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Exhibit 10(u)
EMPLOYMENT AGREEMENT
This Agreement to be effective July 31, 1999 is entered into by and
between AIM Group, Inc., a Delaware corporation and its wholly-owned
subsidiaries (the "Employer"), and Xxxx X. Arena, 0000 Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx 00000 (the "Employee").
WITNESSETH:
WHEREAS, Employer intends to engage in the information technology and
related businesses including but not limited to internet services, software
development and sales, world wide web site development and sales, point of sales
technology and media and advertising, (the "Information Technologies"); and to
conduct research, experimentation, development, and exploitation of these
related technologies and to engage in other businesses; and
WHEREAS, Employer desires to employ Employee as a Director and Chief
Executive Officer of AIM Group, Inc., American Internet Media, Inc. and AIM
Solutions, Inc.; and Director, President and Chief Executive Officer of all
other subsidiaries (the "Company") of Employer, and Employee desires to be
employed by Employer in such capacities pursuant to the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the foregoing and the mutual promises
and covenants herein contained, it is agreed as follows:
1. EMPLOYMENT: DUTIES AND RESPONSIBILITIES
Employer hereby employs Employee as a Director and Chief Executive Officer
of AIM Group, Inc., American Internet Media, Inc. and AIM Solutions, Inc.; and
Director, President and Chief Executive Officer of all other subsidiaries of
Employer. Subject at all times to the direction of the Officers and Board of
Directors of Employer, Employee shall serve in these capacities to be in charge
of the overall operations of AIM Group, Inc. and subsidiaries including the
performance of such other general services and duties as the Board of Directors
shall determine. Employee shall serve in such other positions and offices of the
Employer and its affiliates, if selected, without any additional compensation.
Employee shall interrelate with outside sources and stimuli (conference,
journals, consultation, etc.) and remain aware and current of the opportunities,
both business and technical in nature particular to the field of Information
Technologies.
Employee shall have direct responsibility over the operations of AIM
Group, Inc. and subsidiaries stated in this Section 1.
To confer with the Directors and other Officers of the Corporation on
ideas and proposals to further define time opportunities and gain rationale to
propose to the Board of Directors a
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formal long term as well as immediate plan of both local, national, and
international business.
In the performance of all of the involved research and product/project
development stages and to be aware of other affiliates as well as outside
entities also involved in supporting the progress of the projects to completion.
Furthermore to be responsible for their being informed in a timely manner to
provide for the most efficient and straight forward coordination of efforts,
generally stated, to keep things going.
2. FULL TIME EMPLOYMENT
Employee hereby accepts employment by Employer upon the terms and
conditions contained herein and agrees that during the term of this Agreement,
the Employee shall devote substantially all of his business time, attention, and
energies to the business of the Employer. Employee, during the term of this
Agreement, will not perform any services for any other business entity, whether
such entity conducts a business which is competitive with the business of
Employer or is engaged in any other business activity, provided, however, that
nothing herein contained shall be construed as (a) preventing Employee from
investing his personal assets in any business or businesses which do not compete
directly or indirectly with the Employer, provided such investment or
investments do not require any services on his part on the operation of the
affairs of the entity in which such investment is made and in which his
participation is solely that of an investor, (b) preventing Employee from
purchasing securities in any corporation whose securities are regularly traded,
if such purchases shall not result in his owning beneficially at any time more
than 5% of the equity securities of any corporation engaged in a business which
is competitive, directly or indirectly, to that of Employer, (c) preventing
Employee from engaging in any activities, if he receives the prior written
approval of the Board of Directors of Employer with respect to his engaging in
such activities.
3. RECORDS
In connection with his engagement hereunder, Employee shall accurately
maintain and preserve all notes and records generated by Employer which relate
to Employer and its business and shall make all such reports, written if
required, as Employer may reasonably require.
4. TERM
Employee's employment hereunder shall be for a period of three one-year
terms to commence on the date hereof and end one year from date. Each one year
term shall be deemed a Contract Year.
5. COMPENSATION
(a) As full compensation ("Base Salary") for the performance of his duties
on behalf of Employer, Employee shall be compensated as follows:
(i) Base Salary. Employer, during the term hereof, shall pay
Employee a
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base salary at the rate of One-Hundred Sixty Eight Thousand Dollars
($168,000) per annum, payable semi-monthly; during the second-year term,
Employer shall pay Employee a base salary at the rate of Two-Hundred One
Thousand Dollars ($201,000) per annum, payable semi-monthly; during the
third-year term, Employer shall pay Employee a base salary at the rate of
Two-Hundred Forty One Thousand Dollars ($241,000) per annum, payable
semi-monthly. If this Agreement is renewed for a subsequent term or terms, base
salary shall be increased pursuant to; a) a minimum of Ten-Percent (10%) per
year (the "Minimum Increase"); or b) as the Board of Directors shall determine
if in excess to the Minimum Increase, payable semi-monthly beginning August 1,
2002 subject to the performance criteria as outlined in Section 1. Future salary
increases will be subject to mutual agreement in accordance with job
performance.
