Exhibit 10.22
EMPLOYMENT AGREEMENT
This Employment Agreement, dated this 26th day of July, 2004, is between
CompBenefits Dental and Vision Company ("CompBenefits") and Xxxx Xxx Xxxxxxx
(the "Executive").
WITNESSETH
WHEREAS, CompBenefits desires to employ Executive in the capacity and on
the terms and conditions hereinafter set forth and Executive is willing to serve
in such capacity and on such terms and conditions.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. Employment. Subject to the provisions of Section 6, CompBenefits hereby
employs the Executive and the Executive accepts such employment upon the terms
and conditions hereinafter set forth.
2. Term of Employment. The term of the Executive's employment pursuant to
this Agreement shall be effective as of the date of this Agreement, and shall
remain in effect for a period of five (5) years from said date or until
terminated in accordance with Section 6. The period during which the Executive
serves as an employee of CompBenefits or any of its subsidiary operations in
accordance with and subject to the provisions of this Agreement is referred to
in this Agreement as the "Term of Employment." If CompBenefits continues to
employ Executive beyond the Term of Employment without entering into a written
agreement extending the term of this Agreement, all obligations and rights under
this Agreement shall prospectively lapse as of the expiration date except for
Executive's obligations under Paragraph 8 and Executive shall be an at-will
employee of CompBenefits.
3. Duties. During the Term of Employment, the Executive (a) shall serve as
an officer of CompBenefits, (b) shall perform such duties and responsibilities
as may be reasonably determined by the Chief Executive Officer or other designee
of CompBenefits consistent with the Executive's position as an officer of
CompBenefits, provided that such duties and responsibilities shall be within the
general area of the Executive's experience and skills, (c) upon the request of
the Board of Directors of CompBenefits, shall serve as an officer of any of its
subsidiaries; and (d) shall render all services incident to the foregoing. The
Executive agrees to use her best efforts in, and shall devote her full working
time, attention, skill and energies to, the advancement of the interests of
CompBenefits Dental and Vision Company, CompBenefits Corporation (parent company
of CompBenefits), and their subsidiaries and Affiliates and the performance of
her duties and responsibilities hereunder.
4. Compensation.
(a) During the Term of Employment, CompBenefits shall pay the
Executive a salary ("Base Salary") at an annual rate as shall be determined from
time to time by the Chief Executive Officer of CompBenefits, provided, however,
that such rate per annum shall not be less than $185,000. Such salary shall be
subject to withholding under applicable law and shall be payable in periodic
installments in accordance with CompBenefits' usual practice for its executives,
as in effect from time to time.
(b) Executive shall be paid a signing bonus of $25,000, which will be
provided to Executive in her paycheck on July 30, 2004. Should Executive resign
her position or be terminated for cause, this bonus is recoverable in full
within the first six (6) months of employment. Should Executive resign her
position or be terminated for cause after six (6) months but before one (1) year
of employment, 50% of said bonus shall be recoverable and Executive shall
reimburse the Company within thirty (30) days after her termination of
employment.
(c) Subject to the provisions of Section 6, upon completion of each
calendar year and as determined by the Compensation Committee of the Board of
Directors and the Chief Executive Officer of the Company, the Executive shall be
eligible to receive a bonus to the extent payable pursuant to a bonus plan then
in effect from time to time for Executives of CompBenefits of equivalent
position and title ("Annual Bonus") (with a target percentage of Base Salary of
40% for 2004), provided (i) the Executive has not voluntarily terminated her
employment with the Company for other than Good Reason, or (ii) Executive's
employment has not been terminated for Cause by the Company at the time said
Annual Bonus, if any, is paid in the normal course (typically 2nd Quarter of the
following year). Notwithstanding the above and provided that Executive is
employed with the Company on March 1, 2005, it is agreed that Executive is
guaranteed a calendar year 2004 Annual Bonus payment of not less than $37,000
("Guaranteed Bonus"). Said Guaranteed Bonus shall be due and payable in the 2nd
Quarter of 2005.
All compensation shall be subject to withholding under applicable law.
5. Benefits.
(a) During the Term of Employment, the Executive shall be entitled to
participate in any and all bonus plans, medical, pension and dental insurance
plans and disability income plans as in effect from time to time for executives
of CompBenefits. Such participation shall be subject to (i) the terms of the
applicable plan documents, (ii) generally applicable policies of CompBenefits,
and (iii) the discretion of the Board of Directors of CompBenefits or
administrative or other committee provided for in or contemplated by such plan.
