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 25, 1999 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) 846-1500
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. 6,109,115 shares of Class A
Common Stock and 801,522 shares of Class B Common Stock outstanding as of
November 4, 1999. .
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended September 25, 1999
INDEX
PART I: FINANCIAL INFORMATION PAGE NO.
Consolidated Balance Sheets as of
September 25, 1999 and December 26, 1998...........................1-2
Consolidated Statements of Income for the
Thirteen and thirty-nine weeks ended
September 25, 1999 and September 26, 1998..........................3
Consolidated Statements of Cash Flows for the
Thirty-nine weeks ended September 25, 1999
and September 26, 1998............................................4
Notes to Consolidated Financial Statements.........................5-7
Management's Discussion and Analysis of Financial
Condition and Results of Operations................................8-18
PART II: OTHER INFORMATION
Item 6-Exhibits and Reports on Form 8-K............................19
Signatures.........................................................20
Exhibit 11.........................................................21
<PAGE>
<TABLE>
<CAPTION>
BEN & JERRY'S HOMEMADE, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands)
September 25, December 26,
1999 1998
--------------- ---------------
(Unaudited) (Note)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 27,066 $ 25,111
Short-term investments 24,380 22,118
Trade accounts receivable
(less allowance of $1,156 in 1999
and $979 in 1998 for doubtful accounts) 24,934 11,338
Inventories 15,798 13,090
Deferred income taxes 8,405 7,547
Prepaid expenses and other current assets 2,796 3,105
--------------- ---------------
Total current assets 103,379 82,309
Property, plant and equipment, net 63,382 63,451
Investments 307 303
Other assets 5,608 3,438
--------------- ---------------
$172,676 $149,501
=============== ===============
Note: The balance sheet at December 26, 1998 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 consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BEN & JERRY'S HOMEMADE, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES & STOCKHOLDERS' EQUITY
(In thousands except share data)
September 25, December 26,
1999 1998
--------------- ---------------
(Unaudited) (Note)
<S> <C> <C>
Current liabilities:
Accounts payable and accrued expenses $ 45,626 $ 28,662
Current portion of long-term debt and
obligations under capital leases 5,633 5,266
---------- ----------
Total current liabilities 51,259 33,928
Long-term debt and obligations under capital leases 21,697 20,491
Deferred income taxes 3,863 4,174
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: 6,752,093 at September 25, 1999
and 6,592,392 at December 26, 1998 223 218
Class B common stock - $.033 par value; authorized
3,000,000 shares; issued: 804,242 at September 25, 1999
and 824,480 at December 26, 1998 27 27
Additional paid-in-capital 52,743 50,556
Retained earnings 53,275 45,328
Accumulated other comprehensive loss (112) (151)
Treasury stock, at cost: 548,306 Class A and 1,092 Class B
shares at September 25, 1999 and 291,032 Class A
and 1,092 Class B shares at December 26, 1998 (10,300) (5,071)
---------- ----------
Total stockholders' equity 95,857 90,908
---------- ----------
$ 172,676 $ 149,501
========== ==========
Note: The balance sheet at December 26, 1998 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 consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BEN & JERRY'S HOMEMADE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands except per share amounts)
For the Thirteen weeks ended For the Thirty-nine weeks ended
September 25, September 26, September 25, September 26,
1999 1998 1999 1998
------------ ------------- ------------- ------------
<S> <C> <C> <C> <C>
Net sales $ 67,129 $ 64,566 $ 185,366 $ 164,870
Cost of sales 39,315 40,339 111,847 105,529
------------ ------------- ------------ ------------
Gross profit 27,814 24,227 73,519 59,341
Selling, general and
administrative expenses 22,335 20,018 61,708 51,270
Other income (expense):
Interest income 458 596 1,375 1,626
Interest expense (418) (460) (1,284) (1,433)
Other income (expense), net (80) 174 323 177
------------ ------------ ------------ -----------
(40) 310 414 370
------------ ------------ ------------ -----------
Income before income taxes 5,439 4,519 12,225 8,441
Income taxes 1,904 1,627 4,278 3,039
------------ ----------- ----------- -----------
Net income $ 3,535 $ 2,892 $ 7,947 $ 5,402
============ =========== =========== ===========
Shares used to compute net income
per common share
Basic 7,132 7,181 7,123 7,223
Diluted 7,509 7,446 7,563 7,481
Net income per common share
Basic $ 0.50 $ 0.40 $ 1.12 $ 0.75
Diluted $ 0.47 $ 0.39 $ 1.05 $ 0.72
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BEN & JERRY'S HOMEMADE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
For the Thirty-nine weeks ended
September 25, September 26,
1999 1998
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,947 $ 5,402
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 6,782 5,711
Provision for bad debts 182 50
Deferred income taxes (1,169) (3,196)
Loss on disposition of assets 91 90
Changes in operating assets and liabilities:
Accounts receivable (14,270) (3,572)
Inventories (2,266) (994)
Prepaid expenses (130) (526)
Accounts payable and accrued expenses 12,534 16,981
Income taxes payable/receivable 4,480 2,615
---------- ----------
Net cash provided by operating activities 14,181 22,561
Cash flows from investing activities:
Additions to property, plant and equipment (5,295) (7,481)
Proceeds from sale of assets 5
Changes in other assets (171) (483)
Increase (decrease) in investments (2,266) 655
Acquisitions, net of cash acquired (1,012)
---------- ----------
Net cash used for investing activities (8,739) (7,309)
Cash flows from financing activities:
Repayments of long-term debt and capital leases (294) (258)
Repurchase of common stock (5,413) (2,524)
Proceeds from issuance of common stock 2,192 544
---------- ----------
Net cash used for financing activities (3,515) (2,238)
Effect of exchange rate changes on cash 28 (7)
---------- ----------
Increase in cash and cash equivalents 1,955 13,007
Cash and cash equivalents at beginning of period 25,111 47,318
---------- ----------
Cash and cash equivalents at end of period $ 27,066 $ 60,325
========== ==========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
BEN & JERRY'S HOMEMADE, INC
NOTES TO 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 25, 1999 are not necessarily indicative of the results that may be
expected for the year ended December 25, 1999. 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 26, 1998.
2. INVENTORIES
September 25, December 26,
1999 1998
---- ----
Frozen dessert products and ingredients $14,097 $12,025
Paper goods 801 524
Food, beverage and gift items 900 541
------- -------
Total $15,798 $13,090
======= =======
3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
September 25, December 26,
1999 1998
---- ----
Trade accounts payable $ 7,882 $ 4,623
Accrued expenses 18,305 12,552
Accrued payroll and related costs 3,130 3,272
Accrued promotional costs 6,657 4,297
Accrued marketing costs 5,775 2,837
Accrued insurance expense 938 1,081
Income taxes payable 2,939 0
------- -------
Total $45,626 $28,662
======== =======
<PAGE>
BEN & JERRY'S HOMEMADE, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All numbers in tables in thousands except per share data)
(Unaudited)
4. COMPREHENSIVE INCOME
As of December 28, 1997 the Company adopted Statement No. 130, Reporting
Comprehensive Income (Statement 130). Statement 130 establishes new rules for
the reporting and display of comprehensive income and its components; however,
the adoption of this statement had no impact on the Company's net income or
stockholders' equity. Statement 130 requires unrealized gains or losses on the
Company's available-for-sale securities and foreign currency translation
adjustments, which prior to adoption were reported separately in stockholders'
equity, to be included in other comprehensive income.
Total comprehensive income for the thirteen weeks ended September 25, 1999
amounted to $3,537,000 compared to $2,878,000 for the same period in 1998. Other
comprehensive income consisted of adjustments for net foreign currency
translation gains (losses) in the amounts of $2,000 and $(14,000) for the
thirteen week periods ended September 25, 1999 and September 26, 1998,
respectively. Total comprehensive income for the thirty-nine weeks ended
September 25, 1999 amounted to $7,986,000 compared to $5,389,000 for the same
period in 1998. Other comprehensive income consisted of adjustment for net
foreign currency translation gains (losses) in the amounts of $39,000 and
$(13,000) for the thirty-nine week periods ended September 25, 1999 and
September 26, 1998.
5. SEGMENT INFORMATION
As of December 28, 1997, the Company adopted the Financial Accounting Standards
Boards' Statement of Financial Accounting Standards No. 131, Disclosures about
Segments of an Enterprise and Related Information (Statement 131). Statement 131
superseded FASB Statement No. 14, Financial Reporting for Segments of a Business
Enterprise. Statement 131 establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports. Statement 131 also establishes
standards for related disclosures about products and services, geographic areas,
and major customers. The adoption of Statement 131 did not affect results of
operations or financial position, but did affect the disclosure of segment
information.
Ben & Jerry's Homemade, Inc. has one reportable segment: ice cream manufacturing
and distribution. The Company manufactures super premium ice cream, frozen
yogurt, sorbet and various ice cream novelty products. These products are
distributed throughout the United States primarily through independent
distributors and in certain countries outside the United States.
6. BUSINESS ACQUISITIONS
Effective February 26, 1999, the Company acquired a 60% ownership interest in
its Israeli licensee, The American Company for Ice Cream Manufacturing E.I. Ltd,
for $1 million. The acquisition was accounted for using the purchase method of
accounting and, accordingly, the costs of the acquisition have been allocated to
assets acquired. The excess of the acquisition costs over the fair values of the
net assets and liabilities acquired was $1.7 million and has been recorded as
goodwill, which is being amortized on a straight-line basis over 15 years.
Effective June 16, 1999 the Company purchased the assets of one of its
franchisees for approximately $875,000. The acquisition was accounted for using
the purchase method of accounting. The acquisition included two scoop shops
located in Las Vegas, Nevada, territory rights and goodwill. The intangible
assets of
<PAGE>
BEN & JERRY'S HOMEMADE, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All numbers in tables in thousands except per share data)
(Unaudited)
$606,000 are being amortized on a straight-line basis over 10 years.
7. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS
In March 1998, the Accounting Standards Executive Committee (AcSEC) issued
statement of Position (SOP) No. 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use. The SOP provides guidance for
the capitalization of certain costs incurred to develop or obtain internal-use
software. The Company adopted this SOP effective December 27, 1998. The adoption
of the Statement did not have a material effect on the Company's financial
position or operating results.
In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities (Statement 133).
Statement 133 establishes standards for public companies regarding the
recognition and measurement of derivatives and hedging activities. The statement
is effective for years beginning after June 15, 2000. The Company does not
believe the adoption of this statement will have a material impact on the
Company's financial statements based on the nature and extent of the Company's
use of derivative instruments at the present time.
8. MANUFACTURING RESTRUCTURING PROGRAM
On October 19, 1999 the Company announced a plan to shift manufacturing of its
frozen novelty line of business from a company-owned plant in Springfield,
Vermont to third party co-packers to improve the Company's competitive position,
gross margins and profitability. This action will result in the write-off of
assets associated with the ice cream novelty business, asset impairment charges
of other manufacturing assets and costs associated with severance for those
employees who do not accept the Company's offer of relocation. The Company
currently estimates the implementation of this manufacturing restructuring
program will result in a pre-tax special charge to earnings of approximately
$11-$13 million in the fourth quarter of 1999 which will primarily be non-cash.
This plan will be executed over the next nine months and will result in
improving the Company's profitability during the year 2000. This outsourcing of
its novelty business will enable the Company to introduce a wider range of
novelty products in future periods.
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended September 25, 1999
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>
<CAPTION>
Percentage of Net Sales
Thirteen Weeks Thirty-nine Weeks Percentage Increase (Decrease)
Ended Ended 1999 Compared to 1998
Sept 25, Sept 26, Sept 25, Sept 26, Thirteen Weeks Thirty-nine Weeks
1999 1998 1999 1998 Ended Ended
---- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0% 4.0% 12.4%
Cost of sales 58.6% 62.5% 60.3% 64.0% (2.5)% 6.0%
------- ------- ------- ------ ------- ------
Gross profit 41.4% 37.5% 39.7% 36.0% 14.8% 23.9%
Selling, general and
administrative expenses 33.2% 31.0% 33.3% 31.1% 11.6% 20.4%
------- ------- ------- ------- -------- -----
Operating income 8.2% 6.5% 6.4% 4.9% 30.2% 46.3%
Other income (expense) (0.1)% 0.5% 0.2% 0.2% 112.9% 11.9%
-------- ------- ------- ------- ------ -----
Income before income
taxes 8.1% 7.0% 6.6% 5.1% 20.4% 44.8%
Income taxes 2.8% 2.5% 2.3% 1.8% 17.0% 40.8%
------- ------- ------- ------ ------- -----
Net income 5.3% 4.5% 4.3% 3.3% 22.2% 47.1%
======= ======= ======= ====== ======= =====
</TABLE>
Thirteen Weeks Ended September 25, 1999 and September 26, 1998
Net Sales
Net sales for the thirteen weeks ended September 25, 1999 increased 4.0% to
$67.1 million compared to $64.5 million for the same period in 1998. Pint volume
increased 4.4% compared to the same period in 1998, which was primarily
attributable to the Company's original line of products. Unit volume of 2 1/2
gallon bulk container products increased 7.6% compared to the same period in
1998.
Packaged sales (primarily pints) represented approximately 79% of total net
sales in the third quarter of 1999 compared to 76% in 1998. Net sales of 2 1/2
gallon bulk containers represented approximately 12% of total net sales in the
third quarter of 1999 compared to 11% for the same period in 1998. Net sales of
novelty products (including single servings) accounted for approximately 5% of
total net sales in the third quarter of 1999, compared to 10% in 1998. This
decrease is due to a decline in sales of single serve containers to the Japanese
market in comparison to the prior year. Net sales from the Company's retail
stores represented 4% of total net sales in the third quarter of 1999 compared
to 3% in 1998.
International sales were $5.4 million during the third quarter of 1999,
representing 8.1% of net sales, as compared to $7.0 million in 1998, or 11.0% of
net sales. The decrease in 1999 was primarily due to a decrease in net sales to
the Japanese market partially offset by an increase in sales in the United
Kingdom .
Cost of Sales and Gross profit
Cost of sales in the third quarter of 1999 decreased approximately $1 million or
2.5% from the same period in 1998 and overall gross profit as a percentage of
net sales was 41.4% in the third quarter of 1999 as compared to 37.5% to the
same period last year. The higher gross profit as a percentage of net sales
resulted from
<PAGE>
decreases in dairy prices as compared to the extraordinarily high dairy prices
experienced in 1998.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased 11.6% to $22.3 million in
the third quarter of 1999 from $20.0 million for the same period in 1998.
Selling, general and administrative expenses were 33.2% of net sales in the
third quarter of 1999 as compared to 31.0% for the comparable period last year.
The $2.3 million dollar increase primarily reflects increased advertising and
promotion expenses. In addition the Company is continuing to invest more heavily
in its international operations, most notably in the United Kingdom, Japan and
Israel (where the Company made the previously disclosed majority equity
investment), in order to capitalize on further opportunities to grow its ice
cream sales outside the United States. Selling, general and administrative
expenses also reflect increased salaries, recruiting and training expenses
related to building more infrastructure to manage its business.
Other Income (Expense)
Other income (expense) decreased in the third quarter of 1999 to $(40,000)
compared to other income in the prior year of $310,000. This decrease is
primarily related to foreign currency exchange losses. Interest income decreased
$138,000 in the third quarter of 1999 as compared to the same period in the
prior year. The decrease in interest income was due to lower average invested
balances throughout the period. Interest expense decreased $42,000 in the third
quarter of 1999 as compared to the same period in the prior year primarily due
to principal payments on long term debt made in October 1998 partially offset by
increased debt outstanding related to the Company's 60% investment in its
Israeli licensee.
Income Taxes
Income taxes increased approximately $277,000 due to the increase in income in
1999 as compared to 1998. The Company anticipates an effective rate of 35.0% in
1999 compared to 36.0% in 1998 based upon the expected geographic mix of
earnings.
Net Income
Net income for the third quarter of 1999 was $3.5 million compared to $2.9
million in 1998. Net income, as a percentage of net sales, was 5.3% in the third
quarter of 1999 compared to 4.5% in the third quarter of 1998. Diluted net
income per share was $.47 per common share for the third quarter of 1999
compared to a diluted net income per common share of $.39 for the third quarter
of 1998.
Thirty-Nine Weeks Ended September 25, 1999 and September 26, 1998
Net Sales
Net sales for the thirty-nine weeks ended September 25, 1999 increased 12.4% to
$185.4 million compared to $164.9 million for the same period in 1998. Pint
volume increased 8.4% compared to the same period in 1998, which was primarily
attributable to the Company's original line of products. This volume increase
was combined with a price increase of 3.3% on pints sold to distributors that
went into effect in July 1998. Unit volume of 2 1/2 gallon bulk container
products increased 16.7% compared to the same period in 1998.
Packaged sales (primarily pints) represented 82% of total net sales in the first
three quarters of 1999 compared to 80% for the same period in 1998. Net sales of
2 1/2 gallon bulk containers represented approximately 10% of total net sales in
the first three quarters of 1999 compared to 9% for the same
<PAGE>
period in 1998. Net sales of novelty products (including single servings)
accounted for approximately 6% of total net sales during the first three
quarters of 1999 compared to 9% for the same period in 1998. This decrease is
due to a decline in sales of single serve containers to the Japanese market in
comparison to the prior year. Net sales from the Company's retail stores
represented 2% of total net sales in the first three quarters of both 1999 and
1998.
International sales were $17.1 million during the first thirty-nine weeks of
1999, representing 9.2% of net sales, as compared to $15.0 million for the same
period in 1998, or 9.1% of net sales. The increase in 1999 was primarily due to
increased sales in the United Kingdom partially offset by a decrease in net
sales to the Japanese market.
Cost of Sales and Gross Profit
Cost of sales in the first thirty-nine weeks of 1999 increased approximately
$6.3 million from the same period in 1998 and overall gross profit as a
percentage of net sales was 39.7% in 1999 as compared to 36.0% for the
comparable period in 1998. The higher gross profit as a percentage of net sales
primarily resulted from decreased dairy commodity costs, a 3.3% distributor
price increase effective in July 1998 and in connection with the Company's
distribution redesign in 1999, better plant utilization due to higher production
volumes and improved efficiencies in the plants.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased 20.4% to $61.7 million
for the thirty-nine weeks of 1999 from $51.2 million for the same period in
1998. Selling, general and administrative expenses as a percentage of net sales
increased from 31.1% in 1998 to 33.3% in 1999. The increase in selling, general
and administrative expenses primarily reflects increased selling expenses
related to the Company's earlier restructuring of its distribution system and
increased advertising and promotion expenses. In addition the Company is
investing more heavily in its international operations, most notably in the
United Kingdom, Japan and Israel (where the Company made the previously
disclosed majority equity investment), in order to capitalize on further
opportunities to grow its ice cream sales outside the United States. Selling,
general and administrative expenses also reflect increased salaries, and
recruiting and training expenses related to building more infrastructures to
manage its business.
Other Income (Expense)
Other income increased in the first nine months of 1999 to $414,000 from
$370,000 for the same period in 1998. Interest income decreased to $1.4 million
for the first thirty-nine weeks of 1999 compared to $1.6 million for the same
period in the prior year. This decrease in interest income was due to a lower
average invested balance throughout the period. Interest expense decreased
$149,000 for the first nine months of 1999 as compared to the same period in the
prior year. This decrease is due to the $5 million Senior Notes Principal
payment made in September 1998 partially offset by increased interest expense
for debt acquired through the Company's 60% ownership interest in its Israeli
licensee.
Income Taxes
Income taxes increased $1.2 million due to the increase in income. The Company
anticipates an effective rate of 35.0% in 1999 compared to 36.0% in the prior
year.
<PAGE>
Net Income
As a result of the foregoing, net income for the first thirty-nine weeks of 1999
increased 47.1% to $7.9 million for 1999 compared to $5.4 million for the same
period in 1998. Net income was 4.3% of net sales for the first thirty-nine weeks
of 1999 compared to 3.3% for the same period in 1998. Diluted net income per
share increased to $1.05 per common share for the first thirty-nine weeks of
1999 compared to $0.72 for the same period in 1998.
Liquidity and Capital Resources
As of September 25, 1999 the Company had $51.4 million of cash , cash
equivalents and short-term investments, an increase of $4.2 million since
December 26, 1998. Net cash provided by operations in the first nine months of
1999 was approximately $14.2 million. Uses of cash included increases in
accounts receivable and inventories of $14.2 million and $2.3 million
respectively, repurchase of company stock of $5.4 million, and additions to
property, plant and equipment, primarily for equipment upgrades at the Company's
manufacturing facilities, of $5.3 million. Partially offsetting these uses of
cash was an increase in accounts payable and accrued expenses of $12.5 million.
In addition the Company acquired a 60% interest in its Israeli licensee for $1
million in February, 1999. Cash acquired in the transaction was $858,000. In
June 1999, the Company acquired the assets of one of its franchisees, which
included Las Vegas, Nevada territory rights and two scoop shops, for
approximately $870,000 net of cash acquired.
Since December 26, 1998, trade receivables, and the sum of accounts payable and
accrued expenses have increased $13.6 million and $17.0 million, respectively.
The increase in accounts receivable is due to increased sales during the summer
months combined with a contractual change in the Company's distribution
agreement with Dreyers Grand Ice Cream effective in January 1999, which altered
the payment terms from 14 to 28 days. The increase in accounts payable and
accrued expenses reflect the seasonality of the Company's business and increased
sales and marketing expenses. Inventories have increased $13.6 million since
December 26, 1998. This increase reflects seasonally higher raw material
inventories and increased finished goods inventories.
The Company anticipates capital expenditures in the remainder of 1999 of
approximately $4.8 million. Most of these additional projected capital
expenditures relate to equipment upgrades and enhancements at the Company's
manufacturing facilities, computer related expenditures, and corporate space
expansion at its headquarters.
The Company's short and long term debt includes $25 million aggregate principal
amount of Senior Notes issued in 1993 and 1994. The first principal payment of
$5 million was paid in September 1998 and the remaining principal is payable in
annual installments through 2003.
During the nine months ended September 25, 1999 the Company repurchased a total
of 267,800 shares of the Company's Class A common stock for approximately $5.4
million. The Company completed its previously announced repurchase program
commenced in September 1998, which authorized the Company to purchase shares of
the Company's Class A Common stock up to an aggregate cost of $5 million for use
for general corporate purposes. In September 1999 the Board of Directors
approved an additional $3 million for stock repurchases of its Class A common
shares.
The Company has available two $10,000,000 unsecured working capital line of
credit agreements with two banks. Interest on borrowings under the agreements is
set at the banks' base rate or at LIBOR plus a margin based on a pre-determined
formula. No amounts were borrowed under these or any bank agreements during
<PAGE>
1999. The working capital line of credit agreements expire December 23, 2001.
Management believes that internally generated funds, cash currently on hand,
investments held in marketable securities and equipment lease financing and/or
borrowings under the Company's two unsecured bank lines of credit will be
adequate to meet anticipated operating and capital requirements.