Directors may consider other meritorious adjustments in compensation or a
bonus under appropriate circumstance including the conception of valuable or
unique inventions, processes, discoveries or improvements capable of profitable
exploitation.
(ii) Performance Bonus. Upon the proposed establishment of the
Employer's Performance Profit Sharing Plan (the "Plan"), Employee shall receive
a performance bonus of the pre-tax profit generated from the Employer
("additional compensation") as shall be determined by the Board of Directors of
AIM Group, Inc.
(iii) Incentive Stock Option. Employee shall also receive stock
options under Employer's parent AIM Group, Inc. ("AIM") 1997 Incentive Stock
Option Plan or such other Incentive Stock Option Plan then in existence (the
"ISO Plan") to purchase shares of AIM's Common Stock. The number of options to
be issued to Employee will be set forth by AIM's Board of Directors from time to
time at their sole discretion. Upon execution of this agreement the Employee
shall receive options at minimum, equal to 25,000 common shares of AIM Group,
Inc. exercisable at $4.75 per share in accordance with a 5 year exercise period
and a three year vesting period. During the second year of employment, the
Employee shall receive options provided the performance criteria is reached with
respect to target net revenues of $10 million and net profits of $1 million at a
minimum during the proceeding fiscal year of the Company, equal to one-half
percent (1/2%) of the number of outstanding common shares of AIM Group, Inc. at
the end of the first term exercisable at the price of the Common Stock on such
day of issuance, each subject the terms as more clearly defined within the ISO
Plan. In the event the Employee is terminated by Employer subsequent to a
merger, acquisition or sale transaction by the Employer, then any stock option
or warrants or similar securities held beneficially by the Employee shall
automatically become fully vested and exercisable.
(b) Employer shall reimburse Employee for the expenses incurred by
Employee in connection with his duties hereunder, including travel on
businesses, attending technical and business meetings, professional activities
and entertainment, such reimbursement to be made in accordance with regular
Employer policy and upon presentation by Employee of the details of, and
originals of vouchers for, such expenses.
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6. FRINGE BENEFITS
(a) During the term of this Agreement, Employer shall provide at its
sole expense to Employee, hospitalization, major medical, life insurance and
other fringe benefits on the same terms and conditions as it shall afford other
senior management employees. In addition, Employer will seek to provide key-man
term life insurance on Employee in the amount of One Million Dollars
($1,000,000) to inure Three-Quarters (75%) to the benefit of Employer and
One-Quarter (25%) to the benefit of the Employee's estate. Nothing herein shall
require Employer to obtain or maintain such coverage.
(b) During the term of this Agreement, Employer shall provide paid
vacation to Employee which accrues from the date of execution of this Agreement.
The annual paid vacation earned for each twelve month period is: (i) three (3)
weeks per annum up to three (3) years of full-time employment; (ii) four (4)
weeks per annum up to seven (7) years of full-time employment; and (iii) five
(5) weeks per annum over seven (7) years of full-time employment.
7. SUBSIDIARIES
For the purposes of this Agreement all references to business products,
services and sales of Employer shall include those of Employer's affiliates.
8. INVENTORIES: SHOP RIGHTS
All systems, inventions, discoveries, apparatus, techniques, methods,
know-how, formulae or improvements made, developed or conceived by Employee
during Employee's employment by Employer, whenever or wherever made, developed
or conceived, and whether or not during business hours, which constitutes an
improvement, on those heretofore, now or at any during Employee's employment,
developed, manufactured or used by Employer in connection with the manufacture,
process or marketing of any product heretofore or now or hereafter developed or
distributed by Employer, or any services to be performed by Employer or of any
product which shall or could reasonable be manufactured or developed or marketed
in the reasonable expansion of Employer's business, shall be and continue to
remain Employer's exclusive property, without any added compensation or any
reimbursement for expenses to Employee, and upon the conception of any and every
such invention, process, discovery or improvement and without waiting to perfect
or complete it, Employee promises and agrees that Employee will immediately
disclose it to Employer and to no one else and thenceforth will treat it as the
property and secret of Employer.
