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EXECUTIVE EMPLOYMENT AGREEMENT
between:
MEDICAL STAFFING SOLUTIONS, INC.
a Nevada corporation (the "Company");
and
XX. XXXXXXXXXX X. XXXXX
(the "Executive")
Dated as of January 1, 2005
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EXECUTIVE EMPLOYMENT AGREEMENT
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THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is entered into and
made effective as of January 1, 2005 (the "Effective Date"), by and between
MEDICAL STAFFING SOLUTIONS, INC., a Nevada corporation (the "Company"), and XX.
XXXXXXXXXX X. XXXXX (the "Executive").
Section 1. Definitions. As used herein, the following terms shall have the
meanings set forth below.
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"Agreement" shall have the meaning set forth in the introductory paragraph
hereof.
"Base Compensation" shall have the meaning set forth in Section 5(a).
"Board of Directors" means the incumbent directors of the Company as of
the point in time reference thereto is made in this Agreement.
"Cause" shall have the meaning set forth in Section 10(b).
"COLA Adjustment" means the cost of living adjustment, which shall
correspond to the percent rise in prices for the preceding year as measured by
the Consumer Price Index for all Urban Consumers (CPI-UC), All City Average, all
Items (base year 1982-1984 = 100) published by the United States Department of
Labor, Bureau of Labor Statistics (the "Index"). The COLA Adjustment shall be
determined by multiplying the amount or figure to be adjusted by a fraction, the
numerator of which is the Index published for the month in which occurs the date
of adjustment and the denominator of which is the Index published for the same
month of the preceding year.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, par value $.001 per share, of the
Company.
"Company" shall have the meaning set forth in the introductory paragraph
of this Agreement, and shall include Subsidiaries where appropriate.
"Competitive Business" shall have the meaning set forth in Section 9(a).
"Confidential Information" shall have the meaning set forth in Section
9(c).
"Disability" of the Executive means that, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties on a full time basis for six (6) consecutive months, or
for an aggregate of nine (9) months in any consecutive twelve (12) month period,
and a physician selected by the Executive is of the opinion that (a) he
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is suffering from "total disability" as defined in the Company's disability
insurance program or policy and (b) he will qualify for Social Security
Disability Payments and (c) within thirty (30) days after written notice thereof
is given by the Company to the Executive (which notice may be given at any time
after the end of such six (6) or twelve (12) month periods) the Executive shall
not have returned to the performance of his duties on a full-time basis. (If the
Executive is prevented from performing his duties because of Disability, upon
request by the Company, the Executive shall submit to an examination by a
physician selected by the Company, at the Company's expense, and the Executive
shall also authorize his personal physician to disclose to the selected
physician all of the Executive's medical records).
"Employment Commencement Date" means the date hereof.
"Employment Period" means that period commencing on the Employment
Commencement Date and ending on the Employment Termination Date.
"Employment Termination Date" means the date the Employment Period
terminates as provided in Section 10.
"Executive" shall have the meaning set forth in the introductory paragraph
of this Agreement.
"Fiscal Year" means the fiscal year of the Company ending December 31 or
as such fiscal year as may be amended by the Board of Directors.
"Incentive Bonus Compensation" shall have the meaning set forth in Section
5(b).
"Notice of Termination" shall have the meaning set forth in Section
10(a)(1).
"Restricted Period" shall have the meaning set forth in Section 9(a).
"Scheduled Employment Termination Date" means the later of (a) the day
immediately preceding the fifth (5th) anniversary of the Employment Commencement
Date or (b) such date as is specified by either the Company or the Executive in
a Notice of Termination delivered for the purpose of fixing the scheduled
Employment Termination Date, provided the date so specified shall be at least
three (3) years after the date such Notice of Termination is so delivered.
"Subsidiaries" means wholly owned subsidiaries of the Company.
Section 2. Employment and Term. The Company hereby employs the Executive,
and the Executive hereby accepts such employment by the Company, for the
purposes and upon the terms and conditions contained in this Agreement. The term
of such employment shall be for the Employment Period.
Section 3. Employment Capacity and Duties. The Executive shall be employed
throughout the Employment Period as the President and Chief Executive Officer of
the Company. The Executive shall have the duties and responsibilities incumbent
with the positions of President and Chief Executive Officer of the Company.
Accordingly, and not by way of
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limitation, as President and Chief Executive Officer, the Executive shall
preside over all meetings of the shareholders of the Company and of the Board of
Directors, superintend and manage the business of the Company and coordinate and
supervise the work of its other officers and employ, direct, fix the
compensation of, discipline and discharge its personnel, employ agents,
professional advisors and consultants and perform all functions of a general
manager of the Company's business. The Company agrees that it will not, without
the Executive's written consent, require the Executive to be based anywhere
other than Miami, Florida, except for required travel on the Company's business
to an extent substantially consistent with present travel obligations.
