days after the Executive delivers
         written notice and a written description of such breach to the
         Employer, which notice shall specifically refer to this paragraph of
         this Agreement; (iii) the Employer reduces the Executive's Base Salary
         or materially reduces his benefits; or (iv) Executive is subject to
         reporting to any officer other than the President and Chief Executive
         Officer of Employer.

         6. TERMINATION FOR CAUSE. In the event the Executive's employment is
terminated by the Employer for Cause, the Executive shall be entitled to a lump
sum cash amount representing all compensation and benefits earned by the
Executive and unpaid as of the date of termination, less applicable statutory
deductions, to be paid within six (6) days of termination.

         7. NON-DISCLOSURE, NON-COMPETITION AND NON-SOLICITATION COVENANTS

            (a) Confidential Information Defined. The Executive acknowledges
         that Employer's business is highly competitive, that he will be given
         immediate access to Confidential Information of Employer that is a
         valuable, special, and unique asset used by Employer in its business,
         and that protection of such Confidential Information against
         unauthorized disclosure and use is of critical importance to Employer.
         "Confidential Information" of Employer (or any subsidiary) means and
         includes confidential and/or proprietary information and/or trade
         secrets that have been and/or will be developed or used and that
         cannot be obtained readily by third parties from outside sources.
         Confidential Information includes, but is not limited to, the
         following: information regarding customers, employees, contractors and
         the industry not generally known to the public; strategies, methods,
         books, records and documents; technical information concerning
         products, equipment, services and processes; procurement procedures,
         pricing and pricing techniques; information concerning past, current
         and prospective customers,

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         investors and business affiliates (such as contact name, service
         provided, pricing, type and amount of services used, financial data
         and/or other such information); pricing strategies and price curves;
         positions; plans or strategies for expansion or acquisitions; budgets;
         research; financial and sales data; trading methodologies and terms;
         communications information; evaluations, opinions and interpretations
         of information and data; marketing and merchandising techniques;
         electronic databases; models; specifications; computer programs;
         contracts; bids or proposals; technologies and methods; training
         methods and processes; organizational structure; personnel
         information; payments or rates paid to consultants or other service
         providers; and other such confidential or proprietary information.

            (b) Non-Disclosure Obligations. The Executive agrees that he will
         not, at any time during or after his employment with Employer, make
         any unauthorized disclosure, directly or indirectly, of any
         Confidential Information of Employer, its subsidiary, or of any third
         parties that the Executive received in connection with his employment
         with Employer, or make any use thereof, directly or indirectly, except
         in working for Employer. The Executive also agrees that he shall
         deliver promptly to Employer at the termination of employment or at
         any other time at Employer's request, without retaining any copies,
         all documents and other material in the Executive's possession
         relating, directly or indirectly, to any Confidential Information or
         other information of Employer, or Confidential Information or other
         information regarding third parties, learned as an employee at
         Employer.

            (c) Non-Competition Obligations. In order to protect the
         Confidential Information and in order to enforce Employee's agreement
         not to disclose Confidential Information, Employer and Executive agree
         that, during the term of the Executive's employment with Employer,
         which may exceed the Term of this Agreement, and for twelve (12)
         months after the termination of the Executive's employment with
         Employer ("Non-Competition Period"), the Executive will not, except as
         an employee of Employer, in any capacity for the Executive or others,
         directly or indirectly:

                (i) compete or engage, anywhere in the geographic area
         comprised of Cooke, Denton and Ellis Counties plus any additional
         county in which GNB Bank may establish a branch office (the "Market
         Area"), in a business similar to that of Employer, or compete or
         engage in that type of business which Employer has plans to engage in,
         or any business which Employer has engaged in during the preceding
         twelve (12) month period if within the twelve (12) months before the
         termination of the Executive's employment, the Executive had access to
         or knowledge regarding the proposed plans or the business in which
         Employer engaged;

                (ii) take any action to invest in, own, manage, operate,
         control, participate in, be employed or engaged by or be connected in
         any manner with any partnership, corporation or other business or
         entity engaging in a business similar to that of Employer anywhere
         within the Market Area; except that the Executive is permitted to own,
         directly or indirectly, up to five percent (5%) of the issued and
         outstanding securities of any publicly traded financial institution
         conducting business in the Market Area;

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               (iii) call on, service or solicit competing business from
         customers or prospective customers of Employer if, within the twelve
         (12) months before the termination of the Executive's employment, the
         Executive had or made contact with the customer, or had access to
         information and files about the customer; or

                (iv) call on, solicit or induce any employee of Employer whom
         the Executive had contact with, knowledge of, or association with in
         the course of employment with Employer to terminate employment from
         Employer, and will not assist any other person or entity in such
         activities.

