Exhibit 10 (a)(iii)
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), dated as of September 1, 2001,
between OmniComm Systems, Inc., a Delaware corporation, (the "Company"), and
Xxxxxx Xxxxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Executive has experience in managing at a senior level the
financial activities of a publicly traded company (or a division of such a
company) involved in the clinical trials business;
WHEREAS, the parties acknowledge that the Executive's abilities and
services are unique and essential to the prospects of the Company; and,
WHEREAS, in light of the foregoing, the Company desires to employ the
Executive as its Chief Financial Officer and the Executive desires to accept
such employment.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment. The Company hereby employs the Executive and the Executive
hereby accepts employment upon the terms and conditions hereinafter set forth.
2. Term and Termination. This Agreement shall commence on September 1,
2001 and shall terminate as of the earlier of:
(a) 3 years from the date hereof;
(b) the death or disability of the Executive. Disability shall mean
the Executive's inability, due to sickness or injury, to perform effectively his
duties hereunder for a period of at least 90 consecutive days;
(c) thirty (30) days after notice is given by the Company to the
Executive after a material breach hereof by the Executive; or,
(d) thirty (30) days after notice is given by the Executive to the
Company after a material breach hereof by the Company.
The exercise of the Company's or the Executive's right to terminate this
Agreement pursuant to clause (c) or (d) hereof, as the case may be, shall not
abrogate the rights and remedies of the terminating party in respect of the
breach giving rise to such termination.
3. Salary. For all services rendered under this Agreement:
(a) During the term of his employment, the Company shall pay the
Executive an annual salary of $126,254. The Executive's salary may be paid in
the form of cash and/or stock, as agreed upon by the parties. This amount may be
increased at the discretion of the Board of Directors and shall be adjusted to
compensate for annual cost of living increases.
(b) During the term of his employment, the Executive shall be
entitled to participate in employee benefit plans or programs of the Company, if
any, to the extent the Executive is eligible to participate thereunder. Such
plans and programs shall include, but not be limited to, the following:
(i) major medical health insurance for the Executive, his
spouse and two children; and
(ii) three weeks paid vacation.
(c) The Executive shall be permitted to participate in the
Company's stock option plan. The number of shares subject to options, type of
options, and vesting of the options are set forth on Exhibit "A," attached
hereto as if fully set forth herein.
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(d) The Company shall also pay the Executive a bonus based upon
achieving financial milestones set forth in a particular calendar year. The
Executive shall be entitled to receive a bonus to be agreed upon by the
Executive and the Company's Board of Directors. The Company's Board of
Directors and the Executive shall agree upon the milestones and if the Executive
meets the milestone conditions, he shall be paid 30 days after the end of the
Company's calendar year.
(e) The Executive shall also be entitled to severance pay equal to
six (6) months salary and benefits in the event of termination by the Company
for any reason other than commission of a felony or a crime involving moral
turpitude relating to services provided to the Company, or termination by the
Company pursuant to Paragraph 2(c). Options which have vested prior to the date
of termination shall remain exercisable during the severance period. Unvested
options shall terminate in accordance with the terms of the respective Stock
Option Agreements.
4. Duties. The Executive shall be employed as Chief Financial Officer of
the Company and, subject to the direction of the Board of Directors and the
Company's officers designated by the Board of Directors, shall perform and
discharge well and faithfully the duties which may be assigned to him from time
to time by the Company in connection with the conduct of its business. If the
Executive is elected or appointed a director of the Company or any subsidiary
thereof during the term of this Agreement, the Executive will serve in such
capacity without further compensation.
5. Extent of Services. Except as set forth below, the Executive shall
devote his entire time, attention and energies to the business of the Company
and shall not during the term of this Agreement be engaged, whether or not
during normal business hours, in any other business or professional activity,
whether or not such activity is pursued for gain, profit, or other pecuniary
advantage. Notwithstanding the foregoing, the Executive shall be allowed to
serve on the Board of Directors of other companies so long as such Board
participation does not interfere with the Executive fulfilling his duties to the
Company and the Executive obtains the prior written approval of the Company's
Board of Directors. In addition, the Executive shall be allowed to provide
consulting services to other companies so long as he obtains the prior written
approval of the Company's Board of Directors, turns over to the Company the
entire amount of the compensation he receives as a result of providing such
services, and provides such services no more than three (3) days per month.
6. Disclosure of Information. The Executive recognizes and acknowledges
that the Company's trade secrets and proprietary information and processes, as
they may exist from time to time, are valuable, special and unique assets of the
Company's business, access to and knowledge of which are essential to the
performance of the Executive's duties hereunder. The Executive will not, during
or after the term of his employment by the Company, in whole or in part,
disclose such secrets, information or processes to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever,
nor shall the Executive make use of any such property for his own purposes or
for the benefit of any person, firm, corporation or other entity except the
Company under any circumstances during or after the term of his employment,
provided that after the term of his employment these restrictions shall not
apply to such secrets, information and processes which are then in the public
domain provided that the Executive was not responsible, directly or indirectly,
for such secrets, information or processes entering the public domain without
the Company's consent. The Executive agrees to hold as the Company's property,
all memoranda, books, papers, letters, formulas and other data, and all copies
thereof and therefrom, in any way relating to the Company's business and
affairs, whether made by him or otherwise coming into his possession, and on
termination of his employment, or on demand of the Company, at any time, to
deliver the same to the Company. In the event an action is instituted and prior
knowledge is an issue, it shall be the obligation of the Executive to prove by
clear and convincing evidence that the confidential information disclosed was in
the public domain, was already known by the Executive prior to his employment
with the Company, or was developed independently by the Executive.