Year 2000 Readiness Disclosure
Background of Year 2000 Issues. The "Year 2000" issue is the result of computer
systems and software programs using two rather than four digits to define a
year. As a result, computer systems that have date sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. Unless
remedied, the Year 2000 issue could result in system failures, miscalculations,
and the inability to process necessary transactions or engage in similar normal
business activities. In addition to computer systems and software, equipment
using embedded chips, such as manufacturing and telephone equipment, could also
be at risk.
State of Readiness. The Company has developed, and is implementing a Year 2000
plan to address Year 2000 issues. The plan focuses on the following three broad
categories: (a) information technology systems; (b) manufacturing facilities
including embedded technology; and (c) external noncompliance by customers,
distributors, suppliers and other business partners.
As of September 25, 1999, the Company has substantially completed all phases of
its year 2000 plan for mission critical systems including inventory, assessment,
renovation, testing and implementation. Renovated and new systems that are Y2K
compliant are currently being used for the Company's core software applications
of finance, manufacturing, distribution, sales and payroll. The upgrades,
testing and implementation for non-critical systems are 90% complete and are
expected to continue through November 1999. The Company's communications and
networking equipment was upgraded and tested during the second quarter of 1999.
We are monitoring vendors for Year 2000 software updates and will continue to
install upgrades or patches as appropriate.
The Company has completed a detailed assessment of its manufacturing facilities
and embedded chip technology. The testing and remediation of equipment and
software systems known to have possible Year 2000 issues is substantially
complete. The upgrade of two items related to the refrigeration controls has
been scheduled for after the peak summer production period to minimize the
operational impact.
A critical step in this project is the coordination of Year 2000 readiness with
third parties. The Company is communicating with its significant suppliers,
distributors and customers to determine the extent to which the Company is
vulnerable if the third parties fail to resolve their Year 2000 issues. The
Company will continue to assess and work with all of its major partners to
understand the associated risks and plan for contingencies.
Risks Related to Year 2000 Issues. The Company presently believes that the Year
2000 issue will not pose significant operational problems and that the internal
Year 2000 issues will be resolved in a timely manner. However, the future
compliance of Year 2000 processing within the Company is dependent upon key
personnel, vendor software, vendor equipment and components. In the unlikely
event that no further progress is made on the Company's Year 2000 project, the
Company may be unable to manufacture or ship product, invoice customers or
collect payments. As a result, Year 2000 issues could have a material adverse
impact on the Company's operations and its financial results. In addition, if
systems operated by third parties (including municipalities or utilities) are
not Year 2000 compliant, this could also have a material adverse affect on the
Company.
<PAGE>
Costs to Address Year 2000 Issues. The Company does not separately track the
internal costs incurred for the Year 2000 project, which are primarily the
related payroll costs for its information systems ("IS") group. There have been
no incremental payroll costs related to the Year 2000 project, however
non-critical IS projects have been deferred due to concentration on Year 2000
efforts. The delay of these projects is not expected to have a material impact
on the operations of the Company.
The external costs for software; hardware, equipment and services related to the
Year 2000 project are estimated not to exceed $1.0 million for 1999. The Company
will expense the costs of modifying existing systems and capitalize the
replacement cost of software or equipment that is not Year 2000 compliant. There
can be no guarantee, however, that the systems of other entities which the
Company relies upon will be converted on a timely basis or that any failure to
convert by another entity would not have an adverse effect on the Company's
systems and operations.
Contingency Plans. Due to the general uncertainty inherent in the Year 2000
problem, including uncertainty regarding the Year 2000 readiness of suppliers,
distributors and other manufacturers, the Company is developing contingency
plans. This process includes, among others, developing backup procedures in case
of systems failures, identifying alternative production plans and developing
alternative plans to engage in business activities with customers, distributors
and suppliers that are not experiencing Year 2000 problems.
The above forward looking statements with regard to the timing and overall cost
estimates of the Company's efforts to address the Year 2000 problem are based
upon the Company's experience thus far in this effort. Should the Company
encounter unforeseen difficulties either in the continuing review of its
internal systems, the ultimate remediation, or the responses of its business
partners, the actual results could vary significantly from the estimates in
these forward-looking statements.
Euro Conversion
On January 1, 1999 certain member countries of the European union established
fixed conversion rates between their existing currencies and the European
Union's common currency, ("the euro"). The former currencies of the
participating countries are scheduled to remain legal tender as denominations of
the euro until January 1, 2002 when the euro will be adopted as the sole legal
currency.
The Company has evaluated the potential impact on its business including the
ability of its information systems to handle euro-denominated transactions and
the impact on exchange costs and currency exchange rate risks. The conversion to
the euro is not expected to have a material impact on the Company's operations
or financial position
Forward-Looking Statements
This section, as well as other portions of this document, includes certain
forward-looking statements about the Company's business, new products, sales,
dairy prices, other expenditures and cost savings, Year 2000 program costs,
effective tax rate, operating and capital requirements and refinancing. 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" below.
Risk Factors
Dependence on Independent Ice Cream Distributors. Historically, the Company has
been dependent on maintaining satisfactory relationships with Dreyer's Grand Ice
Cream, Inc. ("Dreyer's") and the other independent ice cream distributors that
have acted as the Company's exclusive or master distributor in their
<PAGE>
assigned territories. In 1998, Dreyer's distributed significantly more than a
majority of the sales of Ben & Jerry's products. While the Company believes its
relationships with Dreyer's and its other distributors generally have been
satisfactory and have been instrumental in the Company's growth, the Company has
at times experienced difficulty in maintaining such relationships to its
satisfaction. In August 1998 - January 1999, the Company redesigned its
distribution network, entering into a distribution agreement with The Pillsbury
Company ("Pillsbury") and a new agreement with Dreyer's. These arrangements took
effect in September 1999, except for certain territories, which were effective,
in April - May 1999. The Company believes the terms of the new arrangements
will, on balance, be more favorable to the Company and expects that, under the
distribution network redesign, no one distributor will account for more than 40%
of the Company's net sales. However, there may be temporary market dislocation
in connection with the September 1999 shift from Dreyer's to Pillsbury as the
Company's principal distributor in certain markets. Both the recently formed
Pillsbury/Nestle ice cream joint venture (through its Haagen-Daz unit), and
Dreyer's are competitors of the Company.
Since available distribution alternatives are limited, and continues to be
adversely impacted by consolidation in the industry, there can be no assurance
that difficulties in maintaining satisfactory relationships with its two
principal distributors and its other distributors, some of which are also
competitors of the Company, will not have a material adverse effect on the
Company's business. In addition, the October 1999 transfer of the Haagen-Daz
unit to the recently formed Pillsbury/Nestle ice cream joint venture has
presented certain opportunities/difficulties for the Company which are under
review.
Growth in Sales and Earnings. In the third quarter of 1999, net sales of the
Company increased 4.0% to $67.1 million from $64.5 million for the third quarter
of 1998. Pint volume for the third quarter of 1999 increased 4.4% compared to
the same period in 1998. In the first nine months of 1999, net sales of the
Company increased 12.4% to $185.4 million from $164.9 million for the first nine
months of 1998. Pint volume for the first nine months of 1999 increased 8.4%
compared to the same period in 1998. Based on information provided by
Information Resources, Inc., a software and marketing information services
company ("IRI"), the Company believes that the super premium ice cream, frozen
yogurt and sorbet industry category sales increased 8.1% in the third quarter of
1999 compared to the third quarter of 1998. The Company believes that the
industry category sales noted above increased 5.6% in the first nine months of
1999 compared to the first nine months of 1998. Given these overall domestic
super premium industry trends, the successful introduction of innovative flavors
on a periodic basis has become increasingly important to sales growth by the
Company. Accordingly, the future degree of market acceptance of any of the
Company's new products, which will be accompanied by significant promotional
expenditures, is likely to have an important impact on the Company's 1999 and
future financial results.
Competitive Environment. The super premium frozen dessert market is highly
competitive with the distinctions between the super premium category, and the
"adjoining" premium and premium plus categories less marked than in the past. As
noted above, the ability to successfully introduce innovative flavors on a
periodic basis that are accepted by the marketplace is a significant competitive
factor. In addition, the Company's principal competitors, two of which are
distributors for the Company, are large, diversified companies with resources
significantly greater than the Company's. The Company expects strong competition
to continue, including competition for adequate distribution and competition for
the limited shelf space for the frozen dessert category in supermarkets and
other retail food outlets.
In September 1999 Dreyer's launched a line of superpremium ice cream, Dreamery
(TM), with a significant marketing program including radio, outdoor and
television advertising as well as heavy price discounting to
<PAGE>
gain trial. The Dreamery (TM) product is marketed primarily in pints. Additional
super premium products may be introduced by other ice cream competition.
Increased Cost of Raw Materials. Management believes that the general trend of
volatility in dairy ingredient commodity costs may continue and it is possible
that at some future date both gross margins and earnings may not be adequately
protected by pricing adjustments, cost control programs and productivity gains.
Reliance on a Limited Number of Key Personnel. The success of the Company is
significantly dependent on the services of Perry Odak, the Chief Executive
Officer, and a limited number of executive managers working under Mr. Odak, as
well as certain continued services of Jerry Greenfield the Chairperson of the
Board and co-founder of the Company; and Ben Cohen, Vice Chairperson and
co-founder of the Company. Loss of the services of any of these persons could
have a material adverse effect on the Company's business.
The Company's Social Mission. The Company's basic business philosophy is
embodied in a three-part "mission statement," which includes a "social mission"
to "operate the Company in a way that actively recognizes the central role that
business plays in the structure of society by initiating innovative ways to
improve the quality of life of a broad community: local, national and
international. Underlying the mission of Ben & Jerry's is the determination to
seek new and creative ways of addressing all three parts, while holding a deep
respect for individuals inside and outside the Company and for the communities
of which they are a part." The Company believes that implementation of its
social mission, which is being more integrated into the Company's business, has
been beneficial to the Company's overall financial performance. However, it is
possible that at some future date the amount of the Company's energies and
resources devoted to its social mission could have some material adverse
financial effect.
International. Total international net sales represented approximately 8.1% of
total consolidated net sales in the third quarter of 1999. Total international
net sales represented approximately 9.2% of total consolidated net sales for the
first nine months of 1999. The Company's principal competitors have substantial
market shares in various countries outside the United States, principally Europe
and Japan. The Company sells product in Japan,, the United Kingdom, Ireland and
France, and through license arrangments in the Netherlands and Belgium and has
started selling in Peru and Lebanon in 1999 under license arrangements. In 1987,
the Company granted an exclusive license to manufacture and sell Ben & Jerry's
products in Israel. In 1999, the Company made an investment of $1 million in its
Israeli licensee, which gave the Company a 60% ownership interest. In May 1998,
the Company signed a Licensing Agreement with Delicious
Alternative Desserts, LTD. to manufacture, sell and distribute Ben & Jerry's
products through the wholesale distribution channels in Canada. The Company is
investigating the possibility of further international expansion. However, there
can be no assurance that the Company will be successful in all of its
international markets or entering (directly or indirectly through licensing), on
a long-term profitable basis, such additional international markets as it
selects.
Control of the Company. The Company has two classes of common stock - the Class
A Common Stock, entitled to one vote per share, and the Class B Common Stock
(authorized in 1987), entitled, except to the extent otherwise provided by law,
to ten votes per share. Ben Cohen, Jerry Greenfield and Jeffrey Furman
(collectively the "Principal Stockholders") hold shares representing
approximately 46% of the aggregate voting power in elections for directors,
permitting them as a practical matter to elect all members of the Board of
Directors and thereby effectively control the business, policies and management
of the Company. Because of their significant holdings of Class B Common Stock,
the Principal Stockholders may continue to exercise this control even if they
sell substantial portions of their Class A Common Stock. In addition, the
Company
<PAGE>
issued all of the authorized Class A Preferred Stock to the Foundation in 1985.
All current directors of the Foundation are directors of the Company. The Class
A Preferred Stock gives the Foundation a class voting right to act with respect
to certain Business Combinations (as defined in the Company's charter) and
significantly limits the voting rights that holders of the Class A Common Stock
and Class B Common Stock, the owners of virtually all of the equity in the
Company, would otherwise have with respect to such Business Combinations.
Also, in April, 1998 the Legislature of the State of Vermont amended a provision
of the Vermont Business Corporation Act to provide that the directors of a
Vermont corporation may also consider, in determining whether an acquisition
offer or other matter is in the best interests of the corporation, the interests
of the corporation's employees, suppliers, creditors and customers, the economy
of the state in which the corporation is located and including the possibility
that the best interests of the corporation may be served by the continued
independence of the corporation.
Also in August, 1998, following approval by its Board of Directors, the Company
put in place two Shareholder Rights Plans, one pertaining to the Class A Common
Stock and one pertaining to the Class B Common Stock. These Plans are intended
to protect stockholders by compelling someone seeking to acquire the Company to
negotiate with the Company's Board of Directors in order to protect stockholders
from unfair takeover tactics and to assist in the maximization of stockholder
value. These Rights Plans, which are common for public companies in the United
States, may also be deemed to be "anti-takeover" provisions in that the Board of
Directors believes that these Plans will make it difficult for a third party to
acquire control of the Company on terms which are unfair or unfavorable to the
stockholders.
While the Board of Directors believes that the Class B Common Stock and the
Class A Preferred Stock are important elements in keeping Ben & Jerry's an
independent, Vermont-based business focused on its three-part corporate mission,
the Class B Common Stock and the Class A Preferred Stock may be deemed to be
"anti-takeover" provisions in that the Board of Directors believes the existence
of these securities will make it difficult for a third party to acquire control
of the Company on terms opposed by the holders of the Class B Common Stock,
including primarily the Principal Stockholders, or The Foundation, or for
incumbent management and the Board of Directors to be removed. In addition, the
1997 amendments to the Company's Articles of Association to classify the Board
of Directors and to add certain other related provisions; the April 1998 Vermont
Legislative Amendment of the Vermont Business Corporation Act and the
Shareholder Rights Plans put in place in August, 1998 may be deemed to be
"anti-takeover" provisions in that the Board of Directors believes that these
amendments and legislation will make it difficult for a third party to acquire
control of the Company on terms opposed by the holders of the Class B Common
Stock, including primarily the Principal Stockholders and the Foundation, or for
incumbent management and the Board of Directors to be removed.
Market Risk
The Company is exposed to a variety of market risks, including changes in
interest rates affecting the return on its investments and foreign currency
fluctuations. The Company's exposure to market risk for a change in interest
rates relates primarily to the Company's investment portfolio. The Company has
classified all of its short-term and long-term investments as "available for
sale" except for certificates of deposits which are held to maturity. The
majority of these investments are municipal bonds and fixed income preferred
stock in which the market value approximates its cost at September 25, 1999. The
Company does not intend to hold such investments to maturity if there is an
underlying change in interest rates or the Company's cash flow requirements.
Certificates of deposits do not expose the consolidated statement of operations
or balance sheets to fluctuations in interest rates. The Company's exposure to
market risk for fluctuations in foreign currency relate primarily to the amounts
due from subsidiaries. Exchange gains and losses related to amounts due from
subsidiaries have not been material for the periods presented.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit (10.37) Michael Sands Stock Option Contract
Exhibit (10.38) Severance Agreement dated as of July 30, 1999 between
Elizabeth Bankowski and the Company.
Exhibit (10.39) Severance Agreement dated as of July 30, 1999 between
Bruce Bowman and the Company.
Exhibit (10.40) Severance Agreement dated as of November 15, 1999
between Richard Doran and the Company.
Exhibit (10.41) Severance Agreement dated as of July 30, 1999 between
Charles Green and the Company.
Exhibit (10.42) Severance Agreement dated as of July 30, 1999 between
Frances Rathke and the Company.
Exhibit (10.43) Employment Agreement effective as of June 25, 1999
between Michael Sands and the Company.
Exhibit (11) Statement Re: Computation of Per Share Earnings
Exhibit (27) Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended September
25, 1999, 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 9, 1999 By /s/Frances Rathke
------------------------------------
Frances Rathke,
Chief Financial Officer and Secretary
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
EXHIBIT 11- COMPUTATION OF NET EARNINGS PER SHARE
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Thirteen weeks ended Thirty-nine weeks ended
September 25, September 26, September 25, September 26,
1999 1998 1999 1998
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Numerator:
Net income $3,535 $2,892 $7,947 $5,402
------------ ------------ ------------- -------------
Denominator:
Denominator for basic earnings per share-
weighted-average shares 7,132 7,181 7,123 7,223
Dilutive stock options 377 265 440 258
------------ ------------ ------------- -------------
Denominator for diluted earnings per share-
adjusted weighted-average shares and
assumed conversions 7,509 7,446 7,563 7,481
============ ============ ============= =============
Net income per common share
Basic $0.50 $0.40 $1.12 $0.75
============ ============ ============= =============
Diluted $0.47 $0.39 $1.05 $0.72
============ ============ ============ =============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
See accompanying notes.
$ in thousands except per share data
</LEGEND>
<MULTIPLIER> 1000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-25-1999
<PERIOD-START> Jun-27-1999
<PERIOD-END> Sep-25-1999
<EXCHANGE-RATE> 1.000
<CASH> 27,066
<SECURITIES> 0
<RECEIVABLES> 24,934
<ALLOWANCES> 0
<INVENTORY> 15,798
<CURRENT-ASSETS> 103,379
<PP&E> 63,382
<DEPRECIATION> 0
<TOTAL-ASSETS> 172,676
<CURRENT-LIABILITIES> 51,259
<BONDS> 0
0
1
<COMMON> 223
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 172,676
<SALES> 67,129
<TOTAL-REVENUES> 0
<CGS> 39,315
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 40
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 418
<INCOME-PRETAX> 5,439
<INCOME-TAX> 1,904
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,535
<EPS-BASIC> .50
<EPS-DILUTED> .47
</TABLE>
BEN & JERRY'S HOMEMADE, INC.
NON-STATUTORY STOCK OPTION CONTRACT
1. GRANT OF OPTION
Ben & Jerry's Homemade, Inc., a Vermont corporation (the "Company"),
has granted, by vote of the Compensation Committee of the Board of Directors of
the Company (the "Committee"), to Michael Sands (the "Participant"), an option
to purchase an aggregate of 35,000 shares of Class A Common Stock of the
Company, $.033 par value (the "Common Stock" or the "Stock") (hereinafter
referred to as the "Option" or the "Award"), at a price of $24.25 per share,
purchasable as set forth in and subject to the terms and conditions of this
Non-Statutory Stock Option Contract (the "Contract"). The Option is intended to
be a non-statutory stock option and is not an ISO. The effective date of grant
of this Option is the day the Participant joins the payroll of the Company
(hereinafter referred to as the "Grant Date").
2. PURPOSE OF OPTION
In granting this Option, the Committee has determined that the Option
will advance the interests of the Company by enhancing its ability to (a)
attract and retain a Participant who is in a position to make significant
contributions to the success of the Company and its subsidiaries and (b)
encourage this Participant to take into account the long-term interests of the
Company through ownership of shares of the Company's Stock. This Option is
granted to induce the Participant to join the Company as an employee.
3. EXERCISE OF OPTION
(a) EXERCISE SCHEDULE
Except as otherwise provided in this Agreement, this Option may be
exercised during the period ending ten (10) years after the Grant Date
(hereinafter the "Expiration Date") on a cumulative basis as described below: on
and after one year from the date in July 2000 which is the first anniversary of
the Grant Date as to 25% of the Option; and thereafter, as to an additional 1/48
of the Option on the last day of each month, commencing with the month of August
2000, so that the Option becomes 100% exercisable on July 31, 2003.
4. ADMINISTRATION
This Contract will be administered by the Compensation Committee of the
Board of Directors of the Company (the "Committee"). The Committee will have
authority, not inconsistent with the express provisions of the Contract and in
addition to other authority granted under the Contract, to (a) grant Awards at
1
<PAGE>
such time or times as it may choose; (b) determine the size of each Option or
other Award, including the number of shares of Stock subject to the Award; (c)
determine the type or types of each Award; (d) determine the terms and
conditions of each Award; (e) waive compliance by a Participant (as defined
below) with any obligations to be performed by the Participant under an Award
and waive any term or condition of an Award; (f) amend or cancel an existing
Award in whole or in part (and if an Award is canceled, grant another Award in
its place on such terms as the Committee shall specify but not by way of "option
repricing" as defined in Section 6), or settle any Award by paying the cash
value of the Stock otherwise issuable, except that the Committee may not,
without the consent of the holder of an Award, take any action under this clause
with respect to such Award if such action would adversely affect the rights of
such holder; (g) prescribe the form or forms of instruments that are required or
deemed appropriate under the Contract, including any written notices and
elections required of the Participant, and change such forms from time to time;
(h) adopt, amend and rescind rules and regulations for the administration of the
Contract; and (i) interpret the Contract and decide any questions and settle all
controversies and disputes that may arise in connection with the Contract. Such
determinations and actions of the Committee, and all other determinations and
actions of the Committee made or taken under authority granted by any provision
of the Contract, will be conclusive and will bind all parties. Nothing in this
paragraph shall be construed as limiting the power of the Board or the Committee
to make adjustments under Section 7.3 or Section 8.6. A majority of the members
of the Committee shall constitute a quorum, and all determinations of the
Committee shall be made by a majority of its members. Any determination of the
Committee under the Contract may be made without notice or meeting of the
Committee by a writing signed by a majority of the Committee members.
5. SHARES SUBJECT TO THE CONTRACT
Subject to the adjustment as provided in Section 8.6 below, the
aggregate number of shares of Stock that may be delivered under the Contract
will be 35,000. If any Award requiring exercise by the Participant for delivery
of Stock terminates without having been exercised in full, or if any Award
payable in Stock or cash is satisfied in cash rather than Stock, the number of
shares of Stock as to which such Award was not exercised or for which cash was
substituted will be available for future grants.
Stock delivered under the Contract may be either authorized but
unissued Stock or previously issued Stock acquired by the Company and held in
treasury. No fractional shares of Stock will be delivered under the Contract
6. THE OPTION
Exercise Price, etc. The exercise price of the Option has been
determined by the Committee to be 26.5625, which is equal to the fair market
value of the stock on June 24, 1999, the fair market value of the Stock at the
time of grant by the Committee.
2
<PAGE>
The Committee may not, notwithstanding any other provision of the Plan,
reduce the exercise price of the Option at any time after the time of grant with
or without the consent of the Participant, thereby prohibiting the cancellation
of higher priced Options and the reissue of lower priced Options, i.e. repricing
options. The Committee may at any time and from time to time accelerate the time
at which all or any part of the Option may be exercised.
Any exercise of the Option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (1) any documents
required by the Committee and (2) payment in full in accordance with paragraph
(e) below for the number of shares for which the Option is exercised.