            (d) Injunctive Relief. Employer and the Executive acknowledge and
         agree that breach of any of the covenants made by the Executive in
         this Paragraph 7 would cause irreparable injury to Employer, which
         could not sufficiently be remedied by monetary damages; and,
         therefore, that Employer shall be entitled to obtain such equitable
         relief as declaratory judgments; temporary, preliminary and permanent
         injunctions; and order of specific performance to enforce those
         covenants or to prohibit any act or omission that constitutes a breach
         thereof. If a party must bring suit to enforce this Agreement or to
         defend any such action, the prevailing party shall be entitled to
         recover its attorneys' fees and costs related thereto.

            (e) Tolling. In the event that Employer shall file a lawsuit in any
         Court of competent jurisdiction alleging a breach of any of the
         Executive's obligations under this Agreement, any time period the
         Executive is in breach of the Agreement shall be deemed tolled as of
         the time such lawsuit is filed, and shall remain tolled until such
         dispute finally is resolved.

         8. RETURN OF EMPLOYER PROPERTY. All records, designs, patents,
business plans, financial statements, manuals, memoranda, lists, contracts and
other property delivered to or compiled by the Executive by or on behalf of the
Employer or their representatives, vendors or customers which pertain to the
business of the Employer (including any subsidiary) shall be and remain the
property of the Employer and subject at all times to its discretion and
control. Likewise, all correspondence, reports, records, charts, advertising
materials and other similar data pertaining to the business, activities or
future plans of the Employer which is collected by Executive during the course
of his employment with the Employer shall be delivered promptly to the Employer
without request by it upon termination of Executive's employment.

         9. INVENTIONS. Executive shall disclose promptly to the Employer any
and all significant conceptions and ideas for inventions, improvements and
valuable discoveries, whether patentable or not, which are conceived or made by
the Executive, solely or jointly with another, during the period of employment
or within one (1) year thereafter, and which are directly related to the
business or activities of the Employer and which the Executive conceives as a
result of his employment hereunder. The Executive hereby assigns and agrees to
assign all his interests therein to the Employer or its nominee. Whenever
requested to do so by the Employer, the Executive shall execute any and all
applications, assignments or other instruments that the Employer shall deem
necessary to apply for and obtain Letters Patent of the United States or any
foreign country or to otherwise protect the Employer's interest therein.

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         10. TRADE SECRETS. The Executive agrees not to, during or after the
term of this Agreement, directly or indirectly, disclose (or use for the
benefit of any person other than the Employer) the specific terms of the
Employer's (including any subsidiary) relationships or agreements with their
respective significant vendors or customers or any other trade secret or other
confidential business information of the Employer (including any subsidiary),
whether in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever, except and only to the extent
(i) such information is or becomes known to the public generally through no
fault of the Executive or (ii) required by law or legal process following
notice to the Employer.

         11. ARBITRATION. Any unresolved dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in the state in
which the Employer's main office is located, in accordance with the Employment
Dispute Resolution Rules of the American Arbitration Association ("AAA") then
in effect, provided that the Executive and the Employer shall comply with the
Employer's grievance procedures in an effort to resolve such dispute or
controversy before resorting to arbitration, and provided further that the
parties may agree to use arbitrators other than those provided by the AAA. The
arbitrators shall not have the authority to add to, detract from, or modify any
provision hereof nor to award punitive damages to any injured party. A decision
by a majority of the arbitration panel shall be final and binding. Judgment may
be entered on the arbitrators' award in any court having jurisdiction. The
direct expense of any arbitration proceeding shall be apportioned by the
arbitration award.

         12. SUCCESSOR; BINDING AGREEMENT. The Employer shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
liquidation or otherwise) to all or substantially all of the business and/or
assets of the Employer to agree to assume and to assume all of the obligations
of the Employer under this Agreement upon or prior to such succession taking
place. A copy of such assumption and agreement shall be delivered to Executive
promptly after its execution by the successor. However, this Agreement is
personal to the Executive and the Executive may not assign or transfer any part
of his rights or duties hereunder, or any compensation due to him hereunder, to
any other person, except that this Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal representatives, executors,
administrators, heirs, distributees, devisees or beneficiaries.

         13. MODIFICATION; WAIVER. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in a writing signed by the Executive and by such director of the
Employer as may be specifically designated by the Board. Waiver by any party of
any breach of or failure to comply with any provision of this Agreement by the
other party shall not be construed as, or constitute waiver of such provision,
or a waiver of any other breach of, or failure to comply with, any other
provision of this Agreement.

         14. NOTICE. All notices, requests, demands and other communications
required or permitted to be given by either party shall be in writing, deemed
to have been given when delivered personally or received by certified or
registered mail, return receipt requested, postage prepaid, at the address of
the other party as follows:

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         If to the Employer to:

                                    Texas United Bancshares, Inc.
                                    202 West Colorado Street
                                    La Grange, Texas 78945

         If to Executive to:

                                    Riley C. Peveto
                                    2321 Medford Ct. East
                                    Fort Worth, Texas 76109

Either party hereto may change its address for purposes of this Paragraph 14 by
giving fifteen (15) days prior notice to the other party hereto.

         15. GOVERNING LAW. This Agreement has been executed and delivered in
the State of Texas, and its validity, interpretation, performance and
enforcement shall be governed by the laws of that State.

