Exhibit 10.22
INDEPENDENT CONTRACTOR AND NONCOMPETITION AGREEMENT
THIS INDEPENDENT CONTRACTOR AND NONCOMPETITION AGREEMENT (this “Agreement”),
dated as of the 1st day of December 2005, between Dean Foods Company (“Dean
Foods”), a Delaware corporation, having its principal place of business at 2515
McKinney Avenue, Suite 1200, Dallas TX 75201, and Pete Schenkel (“Mr. Schenkel”
or “you").
WHEREAS, the Dean Foods Company, or one or more of its affiliates or
subsidiaries (the “Company”) has employed Mr. Schenkel in an executive capacity
for several years;
WHEREAS, Dean Foods has offered Mr. Schenkel to continue his employment, in the
position of “Vice Chairman” of Dean Foods, for a period of up to two years,
under the terms of a written agreement to be executed simultaneously herewith,
that shall specify the terms and conditions of his employment and provide
commitments to Mr. Schenkel with regard to the salary and incentive compensation
opportunities to be made available during such continued employment (the
“Employment Agreement”), and to retain access to Mr. Schenkel’s knowledge and
experience as a senior advisor for an additional two years thereafter, under the
terms of this agreement;
WHEREAS, during his employment, Mr. Schenkel has acquired and will continue to
acquire, by reason of his position, substantial knowledge of the operations and
practices of the business of Company;
WHEREAS, the Company desires to assure that, to the extent and for the period of
Mr. Schenkel’s service to the Company and for a reasonable period thereafter, it
may maintain the confidentiality of its trade secrets and proprietary
information, goodwill and other legitimate business interests, each of which
could be compromised if any competitive business were to secure the services of
Mr. Schenkel; and
WHEREAS, to induce Dean Foods to enter into the Employment Agreement, and to
provide the commitments to Mr. Schenkel in respect of the substantial
compensation to be provided thereunder, the Company has required that
Mr. Schenkel enter into this Agreement.
NOW, THEREFORE, it is agreed as follows:
     1. Services. During the period from your Resignation Date, as defined in
the Employment Agreement, to December 31, 2009 (the “Senior Advisory Services
Period”), your responsibilities under this Agreement will be to provide general
advice and consultation to the Chief Executive Officer, Chairman of the Board,
and the Dairy Group President on matters of strategy and execution, as well as
to provide assistance with respect to such specific operating initiatives as may
be requested from time to time (“Senior Advisory Services”). The Company and you
intend to have an independent contractor relationship. In performing services
for the Company pursuant to this Agreement, you shall act in the capacity of an
independent contractor with respect to the Company and not as an employee of the
Company. You will, however, be considered an agent for purposes of the
Indemnification Agreement dated February 21, 2003 and entered into by you with
Dean Foods Company (“Indemnification Agreement”). Notwithstanding the foregoing,
in the event that your employment under the Employment

