UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: Commission File Number:
September 28, 1996 0-13544
BEN & JERRY'S HOMEMADE, INC.
(Exact name of registrant as specified in its charter)
VERMONT 03-0267543
(State of incorporation) (I.R.S. Employer Identification No.)
30 Community Drive
South Burlington, Vermont 05403-6828
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(802) 651-9600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding of each of the classes of
common stock outstanding as of the latest practicable date. 6,359,897 shares of
Class A Common Stock and 902,500 shares of Class B Common Stock outstanding as
of November 5, 1996.
<PAGE>
INDEX
PART I: FINANCIAL INFORMATION PAGE NO.
Condensed Consolidated Balance Sheets
September 28, 1996 and December 30, 1995 1-2
Condensed Consolidated Statements of Income
Thirteen and thirty-nine weeks ended
September 28, 1996 and September 30, 1995 3
Condensed Consolidated Statements of Cash Flows
Thirty-nine weeks ended September 28, 1996
and September 30, 1995 4
Notes to Condensed Consolidated Financial Statements 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-11
PART II: OTHER INFORMATION
Item 6-Exhibits and Reports on Form 8-K 12
SIGNATURES 13
Exhibit 11 14
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands)
<TABLE>
September December
28, 1996 30, 1995
----------------- -----------------
(Unaudited) (Note)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 30,310 $ 35,406
Accounts receivable:
Trade (less allowance of $915 in 1996 and $802 in 1995
for doubtful accounts) 17,328 11,660
Other 920 854
Inventories 17,524 12,616
Deferred income taxes 3,575 3,599
Income taxes receivable 2,370 2,831
Prepaid expenses 385 1,097
----------------- -----------------
Total current assets 72,412 68,063
----------------- -----------------
Property, plant and equipment, net 65,327 59,600
Investments 1,000
Other assets 2,522 2,411
----------------- -----------------
Total assets $ 140,261 $ 131,074
================= =================
Note: The balance sheet at December 30, 1995 has been derived from the audited financial statements at
that date but does not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See notes to condensed consolidated financial statements.
</TABLE>
- 1 -
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES & STOCKHOLDERS' EQUITY
(In thousands except share data)
<TABLE>
September December
28, 1996 30, 1995
----------------- -----------------
(Unaudited) (Note)
<S> <C> <C>
Current liabilities:
Accounts payable and accrued expenses $ 19,779 $ 16,592
Current portion of long-term debt and
obligations under capital leases 668 448
----------------- -----------------
Total current liabilities 20,447 17,040
Long-term debt and obligations under capital leases 31,388 31,977
Deferred income taxes 4,502 3,526
Stockholders' equity:
$1.20 noncumulative Class A preferred stock - par value
$1.00 per share, redeemable at $12.00 per share;
900 shares authorized, issued and outstanding;
aggregated preference on liquidation - $9 1 1
Class A common stock - $.033 par value; authorized
20,000,000 shares; issued: 6,356,411 at September 28, 1996
and 6,330,302 at December 30, 1995 209 209
Class B common stock - $.033 par value; authorized
3,000,000 shares; issued: 905,986 at September 28, 1996
and 914,325 at December 30, 1995 30 30
Additional paid-in-capital 48,726 48,521
Retained earnings 36,391 31,264
Cumulative translation adjustment (53) (114)
Treasury stock, at cost: 67,032 Class A and 1,092 Class B
shares at September 28, 1996 and December 30, 1995 (1,380) (1,380)
----------------- -----------------
Total stockholders' equity 83,924 78,531
----------------- -----------------
$ 140,261 $ 131,074
================= =================
Note: The balance sheet at December 30, 1995 has been derived from the audited financial statements at
that date but does not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See notes to condensed consolidated financial statements.
