EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of October 11, 1999,
between Adatom, Inc., a California corporation (the "Company"), and Xxxx X.
Xxxxx, an individual residing at 00 Xxxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxxx (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.
(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 "Xxxxx
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; 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.
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(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 Xxxxx Shares and the Note shall forthwith
be deemed to be fully paid performed and discharged, and the Employee
shall own the Xxxxx 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 Xxxxx 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 Xxxxx
Shares, and the Note shall forthwith be deemed to be fully paid
performed and discharged, and the Employee shall own the Xxxxx 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
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:
Xxxx X. Xxxxx
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxx & Green, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Company:
Adatom, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xx 00000
Attn: Mr. Xxxxxxx Xxxxxx, President
Facsimile: (000) 000-0000
with a copy to:
McCutchen, Doyle, Xxxxx & Enersen, LLP
Xxxxx Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
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(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.
(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: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President & CEO
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
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