UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report November 23, 1998
(Date of earliest event reported)
NuMED Home Health Care, Inc.
(Exact name of Registrant as specified in its charter)
Nevada 1-12992 34-171164
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification Number)
5770 Roosevelt Boulevard, Suite 700
Clearwater, Florida 33760
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(Address of principal executive offices) (Zip Code)
(727) 524-3227
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(Registrant's telephone number, including area code)
Item 5. Other Events.
On November 23, 1998, NuMED Home Health Care, Inc. and its Chief
Executive Officer Mr. Jugal K. Taneja, entered into a Termination,
Noncompetition and Mutual Release Agreement pursuant to which Mr.
Taneja relinquished his duties as the Chief Executive Officer and
Chairman of the Board and agreed to accept $250,000 and 744,680 shares
of Common Stock in exchange for releasing NuMED from its contractual
obligations under his Employment Agreement. Additionally, the
expiration date of all of Mr. Taneja's options and warrants were
extended for a term of three years from November 23, 1998, and
accordingly, will expire on November 23, 2001. As the Company's largest
beneficial owner, Mr. Taneja will remain a director.
The Board also approved the appointment of the current President, Ms.
Susan J. Carmichael, to the additional post of Chief Executive Officer
effective November 23, 1998. Correspondingly, the company entered into
a new one-year Employment Agreement with Ms. Carmichael effective as of
November 23, 1998, in lieu of her prior three-year Employment Agreement
as President.
Mr. Taneja's Termination, Noncompetition and Mutual Release Agreement
and Ms. Carmichael's new Employment Agreement are filed as exhibits to
this Current Report on Form 8-K and are incorporated herein by this
reference. The discussion above is qualified in its entirety by
reference to those agreements.
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Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Not applicable
(b) Pro Forma financial information.
Not applicable
(c) Exhibits.
10.1 Termination, Noncompetition and Mutual Release Agreement made effective
as of November 23, 1998, by and between NuMED Home Health Care, Inc.
and Jugal K. Taneja.
10.2 Employment Agreement made effective as of November 23, 1998, by and
between NuMED Home Health Care, Inc. and Ms. Susan J. Carmichael.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NuMED HOME HEALTH CARE, INC.
By: /s/ Susan J. Carmichael
Susan J. Carmichael
Chief Executive Officer and President
Date: December 4, 1998
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EXHIBIT INDEX
Exhibit No. Description
10.1 Termination, Noncompetition and Mutual Release Agreement made effective
as of November 23, 1998, by and between NuMED Home Health Care, Inc.
and Jugal K. Taneja.
10.2 Employment Agreement made effective as of November 23, 1998, by and
between NuMED Home Health Care, Inc. and Ms. Susan J. Carmichael.
Exhibit 10.1
TERMINATION, NONCOMPETITION AND MUTUAL RELEASE AGREEMENT
THIS AGREEMENT is effective as of the 23rd day of November, 1998, by
and between NuMED Home Health Care, Inc., a Nevada corporation (together with
any and all affiliates and subsidiaries, the "Former Employer"), and Jugal K.
Taneja (the "Former Executive").
WITNESSETH
WHEREAS, the Former Executive was employed by the Former Employer under
that certain Employment Agreement by and between Former Employer and Former
Executive dated September 1, 1995 and amended September 30, 1996 and renewed
annually by the Board of Directors thereafter (the "Terminated Agreement") ,
until the date hereof; and
WHEREAS, the Former Executive and the Former Employer have determined
that it is in their mutual best interests to terminate the Terminated Agreement
and their relationship as employee and employer as of the date hereof; and
WHEREAS, the Former Employer desires to assure itself of the Former
Executive's continued noncompetition obligations pursuant to the terms hereof;
and
WHEREAS, the Former Employer and Former Executive desire to mutually
release each other from any and all claims that they might have against each
other and all of their other obligations under the Terminated Agreement and to
enter into this Agreement in full and final settlement pursuant to the terms
hereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
covenant and agree as follows:
1. Termination of Employment Relationship. The Terminated Agreement is
hereby terminated, and the Former Employer and the Former Executive
hereby agree to terminate their employment relationship.
2. Consideration.
A. In consideration for the Former Executive's release of his
rights under the Terminated Agreement, his noncompetition and
non-disclosure covenants, the mutual release, and the
tendering of Former Executive's resignation from any and all
positions as an officer (but not as a director) of the Former
Employer (which includes any and all subsidiaries and
affiliates as defined above), the Former Employer shall (i)
pay the Former Executive (a) the sum of Two Hundred Fifty
Thousand Dollars
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($250,000) in cash (the "Cash Payment") payable in equal
monthly installments at the Former Executive's most recent
annual salary rate until the Former Employer receives the
final payment in connection with the Rosewood Care Center
settlement (the "Rosewood Receivable"), at which time the
Former Employer shall pay the Former Executive the sum of
$250,000 less monthly installments made in accordance with
this subsection through the date thereof, and (b) 744,680
shares of the Former Employer's common stock (the "Common
Stock") (which number of shares represents $350,000 worth of
the Common Stock based on the average closing price for the
last five (5) trading days) which shares of Common Stock shall
be delivered upon the execution and delivery of this
Agreement, and (ii) extend the term of all of Former
Executive's existing options and warrants for a term of three
years from the date hereof.
B. As security for the Cash Payment set forth in subsection A.
above, Former Employer hereby grants to Former Executive a
security interest in the Rosewood Receivable and all proceeds
thereof and hereby covenants and agrees to execute and deliver
to Former Executive a UCC-1 Financing Statement perfecting
such security interest within three days after receipt from
Former Executive's legal counsel. The Former Employer shall
execute and deliver all documents, provide all information and
take or forbear from all such action as may be necessary or
appropriate to grant or perfect the security interest created
hereby and achieve the purpose of this subsection B.