         16. COMPLETE AGREEMENT. This Agreement sets forth the entire agreement
of the parties relating to the subject matter hereof, and supersedes any other
employment agreements or understandings, written or oral, between the Employer,
its predecessors and the Executive. The Executive has no oral representations,
understandings or agreements with the Employer or any of its officers,
directors or representatives covering the same subject matter as this
Agreement. This Agreement is the final, complete and exclusive statement and
expression of the agreement between the Employer and the Executive and of all
the terms of this Agreement, and it cannot be varied, contradicted or
supplemented by evidence of any prior or contemporaneous oral or written
agreements.

         17. SEVERABILITY. If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative.

SIGNATURE PAGE FOLLOWS

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                                          EMPLOYER:

                                          Texas United Bancshares, Inc.
                                          202 West Colorado Street
                                          La Grange, Texas 78945

                                          By:
                                                  -----------------------------
                                          Name:
                                                  -----------------------------
                                          Title:
                                                  -----------------------------

                                          EXECUTIVE:

                                          Riley C. Peveto
                                          2321 Medford Ct. East
                                          Fort Worth, Texas 76109

                                          -------------------------------------

                                      10exv10w2

 

EXHIBIT 10.2

CHANGE IN CONTROL

SEVERANCE AGREEMENT

     AGREEMENT between Doane Pet Care Company, a Delaware corporation (the
“Company”), and Douglas J. Cahill (“Executive”),

W I T N E S S E T H :

     WHEREAS, the Company desires to retain certain key personnel employed by
the Company and, accordingly, the Board of Directors of the Company has
approved the Company entering into a severance agreement with Executive in
order to encourage Executive’s continued service to the Company or an affiliate
of the Company; and

     WHEREAS, Executive is prepared to perform such services in return for
specific arrangements with respect to severance compensation and other
benefits;

     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as follows:

     1. Definitions.

     (a) “Affiliate” shall mean the Parent and any corporation, partnership,
limited liability company or partnership, association, trust or other
organization which, directly or indirectly, controls, is controlled by, or is
under common control with, the Parent. For purposes of the preceding sentence,
“control” (including, with correlative meanings, the terms “controlled by” and
“under common control with”), as used with respect to any entity or
organization, shall mean the possession, directly or indirectly, of the power
(i) to vote more than 50% of the securities having ordinary voting power for
the election of directors of the controlled entity or organization, or (ii) to
direct or cause the direction of the management and policies of the controlled
entity or organization, whether through the ownership of voting securities or
by contract or otherwise.

     (b) “Change in Control” shall mean (i) any merger, consolidation, or
reorganization involving the Parent in which, immediately after giving effect
to such merger, consolidation or reorganization, less than 50% of the total
voting power of outstanding stock of the surviving or resulting entity is then
“beneficially owned” (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) in the aggregate by the
stockholders of the Parent immediately prior to such merger, consolidation or
reorganization, (ii) any sale, lease, exchange, or other transfer of all or
substantially all of the assets of the Parent to any other person or entity
(other than to one or more wholly-owned subsidiaries of the Parent) in one
transaction or a series of related transactions, (iii) the dissolution or
liquidation of the Parent, (iv) when any person or entity, including a “group”
as contemplated by Section 13(d)(3) of the Exchange Act, acquires or gains
ownership or control (including, without limitation, power to vote) of more
than 50% of the outstanding shares of the Parent’s voting stock (based upon
voting power), or (v) as a result of or in connection with a contested election
of directors, the persons

 

 

who were directors of the Parent before such election shall cease to
constitute a majority of the Parent Board.

     (c) “Change in Terms of Service” shall mean the occurrence of any one or
more of the following (whether at the same time or at different times):

	 	(i)	 	A significant reduction in the nature or scope of
Executive’s authorities or duties from those applicable to
Executive immediately prior to the date on which a Change in
Control occurs;
	 
	 	(ii)	 	A reduction in Executive’s annual base salary or
target opportunity under any applicable bonus or incentive
compensation plan or arrangement or significant detrimental
change in the target opportunity goals or the measurement
thereof from that provided to Executive immediately prior to
the date on which a Change in Control occurs;
	 
	 	(iii)	 	A diminution in Executive’s eligibility to
participate in bonus, stock option, incentive award and other
compensation plans from the greater of (A) the opportunities
provided by the Company and the Affiliates (including any
successors thereto) for executives with comparable duties or
(B) the opportunities under any such plans (other than
equity-based incentive plans) under which Executive was
participating immediately prior to the date on which a Change
in Control occurs;
	 
	 	(iv)	 	A diminution in employee benefits (including but
not limited to medical, dental, life insurance, and long-term
disability plans) and perquisites applicable to Executive from
the greater of (A) the employee benefits and perquisites
provided by the Company and the Affiliates (including any
successors thereto) to executives with comparable duties or
(B) the employee benefits and perquisites to which Executive
was entitled immediately prior to the date on which a Change
in Control occurs;
	 
	 	(v)	 	A change in the location of Executive’s principal
place of employment by the Company by more than 50 miles from
the location where Executive was principally employed
immediately prior to the date on which a Change in Control
occurs; or
	 
	 	(vi)	 	Failure of the Parent to obtain from any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Parent an agreement to expressly
assume and agree to perform this Agreement and the Employment
Agreement in the same manner and to the same extent that the
Company would be required to perform such agreements if no
such succession had taken place.