</TABLE>
- 2 -
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
( In thousands except per share amounts)
(Unaudited)
<TABLE>
For the Thirteen weeks ended For the Thirty-nine weeks ended
September September September September
28, 1996 30, 1995 28, 1996 30, 1995
---------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net sales $ 46,143 $ 45,405 $ 132,075 $ 122,545
Cost of sales 31,789 31,329 89,216 85,272
---------------- ----------------- ----------------- -----------------
Gross profit 14,354 14,076 42,859 37,273
Selling, general and
administrative expenses 11,291 9,808 34,899 28,600
---------------- ----------------- ----------------- -----------------
Operating income 3,063 4,268 7,960 8,673
Interest income 373 445 1,185 1,177
Interest expense (481) (482) (1,483) (990)
Other income (expense) (20) (92) 608 (464)
---------------- ----------------- ----------------- -----------------
---------------- ----------------- ----------------- -----------------
(128) (129) 310 (277)
---------------- ----------------- ----------------- -----------------
Income before income taxes 2,935 4,139 8,270 8,396
Income taxes 1,115 1,614 3,143 3,307
---------------- ----------------- ----------------- -----------------
Net income $ 1,820 $ 2,525 $ 5,127 $ 5,089
================ ================= ================= =================
Weighted average common and common
equivalent shares outstanding 7,221 7,260 7,217 7,198
Net income per common share $ 0.25 $ 0.35 $ 0.71 $ 0.71
</TABLE>
See notes to condensed consolidated financial statements
- 3 -
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
For the Thirty-nine
weeks ended
September September
28, 1996 30, 1995
------------------ ----------------
Operating activities:
<S> <C> <C>
Net income $ 5,127 $ 5,089
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 5,052 4,385
Allowance for bad debts 113 100
Deferred income taxes 1,000 254
(Gain)Loss on disposition of assets (54) 88
Changes in operating assets and liabilities:
Accounts receivable (5,847) (2,982)
Inventories (4,908) (109)
Prepaid expenses 712 170
Accounts payable and accrued expenses 3,247 5,604
Income taxes receivable 461 2,942
------------------ ----------------
Net cash provided by operating activities 4,903 15,541
Investing activities:
Additions to property, plant and equipment (10,689) (6,579)
Proceeds from sale of assets 174 4
Changes in other assets (321) (255)
Decrease in investments 1,000 5,000
------------------ ----------------
Net cash used for investing activities (9,836) (1,830)
Financing activities:
Repayments of long-term debt and capital leases (369) (446)
Net proceeds from issuance of common stock 205 226
------------------ ----------------
Net cash used for financing activities (164) (220)
Effect of exchange rate changes on cash 1 (1)
------------------ ----------------
(Decrease) Increase in cash and cash equivalents (5,096) 13,490
Cash and cash equivalents at beginning of period 35,406 20,778
------------------ ----------------
Cash and cash equivalents at end of period $ 30,310 $ 34,268
================== ================
</TABLE>
See notes to condensed consolidated financial statements
- 4 -
BEN & JERRY'S HOMEMADE, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All numbers in tables in thousands except per share data)
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial statements and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine month periods ended
September 28, 1996 are not necessarily indicative of the results that may be
expected for the year ended December 28, 1996. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 30, 1995.
2. INVENTORIES
(In thousands)
September 28, December 30,
1996 1995
----------- ----------
Ice cream, frozen yogurt, sorbet and ingredients $16,140 $11,480
Paper goods 714 674
Food, beverage and gift items 670 462
-------- ----------
$17,524 $12,616
======= =======
3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
(In thousands)
September 28, December 30,
1996 1995
---- ----
Trade accounts payable $ 5,089 $ 5,068
Accrued expenses 9,707 8,101
Accrued payroll and related costs 2,025 1,749
Accrued promotional costs 2,687 1,313
Accrued marketing costs 184 185
Other 87 176
----------- ----------
$19,779 $16,592
======= =======
<PAGE>
BEN & JERRY'S HOMEMADE, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All numbers in tables in thousands except per share data)
(Unaudited)
4. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS
Effective December 31, 1995, the Company has adopted Statement of Financial
Accounting Standards No. 121 ("SFAS 121"), Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of, which requires
impairment losses to be recorded on the long-lived assets used in operations
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets' carrying
amount. SFAS 121 also addresses the accounting for long-lived assets that are
expected to be disposed of. The adoption of SFAS 121 had no impact on the
financial position or results of operations of the Company as no indicators of
impairment currently exist.