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Agreement is terminated by Company with or without Cause or by you for Good
Reason (as each such term is defined in the Employment Agreement), there shall
be no Senior Advisory Services Period.
     2. Senior Advisory Services Fees. For your Senior Advisory Services you
will be paid a Senior Advisory Services fee at the annual rate of $200,000 (the
“Senior Advisory Services Fee”). Such Senior Advisory Services Fee will be paid
in approximately equal monthly installments, in arrears. In addition, during the
Senior Advisory Services Period, Company shall provide you a continued car
allowance, reimbursement of expenses, club membership, office and secretarial
assistance, and other perquisites and benefits provided to you by the Company on
the date hereof. In addition, in the event that your employment under the
Employment Agreement is terminated by the Company without Cause or by you for
Good Reason, at any time after you execute the Employment Agreement, or the
Senior Advisory Period is ended by the Company prior to December 31, 2009 and,
in any such case, you have not theretofore breached any of your obligations in
Sections 4, 5, or 6, Company shall pay you a single lump sum payment, six months
and one day after your termination of employment, equal to the aggregate amount
of the Senior Advisory Services Fees that would have been payable during the
remainder of the Senior Advisory Services Period.
     3. Acknowledgments. You acknowledge that (i) Company is engaged in a
continuous program of research, development and production respecting its
business throughout the United States (the foregoing, together with any other
businesses in which Company engages from the date hereof to the date of the
termination of your employment with Company, is hereinafter referred to as the
“Company Business”); (ii) your work for Company allows you access to trade
secrets of, and confidential information concerning, Company; (iii) the Company
Business is national and international in scope; (iv) Company would not have
agreed to employ you and to enter into the Employment Agreement but for the
agreements and covenants contained in this Agreement; and (v) the agreements and
covenants contained in this Agreement are necessary and essential to protect the
business, goodwill, and customer relationships that Company has expended
significant resources to develop. The Company agrees and acknowledges that, on
or following the date hereof, it will provide you with one or more of the
following: (a) authorization to access Proprietary Information (as defined
below) through a new computer password or by other means, (b) authorization to
represent the Company in communications with customers and other third parties
to promote the goodwill of the business in accordance with generally applicable
Company policies and (c) access to participate in certain restricted access
meetings, conferences or training relating to your position with the Company.
     4. Non-Disclosure. You recognize that Company competes in a highly
competitive field and that Company possesses and will continue to possess
information of commercial value that relates to the Company Business, including
but not limited to trade secrets, technical and scientific information,
financial business information, processes, recipes, formulas, data, know-how,
improvements, inventions, product concepts, discoveries, developments, designs,
inventions, techniques, marketing plans, strategies, forecasts, new products,
blueprints, specifications, programs, ideas, customer lists, vendor lists,
pricing and other structures, marketing and business strategies, budgets,
projections, licenses, costs, financial data, and plans, proposals and
information about Company’s employees and/or consultants (collectively,
"Proprietary Information”). Notwithstanding the foregoing, Proprietary
Information shall not

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include information that: (a) is publicly available when received, (b)
thereafter becomes publicly available through no fault of your own, (c) is
otherwise disclosed by the Company to another party without obligation of
confidentiality, (d) is in your possession, or becomes available to you, on a
non confidential basis, from a source other than the Company, or (e) that you
are required by law, regulation, court order or discovery demand to disclose;
provided, however, that in the case of clause (e), you give the Company
reasonable notice prior to the disclosure of the Proprietary Information and the
reasons and circumstances surrounding such disclosure to provide the Company an
opportunity to seek a protective order or other appropriate request for
confidential treatment of the applicable Proprietary Information. You agree that
the Proprietary Information constitutes a unique and valuable asset which is
essential to the Company’s business success, and that any release of Proprietary
Information would be harmful to Company and/or its customers. To protect
Company’s Proprietary Information, you agree that at all times, including during
and after the term of your employment, you will not disclose to any person,
firm, company, or corporation or use for your own benefit or for the benefit of
any third party (except in furtherance of Company Business or affairs of
Company) any and all Proprietary Information that you may have acquired in the
course of or as an incident to your employment with Company. You further agree
to take all reasonable precautions to protect against the intentional,
negligent, or inadvertent disclosure by you of Company’s Proprietary Information
to any other person, or business entity, except in furtherance of the Company
Business.
     5. Non-Competition. You understand and agree that during your employment
with the Company, and during the Senior Advisory Services Period where you are
available to provide services to the Company as a senior advisor following your
Resignation Date (as defined in such Employment Agreement), you have been and
will continue to be provided access to specialized information related to
Company Business and trade secrets, as well as Company’s customers and their
confidential information. You further agree that if this information were used
in competition against Company, Company would experience serious harm and the
competitor would have a unique advantage against Company. You hereby covenant
and agree that (a) at no time during your employment with Company, (b) at no
time during the Senior Advisory Services Period and (c) at no time until the
second anniversary of the date of your termination of services for Company
(whether as an employee or independent contractor) for any reason (the
“Non-Compete Period”), will you (i) develop, own, manage, operate or otherwise
engage in, participate in, represent in any way or be connected with, whether as
officer, director, partner, owner, employee, agent, independent contractor,
consultant, proprietor, stockholder (except for the ownership of less than five
percent equity interest in a publicly traded company) or otherwise, any company
or business engaged primarily, or as a substantial part of its business, in the
manufacture, distribution, sale or marketing of any Relevant Products in any
geographic territory (within or outside the United States) in which Company does
business or (ii) act in any way, directly or indirectly, with the purpose or
effect of soliciting, diverting or taking away any business, Customer, client
supplier, or good will of Company. You acknowledge that this covenant has a
unique, substantial, and immeasurable value to Company.
As used, herein, “Relevant Products” means (i) milk and milk based beverages,
(ii) creams and creamers, (iii) ice cream and ice cream novelties, (iv) ice
cream mix, and (v) cultured dairy products.