Section 4. Executive Performance Covenants. The Executive accepts the
employment described in Section 3 and agrees to devote a significant amount of
his working time and efforts (except for absences due to illness and appropriate
vacations) to the business and affairs of the Company and the performance of the
aforesaid duties and responsibilities. However, nothing in this Agreement shall
preclude the Executive from devoting a reasonable amount of his time and efforts
to civic, community, charitable, professional and trade association affairs and
matters and such other activities as may be disclosed to the Board of Directors.
Section 5. Compensation. The Company shall pay to the Executive for his
services hereunder, the compensation hereinafter provided in this Section 5.
Such compensation shall be paid to the Executive at the time and in the manner
as provided below.
(a) Base Compensation. The Executive shall be paid "Base
Compensation" for each Fiscal Year at an annual rate of Two Hundred Fifty
Thousand Dollars ($250,000) payable in accordance with the Company's regular
payroll periods. The Base Compensation (i) may be increased (but may not be
decreased) at any time or from time to time by action of the Board of Directors
or any committee thereof, and (ii) shall be increased by the COLA Adjustment
annually as of the beginning of each Fiscal Year, commencing with the Fiscal
Year beginning June 30, 2005. The Base Compensation shall be pro-rated for any
Fiscal Year hereunder which is less than a full Fiscal Year.
(b) Incentive Bonus Compensation. The Executive shall receive an
annual monetary bonus (the "Bonus") equal to one percent (1%) of the revenues of
the Company for each year the Executive is employed by the Company, and as long
as the Company generates positive gross margins. The Bonus, if any, shall be
payable every year on or before June 30, for the preceding fiscal year.
("Incentive Bonus Compensation").
(c) Options. The Executive shall be entitled to receive Three
Million (3,000,000) options to purchase the Common Stock of the Company for
Fiscal Year 2005 at an exercise price of $0.06 per share. For each year after
2005 and during the term of this Agreement, the Executive shall be entitled to
receive Three Million (3,000,000) options to purchase the Common Stock of the
Company at an exercise price equal to the average of the closing price of the
Common Stock for the ten (10) days immediately preceding June 30 of the
applicable year.
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(d) Car Allowance. The Company shall provide the Executive with a
monthly car allowance during the term of this Agreement, plus actual expenses
for any and all fuel, service, insurance and other auto related costs.
Section 6. Payment of Expenses. The Company shall pay the Executive's
reasonable expenses incurred in providing services to the Company, including
expenses for travel, entertainment and similar items, in accordance with the
Company's expense policies as determined from time to time by the Board of
Directors. If there is a dispute as to the eligibility of an expense for payment
in accordance with the Company's expense policies, then such expense shall be
determined to be payable by the Company if approved by a majority of the Board
of Directors.
Section 7. Employee Benefits, Vacations. During the Employment Period, the
Executive shall receive the benefits and enjoy the perquisites described below:
(a) Benefit Plans. The Executive shall be entitled to participate in
any perquisite, benefit or compensation plan (in addition to the compensation
provided for in Section 5) including any profit sharing plan and 401(k) plan,
medical insurance plan, life insurance plan, health and accident plan and
disability plan which are generally applicable to all salaried employees of the
Company (collectively referred to as the "Benefit Plans"). All such Benefit
Plans shall be maintained by the Company, or the Company shall maintain plans
providing substantially similar benefits; provided, however, that the Company
may make modifications in the Benefit Plans so long as such modifications (i)
are generally applicable to all salaried employees of the Company and (ii) do
not discriminate against the Executive or other highly-compensated employees of
the Company.
(b) Vacations. The Executive shall be entitled in each Fiscal Year
to a vacation of four (4) weeks (twenty (20) working days), during which time
his compensation shall be paid in full, and such holidays and other nonworking
days as are consistent with the policies of the Company for executives
generally.
Section 8. Company Life Insurance; Medical Examinations. At any time
during the Employment Period, the Company may, in its discretion, apply for and
procure as owner and for its own benefit, insurance on the life of the
Executive, in such amounts and in such form or forms as the Company may
determine. The Executive shall have no right to any interest in any such policy
or policies, but he shall, at the request of the Company, submit to such medical
examinations, supply such information and execute such applications, instruments
and other documents as reasonably may be required by the insurance company or
companies to whom the Company has applied for such insurance.
If requested by the Company, the Executive shall submit to at least one
medical examination during each Fiscal Year at such reasonable time and place
and by a physician or physicians determined and selected by the Company. All the
costs and expenses of said medical examination, including transportation of the
Executive to the place of examination and return, shall be paid by the Company.
