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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,