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Notwithstanding the foregoing, the restrictions of Sections 5 and 6 shall
terminate immediately if your employment with the Company under the Employment
Agreement is involuntarily terminated by the Company without Cause or by you for
Good Reason, at any time after you execute the Employment Agreement, and you
will be paid the payments under Sections 2 and 7 in accordance with the terms
therein.
     6. Non-Solicitation. (a) Employees. You hereby covenant and agree that at
no time during your employment with the Company and during the Non-Compete
Period, will you, directly or indirectly, other than in the performance of your
duties on behalf of the Company (i) recruit, encourage, solicit or induce any of
the Company’s employees to leave the employ of Company; (ii) hire any of the
Company’s employees or (iii) assist any third party in hiring any of the
Company’s employees.
     (b) Customers. You hereby covenant and agree that at no time during your
employment with the Company and during the Non-Compete Period, will you solicit
any Covered Customer for the purpose of (i) inducing or otherwise intending to
cause such Covered Customer to alter or end its business relationship with
Company or (ii) interfering with Company’s business relationship with such
Covered Customer or (iii) causing such Covered Customer to purchase products
and/or services competitive with those of Company. For purposes of this
Agreement, a “Covered Customer” shall mean any company that is doing business
with the Company, or negotiating to do business with the Company, prior to any
act of interference by you, if within the course of the last two years of your
employment with the Company, (a) you or someone under your direct supervision
had contact with such company or (b) you received proprietary information
regarding such company, it being presumed (subject to your right to prove
otherwise by clear and convincing evidence) that by reason of your position with
the Company you will have received proprietary information regarding any
significant customer of the Company’s Dairy Group.
     7. Payments. In consideration for the covenants provided by you in
Sections 4, 5 and 6 hereof, and subject to your continued compliance with the
covenants set forth therein, Company shall pay you (i) two hundred and eighty
thousand dollars on January 2, 2006; and (ii) four hundred and twenty-five
thousand dollars on each of January 2, 2007, January 2, 2008, January 2, 2009,
January 2, 2010, January 2, 2011 and January 2, 2012. Notwithstanding the
foregoing, in the event of your death prior to the expiration of the Non-Compete
Period or in the event that the Non-Compete Period expires prior to December 31,
2011 due to the termination of your employment under the Employment Agreement by
the Company without Cause or by you for Good Reason, at any time after you
execute the Employment Agreement, and, in either case, so long as you have not
theretofore breached any of your obligations in Sections 4, 5, or 6, any
payments remaining to be paid under this Agreement shall be paid in a single
lump sum payment (a) within 30 days of your death or (b) six months and one day
after your termination of employment by the Company without Cause or you for
Good Reason. The Company shall still make the payments required pursuant to this
Section 7, even if there is no Senior Advisory Period by reason of the last
sentence of Section 1 hereof, and even if the Company terminates the Employment
Agreement for any reason whatsoever, or the Employment Agreement expires, at any
time after you execute the Employment Agreement; provided, however, that if the
covenants in Section 5 and 6 of this Agreement are held to be unenforceable
(other than because they have automatically terminated pursuant to the terms of
the Employment Agreement or this

