EXHIBIT 10.11
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated effective as of February 22, 1999 between
Artra Group, Incorporated, a Pennsylvania corporation (the "Company"), and
Xxxxxxxx X. Xxxxx (the "Executive"), an individual residing at 00 Xxxxxx Xxxxx,
Xxxxxxx, XX 00000.
Recital:
The parties hereto desire to enter into this Agreement to provide for
the employment of the Executive by the Company and for certain other matters in
connection with such employment, all as set forth more fully in this Agreement.
NOW, THEREFORE, in consideration of the premises and covenants set
forth herein, and intending to be legally bound hereby, the parties to this
Agreement hereby agree as follows:
1. Duties. The Company agrees that the Executive shall be employed by
the Company, and the Executive agrees to be so employed, to devote his best
efforts and substantially all of his business time to advance the interests of
the Company and to perform such executive, managerial, administrative and other
duties as are from time to time assigned to him by the President and Chief
Operating Officer of the Company and are consistent with his position as a
senior executive of the Company.
2. Term. Subject to Sections 4 and 5 hereof, the initial term of the
Executive's employment hereunder shall commence on the date of this Agreement
and shall continue for a term of three (3) years, until February 17, 2002
("Expiration Date"). If either party elects not to renew this Agreement
following the Expiration Date, or if the parties are otherwise unable to agree
to mutually acceptable terms for a renewal period within 180 days prior to the
Expiration Date, then (subject to the provisions of Section 17 hereof) this
Agreement shall terminate effective as of the Expiration Date.
3. Compensation.
(a) Salary. During the term of his employment under this
Agreement, the Executive shall be paid an annual salary at the initial rate of
not less than $125,000.00 (the "Base Salary"). The Base Salary may be increased
from time to time by the Board of Directors of the Company (the "Board") in its
sole and absolute discretion. The Board shall review the Base Salary at least
annually at the end of each fiscal year of the Company. The Base Salary shall be
paid in accordance with the Company's regular payroll practices.
(b) Bonuses. At the end of each fiscal year of the Company
that ends during the term of this Agreement, the Board shall consider the award
of a performance bonus to the Executive for such fiscal year. The award of any
bonus shall be in the sole discretion of the Board.
(c) Fringe Benefits. The Executive shall be entitled to
participate in all insurance, vacation and other fringe benefit programs of the
Company to the extent and on the same terms and conditions as are accorded to
other officers and key executives of the Company from time to time. The current
benefits available to key executives of the Company are summa rized on Exhibit
"A" attached hereto.
(d) Reimbursement of Expenses. The Executive shall be
reimbursed for all normal items of travel, entertainment and miscellaneous
business expenses reasonably incurred by him on behalf of the Company, provided
that such expenses are documented and submitted in accordance with the
reimbursement policies of the Company as in effect from time to time.
(e) Stock Options. The Executive and the Company have entered
into a Stock Option Agreement on the date hereof, pursuant to which the
Executive has been granted certain options to purchase shares of the Common
Stock of the Company, on the terms and subject to the conditions set forth
therein.
(f) Entire Compensation. The compensation provided for in this
Agreement shall constitute full payment for the services to be rendered by the
Executive to the Company hereunder.
4. Death or Total Disability of the Executive.
(a) Death. In the event of the death of the Executive during
the term of this Agreement, this Agreement shall terminate effective as of the
date of the Executive's death, and the Company shall not have any further
obligation or liability under this Agreement except that the Company shall pay
to the Executive's estate: (i) any portion of the Executive's Base Salary for
the period up to the Executive's date of death that has been earned but remains
unpaid; and (ii) any benefits that have accrued to the Executive under the terms
of the executive benefit plans of the Company in which he is a participant,
which benefits shall be paid in accordance with the terms of those plans.
