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Severance, Consulting Agreement

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SEVERANCE, CONSULTING AND NON-COMPETE AGREEMENT


This Agreement is made and entered into as of December 5, 1996 by and between DEAN FOODS COMPANY, a Delaware corporation (the "Company"), and THOMAS L. ROSE ("Executive").


RECITALS:


A. Executive has for many years served as an executive of the
Company, he is presently serving as President of the Company, he
will continue to hold this office position until his successor shall
have been elected, and he will thereafter remain an employee of the
Company until December 31, 1996 (the "Severance Date") and serve as
Vice-Chairman for such period as the Board of Directors determines
in its sole discretion.


B. The Company desires to continue to make use of Executive's
expertise after the Severance Date on a consulting basis and to
prevent any competitive business from securing or utilizing the
services of Executive to the extent and for the period hereinafter
provided.


C. Executive desires to continue working for the Company on the
terms and conditions hereinafter set forth.


NOW THEREFORE, in consideration of the recitals and the mutual agreements herein contained, the parties hereto agree as follows:


1. Severance Benefits. The following severance benefits, which are required by law or contract, shall be provided to Executive:


(a) Five weeks of vacation compensation.


(b) Any benefits due under the Company's Management
Deferred Compensation Plan, 1989 Stock Awards Plan and any
qualified retirement plan.


(c) Executive has elected to receive a lump-sum retirement
benefit payable on January 2, 1997, such benefit to be
provided to Executive pursuant to the Company's Amended and
Restated Supplemental Benefit Plan.


In addition, the Company will provide the following special severance benefits to Executive:


(d) Executive's fiscal 1997 incentive bonus, calculated in
accordance with the Company's existing formula and based on
(i) a base pay amount equal to the wages earned by Executive
through the Severance Date plus the consulting fees earned by
Executive until the first to occur of May 25, 1997 or the


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end of the Consulting Term (as hereinafter defined) and
(ii) a personal performance rating of 80%. Such bonus shall
be payable in August, 1997.


(e) A severance payment, payable within 30 days
after the first anniversary of the end of the Consulting
Term, calculated in the manner set forth in clause (d) above,
except that the base pay amount shall be $383,000.00 and
provided that such bonus shall not be less than $197,000.00.


(f) Company life, health and dental insurance
benefits at employee contribution rates until October 13,
2001, or the date on which comparable employer-provided
benefits are available to Executive.


(g) Use of a Company-leased car comparable to the
car currently used by Executive until December 31, 1998 in
accordance with Company policies relating thereto from time
to time in effect.


(h) Payment of up to $6,000 per year for financial
consulting services provided to Executive until April 15,
1999.


(i) Country club dues reimbursement until December
31, 1998 in accordance with Company policies relating thereto
from time to time in effect.


(j) A supplemental lump sum retirement benefit,
payable on January 2, 1997, of $420,562, such benefit to be
provided to Executive in excess of the benefit to be provided
to him under the Company's Amended and Restated Supplemental
Benefit Plan (described in Section 1(c) hereof).


(k) A supplemental lump sum retirement benefit,
payable in September, 1997, equal to 140% of the excess, if
any, of the 1997 fiscal bonus calculated in the manner set
forth in clause (d) above over $197,000.00.


(l) The Company's payment to Executive in fiscal
1998 of the final $55,500 installment of Executive's
relocation allowance previously agreed upon by the parties.


The Company also agrees to amend as of the date hereof all existing incentive stock option agreements between the Company and Executive pursuant to the terms of the Amendment to Incentive Stock Option Agreements set forth in Exhibit A hereto, and further agrees to amend as of the date hereof all existing Non-Qualified Stock Option Agreements between the Company and Executive to conform to the terms set forth in the form attached hereto as Exhibit B.


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2. Nature and Term of Consulting Services. The Company hereby agrees to engage Executive, and Executive hereby agrees to serve the Company, as a full-time consultant during the term (the "Consulting Term") commencing on the Severance Date and ending on the first to occur of (a) Executive's inability, including as a result of his death or disability, or his refusal in his sole discretion to serve as a full-time consultant of the Company as described herein or (b) such date as the Chief Executive Officer of the Company (the "CEO") shall determine in his sole discretion that the Executive's full-time consulting services are no longer required. During the Consulting Term, Executive shall devote his best efforts and his full business time and attention in rendering such services as reasonably requested by the CEO.


3. Compensation Benefits.


(a) Consulting Fees. During the Consulting Term,
Executive shall be paid consulting fees in the amount of
$31,917.00 per month. In the event that the Consulting Term
ends after May 25, 1997, Executive shall be paid one or more
additional consulting payments, payable within 30 days after
the first to occur of the end of the Consulting Term or the
end of each fiscal year after fiscal 1997, in an amount equal
to 51.4% of the consulting fees earned by Executive during
such fiscal year.


(b) Reasonable Expenses. During the Consulting
Term, the Company will reimburse Executive for his reasonable
expenses necessarily incurred in the performance of his
assigned duties, subject to the Company's policies relating
thereto from time to time in effect.


(c) Performance Bonuses. Executive and the Company
agree that, except as otherwise described herein, all
existing benefits of Executive under any bonus or incentive
compensation plan of the Company shall be terminated and the
benefits described in this Agreement are substituted in lieu
thereof.