The Company has adopted the disclosure provisions of Statement of Financial
Accounting Standards No. 123 ("SFAS 123"), Accounting and Disclosure of
Stock-Based Compensation. The Company will continue to account for its
stock-based compensation arrangements under the provisions of APB 25, Accounting
for Stock Issued to Employees.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
The following table sets forth certain items as a percentage of net sales which
are included in the Company's Consolidated Statements of Income and the
percentage increase (decrease) of such items as compared to the prior period:
<TABLE>
Percentage of Net Sales
Thirteen Weeks Thirty-Nine Weeks Percentage Increase(Decrease)
Ended Ended 1996 Compared to 1995
------------------------------------- -----------------------------
Sept 28, Sept 30, Sept 28, Sept 30, Thirteen Weeks Thirty-Nine Weeks
1996 1995 1996 1995 Ended Ended
---- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Net sales ................................. 100.0% 100.0% 100.0% 100.0% 1.6% 7.8%
Cost of sales ............................. 68.9% 69.0% 67.5% 69.6% 1.5% 4.6%
---- ---- ---- ---- --- ---
Gross profit .............................. 31.1% 31.0% 32.5% 30.4% 2.0% 15.0%
Selling, general and
administrative expenses ................. 24.5% 21.6% 26.4% 23.3% 15.1% 22.0%
----- ----- ----- ---- ----- -----
Operating income .......................... 6.6% 9.4% 6.1% 7.1% -28.2% -8.2%
Other income(expense) ..................... -0.2% - 0.3% 0.2% -0.2% 0.5% 211.9%
----- ----- ---- ----- ----- -----
Income before income taxes ................ 6.4% 9.1% 6.3% 6.9% -29.1% -1.5%
Income taxes .............................. 2.5% 3.5% 2.4% 2.7% -30.9% -4.9%
----- ----- ----- ---- ----- -----
Net Income ................................ 3.9% 5.6% 3.9% 4.2% -27.9% 0.7%
----- ----- ----- ---- ----- -----
</TABLE>
Thirteen Weeks Ended September 28, 1996 and September 30, 1995
- --------------------------------------------------------------
NET SALES
Net sales for the thirteen weeks ended September 28, 1996 increased 1.6% to
$46.1 million compared to $45.4 million for the same period in 1995. Pint volume
decreased 2.7% compared to the same period in 1995. This volume decrease was
offset by a 3.6% price increase of pints sold to distributors that went into
effect in August, 1996. Both the novelty and 2 1/2 gallon bulk container
products had modest increases in unit volume.
Pint sales represented 79% of total net sales in the third quarter of 1996
compared to 80% in 1995. Net sales of 2 1/2 gallon bulk containers represented
approximately 10% of total net sales in the third quarter of 1996, compared to
9% in 1995. Net sales of novelty products accounted for approximately 7% of
total net sales during this period in
<PAGE>
1996 and 1995. Net sales from the Company's retail stores represented 4% of
total net sales in the third quarter of 1996 and 1995.
COST OF SALES AND GROSS PROFIT
Cost of sales in the third quarter of 1996 increased approximately $460,000 or
1.5% from the same period in 1995 and overall gross profit as a percentage of
net sales was 31.1% in the third quarter of 1996 as compared to 31.0% in the
comparable period last year.
The gross profit percentage in the third quarter remained comparable to the
prior year despite increased cost of dairy ingredients. This was accomplished
due to improvements in manufacturing efficiencies, production planning and
inventory management. The comparable gross profit also reflects the fact that no
product was manufactured for the Company under a copacking agreement, by Edy's
Grand Ice Cream, a subsidiary of Dreyer's Grand Ice Cream, at its plant in Fort
Wayne, Indiana as compared to the third quarter of 1995 when approximately 14%
of packaged pints were manufactured at the Edy's plant. This agreement expired
in September 1995.
The Company has experienced significant increases in dairy costs this year. The
Company instituted a 3.6% price increase which took effect August 1, 1996 and an
additional 3.4% price increase is planned for December 1, 1996 to offset these
increased costs. If the trend of rising dairy prices continues, there is the
possibility that these costs will not be passed on to consumers which will
negatively impact future gross profit margins. See the Risk Factors in the
"Forward-Looking Statements" section.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased 15.1% to $11.3 million in
the third quarter of 1996 from $9.8 million for the same period in 1995.
Selling, general and administrative expenses were 24.5% of net sales in the
third quarter of 1996 as compared to 21.6% for the comparable period last year.
This increase is attributable to increased sales and marketing expenses relating
to the launch of the new sorbet line introduced in February 1996, operating
expenses relating to the Company's continued international expansion in Europe
and expenses primarily in the production planning and inventory management
areas.
INTEREST INCOME AND INTEREST EXPENSE
Interest income decreased $72,000 in the third quarter of 1996 as compared to
the same period in the prior year. The decrease in interest income was due to a
lower average invested balance throughout the period. Interest expense
approximated $480,000 in the third quarter of 1996 and 1995.