(b) Total Disability. In the event of the Total Disability (as
that term is hereinafter defined) of the Executive, for (i) a period of 180
consecutive days or (ii) for any 180 days within a period of 360 consecutive
days, at any time during the term of this Agreement, the Company shall have the
right to terminate the Executive's employment hereunder by giving the Executive
30 days' written notice thereof, and, upon expiration of such 30-day period, the
Company shall not have any further obligation or liability under this Agreement
except that the Company shall pay to the Executive: (i) any portion of the
Executive's Base Salary for the period up to the date of termination that has
been earned but remains unpaid; and (ii) any benefits that have accrued to the
Executive under the terms of the executive benefit plans of the Company in which
he is a participant, which benefits shall be paid in accordance with the terms
of those plans. The term "Total Disability," when used herein, shall mean a
mental or physical condition that in the reasonable opinion of the Board renders
the Executive unable or incompetent to carry out the essential functions of the
job responsibilities he held or the tasks that he was assigned at the time the
disability was incurred, with or without reasonable accommodation.
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5. Termination.
(a) Termination by the Company for Cause. The Company may
discharge the Executive and thereby terminate his employment hereunder upon
written notice to the Executive for any of the following reasons: (i) material
violation of any policy regarding substance abuse as may be promulgated by the
Company from time to time; (ii) the willful failure to perform the duties or
responsibilities of his position as those may be delegated or assigned to the
Executive by the President and COO or by the Board; (iii) any material breach of
any covenant or agreement contained in Sections 6, 7 or 8 of this Agreement;
(iv) engaging in intentional conduct that causes material damage to the Company
or its business reputation; (v) conviction (by trial or guilty plea) or a plea
of non-contest, nolo contendere or similar plea to a felony (or misdemeanor
which the Company determines to have or could have a material adverse effect on
the Company or its reputation) which has become non-appealable; (vi)
adjudication as an incompetent; or (vii) misappropriation of any funds or
property of the Company, theft, embezzle ment or fraud; provided, however, that
with respect only to subsections (i) and (ii) above, the Company shall not
discharge the Employee for cause unless the Employee fails, refuses or for any
reason does not cure such violation to the reasonable satisfaction of the
Company within thirty (30) days following written notice from the Company that
there exists a reason for discharge for cause. In the event that the Company
shall discharge the Executive pursuant to this Section 5(a), the Company shall
not have any further obligation or liability under this Agreement, except that
the Company shall pay to the Executive: (i) any portion of the Executive's Base
Salary for the period up to the date of termination that has been earned but
remains unpaid; and (ii) any benefits that have accrued to the Executive under
the terms of the executive benefit plans of the Company in which he is a
participant, which benefits shall be paid in accordance with the terms of those
plans.
(b) Termination on Change in Business Purpose. The Company and
the Executive acknowledge and agree that the Executive has been retained by the
Company to assist the Company in its acquisition and development of software and
related products and services to be marketed as tools to effect business to
business transactions via an electronic commerce system (the "Business
Purpose"), primarily through the acquisition of the ORBIT software system and
related assets under a merger agreement with NA Acquisition Corp. If for any
reason the proposed merger has not been consummated by September 30, 1999 and
the Company determines (in its sole discretion) that it has not otherwise made
substantial progress toward accomplishing the merger by that date, then the
Company may at any time after September 30, 1999 but prior to December 31, 1999
discharge the Executive and thereby terminate his employment hereunder, upon ten
business days' prior written notice. If the Company shall terminate the
employment of the Executive pursuant to this Section 5(b), the Executive shall
be entitled to be paid: (i) any portion of the Executive's Base Salary for the
period up to the date of termination that has been earned but remains unpaid;
and (ii) any benefits that have accrued to the Executive under the terms of any
Executive benefit plans of the Company in which he is a participant, which
benefits shall be paid in accordance with the terms of those plans.
(c) Other Termination by the Company. The Company may
discharge the Executive and thereby terminate his employment hereunder at any
time upon ten business days'
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prior written notice for any reason other than one specified in Sections 5(a) or
5(b) hereof. If the Company shall terminate the employment of the Executive for
any reason other than one specified in Sections 5(a) or 5(b) hereof, the
Executive shall be entitled to be paid: (i) any portion of the Executive's Base
Salary for the period up to the date of termination that has been earned but
remains unpaid; (ii) a severance payment equal to the lesser of: (A) an amount
equal to the Executive's Base Salary for a period of twenty-four months, or (B)
an amount equal to the Executive's Base Salary for the balance of the term of
this Agreement, if any, provided that the severance payment shall in no event be
less than an amount equal to the Executive's Base Salary for a period of six
months; and (iii) any benefits that have accrued to the Executive under the
terms of any Executive benefit plans of the Company in which he is a
participant, which benefits shall be paid in accordance with the terms of those
plans. Any severance payment under SubSection 5(c)(ii) hereof shall be paid in
equal monthly installments for that number of months which is the lesser of (A)
24 months or (B) the number of remaining months in the term of this Agreement,
and shall be contingent on the Executive's continued compliance with the
provisions of Sections 6, 7 and 8 hereof.