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Agreement), the Company will not have received the consideration for which it
bargained, and it shall have no further obligation to make any further payments
under this Section 7.
     8. Remedies. You acknowledge, understand, and agree that the restrictions
contained in Sections 4, 5, and 6 of this Agreement are necessary to protect the
legitimate business interests and good will of Company, and are a material
inducement to Company to employ you and to enter into this Agreement, and that
any breach of such restrictions would cause Company substantial and irreparable
harm for which there is no adequate remedy at law. The parties agree and
acknowledge that one of the reasons for entering into this Agreement is to reach
a reasonable compromise regarding the subject matter hereof to avoid any
uncertainty regarding the enforceability, scope and nature of the restrictions
applicable to you and necessary to protect the Company’s legitimate business
interests.
If Company deems such action warranted by the particular circumstances, Company
shall be entitled, to seek equitable relief including, but not limited to,
temporary, preliminary, and permanent injunctive relief, including the issuance
of a temporary restraining order, in order to secure the specific performance of
this Agreement. You agree that the rights of Company to obtain injunctive relief
shall not be considered a waiver of Company’s rights to seek any other remedies
it may have at law or in equity. Prior to the Company withholding payment under
sections 2 or 7 because of an alleged breach of Sections 4, 5, or 6 the Company
shall give Mr. Schenkel ten (10) business days written notice of its intent to
withhold payments, which shall include the facts upon which the Company is
relying to withhold payments. Without limiting the generality of the foregoing,
any monies withheld by the Company under this Agreement will be placed in escrow
at the Company’s expense, pending the final resolution by the arbitrator, at
which time they shall either be returned to the Company (and the Company shall
be relieved from any obligation to make any further payments to you or into
escrow) or paid to you with interest, in accordance with the decision of the
arbitrator.
The restrictions set forth herein shall be construed as a series of separate and
severable covenants. You agree that if in any proceeding, the tribunal refuses
to enforce fully any covenants contained herein because such covenants cover too
extensive a geographic area or too long a period of time, or for any other
reason whatsoever, any such covenant shall be considered divisible both as to
duration, and geographic area so that each month of a specified period shall be
deemed a separate period of time and each county in each particular state (or
such other geographic subdivision as the tribunal determines is reasonable) a
separate geographic area, resulting in an intended requirement that the longest
lesser period of time or the largest lesser geographic area found by such
tribunal to be a reasonable restriction shall remain an effective restrictive
covenant specifically enforceable against you. Further, the covenants contained
in Sections 4, 5, and 6 shall be construed as agreements independent of any
other provision of this Agreement and the existence of any claim or cause of
action by you against Company or any of its employees, agents, shareholders,
directors, or officers, whether predicated on this Agreement or otherwise, shall
not constitute a defense to enforcement by Company of any of these covenants.
You also agree that, if you are found to have breached any of the time-limited
covenants in Section 4, 5 or 6, the time period during which you are subject to
such covenant shall be extended by one day for each day you are found to have
violated such restriction, up to a maximum of two years.