Notwithstanding the foregoing, a Change in Terms of Service may also occur
prior to the date upon which a Change in Control occurs; provided, however,
that such a Change in Terms of Service must occur after the effective date of
this Agreement and no earlier than the date that is

2

 

six months prior to the date upon which a Change in Control occurs. For
purposes of determining whether a pre-Change in Control event constitutes such
a “Change in Terms of Service,” the term “Change in Terms of Service” shall be
interpreted by considering Executive’s authorities, duties, base salary, target
bonus and incentive compensation opportunity, principal place of employment,
perquisites and participation in compensation and benefit plans immediately
prior to any reduction, change or diminution thereof, rather than immediately
prior to the date on which a Change in Control occurs.

     (d) “Code” shall mean the Internal Revenue Code of 1986, as amended.

     (e) “Company Board” shall mean the Board of Directors of the Company.

     (f) “Compensation” shall mean Executive’s Target Bonus for the Company’s
fiscal year in which the Change in Control occurs (or, if earlier, the
Company’s fiscal year in which Executive’s Involuntary Termination occurs) plus
the greater of:

	 	(i)	 	Executive’s annual base salary from the Company
at the rate in effect immediately prior to the date on which a
Change in Control occurs;
	 
	 	(ii)	 	Executive’s annual base salary from the Company
at the rate in effect six months prior to the date of
Executive’s Involuntary Termination; or
	 
	 	(iii)	 	Executive’s annual base salary from the Company
at the rate in effect at the time of Executive’s Involuntary
Termination.

     (g) “Employment Agreement” shall mean that certain Employment Agreement
dated January 1, 1998, by and between Executive and the Company, as amended, or
any successor employment agreement between Executive and the Company or an
Affiliate.

     (h) “Involuntary Termination” shall mean any termination of Executive’s
employment with the Company which:

	 	(i)	 	does not result from a resignation by Executive
(other than a resignation pursuant to clause (ii) or clause
(iii) of this subparagraph (h));
	 
	 	(ii)	 	results from a resignation by Executive on or
before the date which is 30 days after the date upon which
Executive receives notice of a Change in Terms of Service;
provided, however, that if Executive receives notice of a
Change in Terms of Service prior to a Change in Control, then
a resignation with respect to such Change in Terms of Service
must occur on or before the date which is 30 days after the
date upon which the Change in Control occurs; or
	 
	 	(iii)	 	results from a resignation by Executive during
the 30-day period that begins on the later of (x) the date
that is six months after the date upon which a Change in
Control occurs or (y) the date upon which at least 80% of the
consideration received in connection with a Change in Control
by the stockholders of the Parent immediately prior to such
Change in Control shall be (or shall at any time have been) in cash
and/or securities that are readily tradable on an established
securities market.

3

 

Notwithstanding the foregoing, the term “Involuntary Termination” shall not
include a Termination for Cause or any termination as a result of death,
disability under circumstances entitling Executive to benefits under the
Company’s (or an Affiliate’s) long-term disability plan, or Retirement.
Further, if Executive is required pursuant to the terms of the Employment
Agreement to provide Company with written notice of Executive’s resignation in
advance of such resignation, then the delivery of any such notice by Executive
to the Company within the time period described in clause (ii) or clause (iii)
above, as applicable, shall be deemed to satisfy the timing requirements of
such clause even if the actual date of Executive’s Involuntary Termination
occurs after the expiration of the time period described in such clause;
provided, however, that if the Employment Agreement specifies a minimum notice
period with respect to any such resignation, then the effective date of
Executive’s resignation that is specified in Executive’s written notice of
resignation may not extend beyond such minimum notice period by more than five
business days. Finally, the actual date of Executive’s Involuntary Termination
must occur within the period specified in the first sentence of Paragraph 3
hereof in order for Executive to be eligible to receive the payments and
benefits provided for in such Paragraph.

     (i) “Parent” shall mean Doane Pet Care Enterprises, Inc., a Delaware
corporation.

     (j) “Parent Board” shall mean the Board of Directors of the Parent.

     (k) “Prorated Bonus Amount” shall mean an amount equal to Executive’s
Target Bonus for the Company’s fiscal year in which the Change in Control
occurs (or, if earlier, the Company’s fiscal year in which Executive’s
Involuntary Termination occurs) multiplied by a fraction, the numerator of
which is the number of days during the period beginning on the first day of the
Company’s fiscal year in which Executive’s Involuntary Termination occurs and
ending on the date of such Involuntary Termination, and the denominator of
which is 365.