7. Inventions. The Executive hereby sells, transfers and assigns to the
Company or to any person, or entity designated by the Company, all of the entire
right, title and interest of the Executive in and to all inventions, ideas,
disclosures and improvements, whether patented or unpatented, and copyrightable
material, made or conceived by the Executive, solely or jointly, or in whole or
in part, during the term hereof which (i) relate to
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methods, apparatus, designs, products, processes or devices sold, leased, used
or under construction or development by the Company or any subsidiary, or (ii)
otherwise relate to or pertain to the business, functions or operations of the
Company or any subsidiary, or (iii) arise wholly or partly from the efforts of
the Executive during the term hereof. The Executive shall communicate promptly
and disclose to the Company, in such form as the Company requests, all
information, details and data pertaining to the aforementioned inventions,
ideas, disclosures and improvements; and, whether during the term hereof or
thereafter, the Executive shall execute and deliver to the Company such formal
transfers and assignments and such other papers and documents as maybe required
of the Executive at the Company's expense to permit the Company or any person or
entity designated by the Company to file and prosecute the patent applications
and, as to copyrightable material, to obtain copyright thereon. Any invention by
the Executive within one (1) year following the termination of this Agreement
shall be deemed to fall within the provisions of this paragraph unless proved by
the Executive to have been first conceived and made following such termination.
8. Covenant Not to Compete.
(a) During the term hereof and for a period of one (1) year thereafter, the
Executive shall not compete, directly or indirectly, with the Company, interfere
with, disrupt or attempt to disrupt the relationship, contractual or otherwise,
between the Company and any customer, client, supplier, consultant, or employee
of the Company and any customer, client, supplier, consultant or employee of the
Company, including, without limitation, employing or being an investor
(representing more than 5% equity interest) in, or officer, director, or
consultant to, any person or entity which employs any former key or technical
employee whose employment with the Company was terminated after the date which
is one year prior to the date of termination of the Executive's employment
therewith. An activity competitive with an activity engaged in by the Company
shall mean performing services whether as an employee, officer, consultant,
director, partner, or sole proprietor for any person or entity engaged in the
business then engaged in by the Company, which services involve the development
and marketing of a web-based system to collect, manage, and compile clinical
trial and research data.
(b) It is the desire and intent of the parties that the provisions of this
Section shall be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular portion of this Section shall be adjudicated to
be invalid or unenforceable, this Section shall be deemed amended to delete
therefrom the portion thus adjudicated to be invalid or unenforceable, such
deletion to apply only with respect to the operation of this Section in the
particular jurisdiction in which such adjudication is made.
(c) Nothing in this Section shall reduce or abrogate the Executive's
obligations during the term of this Agreement under Sections 4 and 5 hereof.
9. Remedies. If there is a breach or threatened breach of the provisions
of Section 6, 7 or 8 of this Agreement, the Company shall be entitled to an
injunction restraining the Executive from such breach. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies for such
breach or threatened breach.
10. Assignment. This Agreement may not be assigned by any party hereto;
provided that the Company may assign this Agreement: (a) to an affiliate so long
as such affiliate assumes the Company's obligations hereunder; provided that no
such assignment shall discharge the Company of its obligations herein, or (b) in
connection with a merger or consolidation involving the Company or a sale of
more than 50% of the Company's securities or assets, to the surviving
corporation or purchaser as the case may be, so long as such assignee assumes
the Company's obligations thereunder.
11. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by registered mail to the
Executive at his residence at:
Xxxxxx Xxxxxxx
0000 XX 000 Xxx
Xxxxxxxx Xxxxx, XX 00000
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and to the Company at:
OmniComm Systems, Inc.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
12. Waiver of Breach. A waiver by the Company or the Executive of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
13. Entire Agreement. This instrument contains the entire agreement of the
parties. It may be changed only by an agreement in writing signed by a party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
14. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Florida. All questions with respect to the construction
hereof and the rights and liabilities of the parties hereto shall be governed by
the laws of the State of Florida. Any action or proceeding arising out of or
relating hereto shall be brought in Miami-Dade County, State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first hereinabove written.
OmniComm Systems, Inc.
By/s/Xxxxx Xxxxxxxx, D.O.
Dr. Xxxxx Xxxxxxxx
Chief Executive Officer
Executive
/s/Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
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Exhibit "A"
Incentive and Non-Qualified Stock Option
Total Number of Shares Subject to Options: 210,000
Vesting Schedule: 3 years
Amount Price Vesting Date
Year 1 2001 70,000 Market Price+10% September 30, 2001
Year 2 2002 70,000 Market Price+10% September 30, 2002
Year 3 2003 70,000 Market Price+10% September 30, 2003
Other rights:
1. "Piggyback" rights in equal proportion to other employees.
2. Acceleration of all unvested options in the event of change in control,
defined as a sale of more than 50% of the Company's securities or assets to a
third party other than shares sold to Commonwealth Associates, LLP or its
affiliates in the Series B or Series C Preferred Private Placements.
3. Options will granted as Incentive Stock Options (ISO's) to the extent
possible under Sec. 422 of the Internal Revenue Code of 1986.
4. Length of options: ISO 5 years; NonQ 7 years
5. Existing options granted, but unissued, under Stock Option Agreements
preceding this Employment Agreement shall remain in force.
Notes:
1. ISO: Incentive stock option pursuant to Sec. 422 of the Internal Revenue
Code of 1986. ISO option price shall be the fair market value at the date of
grant x 110%
2. NonQ: Non-qualified stock option.
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