Additionally, if the Cash Payment is not paid in full within
ninety (90) days after the date hereof, interest shall accrue
on the unpaid balance at the prime rate of interest of First
Union Bank, N.A. from time to time. Moreover, Former Executive
shall be allowed to retain his current physical office
location until the Cash Payment is paid in full.
3. Noncompetition and Non-Disclosure Requirements.
A. Rationale for Restrictions. Former Executive acknowledges that
his past services to the Former Employer were of a special,
unique, extraordinary and intellectual character, and his
position with the Former Employer placed him in a position of
confidence with customers, suppliers and employees of Former
Employer and other Related Entities. The Former Executive
further acknowledges that the rendering of services to the
Former Employer necessarily required the disclosure to him of
confidential information (as defined below) of the Former
Employer and, to the extent that the Former Employer shall
have any parent, subsidiary, affiliated corporations,
partnerships, or joint venture (collectively "Related
Entities"), of the Related Entities. The Former Executive and
the Former Employer agree that during his course of
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employment with the Former Employer, the Former Executive
developed personal relationships with the Former Employer's
financiers, customers, suppliers and employees, and the Former
Executive agrees that it is reasonable and necessary for the
protection of the goodwill and legitimate business interests
of the Former Employer and Related Entities that the Former
Executive make the covenants contained herein, that the
covenants are a material inducement for the Former Employer to
enter into this Agreement, and that the covenants are given as
an integral part of and incident to this Agreement.
B. Noncompetition In Related Business. As used herein, the term
"Restrictive Period" means the time period commencing on the
date of this Agreement and ending two (2) years after the date
hereof. The Former Executive agrees not to utilize his
knowledge of the business of the Former Employer or his
relationships with investors, suppliers, customers, clients,
or financial institutions to compete with the Former Employer
or any of the Related Entities in any business which is the
same as, or substantially similar to, the business conducted
by the Former Employer or any of the Related Entities on the
date hereof. Pursuant to these covenants, the Former Executive
agrees that he will not, during the Restrictive Period:
i. directly or indirectly engage in, continue in, be
employed by, or carry on any business, including
owning or controlling any financial interest in any
corporation, partnership, firm, or other form of
business organization, which competes with, or is
engaged in, or carries on any aspect of such business
or any business substantially similar to, the Former
Employer's or Related Entities' business as it exists
on the date hereof;
ii. directly or indirectly, assist, promote or encourage
any employees or clients, or potential employees or
clients, of the Former Employer or Related Entities
to terminate or discontinue their relationship in
order to pursue opportunities or employment with any
competitor of the Former Employer or Related
Entities.
iii. consult with, advise or assist in any way, whether or
not for consideration, any corporation, partnership,
firm or other business organization which is now,
becomes or may become a competitor of the Former
Employer or Related Entities in any aspect of the
Former Employer's or Related Entities' business as it
exists on the date hereof.
C. Disclosure of Confidential Information. The Former Executive
acknowledges that the inventions, innovations, software, trade
secrets,
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business plans, financial strategies, finances, and all other
confidential or proprietary information with respect to the
business and operations of the Former Employer and Related
Entities are valuable, special and unique assets of the Former
Employer. The Former Executive agrees not to, at any time
during or after the Restrictive Period, except (i) when
compelled by legal process or as otherwise required by law,
and (ii) when necessary to defend any action brought against
Former Executive relating to the Former Employer or Related
Entities, disclose, directly or indirectly, to any person or
entity, or use or authorize or purpose to authorize any person
or entity to use any confidential or proprietary information
with respect to the Former Employer or Related Entities
without the prior written consent of the Former Employer,
including, without limitation, information as to the financial
condition, results of operations, identities of clients or
prospective clients, products under development, acquisition
strategies or acquisitions under consideration, pricing or
cost information, marketing strategies or any other
information relating to the Former Employer or any of the
Related Entities which could be reasonably regarded as
confidential. Provided, however, information which is or may
become generally available to the public shall not constitute
confidential information which is subject to the restrictions
set forth herein.
D. The Former Executive agrees that the geographic scope of this
covenant not to compete shall extend to any and all markets in
which the Former Employer operates in the United States as of
the date of this Agreement and any Geographic area in which
the Former Employer expands its operations to include (whether
by acquisition or otherwise) during the Restrictive Period.
E. In the event of any breach of this covenant not to compete,
the Former Executive recognizes that the remedies at law will
be inadequate and that in addition to any relief at law which
may be available to the Former Employer for such violation or
breach and regardless of any other provision contained in this
Agreement, the Former Employer shall be entitled to equitable
remedies (including an injunction) and such other relief as a
court may grant after considering the intent of this Section
3.
F. In the event a court of competent jurisdiction determines that
the provision of this covenant not to compete are excessively
broad as to duration, geographic scope, prohibited activities
or otherwise, the parties agree that this covenant shall be
reduced or curtailed to the extent necessary to render it
enforceable.
4. General Mutual Release.
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A. Former Executive, on his own behalf and on behalf of his heirs
and representatives, hereby releases and forever discharges
Former Employer, along with its respective officers,
directors, employees, assigns, successors, and representatives
from all manner of civil actions, contract actions, tort
actions, statutory actions, administrative actions, injuries,
damages, loss of services, constitutional claims, charges of
discrimination and claims for costs, expenses or attorney's
fees which he had, has, or hereafter can, or may have against
the Former Employer arising out of any event, act or
occurrence in any way based on the employment of the Former
Executive by the Former Employer, including but not limited to
any and all claims, damages or losses, known or unknown,
directly or indirectly sustained by the Former Executive in
connection with any matter arising out of their employment
relationship, except for the provisions of this Agreement.