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The Executive shall be entitled to a copy of all reports and other
information provided to the Company in connection with any examination referred
to in this Section 8. Any failure to pass any such medical examination or to
meet any health criteria or medical standard shall not of itself be cause for
termination of the Employment Period by the Company.
Section 9. Certain Company Protection Provisions. The below provisions
apply for the protection of the Company.
(a) Noncompetition. Except for Executive's participation in other
activities disclosed to the Board of Directors, during the Restricted Period (as
hereinafter defined), the Executive shall not directly or indirectly compete
with the Company by owning, managing, controlling or participating in the
ownership, management or control of, or be employed or engaged by or otherwise
affiliated or associated with, any Competitive Business in any location in which
the Company is doing business as of the Employment Termination Date. As used
herein, the term "Restricted Period" means (i) the Employment Period and a
period of two (2) years thereafter or (ii) the Employment Period if the Company
terminates the Executive without "cause" (as defined in Section 10(b)) or the
Executive terminates his employment for "good reason" (as defined in Section
10(e)). As used herein, a "Competitive Business" is any other corporation,
partnership, proprietorship, firm, association or other business entity which is
engaged in any business from which the Company derives five percent or more of
its consolidated revenues during the twelve (12) months preceding the Employment
Termination Date or in which the Company has invested five percent (5%) or more
of its total assets as of the time in question, provided, however, that
ownership of not more than five percent (5%) of the stock of any publicly traded
company shall not be deemed a violation of this provision.
(b) Non-Interference. During the Restricted Period, the Executive
shall not induce or solicit any employee of the Company or any person doing
business with the Company to terminate his or her employment or business
relationship with the Company or otherwise interfere with any such relationship.
(c) Confidentiality. The Executive agrees and acknowledges that, by
reason of the nature of his duties as an officer and employee, he will have or
may have access to and become informed of confidential and secret information
which is a competitive asset of the Company ("Confidential Information"),
including without limitation any lists of customers or suppliers, distributors,
financial statistics, research data or any other statistics and plans contained
in profit plans, capital plans, critical issue plans, strategic plans or
marketing or operation plans or other trade secrets of the Company and any of
the foregoing which belong to any person or company but to which the Executive
has had access by reason of his employment relationship with the Company. The
Executive agrees faithfully to keep in strict confidence, and not, either
directly or indirectly, to make known, divulge, reveal, furnish, make available
or use (except for use in the regular course of his employment duties) any such
Confidential Information. The Executive acknowledges that all manuals,
instruction books, price lists, information and records and other information
and aids relating to the Company's business, and any and all other documents
containing Confidential Information furnished to the Executive by the Company or
otherwise acquired or developed by the Executive, shall at all times be the
property of the Company. Upon termination of the Employment Period, the
Executive shall return to the
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Company any such property or documents which are in his possession, custody or
control, but his obligation of confidentiality shall survive such termination of
the Employment Period until and unless any such Confidential Information shall
have become, through no fault of the Executive, generally known to the trade.
The obligations of the Executive under this subsection are in addition to, and
not in limitation or preemption of, all other obligations of confidentiality
which the Executive may have to the Company under general legal or equitable
principles.
(d) Remedies. It is expressly agreed by the Executive and the
Company that these provisions are reasonable for purposes of preserving for the
Company its business, goodwill and proprietary information. It is also agreed
that if any provision is found by a court having jurisdiction to be unreasonable
because of scope, area or time, then that provision shall be amended to
correspond in scope, area and time to that considered reasonable by a court and
as amended shall be enforced and the remaining provisions shall remain
effective. In the event of any breach of these provisions by the Executive, the
parties recognize and acknowledge that a remedy at law will be inadequate and
the Company may suffer irreparable injury. The Executive acknowledges that the
services to be rendered by him are of a character giving them peculiar value,
the loss of which cannot be adequately compensated for in damages; accordingly
the Executive consents to injunctive and other appropriate equitable relief upon
the institution of proceedings therefor by the Company in order to protect the
Company's rights. Such relief shall be in addition to any other relief to which
the Company may be entitled at law or in equity.
Section 10. Termination of Employment.
(a) Notice of Termination; Employment Termination Date.
(1) Any termination of the Executive's employment by the
Company or the Executive shall be communicated by written Notice of Termination
to the other party thereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination under the
provision so indicated. Furthermore, either the Executive or the Company may
give a Notice of Termination to the other party for the purpose of terminating
this Agreement on the Scheduled Employment Termination Date. Such Notice of
Termination shall have the effect of terminating this Agreement on the Scheduled
Employment Termination Date.
