Employment Agreement - Adatom Inc. and Neal J. Polan
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of October 11, 1999,
between Adatom, Inc., a California corporation (the "Company"), and Neal J.
Polan, an individual residing at 20 Cameron Drive Greenwich, Connecticut (the
"Employee").
W I T N E S S E T H:
WHEREAS, the Company has heretofore executed (i) a certain Agreement and
Plan of Merger (the "Merger Agreement"), dated July 1, 1999, among the Company,
HealthCore Medical Solutions, Inc., a Delaware corporation ("HealthCore"), the
Employee, and the shareholders of the Company, pursuant to which the Company
will be merged (the "Merger") with and into HealthCore, and (ii) a certain
Letter Agreement (the "Letter Agreement"), dated July 1, 1999, between the
Company and the Employee; and
WHEREAS, in connection with the consummation of the Merger, and in
accordance with the terms of the Letter Agreement, the Company desires to retain
the services of the Employee, and the Employee desires to provide such services
to the Company, on the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. EMPLOYMENT AND DUTIES.
(a) The Company hereby employs the Employee, and the Employee
hereby accepts employment with the Company, to advise the Company on
mergers, acquisitions and other initiatives and strategic ventures
contemplated to be undertaken by the Company, as the Company's
President may direct.
(b) The Employee hereby agrees to perform the duties described
in Section 1(a) hereof, and to serve the Company, faithfully,
diligently and to the best of his ability, subject to the direction
of the Company's President. The parties hereby agree that the
Employee shall not be required to devote in excess of sixty (60)
hours per month (the "Monthly Employment Period") to the performance
of his duties under this Agreement, at such timed mutually
acceptable to the Company and the Employee. The parties further
acknowledge and agree that the Employee's employment hereunder shall
in no manner restrict or limit the Employee's freedom to pursue
other professional endeavors provided they do not materially impair
the Employee's ability to perform his duties hereunder.
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(c) During the Term (as defined in Section 2 hereof) the
Employee shall not, directly or indirectly, engage in the internet
retail superstore business or any related internet retail business
in which the Company shall actually engage in any material manner;
provided, however, that such prohibition shall not apply to any
business in which the Employee shall have been engaged, independent
of his employment with the Company, prior to the date on which the
Company commences its engagement of such business.
2. TERM.
The term of the Employee's employment under this Agreement
shall commence (the "Commencement Date") contemporaneously with the
Closing (the "Closing") of the transactions contemplated by the
Merger Agreement, and shall continue for a period of two (2) years
thereafter, unless earlier terminated in accordance with the terms
and conditions of Section 4 hereof (the "Term").
3. COMPENSATION; SIGNING BONUS; EXPENSES; BENEFITS.
(a) BASE COMPENSATION. As compensation for the Employee's
performance of the services contemplated to be rendered by the
Employee hereunder, the Company shall pay to Employee an salary of
Fifty Thousand ($50,000) Dollars per annum, payable in accordance
with the Company's standard payroll practices for senior employees.
Such salary may be increased, but not decreased, by the Board of
Directors and shall be reviewed by the Board no less frequently than
annually.
(b) STOCK PURCHASE. In partial consideration for the
Employee's execution and delivery to Adatom of this Agreement
simultaneously with the execution of the Merger Agreement, the
Company has heretofore agreed, pursuant and subject to the terms of
the Letter Agreement, that immediately prior to the Commencement
Date the Company shall issue to the Employee such number of shares
(such shares being the "Polan Shares") of the Company's common
stock, no par value per share (collectively, the "Adatom Shares")
which in accordance with the terms and conditions set forth in the
Merger Agreement shall be convertible into three hundred fifty
thousand (350,000) shares of HealthCore Class A common stock, par
value $.01 per share, for a purchase price purchase price of Three
Hundred Twenty Thousand Seven Hundred Sixty ($320,760) Dollars
payable pursuant to the terms of a promissory note (the "Note') in
form and substance mutually satisfactory to the Employee and the
Company, and their respective counsel. The Company hereby agrees
that the principal amount of the Note, together with all accrued
interest thereon through the relevant date, shall be forgiven by the
Company six (6) months following the Commencement Date.
(c) EXPENSES. The Employee shall be entitled to advances or
reimbursement in accordance with the Company's standard business
practices for his ordinary and necessary business expenses incurred
in the performance of his duties hereunder provided that his claims
therefor shall be supported by the documentation required by the
Company in accordance with its usual practice;
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and further provided that the Employee acknowledges that in view of
the fact that the Company's offices are located in California, the
Employee will be responsible for the payment of all expenses
associated with the maintenance and management of his New York
office.