B. Former Employer, on its own behalf and on behalf of its
successors and assigns, hereby releases and forever discharges
Former Executive, along with his heirs, successors, and
representatives from all manner of civil actions, contract
actions, tort actions, statutory actions, administrative
actions, injuries, damages, loss of services, constitutional
claims, charges of discrimination and claims for costs,
expenses or attorney's fees which it had, has, or hereafter
can, or may have against the Former Executive arising out of
any event, act or occurrence in any way based on (i) the
employment of the Former Executive by the Former Employer or
(ii) actions or inaction of Former Executive as a director
prior to and including the date hereof, including but not
limited to any and all claims, damages or losses, known or
unknown, directly or indirectly sustained by the Former
Employer in connection with any matter arising out of their
employment relationship or service by Former Executive on the
Former Employer's board of directors, except for the
provisions of this Agreement.
5. Demand Registration Rights.
A. Right to Demand Registration. Upon the written request of
Former Executive at any time after one year after the date of
this Agreement (which request shall specify the Common Stock
intended to be disposed of by Former Executive and the
intended method of distribution thereof), the Former Employer
shall:
i. Prepare and file with the Securities and Exchange
Commission (the "Commission") a registration
statement under the Securities Act of 1933 (the
"Act") with respect to such Common Stock to the
extent required to permit the disposition of such
Common Stock so to be registered in accordance with
the intended method
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of distribution thereof specified in such request and
use its reasonable best efforts to cause such
registration statement to become effective, and keep
such registration statement effective for not less
than one year thereafter or such earlier date as all
securities offered are sold.
ii. Prepare and file with the Commission such amendments
and supplements to such registration statement and
the prospectus used in connection with such
registration statement as may be necessary to comply
with the provisions of the Act with respect to the
disposition of all Common Stock covered by such
registration statement.
iii. Furnish to the Former Executive such numbers of
copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of
the Act, and such other documents as it may
reasonably request in order to facilitate the
disposition of such Common Stock owned by it.
iv. Use its reasonable best efforts to Register and
qualify such Common Stock covered by such
registration statement under the Blue Sky laws of
such jurisdictions as shall be reasonably requested
by the Former Executive, provided that the Former
Employer shall not be required in connection
therewith or as a condition thereto to qualify to do
business or to file a general consent to service of
process in any such states or jurisdiction.
B. Expenses of Registration. All expenses incurred in connection
with any registration or qualification, including, without
limitation, all registration, filing and qualification fees,
printing expenses, fees and disbursements of counsel for the
Former Employer and expenses of any special audits incidental
to or required by such registration, qualification or
compliance shall be borne by the Former Employer, except that
the Former Employer shall not be required to pay underwriters'
discounts, commissions, or stock transfer taxes relating to
the Common Stock or the fees and disbursements of counsel to
the Former Executive.
C. Indemnification. In the event of (i) the registration of any
Common Stock under the Act pursuant to the provisions of this
Agreement and to the extent permitted by applicable law, the
Former Employer agrees to indemnify and hold harmless the
Former Executive, and each other person, if any, who controls
the Former Executive within the meaning of the Act, from and
against any and all losses, claims, damages, or liabilities
(or actions in respect thereof) which arise out of or are
based upon any untrue statement or alleged untrue statement of
any material
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fact contained in any registration statement under which such
Common Stock was Registered under the Act or any prospectus
contained therein, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the
Former Executive, and each such controlling person, for any
legal or any other expenses reasonably incurred by Former
Executive, or controlling person in connection with
investigating or defending any such loss, claim, damage,
liability, or action provided, however, that the Former
Employer will not be liable in any such case to the extent
that any such loss, claim, damage, or liability arises out of
or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such
registration statement or such prospectus in reliance upon,
and in conformity with, information furnished to the Former
Employer by the Former Executive or such controlling person,
specifically for use in preparation thereof; (ii) the
registration of any Common Stock under the Act pursuant to the
provisions of this Agreement and to the extent permitted by
applicable law, the Former Executive, and each other person,
if any, who controls the Former Executive within the meaning
of the Act, agrees to indemnify and hold harmless the Former
Employer, each person who controls the Former Employer within
the meaning of the Act, and each officer and director of the
Former Employer from and against any losses, claims, damages,
or liabilities, joint or several, to which the Former
Employer, such controlling person, or any such officer or
director may become subject under the Act or otherwise,
insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such
Common Stock was registered under the Act or any prospectus
contained therein, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or
alleged untrue statement or omission or alleged omission was
made therein in reliance upon, and in conformity with,
information furnished to the Former Employer by the Former
Executive or such controlling person specifically for use in
connection with the preparation thereof; and will reimburse
the Former Employer, each such controlling person and each
such officer or director for any legal or any other expenses
reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, or
action; (iii) the registration of any Common Stock under the
Act pursuant to the provisions of this Agreement, promptly
after receipt by an indemnified party of notice of the
commencement of any action or the assertion of a claim which
may be subject to indemnification hereunder, such indemnified
party will, if a
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claim in respect thereof is to be made against an indemnifying
party, give written notice to such indemnifying party of the
commencement or assertion thereof, but the omission so to
notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise
than pursuant to the provisions of this paragraph 5C. In case
any such action is brought or such assertion made against any
indemnified party, and it notifies any indemnifying party of
such commencement or assertion made against any indemnified
party, the indemnifying party will be entitled to participate
in and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, and to assume the
defense thereof, with counsel satisfactory to such indemnified
party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the
defense thereof, other than the reasonable cost of
investigation.
