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Exhibit 10.24
EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of
the 13th day of July, 1998, by and between COMPDENT CORPORATION, a
Delaware
corporation (the "Company") and KAREN B. MITCHELL (the
"Employee").
I. Statement of Background Information
The
Employee has been an officer and a key employee of the Company and
the
parties desire to ensure that the Employee's expertise, knowledge
and experience
will continue to be available to the Company in providing
full-service dental
benefits and offering network-based dental care, reduced
fee-for-service, third
party administration and dental practice management (the
"Business").
II. Statement of Agreement
In
consideration of the mutual covenants, promises and conditions set
forth
in this Agreement, and for other good and valuable consideration,
the parties
hereto hereby agree as follows:
1. Employment.
The Company hereby employs Employee in the position of Vice
President of Human Resources and Assistant Corporate Counsel of
the
Company and/or such other position(s) as determined by the Board
of
Directors or its designees and consistent with the Employee's
general area
of
experience, knowledge and skill, and Employee hereby accepts
such
employment upon the terms and conditions set forth in this
Agreement. For
purposes of Sections 6, 7 and 8 of this Agreement, "employment"
shall mean
any
period of time during the term hereof which the Company is paying
the
Employee salary or wages. By execution of this Agreement, the
parties
hereby: (a) terminate, as of the date hereof, that certain
employment
agreement between the Company and Employee dated December 1, 1997
(the
"Prior Employment Agreement") and (b) acknowledge and agree that
no
provisions of the Prior Employment Agreement shall survive the
execution
and
delivery of this Agreement.
2. Duties of
Employee. Employee agrees to perform and discharge the duties
which may be assigned to Employee from time to time by the
Company's Board
of
Directors or its designees and consistent with the Employee's
general
area
of experience, knowledge and skill. Employee also agrees to
materially
comply with all of the Company's material policies, standards
and
regulations and to follow the reasonable instructions and
directives of
Employee's superiors
within the Company, as promulgated by the Board of
Directors or its designees. Employee will devote her full
professional and
business related time, skills and commercially reasonable
efforts
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to
the Business and Employee will not, during the term of this
Agreement,
be
engaged (whether or not during normal business hours) in any
other
business or professional activity (excluding reasonable and
appropriate
charitable activities), whether or not such activity is pursued for
gain,
profit or other pecuniary advantage without the prior written
consent of
the
Chief Executive Officer of the Company, which consent will not
be
unreasonably withheld.
3. Term. The
term of this Agreement will be for a period commencing on the
date
hereof and expiring on the later of the fifth anniversary of such
date
or,
if there is a Change in Control (as defined herein) before such
fifth
anniversary date, the date which is 25 months following any Change
in
Control, subject to earlier termination as provided for in Section
4 below.
4.
Termination.
(a) By the Company. Notwithstanding anything contained in Section 3
to
the
contrary, the Company may terminate this Agreement and all of
its
obligations hereunder immediately if any of the following events
(any of
which shall constitute "cause" for purposes of this Agreement)
occur:
(i) Employee (A) materially breaches any of the terms or
conditions
set
forth in Sections 6, 7 or 8 of this Agreement including,
without
limitation, the failure to use commercially reasonable efforts in
the
performance of duties assigned to the Employee on a full time
basis, or (B)
materially breaches any of the other terms and conditions set forth
in this
Agreement and fails to cure such breach within twenty days after
Employee's
receipt from the Company of written notice of such breach, which
notice
shall describe in reasonable detail the basis for the Company's
belief that
Employee is in breach hereof;
(ii) Employee commits any act in bad faith materially detrimental
to
the
business or reputation of the Company;
(iii) Employee is convicted of any crime involving fraud, deceit
or
moral turpitude or Employee intentionally engages in dishonest or
illegal
activities that have a material adverse effect upon the business
or
reputation of the Company; or
(iv) Employee dies or becomes mentally or physically incapacitated
or
disabled so as to be unable to perform Employee's duties under
this
Agreement. For purposes of this Agreement. Employee shall be deemed
to be
mentally or physically incapacitated or disabled so as to be unable
to
perform her duties if and to the extent he becomes permanently
disabled
under the Company's long-term disability policy then in effect.
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The Company may also terminate the Employee's employment, upon
reasonable written notice to the ' Employee, at any time subject to
the
fulfillment of the Company's obligations under this Agreement and
such
termination by the Company for any other reason shall be deemed
termination
"without cause."
(b) By Employee. The Employee may terminate this Agreement:
(i) if the Company materially breaches any of the terms or
conditions
set
forth in this Agreement and fails to cure its breach within twenty
days
after its receipt from Employee of written notice of such breach,
which
notice describes in reasonable detail Employee's belief that the
Company is
in
breach hereof; or
(ii) for "good reason" (as herein defined) at any time during
the
two-year period
following a Change in Control upon written notice to the
Company.
