Executive Employment Agreement - International Nursing Services Inc. and John P. Yeros
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") by and
between International Nursing Services, Inc. (the "Company")
with principal offices located at Suite 400, 360 South
Garfield Street, Denver, Colorado and John P. Yeros (the
"Executive").
NOW THEREFORE, in consideration of the foregoing
premises and mutual covenants herein contained, the parties
hereto agree as follows:
1. Employment. The Company agrees to employ the
Executive and the Executive agrees to serve the Company as
[its Chairman] President, and Chief Executive Officer.
2. Position and Responsibilities. The Executive
shall exert his best efforts and devote all of his
business time and attentions to the affairs of the Company.
The Executive shall be responsible for all affairs of the
Company and shall have full authority and responsibility
with respect thereto, subject to the general direction,
approval and control of the Board of Directors and to the
restrictions, limitations and guidelines set forth by the
Board of Directors in Resolutions adopted in the Minutes of
the Board of Directors meetings, copies of which shall be
provided to the Executive from time to time.
3. Board of Directors. The Executive shall at all
times discharge his duties as President and Chief Executive
Officer under the supervision of the Board of Directors of
the Corporation. In the performance of his duties, the
Executive shall make his principal office at the corporate
headquarters of International Nursing Services, Inc. in
Denver, Colorado.
4. Term of Employment. The period of the Executive's
employment under this Agreement shall be for a five-year
period or until January 1, 2002, subject to the termination
provisions set forth in Paragraph 13 and 14 hereafter.
5. Duties. During the period of his employment
hereunder and except for illness, specified vacation periods
and reasonable leaves of absence, the Executive shall devote
his best efforts and all his business time, attention and
skill to the business and affairs of the Company and its
affiliated companies, as such business and affairs now exist
and as they may be hereinafter changed or added to, under
and pursuant to the general direction of the Board of
Directors of the Company, provided, however, that, with
approval of the Board of Directors of the Company, the
Executive may continue to serve, on the Board of Directors
of, or hold any other offices or positions in, companies or
organizations which, in such Board's judgment, will not
present any conflict of interest with the Company or any of
its subsidiaries or affiliates or divisions, or materially
affect the performance of Executive's duties pursuant to
this Agreement (see Exhibit A); and further provided that
the outside business is not a "Business Opportunity" of the
Company, as defined herein. A Business Opportunity of the
Company shall be a product, service, investment, venture or
other opportunity which is either:
(a) Directly related to or within the scope
of the existing business of the Company; or
(b) Within the logical scope of the
business of the Company, as such scope may be
expanded or altered from time-to-time by the
Board of Directors.
6. Compensation. The Company shall pay to the
Executive as compensation for his services, the base salary
of $165,000 per year, beginning January 1, 1997, or such
higher salary as may be from time-to-time approved by the
Board of Directors, but in no event less than the base
salary adjusted annually by 10% of the base salary plus
additional compensation and/or bonuses or stock options as
may be voted to him at the sole discretion of the Board of
Directors.
7. Expense Reimbursement. The Company will reimburse
the Executive for all reasonable and necessary expenses
incurred by him in carrying out his duties under this
Agreement. The Executive shall present to the President
each month an itemized account of such expenses in such form
as is required by the Board of Directors.
8. Medical and Dental Coverage. The Executive, his
spouse, and those children who qualify will be eligible to
participate in the Company's current Employee Group Medical
and other group insurance programs on the same basis as
other Executives of the Company. If the Executive elects
not to use the Company's employee group medical plan, the
Company will monthly reimburse the Executive $500.00 per
month.
9. Medical Examination. The Executive agrees to
submit himself for physical examination on one occasion per
year as requested by the Company for the purpose of the
Company's obtaining life insurance on the life of the
Executive for the benefit of the Company; provided, however,
that the Company shall bear the entire cost of such
examinations and shall pay all premiums on any key man life
insurance obtained for the benefit of the Company as
beneficiary.
10. Automobile Allowance. The Company will provide
the Executive with an automobile allowance of $600.00 per
month for the duration of his employment with the Company
under this Agreement.
11. Vacation Time. The Executive shall be entitled to
take four (4) weeks paid vacation per calendar year. Such
vacation may not be taken in any greater than consecutive
two (2) week increments. Vacation not used by the Executive
during the calendar year will be forfeited.
12. Obligations of Executive During and After
Employment.
(a) The Executive agrees that during the terms of
his employment under this Agreement or while receiving
compensation under this Agreement, he will engage in no
other business activities directly or indirectly, which are
or may be competitive with or which might place him in a
competing position to that of the Company, or any affiliated
company.
