EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of June 1, 2002,
between OmniComm Systems, Inc., a Delaware corporation, (the "Company"), and
Cornelis Wit (the "Executive").
WITNESSETH:
WHEREAS, the Executive has experience in managing at a senior level a
publicly traded company (or a division of such a company) involved in a
medical-related 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 Executive Officer and President 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 June 1, 2002
and shall terminate as of the earlier of:
May 31, 2003, unless extended by the Company;
(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. COMPENSATION. For all services rendered under this Agreement:
(a) During the term of his employment, the Company shall pay
the Executive an annual salary of $120,000. The Executive's salary may be paid
in the form of cash and/or stock, as agreed upon by the parties.
(b) During the term of his employment, the Executive shall be
reimbursed for the expense of his existing group health insurance.
(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.
(d) In the event that the Company consummates a transaction
with a third party resulting in the sale, merger, consolidation, reorganization
or other business combination involving all or a majority of the business,
assets or stock of the Company, whether effected in one transaction or a series
of transactions (a "Sale Transaction"), due to the initiative of Executive
(whether or not during the term of this Agreement), Executive shall receive a
fee equal to 2% of the Aggregate Consideration, as defined below (the "Fee").
For purposes of this Section 3(d), the "initiative of Executive" shall
include, but not be limited to, the introduction or referral of a third party to
the Company or any officer or director of the Company for any purpose, including
but not limited to any such introduction or referral of a purchaser, strategic
partner, financing source or otherwise, which results (whether or not through
the efforts of Executive) in the consummation of a Sale Transaction; provided
however that if the purpose of Executive's initiative is other than for the
purpose of a Sale Transaction, then the Fee would only be payable if such
introduction or referral resulted in a Sale Transaction that is consummated
within a period of one year following such introduction or referral.
For purposes of this Section, the term Aggregate Consideration means
the amount of cash and the fair market value (on the date of payment) of
securities (whether debt or equity) or assets receivable by the Company, its
employees or its securityholders, as the case may be. Aggregate Consideration
shall also include the amount of any indebtedness of the Company assumed,
continued, refinanced or otherwise paid in connection with a Sale Transaction.
The fair market value of non-cash, non-publicly traded securities shall be
determined in good faith by the Company.
4. DUTIES. The Executive shall be employed as Chief Executive 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 most of his time, attention and energies to the business of the Company
and shall not during the term of this Agreement be engaged in any other business
or professional activity, whether or not such activity is pursued for gain,
profit, or other pecuniary advantage which interferes with his ability to
perform his duties hereunder. 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.
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.
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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 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 if the
Executive leaves voluntarily or six (6) months if the Executive is terminated by
the Company, 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.
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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:
Cees Wit
0000, 00xx Xxxxxxx
Xxxx Xxxxx, XX 00000
and to the Company at:
OmniComm Systems, Inc.
0000 Xxxxx Xxxx, Xxxxx 000-X
Xxxxx, XX 00000
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 Broward 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/ Xxxxxxx Xxxxx
------------------
Xxxxxxx Xxxxx
Chairman of the Board
EXECUTIVE:
By: /s/ Cornelis Wit
------------------
Cornelis Wit
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EXHIBIT "A"
GRANT OF INCENTIVE AND NON-QUALIFIED STOCK OPTION
50,000 Options exercisable at $0.25 will be granted and shall vest immediately
upon the execution of this Agreement.
50,000 Options exercisable at fair market value shall be granted in the event
that the Company becomes cash flow positive by December 31, 2002. In such event
the exercise price shall be determined as of December 31, 2002.
50,000 Options exercisable at fair market value shall be granted for every
$1,000,000 of revenue generated by the Company from new contracts and/or
customers following June 1, 2002. Such grant(s) shall be determined and awarded
on a quarterly calendar basis and the exercise price shall for each such Option
grant shall be determined by taking the average closing stock price for the
Company's common stock for the month in which the afore-mentioned revenue level
was realized.
OTHER RIGHTS:
1. "Piggyback" rights in equal proportion to other employees.
2. Acceleration of the vesting of all 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.
3. Options will be 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.