(2) "Employment Termination Date" shall mean the date on which
the Employment Period and the Executive's right and obligation to perform
employment services for the Company shall terminate effective upon the first to
occur of the following, it being understood that in no event may the Employment
Period be terminated other than as the result of one of the following events:
(A) If the Executive's employment is terminated for
Disability, the date which is thirty (30) days after
Notice of Termination is given (provided that the
Executive shall not have returned to the performance of
his duties on a full-time basis during such thirty (30)
day period);
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(B) If the Executive's employment is terminated by the
Executive for Good Reason or otherwise by voluntary
action of the Executive (see Section 10(e)), the date
specified in the Notice of Termination, which date
(except with the written consent of the Company to the
contrary) shall not be more than sixty (60) days after
the date that the Notice of Termination is given;
(C) The death of the Executive;
(D) The Scheduled Employment Termination Date;
(E) If the Executive's employment is terminated by the
Company for Cause (see Section 10(b)(1)), the date on
which a Notice of Termination is given; provided that if
within thirty (30) days after any Notice of Termination
is given the party receiving such Notice of Termination
notifies the other party that a dispute exists
concerning the termination, the Employment Termination
Date shall be the date on which the dispute is finally
determined, either by mutual written agreement of the
parties, by a binding and final arbitration award or by
a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected); and
(F) If the Executive's employment is terminated by the
Company other than for Cause, Disability or death of the
Executive (see Section 10(f)), the date specified in the
Notice of Termination which date (except with the
written consent of the Executive to the contrary) shall
not be more than sixty (60) days after the date that the
Notice of Termination is given.
(b) Termination for Cause:
(1) The Company may terminate the Executive's employment and
the Employment Period for Cause. For the purposes of this Agreement, the Company
shall have "Cause" to terminate employment hereunder only (A) if termination
shall have been the result of an act or acts of willful misconduct materially
injurious to the Company, monetarily or otherwise, or (B) upon the willful and
continued failure by the Executive substantially to perform his duties with the
Company (other than any such failure resulting from incapacity due to mental or
physical illness) after a demand in writing for substantial performance is
delivered by the Board of Directors, which demand specifically identifies the
manner in which the Board believes that the Executive has not substantially
performed his duties, and such failure results in demonstrably material injury
to the Company, provided that Executive is afforded a period of not less than
thirty (30) days from receipt of said demand letter to cure such performance
deficiencies. The Executive's employment shall in no event be considered to have
been terminated by the Company for Cause if such termination took place as the
result of (i) bad judgment or negligence, or (ii) any act or omission without
intent of gaining therefrom directly or indirectly a profit to which the
Executive was not legally entitled, or (iii) any act or omission
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believed in good faith to have been in or not opposed to the interest of the
Company, or (iv) any act or omission in respect of which a determination is made
that the Executive met the applicable standard of conduct prescribed for
indemnification or reimbursement or payment of expenses under the Certificate of
Incorporation of the Company or the laws of the State of Delaware, in each case
as in effect at the time of such act or omission. The Executive shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board of Directors
at a meeting of the Board of Directors called and held for the purpose (after
not less than thirty (30) days' written notice to the Executive and an
opportunity for him together with his counsel, to be heard before the Board of
Directors, such notice of meeting to indicate the specific termination provision
of this Agreement relied upon and specify in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision so
indicated), finding that in the good faith opinion of the Board of Directors the
Executive was guilty of conduct set forth above in clauses (A) or (B) of the
second sentence of this paragraph and specifying the particulars thereof in
detail.
(2) If the Executive's employment shall be terminated for
Cause, the Company shall pay the Executive within ten (10) days of such
termination, (i) his unpaid Base Compensation through the Employment Termination
Date at the rate in effect at the time Notice of Termination is given, plus (ii)
any expenses incurred in accordance with Section 6 hereof.
(c) Termination for Disability. The Company may terminate the
Executive's employment because of the Disability of the Executive and thereafter
shall pay to the Executive (or his successors) (1) his unpaid Base Compensation
through the sixth (6th) full month following the Employment Termination Date at
his then effective Base Compensation rate; plus (2) any accrued but unpaid
Incentive Compensation, plus (3) any expenses incurred in accordance with
Section 6 hereof.
(d) Termination Upon Executive's Death. In the event of the
Executive's death, the Company shall pay to the Executive's estate (1) any
unpaid amount of Base Compensation through the date of death at the then
effective Base Compensation rate, plus (2) any accrued but unpaid Incentive
Compensation, plus (3) any expenses incurred in accordance with Section 6
hereof. All previously granted stock options, rights, warrants and awards shall
fully vest on the death of the Executive, except that the provisions of the
Company's Stock Incentive Plan and any other Benefit Plan shall control the
benefits and awards covered thereby.
(e) Termination of Employment by the Executive.
