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 XXXXX X. XXXXXXXXXX (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
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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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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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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(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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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.
x. Xxxxxxxxx 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 Xxxxx X. Xxxxxx) 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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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.
0000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
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/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, authorized member of
the Board of Directors
EXECUTIVE
/s/ Xxxxx X. Xxxxxxxxxx
XXXXX X. XXXXXXXXXX
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/ Xxxxxx x. Xxxxx
Xxxxxx X. Xxxxx, authorized member of
the Board of Directors
/s/ Xxxxx X. Xxxxxxxxxx
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XXXXX X. XXXXXXXXXX
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