Employee will also execute any instruments requested from time to time by
Employer to vest in it complete title and ownership to such invention, discovery
or improvement and will, at the request of Employer do such acts and execute
such instrument as Employer may require but at Employer's expense to obtain
Letters of Patent, trademarks or copyrights in the United States and foreign
countries, for such invention, discovery or improvement and for the purpose of
vesting title thereto in Employer, all without any reimbursement for expenses
(except as provided
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in Section 5 or otherwise and without any additional compensation of any kind of
Employee.
9. NON-DISCLOSURE
(a) Employee acknowledges that the services to be rendered by him or
her to Employer are peculiar, special, unique and extraordinary, and that he may
during the term of his employment obtain confidential information of Employer's
method of doing business, secrets, customers, suppliers, formulae, and
processes, the use or revelation of which by Employee during Employee's
employment or after the termination of the employment hereunder, might, would or
could injure or cause injury to Employer's business. Accordingly, Employee
agrees to forever keep secret and inviolate any knowledge or information as to
any of Employer's secret articles, devices, formulae, processes, invention,
customers, suppliers, or discoveries and will not utilize the same for his
private benefit or indirectly for the benefit of others and will never disclose
such secret knowledge or information to anyone else. The foregoing shall not be
applicable to any information which now is or hereafter shall be in the public
domain in the context in which used provided the Employee does not release such
information without Employer's authorization.
(b) In addition, Employee agrees that all information received from principals
and agents of Employer will be held in total confidence for a period of two (2)
years following termination of employment.
10. NON-COMPETITION
In consideration of the Employee's employment with Employer, its
successors, present or future subsidiaries, or assigns during such time as may
be mutually agreeable, of the compensation provided herein, of the Employee's
Base Salary as an Employee and for other good and valuable consideration,
receipt and adequacy of which are hereby acknowledged, Employee agrees:
(a) That during the employment by Employer, Employee will not (i)
engage in a business that competes, directly or indirectly, with any of the
products, services or businesses of Employer; (ii) be or become a stockholder,
partner, owner, officer, director, employee or agent of, or consultant to, or
give financial or other assistance to, any person or entity engaged in or
considering engaging in any such business; (iii) seek in competition with the
business of Employer to procure orders from or do business with any customer of
Employer; (iv) solicit, or contact with a view to the engagement or employment
of, any person who is an employee of Employer; (v) seek to contract or engage
(in such a way as to adversely affect or interfere with the business of
Employer) any person or entity who has been contracted with or engaged to
manufacture, assemble, supply or deliver products, goods, materials or services
to Employer; or (vi) engage in or participate in any effort or act to induce any
of the customers, associates, consultants, partners, or employees of Employer to
take any action which might be disadvantageous to Employer; provided, however,
that nothing herein shall prohibit Employee from owning, as a passive investor,
in the aggregate not more than 5% of the outstanding publicly traded stock of
any corporation so engaged.
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(b) That for a period of two years following termination of
Employee's employment, Employer shall, at its option, have the right to require
that the Employee not (i) engage in a business that competes, directly or
indirectly with any of the products sold or businesses conducted by any division
or subsidiary of Employer in which the Employee worked during the two (2) year
period prior to the termination of the Employee's employment by Employer; (ii)
be or become a stockholder, partner, owner, officer, director, employee or agent
of, or a consultant to, or give financial or other assistance to, any person or
entity engaged in or considering engaging in any such business; (iii) seek in
competition with the business of Employer to procure orders from or do business
with any customer of Employer with which Employee had contact during the two
years prior to termination of Employee's employment with Employer; (iv) solicit,
or contact with a view to the engagement or employment of, any person who is an
employee of Employer; (v) seek to contract or engage (in such a way as to
adversely affect or interfere with the business of Employer) any person or
entity who has been contracted with or engaged to manufacture, assemble, supply
or deliver products, goods, materials or services to Employer; or (vi) engage in
or participate in any effort or act to induce any of the customers, associates,
consultants, partners, or employees of Employer to take any action which might
be disadvantageous to Employer; provided, however, that nothing herein shall
prohibit Employee from owning, as a passive investor, in the aggregate not more
than 5% of the outstanding publicly traded stock of any corporation so engaged.