(1) The Executive may terminate his employment for Good Reason
and receive the payments and benefits specified in Section 10(f) in the same
manner as if the Company had terminated his employment. For purposes of this
Agreement, "Good Reason" will exist if any one or more of the following occur:
(A) Failure by the Company to honor any of its obligations
under this Agreement, including, without limitation, its
obligations under Section 3 (Employment Capacity and
Duties), Section 4 (Executive Performance Covenants),
Section 5 (Compensation), Section 6
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(Reimbursement of Expenses), Section 7 (Employee
Benefits, Vacations), Section 12 (Indemnification),
and/or Section 14 (Successors and Assigns); or
(B) Any purported termination by the Company of the
Executive's employment that is not effected pursuant to
a Notice of Termination satisfying the requirements of
Section 10(a) above and, for purposes of this Agreement,
no such purported termination shall be effective.
(C) If there is a Change in Control of the Company (as
defined below) and the employment of the Executive is
concurrently or subsequently terminated (i) by the
Company without Cause, (ii) by service of a Notice of
Termination or (iii) by the resignation of the Employee
because he has reasonably determined in good faith that
his titles, authorities, responsibilities, salary, bonus
opportunities or benefits have been materially
diminished, or that a material adverse change in his
working conditions has occurred or the Company has
breached this Agreement. For the purpose of this
Agreement, a Change in Control of the Company has
occurred when: (x) any person (defined for the purposes
of this Section 10 to mean any person within the meaning
of Section 13(d) of the Securities Exchange Act of 1934
(the "Exchange Act")), other than the Company, or an
employee benefit plan established by the Board of
Directors of the Company, acquires, directly or
indirectly, the beneficial ownership (determined under
Rule 13d-3 of the regulations promulgated by the
Securities and Exchange Commission under Section 13(d)
of the Exchange Act) of securities issued by the Company
having twenty percent (20%) or more of the voting power
of all of the voting securities issued by the Company in
the election of directors at a meeting of the holders of
voting securities to be held for such purpose; or (y) a
majority of the directors elected at any meeting of the
holders of voting securities of the Company are persons
who were not nominated for such election by the Board of
Directors of the Company or a duly constituted committee
of the Board of Directors of the Company having
authority in such matters; or (z) the Company merges or
consolidates with or transfers substantially all of its
assets to another person.
(2) The Executive shall have the right voluntarily to
terminate his employment other than for Good Reason prior to the Scheduled
Employment Termination Date, and if the Executive shall so terminate his
employment, he shall be entitled only to payment of the amounts which would be
payable under Section 10(b)(2) had he been terminated for Cause.
(f) Compensation Upon Termination Other Than for Cause.
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(1) If the Company shall terminate the Executive's employment
other than for Cause or pursuant to Section 10(c) or (d), or if the Executive
shall terminate his employment for Good Reason pursuant to Section 10(e)(1) (but
not a termination voluntarily by the Executive other than for Good Reason under
Section 10(e)(2)), then the Company shall pay to the Executive the following
amounts:
(A) (1) His unpaid Base Compensation through the Employment
Termination Date at his then effective Base Compensation
Rate, plus (2) any accrued but unpaid Incentive Bonus
Compensation, plus (3) any expenses incurred in
accordance with Section 6 hereof.
(B) In addition, the Company shall pay to the Executive
promptly in a single lump sum in cash an amount equal to
the product of three (3), multiplied by one hundred
percent (100%) of the aggregate total amount which would
have been payable to Executive under Section 5 for the
entire Fiscal Year in which occurs the Employment
Termination Date as if his employment had not been
terminated (and without deduction or offset for any
amounts actually paid for such Fiscal Year on account of
Base Compensation or Incentive Bonus Compensation, under
Section 5, this Section 10 or otherwise), and assuming
for purposes of calculating (x) the Base Compensation,
one hundred percent (100%) of the amount thereof at the
annual rate payable for such Fiscal Year pursuant to
Section 5(a) and (y) the Incentive Bonus Compensation,
the largest amount thereof accrued for any of the two
(2) most recently completed Fiscal Years.
(C) The Company shall also pay all legal fees and expenses
incurred as a result of such termination (including all
such fees and expenses, if any, incurred in contesting
or disputing any such termination, in seeking to obtain
or enforce any right or benefit provided by this
Agreement, or in interpreting this Agreement). The
Company agrees, in the event the Executive desires to
relocate within one year after the Employment
Termination Date, to pay for (or reimburse) all
reasonable moving expenses incurred relating to a change
of principal residence in connection with such
relocation and to indemnify the Executive in connection
with any loss he may sustain in the sale of his primary
residence.
(D) The Executive shall be under no obligation to seek other
employment and there shall be no offset against any
amounts due the Executive under this Agreement on
account of any remuneration attributable to any
subsequent employment that the Executive may obtain (any
amounts due under Section 10(f) are in the nature of
severance payments, or liquidated damages, or both, and
are not in the nature of a penalty).