     (l) “Retirement” shall mean Executive’s resignation on or after the date
Executive reaches age sixty-five.

     (m) “Severance Amount” shall mean an amount equal to 300% of Executive’s
Compensation.

     (n) “Target Bonus” shall mean the annual bonus to which Executive would be
entitled under the Doane Pet Care Company Annual Bonus Program, as the same may
be amended, replaced or superseded from time to time, for the Company’s fiscal
year in which the Change in Control occurs (or, if earlier, the Company’s
fiscal year in which Executive’s Involuntary Termination occurs), determined as
if actual performance for such year equaled 100% of each corporate and
individual goal established for such year under such program; provided,
however, that if a Change in Terms of Service occurs as a result of a reduction
or diminution in Executive’s annual bonus opportunity as described in Paragraph
1(c)(ii) or (iii) hereof, then the Target Bonus shall be determined without
regard to any reduction or diminution that gave rise to such Change in Terms of
Service.

4

 

     (o) “Termination for Cause” shall mean the termination of Executive’s
employment with the Company for “Cause” as such term (or any similar term) is
defined in the Employment Agreement. Notwithstanding the foregoing, in no
event shall a termination of Executive’s employment constitute a “Termination
for Cause” unless such termination is approved (which approval may occur before
or after the date of Executive’s termination of employment) by at least
two-thirds of the members of the Company Board after Executive has been given
written notice by the Company of the specific reason for such termination and
an opportunity for Executive, together with Executive’s counsel, to be heard
before the Company Board. Executive shall be provided with at least 10 days
advance written notice of any hearing that is required pursuant to this
subparagraph (o), and members of the Company Board may participate in any such
hearing by means of conference telephone or similar communications equipment by
means of which all persons participating in the hearing can hear and speak to
each other; provided, however, that at least one-half of the members of the
Company Board shall attend the hearing in person. If any Termination for Cause
is ever ultimately determined by the Company Board or a court, agency or other
tribunal to have not constituted a Termination for Cause, then the Company’s
sole liability under this Agreement or otherwise at law or in equity shall be
to provide Executive with the payments and benefits that would otherwise have
been provided to Executive hereunder and the reasonable attorneys’ fees and
other amounts described in Paragraph 7(b) hereof associated with Executive’s
successfully obtaining such determination.

     (p) “Welfare Benefit Plans” shall mean the medical, dental, life
insurance, accidental death and dismemberment, and long-term disability plans
provided by the Company (or an Affiliate) to its active employees.

     2. Services. Executive agrees that Executive shall (a) render services to
the Company (as well as any Affiliate) during the period of Executive’s
employment to the best of Executive’s ability and in a prudent and businesslike
manner and (b) devote substantially the same time, efforts, and dedication to
Executive’s duties as heretofore devoted.

     3. Severance Benefits. If Executive’s employment by the Company shall be
subject to an Involuntary Termination during the period beginning on the date
that is six months prior to the date upon which a Change in Control occurs and
ending on the date that is two years after the date upon which a Change in
Control occurs, then Executive shall be entitled to receive, as additional
compensation for services rendered to the Company (including Affiliates), the
following severance benefits:

	 	(a)	 	A lump sum cash payment in an amount equal to the sum of the
Prorated Bonus Amount and the Severance Amount, which shall be paid
to Executive on or before the fifth day after the last day of
Executive’s employment with the Company (or, if later, the date upon
which the Change in Control occurs);
	 
	 	(b)	 	If Executive’s Involuntary Termination occurs during the
two-year period beginning on the date upon which a Change in Control
occurs, then (i) all of the outstanding stock options granted by the
Company or an Affiliate to Executive shall become immediately
exercisable in full upon Executive’s termination of employment and
(ii) all of such stock options shall remain exercisable for a period
of three months after Executive’s Involuntary Termination or for
such greater

5

 

period as may be provided in the plan or plans pursuant to which
such stock options were granted or in the stock option agreements
entered into in connection with such options (but in no event shall
any such stock option be exercisable after the expiration of the
original term of such stock option). If Executive’s Involuntary
Termination occurs during the six-month period preceding the date
upon which a Change in Control occurs, then:

	 	(A)	 	with respect to each Terminated Option Share (as
hereinafter defined), on the date upon which the Change in
Control occurs Executive shall be paid a lump sum cash payment
with respect to each such share in an amount equal to the
difference, if any, between (x) the value of such share as of
the date upon which the Change in Control occurs and (y) the
purchase price with respect to such share under the applicable
stock option agreement; and
	 
	 	(B)	 	with respect to each Exercisable Option Share (as
hereinafter defined), Executive may elect, at any time during
the period beginning on the date upon which the Change in
Control occurs and ending on the date upon which the option
pertaining to such share would otherwise expire (but in no
event shall such period exceed three months from the date upon
which the Change in Control occurs), to surrender Executive’s
right to exercise such option with respect to such share in
exchange for a lump sum cash payment in an amount equal to the
difference, if any, between (x) the value of such share as of
the date upon which the Change in Control occurs and (y) the
purchase price with respect to such share under the applicable
stock option agreement. Any cash payment required to be paid
to Executive pursuant to this clause (B) shall be paid to
Executive on or before the fifth day after Executive provides
written notice to the Company of the exercise of Executive’s
rights pursuant to this clause (B).