6. Return of Former Employer's Property. Simultaneously with the execution
hereof, the Former Executive covenants that he is returning any and all
material records, designs, patents, business plans, financial
statements, manuals, memoranda, lists, software and other property
delivered to or compiled by the Former Executive by or on behalf of the
Former Employer or its representatives, vendors or customers which
pertain to the business of the Former Employer and acknowledges that
such property is and shall remain the property of the Former Employer.
7. Notice. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be
deemed to have been duly given when hand-delivered, sent by telecopier,
facsimile transmission or other electronic means of transmitting
written documents (as long as receipt is acknowledged) or mailed by
United States certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:
If to Former Executive:
Mr. Jugal K. Taneja
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If to Former Employer:
NuMED Home Health Care, Inc.
5770 Roosevelt Boulevard, Suite 700
Clearwater, Florida 33760
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Attn: Chief Executive Officer
Facsimile: (727) 524-3349
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
8. Complete Agreement. Former Executive has no oral representations,
understandings or agreements with the Former Employer or any of its
officers, directors or representatives covering the same subject matter
as this Agreement. This written Agreement is the final, complete and
exclusive statement and expression of the agreement between the Former
Employer and Former Executive and of all the terms of this Agreement,
and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements. This written
Agreement may not be later modified except by a further writing signed
by a duly authorized officer of the Former Employer and Former
Executive, and no term of this Agreement may be waived except by
writing signed by the party waiving the benefit of such term.
9. Expenses Incurred in Connection with the Enforcement of this Agreement.
The Former Employer, if it prevails, and the Former Executive, if he
prevails, shall be entitled to reimbursement for any costs, including
legal fees, incurred in connection with the enforcement of the this
Agreement.
10. Change in Control. Employee understands and acknowledges that the
Former Employer may be merged, sold, or consolidated with or into
another entity and that such entity shall automatically succeed to the
rights and obligations of the Former Employer.
11. Indemnification
A. Indemnification by Former Employer. Former Employer agrees to
indemnify and defend Former Executive and hold him harmless
from and against any and all claims, demands, losses, costs,
expenses, damages, and deficiencies, including, without
limitation, interest, penalties, and attorneys= fees, that
Former Executive shall suffer or incur because of any act or
event occurring prior to the date hereof, including without
limitation, acts or inaction by Former Executive as a director
of Former Employer.
B. Third Party Claims.
i. Promptly after receipt by Former Executive of notice
of the commencement of any proceeding against it,
such indemnified party will, if a claim is to be made
against Former Employer under paragraph 11A, give
notice to Former Employer of the commencement of such
claim, but the failure to notify Former
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Employer will not relieve Former Employer of any
liability that it may have Former Executive, except
to the extent that the Former Employer demonstrates
that the defense of such action is prejudiced by
Former Executive's failure to give such notice.
ii. If any proceeding is brought against Former Executive
and he gives notice to Former Employer of the
commencement of such proceeding, Former Employer will
be entitled to participate in such proceeding and, to
the extent that it wishes (unless (i) Former Employer
is also a party to such proceeding and Former
Executive determines in good faith that joint
representation would be inappropriate, or (ii) Former
Employer fails to provide reasonable assurance to
Former Executive of its financial capacity to defend
such proceeding and provide indemnification with
respect to such proceeding), to assume the defense of
such proceeding with counsel satisfactory to Former
Executive and, after notice from Former Employer to
Former Executive of its election to assume the
defense of such proceeding, Former Employer will not,
as long as it diligently conducts such defense, be
liable to Former Executive under this paragraph 11
for any fees of other counsel or any other expenses
with respect to the defense of such proceeding, in
each case subsequently incurred by Former Executive
in connection with the defense of such proceeding,
other than reasonable costs of investigation. If
Former Employer assumes the defense of a proceeding,
(i) it will be conclusively established for purposes
of this Agreement that the claims made in that
proceeding are within the scope of and subject to
indemnification hereunder; (ii) no compromise or
settlement of such claims may be effected by Former
Employer without Former Executive's consent unless
(A) there is no finding or admission of any violation
of law or any violation of the rights of any person
and no effect on any other claims that may be made
against Former Executive, and (B) the sole relief
provided is monetary damages that are paid in full by
Former Employer; and (iii) Former Executive will have
no liability with respect to any compromise or
settlement of such claims effected without his
consent. If notice is given to Former Employer of the
commencement of any proceeding and Former Employer
does not, within ten days after Former Executive's
notice is given, give notice to Former Executive of
its election to assume the defense of such
proceeding, Former Employer will be bound by any
determination made in such proceeding or any
compromise or settlement effected by Former
Executive.
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iii. Notwithstanding the foregoing, if Former Executive
determines in good faith that there is a reasonable
probability that a proceeding may adversely affect
him or his affiliates other than as a result of
monetary damages for which he would be entitled to
indemnification under this Agreement, Former
Executive may, by notice to Former Employer, assume
the exclusive right to defend, compromise, or settle
such proceeding, but Former Employer will not be
bound by any determination of a proceeding so
defended or any compromise or settlement effected
without its consent (which may not be unreasonably
withheld).
iv. Former Employer hereby consents to the non-exclusive
jurisdiction of any court in which a proceeding is
brought against Former Executive for purposes of any
claim that Former Executive may have under this
Agreement with respect to such proceeding or the
matters alleged therein.
C. Cooperation. In the event of any claim or litigation with a
third party to which the foregoing provisions of this Section
relate, Former Executive agrees to cooperate with Former
Employer in connection therewith and to make all books,
records, and documents relating to the claim being brought, in
Former Executive's possession or under its control, available
to Former Employer or its duly authorized representatives,
upon request, for inspection and copying at the Former
Employer's expense. Nothing contained herein shall be
construed to limit the rights of the parties to discovery
under the procedural rules relevant to any proceeding.