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(b) CompBenefits shall promptly reimburse the Executive for all
reasonable business expenses incurred by the Executive during the Term of
Employment in accordance with CompBenefits' practices for executives of
CompBenefits, as in effect from time to time.
(c) During the Term of Employment, the Executive shall receive paid
vacation annually in accordance with CompBenefits' practices for executives of
CompBenefits, as in effect from time to time.
(d) Except as contemplated by Sections 5 (b) and 5 (c), compliance
with provisions of this Section 5 shall in no way create or be deemed to create
any obligation, express or implied, on the part of CompBenefits or any of its
subsidiaries or Affiliates with respect to the continuation of any benefit or
other plan or arrangement maintained as of or prior to the date hereof or the
creation and maintenance of any particular benefit or other plan or arrangement
at any time after the date hereof. Notwithstanding the foregoing, the benefits
provided to the Executive during the Term of Employment will not be materially
less favorable in the aggregate than the benefits in effect for the executives
of CompBenefits as of the date of this Agreement.
6. Termination of Employment of the Executive. This Agreement and the
Executive's employment with CompBenefits and/or its subsidiaries may be
terminated as follows:
(a) At any time by the mutual consent of the Executive and
CompBenefits.
(b) At any time for "cause" by CompBenefits upon written notice to the
Executive. For purposes of this agreement, a termination shall be for "cause"
if:
(i) the Executive shall commit an act of fraud, embezzlement,
misappropriation or breach of fiduciary duty against CompBenefits or any of its
subsidiaries or affiliates or shall be convicted by a court of competent
jurisdiction or shall plead guilty or nolo contendere to any felony or crime
involving moral turpitude;
(ii) the Executive shall commit a material breach of any of the
covenants, terms or provisions of Section 8 hereof;
(iii) the Executive shall commit a material breach of any of the
covenants, terms or provisions hereof (other than pursuant to Section 8 hereof)
which breach has not been remedied within thirty (30) days after delivery to the
Executive by CompBenefits of written notice thereof; or
(iv) the Executive shall consistently disobey reasonable
instructions from CompBenefits' Chief Executive Officer or his designee
consistent with the terms of this Agreement and Executive's duties, title, and
general area of expertise;
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(v) the Executive shall fail or be unable to carry out
effectively Executive's duties and obligations to CompBenefits and/or its
subsidiaries, or to participate effectively and actively in the management of
CompBenefits as determined in the reasonable judgment of CompBenefits' Chief
Executive Officer, after written notice and a reasonable opportunity to cure
given the nature of failure as described in the written notice.
Upon termination for cause as provided in this Section 6 (b), all
obligations of CompBenefits under this Agreement shall thereupon immediately
terminate other than any obligations with respect to earned but unpaid Base
Salary; provided CompBenefits shall have any and all rights and remedies under
this Agreement and applicable law.
(c) Upon the earlier death or permanent disability (as defined below)
of Executive continuing for a period of ninety (90) days. Upon any such
termination of the Executive's employment, all obligations of CompBenefits under
this Agreement shall thereupon immediately terminate other than any obligations
with respect to (i) earned but unpaid Base Salary including any earned but
unpaid bonus from the previous calendar year, if applicable, through the date of
termination, (ii) bonus payments with respect to the calendar year which such
termination occurred on the basis of and to the extent contemplated in any bonus
plan then in effect with respect to executive officers of CompBenefits,
pro-rated on the basis of number of days of the Executive's actual employment
hereunder during such calendar year through such termination, and (iii) in the
case of permanent disability, continuation of health insurance benefits until
the first anniversary of the date of termination to the extent permitted under
Executive's group health insurance policy. As used herein, the definition of the
term "permanent disability" or "permanently disabled" shall parallel the
definition of same as provided under the long-term disability insurance policy
then in effect on executives of the Company. In the event that no such policy is
in existence at the time of the contended disability, "permanent disability"
shall be defined as the inability of the Executive, by reason of injury, illness
or other similar cause, to perform a major part of her duties and
responsibilities in connection with the conduct of the business and affairs of
CompBenefits.
(d) At any time by the Executive upon sixty (60) days' prior written
notice to CompBenefits. Upon termination by the Executive as provided in this
Section 6 (d), all obligations of CompBenefits under this Agreement shall
thereupon immediately terminate other than any obligations with respect to
earned but unpaid Base Salary.