Payment for Stock. Stock purchased on exercise of the Option must be
paid for as follows: (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company, or (2) through the delivery of shares
of Stock (which in the case of Shares acquired from the Company, have been
outstanding for at least six months) having a fair market value on the last
business day preceding the date of exercise equal to the purchase price, or (3)
by delivery of an unconditional and irrevocable undertaking by a broker to
deliver promptly to the Company sufficient funds to pay the exercise price, or
(4) if so permitted by the instrument evidencing the Option (or by the Committee
on or after grant of the Option), by delivery of a promissory note of the Option
holder to the Company, payable on such terms as are specified by the Board, or
(5) by any combination of the permissible forms of payment; provided, that if
the Stock delivered upon exercise of the Option is an original issue of
authorized but unissued Stock, at least so much of the exercise price as
represents the par value of such Stock must be paid in cash. In the event that
payment of the Option price is made under (2) above, the Committee may provide
that the Option holder be granted an additional Option covering the numbers of
shares surrendered, at an exercise price equal to the fair market value of a
share of Stock on the date of surrender.
Discretionary Payments. If the market price of shares of Stock subject
to the Option exceeds the exercise price of the Option at the time of its
exercise, the Committee may cancel the Option and cause the Company to pay in
cash or in shares of Stock (at a price per share equal to the fair market value
per share) to the person exercising the Option an amount equal to the difference
between the fair market value of the Stock which would have been purchased
pursuant to the exercise (determined on the date the Option is canceled) and the
aggregate exercise price which would have been paid. The Committee may exercise
its discretion to take such action only if it has received a written request
from the person exercising the Option, but such a request will not be binding on
the Committee.
3
<PAGE>
EVENTS AFFECTING OUTSTANDING AWARDS
7.1. Death and Total or Permanent Disability
If a Participant dies or is totally or permanently disabled, the
following will apply:
(a) All Options held by the Participant immediately prior to death
or total or permanent disability, as the case may be, to the extent then
exercisable, may be exercised by the Participant's executor or administrator or
the person or persons to whom the Option is transferred by will or the
applicable laws of descent and distribution, at any time within the one year
period ending with the first anniversary of the Participant's death, or total or
permanent disability, as the case may be (or such shorter or longer period as
the Committee may determine), and shall thereupon terminate. In no event,
however, shall the Option remain exercisable beyond the latest date on which it
could have been exercised without regard to this Section 7. Except as otherwise
determined by the Committee, all Options held by a Participant immediately prior
to death or total or permanent disability, as the case may be, that are not then
exercisable shall terminate at the date of death or total or permanent
disability, as the case may be.
7.2. Termination of Service (Other Than By Death or Disability).
If a Participant who is an Employee ceases to be an Employee for any
reason other than death or total or permanent disability, as the case may be, or
if there is a termination (other than by reason of death or total or permanent
disability, as the case maybe) of the consulting, service or similar
relationship in respect of which a non-Employee Participant was granted an Award
hereunder (such termination of the employment or other relationship being herein
referred to as a "Status Change"), the following will apply:
(a) Except as otherwise determined by the Committee, all Options
held by the Participant that were not exercisable immediately prior to the
Status Change shall terminate at the time of the Status Change. Any Options that
were exercisable immediately prior to the Status Change will continue to be
exercisable for a period of three months (or such longer period as the Committee
may determine), and shall thereupon terminate, unless the Option provides by its
terms for immediate termination in the event of a Status Change. If the Status
Change results from a discharge for cause, the Option will terminate if the
Committee so determines in its discretion either before or after such
termination of employment. In no event, however, shall the Option remain
exercisable beyond the latest date on which it could have been exercised without
regard to this Section 7. For purposes of this paragraph, in the case of a
Participant who is an Employee, a Status Change shall not be deemed to have
resulted by reason of (i) a sick leave or other bona fide leave of absence
approved for purposes of the Plan by the Committee, so long as the Employee's
right to reemployment is guaranteed either by statute or by contract, or (ii) a
transfer of employment between the Company and a subsidiary or between
subsidiaries, or to the employment of a corporation (or a parent or subsidiary
corporation of such corporation) issuing or assuming an option in a transaction
to which section 424(a) of the Code applies.
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7.3 A Change in Control Provision
As used herein, a Change in Control and related definitions shall have
the meanings as set forth in Section 7.3 C below.
Immediately prior to the occurrence of a Change in Control, the Option
shall automatically become fully exercisable unless the Committee shall
otherwise expressly provide at the time of grant.
In addition to the foregoing and Section 6, the Committee may at any
time prior to or after a Change in Control accelerate the exercisability of the
Option.
7.3 B Certain Corporate Transactions.
(a) In the event of a consolidation or merger in which the Company is
not the surviving corporation or which results in the acquisition of
substantially all the Company's outstanding Stock by a single person or entity
or by a group of persons and/or entities acting in concert, or in the event of
the complete liquidation of the Company or the sale or transfer of substantially
all of the Company's assets (a "Covered Transaction"), the Option will terminate
as of the effective date of the Covered Transaction, provided that at least
twenty (20) days prior to the effective date of any such merger, consolidation,
liquidation or sale of assets, but subject to Paragraphs (c) and (d) below, the
Committee shall make the Option exercisable immediately prior to consummation of
such Covered Transaction (to the extent that the Option is not exercisable
immediately prior to the consummation of the Covered Transaction pursuant to
Section 7.3 A).
(b) If the Option is subject to performance or other conditions (other
than conditions relating the mere passage of time and continued employment)
which will not have been satisfied at the time of the Covered Transaction, the
Committee may, in its sole discretion, remove such conditions. If it does not do
so however, such Option will terminate, because the conditions have not been
satisfied, as of the date of the Covered Transaction notwithstanding Paragraph
(a) above.
(c) With respect to the outstanding Option held by the participant who,
following the Covered Transaction, will be employed by a corporation which is a
surviving or acquiring corporation in such transaction or an affiliate of such a
corporation, the Committee may, in lieu of the action of the Committee described
in Paragraphs (a) above or in addition to any Option being exercisable
immediately prior to consummation of the Covered Transaction pursuant to Section
7.3A above, arrange to have such surviving or acquiring corporation or affiliate
assume the Option or grant to the Participant a replacement Option which, in the
judgment of the Committee, is substantially equivalent to the Option
5
<PAGE>
7.3 C Change in Control and Related Definitions.
A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(a) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 35% or more of the
combined voting power of the Company's then outstanding securities; or
(b) during any period of not more than two consecutive years (not
including any period prior to October 26, 1994), individuals who at the
beginning of such period constitute the Board and any new director (other than a
director designated by a Person who has entered into an agreement with the
Company to effect a transaction described in Clause (a), (c) or (d) of Section
7.3 C) whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or
(c) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or being converted into
voting securities of the surviving entity) 60% or more of the combined
voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or
(2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person
acquires 35% or more of the combined voting power of the Company's then
outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets.
Notwithstanding the foregoing provisions of this Section 7.3C, a
"Change in Control" will not be deemed to have occurred solely because of (i)
the ownership or acquisition of securities of the Company (or any reporting
requirement under the Securities Exchange Act of 1934) relating thereto) by an
employee benefit plan maintained by the Company for the benefit of employees or
by ownership or acquisition (whether accomplished by merger, consolidation,
purchase or otherwise) by any of Ben Cohen, Jerry Greenfield, Jeffrey Furman and
Perry Odak or their "affiliates" or "associates" (as such terms are defined in
Rule 12b-2 under the Act) or members of their families (or trusts for their
benefit) or charitable trusts established by any of them and/or other related
management group.
6
<PAGE>
In the foregoing provisions of this Section 7.3 C, the following terms
shall have the meanings set forth below:
"Person" shall have the meaning given in Section 3 (a) (9) of the
Securities Exchange Act of 1934, as modified and used in Sections 13 9d and 14
(d) thereof; however, a Person shall not include
(1) the Company or any controlled subsidiary of the Company,
(2) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or
(3) a corporation or other entity owned, directly or indirectly,
by the shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company.
"Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Securities Exchange Act of 1934 as amended from time to time.
8. GENERAL PROVISIONS
8.1. Documentation of Awards.
The Option will be evidenced by such written instruments, if any, as
may be prescribed by the Committee from time to time. Such instruments may be in
the form of agreements to be executed by both the Participant and the Company,
or certificates, letters or similar instruments, which need not be executed by
the Participant but acceptance of which will evidence agreement to the terms
thereof.
8.2. Rights as a Stockholder, Dividend Equivalents.
Except as specifically provided by this Contract, the receipt of the
Option will not give a Participant rights as a stockholder; the participant will
obtain such rights, subject to any limitations imposed by the Plan or the
instrument evidencing the Option, upon actual receipt of Stock. However, the
Committee may, on such conditions as it deems appropriate, provide that a
Participant will receive a benefit in lieu of cash dividends that would have
been payable on any or all Stock subject to the Participant's Option had such
Stock been outstanding. Without limitation, the Committee may provide for
payment to the Participant of amounts representing such dividends, either
currently or in the future, or for the investment of such amounts on behalf of
the Participant.
7
<PAGE>
8.3. Conditions on Delivery of Stock.
The Company will not be obligated to deliver any shares of Stock
pursuant to this Contract or to remove restriction from shares previously
delivered under the Option until all conditions of the Option have been
satisfied or removed, (b) until, in the opinion of the Company's counsel, all
applicable federal and state laws and regulation have been complied with, (c) if
the outstanding Stock is at the time listed on any stock exchange, until the
shares to be delivered have been listed or authorized to be listed on such
exchange upon official notice of notice of issuance, and (d) until all other
legal matters in connection with the issuance and delivery of such shares have
been approved by the Company's counsel. If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, the Company may
require, as a condition to exercise of the Award, such representations or
agreements as counsel for the Company may consider appropriate to avoid
violation of such Act and may require that the certificates evidencing such
Stock bear an appropriate legend restricting transfer.
If the Option is exercised by the Participant's legal representative,
the Company will be under no obligation to deliver Stock pursuant to such
exercise until the Company is satisfied as to the authority of such
representative.
8.4. Tax Withholding.
The Company will withhold from any cash payment made pursuant to the
Option an amount sufficient to satisfy all federal, state and local withholding
tax requirements (the "withholding requirements").
In the case of an Option pursuant to which Stock may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Stock.
If and to the extent that such withholding is required, the Committee may permit
the Participant or such other person to elect at such time and in such manner as
the Committee provides to have the Company hold back from the shares to be
delivered, or to deliver to the Company, Stock having a value calculated to
satisfy the withholding requirement.
8.5. Nontransferability of the Option.
The Option may not be transferred other than by will or by the laws of
descent and distribution, and during a Participant's lifetime the Option may be
exercised only by him or her (or in the event of the Participant's incapacity,
the person or persons legally appointed to act on the Participant's behalf).
8
<PAGE>
8.6. Adjustments in the Event of Certain Transactions.
(a) In the event of a stock dividend, stock split or combination of
shares, recapitalization or other change in the Company's capitalization, or
other distribution to common stockholders other than normal cash dividends,
after the effective date of this Contract, the Committee will make any
appropriate adjustments to the maximum number of shares that may be delivered
under this Contract under Section 5 above.
(b) In any event referred to in paragraph (a), the Committee will also
make any appropriate adjustments to the number and kind of shares of stock or
securities subject to the Option then outstanding or subsequently granted, any
exercise prices relating to the Option and any other provision of the Option
affected by such change. The Committee may also make such adjustments to take
into account material changes in law or in accounting practices or principles,
mergers, consolidations, acquisitions, dispositions or similar corporate
transactions, or any other event, if it is determined by the Committee that
adjustments are appropriate to avoid distortion in the operation of this
Contract.
8.7. Employment Rights, Etc.
Neither the adoption of this Contract nor the grant of the Option will
confer upon any person any right to continued retention by the Company or any
subsidiary as an Employee or otherwise, or affect in any way the right of the
Company or subsidiary to terminate an employment, service or similar
relationship at any time. Except as specifically provided by the Committee in
any particular case, the loss of existing or potential profit in the Option
granted under this Contract will not constitute an element of damages in the
event of termination of an employment, service or similar relationship even if
the termination is in violation of an obligation of the Company to the
Participant.
8.8. Fair Market Value
For purposes of this Contract, fair market value of a share of Stock on
any date will be the average of the bid and asked prices in the over-the-counter
market with respect to such Stock, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or such other similar system
then in use; or, if on any such date such Stock is not quoted by any such
organization, the average of the closing bid and asked prices with respect to
such Stock, as furnished by a professional market maker making a market in such
Stock selected by the Committee; or if such prices are not available, the fair
market value of such Stock as of such date as determined in good faith by the
Committee; or, where necessary, in order to achieve the intended Federal income
tax result, the value of a share of Stock as determined by the Committee in
accordance with the applicable provisions of the Code.
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<PAGE>
9. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND
TERMINATION
Neither adoption of this Contract nor the grant of the Option to the
Participant will affect the Company's right to grant to such Participant cash or
Stock awards that are not subject to this Contract, to issue to such Participant
Stock as a bonus or otherwise, or to adopt other plans or arrangements under
which Stock be issued to Employees.
The Committee may at any time or times amend this Contract (and the
Committee may amend any outstanding Option) for any purpose which may at the
time be permitted by law, provided that (except to the extent expressly required
or permitted by this Contract) no such amendment may adversely affect the rights
of any Participant (without the Participant's consent) under the Option.
This Option shall be governed by and construed in accordance with the
laws of the State of Vermont.
BEN & JERRY'S HOMEMADE, INC.
By: /s/Frances Rathke
---------------------
Chief Financial Officer
PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing Option and agrees to the
terms and conditions thereof.
PARTICIPANT:
Signature:/s/Michael A. Sands
-----------------------------
SEVERANCE AGREEMENT
Severance Agreement dated as of July 30, 1999 between Elizabeth Bankowski
(the "Executive") and Ben & Jerry's Homemade, Inc. (the "Company"), a Vermont
corporation headquartered at 30 Community Drive, South Burlington, VT 05403.
WHEREAS, the parties wish to confirm certain severance understandings.
NOW THEREFORE, in consideration of these premises and the mutual
promises set forth below and other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereby agree as follows:
1. Severance Payable on Termination by the Company Other Than For Cause,
Death or Disability
1.1 In the event of termination of the Executive by the Company for other
than Cause, Death or Disability, the Executive will be entitled to:
(i) Severance at the Executive's monthly base salary rate immediately
preceding date of notice of termination, payable for six months, plus
(if so approved by the Compensation Committee of the Board of
Directors of the Company or an officer delegated by the Committee) a
second period of up to an additional six months in the event that the
employee has not found other comparable employment, but with payments
in this additional period terminating on the date the Executive
obtains comparable employment; provided that, for officers with three
or more years of employment service at date of termination, severance
at the monthly base salary rate immediately preceding the date of
notice of termination, payable for 12 months;
(ii)Continuation of health, life and other "welfare" insurance
benefits on the same terms as available to employees generally during
the period of severance payments. Other benefits (such as 401(k) or
ESPP or ESOP, which are keyed to employee status) do not continue;
(iii) The severance payments required to be made under (i) above are
not reduced by any other job earnings, i.e. no mitigation;
(iv)for officers with three or more years of service at the date of
termination, payment of the appropriate pro rata percentage (based on
the date of termination in the year) of the next annual cash bonus (if
approved by the Compensation Committee in January/February of the year
following the year of termination) provided that, in addition (if so
approved and if the Company's bottom line financial results for the
year in which termination occurs are not lower than the financial
results for the preceding year), the pro rata percentage, as
determined above, shall be figured on the "base" of a full year's
bonus (which shall in no event be less than the full year's bonus paid
for the prior year) and, for other officers with less than three years
of service at date of termination, payment of the appropriate pro rata
percentage of an amount equal to the next annual cash bonus (if
approved by the Compensation Committee in January/February of the year
following the year of termination).
<PAGE>
(v) $15,000 of outplacement services.
1.2 Cause. "Cause", for the purposes of Section 1, is defined as
conviction of any crime, whether or not involving the Company,
constituting a felony; gross neglect or misconduct in the conduct of
the Executive's duties; willful or repeated failure or refusal to
perform such duties may be delegated to the Executive by the CEO.
1.3 Options. Unless provisions in some other agreement between the
Executive and the Company or provisions in the option plan under which
options held by the Executive at the date of termination were granted
are more favorable to the Executive, (i) for Executives with three or
more years of service at date of termination, unvested options that
would have vested in the first six month period after date of
termination shall accelerate and become vested, and then all vested
options may continue to be exercised for six months thereafter and
(ii) for all other Executives all vested options at the date of
termination may continue to be exercised for six months thereafter. In
each case all unvested options remaining unvested at date of
termination shall terminate.
1.4 Confidential Information
a. The Executive agrees to comply with the policies and procedures of
the Company and its Subsidiaries for protecting Confidential
Information and shall never disclose to any Person (except as required
by applicable law) or use for his own benefit or gain, any
Confidential Information obtained by the Executive incident to his
employment or other association with the Company or any of its
Subsidiaries. The Executive understands that this restriction shall
continue to apply after his employment terminates, regardless of the
reason for such termination.
b. All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the
Company or its subsidiaries and any copies, in whole or in part,
thereof (the "Documents") whether or not prepared by the Executive,
shall be the sole and exclusive property of the Company and its
subsidiaries. The Executive shall safeguard all Documents and shall
surrender to the Company at the time his employment terminates or at
such earlier time or times as the CEO or his designee may specify, all
Documents then in the Executive's possession or control.
<PAGE>
1.5 Covenant Not To Compete
Restricted Activities. The Executive agrees that some restrictions on
his activities during and after his employment are necessary to
protect the goodwill, Confidential Information and other legitimate
interests of the Company and its Subsidiaries, and that the agreed
restrictions set forth below will not deprive the Executive of the
ability to earn a livelihood:
a. While the Executive is employed by the Company and, after his
employment terminates, for the greater of one year or the period
during which severance payments of base amount are being made (the
"Non-Competition Period"), the Executive shall not, directly or
indirectly, whether as owner, partner, investor, consultant, agent,
employee, co-venturer or otherwise, compete with the business of the
Company or any of its Subsidiaries within the United States, or within
any foreign country in which the Products are sold at the date of
termination of employment, or undertake any planning for any business
competitive with the Company or any of its Subsidiaries. Specifically,
but without limiting the foregoing, the Executive agrees not to engage
in any manner in any activity that is directly or indirectly
competitive with the business of the Company or any of its
Subsidiaries as conducted or which has been proposed by management to
the Board within six months prior to termination of the Executive's
employment. Restricted activity also includes without limitation
accepting employment or a consulting position with any Person who is,
or at any time within twelve (12) months prior to termination of the
Executive's employment has been, a distributor of the Company or any
of its Subsidiaries. For the purposes of this Section 1.5, the
business of the Company and its Subsidiaries shall mean the
manufacture or sale of the Products. "Products" mean all products
planned, researched, developed, tested, manufactured, sold, licensed,
leased or otherwise distributed or put into use by the Company or any
of its Subsidiaries, together with all services provided to third
parties or planned by the Company or any of its Subsidiaries, during
the Executive's employment; as used herein, "planned" refers to a
Product or service which the Company has decided to introduce within
six months from the date as of which such term is applied.
b. The Executive further agrees that during the Non-Competition Period
or in connection with the Executive's termination of employment, the
Executive will not hire or attempt to hire any employee of the Company
or any of its Subsidiaries, assist in such hiring by any Person,
encourage any such employee to terminate his or her relationship with
the Company or any of its Subsidiaries, or solicit or encourage any
customer or vendor of the Company or any of its Subsidiaries to
terminate its relationship with them, or, in the case of a customer,
to conduct with any Person any business or activity which such
customer conducts or could conduct with the Company or any of its
Subsidiaries.
c. The provisions of this Section 1.5 shall not be deemed to preclude
the Executive from employment or engagement during the Non-Competition
Period following termination of employment hereunder by a corporation,
some of the activities of which are competitive with the business of
the Company, if the Executive's activities do not relate, to such
competitive business, and nothing contained in this Section 1.5 shall
be deemed to prohibit the Executive, during the Non-Competition Period
<PAGE>
following termination of employment hereunder, from acquiring or
holding, solely as an investment, publicly traded securities of any
competitor corporation so long as such securities do not, in the
aggregate, constitute one-half of 1% of the outstanding voting
securities of such corporation.
d. Without limiting the foregoing, it is understood that the Company
shall not be obligated to continue to make the payments specified in
this Agreement in the event of a material breach by the Executive of
the provisions of Sections 1.4 or 1.5 of this Agreement, which breach
continues without having been cured within 30 days after written
notice to the Executive specifying the breach in reasonable detail.
1.6 Enforcement of Covenants.
The Executive acknowledges that he has carefully read and considered
all the terms and conditions of this Agreement, including the
restraints imposed upon him pursuant to Sections 1.4 and 1.5 hereof.
The Executive agrees that said restraints are necessary for the
reasonable and proper protection of the Company and its Subsidiaries
and that each and every one of the restraints is reasonable in respect
to subject matter, length of time and geographic area. The Executive
further acknowledges that, were he to breach any of the covenants
contained in Sections 1.4 and 1.5 hereof, the damage to the Company
would be irreparable. The Executive therefore agrees that the Company,
in addition to any other remedies available to it, shall be entitled
to seek preliminary and permanent injunctive relief against any breach
or threatened breach by the Executive of any of said covenants,
without having to post bond. The parties further agree that, in the
event that any provision of Section 1.4 or 1.5 hereof shall be
determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a time, too large a
geographic area or too great a range of activities, such provision
shall be deemed to be modified to permit its enforcement to the
maximum extent permitted by law.
1.7 This Section 1 shall not be applicable while the Executive has an
Employment Agreement providing for severance that would be applicable
to a termination other than for cause on the applicable date of such
termination.
2. Severance Payable After a Change in Control
2.1 In the event of a termination by the Company other than for Cause,
Death or Disability within the first two years after a Change in
Control (as defined) or termination by the Executive within the first
two years after a Change in Control for Good Reason (as defined),
severance shall be payable or provided to the Executive as follows
(and subject to the provisions of the additional subsections of
Section 2):
(i) A single lump sum equal to the sum of (a) one and a half times
(i.e. 18 months) annual base salary for the Executive in effect
immediately prior to the date of the Change in Control or immediately
prior to the date of termination (whichever is greater) and (b) an
amount equal to one and a half times the last year's annual cash bonus
paid to the Executive.
<PAGE>
(ii) Health, life and other welfare benefits shall continue for one
year on the same terms available to employees generally.
(iii) The Company's contribution to the 401(k) account of the
Executive shall continue for one year at the same rate (but in no
event lower than the rate in effect prior to the Change in Control) as
applicable to employees generally or, if such continuation is not
permitted by the Company's 401(k) plan, then the amount of the
Company's contribution shall be made by a lump sum payment and/or
distribution of Company stock made to the Executive at the time said
payment/distribution is made to employees generally.
2.2 "Cause" shall have the meaning set forth in Section 1.2 above.