<PAGE>
INCOME TAXES
Income taxes decreased approximately $499,000 primarily due to the decrease in
income partially offset by an effective rate of 38.0% in 1996 compared to an
effective annual rate of 36.8% in the prior year. The increase in the effective
tax rate reflects lower income tax credits in 1996.
NET INCOME
As a result of the foregoing, net income for the third quarter of 1996 decreased
27.9% to $1.8 million from $2.5 million for the third quarter of 1995. Net
income was 3.9% of net sales in the third quarter of 1996 compared to 5.6% in
1995. Net income per share decreased 28.6% to $.25 per share for the third
quarter of 1996 as compared to $.35 per share in the third quarter of 1995.
Thirty-Nine Weeks Ended September 28, 1996 and September 30, 1995
- -----------------------------------------------------------------
NET SALES
Net sales for the thirty-nine weeks ended September 28, 1996 increased 7.8% to
$132.1 million compared to $122.5 million for the same period in 1995. Pint
volume increased 3.8% compared to the same period in 1995. This increase is
primarily attributable to the launch of the Company's new line of sorbet
products. This volume increase was combined with a 3.6% price increase of pints
sold to distributors that went into effect in August, 1996. Each of the other
major product categories had modest increases in unit volume.
Pint sales represented 83% of total net sales in the first three quarters of
1996 and 1995. Net sales of 2 1/2 gallon bulk containers represented
approximately 8% of total net sales in the first three quarters of 1996 and
1995. Net sales of novelties accounted for approximately 7% of total net sales
during the first three quarters of 1996 compared to 6% in 1995. Net sales from
the Company's retail stores represented 2% of total net sales in the first three
quarters of 1996 compared to 3% for the same period in 1995.
COST OF SALES AND GROSS PROFIT
Cost of sales in the first three quarters of 1996 increased approximately $3.9
million or 4.6% from the same period in 1995 and overall gross profit as a
percentage of net sales was 32.5% in 1996 as compared to 30.4% for the
comparable period in 1995. The higher gross profit percentage in the first three
quarters of 1996 is due to the price increase effective in March 1995, and
August 1996 combined with improved inventory management and production
efficiencies. In addition the improved gross profit reflects the fact that no
product was manufactured for the Company in the third quarter of 1996 by Edy's
Grand Ice Cream, a subsidiary of Dreyer's Grand Ice Cream, resulting from the
transfer of production to the Company's new manufacturing facility in St.
Albans, Vermont. In the first three quarters of 1995 approximately 19% of the
packaged pints manufactured by the Company were
<PAGE>
produced by Edy's, under an agreement which expired in September, 1995. These
improvements were partially offset by the increased cost of dairy ingredients.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased 22.0% to $34.9 million
for the first nine months of 1996 from $28.6 million for the same period in
1995. Selling, general and administrative expenses were 26.4% of net sales for
the first nine months of 1996 as compared to 23.3% for the same period last
year. This increase is attributable to increased sales and marketing expenses
relating to the launch of the new sorbet line introduced in February 1996,
operating expenses relating to the Company's continued international expansion
in Europe, and expenses primarily in the production planning and inventory
management areas.
INTEREST INCOME AND INTEREST EXPENSE
Interest income approximated $1.2 million for the first nine months of 1996 and
1995. Interest expense increased $492,000 for the first nine months 1996 as
compared to the same period in the prior year. This increase was primarily due
to the capitalization of interest in the prior year as part of the cost of the
new plant then under construction in St. Albans, Vermont.
INCOME TAXES
Income taxes decreased $163,000 primarily reflecting an effective rate of 38.0%
in 1996 compared to an effective annual rate of 36.8% in the prior year. The
increase in the effective tax rate reflects lower income tax credits in 1996.
NET INCOME
As a result of the foregoing, net income for the first three quarters of 1996
increased 0.7% to $5.1 million for 1996 and 1995. Net income was 3.9% of net
sales in the first three quarters of 1996 compared to 4.2% for the same period
in 1995. Net income per share was $.71 per share for the first three quarters of
1996 and 1995.
Liquidity and Capital Resources
- -------------------------------
As of September 28, 1996 the Company had $30.3 million of cash and cash
equivalents, a decrease of $5.1 million since December 30, 1995. Net cash
provided by operations in the first three quarters of 1996 was approximately
$4.9 million. Approximately $10.7 million was used for additions to property,
plant and equipment, primarily for leasehold improvements at the Company's
headquarters that was moved from Waterbury to South Burlington, Vermont in March
1996, and equipment upgrades in Springfield, Waterbury and St. Albans. Funds
were provided by cash from operations and cash and investments available at
December 30, 1995.