D. Remedies. Each party shall have, and without notice may
exercise in any order, any and all rights and remedies,
whether in law or equity, now or hereafter provided to it
under this Agreement and any other agreement and applicable
law, all of which shall be cumulative and non-exclusive; the
exercise, non-exercise, waiver, or delay in exercise of any
such rights or remedies shall not constitute an election of
remedies or preclude the simultaneous or subsequent exercise
of the same or any other right or remedy.
12. Miscellaneous. This Agreement shall be binding upon, and inure to the
benefit of, the Former Employer, its respective successors and assigns,
and the Former Executive and his heirs, executors, administrators and
legal representatives. The parties agree that if any provision of this
Agreement shall under any circumstances be deemed invalid or
inoperative, the Agreements shall be construed with the invalid or
inoperative provision deleted and the rights and obligations of the
parties shall be construed and enforced accordingly. The validity,
interpretation, construction and performance of this Agreement shall be
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governed by the internal laws of the State of Florida. This Agreement
may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together will constitute but
one and the same instrument.
13. Counterparts; Facsimile Signatures. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
This Agreement may be effective upon the execution and delivery by any
party hereto of facsimile copies of signature pages hereto duly
executed by such party.
14. Default and Cure Period. In the event of a breach by either party of
the terms of this Agreement, the nonbreaching party will give prompt
written notice of such breach to the other and afford the breaching
party 30 days from receipt of such notice to cure such breach.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
NuMED Home Health Care, Inc.,
a Nevada corporation
("Former Employer")
By: /s/
Its:
/s/ Jugal K. Taneja
Jugal K. Taneja
("Former Executive")
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EMPLOYMENT AGREEMENT Exhibit 10.2
THIS AGREEMENT is made effective as of the 23rd day of November, 1998
by and between NUMED HOME HEALTH CARE, INC., a Nevada corporation (the
"Company"), and SUSAN J. CARMICHAEL (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to assure itself of the Executive's
continued employment in an executive capacity; and
WHEREAS, the Executive desires to be employed by the Company on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
covenant and agree as follows:
1. Employment and Duties. Subject to the terms and conditions of this
Agreement, the Company shall employ the Executive during the Term (as
hereinafter defined) as the Chief Executive Officer and President of the
Company, in such management capacities as may be assigned, from time to time, by
the Company. The Executive accepts such employment and agrees to devote her best
efforts and entire business time, skill, labor and attention to the performance
of such duties. The Executive agrees to provide promptly a description of any
other commercial duties or pursuits engaged in by the Executive to the Company's
Board of Directors. If the Board of Directors determines, in good faith, that
such activities conflict with the Executive's performance of her duties
hereunder, the Executive shall promptly cease such activities to the extent as
directed by the Board of Directors. It is acknowledged and agreed that such
description shall be made regarding any such activities in which the Executive
owns more than 10% of the ownership of the organization or which may be in
violation of Section 5 hereof, and that the failure of the Executive to provide
any such description shall enable the Company to terminate the Executive for
Cause (as provided in Section 6(c) hereof). The Company agrees to hold any such
information provided by the Executive confidential and not disclose the same to
any person other than a person to whom disclosure is reasonably necessary or
appropriate in light of the circumstances. In addition, the Executive agrees to
serve without additional compensation if elected or appointed to any additional
office or position, including as a director, of the Company or any subsidiary or
affiliate of the Company; provided, however, that the Executive shall be
entitled to receive such benefits and additional compensation, if any, that is
paid to executive officers of the Company in connection with such service.
2. Term. Subject to the terms and conditions of this Agreement,
including but not limited to the provisions for termination set forth in Section
6 hereof, the employment of the Executive under this Agreement shall commence on
November 23, 1998 and shall continue through and including the close of business
on the first anniversary date as set forth
<PAGE>
on Exhibit A attached hereto and incorporated herein (such term shall herein be
defined as the "Term"); provided, however, that the Company shall notify
Executive of its intent to renew or not to renew this Agreement at least 90 days
prior to the end of the Term and if the Company elects not to renew this
Agreement then Executive shall receive the Severance Payment set forth on
Exhibit A in equal installments over the 12 month period following the end of
the Term in accordance with Company pay policy immediately prior to such
notification.
3. Compensation.
a. Base Salary and Bonus. As compensation for the Executive's services
under this Agreement, the Executive shall receive, and the Company shall pay, an
annual base salary set forth on Exhibit A. Such base salary may be increased,
but not decreased, during the Term, in the Company's discretion, based upon the
Executive's performance and any other factors the Company deems relevant. Such
base salary shall be payable in accordance with the policy then prevailing for
the Company's executives. In addition to such base salary, the Executive shall
be entitled, during the Term, to a performance bonus as set forth on Exhibit A
and to participate in and receive payments from all other bonus and other
incentive compensation plans as may be adopted by the Company on the same basis
as other executive officers of the Company.
b. Payments. All amounts paid pursuant to this Agreement shall be
subject to withholding or deduction by reason of the Federal Insurance
Contribution Act, Federal income tax, state and local income tax, if any, and
comparable laws and regulations.
c. Other Benefits. The Executive shall be reimbursed by the Company for
all reasonable and customary travel and other business expenses incurred by the
Executive in the performance of the Executive's duties hereunder in accordance
with the Company's standard policy regarding expense verification practices. The
Executive shall be entitled to that number of weeks paid vacation per year that
is available to other executive officers of the Company in accordance with the
Company's standard policy regarding vacations and such other fringe benefits as
are set forth on Exhibit A, and shall be eligible to participate in such
pension, life insurance, health insurance, disability insurance and other
employee benefits plans, if any, which the Company may from time to time make
available to its executive officers generally.