2.3 "Change in Control" shall be defined as follows:
A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have
been satisfied:
(a) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 35% or more of
the combined voting power of the Company's then outstanding
securities; or
(b) during any period of not more than two consecutive years (not
including any period prior to October 26, 1994), individuals who at
the beginning of such period constitute the Board and any new director
(other than a director designated by a Person who has entered into an
agreement with the Company to effect a transaction described in Clause
(a), (c) or (d) of this Section 2.3) whose election by the Board or
nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or
(c) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being
converted into voting securities of the surviving entity) 60% or
more of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation, or
<PAGE>
(2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which
no person acquires 35% or more of the combined voting power of
the Company's then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets.
Notwithstanding the foregoing provisions of this Section 2.3, a "Change in
Control" will not be deemed to have occurred solely because of (i) the ownership
or acquisition of securities of the Company (or any reporting requirement under
the Securities Exchange Act of 1934) relating thereto by an employee benefit
plan maintained by the Company for the benefit of employees or by ownership of
securities of the Company that were beneficially owned as of December 31,1998 by
any of Ben Cohen, Jerry Greenfield, Jeffrey Furman and Perry Odak; provided,
however, that a "Change of Control" under Section 2.3 shall be deemed to have
occurred in the event any of Ben Cohen, Jerry Greenfield or Jeffrey Furman
becomes the Beneficial Owner, directly or indirectly, of Common Stock or other
voting securities of the Company representing an amount of beneficial ownership
which is (i) greater than 35% of the combined voting power of the Company's then
outstanding voting securities (the threshold under Section 2.3(a)) and (ii)
greater than the amount beneficially owned by any such Person as of December 31,
1998, by at least 22% of the number of outstanding shares of Common Stock of the
Company as of December 31, 1998 (adjusted for stock splits and the like).
In addition, a Change in Control shall not be deemed to have occurred for
purposes of this Section 2.3 if the Executive is the person obtaining control or
a member of any group obtaining control in the defined Change of Control. [
In the foregoing provisions of this definition of "Change in Control", the
following terms shall have the meanings set forth below:
"Person" in Section 2.3 shall have the meaning given in Section 3 (a) (9)
of the Securities Exchange Act of 1934, as modified and used in Sections 13 9d
and 14 (d) thereof; however, a Person shall not include
(1) the Company or any controlled subsidiary of the Company,
(2) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or
<PAGE>
(3) a corporation or other entity owned, directly or indirectly, by
the shareholders of the Company in substantially the same proportions
as their ownership of stock of the Company.
"Beneficial Owner" in Section 2.3 shall have the meaning defined in
Rule 13d-3 under the Securities Exchange Act of 1934 as amended from
time to time.
2.4 "Good Reason" shall be defined as follows:
(i) Failure of the Company to continue the Executive in the position
the Executive had twelve months prior to the date of a Change in
Control or any portion of greater responsibility the Executive may
have held immediately prior to the Change in Control;
(ii) Diminution in the nature or scope of the Executive's
responsibilities, duties or authority; or
(iii) Failure of the Company to provide the Executive the base
amounts, bonus and benefits in accordance with the terms of any
employment agreement in effect immediately prior to the Change in
Control between the Executive and the Company or, if there is no such
employment agreement, the levels of base salary, bonus or aggregate
benefits taken together that were in effect immediately prior to the
Change in Control.
2.5 Options.
Unless provisions in some other agreement (including an option grant)
between the Executive and the Company or applicable provisions in the
option plan under which options held by the Executive were granted are
more favorable to the Executive, and except as may be provided on
terms more favorable to the Executive in Section 1 of this Agreement,
with respect to a termination of the Executive Other Than For Cause,
all unvested options held by the Executive shall accelerate and become
vested immediately prior to the Change in Control and shall continue
to be exercisable for six months.
<PAGE>
2.6 Excise Tax Limitation.
Notwithstanding Section 2.1 of this Agreement, in the event that any
Payment (as hereinafter defined) would be subject in whole or in part
to the excise tax (the "Excise Tax") under Section 4999 of the
Internal Revenue Code (the "Code"), then the severance payments
payable under Section 2.1 of this Agreement shall be reduced to the
extent, but only to the extent, necessary so that no portion of any
Payment is subject to the Excise Tax (the "Severance Reduction").
However, no Severance Reduction shall be made unless the net amount of
the Total Payments (as hereinafter defined) after such Severance
Reduction and after deduction of the net amount of federal, state and
local income taxes on such reduced Total Payments would be greater
than the net amount of the Total Payments without the Severance
Reduction but after deduction of the Excise Tax and the net amount of
federal, state and local income taxes on such unreduced Total
Payments. The determination as to whether a Severance Reduction is to
be made and, if so, the amount of any such reduction shall be made by
the firm of certified public accountants that had been acting as the
Company's auditors prior to the Change in Control or by such other
firm of certified public accountants, benefits consulting firm or
legal counsel as the Board may designate for such purpose, with the
approval of the Executive, prior to the Change in Control.
The Company shall provide the Executive with the auditor's
calculations of the amounts referred to in this Section 2.6 and such
supporting materials as are reasonably necessary for the Executive to
evaluate the Company's calculation.
For purposes of this Section 2.6, the term "Payment" means any
"payment in the nature of compensation" (as that term is used in
Section 280G of the Code") to or for the benefit of the Executive,
whether or not paid pursuant to this Agreement, that is contingent or
under Section 280G of the Code would be presumed to be contingent on a
Change in Control; and the term "Total Payments" means the aggregate
of all Payments.
2.7 Additional Provisions.
The provisions of Section 1.4 shall continue to be applicable after a
termination of employment under Subsection 2.1. The provisions of
Section 1.5 shall remain applicable.
3. Other Provisions
3.1 Assignment.
Neither the Company nor the Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise,
without the prior written consent of the other; provided, however,
that in the event that the Company shall hereafter effect a
reorganization, consolidate with, or merge into, any other Person or
transfer all or substantially all of its properties or assets to any
other Person, the Company shall require such Person or the resulting
entity to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required
to perform and provided that nothing in this Section shall limit the
provisions of Section 2.
3.2 Severability.
If any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application
of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall be not be
affected thereby, and each portion and provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
<PAGE>
3.3 Waiver
No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of either party
to require the performance of any term or obligation of this
Agreement, or the waiver by either party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term
or obligation or be deemed a waiver of any subsequent breach.
3.4 Notices.
Any and all notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be
effective when delivered in person or deposited in the United States
mail, postage prepaid, registered or certified, and addressed to the
Executive at his last known address on the books of the Company and,
in the case of the Company, at its principal place of business,
attention Chief Executive Officer, with a copy to Ropes & Gray,
Attention Howard K. Fuguet, Esq., One International Place, Boston, MA
02110.
3.5 Entire Agreement.
This Agreement constitutes the entire agreement between the parties
with respect to severance upon a termination by the Company other than
for cause and with respect to severance upon a termination by the
Company other than for cause or by the Executive for Good Reason after
a Change in Control and with respect to Options upon a Change in
Control and supersedes all prior and contemporaneous communications,
representations and understandings, written or oral, with respect
thereto, except (i) as otherwise expressly provided herein and (ii) as
otherwise provided in any other written agreement or benefit plan that
is more favorable to the Executive with respect to severance or
options.
3.6 Amendment.
This Agreement may be amended or modified only by a written instrument
signed by the Executive and by a duly authorized officer of the
Company.
3.7 Governing Law, Arbitration and Consent to Jurisdiction.
This is a Vermont contract and shall be construed and enforced under
and be governed in all respects by the laws of the State of Vermont,
without regard to the Vermont internal conflict of laws principles
thereof. The parties each agree to promptly and mutually select a
mediator and promptly mediate in good faith any controversy, claim or
dispute arising between the parties hereto arising out of or related
to this Agreement and its performance or any breach or claimed breach
thereof. In the event that mediation does not resolve any such matter,
then such matter other than any matter in which injunctive relief or
other equitable relief is sought shall be definitively resolved
through binding arbitration conducted in the City of Burlington,
Vermont, by a panel of three (3) arbitrators in accordance with the
<PAGE>
then current Commercial Arbitration Rules of the American Arbitration
Association; provided, however, that notwithstanding anything to the
contrary in such Commercial Arbitration Rules, the parties shall be
entitled in the course of any arbitration conducted pursuant to this
Section to seek and obtain discovery from one another to the same
extent and by means of the same mechanisms authorized by Rules 27
through 37 of the Federal Rules of Civil Procedure. The power and
office of the arbitrators shall arise wholly and solely from this
Agreement and the then current Commercial Arbitration Rules of the
American Arbitration Association. The award of the panel or a majority
of them so rendered shall be final and binding, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereto.
To the extent a dispute is not to be arbitrated in accordance with the
foregoing, each of the Company and the Executive (i) irrevocably
submits to the jurisdiction of the United States District Court of
Vermont and to the jurisdiction of the state courts of Vermont for the
purpose of any suit or other proceeding arising out of or based upon
the Agreement or the subject matter hereof and agrees that any such
proceeding shall be brought or maintained only in such court, and (ii)
waives, to the extent not prohibited by applicable law, and agrees not
to assert in any such proceedings, any claim that it is not subject to
the jurisdiction of the above-named courts, that he or it is immune
from extraterritorial injunctive relief or other injunctive relief,
that any such proceeding brought or maintained in a court provided for
above may not be properly brought or maintained in such court, should
be transferred to some other court or should be stayed or dismissed by
reason of the pendency of some other proceeding in some other court,
or that this Agreement or the subject matter hereof may not be
enforced in or by such court.
3.8 Protection of Reputation.
During the period of employment and during any period in which
severance payments or benefits are paid or provided under this
Agreement, the Executive agrees that he will take no action which is
intended to, or would reasonably be expected to, harm the Company or
its reputation or which would reasonably be expected to lead to
unwanted or unfavorable publicity to the Company (it being understood
that competition which does not breach Section 1.5 shall not be deemed
to be a breach of this Section).
3.9 Survival.
Cessation or termination of Executive's employment with the Company
shall not result in termination of this Agreement. The respective
obligations of Executive and the rights and benefits afforded to the
Company as provided in this Agreement after termination of employment
shall survive cessation or termination of Executive's employment
hereunder.
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its
duly authorized officer and by the Executive as of the date first above written.
BEN & JERRY'S HOMEMADE, INC.
/s/Elizabeth Bankowski By:/s/Perry D. Odak
---------------------- -------------------
Executive Chief Executive Officer
SEVERANCE AGREEMENT
Severance Agreement dated as of July 30, 1999 between Bruce Bowman (the
"Executive") and Ben & Jerry's Homemade, Inc. (the "Company"), a Vermont
corporation headquartered at 30 Community Drive, South Burlington, VT 05403.
WHEREAS, the parties wish to confirm certain severance understandings.
NOW THEREFORE, in consideration of these premises and the mutual
promises set forth below and other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereby agree as follows:
1. Severance Payable on Termination by the Company Other Than For Cause,
Death or Disability
1.1 In the event of termination of the Executive by the Company for other
than Cause, Death or Disability, the Executive will be entitled to:
(i) Severance at the Executive's monthly base salary rate immediately
preceding date of notice of termination, payable for six months, plus
(if so approved by the Compensation Committee of the Board of
Directors of the Company or an officer delegated by the Committee) a
second period of up to an additional six months in the event that the
employee has not found other comparable employment, but with payments
in this additional period terminating on the date the Executive
obtains comparable employment; provided that, for officers with three
or more years of employment service at date of termination, severance
at the monthly base salary rate immediately preceding the date of
notice of termination, payable for 12 months;
(ii)Continuation of health, life and other "welfare" insurance
benefits on the same terms as available to employees generally during
the period of severance payments. Other benefits (such as 401(k) or
ESPP or ESOP, which are keyed to employee status) do not continue;
(iii) The severance payments required to be made under (i) above are
not reduced by any other job earnings, i.e. no mitigation;
(iv)for officers with three or more years of service at the date of
termination, payment of the appropriate pro rata percentage (based on
the date of termination in the year) of the next annual cash bonus (if
approved by the Compensation Committee in January/February of the year
following the year of termination) provided that, in addition (if so
approved and if the Company's bottom line financial results for the
year in which termination occurs are not lower than the financial
results for the preceding year), the pro rata percentage, as
determined above, shall be figured on the "base" of a full year's
bonus (which shall in no event be less than the full year's bonus paid
for the prior year) and, for other officers with less than three years
of service at date of termination, payment of the appropriate pro rata
percentage of an amount equal to the next annual cash bonus (if
approved by the Compensation Committee in January/February of the year
following the year of termination).
<PAGE>
(v) $15,000 of outplacement services.
1.2 Cause. "Cause", for the purposes of Section 1, is defined as
conviction of any crime, whether or not involving the Company,
constituting a felony; gross neglect or misconduct in the conduct of
the Executive's duties; willful or repeated failure or refusal to
perform such duties may be delegated to the Executive by the CEO.
1.3 Options. Unless provisions in some other agreement between the
Executive and the Company or provisions in the option plan under which
options held by the Executive at the date of termination were granted
are more favorable to the Executive, (i) for Executives with three or
more years of service at date of termination, unvested options that
would have vested in the first six month period after date of
termination shall accelerate and become vested, and then all vested
options may continue to be exercised for six months thereafter and
(ii) for all other Executives all vested options at the date of
termination may continue to be exercised for six months thereafter. In
each case all unvested options remaining unvested at date of
termination shall terminate.
1.4 Confidential Information
a. The Executive agrees to comply with the policies and procedures of
the Company and its Subsidiaries for protecting Confidential
Information and shall never disclose to any Person (except as required
by applicable law) or use for his own benefit or gain, any
Confidential Information obtained by the Executive incident to his
employment or other association with the Company or any of its
Subsidiaries. The Executive understands that this restriction shall
continue to apply after his employment terminates, regardless of the
reason for such termination.
b. All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the
Company or its subsidiaries and any copies, in whole or in part,
thereof (the "Documents") whether or not prepared by the Executive,
shall be the sole and exclusive property of the Company and its
subsidiaries. The Executive shall safeguard all Documents and shall
surrender to the Company at the time his employment terminates or at
such earlier time or times as the CEO or his designee may specify, all
Documents then in the Executive's possession or control.
<PAGE>
1.5 Covenant Not To Compete
Restricted Activities. The Executive agrees that some restrictions on
his activities during and after his employment are necessary to
protect the goodwill, Confidential Information and other legitimate
interests of the Company and its Subsidiaries, and that the agreed
restrictions set forth below will not deprive the Executive of the
ability to earn a livelihood:
a. While the Executive is employed by the Company and, after his
employment terminates, for the greater of one year or the period
during which severance payments of base amount are being made (the
"Non-Competition Period"), the Executive shall not, directly or
indirectly, whether as owner, partner, investor, consultant, agent,
employee, co-venturer or otherwise, compete with the business of the
Company or any of its Subsidiaries within the United States, or within
any foreign country in which the Products are sold at the date of
termination of employment, or undertake any planning for any business
competitive with the Company or any of its Subsidiaries. Specifically,
but without limiting the foregoing, the Executive agrees not to engage
in any manner in any activity that is directly or indirectly
competitive with the business of the Company or any of its
Subsidiaries as conducted or which has been proposed by management to
the Board within six months prior to termination of the Executive's
employment. Restricted activity also includes without limitation
accepting employment or a consulting position with any Person who is,
or at any time within twelve (12) months prior to termination of the
Executive's employment has been, a distributor of the Company or any
of its Subsidiaries. For the purposes of this Section 1.5, the
business of the Company and its Subsidiaries shall mean the
manufacture or sale of the Products. "Products" mean all products
planned, researched, developed, tested, manufactured, sold, licensed,
leased or otherwise distributed or put into use by the Company or any
of its Subsidiaries, together with all services provided to third
parties or planned by the Company or any of its Subsidiaries, during
the Executive's employment; as used herein, "planned" refers to a
Product or service which the Company has decided to introduce within
six months from the date as of which such term is applied.
b. The Executive further agrees that during the Non-Competition Period
or in connection with the Executive's termination of employment, the
Executive will not hire or attempt to hire any employee of the Company
or any of its Subsidiaries, assist in such hiring by any Person,
encourage any such employee to terminate his or her relationship with
the Company or any of its Subsidiaries, or solicit or encourage any
customer or vendor of the Company or any of its Subsidiaries to
terminate its relationship with them, or, in the case of a customer,
to conduct with any Person any business or activity which such
customer conducts or could conduct with the Company or any of its
Subsidiaries.
c. The provisions of this Section 1.5 shall not be deemed to preclude
the Executive from employment or engagement during the Non-Competition
Period following termination of employment hereunder by a corporation,
some of the activities of which are competitive with the business of
the Company, if the Executive's activities do not relate, to such
competitive business, and nothing contained in this Section 1.5 shall
be deemed to prohibit the Executive, during the Non-Competition Period
<PAGE>
following termination of employment hereunder, from acquiring or
holding, solely as an investment, publicly traded securities of any
competitor corporation so long as such securities do not, in the
aggregate, constitute one-half of 1% of the outstanding voting
securities of such corporation.
d. Without limiting the foregoing, it is understood that the Company
shall not be obligated to continue to make the payments specified in
this Agreement in the event of a material breach by the Executive of
the provisions of Sections 1.4 or 1.5 of this Agreement, which breach
continues without having been cured within 30 days after written
notice to the Executive specifying the breach in reasonable detail.
1.6 Enforcement of Covenants.
The Executive acknowledges that he has carefully read and considered
all the terms and conditions of this Agreement, including the
restraints imposed upon him pursuant to Sections 1.4 and 1.5 hereof.
The Executive agrees that said restraints are necessary for the
reasonable and proper protection of the Company and its Subsidiaries
and that each and every one of the restraints is reasonable in respect
to subject matter, length of time and geographic area. The Executive
further acknowledges that, were he to breach any of the covenants
contained in Sections 1.4 and 1.5 hereof, the damage to the Company
would be irreparable. The Executive therefore agrees that the Company,
in addition to any other remedies available to it, shall be entitled
to seek preliminary and permanent injunctive relief against any breach
or threatened breach by the Executive of any of said covenants,
without having to post bond. The parties further agree that, in the
event that any provision of Section 1.4 or 1.5 hereof shall be
determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a time, too large a
geographic area or too great a range of activities, such provision
shall be deemed to be modified to permit its enforcement to the
maximum extent permitted by law.
1.7 This Section 1 shall not be applicable while the Executive has an
Employment Agreement providing for severance that would be applicable
to a termination other than for cause on the applicable date of such
termination.
2. Severance Payable After a Change in Control
2.1 In the event of a termination by the Company other than for Cause,
Death or Disability within the first two years after a Change in
Control (as defined) or termination by the Executive within the first
two years after a Change in Control for Good Reason (as defined),
severance shall be payable or provided to the Executive as follows
(and subject to the provisions of the additional subsections of
Section 2):
(i) A single lump sum equal to the sum of (a) one and a half times
(i.e. 18 months) annual base salary for the Executive in effect
immediately prior to the date of the Change in Control or immediately
prior to the date of termination (whichever is greater) and (b) an
amount equal to one and a half times the last year's annual cash bonus
paid to the Executive.
<PAGE>
(ii) Health, life and other welfare benefits shall continue for one
year on the same terms available to employees generally.
(iii) The Company's contribution to the 401(k) account of the
Executive shall continue for one year at the same rate (but in no
event lower than the rate in effect prior to the Change in Control) as
applicable to employees generally or, if such continuation is not
permitted by the Company's 401(k) plan, then the amount of the
Company's contribution shall be made by a lump sum payment and/or
distribution of Company stock made to the Executive at the time said
payment/distribution is made to employees generally.
2.2 "Cause" shall have the meaning set forth in Section 1.2 above.
2.3 "Change in Control" shall be defined as follows:
A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have
been satisfied:
(a) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 35% or more of
the combined voting power of the Company's then outstanding
securities; or
(b) during any period of not more than two consecutive years (not
including any period prior to October 26, 1994), individuals who at
the beginning of such period constitute the Board and any new director
(other than a director designated by a Person who has entered into an
agreement with the Company to effect a transaction described in Clause
(a), (c) or (d) of this Section 2.3) whose election by the Board or
nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or
(c) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being
converted into voting securities of the surviving entity) 60% or
more of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation, or
<PAGE>
(2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which
no person acquires 35% or more of the combined voting power of
the Company's then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets.
Notwithstanding the foregoing provisions of this Section 2.3, a "Change in
Control" will not be deemed to have occurred solely because of (i) the ownership
or acquisition of securities of the Company (or any reporting requirement under
the Securities Exchange Act of 1934) relating thereto by an employee benefit
plan maintained by the Company for the benefit of employees or by ownership of
securities of the Company that were beneficially owned as of December 31,1998 by
any of Ben Cohen, Jerry Greenfield, Jeffrey Furman and Perry Odak; provided,
however, that a "Change of Control" under Section 2.3 shall be deemed to have
occurred in the event any of Ben Cohen, Jerry Greenfield or Jeffrey Furman
becomes the Beneficial Owner, directly or indirectly, of Common Stock or other
voting securities of the Company representing an amount of beneficial ownership
which is (i) greater than 35% of the combined voting power of the Company's then
outstanding voting securities (the threshold under Section 2.3(a)) and (ii)
greater than the amount beneficially owned by any such Person as of December 31,
1998, by at least 22% of the number of outstanding shares of Common Stock of the
Company as of December 31, 1998 (adjusted for stock splits and the like).
In addition, a Change in Control shall not be deemed to have occurred for
purposes of this Section 2.3 if the Executive is the person obtaining control or
a member of any group obtaining control in the defined Change of Control. [
In the foregoing provisions of this definition of "Change in Control", the
following terms shall have the meanings set forth below:
"Person" in Section 2.3 shall have the meaning given in Section 3 (a) (9)
of the Securities Exchange Act of 1934, as modified and used in Sections 13 9d
and 14 (d) thereof; however, a Person shall not include
(1) the Company or any controlled subsidiary of the Company,
(2) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or
<PAGE>
(3) a corporation or other entity owned, directly or indirectly, by
the shareholders of the Company in substantially the same proportions
as their ownership of stock of the Company.
"Beneficial Owner" in Section 2.3 shall have the meaning defined in
Rule 13d-3 under the Securities Exchange Act of 1934 as amended from
time to time.
2.4 "Good Reason" shall be defined as follows:
(i) Failure of the Company to continue the Executive in the position
the Executive had twelve months prior to the date of a Change in
Control or any portion of greater responsibility the Executive may
have held immediately prior to the Change in Control;
(ii) Diminution in the nature or scope of the Executive's
responsibilities, duties or authority; or
(iii) Failure of the Company to provide the Executive the base
amounts, bonus and benefits in accordance with the terms of any
employment agreement in effect immediately prior to the Change in
Control between the Executive and the Company or, if there is no such
employment agreement, the levels of base salary, bonus or aggregate
benefits taken together that were in effect immediately prior to the
Change in Control.
