EXHIBIT 10.2
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (this "Agreement"), dated as
of this 28th day of January 2002 (the "Effective Date"), by and between Memry
Corporation, a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxx
("Xxxxxxxx").
W I T N E S S E T H :
WHEREAS, on May 22, 2001, Xxxxxxxx'x employment with the Company as its
President and Chief Operating Officer terminated; and
WHEREAS, the Company had previously loaned Xxxxxxxx $200,000, which loan is
evidenced by a $200,000 Promissory Note issued by Xxxxxxxx to the Company and
dated August 25, 2000 (the "Note"), which Note is secured by a Statutory Form
Mortgage Deed from Xxxxxxxx to the Company of even date (the "Mortgage"); and
WHEREAS, without any admission of liability to each other, the Company and
Xxxxxxxx have determined to (i) resolve all disputed matters between them and
(ii) with the exception of the continuing obligations of (A) Xxxxxxxx and the
Company to each other under this Agreement and (B) of Xxxxxxxx to the Company
under the Note, Mortgage and Sections 4 through 7 of the Employment Agreement by
and between the Company and Xxxxxxxx, dated January 1, 2000 (the "Employment
Agreement") (each as modified herein), release all claims pursuant to the Memry
Release and the Xxxxxxxx Release (each as defined herein).
NOW, THEREFORE, in consideration of the foregoing and in consideration of
the mutual covenants, agreements and releases contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which the
parties hereto hereby acknowledge, the Company and Xxxxxxxx hereby agree as
follows:
1. Payments/Benefits.
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(a) $90,000 of the amount payable to the Company under the Note shall
be forgiven as of January 28, 2002. Xxxxxxxx shall pay the remaining
$110,000 of the amount payable under the Note on the earlier of (1) the
third anniversary of the Effective Date and (2) the date on which the
property described in the Note is sold or fee ownership is otherwise
transferred. These modifications shall be reflected in an Amended and
Restated Secured Promissory Note in the form attached hereto as Exhibit D
executed by Xxxxxxxx and an Amended and Restated Statutory Form Mortgage
Deed in the form attached hereto as Exhibit E executed by Xxxxxxxx and by
Xxxxx X. Xxxxxxxx, both of which shall be executed and delivered to the
Company contemporaneously with the execution of this Agreement. In
addition, the Company agrees that it will permit Xxxxxxxx to refinance the
existing third party note and mortgage on the property and to subordinate
its mortgage to the mortgage securing the note resulting from such
refinancing, so long as such refinancing is in an amount no greater than
the outstanding balance of the existing third party note and first
mortgage.
(b) The Company shall transfer ownership to Xxxxxxxx of the laptop
computer and palm pilot currently in Xxxxxxxx'x possession. The Company
agrees to transfer ownership to Xxxxxxxx of the cell phone currently in
Xxxxxxxx'x possession. In addition, the Company agrees, if Xxxxxxxx brings
that laptop computer to the Company's offices at a mutually convenient
time, to permit its information technology consultant, at no cost to
Xxxxxxxx, to remove or change to a password selected by Xxxxxxxx, the
password presently installed in that laptop computer.
(c) The Company shall pay to Xxxxxxxx a lump sum payment of $25,000 on
the later of (1) January 28, 2002; or (2) the eighth day following the
Effective Date; provided, that Xxxxxxxx has not revoked the Xxxxxxxx
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Release (defined in Section 3) in accordance with Section 5 thereof.
(d) As soon as practicable following the Effective Date, the Company
shall xxxxx Xxxxxxxx a fully-vested nonqualified stock option to acquire
75,000 shares of the Company's common stock at a per share exercise price
equal to the closing price of a share of the Company's common stock on the
trading date immediately preceding the Effective Date. Such option shall be
issued pursuant to the form of Option Agreement attached hereto as Exhibit
C and Xxxxxxxx acknowledges that, due to statutory requirements, such
option may not be issued under the Company's employee stock incentive
plans. It is understood by the parties that the Company's offer and sale of
common stock to Xxxxxxxx upon the exercise of these stock options will not
be registered under the Securities Act of 1933 as amended, nor will
Xxxxxxxx'x reoffer and resale of such common stock be so registered.
