Exhibit 10.22
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (the "Agreement") is entered into
by and between Del Global Technologies Corp. and its affiliates, subsidiaries,
present and former directors, officers, agents, accountants, attorneys,
stockholders, predecessors and the agents and attorneys of its present and
former directors (the "Company") and Xxxxxxx X. Xxxxxxx and each of his heirs,
administrators, liquidators, executors, successors, and assigns ("Trugman"), in
consideration of the covenants contained herein as follows:
RECITALS
WHEREAS, in or about February 2002, the Company filed a complaint
against Trugman, amended in or about May 2002, in an action entitled Del Global
Technologies Corporation v. Xxxxxxx X. Xxxxxxx, No. 02 Civ. 0964 (CM) (GAY), in
the United States District Court for the Southern District of New York (the
"Action"); and
WHEREAS, Trugman filed an answer to the amended complaint,
counterclaims against the Company, a third-party complaint and an amended
third-party complaint (which amended third-party complaint was subsequently
dismissed by the court in this Action); and
WHEREAS, the Company and Trugman (the "Parties") recognize the
existence of their disputes and desire to resolve and discontinue those
disputes, and the Parties now deem it to be in their best interest to settle and
compromise the disputes existing between them; and
WHEREAS, Trugman and/or Trugman jointly with his wife owns or own
14,597 shares of common stock of the Company and the FBO Trugman Family Trust
(of which Trugman is a trustee) owns 370 shares of common stock of the Company,
and the Parties desire that transfer of ownership of these 14,967 shares (the
"Shares") to the Company shall be part of this Agreement; and
WHEREAS, this Agreement does not constitute an admission of any
liability with respect to any of the matters referenced herein; it is hereby
agreed to as follows:
1
AGREEMENT
1. Trugman and the Company will, simultaneous with the execution of this
Agreement, execute a Stipulation of Dismissal With Prejudice, in the form
annexed hereto at Tab 1, dismissing with prejudice the claims and counterclaims
asserted in the Action (the "Stipulation"). The Stipulation will be held in
escrow by Xxxxxxxxxxx & Partners until such time as the Company actually
receives both the Shares and the payment described below. At that time,
Xxxxxxxxxxx & Partners will file the Stipulation with the Clerk, U.S. District
Court for the Southern District of New York.
2. Trugman agrees to transfer ownership of the Shares, including all rights,
titles and interests in the Shares, to the Company (the "Transfer").
3. Simultaneous with the execution of the Agreement, Trugman will deliver to the
Company executed forms of stock powers in the forms annexed hereto at Tab 2.
4. Trugman agrees that by no later than 5:00 p.m. on March 10, 2003, he will
instruct the appropriate transfer agent to take all steps necessary to effect
the Transfer.
5. Trugman agrees that he will take all steps necessary to effect the Transfer.
6. The Company agrees that it will take all steps necessary to effect the
Transfer, including removal of all restrictive legends.
7. Trugman represents that he is authorized to enter into this Agreement to
Transfer the Shares to the Company, that the parties transferring the Shares to
the Company have good and marketable title to the Shares and that there are no
pledges, liens or encumbrances of any type on the Shares other than the
restrictive legends placed on the Shares by the Company.
8. The Company agrees that upon demand, it will immediately have its counsel
review any restrictive legends upon Del Global stock in the names of Xxxxx
Xxxxx, Xxxxxxxxx Xxxxx, Xxxx Xxxxx, or Xxxxxx Xxxxxxx. If removal of such
legends are consistent with securities regulations, the Company further agrees
that it will request its counsel to issue, in a timely fashion, the appropriate
opinion so that the stock in the above names may become unencumbered.
9. Trugman agrees to pay the Company four hundred thousand dollars ($400,000.00)
(the "Payment").
10. Trugman agrees that he will make the Payment by delivering to the Company by
certified check, or by wire transfer to such account as the Company shall
designate, four hundred thousand dollars ($400,000.00) by no later than 5:00
p.m. on March 10, 2003.
11. The Transfer and Payment are intended to represent the return of possible
overpayment of bonuses based on pre-tax earnings that Trugman received for the
1997 to 1999 fiscal years as subsequently indicated by the Company's restatement
of its earnings for that period.
12. The Company and Trugman agree not to disparage each other's business and
personal abilities and reputations.