2.5 Options.
Unless provisions in some other agreement (including an option grant)
between the Executive and the Company or applicable provisions in the
option plan under which options held by the Executive were granted are
more favorable to the Executive, and except as may be provided on
terms more favorable to the Executive in Section 1 of this Agreement,
with respect to a termination of the Executive Other Than For Cause,
all unvested options held by the Executive shall accelerate and become
vested immediately prior to the Change in Control and shall continue
to be exercisable for six months.
<PAGE>
2.6 Excise Tax Limitation.
Notwithstanding Section 2.1 of this Agreement, in the event that any
Payment (as hereinafter defined) would be subject in whole or in part
to the excise tax (the "Excise Tax") under Section 4999 of the
Internal Revenue Code (the "Code"), then the severance payments
payable under Section 2.1 of this Agreement shall be reduced to the
extent, but only to the extent, necessary so that no portion of any
Payment is subject to the Excise Tax (the "Severance Reduction").
However, no Severance Reduction shall be made unless the net amount of
the Total Payments (as hereinafter defined) after such Severance
Reduction and after deduction of the net amount of federal, state and
local income taxes on such reduced Total Payments would be greater
than the net amount of the Total Payments without the Severance
Reduction but after deduction of the Excise Tax and the net amount of
federal, state and local income taxes on such unreduced Total
Payments. The determination as to whether a Severance Reduction is to
be made and, if so, the amount of any such reduction shall be made by
the firm of certified public accountants that had been acting as the
Company's auditors prior to the Change in Control or by such other
firm of certified public accountants, benefits consulting firm or
legal counsel as the Board may designate for such purpose, with the
approval of the Executive, prior to the Change in Control.
The Company shall provide the Executive with the auditor's
calculations of the amounts referred to in this Section 2.6 and such
supporting materials as are reasonably necessary for the Executive to
evaluate the Company's calculation.
For purposes of this Section 2.6, the term "Payment" means any
"payment in the nature of compensation" (as that term is used in
Section 280G of the Code") to or for the benefit of the Executive,
whether or not paid pursuant to this Agreement, that is contingent or
under Section 280G of the Code would be presumed to be contingent on a
Change in Control; and the term "Total Payments" means the aggregate
of all Payments.
2.7 Additional Provisions.
The provisions of Section 1.4 shall continue to be applicable after a
termination of employment under Subsection 2.1. The provisions of
Section 1.5 shall remain applicable.
3. Other Provisions
3.1 Assignment.
Neither the Company nor the Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise,
without the prior written consent of the other; provided, however,
that in the event that the Company shall hereafter effect a
reorganization, consolidate with, or merge into, any other Person or
transfer all or substantially all of its properties or assets to any
other Person, the Company shall require such Person or the resulting
entity to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required
to perform and provided that nothing in this Section shall limit the
provisions of Section 2.
3.2 Severability.
If any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application
of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall be not be
affected thereby, and each portion and provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
<PAGE>
3.3 Waiver
No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of either party
to require the performance of any term or obligation of this
Agreement, or the waiver by either party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term
or obligation or be deemed a waiver of any subsequent breach.
3.4 Notices.
Any and all notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be
effective when delivered in person or deposited in the United States
mail, postage prepaid, registered or certified, and addressed to the
Executive at his last known address on the books of the Company and,
in the case of the Company, at its principal place of business,
attention Chief Executive Officer, with a copy to Ropes & Gray,
Attention Howard K. Fuguet, Esq., One International Place, Boston, MA
02110.
3.5 Entire Agreement.
This Agreement constitutes the entire agreement between the parties
with respect to severance upon a termination by the Company other than
for cause and with respect to severance upon a termination by the
Company other than for cause or by the Executive for Good Reason after
a Change in Control and with respect to Options upon a Change in
Control and supersedes all prior and contemporaneous communications,
representations and understandings, written or oral, with respect
thereto, except (i) as otherwise expressly provided herein and (ii) as
otherwise provided in any other written agreement or benefit plan that
is more favorable to the Executive with respect to severance or
options.
3.6 Amendment.
This Agreement may be amended or modified only by a written instrument
signed by the Executive and by a duly authorized officer of the
Company.
3.7 Governing Law, Arbitration and Consent to Jurisdiction.
This is a Vermont contract and shall be construed and enforced under
and be governed in all respects by the laws of the State of Vermont,
without regard to the Vermont internal conflict of laws principles
thereof. The parties each agree to promptly and mutually select a
mediator and promptly mediate in good faith any controversy, claim or
dispute arising between the parties hereto arising out of or related
to this Agreement and its performance or any breach or claimed breach
thereof. In the event that mediation does not resolve any such matter,
then such matter other than any matter in which injunctive relief or
other equitable relief is sought shall be definitively resolved
through binding arbitration conducted in the City of Burlington,
Vermont, by a panel of three (3) arbitrators in accordance with the
<PAGE>
then current Commercial Arbitration Rules of the American Arbitration
Association; provided, however, that notwithstanding anything to the
contrary in such Commercial Arbitration Rules, the parties shall be
entitled in the course of any arbitration conducted pursuant to this
Section to seek and obtain discovery from one another to the same
extent and by means of the same mechanisms authorized by Rules 27
through 37 of the Federal Rules of Civil Procedure. The power and
office of the arbitrators shall arise wholly and solely from this
Agreement and the then current Commercial Arbitration Rules of the
American Arbitration Association. The award of the panel or a majority
of them so rendered shall be final and binding, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereto.
To the extent a dispute is not to be arbitrated in accordance with the
foregoing, each of the Company and the Executive (i) irrevocably
submits to the jurisdiction of the United States District Court of
Vermont and to the jurisdiction of the state courts of Vermont for the
purpose of any suit or other proceeding arising out of or based upon
the Agreement or the subject matter hereof and agrees that any such
proceeding shall be brought or maintained only in such court, and (ii)
waives, to the extent not prohibited by applicable law, and agrees not
to assert in any such proceedings, any claim that it is not subject to
the jurisdiction of the above-named courts, that he or it is immune
from extraterritorial injunctive relief or other injunctive relief,
that any such proceeding brought or maintained in a court provided for
above may not be properly brought or maintained in such court, should
be transferred to some other court or should be stayed or dismissed by
reason of the pendency of some other proceeding in some other court,
or that this Agreement or the subject matter hereof may not be
enforced in or by such court.
3.8 Protection of Reputation.
During the period of employment and during any period in which
severance payments or benefits are paid or provided under this
Agreement, the Executive agrees that he will take no action which is
intended to, or would reasonably be expected to, harm the Company or
its reputation or which would reasonably be expected to lead to
unwanted or unfavorable publicity to the Company (it being understood
that competition which does not breach Section 1.5 shall not be deemed
to be a breach of this Section).
3.9 Survival.
Cessation or termination of Executive's employment with the Company
shall not result in termination of this Agreement. The respective
obligations of Executive and the rights and benefits afforded to the
Company as provided in this Agreement after termination of employment
shall survive cessation or termination of Executive's employment
hereunder.
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its
duly authorized officer and by the Executive as of the date first above written.
BEN & JERRY'S HOMEMADE, INC.
/s/Bruce Bowman By:/s/Perry D. Odak
---------------------- -------------------
Executive Chief Executive Officer
SEVERANCE AGREEMENT
Severance Agreement dated as of November 15, 1999 between Richard Doran
(the "Executive") and Ben & Jerry's Homemade, Inc. (the "Company"), a Vermont
corporation headquartered at 30 Community Drive, South Burlington, VT 05403.
WHEREAS, the parties wish to confirm certain severance understandings.
NOW THEREFORE, in consideration of these premises and the mutual
promises set forth below and other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereby agree as follows:
1. Severance Payable on Termination by the Company Other Than For Cause,
Death or Disability
1.1 In the event of termination of the Executive by the Company for other
than Cause, Death or Disability, the Executive will be entitled to:
(i) Severance at the Executive's monthly base salary rate immediately
preceding date of notice of termination, payable for six months, plus
(if so approved by the Compensation Committee of the Board of
Directors of the Company or an officer delegated by the Committee) a
second period of up to an additional six months in the event that the
employee has not found other comparable employment, but with payments
in this additional period terminating on the date the Executive
obtains comparable employment; provided that, for officers with three
or more years of employment service at date of termination, severance
at the monthly base salary rate immediately preceding the date of
notice of termination, payable for 12 months;
(ii)Continuation of health, life and other "welfare" insurance
benefits on the same terms as available to employees generally during
the period of severance payments. Other benefits (such as 401(k) or
ESPP or ESOP, which are keyed to employee status) do not continue;
(iii) The severance payments required to be made under (i) above are
not reduced by any other job earnings, i.e. no mitigation;
(iv)for officers with three or more years of service at the date of
termination, payment of the appropriate pro rata percentage (based on
the date of termination in the year) of the next annual cash bonus (if
approved by the Compensation Committee in January/February of the year
following the year of termination) provided that, in addition (if so
approved and if the Company's bottom line financial results for the
year in which termination occurs are not lower than the financial
results for the preceding year), the pro rata percentage, as
determined above, shall be figured on the "base" of a full year's
bonus (which shall in no event be less than the full year's bonus paid
for the prior year) and, for other officers with less than three years
of service at date of termination, payment of the appropriate pro rata
percentage of an amount equal to the next annual cash bonus (if
approved by the Compensation Committee in January/February of the year
following the year of termination).
<PAGE>
(v) $15,000 of outplacement services.
1.2 Cause. "Cause", for the purposes of Section 1, is defined as
conviction of any crime, whether or not involving the Company,
constituting a felony; gross neglect or misconduct in the conduct of
the Executive's duties; willful or repeated failure or refusal to
perform such duties may be delegated to the Executive by the CEO.
1.3 Options. Unless provisions in some other agreement between the
Executive and the Company or provisions in the option plan under which
options held by the Executive at the date of termination were granted
are more favorable to the Executive, (i) for Executives with three or
more years of service at date of termination, unvested options that
would have vested in the first six month period after date of
termination shall accelerate and become vested, and then all vested
options may continue to be exercised for six months thereafter and
(ii) for all other Executives all vested options at the date of
termination may continue to be exercised for six months thereafter. In
each case all unvested options remaining unvested at date of
termination shall terminate.
1.4 Confidential Information
a. The Executive agrees to comply with the policies and procedures of
the Company and its Subsidiaries for protecting Confidential
Information and shall never disclose to any Person (except as required
by applicable law) or use for his own benefit or gain, any
Confidential Information obtained by the Executive incident to his
employment or other association with the Company or any of its
Subsidiaries. The Executive understands that this restriction shall
continue to apply after his employment terminates, regardless of the
reason for such termination.
b. All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the
Company or its subsidiaries and any copies, in whole or in part,
thereof (the "Documents") whether or not prepared by the Executive,
shall be the sole and exclusive property of the Company and its
subsidiaries. The Executive shall safeguard all Documents and shall
surrender to the Company at the time his employment terminates or at
such earlier time or times as the CEO or his designee may specify, all
Documents then in the Executive's possession or control.
<PAGE>
1.5 Covenant Not To Compete
Restricted Activities. The Executive agrees that some restrictions on
his activities during and after his employment are necessary to
protect the goodwill, Confidential Information and other legitimate
interests of the Company and its Subsidiaries, and that the agreed
restrictions set forth below will not deprive the Executive of the
ability to earn a livelihood:
a. While the Executive is employed by the Company and, after his
employment terminates, for the greater of one year or the period
during which severance payments of base amount are being made (the
"Non-Competition Period"), the Executive shall not, directly or
indirectly, whether as owner, partner, investor, consultant, agent,
employee, co-venturer or otherwise, compete with the business of the
Company or any of its Subsidiaries within the United States, or within
any foreign country in which the Products are sold at the date of
termination of employment, or undertake any planning for any business
competitive with the Company or any of its Subsidiaries. Specifically,
but without limiting the foregoing, the Executive agrees not to engage
in any manner in any activity that is directly or indirectly
competitive with the business of the Company or any of its
Subsidiaries as conducted or which has been proposed by management to
the Board within six months prior to termination of the Executive's
employment. Restricted activity also includes without limitation
accepting employment or a consulting position with any Person who is,
or at any time within twelve (12) months prior to termination of the
Executive's employment has been, a distributor of the Company or any
of its Subsidiaries. For the purposes of this Section 1.5, the
business of the Company and its Subsidiaries shall mean the
manufacture or sale of the Products. "Products" mean all products
planned, researched, developed, tested, manufactured, sold, licensed,
leased or otherwise distributed or put into use by the Company or any
of its Subsidiaries, together with all services provided to third
parties or planned by the Company or any of its Subsidiaries, during
the Executive's employment; as used herein, "planned" refers to a
Product or service which the Company has decided to introduce within
six months from the date as of which such term is applied.
b. The Executive further agrees that during the Non-Competition Period
or in connection with the Executive's termination of employment, the
Executive will not hire or attempt to hire any employee of the Company
or any of its Subsidiaries, assist in such hiring by any Person,
encourage any such employee to terminate his or her relationship with
the Company or any of its Subsidiaries, or solicit or encourage any
customer or vendor of the Company or any of its Subsidiaries to
terminate its relationship with them, or, in the case of a customer,
to conduct with any Person any business or activity which such
customer conducts or could conduct with the Company or any of its
Subsidiaries.
c. The provisions of this Section 1.5 shall not be deemed to preclude
the Executive from employment or engagement during the Non-Competition
Period following termination of employment hereunder by a corporation,
some of the activities of which are competitive with the business of
the Company, if the Executive's activities do not relate, to such
competitive business, and nothing contained in this Section 1.5 shall
be deemed to prohibit the Executive, during the Non-Competition Period
<PAGE>
following termination of employment hereunder, from acquiring or
holding, solely as an investment, publicly traded securities of any
competitor corporation so long as such securities do not, in the
aggregate, constitute one-half of 1% of the outstanding voting
securities of such corporation.
d. Without limiting the foregoing, it is understood that the Company
shall not be obligated to continue to make the payments specified in
this Agreement in the event of a material breach by the Executive of
the provisions of Sections 1.4 or 1.5 of this Agreement, which breach
continues without having been cured within 30 days after written
notice to the Executive specifying the breach in reasonable detail.
1.6 Enforcement of Covenants.
The Executive acknowledges that he has carefully read and considered
all the terms and conditions of this Agreement, including the
restraints imposed upon him pursuant to Sections 1.4 and 1.5 hereof.
The Executive agrees that said restraints are necessary for the
reasonable and proper protection of the Company and its Subsidiaries
and that each and every one of the restraints is reasonable in respect
to subject matter, length of time and geographic area. The Executive
further acknowledges that, were he to breach any of the covenants
contained in Sections 1.4 and 1.5 hereof, the damage to the Company
would be irreparable. The Executive therefore agrees that the Company,
in addition to any other remedies available to it, shall be entitled
to seek preliminary and permanent injunctive relief against any breach
or threatened breach by the Executive of any of said covenants,
without having to post bond. The parties further agree that, in the
event that any provision of Section 1.4 or 1.5 hereof shall be
determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a time, too large a
geographic area or too great a range of activities, such provision
shall be deemed to be modified to permit its enforcement to the
maximum extent permitted by law.
1.7 This Section 1 shall not be applicable while the Executive has an
Employment Agreement providing for severance that would be applicable
to a termination other than for cause on the applicable date of such
termination.
2. Severance Payable After a Change in Control
2.1 In the event of a termination by the Company other than for Cause,
Death or Disability within the first two years after a Change in
Control (as defined) or termination by the Executive within the first
two years after a Change in Control for Good Reason (as defined),
severance shall be payable or provided to the Executive as follows
(and subject to the provisions of the additional subsections of
Section 2):
(i) A single lump sum equal to the sum of (a) one and a half times
(i.e. 18 months) annual base salary for the Executive in effect
immediately prior to the date of the Change in Control or immediately
prior to the date of termination (whichever is greater) and (b) an
amount equal to one and a half times the last year's annual cash bonus
paid to the Executive.
<PAGE>
(ii) Health, life and other welfare benefits shall continue for one
year on the same terms available to employees generally.
(iii) The Company's contribution to the 401(k) account of the
Executive shall continue for one year at the same rate (but in no
event lower than the rate in effect prior to the Change in Control) as
applicable to employees generally or, if such continuation is not
permitted by the Company's 401(k) plan, then the amount of the
Company's contribution shall be made by a lump sum payment and/or
distribution of Company stock made to the Executive at the time said
payment/distribution is made to employees generally.
2.2 "Cause" shall have the meaning set forth in Section 1.2 above.
2.3 "Change in Control" shall be defined as follows:
A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have
been satisfied:
(a) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 35% or more of
the combined voting power of the Company's then outstanding
securities; or
(b) during any period of not more than two consecutive years (not
including any period prior to October 26, 1994), individuals who at
the beginning of such period constitute the Board and any new director
(other than a director designated by a Person who has entered into an
agreement with the Company to effect a transaction described in Clause
(a), (c) or (d) of this Section 2.3) whose election by the Board or
nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or
(c) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being
converted into voting securities of the surviving entity) 60% or
more of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation, or
<PAGE>
(2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which
no person acquires 35% or more of the combined voting power of
the Company's then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets.
Notwithstanding the foregoing provisions of this Section 2.3, a "Change in
Control" will not be deemed to have occurred solely because of (i) the ownership
or acquisition of securities of the Company (or any reporting requirement under
the Securities Exchange Act of 1934) relating thereto by an employee benefit
plan maintained by the Company for the benefit of employees or by ownership of
securities of the Company that were beneficially owned as of December 31,1998 by
any of Ben Cohen, Jerry Greenfield, Jeffrey Furman and Perry Odak; provided,
however, that a "Change of Control" under Section 2.3 shall be deemed to have
occurred in the event any of Ben Cohen, Jerry Greenfield or Jeffrey Furman
becomes the Beneficial Owner, directly or indirectly, of Common Stock or other
voting securities of the Company representing an amount of beneficial ownership
which is (i) greater than 35% of the combined voting power of the Company's then
outstanding voting securities (the threshold under Section 2.3(a)) and (ii)
greater than the amount beneficially owned by any such Person as of December 31,
1998, by at least 22% of the number of outstanding shares of Common Stock of the
Company as of December 31, 1998 (adjusted for stock splits and the like).
In addition, a Change in Control shall not be deemed to have occurred for
purposes of this Section 2.3 if the Executive is the person obtaining control or
a member of any group obtaining control in the defined Change of Control. [
In the foregoing provisions of this definition of "Change in Control", the
following terms shall have the meanings set forth below:
"Person" in Section 2.3 shall have the meaning given in Section 3 (a) (9)
of the Securities Exchange Act of 1934, as modified and used in Sections 13 9d
and 14 (d) thereof; however, a Person shall not include
(1) the Company or any controlled subsidiary of the Company,
(2) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or
<PAGE>
(3) a corporation or other entity owned, directly or indirectly, by
the shareholders of the Company in substantially the same proportions
as their ownership of stock of the Company.
"Beneficial Owner" in Section 2.3 shall have the meaning defined in
Rule 13d-3 under the Securities Exchange Act of 1934 as amended from
time to time.
2.4 "Good Reason" shall be defined as follows:
(i) Failure of the Company to continue the Executive in the position
the Executive had twelve months prior to the date of a Change in
Control or any portion of greater responsibility the Executive may
have held immediately prior to the Change in Control;
(ii) Diminution in the nature or scope of the Executive's
responsibilities, duties or authority; or
(iii) Failure of the Company to provide the Executive the base
amounts, bonus and benefits in accordance with the terms of any
employment agreement in effect immediately prior to the Change in
Control between the Executive and the Company or, if there is no such
employment agreement, the levels of base salary, bonus or aggregate
benefits taken together that were in effect immediately prior to the
Change in Control.
2.5 Options.
Unless provisions in some other agreement (including an option grant)
between the Executive and the Company or applicable provisions in the
option plan under which options held by the Executive were granted are
more favorable to the Executive, and except as may be provided on
terms more favorable to the Executive in Section 1 of this Agreement,
with respect to a termination of the Executive Other Than For Cause,
all unvested options held by the Executive shall accelerate and become
vested immediately prior to the Change in Control and shall continue
to be exercisable for six months.
<PAGE>
2.6 Excise Tax Limitation.
Notwithstanding Section 2.1 of this Agreement, in the event that any
Payment (as hereinafter defined) would be subject in whole or in part
to the excise tax (the "Excise Tax") under Section 4999 of the
Internal Revenue Code (the "Code"), then the severance payments
payable under Section 2.1 of this Agreement shall be reduced to the
extent, but only to the extent, necessary so that no portion of any
Payment is subject to the Excise Tax (the "Severance Reduction").
However, no Severance Reduction shall be made unless the net amount of
the Total Payments (as hereinafter defined) after such Severance
Reduction and after deduction of the net amount of federal, state and
local income taxes on such reduced Total Payments would be greater
than the net amount of the Total Payments without the Severance
Reduction but after deduction of the Excise Tax and the net amount of
federal, state and local income taxes on such unreduced Total
Payments. The determination as to whether a Severance Reduction is to
be made and, if so, the amount of any such reduction shall be made by
the firm of certified public accountants that had been acting as the
Company's auditors prior to the Change in Control or by such other
firm of certified public accountants, benefits consulting firm or
legal counsel as the Board may designate for such purpose, with the
approval of the Executive, prior to the Change in Control.
The Company shall provide the Executive with the auditor's
calculations of the amounts referred to in this Section 2.6 and such
supporting materials as are reasonably necessary for the Executive to
evaluate the Company's calculation.
For purposes of this Section 2.6, the term "Payment" means any
"payment in the nature of compensation" (as that term is used in
Section 280G of the Code") to or for the benefit of the Executive,
whether or not paid pursuant to this Agreement, that is contingent or
under Section 280G of the Code would be presumed to be contingent on a
Change in Control; and the term "Total Payments" means the aggregate
of all Payments.
2.7 Additional Provisions.
The provisions of Section 1.4 shall continue to be applicable after a
termination of employment under Subsection 2.1. The provisions of
Section 1.5 shall remain applicable.
3. Other Provisions
3.1 Assignment.
Neither the Company nor the Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise,
without the prior written consent of the other; provided, however,
that in the event that the Company shall hereafter effect a
reorganization, consolidate with, or merge into, any other Person or
transfer all or substantially all of its properties or assets to any
other Person, the Company shall require such Person or the resulting
entity to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required
to perform and provided that nothing in this Section shall limit the
provisions of Section 2.
3.2 Severability.
If any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application
of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall be not be
affected thereby, and each portion and provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
<PAGE>
3.3 Waiver
No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of either party
to require the performance of any term or obligation of this
Agreement, or the waiver by either party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term
or obligation or be deemed a waiver of any subsequent breach.
3.4 Notices.
Any and all notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be
effective when delivered in person or deposited in the United States
mail, postage prepaid, registered or certified, and addressed to the
Executive at his last known address on the books of the Company and,
in the case of the Company, at its principal place of business,
attention Chief Executive Officer, with a copy to Ropes & Gray,
Attention Howard K. Fuguet, Esq., One International Place, Boston, MA
02110.