7. Severance Payments Following a Change In Control.
In the event of termination of the Executive within 18 months
following a Change In Control (as defined in paragraph 10(a)) by either (i)
CompBenefits without cause or (ii) by Executive for Good Reason (as defined
under Section 10(b)), then CompBenefits shall, in lieu of the payments and
arrangements specified above, pay the Executive severance pay in an amount equal
to one (1) times the Executive's Base Salary on the termination date ("Severance
Pay").
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Such Severance Pay shall be payable over twelve (12) months in equal monthly
installments and shall be subject to withholding to the extent required under
applicable law. The Severance Pay contemplated by this Section 7 is agreed by
the parties hereto to be in full satisfaction and compromise of any claim
arising out of Executive's employment by CompBenefits and the termination
thereof. Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise.
During the period of time during which the Severance Pay is being
remitted pursuant to the above, the Company will either continue the Executive's
health (medical) insurance as provided in Section 5 to the extent permitted
under applicable law and CompBenefits' group health insurance policies or
reimburse the Executive for her cost for comparable coverage to the extent such
coverage cannot be provided under such policies; provided that, notwithstanding
anything herein to the contrary, CompBenefits shall not be required to continue
to provide the Executive with health benefits under this paragraph to the extent
the Executive becomes entitled to receive benefits substantially similar to
those which the Executive otherwise would have been entitled to receive
hereunder.
8. Non-Competition.
(a) During any period in which the Executive serves as an employee of
CompBenefits and for the greater of (i) the period Executive continues to
receive Severance Pay, or (ii) a period of one (1) year after the date of
termination of the Executive's employment at any time, regardless of the
circumstances thereof, the Executive shall not, without the express written
consent of CompBenefits, directly or indirectly, engage, participate, invest in,
be employed by or assist, whether as owner, part-owner, shareholder, partner,
director, officer, trustee, employee, agent or consultant, or in any other
capacity, any Person other than CompBenefits and its Affiliates whose
activities, products, and/or services are in the Designated Industry. Without
limiting the foregoing, the foregoing covenant shall prohibit the Executive
during the period set forth above from (i) hiring or attempting to hire for or
on behalf of any Person in the Designated Industry any officer or Employee of
CompBenefits or any of its Affiliates, (ii) encouraging for or on behalf of any
such Person in the Designated Industry any officer or Employee to terminate her
or her relationship or employment with CompBenefits or any of its Affiliates,
(iii) soliciting for or on behalf of any such Person in the Designated Industry
any customer of CompBenefits or any of its Affiliates and (iv) diverting to any
such Person in the Designated Industry any customer of CompBenefits or any of
its Affiliates; provided, however, that nothing herein shall be construed as
preventing the Executive from making passive investments in a Person in the
Designated Industry if the securities of such Person are publicly traded and
such investment constitutes less than five percent of the outstanding shares of
capital stock or comparable equity interests of such Person. As of the date of
this Agreement, the Executive is not performing any other duties for, and is not
a party to any similar agreement with, any Person competing with CompBenefits or
any of its affiliates.
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(b) In the course of performing services hereunder and otherwise, the
Executive has had, and it is anticipated that the Executive will from time to
time have, access to confidential records, data, customer lists, trade secrets
and similar confidential information owned or used in the course of business by
CompBenefits and its subsidiaries and affiliates (the "Confidential
Information"). The Executive agrees (i) to hold the Confidential Information in
strict confidence, (ii) not to disclose the Confidential Information to any
Person (other than in the regular business of CompBenefits), and (iii) not to
use, directly or indirectly, any of the Confidential Information for any
competitive or commercial purpose; provided, however, that the limitations set
forth above shall not apply to any Confidential Information which (A) is then
generally known to the public; (B) became or becomes generally known to the
public through no fault of the Executive; or (C) is disclosed in accordance with
an order of a court of competent jurisdiction or applicable law. Upon the
termination of the Executive's employment with CompBenefits, all data,
memoranda, customer lists, notes, programs and other papers and items, and
reproductions thereof relating to the foregoing matters in the Executive's
possession or control, shall be returned to CompBenefits and remain in its
possession.
(c) For purposes of this Section 8, the following terms shall have the
meanings specified unless defined otherwise herein:
(i) "Affiliates" shall mean any subsidiary company of
CompBenefits Dental and Vision Company, whether wholly or partially owned,
CompBenefits Corporation, parent company of CompBenefits Dental and Vision
Company, and any subsidiary company of CompBenefits Corporation, whether wholly
or partially owned.
