DEAN FOODS COMPANY
Exhibit 10.38
XXXX FOODS COMPANY
THIS AGREEMENT (the “Agreement”), effective as of the date indicated on the attached
Notice of Grant, is made and entered into by and between Xxxx Foods Company, a Delaware corporation
(the “Company”), and the individual named on the cover page of this Agreement
(“you”).
WITNESSETH:
WHEREAS, the Company has adopted and approved the Xxxx Foods Company 2007 Stock Incentive Plan
(the “Plan”), which was adopted by the Company’s Board of Directors (the “Board”)
and approved as required by the Company’s stockholders, and which provides for the grant of
non-qualified stock options (“Options”) and other forms of stock-based compensation to
certain Employees and non-employee Directors of the Company and its Subsidiaries (Capitalized terms
used and not otherwise defined in this Agreement shall have the meanings set forth in the Plan);
and
WHEREAS, the Options and other Awards provided for under the Plan are intended to comply with
the requirements of Rule 16b-3 under the Securities Exchange Act of 1934, as amended; and
WHEREAS, you are a non-employee Director; and
WHEREAS, The Xxxx Foods Company Eighth Amended and Restated 1997 Stock Option and Restricted
Stock Plan provided that on June 30 of each year, each non-employee Director would automatically be
granted a non-qualified Option to purchase 7,500 shares of Stock, subject to the terms and
conditions described therein; and
WHEREAS, it is the intent of the Compensation Committee of the Board of Directors that such
practice be continued under the Plan;
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
herein contained, and to promote the success of the business of the Company and its Subsidiaries,
the parties hereby agree as follows:
1. Grant of Option. The Company hereby grants to you, and you hereby accept,
effective as of the date shown on the attached Notice of Grant (the “Date of Grant”) and on
the terms and subject to the conditions, limitations and restrictions set forth in the Plan and in
this Agreement, an Option to purchase 7,500 shares of Stock for $ per share (the “Exercise
Price”).
2. Vesting. The Option is immediately vested in full with respect to all of the
underlying shares of Stock subject thereto.
2008 Grant
3. Exercise. In order to exercise the Option with respect to any vested portion, you
must notify the Company in writing, either sent to the Corporate Secretary’s attention at the
Company’s principal office, or via the internet through E*Trade (the Company’s plan broker) at
xxx.xxxxxx.xxx. No Stock shall be delivered prusuant to any exercise of an Option until payment in
full of the exercise price therefor is received by the Company. At the time of exercise, you must
pay to the Company the exercise price (as set forth on the Notice of Grant) times the number of
vested shares for which the Option is being exercised. Such payment may be made in cash or its
equivalent or, if permitted by the Committee, (i) by exchanging shares of Stock you have owned for
at least six months (or for such greater or lesser period as the Committee may determine from time
to time) and which are not the subject of any pledge or other security interest, (ii) through an
arrangement with a broker approved by the Company whereby payment of the exercise price is
accomplished with the proceeds of the sale of Stock or (iii) by a combination of the foregoing,
provided that the combined value of all cash and cash equivalents and the fair market value of any
Stock tendered to the Company, valued as of the date of such tender, is at least equal to such
exercise price of the portion of the Option being exercised.
4. Expiration of Option. The Option shall expire, and shall not be exercisable with
respect to any vested portion as to which the Option has not been exercised, on the first to occur
of:
(a) the tenth anniversary of the Date of Grant;
(b) 90 days after your term as a non-employee Director of the Company has expired or been
otherwise terminated for any reason other than death, Retirement or Disability;
(c) 12 months following the date your term as a non-employee Director of the Company has
expired or been otherwise terminated, if such cessation of service is due to your death or
Disability; or
(d) the earlier of (i) the tenth anniversary of the Date of Grant, or (ii) the first
anniversary of your death for any Options you hold upon Retirement.
For purposes of this Agreement, “Retirement” shall be defined as your retirement from
employment or other service to the Company or any Subsidiary after you reach the age of 65.
“Disability” shall be defined as your permanent and total disability (within the meaning of
Section 22(e)(3) of the Code).
Upon your death, any vested Option exercisable on the date of death may be exercised by your
estate or by a person who acquires the right to exercise such Option by bequest or
inheritance or by reason of your death, provided that such exercise occurs within the shorter
of the remaining Option term of the Option and 12 months after the date of your death.
Notwithstanding any provision of the Plan or this Agreement to the contrary, you may not,
under any circumstances, exercise a vested Option following your removal as a non-
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employee Director
if you are removed as a non-employee Director due to your willful or intentional fraud,
embezzlement or other conduct seriously detrimental to the Company or any Subsidiary. The
determination of whether or not you will be removed as a non-employee Director for any of the
reasons specified in the preceding sentence will be made by the Committee.