6. Non-Disclosure and Non-Competition.
(a) Non-Disclosure. The Executive acknowledges that in the
course of performing services for the Company, the Executive will obtain
knowledge of the Company's business plans, products, processes, software,
know-how, trade secrets, formulas, methods, models, prototypes, discoveries,
inventions, improvements, disclosures, names and positions of executives and/or
other proprietary and/or confidential information, and further that the
Executive presently possesses knowledge of proprietary and/or confidential
information of his prior employer(s) which has been acquired by the Company
contemporaneously with the execution of this Agreement (collectively, the
"Confidential Information"). The Executive agrees to keep the Confidential
Information secret and confidential and not to publish, disclose or divulge to
any other party, and the Executive agrees not to use any of the Confidential
Information for the Executive's own benefit or to the detriment of the Company
without the prior written consent of the Company, whether or not such
Confidential Information was discovered or developed by the Executive. The
Executive also agrees not to divulge, publish or use any proprietary and/or
confidential information of others that the Company is obligated to maintain in
confidence.
(b) Non-Competition. The Executive agrees that, during his
employment by the Company hereunder and for an additional period of one year
after the termination or expiration of the Executive's employment hereunder,
neither the Executive nor any corporation or other entity in which the Executive
may be interested as a partner, trustee, director, officer, executive, employee,
agent, shareholder, lender of money or guarantor, or for which he performs
services in any capacity (including as a consultant or independent contractor)
shall at any time during such period (i) be engaged, directly or indirectly, in
any Competitive Business (as that term is hereinaf ter defined) or (ii) solicit,
hire, contract for services or otherwise employ, directly or indirectly, any of
the executives of the Company. Nothing herein contained shall be deemed to
prevent the Executive from investing in or acquiring one per cent or less of any
class of securities of any company if such class of securities is listed on a
national securities exchange or is quoted on the Nasdaq Stock Market. For
purposes of this Section 6(b), the term "Competitive Business" shall
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mean any business that engages in any respect in the development, production or
marketing of software and related products and services that enable users to
effect barter transactions via an electronic commerce system, or which engages
in any other activities that are competitive with the business or proposed
business of the Company at the time of termination or expiration of this
Agreement. If the Executive violates any provision of this Section 6(b), the one
year restrictive period set forth herein shall be extended for the duration of
any such violation, so that the Company enjoys the full term of such restrictive
period. Notwithstanding the foregoing, the Company acknowledges and agrees that
the provisions of this Section 6(b) shall not apply if the Executive's
employment is terminated by the Company under the provisions of Section 5(b)
hereof.
7. Inventions and Discoveries.
(a) Disclosure. The Executive shall promptly and fully
disclose to the Company, with all necessary detail, all developments, know-how,
discoveries, inventions, improvements, concepts, ideas, formulae, processes and
methods (whether copyrightable, patent able or otherwise) made, received,
conceived, acquired or written by the Executive (whether or not at the request
or upon the suggestion of the Company, solely or jointly with others, during the
period of his employment with the Company that relate to any line of business,
activities or fields of interest or investigation engaged in by the Company)
from time to time during the course of the Executive's employment by the
Company, or that are otherwise made through the use of the Company's time,
facilities or materials (collectively, the "Inventions").
(b) Assignment and Transfer. The Executive agrees to assign
and transfer to the Company all of the Executive's right, title and interest in
and to the Inventions, and the Executive further agrees to deliver to the
Company any and all drawings, notes, specifications and data relating to the
Inventions, and to sign, acknowledge and deliver all such further papers,
including applications for and assignments of copyrights and patents, and all
renewals thereof, as may be necessary to obtain copyrights and patents for any
Inventions in any and all countries and to vest title thereto in the Company and
its successors and assigns and to otherwise protect the Company's interests
therein.