For purposes of the preceding sentence, the value of a share of
stock as of the date upon which the Change in Control occurs shall
be determined in good faith by the Parent Board based on the
consideration received by the Parent’s stockholders in connection
with the Change in Control transaction and such other factors as
the Parent Board deems relevant. The term “Terminated Option
Share” means each share of stock that (i) as of the date of
Executive’s Involuntary Termination, was subject to an outstanding
stock option granted by the Company or an Affiliate to Executive
(irrespective of whether such share could then be purchased under
the terms of such stock option), and (ii) as of the date upon which
the Change in Control occurred, had not been purchased, and could
no longer be purchased, by Executive pursuant to the terms of such
stock option. The term “Exercisable Option Share” means each share
of stock that, as of the date upon which Executive exercises his
rights described in clause (B) above, could be purchased by
Executive pursuant to the terms of an outstanding stock option
granted by the Company or an Affiliate to Executive. The incentive
stock options (within the meaning of section 422 of the Code) that
have been granted by the Company or an Affiliate to Executive prior
to the date hereof (the “Existing ISOs”) are

6

 

intended to continue to qualify as incentive stock options after
the execution of this Agreement to the maximum extent permitted
under the Code. However, Executive agrees and acknowledges that
the provisions of this Section 3(b) may cause the Existing ISOs to
cease to qualify (in whole or in part) as incentive stock options;

	 	(c)	 	Executive and those of Executive’s dependents (including
Executive’s spouse) who were covered under the Welfare Benefit Plans
at the time of Executive’s Involuntary Termination shall continue to
be covered under such plans throughout the thirty-six month period
beginning on the date of Executive’s Involuntary Termination (or, if
Executive’s Involuntary Termination occurs during the six-month
period preceding the date upon which the Change in Control occurs,
then Executive and such dependents shall be reinstated under such
plans with such coverage beginning on the date of the Change in
Control and continuing for the remainder of such thirty-six month
period) at a cost to Executive that is no greater than the lesser of
(i) the cost of such coverage paid by Executive immediately prior to
such termination or (ii) the cost of such coverage paid by Executive
immediately prior to the Change in Control (if applicable);
provided, however, that coverage under a particular Welfare Benefit
Plan shall immediately end upon Executive’s obtainment of new
employment and coverage under a similar welfare benefit plan
maintained by Executive’s new employer (with Executive being
obligated hereunder to promptly report such new coverage to the
Company); provided, further, that (A) if such continued coverage
will have adverse tax consequences to Executive as compared to the
tax consequences associated with similar coverage provided to an
active executive employee of the Company, then the Company shall
provide identical coverage through individual policies that do not
have such adverse tax consequences or otherwise pay to Executive a
cash gross-up payment to make Executive whole (on an after-tax
basis) for such adverse tax consequences, and (B) if such continued
coverage will have adverse consequences to the Company or the
Welfare Benefit Plans (or any Affiliate or successor), then the
Company shall provide identical coverage through individual policies
or otherwise pay to Executive a cash payment sufficient to allow
Executive (on an after-tax basis) to procure such individual
policies. In addition, if Executive’s Involuntary Termination
occurs during the six-month period preceding the date upon which the
Change in Control occurs and Executive and/or his dependents elect
COBRA continuation coverage under one or more group health plans
maintained by the Company or an Affiliate, then, on the date upon
which the Change in Control occurs, Executive shall receive a lump
sum cash payment equal to the amount by which the COBRA premiums
paid by Executive and his dependents for such coverage prior to the
date of the Change in Control exceeded the premiums that would have
been paid for such coverage by a comparable executive of the Company
who was in active employment during such period;
	 
	 	(d)	 	Executive shall be entitled to receive out-placement services
in connection with obtaining new employment up to a maximum cost of
$25,000 (which shall be paid by the Company (or an Affiliate)
directly to the provider of such services); and

7

 

	 	(e)	 	The provisions of the Employment Agreement that restrict
Executive’s ability to solicit any employee of the Company to
terminate his or her employment with the Company or employ any such
individual (which provisions are set forth in Section 6(c) of the
Employment Agreement as of the date hereof) shall terminate and
cease to apply effective as of the later of the date of the Change
in Control or the date of Executive’s Involuntary Termination.