<PAGE>
Since December 30, 1995 trade receivables, inventory, accounts payable and
accrued expenses have increased $5.8 million, $4.9 million, and $3.2 million
respectively. These increases reflect the seasonality of the Company's net sales
and production requirements, combined with the effect on inventory of lower than
anticipated sales in the third quarter of 1996. Management plans to reduce this
level of inventories over the remainder of 1996.
In addition to the $10.7 million spent on capital additions in the first nine
months of 1996, the Company anticipates other capital expenditures in the
remainder of 1996 of approximately $1.7 million. These additional projected
capital expenditures relate primarily to the installation of a third
manufacturing line at the St. Albans plant, and equipment upgrades in Waterbury
and Springfield.
The Company has two lines of credit for an aggregate of $20,000,000 with The
First National Bank of Boston and Key Bank of Vermont. These are unsecured
agreements providing for borrowings from time to time, expiring at September 29,
1998 and December 29, 1998, respectively. The agreements specify interest at the
banks' Base Rate or the Eurodollar rate plus a maximum of 1.25%. As of November
12, 1996, there have been no borrowings under these line of credit agreements.
Since its inception, the Company has met its liquidity requirements through cash
provided by operations, public stock offerings, lease arrangements for equipment
and facilities, and short and long-term borrowings. Management believes that its
cash and equivalents, cash provided from operations and lines of credit
availability will be adequate to meet the Company's liquidity requirements for
the immediate future.
"FORWARD-LOOKING STATEMENTS"
This section includes certain forward-looking statements about the Company's
business and new products, sales, expenditures and cost savings, effective tax
rate and operating and capital requirements and refinancings. Any such
statements are subject to risks that could cause the actual results or needs to
vary materially. These risks are discussed in "Risk Factors" in the Company
Report on form 10-K for the year 1995. Additional risk factors are as follows:
Increased Cost of Raw Materials : Management believes that the trend of
increased dairy ingredient costs may continue and it is possible that at some
future date both gross margins and earnings may not be protected by pricing
adjustments, cost control programs and productivity gains.
<PAGE>
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit (11) Statement Re: Computation of Per Share Earnings
Exhibit (27) Financial Data Schedule
Exhibit (10.28.1) Amendment to Employment Agreement between
Robert Holland Jr. and the Company
(b) No reports on Form 8-K were filed during the quarter ended
September 28, 1996, for which this report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be duly signed on its behalf by
the undersigned thereunto duly authorized, being also its principal financial
officer.
BEN & JERRY'S HOMEMADE, INC.
DATE: November 12, 1996 BY: /s/Frances Rathke
--------------
Frances Rathke, Chief Financial Officer
and Secretary/Treasurer
EXHIBIT 11
BEN & JERRY'S HOMEMADE, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
(In thousands except per share amounts)
<TABLE>
Thirteen weeks ended Thirty-nine weeks ended
9/28/96 9/30/95 9/28/96 9/30/95
--------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding 7,192 7,177 7,187 7,157
Net effect of dilutive stock options
based on the treasury stock method
using average market price 29 83 30 41
--------------- -------------- --------------- --------------
7,221 7,260 7,217 7,198
=============== ============== =============== ==============
Net Income $1,820 $2,525 $5,127 $5,089
=============== ============== =============== ==============
Per share amount $0.25 $0.35 $0.71 $0.71
=============== ============== =============== ==============
Fully diluted:
Average shares outstanding 7,192 7,177 7,187 7,157
Net effect of dilutive stock options -
based on the treasury stock
method using average
market price which is greater
than quarter-end market price 29 103 37 60
--------------- -------------- --------------- --------------
7,221 7,280 7,224 7,217
=============== ============== =============== ==============
Net Income $1,820 $2,525 $5,127 $5,089
=============== ============== =============== ==============
Per share amount $0.25 $0.35 $0.71 $0.71
=============== ============== =============== ==============
</TABLE>
Exhibit 10.28.1
AGREEMENT
Agreement between Ben & Jerry's Homemade, Inc. (the "Company") and Robert
Holland, Jr. (the "Executive") dated October 21, 1996.