(c) Records. The Executive agrees that in connection with any
research, development or other services performed for the Company, the Executive
will maintain careful, adequate and contemporaneous written records of all
Inventions, which records shall be the property of the Company.
8. Company Documentation. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all documentation, disks, programs,
data, records, drawings, manuals, reports, sketches, blueprints, letters, notes,
notebooks and all other writings, electronic data, graphics and tangible
information and materials of a secret, confidential or proprietary information
nature relating to the Company or the Company's business that are in the
possession or under the control of the Executive.
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9. Injunctive Relief. The Executive acknowledges that his compliance
with the agreements in Sections 6, 7 and 8 hereof is necessary to protect the
good will and other propri etary interests of the Company and that he is one of
the principal executives of the Company and conversant with its affairs, its
trade secrets and other proprietary information. The Executive acknowledges that
a breach of any of his agreements in Sections 6, 7 and 8 hereof will result in
irreparable and continuing damage to the Company for which there will be no
adequate remedy at law; and the Executive agrees that in the event of any breach
of the aforesaid agreements, the Company and its successors and assigns shall be
entitled to injunctive relief and to such other and further relief as may be
proper.
10. Supersedes Other Agreements. This Agreement supersedes and is in
lieu of any and all other employment arrangements between the Executive and the
Company, but shall not supersede any existing confidentiality or nondisclosure
agreements between the Executive and the Company.
11. Amendments. Any amendment to this Agreement shall be made in
writing and signed by the parties hereto.
12. Enforceability. If any provision of this Agreement shall be invalid
or unenforce able, in whole or in part, then such provision shall be deemed to
be modified or restricted to the extent and in the manner necessary to render
the same valid and enforceable, or shall be deemed excised from this Agreement,
as the case may require, and this Agreement shall be construed and enforced to
the maximum extent permitted by law as if such provision had been originally
incorporated herein as so modified or restricted or as if such provision had not
been originally incorporated herein, as the case may be.
13. Construction. This Agreement shall be construed and interpreted in
accordance with the internal laws of the Commonwealth of Pennsylvania.
14. Assignment.
(a) By the Company. The rights and obligations of the Company
under this Agreement shall inure to the benefit of, and shall be binding upon,
the successors and assigns of the Company. The Company shall require each and
every successor (whether direct or indirect, by asset or stock purchase, share
exchange, merger, consolidation or otherwise) to all or substan tially all of
the business and/or assets of the Company, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent the Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, "the Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as provided above that executes and
delivers the agreement provided for in this Section 14(a) or that otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(b) By the Executive. This Agreement and the obligations
created hereunder may not be assigned by the Executive, but all rights of the
Executive hereunder shall inure to the
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benefit of and be enforceable by his heirs, devisees, legatees, executors,
administrators and personal representatives.
15. Notices. All notices required or permitted to be given hereunder
shall be in writing and shall be deemed to have been given when mailed by
certified mail, return receipt requested, or delivered by a national overnight
delivery service addressed to the intended recipient as follows:
If to the Company: Artra Group Incorporated
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxx
If to the Executive: Xxxxxxxx X. Xxxxx
00 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Any party may from time to time change its address for the purpose of notices to
that party by a similar notice specifying a new address, but no such change
shall be deemed to have been given until it is actually received by the party
sought to be charged with its contents.
16. Waivers. No claim or right arising out of a breach or default under
this Agreement shall be discharged in whole or in part by a waiver of that claim
or right unless the waiver is supported by consideration and is in writing and
executed by the aggrieved party hereto or his or its duly authorized agent. A
waiver by any party hereto of a breach or default by the other party hereto of
any provision of this Agreement shall not be deemed a waiver of future
compliance therewith, and such provisions shall remain in full force and effect.
17. Survival of Covenants. The provisions of Sections 6, 7, 8 and 9
hereof shall survive any termination or expiration of this Agreement.
Furthermore, any provision of this Agreement which provides a benefit to the
Executive and which by the express terms hereof does not terminate upon the
termination of the Executive's employment shall remain binding upon the Company
until such time as such benefits are paid in full to the Executive or his
successors.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties as
of the date first above written.
ARTRA GROUP, INCORPORATED
By:______________________________
Title:
/s/ Xxxxxxxx X. Xxxxx
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XXXXXXXX X. XXXXX
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