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(2) Unless Executive is terminated for Cause, the Company
shall maintain in full force and effect, for the Executive's continued benefit
through the Scheduled Employment Terminate Date, all active and retired Benefit
Plans and other benefit programs or arrangements in which he was entitled to
participate immediately prior to the Scheduled Employment Terminate Date (except
as specified in Section 7(a) of this Agreement), provided that continued
participation is possible under the general terms and provisions of such plans
and programs. In the event that participation in any such plan or program is
barred, the Company shall arrange to provide him with benefits substantially
similar to those which he is entitled to receive under such plans and programs.
(g) Compensation Upon Disability. During any period that the
Executive fails to perform his duties hereunder as a result of incapacity due to
physical or mental illness, he shall continue to receive his full Base
Compensation at the rate then in effect and his full Incentive Bonus
Compensation until this Agreement is terminated pursuant to Section 10(c)
hereof. Thereafter, his benefits shall be determined in accordance with the
Company's Benefit Plans.
Section 11. Certain Tax Matters
(a) Optional Right of Partial Disclaimer.
It is recognized that under certain circumstances:
(1) Payments or benefits provided to the Executive under this
Agreement or otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement (including without limitation any stock option
plan) might give rise to an "excess parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, or any successor provision
thereof.
(2) It might be beneficial to the Executive to disclaim some
portion of the payment or benefit in order to avoid such "excess parachute
payment" and thereby avoid the imposition of an excise tax resulting therefrom.
(3) Under such circumstances it would not be to the
disadvantage of the Company to permit the Executive to disclaim any such payment
or benefit in order to avoid the "excess parachute payment" and the excise tax
resulting therefrom.
Accordingly, the Executive may, at the Executive's option, exercisable at
any time or from time to time, disclaim any entitlement to any portion of the
payment or benefits arising under this Agreement or otherwise pursuant to or by
reason of any other agreement, policy, plan, program or arrangement (including
without limitation any stock option plan) which would constitute "excess
parachute payments" and it shall be the Executive's choice as to which payments
or benefits shall be so surrendered, if and to the extent that the Executive
exercises such option, so as to avoid "excess parachute payments."
(b) Additional Payments.
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(1) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined (as hereafter provided)
that any payment or distribution to or for the Executive's benefit, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement (including without limitation any stock option
plan), or similar right (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986 (or any successor
provision thereto), or any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment or payments (a "Gross-Up Payment") in
an amount such that, after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the lesser of (A) the Excise Tax imposed upon the
Payments or (B) the Excise Tax that would be imposed upon all payments or
benefits provided under this Agreement (including any stock option agreement) if
such payments or benefits (but only such payments or benefits) constituted in
their entirety "excess parachute payments" as such term is defined in section
280G and 4999 of the Internal Revenue Code of 1986 (or any successor provisions
thereto).
(2) Subject to the provisions of Section 11(b) (5), all
determinations required to be made under this Section 11(b), including whether
an Excise Tax is payable by the Executive, the amount of such Excise Tax,
whether a Gross-Up Payment is required, and the amount of such Gross-Up Payment,
shall be made by a nationally-recognized legal or accounting firm (the "Firm")
selected by the Executive in the Executive's sole discretion. The Executive
agrees to direct the Firm to submit its determination and detailed supporting
calculations to both the Executive and the Company as promptly as practicable.
If the Firm determines that any Excise Tax is payable by the Executive and that
a Gross-Up Payment is required, the Company shall pay the Executive the required
Gross-Up Payment within ten (10) business days after receipt of such
determination and calculations. If the Firm determines that no Excise Tax is
payable by the Executive, it shall, at the same time as it makes such
determination, furnish the Executive with an opinion that the Executive has
substantial authority not to report any Excise Tax on the Executive's federal
income tax return. Any determination by the Firm as to the amount of the
Gross-Up Payment shall be binding upon the Executive and the Company. As a
result of the uncertainty in the application of Section 4999 of the Internal
Revenue Code of 1986 (or any successor provision thereto) at the time of the
initial determination by the Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (an
"Underpayment"). In the event that the Company exhausts its remedies pursuant to
Section 11(b)(5) hereof and the Executive thereafter is required to make a
payment of any Excise Tax, the Executive may direct the Firm to determine the
amount of the Underpayment (if any) that has occurred and to submit its
determination and detailed supporting calculations to both the Executive and the
Company as promptly as possible. Any such Underpayment shall be promptly paid by
the Company to the Executive, or for the Executive's benefit, within ten (10)
business days after receipt of such determination and calculations.