13. If any private third party makes any inquiries - that are not pursuant to a
subpoena or other judicial, administrative or agency process - about the Action
or Trugman's relationship with the Company, the Company and Trugman agree to
respond in substance that the Company and Trugman have entered into a Settlement
Agreement and Release, and under the terms of that Agreement, the Parties are
not to discuss their relationship or this Action. If the Company issues a press
release (or makes any other unsolicited statement to the public or to any
private third party) about this Agreement or the settlement of the Action, the
Company agrees that it will state in substance nothing more regarding the
Agreement or settlement than the stock transfer (valued at approximately
$45,000) and payment of $400,000 are being made to the Company in settlement of
the Action. The Company agrees that any such press release will not mention
Trugman's name and will not describe any of the Company's allegations against
Trugman.
2
RELEASE
14. In consideration of the above Agreement and for other good and valuable
cause and consideration, Trugman hereby releases and forever discharges the
Company from any and all claims, causes of action, in law or in equity, suits,
debts, liens, contracts, agreements, promises, liabilities, of any kind or
nature, known or unknown, fixed of contingent, direct of indirect, which Trugman
now has or hereafter may have against the Company from the beginning of the
world to the day of the date of this Agreement. This release includes, but is
not limited to, all claims that Trugman asserted, or could have asserted, in his
counterclaims, his third-party complaint and his amended third-party complaint.
15. In consideration of the above agreement and for other good and valuable
cause and consideration, the Company hereby releases and forever discharges
Trugman from any and all claims, causes of action, in law or in equity, suits,
debts, liens, contracts, agreements, promises, liabilities, of any kind or
nature, known or unknown, fixed or contingent, direct or indirect, which the
Company now has or hereafter may have against Trugman from the beginning of the
world to the day of the date of this Agreement. This release includes, but is
not limited to, all claims that the Company asserted, or could have asserted, in
its complaint and its amended complaint.
16. The Company agrees that if Trugman's wife, Xxxx Xxxxxxx, executes and
delivers to the Company a mutual release in the form annexed hereto at Tab 3 by
no later than March 17, 2003, the Company will also execute that mutual release
by no later than March 24, 2003.
17. The Company agrees that if Trugman's daughter, Xxxxx Xxxxx, executes and
delivers to the Company a mutual release in the form annexed hereto at Tab 4 by
no later than March 17, 2003, the Company will also execute that mutual release
by no later than March 24, 2003.
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CONSTRUCTION
18. This Agreement was negotiated between the Parties hereto at arms length,
with each party having the opportunity to receive advice of independent counsel
of its choosing. It is the intent of the Parties that no part of this Agreement
be construed against any of the Parties because of the identity of the drafter.
19. This Agreement constitutes a single integrated and written contract
expressing the entire agreement between the Parties. This Agreement supersedes
any prior understanding and agreements among the Parties with respect to the
subject matter herein. There are no representations, agreements, arrangements or
understandings among the Parties, oral or written, relating to the subject
matter of this Agreement that are not fully expressed herein. Any statements,
promises or inducements, whether made by any party or any agent of any party,
that are not contained in this written Agreement, shall not be valid or binding.
This Agreement may not be enlarged, modified or altered except by written
agreement signed by all of the Parties of this Agreement.
20. The Parties agree that this Agreement should not be construed as precluding
the Company from receiving any recovery or other relief obtained for its benefit
from any action or proceeding brought by the Securities and Exchange Commission.
21. The Parties agree that nothing in this Agreement should be construed as
affecting the Company's obligations to report matters to the Securities and
Exchange Commission or any other governmental entity to which the Company has
any legal obligations to report matters.
LIABILITY
22. Nothing contained in this Agreement is intended to be an admission of
liability on the part of any of the Parties with respect to the matters
referenced herein.
SUCCESSORS AND ASSIGNS
23. This Agreement shall inure to the benefit of, and shall be binding upon, the
executors, administrators, heirs, successors and assigns of each of the Parties
to this Agreement.
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MISCELLANEOUS PROVISIONS
24. The parties represent that each of them is authorized to make the
representations contained herein and to enter into this Agreement.
25. This Agreement and its terms shall be construed under the laws of the State
of New York.
26. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all such counterparts shall together constitute
but one and the same instrument.
Dated: March 10, 2003 Dated: March 10, 2003
Del Global Technologies Corp.