(e) Xxxxxxxx shall be entitled to (i) continued base salary payments
(at the annual base salary rate of $205,140.00) through November 22, 2002,
such amounts to be paid to Xxxxxxxx as and when they would otherwise be due
absent the termination of Xxxxxxxx'x employment and (ii) a payment of
$50,891.00 on or about September 27, 2002. With respect to the amount
specified in clause (ii) above, the Company may elect to pay up to
one-third of such amount by delivering to Xxxxxxxx shares of the Company's
common stock having an equivalent value (determined based on the last
reported trade price on the day three business days prior to the date on
which said payment would otherwise be due).
(f) Sections 4 through 7 of the Employment Agreement shall remain in
full force and effect; provided, however, that the Company shall not elect
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to extend the noncompetition restrictions as permitted under Section
4(a)(ii) of the Employment Agreement.
(g) For purposes of clarification, Xxxxxxxx acknowledges and agrees
that, pursuant to this Agreement, he has relinquished all of his rights
under Section 8 of the Employment Agreement, including, without limitation,
any right to enhanced severance in the event of a Change in Control (as
defined in the Employment Agreement).
(h) All amounts payable under this Agreement shall be subject to
applicable withholding requirements under federal and state law and to
Section 3 hereof. Otherwise,
all amounts payable hereunder to Xxxxxxxx shall be payable without any
right of set-off (including, without limitation, on the basis of any
alleged breach by Xxxxxxxx of the covenants hereof or in the Employment
Agreement) or claim to mitigation of damages.
2. Non-Disparagement.
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(a) Xxxxxxxx agrees that he will not make any statements or claims,
initiate any proceedings or take any actions either directly or indirectly,
or through third parties, which demean, detract, criticize or otherwise
cast the Company and/or any of its subsidiaries (collectively, the "Company
Related Entities") or any of their respective officers and directors in an
unfavorable light in the eyes of their customers, suppliers, employees,
consultants or any other persons, or which could adversely affect the
morale of any employee of a Company Related Entity, or which interfere with
a Company Related Entity's contractual relationships with its customers,
suppliers, employees or consultants, or which otherwise disparage or defame
the goodwill or reputation of a Company Related Entity or any of its
officers, directors or employees.
(b) Each of the Company Related Entities agrees that neither it nor
any of its officers will make any statements or claims, initiate any
proceedings or take any actions either directly or indirectly, or through
third parties, which demean, detract, criticize or otherwise cast Xxxxxxxx
in an unfavorable light in the eyes of any other persons, or which
otherwise disparage or defame the reputation of Xxxxxxxx. The Company shall
provide a mutually agreed-upon employer reference upon request.
3. Releases. This Agreement is subject to the execution and effectiveness
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of the releases attached hereto as Exhibits A (the "Memry Release") and B (the
"Xxxxxxxx Release"), which are being executed and delivered simultaneously with
the execution and delivery hereof, and obligations of the Company set forth
herein shall not be enforceable if Xxxxxxxx revokes the Xxxxxxxx Release
pursuant to Section 5 thereof.
4. Successors and Assigns. This Agreement shall be binding upon and inure
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to the benefit of the parties hereto and their respective successors, assigns,
heirs and representatives.
5. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall constitute an original but both of which, when
taken together, shall constitute one and the same instrument.
6. Severability. In the event any one or more of the provisions contained
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in this Agreement shall be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby.
7. Miscellaneous.
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(a) This Agreement, and any releases or other documents executed and
delivered in connection with any of the foregoing, may only be modified,
terminated or waived by a writing signed by the party against whom
enforcement of such modification,
termination or waiver is sought. Any such waiver shall be limited to the
specific matter or item waived.