The foregoing restrictions shall apply to conduct and activities in any city,
county or state in the United States or in any foreign country in which any
Employer subsidiary or division in which Employee worked during the two years
prior to termination of Employee's employment with Employer sells products or
services or conducts business. Employer shall, if it exercises its option set
forth in this Section 10 (b), with respect to employment or consulting
activities, make the payments described in Section 10 (d) below to Employee. In
the event that the Employee would violate the provisions of this section
following termination of Employee's employment, Employer may, at its option,
extend the foregoing two (2) year period by the duration of the Employee's
violation.
(c) During Employee's employment by Employer and during the course
of the above-mentioned two (2) year period, Employee shall advise Employer in
writing of each and every bona fide offer subject to the restrictions set forth
in this Agreement which Employee receives and wishes to accept. Employees notice
shall be sufficiently detailed regarding the nature and scope of the offer and
the identity and business of the offeror to permit Employer to make an informed
decision whether to exercise its option hereunder, and shall include a copy of
the written offer from the offeror. Employee agrees to supplement the notice
with further information upon request by Employer.
(d) Employer shall have ten (10) business days following receipt of
Employee's written notification (and any requested supplement) to advise me of
its election, in its sole discretion, either; (i) to waive the non-competition
provisions of this Agreement, in which case Employee shall be free to accept
such offer subject to all the other terms and conditions of any agreements with
Employer relating to inventions and confidential information; or (ii) to insist
upon Employers full compliance with the provisions of this Agreement. If
Employer elects option (ii) with respect to an employment or consulting offer,
Employer shall
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compensate Employee monthly in an amount equal to my latest monthly base pay as
an employee of the Employer in lieu of salary, benefits and all other
remuneration Employee would have received in connection with the proposed
employment or consulting for a period beginning on the date of Employees notice
as provided above and ending twenty-four (24) months from severance of
Employee's employment with Employer. The amount payable may be reduced as
provided herein. Monthly payments shall begin with the end of the month Employer
elects option (ii) above. In the event Employee receives an offer of temporary
or part-time employment or an offer to serve as consultant, the amount payable
pursuant to this Section 10(d) shall be the lesser of (a) my latest monthly base
pay or (b) the amount offered for temporary or part-time employment or
consulting. Payments for temporary employment or consulting shall only be paid
during the period for which Employee receives an offer of temporary employment
or consulting.
(e) The election by Employer of option (i) in Section 10(d) above
with respect to any one offer shall not be deemed a release or a waiver with
respect to any other offers which Employee may receive during the two-year
period of restriction. Payments pursuant to Section 10(d) above will be adjusted
if Employer exercises its option with respect to a subsequent offer of
employment or consulting which results in different payments. Payments ender
Section 10(d) will be based solely upon the most recent offer of employment or
consulting presented to Employer. In no event will compensation ender Section
10(d) exceed Employee's latest monthly base pay as an employee of Employer.
(f) If Employee accepts employment or performs services for any
business acceptable to Employer or not subject to the restriction set forth in
this Agreement during the two-year period of restriction, the amount of any
compensation to which Employee may later become entitled hereunder shall be
reduced by the amount by which compensation received for such employment or
services exceeds the base pay Employee would have received at Employer for a
period of time of the same duration as such employment or services. Employee
shall promptly advise Employer in writing upon seeking payment pursuant to
Section 10(d) of the dates such acceptable or unrestricted employment commenced
and terminated and the compensation received therefor. In such case, Employer
shall reduce future payments to Employee under Section 10(d) as provided herein.
Payments pursuant to Section 10(d) above shall also be reduced by an amount
equal to the amount paid to Employee by Employer under any other agreement, if
any, limiting Employee's right to subsequent employment.
(g) Notices shall be sent to Employer at most recent corporate
headquarters address, and to Employee at the most recent address Employer has
for Employee, or at such different address as either party shall have given
notice by certified mail, Return Receipt Requested. Refusal by either party to
accept a notice shall be deemed receipt of that notice.
(h) If any provision of this Section 10 should be adjudicated to be
invalid or unenforceable, such provision shall be deemed deleted herefrom with
respect, and only with respect, to the operation of such provision in the
particular jurisdiction in which such adjudication was made; provided, however,
that to the extent any such provision may be made
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valid and enforceable in such jurisdiction by limitations on the scope of
activities, geographical area or time period covered, the parties agree that
such provision instead shall be modified and deemed limited to the extent, and
only to the extent, necessary to make such provisions enforceable to the fullest
extent permissible under the laws and public policies applied in such
jurisdiction, and in such limited form shall be fully enforceable. The parties
further agree to modify, re-execute and resubmit this Agreement to an
appropriate court if necessary to effect the purpose of this Agreement. This
Agreement shall be construed and enforced in accordance with the laws of the
State of Georgia.