(3) The Executive and the Company shall each provide the Firm
access to and copies of any books, records and documents in the possession of
the Company or
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the Executive, as the case may be, reasonably requested by the Firm, and
otherwise cooperate with the Firm in connection with the preparation and
issuance of the determination contemplated by Section 11(b)(2) hereof.
(4) The fees and expenses of the Firm for its services in
connection with the determinations and calculations contemplated by Section
11(b)(2) hereof shall be borne by the Company. If such fees and expenses are
initially paid by the Executive, the Company shall reimburse the Executive the
full amount of such fees and expenses within ten (10) business days after
receipt from the Executive of a statement therefor and reasonable evidence of
the Executive's payment thereof.
(5) The Executive agrees to notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment. Such notification shall be given
as promptly as practicable but no later than ten (10) business days after the
Executive actually receives notice of such claim. The Executive agrees to
further apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid (in each case, to the extent known by the
Executive). The Executive agrees not to pay such claim prior to the earlier of
(a) the expiration of the thirty (30) calendar-day period following the date on
which the Executive gives such notice to the Company and (b) the date that any
payment with respect to such claim is due. If the Company notifies the Executive
in writing at least five (5) business days prior to the expiration of such
period that it desires to contest such claim, the Executive agrees to:
a) provide the Company with any written records or
documents in the Executive's possession relating to such
claim as the Company shall reasonably request in writing
from time to time, including without limitation
accepting legal representation with respect to such
claim by an attorney competent in respect of the subject
matter and reasonably selected by the Company;
b) cooperate with the Company in good faith in order to
effectively contest such claim; and
c) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, from and against any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limiting the foregoing provisions of this
Section 11(b)(5), the Company shall control all proceedings taken in connection
with the contest of any claim contemplated by this Section 11(b)(5) and, at its
sole option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim (provided, however, that the Executive may participate therein at the
Executive's own cost and expense) and may, at its option, either direct the
Executive to pay the tax claimed and xxx for a refund or contest the claim in
any permissible manner, and the Executive agrees to prosecute
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such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company
shall determine; provided, however, that if the Company directs the Executive to
pay the tax claimed and xxx for a refund, the Company shall advance the amount
of such payment to the Executive on an interest-free basis and shall indemnify
and hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect thereto, imposed with
respect to such advance; and provided further, however, that any extension of
the statute of limitations relating to payment of taxes for the Executive's
taxable year with respect to which the contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
any such contested claim shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(6) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 11(b)(5) hereof, the Executive
receives any refund with respect to such claim, the Executive agrees (subject to
the Company's complying with the requirements of Section 11(b)(5) hereof) to
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable thereto). If, after
the Executive's receipt of an amount advanced by the Company pursuant to Section
11(b)(5) hereof, a determination is made that the Executive is not entitled to
any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of thirty (30) calendar days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid pursuant to this Section 11(b).
Section 12. Indemnification. As an employee, officer and director of the
Company, the Executive shall be indemnified against all liabilities, damages,
fines, costs and expenses by the Company in accordance with the indemnification
provisions of the Company's Articles of Incorporation as in effect on the date
hereof, and otherwise to the fullest extent to which employees, officers and
directors of a corporation organized under the laws of Nevada may be indemnified
pursuant to Section 78.7502 of the Nevada statutes, as the same may be amended
from time to time (or any subsequent statute of similar tenor and effect),
subject to the terms and conditions of such statute.
Section 13. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Miami, Florida in accordance with the rules of the American Arbitration
Association then in effect; provided that all arbitration expenses shall be
borne by the Company. Notwithstanding the pendency of any dispute or controversy
concerning termination or the effects thereof, the Company will continue to pay
the Executive his full compensation in effect immediately before any Notice of
Termination giving rise to the dispute was given (including, but not limited to,
Base Salary and Incentive Compensation) and continue him as a participant in all
compensation, benefit and insurance plans in which he was then participating,
until the dispute is finally resolved. Judgment may be entered on the
arbitrators' award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to
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seek specific performance of his right to be paid until the Employment
Termination Date during the pendency of any dispute or controversy arising under
or in connection with this Agreement.
Section 14. Successors and Assigns. Except as hereinafter expressly
provided, the agreements, covenants, terms and provisions of this Agreement
shall bind the respective heirs, executors, administrators, successors and
assigns of the parties. Specifically, and not by way of limitation of the
foregoing, the Executive shall be bound by the terms and conditions of this
Agreement to any successor assignee of the Company's rights and obligations
hereunder as a result of any merger, consolidation or sale or lease of all or
substantially all of the Company's business and assets. If any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company fails,
concurrently with the effectiveness of any such succession, to agree in writing
in form and substance reasonably satisfactory to the Executive expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place, then the Executive shall have the right, effected by notice to such
successor not later than ninety (90) days after the effectiveness of such
succession, to terminate the Employment Period under Section 10(e) as though
such failure was an uncured breach by the Company of a material covenant or
agreement of the Company contained in this Agreement.
