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Exhibit 10.17
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into
as of the 17th day of June, 1999, by and between COMPDENT
CORPORATION, a
Delaware corporation (the "Company") and Bruce A. 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 the Employee in the
position
of Executive Vice President and General Counsel of the Company, and
the Employee
hereby accepts such employment upon the terms and conditions set
forth in this
Agreement. For purposes 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 the
Employee dated July 6, 1998 (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 THE EMPLOYEE. The Employee agrees to perform and
discharge the duties which may be assigned to the 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. The
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 the Employee's superiors within the Company, as
promulgated by the
Board of Directors of the Company. The Employee will devote his
full
professional and business related time, skills and commercially
reasonable
efforts to the Business and the 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 Board of
Directors of the Company, which consent will not be unreasonably
withheld.
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3. COMPENSATION AND BENEFITS.
(a) Annual Salary. For all services rendered by the Employee
under
this Agreement, the Company will pay the Employee a base salary of
at least two
hundred thousand dollars ($200,000) per annum in equal monthly
installments, or
a greater amount as determined by the Compensation Committee of the
Board of
Directors of the Company (the "Base Salary").
(b) Annual Bonus Payment. Upon completion of each fiscal year and
as
determined by the Compensation Committee of the Board of Directors
of the
Company, the Employee shall be eligible to receive a bonus ("Annual
Bonus") in
accordance with any bonus plan then in effect for executives of the
Company of
equivalent position and title, provided the Employee is employed by
the Company
at the end of such fiscal year.
(c) Other Benefits. The Employee will be entitled to such
fringe
benefits as may be provided from time-to-time by the Company to its
employees,
including, but not limited to, group health insurance, disability,
dental,
retirement and any other fringe benefits now or hereafter provided
by the
Company to its employees, if and when the Employee meets the
eligibility
requirements for any such benefit. The Company reserves the right
to change or
discontinue any employee benefit plans or program now being offered
to its
employees; provided, however, that all benefits provided for
executive officers
of the Company will be provided to the Employee on an equal basis
and the
aggregate of such benefits shall not be less than those currently
in effect or
otherwise be materially less favorable to the Employee.
(d) Business Expenses. The Employee will be reimbursed for all
reasonable expenses incurred in the discharge of the Employee's
duties under
this Agreement pursuant to the Company's standard reimbursement
policies.
(e) Vacation. The Employee shall receive paid vacation annually
in
accordance with the Company's practices for executive officers of
the Company.
(f) Withholding. The Company will deduct and withhold from the
payments made to the Employee under this Agreement, state and
federal income
taxes, FICA and other amounts normally withheld from compensation
due employees.
(g) Car Allowance. The Employee shall receive a car allowance of
$800
per month during the term of this Agreement. The Employee otherwise
shall bear
all expenses and liabilities with respect to such car.
(h) Special Services. The Company shall pay to Employee on the
date
hereof a one time payment for special services rendered in
connection with the
Company's merger in the amount of $81,250 less withholdings under
Section 3(f).
4. TERM AND TERMINATION. The Employee's employment with the
Company
will be for a period commencing on the date hereof and expiring on
the first to
occur of (i)
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termination by the Company (with or without Cause) and (ii) the
Employee's
resignation (with or without Good Reason).
(a) Definition of Cause. For purposes of this Agreement, "Cause"
shall
mean the occurrence of any of the following:
(i) the Employee (A) materially breaches any of the terms or
conditions set forth in Sections 5, 6, or 7 of this Agreement or
(B)
materially breaches any of the other terms and conditions set forth
in 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, and, in the case of either clause (A) or clause
(B),
fails to cure such breach within twenty (20) days after the
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
the Employee is in breach hereof;
(ii) the Employee commits any act in bad faith materially
detrimental to the business or reputation of the Company;
(iii) the Employee is convicted of (or admits in writing to the
commission of) any crime involving fraud, deceit or moral turpitude
or the
Employee intentionally engages in dishonest or illegal activities
that have
a material adverse effect upon the business or reputation of the
Company;
or
(iv) the Employee dies or becomes mentally or physically
incapacitated or disabled so as to be unable to perform the
Employee's
duties under this Agreement. For purposes of this Agreement, the
Employee
shall be deemed to be mentally or physically incapacitated or
disabled so
as to be unable to perform his duties if and to the extent he
becomes
permanently disabled under the Company's long-term disability
policy then
in effect.
(b) Definition of Good Reason. For purposes of this Agreement,
"Good
Reason" shall mean the occurrence of any of the following:
(i) the Company materially breaches any of the terms or
conditions set forth in this Agreement and fails to cure its breach
within
twenty (20) days after its receipt from the Employee of written
notice of
such breach, which notice describes in reasonable detail the
Employee's
belief that the Company is in breach hereof;
(ii) the Company materially diminishes the Employee's duties or
reassigns the Employee to a position not consistent with the
Employee's
general area of knowledge, experience and skills, or assigns
substantial
additional responsibilities to the Employee;
(iii) the Company reduces the Employee's Base Salary;
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(iv) the Company relocates the Employee's principal place of
employment to more than 35 miles from the Employee's then current
principal
place of employment;
(v) the Company materially increases the Employee's travel
obligations; or
(vi) the Company transfers substantially all of its assets to a
successor entity and such entity fails to assume the Company's
obligations
under this Agreement.
For purposes of this Agreement, "termination of employment"
"termination of the
Employee" and "termination of this Agreement" shall have the same
meaning unless
otherwise agreed to in writing by the parties hereto.
(c) Severance Payments. In the event of termination of the Employee
by
the Company without Cause or resignation by the Employee with Good
Reason:
(i) if such termination occurs prior to the second anniversary
of
the date of this Agreement, the Employee shall be entitled to
receive
severance payments equal his Base Salary until the second
anniversary of
the date of such termination which amounts will be payable at the
same
times as the Base Salary would have been payable had the Employee
not been
terminated;
(ii) if such termination occurs on or after the second
anniversary of the date of this Agreement, the Employee shall be
entitled
to receive severance payments equal to his Base Salary until the
first
anniversary of the date of such termination which amounts will be
payable
at the same times as the Base Salary would have been payable had
the
Employee not been terminated;
(iii) during the period of time during which the severance
payments are being
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