To (i) align employee variable cash compensation with the annual objectives of the Company, (ii) motivate employees to create sustained shareholder value, and (iii) ensure retention of key employees by ensuring that cash compensation remains competitive.
Employees of Dean Foods who are in positions to influence and/or control results in their specific areas of responsibility and/or the Corporation. In particular, salary grade levels 9 and above are eligible to participate.
The criteria for payment to Participants under this Plan and
the weighting of such criteria is based on individual target incentive percentages, performance against financial targets, and performance against individual objectives as set forth below. Depending on the Participant’s role in the organization, Individual Objectives may be based on Corporate, Functional, Business Unit, or Individual Objectives and will be noted as Individual Objectives in the Components.
Chief Executive Officer
EVP, General Counsel & Secretary
SVP, Operations & Procurement
SVP, Finance & Treasurer
All Corporate Staff not covered by another STI plan
- 60% Financial Objectives
60% = Dean Foods Operating Income
- 40% Individual Objectives
The financial payout factor is 0% - 200% based on actual performance against approved objectives. The individual objective factor is 0% - 200% of actual performance against approved objectives. Payments under the Dean Foods Short-Term Incentive (STI) Compensation Plan are variable in nature and are not guaranteed.
Approved financial objectives and the range of performance
for each objective for the Plan Year along with the corresponding
payout factor scale based on actual performance will be included
in the Administrative Guidelines for the Plan. The STI Plan Year is the same as the Dean Foods fiscal year.
Each Plan Participant has 40% of their STI target calculated against the
attainment of certain specified individual objectives as determined by the Participant’s supervisor and / or Compensation Committee of the Board of Directors. Actual earned awards are based on the individual’s performance rating under the Performance Management Process and the determination of final percentage targets against which the 40% will apply.
Upon the recommendation of the CEO, the Compensation Committee may (but
occurrence of extraordinary events or circumstances. Significant acquisitions or dispositions of assets or companies or issuances or repurchases of common stock or other equity interests may, at the Compensation Committee’s discretion,
Individual target incentives for specific positions are included in the Dean Foods
Compensation Program. The Company may make adjustments to an individual’s
target incentive based on market conditions or business requirements, as necessary.
“Disability” is defined as permanent and total disability (within the meaning of Section 22(e)(3) of the Internal Revenue Service Code (“Code”).
Eligibility is determined by salary grade in the Company, or as approved by the Executive Vice President Human Resources, or designate. Participants must be employed by the Company on the last working day of the Plan Year in order to receive an incentive award, except as otherwise provided by State law.
For purposes of this Agreement, “Cause” means a Participant’s (i) willful failure to perform substantially a Participant’s duties; (ii) willful or serious misconduct that has caused, or could reasonably be expected to result in, material injury to the business or reputation of the Company; (iii) conviction of, or entering a plea of guilty or nolo contendere to, a crime constituting a felony; (iv) breach of any written covenant or agreement with the Company, any material written policy of
All Plan participants agree and acknowledge that this Plan is subject to the
policies that the Compensation Committee of the Dean Foods Board of Directors may adopt from time to time, with respect to the repayment to the Company of any benefit received pursuant to this Plan, including “clawback” policies.
On May 14, 2014, the Compensation Committee of the Board of Directors of Dean Foods amended the Plan. Notwithstanding anything else in the Plan to the contrary, the amended Plan provides an alternative calculation of the financial objectives performance portion of a participant’s STI payment using the financial results only from the second half of 2014 (i.e., July 1, 2014 – December 31, 2014). No participant may earn more than 50% of her or his financial performance targeted portion of the STI when applying this alternative calculation. If the entire year financial results produce the greater STI payout, the alternative calculation shall not apply. If the alternative calculation results in a higher STI payout than the employee or executive would have received based on a calculation of the entire year financial results, then such calculation will be used in determining the employee or executive’s STI financial results payment.