(d) Benefits. The Company shall provide the Employee with
family health insurance coverage, and shall allow the Employee to
participate in the Company's employee stock option plans.
4. TERMINATION.
(a) Termination for Cause. The Company may terminate the
Employee's employment hereunder for "cause," which term shall be
defined as (i) Employee's conviction of a crime constituting a
felony or involving moral turpitude, and (ii) an act by Employee of
fraud in connection with Employee's performance of his duties to the
Company. Upon a termination for cause, the parties' obligations
hereunder shall terminate and be of no further force or effect;
provided, however, that the Employee shall retain the Polan Shares
and the Note shall forthwith be deemed to be fully paid performed
and discharged, and the Employee shall own the Polan Shares free and
clear of any and all claims arising under the Note and/or this
Agreement.
(b) Termination Without Cause. The Company may terminate the
Employee's employment at any time "without cause" (which term shall
be defined as a termination for any reason other than as set forth
in Section 4(a) hereof), including, without limitation, by reason of
the Employee's death, illness, disability or other incapacity. In
such event (i) the Employee's obligations under the Note shall
forthwith be deemed to be fully paid performed and discharged, and
the Employee shall own the Polan Shares free and clear of any and
all claims arising under the Note and/or this Agreement, and (ii)
except in the case of termination as a result of death, disability
or incapacity, the Employee shall be entitled receive the full
payment of any and all salary required to be provided to the
Employee pursuant to the terms of this Agreement at the times such
salary would have been paid hereunder, and, other than as provided
(i) and (ii) of this Section 4(b), the parties' obligations
hereunder shall terminate and be of no further force or effect.
(c) Termination by Employee. In the event the Employee shall
terminate his employment hereunder for any reason the parties'
obligations hereunder shall terminate and be of no further force or
effect; provided, however, that the Employee shall retain the Polan
Shares, and the Note shall forthwith be deemed to be fully paid
performed and discharged, and the Employee shall own the Polan
Shares free and clear of any and all claims arising under the Note
and/or this Agreement.
5. BOARD OF DIRECTORS.
In the event the Employee shall at any time during the term
hereof serve on the Board of Directors of the Company, the Employee
shall be entitled to receive, in addition to the compensation and
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benefits payable hereunder, such compensation, benefits and
entitlements as provided to the outside directors of the Company.
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6. MISCELLANEOUS.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California
applicable to agreements made and to be performed in that state.
(b) Notices. All notices, consents and other communications
under this Agreement shall be in writing and shall be deemed to have
been duly given when (a) delivered by hand (with receipt confirmed),
(b) sent by telex or telecopier (with receipt confirmed), provided
that a copy is mailed by registered mail, return receipt requested,
or (c) when received by the addressee, if sent by Express Mail,
Federal Express or other express delivery service (receipt
requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier
numbers as a party may designate as to itself by notice to the other
parties):
If to the Employee:
Neal J. Polan
20 Cameron Drive
Greenwich, Connecticut 07831
Facsimile: (917) 368-3601
with a copy to:
Epstein Becker & Green, P.C.
250 Park Avenue
New York, NY 10177
Attn: Seth Truwit, Esq.
Facsimile: (212) 661-0989
If to the Company:
Adatom, Inc.
920 Hillview Court, Suite 160
Milpitas, Ca 95035
Attn: Mr. Richard Barton, President
Facsimile: (561) 364-0771
with a copy to:
McCutchen, Doyle, Brown & Enersen, LLP
Three Embarcadero Center
San Francisco, CA 94111
Attn: Hank Evans, Esq.
Facsimile: (415) 393-2286
(c) Entire Agreement; Amendment. This Agreement contains the
entire understanding between the parties and may not be modified,
altered or terminated except by an instrument in writing signed by
the parties.
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(d) Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be
considered a waiver thereof or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other
term of this Agreement.
(e) Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs,
representatives, successors and assigns.
(f) Severability. If any of the provisions, terms or clauses
of this Agreement are declared illegal, unenforceable or ineffective
in a legal forum, those provisions, terms and clauses shall be
deemed severable, such that all other provisions, terms and clauses
of this Agreement shall remain valid and binding upon both parties.
(g) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which, when taken together, shall constitute one and same
instrument.
IN WITNESS WHEREOF, the parties hereto have each executed this
Employment Agreement as of the day and year first above written.
ADATOM, INC.
By:
_______________________________________
Name:
Title:
_______________________________________
Neal J. Polan
ACCEPTED AND AGREED TO AS OF THE
CLOSING:
HEALTHCORE MEDICAL SOLUTIONS, INC.
By: __________________________________ Date: _____________________
Name:
Title:
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