3.5 Entire Agreement.
This Agreement constitutes the entire agreement between the parties
with respect to severance upon a termination by the Company other than
for cause and with respect to severance upon a termination by the
Company other than for cause or by the Executive for Good Reason after
a Change in Control and with respect to Options upon a Change in
Control and supersedes all prior and contemporaneous communications,
representations and understandings, written or oral, with respect
thereto, except (i) as otherwise expressly provided herein and (ii) as
otherwise provided in any other written agreement or benefit plan that
is more favorable to the Executive with respect to severance or
options.
3.6 Amendment.
This Agreement may be amended or modified only by a written instrument
signed by the Executive and by a duly authorized officer of the
Company.
3.7 Governing Law, Arbitration and Consent to Jurisdiction.
This is a Vermont contract and shall be construed and enforced under
and be governed in all respects by the laws of the State of Vermont,
without regard to the Vermont internal conflict of laws principles
thereof. The parties each agree to promptly and mutually select a
mediator and promptly mediate in good faith any controversy, claim or
dispute arising between the parties hereto arising out of or related
to this Agreement and its performance or any breach or claimed breach
thereof. In the event that mediation does not resolve any such matter,
then such matter other than any matter in which injunctive relief or
other equitable relief is sought shall be definitively resolved
through binding arbitration conducted in the City of Burlington,
Vermont, by a panel of three (3) arbitrators in accordance with the
<PAGE>
then current Commercial Arbitration Rules of the American Arbitration
Association; provided, however, that notwithstanding anything to the
contrary in such Commercial Arbitration Rules, the parties shall be
entitled in the course of any arbitration conducted pursuant to this
Section to seek and obtain discovery from one another to the same
extent and by means of the same mechanisms authorized by Rules 27
through 37 of the Federal Rules of Civil Procedure. The power and
office of the arbitrators shall arise wholly and solely from this
Agreement and the then current Commercial Arbitration Rules of the
American Arbitration Association. The award of the panel or a majority
of them so rendered shall be final and binding, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereto.
To the extent a dispute is not to be arbitrated in accordance with the
foregoing, each of the Company and the Executive (i) irrevocably
submits to the jurisdiction of the United States District Court of
Vermont and to the jurisdiction of the state courts of Vermont for the
purpose of any suit or other proceeding arising out of or based upon
the Agreement or the subject matter hereof and agrees that any such
proceeding shall be brought or maintained only in such court, and (ii)
waives, to the extent not prohibited by applicable law, and agrees not
to assert in any such proceedings, any claim that it is not subject to
the jurisdiction of the above-named courts, that he or it is immune
from extraterritorial injunctive relief or other injunctive relief,
that any such proceeding brought or maintained in a court provided for
above may not be properly brought or maintained in such court, should
be transferred to some other court or should be stayed or dismissed by
reason of the pendency of some other proceeding in some other court,
or that this Agreement or the subject matter hereof may not be
enforced in or by such court.
3.8 Protection of Reputation.
During the period of employment and during any period in which
severance payments or benefits are paid or provided under this
Agreement, the Executive agrees that he will take no action which is
intended to, or would reasonably be expected to, harm the Company or
its reputation or which would reasonably be expected to lead to
unwanted or unfavorable publicity to the Company (it being understood
that competition which does not breach Section 1.5 shall not be deemed
to be a breach of this Section).
3.9 Survival.
Cessation or termination of Executive's employment with the Company
shall not result in termination of this Agreement. The respective
obligations of Executive and the rights and benefits afforded to the
Company as provided in this Agreement after termination of employment
shall survive cessation or termination of Executive's employment
hereunder.
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its
duly authorized officer and by the Executive as of the date first above written.
BEN & JERRY'S HOMEMADE, INC.
/s/Richard Doran By:/s/Perry D. Odak
---------------------- -------------------
Executive Chief Executive Officer
SEVERANCE AGREEMENT
Severance Agreement dated as of July 30, 1999 between Charles Green (the
"Executive") and Ben & Jerry's Homemade, Inc. (the "Company"), a Vermont
corporation headquartered at 30 Community Drive, South Burlington, VT 05403.
WHEREAS, the parties wish to confirm certain severance understandings.
NOW THEREFORE, in consideration of these premises and the mutual
promises set forth below and other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereby agree as follows:
1. Severance Payable on Termination by the Company Other Than For Cause,
Death or Disability
1.1 In the event of termination of the Executive by the Company for other
than Cause, Death or Disability, the Executive will be entitled to:
(i) Severance at the Executive's monthly base salary rate immediately
preceding date of notice of termination, payable for six months, plus
(if so approved by the Compensation Committee of the Board of
Directors of the Company or an officer delegated by the Committee) a
second period of up to an additional six months in the event that the
employee has not found other comparable employment, but with payments
in this additional period terminating on the date the Executive
obtains comparable employment; provided that, for officers with three
or more years of employment service at date of termination, severance
at the monthly base salary rate immediately preceding the date of
notice of termination, payable for 12 months;
(ii)Continuation of health, life and other "welfare" insurance
benefits on the same terms as available to employees generally during
the period of severance payments. Other benefits (such as 401(k) or
ESPP or ESOP, which are keyed to employee status) do not continue;
(iii) The severance payments required to be made under (i) above are
not reduced by any other job earnings, i.e. no mitigation;
(iv)for officers with three or more years of service at the date of
termination, payment of the appropriate pro rata percentage (based on
the date of termination in the year) of the next annual cash bonus (if
approved by the Compensation Committee in January/February of the year
following the year of termination) provided that, in addition (if so
approved and if the Company's bottom line financial results for the
year in which termination occurs are not lower than the financial
results for the preceding year), the pro rata percentage, as
determined above, shall be figured on the "base" of a full year's
bonus (which shall in no event be less than the full year's bonus paid
for the prior year) and, for other officers with less than three years
of service at date of termination, payment of the appropriate pro rata
percentage of an amount equal to the next annual cash bonus (if
approved by the Compensation Committee in January/February of the year
following the year of termination).
<PAGE>
(v) $15,000 of outplacement services.
1.2 Cause. "Cause", for the purposes of Section 1, is defined as
conviction of any crime, whether or not involving the Company,
constituting a felony; gross neglect or misconduct in the conduct of
the Executive's duties; willful or repeated failure or refusal to
perform such duties may be delegated to the Executive by the CEO.
1.3 Options. Unless provisions in some other agreement between the
Executive and the Company or provisions in the option plan under which
options held by the Executive at the date of termination were granted
are more favorable to the Executive, (i) for Executives with three or
more years of service at date of termination, unvested options that
would have vested in the first six month period after date of
termination shall accelerate and become vested, and then all vested
options may continue to be exercised for six months thereafter and
(ii) for all other Executives all vested options at the date of
termination may continue to be exercised for six months thereafter. In
each case all unvested options remaining unvested at date of
termination shall terminate.
1.4 Confidential Information
a. The Executive agrees to comply with the policies and procedures of
the Company and its Subsidiaries for protecting Confidential
Information and shall never disclose to any Person (except as required
by applicable law) or use for his own benefit or gain, any
Confidential Information obtained by the Executive incident to his
employment or other association with the Company or any of its
Subsidiaries. The Executive understands that this restriction shall
continue to apply after his employment terminates, regardless of the
reason for such termination.
b. All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the
Company or its subsidiaries and any copies, in whole or in part,
thereof (the "Documents") whether or not prepared by the Executive,
shall be the sole and exclusive property of the Company and its
subsidiaries. The Executive shall safeguard all Documents and shall
surrender to the Company at the time his employment terminates or at
such earlier time or times as the CEO or his designee may specify, all
Documents then in the Executive's possession or control.
<PAGE>
1.5 Covenant Not To Compete
Restricted Activities. The Executive agrees that some restrictions on
his activities during and after his employment are necessary to
protect the goodwill, Confidential Information and other legitimate
interests of the Company and its Subsidiaries, and that the agreed
restrictions set forth below will not deprive the Executive of the
ability to earn a livelihood:
a. While the Executive is employed by the Company and, after his
employment terminates, for the greater of one year or the period
during which severance payments of base amount are being made (the
"Non-Competition Period"), the Executive shall not, directly or
indirectly, whether as owner, partner, investor, consultant, agent,
employee, co-venturer or otherwise, compete with the business of the
Company or any of its Subsidiaries within the United States, or within
any foreign country in which the Products are sold at the date of
termination of employment, or undertake any planning for any business
competitive with the Company or any of its Subsidiaries. Specifically,
but without limiting the foregoing, the Executive agrees not to engage
in any manner in any activity that is directly or indirectly
competitive with the business of the Company or any of its
Subsidiaries as conducted or which has been proposed by management to
the Board within six months prior to termination of the Executive's
employment. Restricted activity also includes without limitation
accepting employment or a consulting position with any Person who is,
or at any time within twelve (12) months prior to termination of the
Executive's employment has been, a distributor of the Company or any
of its Subsidiaries. For the purposes of this Section 1.5, the
business of the Company and its Subsidiaries shall mean the
manufacture or sale of the Products. "Products" mean all products
planned, researched, developed, tested, manufactured, sold, licensed,
leased or otherwise distributed or put into use by the Company or any
of its Subsidiaries, together with all services provided to third
parties or planned by the Company or any of its Subsidiaries, during
the Executive's employment; as used herein, "planned" refers to a
Product or service which the Company has decided to introduce within
six months from the date as of which such term is applied.
b. The Executive further agrees that during the Non-Competition Period
or in connection with the Executive's termination of employment, the
Executive will not hire or attempt to hire any employee of the Company
or any of its Subsidiaries, assist in such hiring by any Person,
encourage any such employee to terminate his or her relationship with
the Company or any of its Subsidiaries, or solicit or encourage any
customer or vendor of the Company or any of its Subsidiaries to
terminate its relationship with them, or, in the case of a customer,
to conduct with any Person any business or activity which such
customer conducts or could conduct with the Company or any of its
Subsidiaries.
c. The provisions of this Section 1.5 shall not be deemed to preclude
the Executive from employment or engagement during the Non-Competition
Period following termination of employment hereunder by a corporation,
some of the activities of which are competitive with the business of
the Company, if the Executive's activities do not relate, to such
competitive business, and nothing contained in this Section 1.5 shall
be deemed to prohibit the Executive, during the Non-Competition Period
<PAGE>
following termination of employment hereunder, from acquiring or
holding, solely as an investment, publicly traded securities of any
competitor corporation so long as such securities do not, in the
aggregate, constitute one-half of 1% of the outstanding voting
securities of such corporation.
d. Without limiting the foregoing, it is understood that the Company
shall not be obligated to continue to make the payments specified in
this Agreement in the event of a material breach by the Executive of
the provisions of Sections 1.4 or 1.5 of this Agreement, which breach
continues without having been cured within 30 days after written
notice to the Executive specifying the breach in reasonable detail.
1.6 Enforcement of Covenants.
The Executive acknowledges that he has carefully read and considered
all the terms and conditions of this Agreement, including the
restraints imposed upon him pursuant to Sections 1.4 and 1.5 hereof.
The Executive agrees that said restraints are necessary for the
reasonable and proper protection of the Company and its Subsidiaries
and that each and every one of the restraints is reasonable in respect
to subject matter, length of time and geographic area. The Executive
further acknowledges that, were he to breach any of the covenants
contained in Sections 1.4 and 1.5 hereof, the damage to the Company
would be irreparable. The Executive therefore agrees that the Company,
in addition to any other remedies available to it, shall be entitled
to seek preliminary and permanent injunctive relief against any breach
or threatened breach by the Executive of any of said covenants,
without having to post bond. The parties further agree that, in the
event that any provision of Section 1.4 or 1.5 hereof shall be
determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a time, too large a
geographic area or too great a range of activities, such provision
shall be deemed to be modified to permit its enforcement to the
maximum extent permitted by law.
1.7 This Section 1 shall not be applicable while the Executive has an
Employment Agreement providing for severance that would be applicable
to a termination other than for cause on the applicable date of such
termination.
2. Severance Payable After a Change in Control
2.1 In the event of a termination by the Company other than for Cause,
Death or Disability within the first two years after a Change in
Control (as defined) or termination by the Executive within the first
two years after a Change in Control for Good Reason (as defined),
severance shall be payable or provided to the Executive as follows
(and subject to the provisions of the additional subsections of
Section 2):
(i) A single lump sum equal to the sum of (a) one and a half times
(i.e. 18 months) annual base salary for the Executive in effect
immediately prior to the date of the Change in Control or immediately
prior to the date of termination (whichever is greater) and (b) an
amount equal to one and a half times the last year's annual cash bonus
paid to the Executive.
<PAGE>
(ii) Health, life and other welfare benefits shall continue for one
year on the same terms available to employees generally.
(iii) The Company's contribution to the 401(k) account of the
Executive shall continue for one year at the same rate (but in no
event lower than the rate in effect prior to the Change in Control) as
applicable to employees generally or, if such continuation is not
permitted by the Company's 401(k) plan, then the amount of the
Company's contribution shall be made by a lump sum payment and/or
distribution of Company stock made to the Executive at the time said
payment/distribution is made to employees generally.
2.2 "Cause" shall have the meaning set forth in Section 1.2 above.
2.3 "Change in Control" shall be defined as follows:
A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have
been satisfied:
(a) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 35% or more of
the combined voting power of the Company's then outstanding
securities; or
(b) during any period of not more than two consecutive years (not
including any period prior to October 26, 1994), individuals who at
the beginning of such period constitute the Board and any new director
(other than a director designated by a Person who has entered into an
agreement with the Company to effect a transaction described in Clause
(a), (c) or (d) of this Section 2.3) whose election by the Board or
nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or
(c) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being
converted into voting securities of the surviving entity) 60% or
more of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation, or
<PAGE>
(2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which
no person acquires 35% or more of the combined voting power of
the Company's then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets.
Notwithstanding the foregoing provisions of this Section 2.3, a "Change in
Control" will not be deemed to have occurred solely because of (i) the ownership
or acquisition of securities of the Company (or any reporting requirement under
the Securities Exchange Act of 1934) relating thereto by an employee benefit
plan maintained by the Company for the benefit of employees or by ownership of
securities of the Company that were beneficially owned as of December 31,1998 by
any of Ben Cohen, Jerry Greenfield, Jeffrey Furman and Perry Odak; provided,
however, that a "Change of Control" under Section 2.3 shall be deemed to have
occurred in the event any of Ben Cohen, Jerry Greenfield or Jeffrey Furman
becomes the Beneficial Owner, directly or indirectly, of Common Stock or other
voting securities of the Company representing an amount of beneficial ownership
which is (i) greater than 35% of the combined voting power of the Company's then
outstanding voting securities (the threshold under Section 2.3(a)) and (ii)
greater than the amount beneficially owned by any such Person as of December 31,
1998, by at least 22% of the number of outstanding shares of Common Stock of the
Company as of December 31, 1998 (adjusted for stock splits and the like).
In addition, a Change in Control shall not be deemed to have occurred for
purposes of this Section 2.3 if the Executive is the person obtaining control or
a member of any group obtaining control in the defined Change of Control. [
In the foregoing provisions of this definition of "Change in Control", the
following terms shall have the meanings set forth below:
"Person" in Section 2.3 shall have the meaning given in Section 3 (a) (9)
of the Securities Exchange Act of 1934, as modified and used in Sections 13 9d
and 14 (d) thereof; however, a Person shall not include
(1) the Company or any controlled subsidiary of the Company,
(2) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or
<PAGE>
(3) a corporation or other entity owned, directly or indirectly, by
the shareholders of the Company in substantially the same proportions
as their ownership of stock of the Company.
"Beneficial Owner" in Section 2.3 shall have the meaning defined in
Rule 13d-3 under the Securities Exchange Act of 1934 as amended from
time to time.
2.4 "Good Reason" shall be defined as follows:
(i) Failure of the Company to continue the Executive in the position
the Executive had twelve months prior to the date of a Change in
Control or any portion of greater responsibility the Executive may
have held immediately prior to the Change in Control;
(ii) Diminution in the nature or scope of the Executive's
responsibilities, duties or authority; or
(iii) Failure of the Company to provide the Executive the base
amounts, bonus and benefits in accordance with the terms of any
employment agreement in effect immediately prior to the Change in
Control between the Executive and the Company or, if there is no such
employment agreement, the levels of base salary, bonus or aggregate
benefits taken together that were in effect immediately prior to the
Change in Control.
2.5 Options.
Unless provisions in some other agreement (including an option grant)
between the Executive and the Company or applicable provisions in the
option plan under which options held by the Executive were granted are
more favorable to the Executive, and except as may be provided on
terms more favorable to the Executive in Section 1 of this Agreement,
with respect to a termination of the Executive Other Than For Cause,
all unvested options held by the Executive shall accelerate and become
vested immediately prior to the Change in Control and shall continue
to be exercisable for six months.
<PAGE>
2.6 Excise Tax Limitation.
Notwithstanding Section 2.1 of this Agreement, in the event that any
Payment (as hereinafter defined) would be subject in whole or in part
to the excise tax (the "Excise Tax") under Section 4999 of the
Internal Revenue Code (the "Code"), then the severance payments
payable under Section 2.1 of this Agreement shall be reduced to the
extent, but only to the extent, necessary so that no portion of any
Payment is subject to the Excise Tax (the "Severance Reduction").
However, no Severance Reduction shall be made unless the net amount of
the Total Payments (as hereinafter defined) after such Severance
Reduction and after deduction of the net amount of federal, state and
local income taxes on such reduced Total Payments would be greater
than the net amount of the Total Payments without the Severance
Reduction but after deduction of the Excise Tax and the net amount of
federal, state and local income taxes on such unreduced Total
Payments. The determination as to whether a Severance Reduction is to
be made and, if so, the amount of any such reduction shall be made by
the firm of certified public accountants that had been acting as the
Company's auditors prior to the Change in Control or by such other
firm of certified public accountants, benefits consulting firm or
legal counsel as the Board may designate for such purpose, with the
approval of the Executive, prior to the Change in Control.
The Company shall provide the Executive with the auditor's
calculations of the amounts referred to in this Section 2.6 and such
supporting materials as are reasonably necessary for the Executive to
evaluate the Company's calculation.
For purposes of this Section 2.6, the term "Payment" means any
"payment in the nature of compensation" (as that term is used in
Section 280G of the Code") to or for the benefit of the Executive,
whether or not paid pursuant to this Agreement, that is contingent or
under Section 280G of the Code would be presumed to be contingent on a
Change in Control; and the term "Total Payments" means the aggregate
of all Payments.
2.7 Additional Provisions.
The provisions of Section 1.4 shall continue to be applicable after a
termination of employment under Subsection 2.1. The provisions of
Section 1.5 shall remain applicable.
3. Other Provisions
3.1 Assignment.
Neither the Company nor the Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise,
without the prior written consent of the other; provided, however,
that in the event that the Company shall hereafter effect a
reorganization, consolidate with, or merge into, any other Person or
transfer all or substantially all of its properties or assets to any
other Person, the Company shall require such Person or the resulting
entity to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required
to perform and provided that nothing in this Section shall limit the
provisions of Section 2.
3.2 Severability.
If any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application
of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall be not be
affected thereby, and each portion and provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
<PAGE>
3.3 Waiver
No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of either party
to require the performance of any term or obligation of this
Agreement, or the waiver by either party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term
or obligation or be deemed a waiver of any subsequent breach.
3.4 Notices.
Any and all notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be
effective when delivered in person or deposited in the United States
mail, postage prepaid, registered or certified, and addressed to the
Executive at his last known address on the books of the Company and,
in the case of the Company, at its principal place of business,
attention Chief Executive Officer, with a copy to Ropes & Gray,
Attention Howard K. Fuguet, Esq., One International Place, Boston, MA
02110.
3.5 Entire Agreement.
This Agreement constitutes the entire agreement between the parties
with respect to severance upon a termination by the Company other than
for cause and with respect to severance upon a termination by the
Company other than for cause or by the Executive for Good Reason after
a Change in Control and with respect to Options upon a Change in
Control and supersedes all prior and contemporaneous communications,
representations and understandings, written or oral, with respect
thereto, except (i) as otherwise expressly provided herein and (ii) as
otherwise provided in any other written agreement or benefit plan that
is more favorable to the Executive with respect to severance or
options.
3.6 Amendment.
This Agreement may be amended or modified only by a written instrument
signed by the Executive and by a duly authorized officer of the
Company.
3.7 Governing Law, Arbitration and Consent to Jurisdiction.
This is a Vermont contract and shall be construed and enforced under
and be governed in all respects by the laws of the State of Vermont,
without regard to the Vermont internal conflict of laws principles
thereof. The parties each agree to promptly and mutually select a
mediator and promptly mediate in good faith any controversy, claim or
dispute arising between the parties hereto arising out of or related
to this Agreement and its performance or any breach or claimed breach
thereof. In the event that mediation does not resolve any such matter,
then such matter other than any matter in which injunctive relief or
other equitable relief is sought shall be definitively resolved
through binding arbitration conducted in the City of Burlington,
Vermont, by a panel of three (3) arbitrators in accordance with the
<PAGE>
then current Commercial Arbitration Rules of the American Arbitration
Association; provided, however, that notwithstanding anything to the
contrary in such Commercial Arbitration Rules, the parties shall be
entitled in the course of any arbitration conducted pursuant to this
Section to seek and obtain discovery from one another to the same
extent and by means of the same mechanisms authorized by Rules 27
through 37 of the Federal Rules of Civil Procedure. The power and
office of the arbitrators shall arise wholly and solely from this
Agreement and the then current Commercial Arbitration Rules of the
American Arbitration Association. The award of the panel or a majority
of them so rendered shall be final and binding, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereto.
To the extent a dispute is not to be arbitrated in accordance with the
foregoing, each of the Company and the Executive (i) irrevocably
submits to the jurisdiction of the United States District Court of
Vermont and to the jurisdiction of the state courts of Vermont for the
purpose of any suit or other proceeding arising out of or based upon
the Agreement or the subject matter hereof and agrees that any such
proceeding shall be brought or maintained only in such court, and (ii)
waives, to the extent not prohibited by applicable law, and agrees not
to assert in any such proceedings, any claim that it is not subject to
the jurisdiction of the above-named courts, that he or it is immune
from extraterritorial injunctive relief or other injunctive relief,
that any such proceeding brought or maintained in a court provided for
above may not be properly brought or maintained in such court, should
be transferred to some other court or should be stayed or dismissed by
reason of the pendency of some other proceeding in some other court,
or that this Agreement or the subject matter hereof may not be
enforced in or by such court.
3.8 Protection of Reputation.
During the period of employment and during any period in which
severance payments or benefits are paid or provided under this
Agreement, the Executive agrees that he will take no action which is
intended to, or would reasonably be expected to, harm the Company or
its reputation or which would reasonably be expected to lead to
unwanted or unfavorable publicity to the Company (it being understood
that competition which does not breach Section 1.5 shall not be deemed
to be a breach of this Section).