(i) The Employee acknowledges and agrees that a breach of the
provisions of this Agreement by the Employee will cause serious and irreparable
damage to Employer that may be difficult to quantify and for which monetary
damages alone will not be adequate. Accordingly, the Employee agrees that if
Employer should bring an action to enforce its rights under this Agreement and
if Employer establishes that Employee has breached any of the Employee's
obligations under this Agreement, Employer shall be entitled to (i) temporary
and/or permanent injunctive relief without the need for posting a bond, and (ii)
reasonable attorneys' fees incurred by Employer in bringing and prosecuting any
action for breach. Nothing in this Agreement shall be construed to prohibit
Employer from pursuing any other legal or equitable remedy. Employee agrees that
in no event will Employer be liable to Employee for damages in connection with
Employer's enforcement of this Agreement in excess of the amounts specifically
provided herein. Employee agrees that Employer, or its assignee, may assign this
Agreement upon written notice to Employee.
(j) In consideration for Employees obligations under this Agreement,
Employer shall pay Employee upon termination of Employee's employment with
Employer, as supplemental severance pay in addition to all other normal
severance benefits, but in lieu of similar severance under any other
non-competition agreement, if any, with Employer, six months of Employee's
latest Base Salary as an Employee of Employer if termination occurs within the
first one-year term of Employment and three months of Employee's latest Base
Salary as an Employee of Employer thereafter.
11. INJUNCTION
(a) Should Employee at any time reveal or threaten to reveal any
such secret knowledge or information, or during any restricted period, engage or
threaten to engage in any business in competition with that of Employer, or
perform or threaten to perform any services for anyone engaged in such
competitive business, or in any way violate or threaten to violate any of the
provisions of this Agreement, Employer shall be entitled to an injunction
restraining Employee from doing or continuing to do or performing any such acts;
and Employee hereby consents to the issuance of such an injunction.
(b) In the event that a proceeding is brought in equity to enforce
the provisions of this Paragraph, Employee shall not argue as a defense that
there is an adequate remedy at law, nor shall Employer be prevented from seeking
any other remedies which may be available.
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(c) The existence of any claim or cause of action by Employer
against Employee, or by Employee against Employer, whether predicated upon this
Agreement or otherwise, shall not constitute a defense to the enforcement by
Employer of the foregoing restrictive covenants but shall be litigated
separately.
12. PRIOR AGREEMENTS
Employee represents that Employee is not now under any written agreement,
nor has he previously, at any time entered into any written agreement with any
person, firm or corporation, which would or could in any manner preclude or
prevent Employee from giving freely and Employer receiving the exclusive benefit
of his services.
13. MISCELLANEOUS
If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced in
whole or in part, the remaining conditions and provisions or portions thereof
shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provision shall be deemed
dependent upon any covenant or provision so expressed herein.
All prior agreements with respect to the subject matter hereof between the
parties are hereby cancelled. This Agreement contains the entire agreement of
the parties relating to the subject matter hereof, and the parties hereto have
made no agreements, representations or warranties relating to the subject matter
of this Agreement which are not set forth herein. No modification of this
Agreement shall be valid unless made in writing and signed by the parties
hereto.
The rights, benefits, duties and obligations under this Agreement shall
inure to, and be binding upon, the Employer, its successors and assigns, and
upon the Employee and his legal representatives, heirs and legatees. This
Agreement constitutes a personal service agreement, and the performance of the
Employee's obligations hereunder may not be transferred or assigned by the
Employee.
The failure of either party to insist upon the strict performance of any
of the terms, conditions and provisions of this Agreement shall not be construed
as a waiver or relinquishment of future compliance therewith, and said terms,
conditions and provisions shall remain in full force and effect. No waiver of
any term or conditions of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.
This Agreement shall be construed and governed by the laws of the State of
Georgia.
Except as provided in Section 10, any controversy or claim arising under,
out of, or in connection with this Agreement or any breach or claimed breach
thereof, shall be settled by
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arbitration before the American Arbitration Association, in Atlanta, Georgia,
before a panel of three arbitrators, in accordance with its rules, and judgement
upon any award rendered may be entered in any court having jurisdiction thereof.
IN WITNESS WHEREOF the parties have set their hands and seals this 31st day of
July, 1999.
On Behalf of Employer:
AIM GROUP, INC.
By:/s/ Xxxxxxxx X. Xxxx
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XXXXXXXX X. XXXX, Director
/s/ Xxxx X. Arena
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XXXX X. ARENA, Employee
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