(b) The Executive realizes that during the course
of his employment, Executive will have produced and/or
have access to confidential business plans, information,
business opportunity records, notebooks, data, formula,
specifications, trade secrets, customer lists, account lists
and secret inventions and processes of the Company and its
affiliated companies. Therefore, during his employment by
the Company or by an affiliated company or while receiving
compensation under this Agreement, the Executive agrees to
hold in confidence and not to directly or indirectly
disclose or use or copy or make lists of any such
information, except to the extent authorized by the Company
in writing. All records, files, business plans, documents,
equipment and the like, or copies thereof, relating to
Company's business, or the business of an affiliated
company, which Executive shall prepare, or use, or come into
contact with, shall remain the sole property of the Company,
or of an affiliated company, and shall not be removed from
the Company's or the affiliated company's premises without
its written consent, and shall be promptly returned to the
Company upon termination of employment with the Company and
its affiliated companies.
(c) In the event a court of competent
jurisdiction finds any provision of this Section 12 to be so
over broad as to be unenforceable, then such provision shall
be reduced in scope by the court, but only to the extent
deemed necessary by the court to render the provision
reasonable and enforceable, it being the Executive's
intention to provide the Company with the broadest
protection possible against harmful competition.
13. Termination by the Company.
(a) Termination for Cause by the Company. During
the first year of the term of this Agreement, there can be
no termination of the Executive by the Company except for
"Termination for Cause" as outlined below:
(1) Notwithstanding anything herein to the
contrary, the Company may, without liability, terminate the
Executive's employment hereunder for cause at any time upon
written notice from the Board of Directors specifying such
cause, and thereafter the Company's obligations hereunder
shall cease and terminate.
Grounds for termination "for cause" shall be
one or more of the following:
(1) A willful breach of duty by the
Executive during the course of his employment;
(2) Disloyal, dishonest or illegal conduct
of the Executive.
(b) Termination Without Cause by the Company.
After the completion of the initial year of employment
hereunder, the Board of Directors may terminate the
employment of the Executive upon thirty (30) days written
notice without cause, by a majority vote, if in the opinion
of the Board, the Executive has failed to meet projected
financial goals and/or discharged his duties and
responsibilities to the satisfaction of the Board. In the
event of termination without cause, the Company will pay the
Executive the compensation provided for in paragraph 6 for
the duration of the Agreement. The obligations of paragraph
12 of the Agreement shall be in effect during the remaining
term of the Agreement, unless the Executive gains approval
from the Board of Directors to be relieved of those
obligations in consideration for their being relieved of the
compensation obligation in paragraph 6. At least three
months prior to the expiration of this contract, the Company
will either notify the Executive in writing that the
contract will not be renewed or will commence good faith
negotiation to enter into a new or modified contract.
14. Termination by the Executive Without Cause.
The Executive, without cause, may terminate this Agreement
upon 90 days' written notice to the Company. In such event,
the Board shall be relieved of its compensation obligation
in paragraph 6 and its remaining obligations under this
Agreement , but Executive agrees that for a period of one
(1) year after termination of his employment, he will not,
directly or indirectly, compete with the Company in the
business of supplemental staffing, home health,
rehabilitation services and travel nurse related services
within 100 miles of locations operated by the Company on the
date of termination.
In the event a court of competent jurisdiction
finds any provision of this Section 14 to be so over broad
as to be unenforceable, then such provision shall be reduced
in scope by the court, but only to the extent deemed
necessary by the court to render the provision reasonable
and enforceable, it being the Executive's intention to
provide the Company with the broadest protection possible
against harmful competition.
15. Benefits Payable on Disability. If the Executive
becomes disabled from properly performing services hereunder
by reason of illness or other physical or mental incapacity,
the Company shall continue to pay the Executive his then
current salary hereunder for the first twelve (12) months of
such continuous disability commencing with the first date of
such disability.
If the Executive qualifies for coverage during the
term of this Agreement, the Company shall purchase and
maintain a policy of Disability Insurance which, after
twelve (12) continuous months of disability, will pay up to
$8,000 per month of the Executive's salary. After the first
twelve (12) months of disability, the Company has no
obligation to supplement or augment disability payments made
under any such disability policy or plan or make any other
payment in connection with such disability.
If the Company is unable to obtain a policy of
Disability Insurance, the Company shall pay up to $4,000
per month to the Executive for a twelve (12) month period
from the twelfth to the twenty-fourth month from the first
date of such disability.