If the Executive should die while any amounts are payable to him
hereunder, or if by reason of his death payments are to be made to him
hereunder, then this Agreement shall inure to the benefit of and be enforceable
by the Executive's executors, administrators, heirs, distributees, devisees and
legatees and all amounts payable hereunder shall then be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee or other
designee or, if there is no such designee, to his estate.
This Agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder, except as hereinbefore provided in this
Section 14. Without limiting the foregoing, the Executive's right to receive
payments hereunder shall not be assignable or transferable, whether by pledge,
creation of a security interest or otherwise, other than a transfer by his will
or by the laws of descent or distribution, and in the event of any attempted
assignment or transfer contrary to this paragraph the Company shall have no
liability to pay to the purported assignee or transferee any amount so attempted
to be assigned or transferred.
As used in this Agreement, the "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in the first
paragraph of this Section 14 or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.
Section 15. Notices. Any notice or other communication required or desired
to be given hereunder shall be in writing and shall be deemed sufficiently given
when personally delivered or when mailed by first class certified mail, return
receipt requested and postage prepaid, addressed to the parties at their
respective addressed set forth under their respective signatures below or such
other person or addresses as shall be given by notice of any party.
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Section 16. Waiver; Remedies Cumulative. No waiver of any right or option
hereunder by any party shall operate as a waiver of any other right or option,
or the same right or option as respects any subsequent occasion for its
exercise, or of any legal remedy. No waiver by any party of any breach of this
Agreement or of any agreement or covenant contained herein shall be held to
constitute a waiver of any other breach or a continuation of the same breach.
All remedies provided by this Agreement are in addition to all other remedies by
it or the law provided.
Section 17. Governing Law; Severability. The validity and effect of this
Agreement shall be governed by and construed and enforced in accordance with the
laws of Nevada without regard to principles of conflicts of laws thereof. It is
the intention of the Company and the Executive to comply fully with all laws and
matters of public policy relating to employment agreements and restrictive
covenants, and this Agreement shall be construed consistently with such laws and
public policy to the extent possible. If and to the extent any one or more
covenants, agreements, terms and provisions of this Agreement or any portion or
portions thereof shall be held invalid or unenforceable by a court of competent
jurisdiction, then such covenants, agreements, terms and provisions (or portions
thereof) shall be deemed separable from the remaining covenants, agreements,
terms and provisions of this Agreement and such holding shall in no way affect
the validity or enforceability of any of the other covenants, agreements, terms
and provisions hereof.
Section 18. Attorney's Fees. In the event of any litigation arising under
the terms of this Agreement, the prevailing party shall be entitled to recover
its or their reasonable attorneys' fees and court costs from the other party,
including trial and appellate proceedings, as well as the costs of collecting
any judgment.
Section 19. Independent Counsel. The Company is represented by Xxxxxxxxxxx
& Xxxxxxxx Xxxxxxxxx Xxxxxx LLP and Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx LLP
is only representing the Company in connection with the Agreement. The Executive
is expressly advised to obtain independent counsel and advice with respect to
the subject matter of this Agreement, and has been afforded an ample period of
time so to do. The Executive confirms that he has not relied, directly or
indirectly, upon any communication, advice, or consultation with Xxxxxxxxxxx &
Xxxxxxxx Xxxxxxxxx Xxxxxx LLP but, in fact, has relied solely and exclusively
upon his independent judgment and upon the advice of the independent counsel
employed by him, if applicable.
Section 20. Miscellaneous. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
This Agreement may not be modified, changed or amended except in a writing
signed by each of the parties hereto. This Agreement may be signed in multiple
counterparts, each of which shall be deemed an original hereof. The captions of
the several sections and subsections of this Agreement are not a part of the
context hereof, are inserted only for convenience in locating such sections and
subsections and shall be ignored in construing this Agreement.
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IN WITNESS WHEREOF, the Company and the Executive have executed multiple
counterparts of this Agreement.
COMPANY: EXECUTIVE:
0000 Xxxxxxxx Xxxx 0000 Xxxx Xxxx Xxxxx
Xxxxx 0000 Xxxxxx, Xxxxxxxx 00000
Xxxxxx, Xxxxxxxx 00000
MEDICAL STAFFING SOLUTIONS, INC., a Nevada
corporation
By: /s/ XX. XXXXXXXXXX X. XXXXX
----------------------------------------- ------------------------
Name: XX. XXXXXXXXXX X. XXXXX XX. XXXXXXXXXX X. XXXXX
---------------------------------------
Its: PRESIDENT & CEO
---------------------------------------
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