3.9 Survival.
Cessation or termination of Executive's employment with the Company
shall not result in termination of this Agreement. The respective
obligations of Executive and the rights and benefits afforded to the
Company as provided in this Agreement after termination of employment
shall survive cessation or termination of Executive's employment
hereunder.
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its
duly authorized officer and by the Executive as of the date first above written.
BEN & JERRY'S HOMEMADE, INC.
/s/Charles Green By:/s/Perry D. Odak
---------------------- -------------------
Executive Chief Executive Officer
SEVERANCE AGREEMENT
Severance Agreement dated as of July 30, 1999 between Frances Rathke (the
"Executive") and Ben & Jerry's Homemade, Inc. (the "Company"), a Vermont
corporation headquartered at 30 Community Drive, South Burlington, VT 05403.
WHEREAS, the parties wish to confirm certain severance understandings.
NOW THEREFORE, in consideration of these premises and the mutual
promises set forth below and other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereby agree as follows:
1. Severance Payable on Termination by the Company Other Than For Cause,
Death or Disability
1.1 In the event of termination of the Executive by the Company for other
than Cause, Death or Disability, the Executive will be entitled to:
(i) Severance at the Executive's monthly base salary rate immediately
preceding date of notice of termination, payable for six months, plus
(if so approved by the Compensation Committee of the Board of
Directors of the Company or an officer delegated by the Committee) a
second period of up to an additional six months in the event that the
employee has not found other comparable employment, but with payments
in this additional period terminating on the date the Executive
obtains comparable employment; provided that, for officers with three
or more years of employment service at date of termination, severance
at the monthly base salary rate immediately preceding the date of
notice of termination, payable for 12 months;
(ii)Continuation of health, life and other "welfare" insurance
benefits on the same terms as available to employees generally during
the period of severance payments. Other benefits (such as 401(k) or
ESPP or ESOP, which are keyed to employee status) do not continue;
(iii) The severance payments required to be made under (i) above are
not reduced by any other job earnings, i.e. no mitigation;
(iv)for officers with three or more years of service at the date of
termination, payment of the appropriate pro rata percentage (based on
the date of termination in the year) of the next annual cash bonus (if
approved by the Compensation Committee in January/February of the year
following the year of termination) provided that, in addition (if so
approved and if the Company's bottom line financial results for the
year in which termination occurs are not lower than the financial
results for the preceding year), the pro rata percentage, as
determined above, shall be figured on the "base" of a full year's
bonus (which shall in no event be less than the full year's bonus paid
for the prior year) and, for other officers with less than three years
of service at date of termination, payment of the appropriate pro rata
percentage of an amount equal to the next annual cash bonus (if
approved by the Compensation Committee in January/February of the year
following the year of termination).
<PAGE>
(v) $15,000 of outplacement services.
1.2 Cause. "Cause", for the purposes of Section 1, is defined as
conviction of any crime, whether or not involving the Company,
constituting a felony; gross neglect or misconduct in the conduct of
the Executive's duties; willful or repeated failure or refusal to
perform such duties may be delegated to the Executive by the CEO.
1.3 Options. Unless provisions in some other agreement between the
Executive and the Company or provisions in the option plan under which
options held by the Executive at the date of termination were granted
are more favorable to the Executive, (i) for Executives with three or
more years of service at date of termination, unvested options that
would have vested in the first six month period after date of
termination shall accelerate and become vested, and then all vested
options may continue to be exercised for six months thereafter and
(ii) for all other Executives all vested options at the date of
termination may continue to be exercised for six months thereafter. In
each case all unvested options remaining unvested at date of
termination shall terminate.
1.4 Confidential Information
a. The Executive agrees to comply with the policies and procedures of
the Company and its Subsidiaries for protecting Confidential
Information and shall never disclose to any Person (except as required
by applicable law) or use for his own benefit or gain, any
Confidential Information obtained by the Executive incident to his
employment or other association with the Company or any of its
Subsidiaries. The Executive understands that this restriction shall
continue to apply after his employment terminates, regardless of the
reason for such termination.
b. All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the
Company or its subsidiaries and any copies, in whole or in part,
thereof (the "Documents") whether or not prepared by the Executive,
shall be the sole and exclusive property of the Company and its
subsidiaries. The Executive shall safeguard all Documents and shall
surrender to the Company at the time his employment terminates or at
such earlier time or times as the CEO or his designee may specify, all
Documents then in the Executive's possession or control.
<PAGE>
1.5 Covenant Not To Compete
Restricted Activities. The Executive agrees that some restrictions on
his activities during and after his employment are necessary to
protect the goodwill, Confidential Information and other legitimate
interests of the Company and its Subsidiaries, and that the agreed
restrictions set forth below will not deprive the Executive of the
ability to earn a livelihood:
a. While the Executive is employed by the Company and, after his
employment terminates, for the greater of one year or the period
during which severance payments of base amount are being made (the
"Non-Competition Period"), the Executive shall not, directly or
indirectly, whether as owner, partner, investor, consultant, agent,
employee, co-venturer or otherwise, compete with the business of the
Company or any of its Subsidiaries within the United States, or within
any foreign country in which the Products are sold at the date of
termination of employment, or undertake any planning for any business
competitive with the Company or any of its Subsidiaries. Specifically,
but without limiting the foregoing, the Executive agrees not to engage
in any manner in any activity that is directly or indirectly
competitive with the business of the Company or any of its
Subsidiaries as conducted or which has been proposed by management to
the Board within six months prior to termination of the Executive's
employment. Restricted activity also includes without limitation
accepting employment or a consulting position with any Person who is,
or at any time within twelve (12) months prior to termination of the
Executive's employment has been, a distributor of the Company or any
of its Subsidiaries. For the purposes of this Section 1.5, the
business of the Company and its Subsidiaries shall mean the
manufacture or sale of the Products. "Products" mean all products
planned, researched, developed, tested, manufactured, sold, licensed,
leased or otherwise distributed or put into use by the Company or any
of its Subsidiaries, together with all services provided to third
parties or planned by the Company or any of its Subsidiaries, during
the Executive's employment; as used herein, "planned" refers to a
Product or service which the Company has decided to introduce within
six months from the date as of which such term is applied.
b. The Executive further agrees that during the Non-Competition Period
or in connection with the Executive's termination of employment, the
Executive will not hire or attempt to hire any employee of the Company
or any of its Subsidiaries, assist in such hiring by any Person,
encourage any such employee to terminate his or her relationship with
the Company or any of its Subsidiaries, or solicit or encourage any
customer or vendor of the Company or any of its Subsidiaries to
terminate its relationship with them, or, in the case of a customer,
to conduct with any Person any business or activity which such
customer conducts or could conduct with the Company or any of its
Subsidiaries.
c. The provisions of this Section 1.5 shall not be deemed to preclude
the Executive from employment or engagement during the Non-Competition
Period following termination of employment hereunder by a corporation,
some of the activities of which are competitive with the business of
the Company, if the Executive's activities do not relate, to such
competitive business, and nothing contained in this Section 1.5 shall
be deemed to prohibit the Executive, during the Non-Competition Period
<PAGE>
following termination of employment hereunder, from acquiring or
holding, solely as an investment, publicly traded securities of any
competitor corporation so long as such securities do not, in the
aggregate, constitute one-half of 1% of the outstanding voting
securities of such corporation.
d. Without limiting the foregoing, it is understood that the Company
shall not be obligated to continue to make the payments specified in
this Agreement in the event of a material breach by the Executive of
the provisions of Sections 1.4 or 1.5 of this Agreement, which breach
continues without having been cured within 30 days after written
notice to the Executive specifying the breach in reasonable detail.
1.6 Enforcement of Covenants.
The Executive acknowledges that he has carefully read and considered
all the terms and conditions of this Agreement, including the
restraints imposed upon him pursuant to Sections 1.4 and 1.5 hereof.
The Executive agrees that said restraints are necessary for the
reasonable and proper protection of the Company and its Subsidiaries
and that each and every one of the restraints is reasonable in respect
to subject matter, length of time and geographic area. The Executive
further acknowledges that, were he to breach any of the covenants
contained in Sections 1.4 and 1.5 hereof, the damage to the Company
would be irreparable. The Executive therefore agrees that the Company,
in addition to any other remedies available to it, shall be entitled
to seek preliminary and permanent injunctive relief against any breach
or threatened breach by the Executive of any of said covenants,
without having to post bond. The parties further agree that, in the
event that any provision of Section 1.4 or 1.5 hereof shall be
determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a time, too large a
geographic area or too great a range of activities, such provision
shall be deemed to be modified to permit its enforcement to the
maximum extent permitted by law.
1.7 This Section 1 shall not be applicable while the Executive has an
Employment Agreement providing for severance that would be applicable
to a termination other than for cause on the applicable date of such
termination.
2. Severance Payable After a Change in Control
2.1 In the event of a termination by the Company other than for Cause,
Death or Disability within the first two years after a Change in
Control (as defined) or termination by the Executive within the first
two years after a Change in Control for Good Reason (as defined),
severance shall be payable or provided to the Executive as follows
(and subject to the provisions of the additional subsections of
Section 2):
(i) A single lump sum equal to the sum of (a) one and a half times
(i.e. 18 months) annual base salary for the Executive in effect
immediately prior to the date of the Change in Control or immediately
prior to the date of termination (whichever is greater) and (b) an
amount equal to one and a half times the last year's annual cash bonus
paid to the Executive.
<PAGE>
(ii) Health, life and other welfare benefits shall continue for one
year on the same terms available to employees generally.
(iii) The Company's contribution to the 401(k) account of the
Executive shall continue for one year at the same rate (but in no
event lower than the rate in effect prior to the Change in Control) as
applicable to employees generally or, if such continuation is not
permitted by the Company's 401(k) plan, then the amount of the
Company's contribution shall be made by a lump sum payment and/or
distribution of Company stock made to the Executive at the time said
payment/distribution is made to employees generally.
2.2 "Cause" shall have the meaning set forth in Section 1.2 above.
2.3 "Change in Control" shall be defined as follows:
A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have
been satisfied:
(a) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 35% or more of
the combined voting power of the Company's then outstanding
securities; or
(b) during any period of not more than two consecutive years (not
including any period prior to October 26, 1994), individuals who at
the beginning of such period constitute the Board and any new director
(other than a director designated by a Person who has entered into an
agreement with the Company to effect a transaction described in Clause
(a), (c) or (d) of this Section 2.3) whose election by the Board or
nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or
(c) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being
converted into voting securities of the surviving entity) 60% or
more of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation, or
<PAGE>
(2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which
no person acquires 35% or more of the combined voting power of
the Company's then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets.
Notwithstanding the foregoing provisions of this Section 2.3, a "Change in
Control" will not be deemed to have occurred solely because of (i) the ownership
or acquisition of securities of the Company (or any reporting requirement under
the Securities Exchange Act of 1934) relating thereto by an employee benefit
plan maintained by the Company for the benefit of employees or by ownership of
securities of the Company that were beneficially owned as of December 31,1998 by
any of Ben Cohen, Jerry Greenfield, Jeffrey Furman and Perry Odak; provided,
however, that a "Change of Control" under Section 2.3 shall be deemed to have
occurred in the event any of Ben Cohen, Jerry Greenfield or Jeffrey Furman
becomes the Beneficial Owner, directly or indirectly, of Common Stock or other
voting securities of the Company representing an amount of beneficial ownership
which is (i) greater than 35% of the combined voting power of the Company's then
outstanding voting securities (the threshold under Section 2.3(a)) and (ii)
greater than the amount beneficially owned by any such Person as of December 31,
1998, by at least 22% of the number of outstanding shares of Common Stock of the
Company as of December 31, 1998 (adjusted for stock splits and the like).
In addition, a Change in Control shall not be deemed to have occurred for
purposes of this Section 2.3 if the Executive is the person obtaining control or
a member of any group obtaining control in the defined Change of Control. [
In the foregoing provisions of this definition of "Change in Control", the
following terms shall have the meanings set forth below:
"Person" in Section 2.3 shall have the meaning given in Section 3 (a) (9)
of the Securities Exchange Act of 1934, as modified and used in Sections 13 9d
and 14 (d) thereof; however, a Person shall not include
(1) the Company or any controlled subsidiary of the Company,
(2) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or
<PAGE>
(3) a corporation or other entity owned, directly or indirectly, by
the shareholders of the Company in substantially the same proportions
as their ownership of stock of the Company.
"Beneficial Owner" in Section 2.3 shall have the meaning defined in
Rule 13d-3 under the Securities Exchange Act of 1934 as amended from
time to time.
2.4 "Good Reason" shall be defined as follows:
(i) Failure of the Company to continue the Executive in the position
the Executive had twelve months prior to the date of a Change in
Control or any portion of greater responsibility the Executive may
have held immediately prior to the Change in Control;
(ii) Diminution in the nature or scope of the Executive's
responsibilities, duties or authority; or
(iii) Failure of the Company to provide the Executive the base
amounts, bonus and benefits in accordance with the terms of any
employment agreement in effect immediately prior to the Change in
Control between the Executive and the Company or, if there is no such
employment agreement, the levels of base salary, bonus or aggregate
benefits taken together that were in effect immediately prior to the
Change in Control.
2.5 Options.
Unless provisions in some other agreement (including an option grant)
between the Executive and the Company or applicable provisions in the
option plan under which options held by the Executive were granted are
more favorable to the Executive, and except as may be provided on
terms more favorable to the Executive in Section 1 of this Agreement,
with respect to a termination of the Executive Other Than For Cause,
all unvested options held by the Executive shall accelerate and become
vested immediately prior to the Change in Control and shall continue
to be exercisable for six months.
<PAGE>
2.6 Excise Tax Limitation.
Notwithstanding Section 2.1 of this Agreement, in the event that any
Payment (as hereinafter defined) would be subject in whole or in part
to the excise tax (the "Excise Tax") under Section 4999 of the
Internal Revenue Code (the "Code"), then the severance payments
payable under Section 2.1 of this Agreement shall be reduced to the
extent, but only to the extent, necessary so that no portion of any
Payment is subject to the Excise Tax (the "Severance Reduction").
However, no Severance Reduction shall be made unless the net amount of
the Total Payments (as hereinafter defined) after such Severance
Reduction and after deduction of the net amount of federal, state and
local income taxes on such reduced Total Payments would be greater
than the net amount of the Total Payments without the Severance
Reduction but after deduction of the Excise Tax and the net amount of
federal, state and local income taxes on such unreduced Total
Payments. The determination as to whether a Severance Reduction is to
be made and, if so, the amount of any such reduction shall be made by
the firm of certified public accountants that had been acting as the
Company's auditors prior to the Change in Control or by such other
firm of certified public accountants, benefits consulting firm or
legal counsel as the Board may designate for such purpose, with the
approval of the Executive, prior to the Change in Control.
The Company shall provide the Executive with the auditor's
calculations of the amounts referred to in this Section 2.6 and such
supporting materials as are reasonably necessary for the Executive to
evaluate the Company's calculation.
For purposes of this Section 2.6, the term "Payment" means any
"payment in the nature of compensation" (as that term is used in
Section 280G of the Code") to or for the benefit of the Executive,
whether or not paid pursuant to this Agreement, that is contingent or
under Section 280G of the Code would be presumed to be contingent on a
Change in Control; and the term "Total Payments" means the aggregate
of all Payments.
2.7 Additional Provisions.
The provisions of Section 1.4 shall continue to be applicable after a
termination of employment under Subsection 2.1. The provisions of
Section 1.5 shall remain applicable.
3. Other Provisions
3.1 Assignment.
Neither the Company nor the Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise,
without the prior written consent of the other; provided, however,
that in the event that the Company shall hereafter effect a
reorganization, consolidate with, or merge into, any other Person or
transfer all or substantially all of its properties or assets to any
other Person, the Company shall require such Person or the resulting
entity to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required
to perform and provided that nothing in this Section shall limit the
provisions of Section 2.
3.2 Severability.
If any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application
of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall be not be
affected thereby, and each portion and provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
<PAGE>
3.3 Waiver
No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of either party
to require the performance of any term or obligation of this
Agreement, or the waiver by either party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term
or obligation or be deemed a waiver of any subsequent breach.
3.4 Notices.
Any and all notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be
effective when delivered in person or deposited in the United States
mail, postage prepaid, registered or certified, and addressed to the
Executive at his last known address on the books of the Company and,
in the case of the Company, at its principal place of business,
attention Chief Executive Officer, with a copy to Ropes & Gray,
Attention Howard K. Fuguet, Esq., One International Place, Boston, MA
02110.
3.5 Entire Agreement.
This Agreement constitutes the entire agreement between the parties
with respect to severance upon a termination by the Company other than
for cause and with respect to severance upon a termination by the
Company other than for cause or by the Executive for Good Reason after
a Change in Control and with respect to Options upon a Change in
Control and supersedes all prior and contemporaneous communications,
representations and understandings, written or oral, with respect
thereto, except (i) as otherwise expressly provided herein and (ii) as
otherwise provided in any other written agreement or benefit plan that
is more favorable to the Executive with respect to severance or
options.
3.6 Amendment.
This Agreement may be amended or modified only by a written instrument
signed by the Executive and by a duly authorized officer of the
Company.
3.7 Governing Law, Arbitration and Consent to Jurisdiction.
This is a Vermont contract and shall be construed and enforced under
and be governed in all respects by the laws of the State of Vermont,
without regard to the Vermont internal conflict of laws principles
thereof. The parties each agree to promptly and mutually select a
mediator and promptly mediate in good faith any controversy, claim or
dispute arising between the parties hereto arising out of or related
to this Agreement and its performance or any breach or claimed breach
thereof. In the event that mediation does not resolve any such matter,
then such matter other than any matter in which injunctive relief or
other equitable relief is sought shall be definitively resolved
through binding arbitration conducted in the City of Burlington,
Vermont, by a panel of three (3) arbitrators in accordance with the
<PAGE>
then current Commercial Arbitration Rules of the American Arbitration
Association; provided, however, that notwithstanding anything to the
contrary in such Commercial Arbitration Rules, the parties shall be
entitled in the course of any arbitration conducted pursuant to this
Section to seek and obtain discovery from one another to the same
extent and by means of the same mechanisms authorized by Rules 27
through 37 of the Federal Rules of Civil Procedure. The power and
office of the arbitrators shall arise wholly and solely from this
Agreement and the then current Commercial Arbitration Rules of the
American Arbitration Association. The award of the panel or a majority
of them so rendered shall be final and binding, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereto.
To the extent a dispute is not to be arbitrated in accordance with the
foregoing, each of the Company and the Executive (i) irrevocably
submits to the jurisdiction of the United States District Court of
Vermont and to the jurisdiction of the state courts of Vermont for the
purpose of any suit or other proceeding arising out of or based upon
the Agreement or the subject matter hereof and agrees that any such
proceeding shall be brought or maintained only in such court, and (ii)
waives, to the extent not prohibited by applicable law, and agrees not
to assert in any such proceedings, any claim that it is not subject to
the jurisdiction of the above-named courts, that he or it is immune
from extraterritorial injunctive relief or other injunctive relief,
that any such proceeding brought or maintained in a court provided for
above may not be properly brought or maintained in such court, should
be transferred to some other court or should be stayed or dismissed by
reason of the pendency of some other proceeding in some other court,
or that this Agreement or the subject matter hereof may not be
enforced in or by such court.
3.8 Protection of Reputation.
During the period of employment and during any period in which
severance payments or benefits are paid or provided under this
Agreement, the Executive agrees that he will take no action which is
intended to, or would reasonably be expected to, harm the Company or
its reputation or which would reasonably be expected to lead to
unwanted or unfavorable publicity to the Company (it being understood
that competition which does not breach Section 1.5 shall not be deemed
to be a breach of this Section).
3.9 Survival.
Cessation or termination of Executive's employment with the Company
shall not result in termination of this Agreement. The respective
obligations of Executive and the rights and benefits afforded to the
Company as provided in this Agreement after termination of employment
shall survive cessation or termination of Executive's employment
hereunder.
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its
duly authorized officer and by the Executive as of the date first above written.
BEN & JERRY'S HOMEMADE, INC.
/s/Frances Rathke By:/s/Perry D. Odak
---------------------- -------------------
Executive Chief Executive Officer
EXHIBIT 10.43
EMPLOYMENT AGREEMENT
This Agreement (together with all exhibits hereto, the "Agreement")
made in Burlington, Vermont by and between Ben & Jerry's Homemade, Inc. (the
"Company"), a Vermont corporation with its principal place of business at 30
Community Drive, South Burlington, Vermont 05403-6828, and Michael A. Sands of
28 Grove Lane, Bronxville, New York 10708 (the "Executive"), effective as of
June 25, 1999 (which is referred to herein as the "Effective Date").
WHEREAS, subject to the terms and considerations hereinafter set forth,
the Company wishes to employ the Executive as its Senior Director of Marketing,
and Executive wishes to accept such employment;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, terms, provisions, and conditions set forth in this Agreement,
the parties hereby agree:
1. Employment.
a. Employment by the Company. Executive agrees to be employed by the
Company for the Term of this Agreement upon the terms and subject to the
conditions set forth in this Agreement. Executive shall serve as the Senior
Director of Marketing ("SDM" ) of the Company, commonly referred to by the title
Chief Marketing Officer, and shall have such duties as may be prescribed by the
Chief Executive Officer ("CEO") and Executive shall serve in such other and/or
additional position(s) as the CEO may determine from time to time. During the
Term of this Agreement the SDM shall report directly to the CEO; and, initially
during his employment with the Company, he shall also report to the Company's
Senior Director of Sales for the Company.
b. Performance of Duties. Throughout the Term of this Agreement,
Executive shall faithfully and diligently perform Executive's duties in
conformity with the directions of the CEO and will serve the Company to the best
of Executive's ability. Executive shall devote Executive's entire working time,
attention and energies to the business and affairs of the Company, subject to
vacations and sick leave in accordance with Company's policy.
c. Place of Performance. During the Term of this Agreement, Executive
shall be based in the Company's offices in Burlington, Vermont. Executive will
be at the Company's principal place of business in South Burlington, Vermont and
be ready, willing, and able to perform his duties hereunder no later than July
28, 1999, hereinafter referred to as the "Start Date."
2. Term. Subject to earlier termination as hereafter provided, the
Executive's employment hereunder shall be for a term of three (3) years and five
days, commencing on the Effective Date herein and ending thirty-six (36) months
thereafter on June 30, 2002. If the Company elects not to renew this Agreement
it shall do so by notifying Executive six (6) months before the end of the Term
of the Company's intention in that regard.