By: /s/ Xxxxxx Xxxx By: /s/Xxxxxxx X. Xxxxxxx
-------------------- -----------------------
Xxxxxx X. Xxxx, Xxxxxxx X. Xxxxxxx
President
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TAB 0
XXXXXX XXXXXX XXXXXXXX XXXXX
XXXXXXXX XXXXXXXX XX XXX XXXX
---------------------------------------------------------------x
:
DEL GLOBAL TECHNOLOGIES :
CORPORATION, :
Plaintiff, :
:
-against- :
:
XXXXXXX X. XXXXXXX, :
:
Defendant. :
:
---------------------------------------------------------------x
02 Civ. 0964 (CM)(GAY)
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STIPULATION OF DISMISSAL WITH PREJUDICE
IT IS HEREBY STIPULATED AND AGREED, by and between the undersigned
counsel for Plaintiff and Defendant that the above-captioned action is hereby
dismissed with prejudice pursuant to Rule 41(a)(1) of the Federal Rules of Civil
Procedure. Such dismissal is without costs or attorneys' fees to any party.
Dated: New York, New York Dated: New York, New York
March 10, 2003 March 10, 2003
XXXXXXXXXXX & PARTNERS XXXXXX X. XXXXXXXX
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx K, Erlanger
------------------------ ----------------------------
Xxxx X. Xxxxxx (GM-3119) Xxxxxx X. Xxxxxxxx (RE-0886)
000 Xxxxxxx Xxxxxx 000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000 New York New York 10001
(212) 350-2700 (212) 686-8045
Attorneys for Plaintiff Attorney for Defendant
So Ordered:
--------------------------------
U.S.D.J.
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TAB 2
STOCK POWER
For Value Received, the undersigned hereby assigns and transfers unto
Del Global Technologies Corporation (the "Corporation"), or its assignee or
designee, Fourteen Thousand Five Hundred Ninety Seven (14,597) Shares of the
Common Stock of the Corporation represented by Certificates Nos. S15390, S15381
and S15431, standing in the name of the undersigned on the books of said
Corporation and do hereby irrevocably constitute and appoint the President or
the Secretary of the Corporation Attorney to transfer the said Stock on the
books of the aforementioned Corporation with full power of substitution in the
premises.
Dated: March 10, 2003
In the presence of:
/s/ Xxxxxxx X. Xxxxxxx
------------------------- -----------------------------
Xxxxxxx X. Xxxxxxx
Dated: March 10, 2003
In the presence of:
_________________________ /s/ Xxxx Xxxxxxx
------------------------------
Xxxx Xxxxxxx
8
STOCK POWER
For Value Received, the undersigned hereby assigns and transfers unto
Del Global Technologies Corporation (the "Corporation"), or its assignee or
designee, Three Hundred Seventy (370) Shares of the Common Stock of the
Corporation represented by Certificates Nos. S16565, S11088 and S12072, standing
in the name of the undersigned on the books of said Corporation and do hereby
irrevocably constitute and appoint the President or the Secretary of the
Corporation Attorney to transfer the said Stock on the books of the
aforementioned Corporation with full power of substitution in the premises.
FBO Trugman Family Trust
Dated: March 10, 2003
In the presence of:
_________________________ By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx,
Trustee
Dated: March 10, 2003
In the presence of:
_________________________ By: /s/ Xxxx Xxxxxxx
----------------------------------------
Xxxx Xxxxxxx,
Trustee
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TAB 3
MUTUAL RELEASE
For good and valuable cause and consideration, Del Global Technologies
Corp. and Xxxx Xxxxxxx hereby release and forever discharge each other from any
and all claims, causes of action, in law or in equity, suits, debts, liens,
contracts, agreements, promises, liabilities, of any kind or nature, known or
unknown, fixed of contingent, direct of indirect, which either of them now has
or hereafter may have against the other from the beginning of the world to March
10, 2003.
Dated: March 10, 2003 Dated: March 10, 2003
Del Global Technologies Corp.
By: /s/ Xxxxxx X. Xxxx /s/ Xxxx Xxxxxxx
------------------- -----------------
Xxxxxx X. Xxxx, Xxxx Xxxxxxx
President
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TAB 4
MUTUAL RELEASE
For good and valuable cause and consideration, Del Global Technologies
Corp. and Xxxxx Xxxxx hereby release and forever discharge each other from any
and all claims, causes of action, in law or in equity, suits, debts, liens,
contracts, agreements, promises, liabilities, of any kind or nature, known or
unknown, fixed of contingent, direct of indirect, which either of them now has
or hereafter may have against the other from the beginning of the world to March
10, 2003.
Dated: March 10, 2003 Dated: March 10, 2003
Del Global Technologies Corp.
By: /s/ Xxxxxx X. Xxxx /s/ Xxxxx Xxxxx
------------------- ----------------
Xxxxxx X. Xxxx, Xxxxx Xxxxx
President
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