WHEREAS, the parties wish to record certain understandings with respect to
the Executive's termination of employment from the Company in the mutual best
interests of the Company and the Executive, and to amend the Employment
Agreement between the parties dated January 30, 1995 and the Option made
effective January 30, 1995.
NOW THEREFORE, in consideration of those premises and the mutual promises
set forth below the parties each agree as follows:
1. Notwithstanding the provisions of the Employment Agreement dated
January 30, 1995 and the Option effective January 30, 1995, the
following severance shall be paid by the Company upon the Executive's
mutually acceptable termination of employment by resignation effective
October 31, 1996:
(a) Continued monthly salary, at the annual rate in effect on the
date hereof, through January 30, 1998;
(b) Bonus for 1996, payable by January 2, 1997 in an amount equal to
$100,000;
(c) Options for an aggregate of 80,000 shares, which were granted in
January, 1995, will be vested and exercisable up through April
30, 1997; and all other options terminate on October 31, 1996,
other than the option for 25,000 shares granted in January, 1995
which vest in the fifth year under the Employment Agreement and
which will either (i) terminate on October 31, 1996 or (ii)
receive accelerated vesting (and hence be exercisable up through
April 30, 1997), as to be determined by the Board of Directors at
its meeting on October 24, 1996. The two year holding period
requirement in Section 4 of the Option on the stock that the
Executive may purchase upon any exercise of the options is hereby
deleted.
(d) Participation in the Company's life insurance and health
insurance plans shall continue on the current basis for the
shorter of one year, from October 31, 1996, or the commencement
of new employment for the Executive which provides the Executive
with eligibility to participate in comparable plans.
In the event of the Executive's death prior to the making of all of
the above payments to the Executive, the above payments shall be made
to his estate (or as he may have otherwise directed the Company in
writing); and any options that are exercisable after October 31, 1996
may be exercised by his estate as provided in the Company's Option
Plan.
2. The Executive hereby delivers his resignation effective October 31,
1996 as an officer of the Company. The Executive shall, in accordance
with his wishes and at the request of the Company, remain a director
of the Company until the 1997 Annual Meeting, to assist in the
transition to a new CEO. In addition, at his wish and in accordance
with the request of the Company, and in consideration of the
foregoing, the Executive shall be available through January 30, 1998,
for reasonable consultation and services to be performed on behalf of
the Company with respect to marketing/franchising/supplier
relationships of the Company with minority individuals and also with
respect to such other matters as may be mutually agreed between the
Company and the Executive. Such consultation and services shall be
performed at such times, given the Executive's schedule, as may be
mutually convenient and agreed, but not more than 4 days per month.
The Executive's reasonable travel and other business expenses as a
director and in performing such services shall be reimbursed by the
Company in accordance with the Company's regular procedures for
expense reimbursement.
The Company will consider an additional bonus to be paid to the
Executive (or to his estate in the event of his death) in an amount to
be determined to the Executive, depending on the success of the
Executive's efforts in the marketing/franchising/supplier area.
3. The Executive shall be entitled to keep without charge the computer
presently furnished to him by the Company. The Company shall assume
the Executive's Vermont apartment lease obligation at $1,800 plus
utilities per month, not exceeding eight (8) months from the date
hereof.
4. All other provisions in the Employment Agreement and the Option,
including covenant not to compete, shall remain applicable.
5. The parties shall exchange mutual releases for all claims, other than
the ongoing obligations after the date hereof, under the Employment
Agreement and the Option, all as amended by this Agreement.
IN WITNESS WHEREOF, each of the parties has executed this Agreement on the
day set forth above.
BEN & JERRY'S HOMEMADE, INC.
/s/Robert Holland, Jr. By:/s/Frances Rathke
Robert Holland, Jr. Frances Rathke
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
See accompanying notes.
$ in thousands, except per share data.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-START> JUN-30-1996
<PERIOD-END> SEP-28-1996
<CASH> 30310
<SECURITIES> 0
<RECEIVABLES> 18248
<ALLOWANCES> 0
<INVENTORY> 17524
<CURRENT-ASSETS> 72412
<PP&E> 65327
<DEPRECIATION> 0
<TOTAL-ASSETS> 140261
<CURRENT-LIABILITIES> 20447
<BONDS> 0
0
1
<COMMON> 239
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 140261
<SALES> 46143
<TOTAL-REVENUES> 0
<CGS> 31789
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 20
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 481
<INCOME-PRETAX> 2935
<INCOME-TAX> 1115
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1820
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