4. Confidential Information.
a. The Executive has acquired and will acquire information and
knowledge respecting the intimate and confidential affairs of the Company (for
this purpose including all subsidiaries and affiliates, including without
limitation confidential information with respect to the Company's customer
lists, business methodology, processes, production methods and techniques,
promotional materials and information, and other similar matters treated by the
Company as confidential (the "Confidential Information"). Accordingly, the
Executive covenants and agrees that during the Executive's employment by the
Company (whether during the Term hereof or otherwise) and thereafter, the
Executive shall not, without the prior written consent of the Company, disclose
to any person, other than a person to whom disclosure is
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<PAGE>
reasonably necessary or appropriate in connection with the performance by the
Executive of the Executive's duties hereunder, any Confidential Information
obtained by the Executive while in the employ of the Company.
b. The Executive agrees that all memoranda, notes, records, papers or
other documents and all copies thereof relating to the Company's operations or
business, some of which may be prepared by the Executive, and all objects
associated therewith in any way obtained by the Executive shall be the Company's
property. This shall include, but is not limited to, documents and objects
concerning any customer lists, contracts, price lists, manuals, mailing lists,
advertising materials, and all other materials and records of any kind that may
be in the Executive's possession or under the Executive's control. The Executive
shall not, except for the Company's use, copy or duplicate any of the
aforementioned documents or objects (except for the purpose of performing
Executive's duties) nor remove them from the Company's facilities, nor use any
information concerning them except for the Company's benefit, either during the
Executive's employment or thereafter. The Executive covenants and agrees that
the Executive will deliver all of the aforementioned documents and objects, if
any, that may be in the Executive's possession to the Company upon termination
of the Executive's employment, or at any other time at the Company's request.
5. Covenant Not to Compete.
a. Subject to the payment provisions set forth in (g) below, the
Executive covenants and agrees that during the Executive's employment by the
Company (whether during the Term hereof or otherwise), and thereafter for a
period of time set forth on Exhibit A following the termination of the
Executive's employment with the Company, the Executive will not:
(i) directly or indirectly engage in, continue in or carry on the
business of any corporation, partnership, firm or other business organization
which is now, becomes or may become a competitor of the Company or any business
substantially similar thereto, including owning or controlling any financial
interest in, any corporation, partnership, firm or other form of business
organization which competes with or is engaged in or carries on any aspect of
such business or any business substantially similar thereto;
(ii) consult with, advise or assist in any way, whether or not for
consideration, any corporation, partnership, firm or other business organization
which is now, becomes or may become a competitor of the Company in any aspect of
the Company's business during the Executive's employment with the Company,
including, but not limited to: advertising or otherwise endorsing the products
of any such competitor; soliciting customers or otherwise serving as an
intermediary for any such competitor; or loaning money or rendering any other
form of financial assistance to or engaging in any form of business transaction
whether or not on an arms' length basis with any such competitor; or
(iii) engage in any practice the purpose of which is to evade the
provisions of this Agreement or to commit any act which is detrimental to the
successful continuation of, or which adversely affects, the business or the
Company;
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<PAGE>
provided, however, that the foregoing shall not preclude the Executive's
ownership of not more than 2% of the equity securities of a corporation which
has such securities registered under Section 12 of the Securities Exchange Act
of 1934, as amended.
b. The Executive agrees that the geographic scope of this covenant not
to compete shall extend to the geographic area where the Company's customers
conduct business at any time during the Term of this Agreement. For purposes of
this Agreement, "customers" means any person or entity to which the Company
provides or has provided within a period of one (1) year prior to the
Executive's termination of employment labor, materials or services for the
furtherance of such entity or person's business or any person or entity that
within such period of one (1) year the Company has pursued or communicated with
for the purposes of obtaining business for the Company.
c. In the event of any breach of this covenant not to compete, the
Executive recognizes that the remedies at law will be inadequate and that in
addition to any relief at law which may be available to the Company for such
violation or breach and regardless of any other provision contained in this
Agreement, the Company shall be entitled to equitable remedies (including an
injunction) and such other relief as a court may grant after considering the
intent of this Section 5. It is further acknowledged and agreed that the
existence of any claim or cause of action on the part of the Executive against
the Company, whether arising from this Agreement or otherwise, shall in no way
constitute a defense to the enforcement of this covenant not to compete, and the
duration of this covenant not to compete shall be extended in an amount which
equals the time period during which the Executive is or has been in violation of
this covenant not to compete. Further, the Executive acknowledges and agrees
that the Company shall be entitled to liquidated damages in the amount of $200
per day for each day during which the Executive is in violation of this covenant
not to compete, and the Executive does specifically acknowledge and agree that
the liquidated damages in such amount are fair and reasonable, in that it may be
difficult for the Company to determine the extent of the damages actually
incurred in the event of the breach of this covenant not to compete by the
Executive.
d. In the event a court of competent jurisdiction determines that the
provisions of this covenant not to compete are excessively broad as to duration,
geographic scope, prohibited activities or otherwise, the parties agree that
this covenant shall be reduced or curtailed to the extent necessary to render it
enforceable.
e. For the purposes of this Section 5, Company shall be deemed to
include the Company, as well as its subsidiaries and affiliates.
f. The parties hereto expressly acknowledge and agree that any
provision of this Section 5 may be amended or waived by the mutual written
agreement of both parties.
g. In addition to complying with the notice requirements of Section 6,
in order for the covenant not to compete set forth in this Section 5 to be
binding upon the Executive, the Company must comply with the following
provisions:
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<PAGE>
(i) If the Company should terminate the Executive's employment for
any reason other than pursuant to Section 6 prior to the end of the Term (or if
the Executive should terminate his employment for Good Reason after a Change of
Control), then the Company must pay the Executive both the applicable Severance
Payment for the balance of the Term (or in the event of a Change of Control, the
Change of Control Termination Payment) and an annual amount equal to the
Severance Payment for such period as the covenant not to compete is to remain in
effect at the election of the Company after the end of the Term (with such
12-month or 24-month period to be noticed by the Company pursuant to Section 6).