     4. Benefits Under Employment Agreement. The benefits, if any, under the
Employment Agreement to which Executive would be entitled upon an Involuntary
Termination are not intended to be in addition to the benefits to which
Executive is entitled under this Agreement. Accordingly, if Executive is
entitled to receive benefits under Paragraph 3 of this Agreement, then
Executive agrees that (a) Executive shall not be entitled to continued payment
of salary, bonus, benefits, severance payments or any other compensation under
the Employment Agreement, whether as payment for the remainder of the
employment term provided therein or otherwise, and, in the event of an
Involuntary Termination prior to the occurrence of a Change in Control, the
lump sum cash payment provided for in Paragraph 3(a) hereof shall be reduced by
the aggregate amount of any severance payments received by Executive under the
Employment Agreement, (b) the non-competition covenants, if any, under the
Employment Agreement shall continue to apply, and (c) Executive shall not be
eligible to receive any benefits under any other severance benefit plan or
policy maintained by the Company or any Affiliate. Notwithstanding the
foregoing, nothing in this Agreement shall adversely affect Executive’s
entitlement to payment from the Company for the amount of Executive’s accrued
but unused vacation and sick leave through the date of an Involuntary
Termination, to the extent any such amount is due and owing under the terms of
the Employment Agreement or the Company’s applicable vacation and sick leave
policies.

     5. Interest on Late Benefit Payments. If any cash payment provided for in
Paragraph 3 or Paragraph 6 hereof is not made when due, the Company shall pay
to Executive interest on the amount payable from the date that such payment
should have been made under such paragraph until such payment is made, which
interest shall be calculated at the rate of 12% per annum.

     6. Certain Additional Payments by the Company. Notwithstanding anything
to the contrary in this Agreement, in the event that any payment, benefit or
distribution by the Company or any Affiliate to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (a “Payment”), would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties
(other than interest or penalties that are the result of errors or omissions
that are the primary responsibility of Executive) with respect to such excise
tax (such excise tax, together with any such interest or penalties, are
hereinafter collectively referred to as the “Excise Tax”), the Company shall
promptly pay to Executive an additional payment (a “Gross-up Payment”) in an
amount such that after payment by Executive of all taxes (including any
interest or penalties imposed with respect to such taxes other than interest or
penalties that are the result of errors or omissions that are the primary
responsibility of Executive), including any Excise Tax imposed on any Gross-up
Payment, Executive retains an amount of the Gross-up Payment equal to the
Excise Tax imposed upon the Payments. The Company and Executive shall make an
initial determination as to whether a Gross-up Payment is required and the
amount of any such

8

 

Gross-up Payment. Executive shall notify the Company in writing (within five
days of the receipt of any claim; provided that failure to timely notify the
Company shall not affect Executive’s right to receive a Gross-up Payment unless
the delay results in a significant detriment to the Company) of any claim by
the Internal Revenue Service which, if successful, would require the Company to
make a Gross-up Payment (or a Gross-up Payment in excess of that, if any,
initially determined by the Company and Executive). The Company shall notify
Executive in writing at least ten days prior to the due date of any response
required with respect to such claim if it plans to contest the claim. If the
Company decides to contest such claim, Executive shall cooperate fully with the
Company in such action; provided, however, the Company shall bear and pay
directly or indirectly all costs and expenses (including additional interest
and penalties) incurred in connection with such action and shall indemnify and
hold Executive harmless, on an after-tax basis, for any Excise Tax or income
tax, including interest and penalties with respect thereto, imposed as a result
of the Company’s action. If, as a result of the Company’s action with respect
to a claim, Executive receives a refund of any amount paid by the Company with
respect to such claim, Executive shall promptly pay such refund to the Company.
If the Company fails to timely notify Executive whether it will contest such
claim or the Company determines not to contest such claim, then the Company
shall immediately pay to Executive the portion of such claim, if any, which it
has not previously paid to Executive.

     7. General.

     (a) Term. The effective date of this Agreement is April 22, 2004. Within
sixty days from and after the expiration of two years after said effective date
and within sixty days after each successive two-year period of time after said
effective date that this Agreement is in effect, the Company shall have the
right to review this Agreement, and in its sole discretion either continue and
extend this Agreement, terminate this Agreement, and/or offer Executive a
different agreement. The Compensation Committee of the Company Board
(excluding any member of such committee who is covered by this Agreement or by
a similar agreement with the Company or an Affiliate) will vote on whether to
so extend, terminate, and/or offer Executive a different agreement and will
notify Executive of such action within said sixty-day time period mentioned
above. This Agreement shall remain in effect until so terminated and/or
modified by the Company. Failure of the Compensation Committee of the Company
Board to take any action within said sixty days shall be considered as an
extension of this Agreement for an additional two-year period of time.
Notwithstanding anything to the contrary contained in this “sunset provision,”
it is agreed that if a Change in Control occurs while this Agreement is in
effect, then this Agreement shall not be subject to termination or modification
under this “sunset provision,” and shall remain in force for a period of two
years after such Change in Control, and if within said two years the
contingency factors occur which would entitle Executive to the benefits as
provided herein, this Agreement shall remain in effect in accordance with its
terms. If, within such two years after a Change in Control, the contingency
factors that would entitle Executive to said benefits do not occur, thereupon
this two-year “sunset provision” shall again be applicable with the sixty-day
time period for action by the Compensation Committee of the Company Board to
thereafter commence at the expiration of said two years after such Change in
Control and on each two-year anniversary date thereafter. Executive may
terminate this Agreement by delivering written notice of such termination to
the Company at any time prior to Executive’s receipt of payments or benefits
pursuant to the terms of this Agreement, and, if Executive does

9

 

so terminate this Agreement, then Executive shall not be considered
entitled to receive benefits under this Agreement for purposes of applying
Paragraph 4 hereof.