16. Termination Upon Death of Executive. In addition
to any other provision relating to termination, this
Agreement shall terminate upon the Executive's death. No
severance allowance or compensation for vacation time not
taken by Executive shall be paid to the Executive's estate.
17. Lump Sum Compensation. In the event of the
occurrence of a "Triggering Event" which shall be defined to
include a (i) change in ownership of 50%or more of the
outstanding shares of the Company, or (ii) merger,
consolidation, reorganization or liquidation of the Company,
the Executive shall receive lump sum compensation equal to
his annual salary and incentive or bonus payments, if any,
as would have been paid to the Executive during the
Company's most recent fiscal year (as if the Executive had
been employed for the full fiscal year) and for the duration
of this Agreement within 30 days of the Triggering Event.
The Executive will also receive complete vesting of any
outstanding granted options and registration of all
underlying shares not previously registered. If the total
amount of the change of control compensation were to exceed
three times the Executive's base amount (the average annual
taxable compensation of the Executive for the five years
preceding the year in which the change of control occurs),
the Company and the Executive may agree to reduce the lump
sum compensation to be received by Executive in order to
avoid the imposition of the golden parachute tax as provided
in the Tax Reform Act of 1984, as amended by the Tax Reform
Act of 1986.
In the event the Executive is required to hire counsel
to negotiate on his behalf in connection with his
termination or resignation from the Company upon the
occurrence of a Triggering Event, or in order to enforce the
rights and obligations of the Company as provided in this
Paragraph, the Company shall reimburse to the Executive all
reasonable attorney's fees that may be expended by the
Executive in seeking to enforce the terms hereof short of
dispute resolution under paragraph 18. Such reimbursement
shall be paid every 30 days after the Executive provides
copies of invoices from the Executive's counsel to the
Company.
18. Arbitration. Any controversy, dispute or claim
arising out of, or relating to this Agreement and/or its
interpretation shall, unless resolved by agreement of the
parties, be settled by binding arbitration in Denver,
Colorado in accordance with the Rules of the American
Arbitration Association for employment disputes then
existing. This Agreement to arbitrate shall be specifically
enforceable under the prevailing arbitration laws of the
State of Colorado. The award rendered by the arbitrators
shall be final and judgment may be entered upon the award in
any court of the State of Colorado having jurisdiction of
the matter.
If any legal proceeding and/or arbitration is brought
to enforce or interpret the terms of this Agreement, each
party shall bear its own attorney's fees, costs and
necessary disbursements in such legal proceeding and/or
arbitration .
19. General Provisions.
(a) The Executive's rights and obligations under
this Agreement shall not be transferrable by assignment or
otherwise, nor shall Executive's rights be subject to
encumbrance or to the claims of the Company's creditors.
Nothing in this Agreement shall prevent the consolidation of
the Company, with or its merger into, any other Corporation,
or the sale by the Company of all or substantially all of
its property or assets.
(b) This Agreement and the rights of Executive
with respect to the obligations and benefits of employment
recited in this Agreement, constitute the entire Agreement
between the parties hereto in respect of the employment of
the Executive by the Company and supersede any and all other
agreements either oral or in writing between the parties
hereto with respect to the employment of the Executive.
(c) The provisions of this Agreement shall be
regarded as divisible, and if any of said provisions or any
part thereof are declared invalid or unenforceable by a
court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts
thereof and the applicability thereof shall not be affected
thereby.
(d) This Agreement may not be amended or modified
except by a written instrument executed by Company and
Executive.
(e) This Agreement and the rights and obligations
hereunder shall be governed by and construed in accordance
with the laws of the State of Colorado.
20. Construction. Throughout this Agreement, the
singular shall include the plural, and the plural shall
include the singular, and the masculine and neuter shall
include the feminine, wherever the context so requires.
21. Text to Control. The headings of paragraphs and
sections are included solely for convenience of reference.
If any conflict between any heading and the text of this
Agreement exists, the text shall control.
22. Authority. The officer executing this Agreement
on behalf of the Company has been empowered and directed to
do so by the Board of Directors of the Company.
23. Effective Date. The effective date of this
Agreement shall be ____________, 199__.
FOR THE COMPANY:
INTERNATIONAL NURSING SERVICES, INC.
By:/s/ Robin Bradbury
Date March 31, 1997 Board Member
Date March 31, 1997 Board Member
FOR THE EXECUTIVE:
Date March 31, 1997 John P. Yeros
EXHIBIT A
EXCLUSIONS TO PARAGRAPH 5 OF THE
EXECUTIVE EMPLOYMENT AGREEMENT