(ii) "Employee" shall mean any individual employed currently or
during a one-year period immediately prior to the date of any hiring or
solicitation for hire of such individual by CompBenefits or its Affiliates;
(iii) "Designated Industry" shall mean (A) the business of
providing dental health care services and any and all activities relating
thereto, including, without limitation, the provision and administration of
discount fee-for-service dental plans, prepaid dental plans, PPO dental plans
and indemnity dental plans and operation and/or ownership of dental health care
practices, (B) the business of providing vision health care services and any and
all activities relating thereto, including, without limitation, the provision
and administration of discount fee-for-service vision plans, prepaid vision
plans, PPO vision plans and indemnity vision plans, and (C) any other revenue
generating business conducted by CompBenefits or its Affiliates;
(iv) "Person" shall mean an individual, a corporation, an
association, a partnership, an estate, a trust, and any other entity or
organization.
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9. Specific Performance: Severability. It is specifically understood and
agreed that any breach of the provisions of this Agreement including, without
limitation, Section 8 hereof by the Executive is likely to result in irreparable
injury to CompBenefits and its Affiliates, that the remedy at law alone will be
inadequate remedy for such breach and that, in addition to any other remedy it
may have, CompBenefits shall be entitled to enforce the specific performance of
this Agreement by the Executive and to seek both temporary and permanent
injunctive relief (to the extent permitted by law), without the necessity of
proving actual damages. In case any of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, any such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this unenforceable provision
shall be limited or modified (consistent with its general intent) to the extent
necessary to make it valid, legal and enforceable, or if it shall not be
possible to so limit or modify such invalid, illegal or unenforceable provision
or part of a provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision or part of a provision had never been
contained in this Agreement.
10. Definitions.
(a) For purposes of this Agreement, "Change In Control" shall mean any
of the following events:
(i) 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") 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);
(ii) 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;
(iii) 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,
directly or indirectly, shares representing in the aggregate 50 percent of the
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
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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.
(b) For purposes of this Agreement, "Good Reason" shall mean the
following:
(i) a reassignment of the Executive to a position not consistent
with the Executive's general area of knowledge, experience and skills;
(ii) any material diminution of the Executive's Base Salary as in
effect immediately preceding a Change In Control;
(iii) any relocation of Executive's principal place of employment
to more than 50 miles from the principal place of employment immediately
preceding a Change In Control;
(iv) any failure of any successors to the Company to assume this
agreement; or
(v) any breach of this Agreement by the Company not cured within
thirty (30) days after its receipt of notice from Executive of such breach.
11. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or mailed by certified or registered mail (return receipt
requested) as follows:
To CompBenefits:
000 Xxxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
To the Executive:
Xxxx Xxx Xxxxxxx
or to such other address of which any party may notify the other parties as
provided above. Notices shall be effective as of the date of such delivery or
mailing.
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12. Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, by and between the parties hereto with
respect to the employment of Executive by CompBenefits and/or its Affiliates.
Each party to this Agreement acknowledges and agrees that no representations,
inducements, or other agreement, statement, or promise, oral or otherwise, not
contained in this Agreement shall be valid or binding.
13. Arbitration. Disputes arising out of or relating to this Agreement
shall be determined by binding arbitration in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association, provided,
however, that any dispute arising out of the non-competition provision of this
Agreement (Section 8) shall not be subject to arbitration.
14. Miscellaneous. This Agreement shall be governed by and construed under
the laws of the State of Georgia, and shall not be amended, modified or
discharged in whole or in part except by an Agreement in writing signed by both
of the parties hereto. The failure of either of the parties to require the
performance of a term or obligation or to exercise any right under this
Agreement or the waiver of any breach hereunder shall not prevent subsequent
enforcement of such term or obligation or exercise of such right or the
enforcement at any time of any other right hereunder or be deemed a waiver of
any subsequent breach of the provision so breached, or of any other breach
hereunder. This Agreement shall inure to the benefit of successors of
CompBenefits by way of merger, consolidation or transfer of all or substantially
all of the assets of CompBenefits, and may not be assigned by the Executive.
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IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first set forth above.
COMPBENEFITS DENTAL & VISION COMPANY
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Executive Officer
EXECUTIVE
By: /s/ Xxxx Xxx Xxxxxxx
------------------------------------
Name: Xxxx Xxx Xxxxxxx
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