4. No Competition; Confidentiality.


In consideration of the payments to be made to Executive hereunder and the additional non-compete payment of $963,000, payable in 24 monthly installments of $32,000.00 during the two-year period (the "Non-Compete Period") commencing immediately after the end of the Consulting Term plus a final installment of $195,000.00, payable within 30 days after the Non-Compete Period, Executive agrees that:


(a) During the Consulting Term, Executive will not
in any manner, directly or indirectly, through any person,
firm or corporation, alone or as a member of a partnership or
as an officer, director,


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stockholder, investor or employee of or in any other
corporation or enterprise or otherwise, engage or be engaged
in, or assist any other person, firm, corporation or
enterprise in engaging or being engaged in, the development,
processing, marketing, distribution or sale of any product of
a kind actively being developed, processed, marketed,
distributed or sold by the Company or any of its subsidiaries
or affiliates (collectively, the "Dean Companies"), in any
geographic area in which the Company or any of its
subsidiaries or affiliates is engaged in such development,
processing, marketing, distribution or selling (whether
through production, calling on customers or prospective
customers, or otherwise) at the end of the Consulting Term.
During the Non-Compete Period, in the event that Executive
engages in any of the foregoing activities, all benefits,
consulting fees and other payments to which he would
otherwise be entitled hereunder, other than the benefits
provided in clauses (d), (j) and (k) of Section 1, shall
forthwith cease. Executive further covenants and agrees
that, during the Consulting Term and the Non-Compete Period,
he shall not induce, attempt to induce, or in any way assist
or act in concert with any other person, firm or entity in
inducing or attempting to induce, any employee or agent
of any of the Dean Companies to terminate his, her or its
relationship with any of the Dean Companies. Nothing
contained herein shall preclude Executive from owning less
than 5% of any class of publicly-traded securities of any
corporation.


(b) Executive will not divulge, furnish or make
accessible to anyone, otherwise than in the regular course of
performance of his duties hereunder, or use for his benefit
or for the benefit of any other person, firm, corporation or
other entity, any trade secret, knowledge or other
information with respect to the confidential or secret
processes, plans, devices or materials of any of the Dean
Companies.


(c) All developments, processes, inventions,
equipment or products, except those of a nature totally
unrelated to those utilized by any of the Dean Companies,
whether patentable or unpatentable, made, conceived or
resulting from work done solely by Executive or jointly with
Company employees or agents or acquired by him prior to the
end of the Consulting Term shall be the sole property of the
Dean Companies, irrespective of whether so made, conceived or
resulting from work done, or acquired, during business hours
or after business hours. Executive further agrees to execute
all documents necessary to vest full and unencumbered title
thereto in the Company and to do all things deemed necessary


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by the Company to obtain patent protection thereon in all
countries or to maintain the same as trade secrets, if the
Company so elects, at the Company's expense.


(d) The provisions of this Section 4(b) and (c)
shall survive the expiration or termination of this
Agreement.


(e) If under the circumstances existing at the time
of enforcement of any of the provisions of this Section 4,
the period, scope or area described therein shall be found or
held to be unreasonable, the parties agree that the maximum
period, scope or area reasonable under the circumstances
shall be substituted for the stated period, scope or area.


5. Tax Consequences. Executive expressly acknowledges and agrees that the payments to be made hereunder to him by the Company shall be taxed to him as items of ordinary income and that the Company will withhold from the payments to be made hereunder as may be required by applicable law.


6. Relief for Breach. Executive recognizes and agrees that his covenants and undertakings contained herein relate to matters which, for purposes of this Agreement exclusively, are of a special and unique character and that a breach thereof by Executive will result in irreparable injury to the Company for which there is no adequate remedy at law. Executive, therefore, expressly agrees that if he shall at any time breach or in any manner violate any of the terms of this Agreement, the Company shall be entitled, at any time after any such breach, to immediately obtain in any court of competent jurisdiction injunctive relief against Executive (in addition to, and not in substitution for, any and all other relief to which the Company may be entitled either at law or in equity) prohibiting Executive from committing such breach or violation and compelling compliance by Executive with his obligations hereunder. Executive agrees that the Company shall be entitled to recover all costs of successfully enforcing any provision of this Agreement, including reasonable attorneys' fees. In the event of any breach or violation by Executive of any of his covenants herein, any applicable non-compete period set forth in Section 4 shall be extended automatically for a period equal to the period during which Executive committed such breach or violation. In addition, in the event Executive shall breach this Agreement in any manner, all benefits, consulting fees and other payments to which he would otherwise be entitled under this Agreement, other than the benefits provided in clauses (d), (j) and (k) of Section 1, shall forthwith cease.


7. Waiver and Release. In consideration of the benefits set forth above, Executive promises to waive and to release the Dean Companies from liability for all rights and claims, whether or not they are presently known to exist, that Executive has against the Dean Companies relating in any way to his employment or separation from employment. For the purposes of this waiver and release, the Dean Companies should be


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understood to also include all present and former directors, shareholders, employees and agents of the Dean Companies. It also means successors and assigns of the Dean Companies.


The rights and claims which Executive waives and releases in this Agreement, include, to every extent allowed by law, those arising under the Employee Retirement Income Security Act of 1974, the Civil Rights Acts of 1866, 1871 and 1964, the Rehabilitation Act of 1973, and the Age Discrimination in Employment Act of 1967, as amended by the Older Worker's Benefit Protection Act of 1990. This is not a complete list, and Executive waives and releases all similar rights and claims under all other federal, state and local discrimination provisions and all other statutory and common law causes of action relating in any way to his employment or separation from employment.


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