(b) Any delay or omission in the enforcement of any right or remedy
arising under this Agreement and any releases or other documents executed
and delivered in connection with any of the foregoing, shall not be deemed
a waiver of such right or remedy.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut without regard to principles of
conflict of laws thereunder. Any claim or dispute between the parties
arising out of or in connection with this Agreement or any alleged breach
hereof shall be finally settled by arbitration under the Employment
Arbitration Rules of the American Arbitration Association (provided that
notwithstanding any such Rules to the contrary, the reasonable attorneys
fees of the prevailing party shall be paid by the other party), and
judgment upon the award rendered by the Arbitrator may be rendered in any
court having jurisdiction over it. There shall be one arbitrator of any
such arbitration. The arbitration shall be held in Fairfield County,
Connecticut. The parties shall endeavor to agree on the selection of an
arbitrator, but if no agreement has been reached within ten (10) days of
one party's request for an arbitration, the arbitrator shall be selected by
the American Arbitration Association. The foregoing provisions of this
Section 7(c) shall not preclude an action in court by either party for
injunctive relief, nor shall it be construed to limit or restrict in any
manner the Company's rights and remedies under Sections 4 through 7 of the
Employment Agreement.
(d) This Agreement, the Note, the Mortgage, and the Employment
Agreement, together with any other document executed in connection with
this Agreement, constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and thereof and supersedes all oral
statements, conversations and correspondence and is intended by the parties
hereto to be the final expression of their agreement on all terms and
conditions set forth herein and therein.
(e) The statements contained in the Recital section of this Agreement
are stipulated by the parties to be true and correct.
(f) All exhibits hereto shall be a part of this Agreement.
(g) This Agreement shall not be enforced against and shall not be
binding upon any party to this Agreement unless and until this Agreement
has been signed by all parties to this Agreement.
(h) If at any time after the Effective Date any further action is
necessary or desirable to carry out the purposes of this Agreement, each
party hereto will take such further action (including the execution and
delivery of such further instruments and documents) as the other party may
reasonably request, all at the sole cost and expense of the requesting
party.
(i) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first written above.
WITNESS: MEMRY CORPORATION
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Chief Executive Officer
/s/ Xxxxxxx Xxxxxxxxxx
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/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Kavanauch
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Xxxxxxx X. Kavanauch
[ACKNOWLEDGEMENTS TO SETTLEMENT AGREEMENT]
ACKNOWLEDGMENTS
STATE OF CONNECTICUT)
) ss: Bethel, Connecticut
COUNTY OF FAIRFIELD )
On this the 28th day of January, 2002, before me, the undersigned
officer, personally appeared Xxxxx X. Xxxxx, who acknowledged himself to be the
Chief Executive Officer of Memry Corporation, a Delaware corporation (the
"Corporation"), and that he as such Chief Executive Officer, being authorized to
do so, executed the foregoing instrument for the purposes therein contained, by
signing the name of the Company by himself as its Chief Executive Officer.
In witness whereof, I have hereunto set my hand.
/s/ Xxxx C.A. Xxxxx
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Notary Public/Commissioner
of the Superior Court
My Commission Expires: 3/21/2005
STATE OF CONNECTICUT)
) ss: Ridgefield, Connecticut
COUNTY OF FAIRFIELD )
On this 28 day of January, 2002, before me, the undersigned officer,
personally appeared Xxxxxx X. Xxxxxxxx, known to me (or satisfactorily proven)
to be the person whose name is subscribed to the within instrument and
acknowledged that he has executed the same for the purposes therein contained
and acknowledged the same to be his free act and deed.
In witness whereof, I have hereunto set my hand.
/s/ Xxxxxx X. Xxxxxxxx Xx.
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Notary Public/Commissioner
of the Superior Court
My Commission Expires: August 31, 2002
EXHIBITS A-E INTENTIONALLY OMITTED