     (b) Indemnification. If Executive shall obtain any money judgment or
otherwise prevail with respect to any litigation brought by Executive or the
Company to enforce or interpret any provision contained herein, the Company, to
the fullest extent permitted by applicable law, hereby indemnifies Executive
for Executive’s reasonable attorneys’ fees and disbursements incurred in such
litigation and hereby agrees (i) to pay in full all such fees and disbursements
and (ii) to pay prejudgment interest on any money judgment obtained by
Executive from the earliest date that payment to Executive should have been
made under this Agreement until such judgment shall have been paid in full,
which interest shall be calculated at the rate of 12% per annum.

     (c) Payment Obligations Absolute. The Company’s obligation to pay (or
cause an Affiliate to pay) Executive the amounts and to make the arrangements
provided herein shall be absolute and unconditional and shall not be affected
by any circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company (including an Affiliate)
may have against Executive or anyone else. All amounts payable by the Company
hereunder shall be paid without notice or demand. Executive shall not be
obligated to seek other employment in mitigation of the amounts payable or
arrangements made under any provision of this Agreement, and, except as
provided in Paragraph 3(c) hereof, the obtaining of any such other employment
shall in no event effect any reduction of the Company’s obligations to make (or
cause to be made) the payments and arrangements required to be made under this
Agreement.

     (d) Successors. This Agreement shall be binding upon and inure to the
benefit of the Company and any successor of the Company, by merger or
otherwise. This Agreement shall also be binding upon and inure to the benefit
of Executive and Executive’s estate. If Executive shall die prior to full
payment of amounts due pursuant to this Agreement, such amounts shall be
payable pursuant to the terms of this Agreement to Executive’s estate.

     (e) Severability. Any provision in this Agreement which is prohibited or
unenforceable in any jurisdiction by reason of applicable law shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating or affecting the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.

     (f) Non-Alienation. Executive shall not have any right to pledge,
hypothecate, anticipate or assign this Agreement or the rights hereunder,
except by will or the laws of descent and distribution.

     (g) Notices. Any notices or other communications provided for in this
Agreement shall be sufficient if in writing. In the case of Executive, such
notices or communications shall be effectively delivered if hand delivered to
Executive at Executive’s principal place of employment or if sent by registered
or certified mail or by overnight delivery via a nationally-recognized courier
service to Executive at the last address Executive has filed with the Company.
In the case of the Company, such notices or communications shall be effectively
delivered if sent

10

 

by registered or certified mail or by overnight delivery via a
nationally-recognized courier service to the Company at its principal executive
offices.

     (h) Controlling Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Tennessee.

     (i) Full Settlement; Withholding. If Executive is entitled to and
receives the benefits provided hereunder, performance of the obligations of the
Company hereunder will constitute full settlement of all claims that Executive
might otherwise assert against the Company on account of Executive’s
termination of employment. Any severance benefits paid pursuant to this
Agreement shall be deemed to be a severance payment and not “Compensation” for
purposes of determining benefits under the Company’s qualified plans (unless
and to the extent that any such qualified plan expressly provides otherwise),
and shall be subject to any required tax withholding.

     (j) Unfunded Obligation. The obligation to pay amounts under this
Agreement is an unfunded obligation of the Company, and no such obligation
shall create a trust or be deemed to be secured by any pledge or encumbrance on
any property of the Company (including any Affiliate).

     (k) Not a Contract of Employment. This Agreement shall not be deemed to
constitute a contract of employment, nor shall any provision hereof affect (i)
the right of the Company (or an Affiliate) to discharge Executive or (ii) the
terms and conditions of any other agreement between the Company and Executive
except as expressly provided herein. To the extent provided in Paragraph 4
hereof, this Agreement constitutes an amendment to the Employment Agreement.

     (l) Employment Relationship. For purposes of this Agreement, Executive
shall be considered to be in the employment of the Company as long as Executive
remains an employee of either the Company or any Affiliate.

     (m) Number and Gender. Wherever appropriate herein, words used in the
singular shall include the plural and the plural shall include the singular.
The masculine gender where appearing herein shall be deemed to include the
feminine gender.

11

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
7th day of May, 2004.

	 	 	 	 	 
	 	DOUGLAS J. CAHILL

 	 
	 	/s/ Douglas J. Cahill
 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	DOANE PET CARE COMPANY

 	 
	 	By:  	/s/ Philip K. Woodlief
 	 
	 	 	Name:  	Philip K. Woodlief 	 
	 	 	Title:  	Vice President-Finance and
Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

12

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