The
Employee may also resign and terminate her employment on
reasonable
written notice at any time and such termination by Employee for any
other
reason (other than as provided in Sections 4(b)(i) or (ii)) and in
such
event, the Employee shall receive no severance benefits under
this
Agreement as a result of such termination.
(c) Certain definitions.
(i) For purposes of this Agreement, "good reason" shall mean
the
following:
(A) any material
diminution of the Employee's duties or a
reassignment of the Employee to a position not consistent
with the Employee's general area of knowledge, experience
and skills, or the assignment of substantial additional
responsibilities to the Employee;
(B) any material
diminution of the Employee's compensation or a
material diminution of the Employee's bonus, long-term
incentives, employee benefits or perquisites as in effect
immediately preceding the Change in Control;
(C) any relocation of
Employee's principal place of employment
to more than 35 miles from the principal place of employment
immediately preceding the Change in Control;
(D) any material
increase in Employee's travel obligations;
(E) any failure of any
successors to the Company to assume this
agreement; or
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(F) any breach of this
Agreement by the Company not cured within ten
days after its receipt of notice from Employee of such breach
(in
the event of such a breach and a termination of this Agreement
by
Employee following a Change in Control, such termination shall
be
deemed to have occurred under Section 4(c)(i)(F) and not under
Section 4(b)(i) of this Agreement).
(ii)
For purposes of this Agreement, "Change in Control" shall mean any
of
the following events:
(A) the direct or
indirect beneficial ownership (within the meaning
of Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Regulation 13D thereof) of a
majority of the outstanding common stock of the Company is
acquired or becomes held by any person or group of persons
(within the meaning of Section 13(d)(3) of the Exchange Act);
(B) a change of stock
ownership of the Company of a nature that would
be required to be reported in response to Item 6(e) of Schedule
14A promulgated under the Exchange Act, and any successor Item
of
a similar nature;
(C) the acquisition of
beneficial ownership, directly or indirectly,
by any person (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) of securities of the Company representing
25
percent or more of the voting power of the then outstanding
securities of the Company;
(D) the stockholders
of the Company shall approve (provided, however,
if the transaction approved by the stockholders is subsequently
terminated, and the Employee is still employed by the Company
at
the termination of the transaction, then no "Change in Control"
shall be deemed to have taken place): (1) any consolidation,
merger, share exchange or other extraordinary transaction
related
to the Company where
the stockholders of the Company, immediately
prior to the consolidation, merger, share exchange or other
extraordinary transaction, would not immediately after the
consolidation, merger, share exchange or other extraordinary
transaction, beneficially own (as such term is defined in Rule
13d-3 under the Exchange Act), directly or indirectly, shares
representing in the aggregate 50 percent of the
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voting securities of the corporation issuing cash or securities
in the consolidation, merger, share exchange or other
extraordinary transaction (or of its ultimate parent
corporation,
if any), (2) any lease, exchange, mortgage or other transfer
(in
one transaction or series of transactions contemplated or
arranged by any party as a single plan) of all or substantially
all of the assets of the Company and its subsidiaries (taken as
a
whole), or (3) any plan or proposal for the liquidation or
dissolution of the Company; or
(E) the following
individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board of Directors and
any new director (other than a director whose initial
assumption
of office is in connection with an actual or threatened
election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board of Directors or nomination
for election by the Company's stockholders was approved or
recommended by a vote of at least two-thirds of the directors
then still in office who either were directors on the date
hereof
or whose appointment, election or nomination for election was
previously so approved or recommended.
(iii) For purposes of this Agreement, "termination of
employment,"
"termination of Employee" and "termination of this Agreement" shall
have the
same meaning unless otherwise agreed to in writing by the parties
hereto.
(d)
Severance Payments.
(i)
In the event of termination of the Employee by the Company
without
cause or termination of this Agreement by Employee pursuant to
Section 4(b)(i)
hereof, the Company shall: (A) pay to Employee an amount equal to
one times the
Employee's annual salary in effect at the time of termination (not
giving effect
to any salary reduction giving rise to such termination) and (B)
either continue
the Employee's health (medical and dental) insurance as provided in
Section 5(c)
for one year following the date of such termination to the extent
permitted
under applicable law and the Company's group health insurance
policies or
reimburse the Employee for her cost for comparable coverage to the
extent such
coverage cannot be provided under such policies. Such severance pay
shall be
payable in equal monthly installments over the one-year period
beginning on the
date of termination of this Agreement and shall be subject to tax
withholding to
the extent required under applicable law. Notwithstanding anything
herein to the
contrary, the Company shall not be required to continue to
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provide Employee with health benefits under this paragraph if
Employee becomes
entitled to receive benefits substantially similar to those which
Employee
otherwise would have been entitled to receive hereunder. This
severance pay and
continuation of health benefits contemplated by this paragraph are
agreed by the
parties hereto to be in full satisfaction and compromise of any
claim arising
out of any t