3. Compensation and Benefits. As full and complete compensation for all
services performed by the Executive and subject to performance of the
Executive's obligations:
a. Base Salary. The Company agrees to pay the Executive a base salary
("Base Salary") at the annual rate of Two Hundred Five Thousand Dollars
($205,000 and 00/100), commencing on the Start Date, and payable in installments
consistent with the Company's payroll practices and schedule, as established
from time to time. The Executive will be subject to annual merit salary reviews
by the CEO.
b. One Time Guaranteed Award. On the Start Date, the Company agrees to
pay to the Executive, provided the Executive is then in the active employ of the
Company, the sum of Thirty-Five Thousand Dollars ($35,000 and 00/100) (less all
applicable deductions and withholdings). This sum will be made to Executive as a
payment to "make whole" the Executive for certain stock options he is forfeiting
with his present employer. This is a one-time payment obligation of the Company.
c. Annual Bonus. The Executive shall be entitled to participate in the
Company's discretionary annual bonus pool, as currently practiced, and as may be
changed from time to time, with respect to the members of the Company's Office
of the CEO, provided that, for calendar year 1999 only, Executive shall (i) be
treated as though he worked for the Company for entire calendar year 1999, and
(ii) receive a minimum bonus of $50,000 (Fifty Thousand Dollars and 00/100), a
portion of which is to "make whole" the Executive for certain sums of money in
the form of bonus compensation that he is forfeiting with his present employer.
The parties hereby agree that for all other years under this contract, there is
no guarantee of a minimum bonus. Notwithstanding the foregoing, the parties
hereby acknowledge that the CEO is in the process of developing an Elective
Management Incentive Pool ("EMIP"). The EMIP is not presently finalized but is
in the process of being prepared for submission and approval of the Company's
Board of Directors. The parties agree that if Executive is employed hereunder
when such plan is adopted, Executive will participate therein and will be
treated in accordance with his position and the terms of the EMIP
d. Other Benefits. The Executive shall be entitled to participate in,
to the extent Executive is otherwise eligible under the terms thereof, the
employee benefit plans and programs of the Company, and receive the benefits and
perquisites, generally provided to executives of the same level and
responsibility as Executive. Nothing in the Agreement shall preclude the Company
from terminating or amending from time to time any employee benefit plan or
program. Executive shall be entitled to three weeks' of vacation leave per year
during the term of this Agreement; at least one week of the first year's
entitlement may be taken prior to January 1, 1999. Thereafter, the amount of
vacation leave may be increased to reflect Employee's length of service to the
Company.
e. Business Expenses. Upon submission of itemized expense statements in
the manner specified by the Company, Executive shall be entitled to
reimbursement for reasonable travel and other reasonable business expenses duly
incurred by the Executive in the performance of Executive's duties under this
Agreement. Such reimbursement shall be in accordance with the policies and
procedures established by the Company from time to time and for executives of
the same level and responsibility as Executive.
f. Relocation Expenses. The Company will reimburse the Executive for
the following relocation expenses that he incurs within twelve (12) months of
the Start Date: (i) Closing costs on selling the Executive's existing home,
including sales commission and legal fees, not to exceed $15,000 (Fifteen
Thousand Dollars and 00/100); (ii) the costs of the Executive's monthly mortgage
payments on his existing home, for a period of four months, should he not be
able sell it within six months' of the Start Date provided that he has actively
marketed his home in a manner consistent with the recommendations of the Home
Marketing Assistance program; (iii) Expenses to move and store all household
goods, not to exceed $8,000; (iv) Interim reasonable and necessary living
expenses for ninety (90) days; (v) Weekly travel costs for roundtrip airfare
from Burlington, Vermont to Executive's existing home in Bronxville, New York
over the 26 (twenty-six) week period immediately following the Start Date
provided that reservation and fares shall be arranged in accordance with the
Company's travel policy and procedures, and reimbursement from the Company to
the Executive shall be to the limits established thereunder; (vi) Expenses for
up to two (2) house-hunting trips for the Executive and his wife including air
fare, lodging, meals and rental car; and (vii) Closing costs on any new purchase
of the Executive's primary residence, including standard mortgage points (not
buy down interest rate expenses) and legal fees, not to exceed $8,000 (Eight
Thousand Dollars and 00/100). The Company is willing to consider reimbursement
for any expenses which exceed the limitations listed above, should the cost of
relocation increase substantially for unforeseen reasons, provided that the CEO
agrees in writing to the unforeseen costs in advance of the Executive incurring
such costs. All reimbursed amounts will be grossed up for tax purposes.
Executive hereby agrees to reimburse the Company for all relocation expenses
that are reimbursed to him if, in the first twelve (12) months of employment
after the Start Date, he should voluntarily resign his employment with the
Company or have his employment terminated by the Company for Cause, in
accordance with Paragraph 4 (b), below. Additionally, Executive hereby agrees to
reimburse the Company for all relocation expenses paid to him in accordance with
Paragraph 3(f) (i)(ii)(iii) or (vii) if, within twelve months of reimbursement
for these relocation expenses, he should voluntarily resign his employment with
the Company or have his employment terminated by the Company for Cause, in
accordance with Paragraph 4 (b), below. In the event that Executive's employment
is terminated by the Company for any other reason, in accordance with Paragraph
4 (d), below, the Company hereby acknowledges that Executive shall not be
obligated to repay any relocation expenses reimbursed to him in accordance with
Paragraph 3(f).
g. Grant of Option and Terms Thereof. The Company hereby agrees that,
on June 25, 1999, it will grant to Executive, pursuant to a separate Option
Contract, not granted under the 1995 Equity Incentive Plan, but having terms
consistent with the Plan, attached or to be promptly attached hereto as Exhibit
A, a non-incentive stock option to purchase 35,000 shares of Class A Common
Stock of the Company ("Option Shares") exercisable at the market price of
$26.5625. The Option will expire 10 years from the date of grant thereof.
Provided that the Executive is an employee in full compliance with terms and
conditions of the Contract, the Option will be exercisable over a four (4) year
period of time commencing from the date of grant, with one-fourth becoming
exercisable on the first anniversary of the date of grant and an additional 1/48
of the shares covered by this Option on the last day of each month in the next
three years after said anniversary, commencing with the month of July 2000.
h. No Other Compensation or Benefits, Payment. The compensation and
benefits specified in Sections 3 and 4 of this Agreement shall be in lieu of any
and all other compensation and benefits. Payment of all compensation and
benefits to Executive hereunder shall be made in accordance with the relevant
Company policies in effect from time to time, including normal payroll
practices, and shall be subject to all applicable employment and withholding
taxes.
i. Cessation of Employment. In the event Executive shall cease to be
employed by the Company for any reason, then Executive's compensation and
benefits shall cease on the date of such event, except as otherwise provided
herein or in any applicable employee benefit plan or program.
4. Termination of Employment.
a. Termination. The Company may terminate Executive's employment for
Cause (as defined below) or for any breach of this Agreement, in which case the
provisions of Section 4(b) shall apply. The Company may also terminate
Executive's employment in the event of Executive's Disability (as defined
below), in which case the provisions of Section 4(c) shall apply. The Company
may also terminate the Executive's employment for any other reason by written
notice to Executive, in which case the provisions of Section 4(d) shall apply.
If Executive's employment is terminated by reason of Executive's death,
retirement or voluntary resignation, then the provisions of Section 4(b) shall
apply.
b. Termination for Cause; Termination by Reason of Death or Retirement or
Voluntary Resignation. In the event that the Executive's employment hereunder is
terminated during the Agreement Term (x) by the Company for Cause (as defined
below), or (y) by reason of Executive's death or retirement or (z) by reason of
Executive's voluntary resignation, then the Company shall pay to the Executive
or the Executive's designated beneficiary or, if no beneficiary has been
designated by the Executive, to his estate (all as the specific case may be),
any Base Salary, bonuses and incentives that are earned but unpaid, pro-rated
through any such termination under the Section 4(b) and payment or reimbursement
of business expenses accrued prior to any act of termination under this Section
4(b). For purposes of this Agreement, "Cause" shall mean (i) conviction of any
crime (whether or not involving the Company) constituting a felony in the
jurisdiction involved; (ii) conviction of any crime involving moral turpitude;
or (iii) a willful and material breach of, material gross negligence with
respect to, or the willful or repeated failure or refusal to perform such
reasonable and lawful duties as may be delegated to Executive by the CEO, and
that as to any conduct concerning this subsection (iii), that such conduct is
not corrected by Executive within fourteen (14) days following receipt by
Executive of written notice from the CEO, such notice to state with specificity
the nature of the breach, gross negligence, failure or refusal.
c. Disability. If as a result of Executive's incapacity due to physical
or mental illness, Executive shall have been absent from Executive's duties
hereunder on a full time basis for either (i) one hundred and twenty (120)
calendar days within any three hundred and sixty-five (365) calendar day period,
or (ii) ninety (90) consecutive calendar days, and if within thirty (30)
calendar days after written notice of termination is given Executive shall not
have returned to the performance of Executive's duties hereunder on a full time
basis, the Company may terminate the Executive's employment hereunder for
"Disability." In that event, the Company shall pay to Executive, within thirty
calendar (30) days of the date of such termination, only the Base Salary through
such date of termination. During any time period that Executive fails to perform
Executive's duties hereunder as a result of incapacity due to physical or mental
illness (a "Disability Period"), Executive shall continue to receive the
compensation and benefits provided by Section 3 hereof until Executive's
employment hereunder is terminated; provided, however, that the amount of
compensation and benefits received by Executive during the Disability Period
shall be reduced by the aggregate amounts, if any, payable to Executive under
disability benefit plans and programs of the Company or under the Social
Security disability insurance program.
d. Termination by Company for Any Other Reason. In the event that
Executive's employment hereunder is terminated by the Company during the
Agreement Term for any reason other than as provided in Sections 4(b) or 4(c)
hereof, then the Company shall pay to Executive, within thirty (30) days of the
date of such termination, the Base Salary through such date of termination and,
in lieu of any further compensation and benefits for the balance of the
Agreement Term, severance pay equal to one of the following circumstances: if
Executive is terminated within: (t) the first month of the Term, then eleven
(11) months of Base Salary; (u) the second month of the term, then ten (10)
months of the Base Salary; (v) the third month of the Term, then nine (9) months
of the Base Salary; (w) the fourth month of the Term, then eight (8) months of
the Base Salary; (x) the fifth month of the Term, then seven (7) months of the
Base Salary; (y) the sixth month of the Term, then six (6) months of the Base
Salary; and (z) any time after the sixth month of the commencement of the Term
but before the last six (6) months of the Term, then six (6) months of the Base
Salary (for purposes of convenience only, the respective time period for
severance will be referred to as "Severance Period"). The respective severance
payments will be paid at the times and in the amounts such Base Salary would
have been paid. Under such circumstances, except as set forth below, for the
balance of the respective Severance Period, Executive shall also continue to
participate in and receive the benefits and perquisites provided for above (but
not including any bonus or stock options) to the same extent as if the
Executive's employment had not been terminated, if permitted by the employee
benefit plans in which Executive participated at the time his employment was
terminated; provided, however, that in the event that Executive shall breach any
of the duties, obligations, and/or promises hereunder including but not limited
to Sections 5 and 7, in addition to any other remedies the Company may have in
the event Executive breaches this Agreement, the Company's obligation pursuant
to this Section 4(d) to continue such salary, benefits and perquisites shall
cease and Executive's right thereto shall terminate and shall be forfeited.
e. No Further Liability; Release. Other than paying Executive's Base
Salary through the date of termination of Executive's employment and making any
severance payment and continuing benefits and perquisites pursuant to and in
accordance with this Section 4 (as applicable), the Company and its directors,
officers, employees, subsidiaries, affiliates, stockholders, successors,
assigns, agents and representatives shall have no further obligation or
liability to Executive or any other person under this Agreement. The Company
shall have the right to condition the payment of any severance or other amounts
pursuant to Sections 4(c) or 4(d) hereof upon delivery by Executive to the
Company of a release in form and substance satisfactory to the Company of any
and all claims Executive may have against the Company and its directors,
officers, employees, agents and representatives arising out of or related to
Executive's employment by the Company and termination of such employment.
5. Confidential Information.
a. The Executive will comply with the policies and procedures of the
Company and its Subsidiaries for protecting Confidential Information and shall
never disclose to any Person (except as required by applicable law) or use for
his own benefit or gain, any Confidential Information obtained by the Executive
incident to his employment or other association with the Company or any of its
Subsidiaries. The Executive understands that this restriction shall continue to
apply after his employment terminates, regardless of the reason for such
termination.
b. All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the Company or
its Subsidiaries and any copies, in whole or in part, thereof (the "Documents"),
whether or not prepared by the Executive, shall be the sole and exclusive
property of the Company and its Subsidiaries. The Executive shall safeguard all
Documents and shall surrender to the Company at the time his employment
terminates or at such earlier time or times as the CEO or his designee may
specify, all Documents that are then in the Executive's possession or control.
6. Assignment of Rights to Intellectual Property. The Executive shall
promptly and fully disclose all Intellectual Property to the Company. The
Executive hereby assigns and agrees to assign to the Company (or as otherwise
directed by the Company) the Executive's full right, title and interest in and
to all Intellectual Property. All copyrightable works that the Executive creates
shall be considered "work made for hire."
7. Restricted Activities. The Executive agrees that some restrictions
on his activities during and after his employment are necessary to protect the
goodwill, Confidential Information and other legitimate interests of the Company
and its Subsidiaries, and that the agreed restrictions set forth below will not
deprive the Executive of the ability to earn a livelihood.
a. While the Executive is employed by the Company and for one year
after his employment terminates (the "Non-Competition Period"), the Executive
shall not, directly or indirectly, whether as owner, partner, investor,
consultant, agent, employee, co-venturer or otherwise, compete with the Company
or any of its Subsidiaries within the United States, or within any foreign
country in which the Products are sold at the date of termination of employment,
or undertake any planning for any business competitive with the Company or any
of its Subsidiaries.
b. The Executive further agrees that while he is employed by the
Company and during the Non-Competition Period, the Executive will not hire or
attempt to hire any employee of the Company or any of its Subsidiaries, assist
in such hiring by any Person, encourage any such employee to terminate his or
her relationship with the Company or any of its Subsidiaries, or solicit or
encourage any customer or vendor of the Company or any of its Subsidiaries, to
terminate its relationship with them, or, in the case of a customer, to conduct
with any Person any business activity which such customer conducts or could
conduct with the Company or any of its Subsidiaries.
c. The provisions of this Section 7 shall not be deemed to preclude the
Executive from employment during the Non-Competition Period following
termination of employment hereunder by a corporation, some of the activities of
which are competitive with the business of the Company, if the Executive's
employment does not relate, directly or indirectly, to such competitive
business, and nothing contained in this Section 7 shall be deemed to prohibit
the Executive, during the Non-Competition Period following termination of
employment hereunder, from acquiring or holding, solely as an investment,
publicly traded securities of any competitor corporation so long as such
securities do not, in the aggregate, constitute one-half of 1% of the
outstanding voting securities of such corporation.
8. Enforcement of Covenants. The Executive acknowledges that he has
carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him pursuant to Sections 5, 6 and 7
hereof. The Executive agrees that said restraints are necessary for the
reasonable and proper protection of the Company and its Subsidiaries and that
each and every one of the restraints is reasonable in respect to subject matter,
length of time and geographic area. The parties further agree that, in the event
that any provision of Sections 5, 6, 7 and 22 hereof shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographical area or too great a
range of activities, such provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.
9. Indemnification. The Company shall indemnify the Executive to the
extent provided for the Company's officers, including its executive officers, in
its then current Articles of Incorporation or Bylaws. The Executive agrees to
promptly notify the Company of any actual or threatened claim arising out of or
as a result of his employment with the Company.
l0. Definitions. Words or phrases which are initially capitalized or are within
quotation marks shall have the meanings provided in this Section 10 and as
provided elsewhere herein. For purposes of this Agreement the following
definitions apply:
a. "Confidential Information" means any and all information of the
Company and its Subsidiaries that is not generally known by others with whom
they compete or do business, or with whom they plan to compete or do business
and any and all information not readily available to the public, which, if
disclosed by the Company or its Subsidiaries would assist in competition against
them. Confidential Information includes without limitation such information,
including but not limited to, plans, proposals and ideas, relating to (i) the
development, research, testing, manufacturing, plant operation processes,
marketing and financial activities, including costs, profits and sales, of the
Company and its Subsidiaries, (ii) the Products and all formulas thereof, (iii)
the costs, course of supply, financial performance and strategic plans of the
Company and its Subsidiaries, (iv) the identity and special needs of the
customers and suppliers of the Company and its Subsidiaries, and (v) the people
and organizations with whom the Company and its Subsidiaries have business
relationships and those relationships. Confidential Information also includes
comparable information that the Company or any of its Subsidiaries have received
belonging to others or which was received by the Company or any of its
Subsidiaries with any understanding that it would not be disclosed.
b. "Intellectual Property" means inventions, discoveries, developments,
methods, processes, formulas, compositions, works, concepts and ideas (whether
or not patentable or copyrightable or constituting trade secrets) conceived,
made, created, developed, or reduced to practice by the Executive (whether alone
or with others, whether or not during normal business hours or on or off Company
premises) during the Executive's employment that relate to either the Products
or any prospective activity of the Company and its Subsidiaries.
c. "Products" mean all products planned, researched, developed, tested,
manufactured, sold, licensed, leased or otherwise distributed or put into use by
the Company or any of its Subsidiaries, together with all services provided or
planned by the Company or any of its Subsidiaries, during the Executive's
employment.
11. Withholding. All payments made by the Company under this Agreement
shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law.
12. Assignment. Neither the Company nor the Executive may make any
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other; provided, however,
that in the event that the Company shall hereafter effect a reorganization,
consolidate with, or merge into, any other Person or transfer all or
substantially all of its properties or assets to any other person or entity, the
Company shall require such person or the resulting entity to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it.
13. Severability. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
14. Waiver. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of either party to
require the performance of any term or obligation of this Agreement, or the
waiver by either party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
15. Notice. Any and all notices, requests, demands and other
communications provided for by this Agreement, shall be in writing, and shall be
effective when delivered in person or deposited in the United States mail,
postage prepaid, registered or certified, and addressed to the Executive at his
last known address on the books of the Company or, in the case of the Company,
at its principal place of business, attention Chief Executive Officer and
President.
16. Entire Agreement. This Agreement and its Exhibits A and B
constitute the entire agreement between the parties and supersedes all prior and
contemporaneous communications, representations and understandings, written or
oral, with respect to the terms and conditions of the Executive's employment.
17. Amendment. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by an expressly authorized
officer of the Company.
18. Governing Law and Consent to Jurisdiction and Court Trial. This is
a Vermont contract and shall be construed and enforced under and be governed in
all respects by the laws of the State of Vermont, without regard to the conflict
of laws principles thereof. Each of the Company and the Executive (i)
irrevocably submits to the jurisdiction of the United States District Court for
the District of Vermont and to the jurisdiction of the state courts of Vermont
(Chittenden County Superior and District Courts) for the purpose of any suit or
other proceeding arising out of or based upon the Agreement or the subject
matter hereof and agrees that any such proceeding shall be brought or maintained
only in such court, (ii) waives its or his right to a jury trial and agrees that
any such suit or other proceeding arising out of or based upon the Agreement or
the subject matter hereof shall be tried by the Court without a jury; and (iii)
waives, to the extent not prohibited by applicable law, and agrees not to assert
in any such proceedings, any claim that it is not subject to the jurisdiction of
the above-named courts, that he or it is immune from extraterritorial injunctive
relief or other injunctive relief, that any such proceeding brought or
maintained in a court provided for above may not be properly brought or
maintained in such court, should be transferred to some other court or should be
stayed or dismissed by reason of the pendency of some other proceeding in some
other court, or that this Agreement or the subject matter hereof may not be
enforced in or by such court.
19. Other Obligations. Executive represents and warrants that neither
Executive's employment with the Company nor Executive's performance of his
obligations hereunder will conflict with or violate or otherwise are
inconsistent with any other obligations, legal or otherwise, which Executive may
have.
20. Cooperation. Following termination of employment with the Company,
Executive shall cooperate with the Company, as requested by the Company, to
effect a transition of Executive's responsibilities and to ensure that the
Company is aware of all matters being handled by the Executive.
21. Protection of Reputation. During the Agreement Term and thereafter,
Executive agrees that he will take no action which is intended, or would
reasonably be expected, to harm the Company or its reputation or which would
reasonably be expected to lead to unwanted or unfavorable publicity to the
Company.
22. Remedies for Breach. The parties hereto agree that Executive is
obligated under this Agreement to render personal services during the Agreement
Term of a special, unique, unusual, extraordinary and intellectual character,
thereby giving this Agreement peculiar value, and, in the event of a breach of
any covenant of Executive herein, the injury or imminent injury to the value and
the goodwill of the Company's business could not be reasonably or adequately
compensated in damages in an action at law. Accordingly, Executive expressly
acknowledges that the Company shall be entitled to specific performance,
injunctive relief or any other equitable remedy against Executive, without the
posting of a bond, in the event of any breach or threatened breach of any
provision of this Agreement by Executive (including Sections 5, 6 and 7 hereof).
Without limiting the generality of the foregoing, if Executive breaches Section
5, 6 or 7 hereof, such breach will entitle the Company to enjoin Executive from
disclosing any Confidential Information to any competing business, to enjoin
such competing business from receiving Executive or using any such Confidential
Information, and/or to enjoin Executive from rendering personal services to or
in connection with such competing business. The rights and remedies of the
parties hereto are cumulative and shall not be exclusive, and each such party
shall be entitled to pursue all legal and equitable rights and remedies and to
secure performance of the obligations and duties of the other under this
Agreement, and the enforcement of one or more of such rights and remedies by a
party shall in no way preclude such party from pursing, at the same time or
subsequently, any and all other rights and remedies available to it.
23. Assistance in Proceedings, Etc. Executive shall, without additional
compensation, during and after expiration of the Agreement Term, upon reasonable
notice, furnish such information and proper assistance to the Company as may
reasonably be required and requested by the Company in connection with any legal
or quasi-legal proceeding, including any external or internal investigation,
involving the Company or any of its subsidiaries or affiliates or in which any
of them is, or may become, a party Executive shall be entitled to reimbursement
for reasonable travel and other reasonable business expenses duly incurred in
the performance of his obligations under Paragraph 23, in accordance with
Paragraph 3 (e), above.
24. Survival. Cessation or termination of Executive's employment with
the Company shall not result in termination of this Agreement. The respective
obligations of Executive and the rights and benefits afforded to the Company as
provided in this Agreement shall survive cessation or termination of Executive's
employment hereunder. This Agreement shall not terminate upon, and shall remain
in full force and effect following, expiration of the Agreement Term and all
rights and obligations of the parties hereto as and to the extent provided
herein shall survive such expiration.
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by
its duly authorized officer, and by the Executive, as of the date first above
mentioned.
BEN & JERRY'S HOMEMADE, INC.
/s/ Michael A. Sands By: /s/Perry D. Odak
-------------------- --------------------
Michael A. Sands, Perry D. Odak,
Executive Chief Executive Officer and President