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     9. Arbitration. The parties agree that any controversy or claim arising out
of or relating to this Agreement, or the breach thereof, shall be resolved by
arbitration administered by the American Arbitration Association (“AAA”) under
its Commercial Arbitration Rules, including the Optional Rules for Emergency
Measures of Protection. The arbitration will take place in Dallas, Texas. The
arbitrator will have the authority to award the same remedies, damages, and
costs that a court could award. The arbitrator shall issue a reasoned award
explaining the decision, the reasons for the decision, and any damages awarded
where the arbitrator finds you violated any of Section 4, 5, or 6 hereof or
Company failed to comply with its obligations under Sections 2 or 7. The
arbitrator’s decision will be final and binding. The judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. To the extent that any matter related to this Agreement shall be
brought in court, (i) the parties agree that Dallas, Texas shall be the sole and
exclusive venue in which any such action may be heard, (ii) each party hereby
consents to the personal jurisdiction of any court in Dallas, Texas otherwise
having jurisdiction over this matter, and (iii) each party hereby waives any
right to a trial by jury in any such proceeding. If the arbitrator finds that
the Company is liable for any payments under this agreement, any such payments
shall be made promptly (but not more that 10 business days) following the
entering of such decision, with interest thereon from the date such payments
should have been made hereunder to the date of such payment, at the prime rate
specified in The Wall Street Journal for the date on which such payment was
otherwise due, plus 1%. The arbitration proceedings, any record of the same, and
the award shall be confidential. This provision and any decision and award
hereunder is governed by and enforceable under the Federal Arbitration Act.
     10. Return of Records. Upon termination of the Senior Advisory Services
Period (or, if there is no such period, the termination of your employment), you
agree to return to Company all documents (whether electronic or written), notes,
drawings data, records, materials and other property of whatever nature received
from or and all copies thereof including, but not limited to, those documents,
records, and materials containing or relating to the Company’s Proprietary
Information. You agree that all such Proprietary Information that is currently
in your possession, or control or which possession or control in the future
shall be the property of Company. This provision shall not apply to Company
documents that are personal to you, including documents reflecting compensation,
payroll, benefits, options and awards, and other similar documents.
     11. Miscellaneous.
          (a) Severability. Nothing in this agreement shall be construed so as
to require the commission of any act contrary to law and wherever there is any
conflict between any provision of this Agreement and any law, statute,
ordinance, order or regulation, the latter shall prevail, but in the event of
any conflict, any provision of this Agreement shall be curtailed and limited
only to the extent necessary to bring it within applicable legal requirements.
If any provision of this Agreement should be held invalid or unenforceable, the
remaining provisions shall be unaffected by the holding.
          (b) Complete Agreement. This Agreement contains the entire agreement
and understanding between the parties relating to the subject matter hereof, and
supersedes any prior understandings, agreements, or representations by or
between, the parties, written or oral,

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relating to the subject matter hereof, including any non-competition and
restrictive covenants in any other agreement between the parties (which include
any stock option and restricted and deferred stock or stock units or other
equity award agreements); provided however, that all other terms and conditions
of those agreements will remain in full force and effect and this section 11(b)
shall not in any way modify, limit, alter, impair or supercede (i) the Change in
Control Agreement; (ii) the Employment Agreement; (iii) the Indemnification
Agreement; or (iv) Mr. Schenkel’s existing Executive Medical Agreement, as
amended, entered into with Southern Foods Group, L.P., each of which shall
remain in full force and effect in accordance with its terms. Each party agrees
and acknowledges that, except to the extent set forth in the Employment
Agreement, neither party relied on any representation or understanding outside
of the express terms of this Agreement. This Agreement may not be modified,
except in a written document executed by both parties to this Agreement.
          (c) Other Agreements. You represent and warrant that you are not a
party to or bound by the provisions of any other agreement which would prevent
or impair your ability to render services to Company and your entering into this
Agreement. The parties hereto each represent and warrant to the other party that
the performance of any obligations hereunder by such party will not violate the
provisions of or cause such party to be in default under, any other agreement or
contract to which such party is a party or by which such party is bound.
          (d) Section Headings. The section headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.
          (e) Governing Law. This Agreement shall be governed by, and this
Agreement and any disputes or controversies related hereto shall be construed in
accordance with, the laws of the State of Texas, excluding any choice of law
provisions that would apply the laws of any other jurisdiction.
          (f) Waiver. No delay on the part of either party in exercising any
right, power, or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of either party of any right, power, or privilege
hereunder, preclude any other or further exercise thereof or the exercise of any
other right, power, or privilege hereunder, unless in writing and signed by both
parties.
          (g) Assignment. This Agreement and your rights and obligations
hereunder may not be assigned by you. Company may, without your consent, assign
its rights, together with its obligations, under this Agreement. This agreement
shall be binding on, and enforceable against, all successors and assignees of
Dean Foods.
          (h) Counterparts. This Agreement may be entered into in two or more
counterparts, or by facsimile, each of which shall be deemed an original, and
together shall be deemed to be one and the same instrument.

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IN WITNESS WHEREOF, the parties have executed and delivered this Independent
Contractor and Noncompetition Agreement as of the date first set forth above.

            DEAN FOODS COMPANY        
 
    Name:  
Gregg L. Engles
    Title:  
Chairman and Chief Executive Officer
     
 
Pete Schenkel                      

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