(ii) If the Executive remains in the employ of the Company pursuant
to the terms of this Agreement for the full Term, and the employment of the
Executive is not renewed at such time, then the Company must pay the Executive
an annual amount equal to the Severance Payment for such period as the covenant
not to compete is to remain in effect at the election of the Company after the
end of the Term (with such 12-month or 24-month period to be noticed by the
Company pursuant to Section 6).
(iii) If the Executive should terminate her employment prior to the
end of the Term (for other than Good Reason in the event of a Change of
Control), then after the Company has given notice pursuant to Section 6, the
Company will not be required to make any payment to the Executive for the
covenant not to compete to be effective for the 12-month or 24-month period
noticed by the Company pursuant to Section 6.
6. Termination.
a. Death. The Executive's employment hereunder shall terminate upon
her death.
b. Disability. If, during the Term, the Executive becomes physically
or mentally disabled in accordance with the terms and conditions of any
disability insurance policy covering the Executive or, if due to such physical
or mental disability, the Executive becomes unable for a period of more than six
(6) consecutive months to perform her duties hereunder on substantially a
full-time basis as determined by the Company in its sole reasonable discretion,
the Company may, at its option, terminate the Executive's employment hereunder
upon the termination of the six (6) month period referenced in this Section
6(b).
c. Cause. The Company may terminate the Executive's employment
hereunder for Cause effective immediately upon notice. For purposes of this
Agreement, the Company shall have "Cause" to terminate the Executive's
employment hereunder: (i) if the Executive engages in conduct which has caused,
substantial and serious injury to Company; (ii) if the Executive is convicted of
a felony, as evidenced by a binding and final judgment, order or decree of a
court of competent jurisdiction; (iii) for the Executive's repeated neglect of
her duties hereunder or the Executive's refusal to perform her duties or
responsibilities hereunder, as determined by the Company's Board of Directors in
good faith; (iv) for the Executive's violation of this Agreement, including
without limitation Section 5 hereof; (v) chronic absenteeism; (vi) use of
illegal drugs or addiction to habit forming drugs; (vii) insobriety by the
Executive while performing her or her duties hereunder; and (viii) any act of
dishonesty or
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<PAGE>
falsification of reports, records or information submitted by the Executive to
the Company. Prior to any termination for Cause by the Company of the
Executive's employment hereunder (other than for Cause which is not reasonably
curable by the Executive), the Company shall provide the Executive with written
notice of its intention so to terminate (the "Termination Notice"). The
Termination Notice shall set forth in reasonable detail the grounds for the
termination for Cause. The Company hereby expressly acknowledges and agrees that
the Executive shall be granted a period of thirty (30) days from the date of the
receipt by the Executive of the Termination Notice, in order to remedy any act
or omission of the Executive which constitutes the grounds for Cause hereunder.
d. Severance Payment. In the event of a termination of the Executive's
employment pursuant to this Section 6, or by the Executive, prior to the end of
the Term, all payments to the Executive hereunder shall immediately cease and
terminate. In the event of a termination by the Company of the Executive's
employment with the Company for any reason other than pursuant to this Section
6, then the Company shall pay the Executive the Severance Payment set forth on
Exhibit A in equal installments over the 12 month period following the
termination in accordance with Company pay policy immediately prior to such
termination.
If the Company terminates the Executive's employment pursuant to this
Section 6 or the Executive terminates such employment, prior to the end of the
Term, the Executive shall not be entitled to the Severance Payment and the
covenant not to compete set forth in Section 5 hereof shall remain in full force
and effect for either a 12 or 24 month period noticed by the Company pursuant to
this Section 6. Notwithstanding anything to the contrary herein contained, the
Executive shall receive all compensation and other benefits to which he was
entitled under this Agreement or otherwise as an employee of the Company through
the termination date.
In all events where the Company elects to enforce the covenant not to
compete set forth in Section 5 hereof after Executive is no longer in the
employment of the Company it shall notify Executive in writing as follows:
(i) Prior to the end of the Term, if Executive's employment has not
been terminated prior to the end of the Term;
(ii) Within ten (10) days of the Company's receipt of Executive's
resignation if termination is by the Executive; and
(iii) If termination is for Cause at the time Company notifies
Executive of Termination for Cause.
7. Termination after Change of Control. A "Change in Control" shall be
deemed to have occurred if the event set forth in any one of the following
paragraphs shall have occurred:
a. the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on January 1,
1999, constituted the
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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, as such terms are used in Rule 14a-11 of
Regulation 14A under the Act) whose appointment or election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors on January 1, 1999 or whose appointment, election or nomination for
election was previously so approved; or
b. the stockholders of the Company approve a merger, consolidation or
share exchange of the Company with any other corporation or approve the issuance
of voting securities of the Company in connection with a merger, consolidation
or share exchange of the Company (or any direct or indirect subsidiary of the
Company) pursuant to applicable stock exchange requirements, other than (A) a
merger, consolidation or share exchange which would result in the voting
securities of the Company outstanding immediately prior to such merger,
consolidation or share exchange continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or any parent thereof) at least 50% of the combined voting power of the voting
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger, consolidation or share exchange, or
(B) a merger, consolidation or share exchange effected to implement a
recapitalization of the Company (or similar transaction) in which no Person
(other than Jugal K. Taneja) is or becomes the beneficial owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its Affiliates after January 1, 1999 pursuant to express
authorization by the Board that refers to this exception) representing 51% or
more of either the then outstanding shares of common stock of the Company or the
combined voting power of the Company's then outstanding voting securities; or
c. The stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets
(in one transaction or a series of related transactions within any period of 24
consecutive months), other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity at least 75% of the
combined voting power of the voting securities of which are owned by Persons in
substantially the same proportions as their ownership of the Company immediately
prior to such sale.