5. Tax Withholding. The Employer shall have the right to deduct from all amounts
paid to you in cash (whether under the Plan or otherwise) any amount required by law to be withheld
in respect of any awards under the Plan as may be necessary in the opinion of the Employer to
satisfy any applicable tax withholding requirements under the laws of any country, state, province,
city or other jurisdiction, including but not limited to income taxes, capital gains taxes,
transfer taxes, and social security contributions that are required by law to be withheld. In the
case of payments of awards in the form of Stock, at the Committee’s discretion, you will be
required to either pay to the Employer the amount of any taxes required to be withheld with respect
to such Stock or, in lieu thereof, the Employer shall have the right to retain (or you may be
offered the opportunity to elect to tender) the number of shares of Stock whose fair market value
equals such amount required to be withheld.
6. Transfer of Option. The Option is not transferable except in accordance with the
provisions of the Plan.
7. Certain Legal Restrictions. The Plan, the granting and exercising of this Option,
and any obligations of the Company under the Plan, shall be subject to all applicable federal,
state and foreign country laws, rules and regulations, and to such approvals by any regulatory or
governmental agency as may be required, and to any rules or regulations of any exchange on which
the Stock is listed. The Company, in its discretion, may postpone the granting and exercising of
this Option, the issuance or delivery of Stock under this Option or any other action permitted
under the Plan to permit the Company, with reasonable diligence, to complete such stock exchange
listing or registration or qualification of such Stock or other required action under any federal,
state or foreign country law, rule or regulation and may require you to make such representations
and furnish such information as it may consider appropriate in connection with the issuance or
delivery of Stock in compliance with applicable laws, rules and regulations. The Company shall not
be obligated by virtue of any provision of the Plan to recognize the exercise of this Option or to
otherwise sell or issue Stock in violation of any such laws, rules or regulations, and any
postponement of the exercise or settlement of this Option under this provision shall not extend the
term of the Option. Neither the Company nor its directors or officers shall have any obligation or
liability to you with respect to any Option (or Stock issuable thereunder) that shall lapse because
of such postponement.
8. Plan Incorporated. You accept the Option subject to all the provisions of the
Plan, which are incorporated into this Agreement, including the provisions that authorize the
Committee to administer and interpret the Plan and which provide that the Committee’s decisions,
determinations and interpretations with respect to the Plan are final and conclusive on all persons
affected thereby. Except as otherwise set forth in this Agreement, terms defined in the Plan have
the same meanings herein.
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9. Miscellaneous.
(a) No ISO Treatment. The Option is intended to be a non-qualified stock option under
applicable tax laws, and it is not to be characterized or treated as an incentive stock option
under such laws.
(b) No Stockholder Rights. Neither you nor any person claiming under or through you
shall be or shall have any of the rights or privileges of a stockholder of the Company in respect
of any of the shares issuable upon the exercise of the Option herein unless and until certificates
representing such shares shall have been issued and delivered to you or your agent.
(c) Notices. Any notice to be given to the Company under the terms of this Agreement
or any delivery of the Option to the Company shall be addressed to the Company at its principal
executive offices, and any notice to be given to you shall be addressed to you at the address set
forth beneath his or her signature hereto, or at such other address for a party as such party may
hereafter designate in writing to the other. Any such notice shall be deemed to have been duly
given if mailed, postage prepaid, addressed as aforesaid.
(d) Binding Agreement. Subject to the limitations in this Agreement and the Plan on
the transferability by you of the Option and any shares of Stock, this Agreement shall be binding
upon and inure to the benefit of your representatives, executors, successors or beneficiaries.
(e) Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of Delaware and the United States, as applicable,
without reference to the conflict of laws provisions thereof.
(f) Severability. If any provision of this Agreement is declared or found to be
illegal, unenforceable or void, in whole or in part, then the parties shall be relieved of all
obligations arising under such provision, but only to the extent that it is illegal, unenforceable
or void, it being the intent and agreement of the parties that this Agreement shall be deemed
amended by modifying such provision to the extent necessary to make it legal and enforceable while
preserving its intent or, if that is not possible, by substituting therefor another provision that
is legal and enforceable and achieves the same objectives.
(g) Interpretation. All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no way shall define, limit,
extend or describe the scope or intent of any provisions of this Agreement.
(h) Entire Agreement. This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
(i) No Waiver. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any right or
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remedy
consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant,
duty, agreement or condition.
(j) Counterparts. This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto, notwithstanding that all
such parties are not signatories to the original or the same counterpart.
(k) Relief. In addition to all other rights or remedies available at law or in
equity, the Company shall be entitled to injunctive and other equitable relief to prevent or enjoin
any violation of the provisions of this Agreement.
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