d. Notwithstanding the foregoing, no "Change in Control" shall be
deemed to have occurred if there is consummated any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity that owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
The Executive may terminate her employment pursuant to and only
after the condition of this Section 7 has occurred for Good Reason; and the
Company expressly acknowledges and agrees that, upon such termination, the
Executive shall be entitled to the
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<PAGE>
Change of Control Termination Payment, as hereinafter defined, to which the
Executive, but for such termination, would otherwise be entitled. For purposes
of this Agreement, "Good Reason" shall mean: (i) any reduction of the Base
Salary or any other compensation or benefits (other than the Performance Bonus);
and (ii) any other material adverse change to the terms and conditions of the
Executive's employment, including but not limited to any change in the
responsibilities or duties performed by the Executive in her capacity as Chief
Executive Officer and President of the Company.
Subsequent to a Change of Control, the Executive shall continue to
hold such office and such level of authority and responsibility within the
Company either (a) as was held immediately prior to such Change of Control or
(b) of such scope, importance and influence as the responsibilities or duties
performed by the Executive in her capacity as Chief Executive Officer and
President of the Company immediately prior to any such Change in Control.
In the event Executive's employment hereunder is terminated for any of
the reasons set forth in Section 6a, b or c, or by the Executive (other than for
Good Reason, defined herein below), then this Section 7, dealing with Change of
Control, shall have no effect. If, however, Executive's employment hereunder is
terminated (i) by the Executive for Good Reason; (ii) other than by the
Executive and (iii) other than as set forth in Section 6a, b or c, then, in that
event, Executive shall receive (in equal installments and in accordance with
company policy immediately prior to such termination) an amount to be determined
by multiplying by one (1) Executive's base salary and actual bonus for the
calendar year immediately prior to such termination ("Change of Control
Termination Payment").
8. Notice. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when hand-delivered, sent by telecopier, facsimile
transmission or other electronic means of transmitting written documents (as
long as receipt is acknowledged) or mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive, to the address set forth on the signature page
If to the Company:
NuMED Home Health Care, Inc.
5770 North Roosevelt Boulevard
Suite 700
Clearwater, Florida 33760
Attn: The Board of Directors
or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that a notice of change of
address shall be effective only upon receipt.
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9. Miscellaneous. No provision of this Agreement may be modified or
waived unless such waiver or modification is agreed to in writing signed by the
parties hereto; provided, however, Exhibit A may be amended by the Company in
its discretion without the Executive's consent to the extent provided therein.
No waiver by any party hereto of any breach by any other party hereto shall be
deemed a waiver of any similar or dissimilar term or condition at the same or at
any prior or subsequent time. This Agreement is the entire agreement between the
parties hereto with respect to the Executive's employment by the Company and
there are no agreements or representations, oral or otherwise, expressed or
implied, with respect to or related to the employment of the Executive which are
not set forth in this Agreement. Any prior agreement relating to the Executive's
employment with the Company is hereby superceded and void, and is no longer in
effect. This Agreement shall be binding upon and inure to the benefit of the
Company, its respective successors and assigns, and the Executive and her heirs,
executors, administrators and legal representatives. Except as expressly set
forth herein, no party shall assign any of her or its rights under this
Agreement without the prior written consent of the other party and any attempted
assignment without such prior written consent shall be null and void and without
legal effect. The parties agree that if any provision of this Agreement shall
under any circumstances be deemed invalid or inoperative, the Agreement shall be
construed with the invalid or inoperative provision deleted and the rights and
obligations of the parties shall be construed and enforced accordingly. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the internal laws of the State of Florida. This Agreement may be
executed in one or more counterparts, each of which shall be deemed to be an
original but all of which together will constitute but one and the same
instrument. This Agreement has been jointly drafted by the respective
representatives of the parties and no party shall be considered as being
responsible for such drafting for the purpose of applying any rule constituting
ambiguities against the drafter or otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
NUMED HOME HEALTH CARE, INC.
By: /s/ Thomas V. Chema
Thomas V. Chema, authorized member of
the Board of Directors
EXECUTIVE
/s/ Susan J. Carmichael
SUSAN J. CARMICHAEL
Address of Executive:
___________________________
___________________________
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EXHIBIT A TO EMPLOYMENT AGREEMENT
Term: 1 year, commencing November 23, 1998, subject to the renewal or nonrenewal
notification requirements contained in Section 2.
Base Salary: $175,000 annually
Options: Options to purchase 200,000 shares of common stock of the Company at
the closing price on November 23, 1998, subject to a 1 year vesting period which
will be accelerated upon a Change in Control as defined in Section 7 or upon a
termination other than for Cause as defined in Section 6.
Performance Bonus: To be determined by the Board of Directors.
Fringe Benefits: Standard fringe benefits offered to executives generally.
Covenant Not to Compete: 24 months or 12 months as noticed by the Company
Severance Payment: $175,000 per year
IN WITNESS WHEREOF, the parties have executed this Exhibit A effective
as of the 23rd day of November, 1998.
NUMED HOME HEALTH CARE, INC.
By: /s/ Thomas v. Chema
Thomas V. Chema, authorized member of
the Board of Directors
/s/ Susan J. Carmichael
------------------------------------
SUSAN J. CARMICHAEL
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